Introduction

Allstar Brand was established in 1924 in United States as consumer product company. Additionally to the United Stated market the company operates internationally included superior presence in the Europe market and partnership in Asia market. Allstar Brands producing over the counter drugs and other consumer products such as Allsmile toothpaste brand (Interpretive website 2011). Moreover, Allstar Brands board decided to expand their operations to Latin America’s country because the existing markets are matured and the population has a slow growth, therefore the power of purchasing is reducing. Allstar effectively has penetrated into a three Latin America markets.

Competitive Strategy

The Allstar Brands’ competitive strategy was to achieve all the goals effectively and efficiently in order to create a competitive advantage. The company has successfully accomplished its objectives in USA and Europe markets in addition developed new strategies in Latin America countries. Moreover, Allstar Allsmile brand expanded consumer healthcare and consumer product (toothpaste) in Mexico, Chile, and Brazil markets. The company’s management has implemented their marketing plan by considering several factors such as trade agreement, industry news, economy, cost structure, currency exchange rate, tariff and non-tariff, shipping, and distribution channel.

Allsmile Brands attained a distinctive ability to provide high quality toothpaste in Latin America’s markets. Moreover, it has selected an efficient supply chain in order to deliver toothpaste by covering Mexico, Chile, and Brazil market. Other strategy included building up a specific knowledge and information of each segment in our selected right market.

Allstar have adopted the following competitive strategies to create the competitive advantage required to reach growth. Firstly, The company has excelled in entering Mexico by obtaining an opportunity of the NAFTA agreement, no import duties or tariffs for USA manufacturing, which gives an advantage to Allsmile toothpaste brands over its rival. Secondly, Allstar management has followed cost leadership in establishing a lower cost base than its local competitors’ price. For instance, customer decision was taken into consideration as the most important aspect for the brand preference in Latin America. Therefore, the decision criteria were: Mexico 52.7%, Chile 45.9% and Brazil 51.6%. Hence, the prices were considered to be set in consistency with the customer decision criteria. Accordingly, we have selected Chile market to build our plant due to lower labor cost and less transportation expenses. In addition to Allstar management’s main objectives in their competitive strategy, were to consider cost reduction as well as increasing profit.

Market Entry

The selection of market entry was made considering a number of criteria as follows:

The firms’ objectives and attitudes towards international marketing.
The management operation capabilities in foreign countries.
External environmental factors such as Social, Culture, Political, and Economic for each country.
The level and power of the competing companies within the region market.
The nature of the existing tariff and non-tariff barriers.
Consideration of trading agreement between countries.

Moreover, different aspects were considered for entering the Latin America’s market such as consumer shopping habit, cost structure, and shipping. The market entry method was used differently for each country, due to different market volumes, industry and market analysis results. The first move considered by Allstar management, was to analyze the country’s population, political stability, GDP per capita, GDP growth, economic growth rate, percentage of below poverty line, labor cost, currency exchange rate and power of purchase. Secondly, as one of the important parts of market entry considered was using benchmarking method in order toBenchmarking is a systematic comparison of organizational processes and performance to create new standards or to improve processes Benchmarking is a systematic comparison of organizational processes and performance to create new standards or to improve processes Benchmarking is a systematic comparison of organizational processes and performance to create new standards or to improve processes achieve successful opportunities of capturing new market . The management has applied the benchmarking method via examining the strong competitor in the market, exploring their market share, number of sales, gross margin, as well as their net contribution. Finally, after screening consumer shopping habits, cost structure and shipping have decided to select three countries among six Latin America countries.

The main reason for selecting Mexico as first country among other alternatives of Latin America’s countries was because of two reasons: borders with US and initially to benefit from the existing manufacturing which was based in the home county, due to the unlimited production capacity in million units. Other reason included trading agreement with US (free tariff) and shipping cost per unit at rate of 20%.

Since we had obtained highest market share in Mexico and increase of profit margin, Chile was the second selected market entry because of cost reduction and low labor cost. Our approach to cost reduction included producing the product locally rather than purchasing the product from the manufacturing home country. Therefore, we expanded our operations by building 100 million units capacity plant in Chile and slight increase in plants capacity to 380 million units. Finally, in fifth year of entry to Latin America, we selected Brazil market and decided to import the product from Chile plant.

According to the economic position, Brazil has been preferred because of the highest manufacture sales of the toothpaste, high population and the strong power of purchase. We have successfully export the toothpaste products to Brazil market from our Chile plant. On the other hand, we have set the advertising and promotion budget to increase awareness and accessibility in the new markets. In addition, forecasting and units of sales estimating were based upon the main competitor’s highest manufacture sales.

Marketing Mix

Product

The product element is known as the goods or service the business offers to its customers. The decisions of the product comprises of characteristics such as: appearance, packaging, function, and service. In Mexico, Chile, and Brazil market, Allsmile toothpaste comprised of diverse product line targeting different consumer segments according to their desired benefits. Our decisions for the product formulations, ingredient, benefits, and product size were based upon competitors’ chosen segments. We have introduced the following Allsmile toothpaste in three sizes (25, 75, 250 grams), delivery systems (Tube or Pump), textures (Paste or Gel) formulations (Basic/economic, Whiteness, Healthy, and Kids). Also, we monitoring our main competitor as per their highest net contribution for each year, and based on that, we selected the brand formulation for each market. The forecasting method was determined as per the highest manufactures sales of competitors and based on our pervious actual sales. Consequently, we have forecasted according to the demand of the market.

For instance, the healthy toothpaste product is mainly focused on the families with children. The segment which is attracted to the whiteness benefit is the young singles who are seeking to have whiter teeth. On the other hand, children are focused on the toothpaste with taste appeal while middle aged are focused on the prevention of tartar. As for the packaging concern, families with children prefer buying the large package while teenagers and adults would prefer the small ones. The children on the contrary, would not care on the size of package but instead would prefer pump dispensers which are more expensive to produce than normal tubes. Our product characteristics were correspondent to the customer’s decision criteria in the selected market (Mexico, Chile, and Brazil). It was based on customers’ demand in those markets to cover different segments requirements. For example, we produced variations of toothpaste packaging and formulation such as: “Gel & Pump”.

Price

The price element in the marketing mix is known as how much the product or service is offered to the customer. The decisions taken for the price strategy should consider profit margins and the possible pricing strategy of the competitors. The price element must also include the discounts, list price, and financing of the product. In Allsmile, we managed to create a competitive advantage for our products targeting several segments. In each year, we had slightly decreased our prices among other competitors in order to attract as many customers as possible, while maintaining our costs and margins. Till date, we managed to achieve the highest cum/net regional contribution in our products. Our initial strategy was based on penetration pricing which is setting heavily low prices on new products to get involved immediately to mass market. The reason we have chosen this strategy in the early stage of market entry was to obtain a broader segment of the population and to increase market share. However, our strategy was not successful which has lead to having a negative net regional contribution. Subsequently, our next decision was to follow the main competitor’s pricing strategy and setting a price slightly lower. This strategy also included reviewing the decision criteria of each country and setting the price according to the weighting preference of each criterion. As for discounts, our strategy included examining the competitor’s highest units sold for each product, obtaining their price and discounts and setting the price lower while offering the similar discount.

Promotion

Promotion mix is one of the most significant types of marketing mix strategies to reach mass market. It is important to create brand name and in determining consumers’ insight about products or services. Our promotion budget for each market for Allsmile product was based on the budget allocated by the competitors. In each year, we would choose our main competitor with the highest net contribution, in order to place the promotion budget based on competitor’s decision. Similar strategy was applied for our advertising decisions in all of targeted countries. However, advertising campaigns was depending on the products selected and targeted segment of each country. Moreover, we used variety of advertising campaigns in order to increase the awareness and accessibility in newly entered markets. Those advertising were classified as adapted or newly created advertisement. Furthermore, we considered the advertisement to be adapted to language and culture to be relevant to markets’ values and norms. For example, in Mexico market most of our advertising was translated from English to Spanish language to make it more effective. Meanwhile, the promotion targeted mass audience from B2B perspective and struggled with various competitors in the market.

Place (Distribution)

The place element in the marketing mix includes decisions related to channels of the product distribution and the process of getting the product delivered to the target customer. The distribution decisions also comprises of market coverage, selection of channel member, and level of service. The first market entry in Latin America for Allsmile product targeted Mexico, followed by Chile for the fourth year then Brazil in fifth year. Production capacity for Chile and Brazil market was based on plant in Chile in the fourth year of the company operations in Latin America. However, we have monitored the shopping habits of the consumers and accordingly have assigned the number of sales force in the following distribution channels: traditional, hypermarket, self-service, and wholesaler. Hence, we have managed to generate more sales for the desired channel, which helped in achieving high profits as well as an increase in market share.