Post on 25-Aug-2020
MARKET REPORT – CHILE
BA 447
ALI CHEEMABOBBY FERGUSON
JONATHAN JOHANSON
Chile Marketing/Country Situation
BackgroundPrior to the coming of the Spanish in the 16th century, northern Chile was under Inca rule while Araucanian Indians (also known as Mapuches) inhabited central and southern Chile. Although Chile declared its independence in 1810, decisive victory over the Spanish was not achieved until 1818. In the War of the Pacific (1879-83), Chile defeated Peru and Bolivia and won its present northern regions. It was not until the 1880s that the Araucanian Indians were completely subjugated. A three-year-old Marxist government of Salvador ALLENDE was overthrown in 1973 by a military coup led by Augusto PINOCHET, who ruled until a freely elected president was installed in 1990. Sound economic policies, maintained consistently since the 1980s, have contributed to steady growth, reduced poverty rates by over half, and have helped secure the country's commitment to democratic and representative government. Chile has increasingly assumed regional and international leadership roles befitting its status as a stable, democratic nation.
GeographyLocation: Southern South America, bordering the South
Pacific Ocean, between Argentina and Peru
Geographic coordinates: 30 00 S, 71 00 W
Map references: South America
Area: total: 756,950 sq km land: 748,800 sq km water: 8,150 sq km note: includes Easter Island (Isla de Pascua) and Isla Sala y Gomez
Area - comparative: slightly smaller than twice the size of Montana
Land boundaries: total: 6,339 km border countries: Argentina 5,308 km, Bolivia 860 km, Peru 171 km
Coastline: 6,435 km
Maritime claims: territorial sea: 12 nm contiguous zone: 24 nm exclusive economic zone: 200 nm continental shelf: 200/350 nm
Climate: temperate; desert in north; Mediterranean in central region; cool and damp in south
Terrain: low coastal mountains; fertile central valley; rugged Andes in east
Elevation extremes: lowest point: Pacific Ocean 0 m highest point: Nevado Ojos del Salado 6,880 m
Natural resources: copper, timber, iron ore, nitrates, precious metals, molybdenum, hydropower
Land use: arable land: 2.62% permanent crops: 0.43% other: 96.95% (2005)
Irrigated land: 19,000 sq km (2003)
Total renewable water resources:
922 cu km (2000)
Freshwater withdrawal (domestic/industrial/agricultural)
:
total: 12.55 cu km/yr (11%/25%/64%) per capita: 770 cu m/yr (2000)
Natural hazards: severe earthquakes; active volcanism; tsunamis
Environment - current issues: widespread deforestation and mining threaten natural resources; air pollution from industrial and vehicle emissions; water pollution from raw sewage
Environment - international agreements:
party to: Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Seals, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Marine Dumping, Ozone Layer Protection, Ship Pollution, Wetlands, Whaling signed, but not ratified: none of the selected agreements
Geography - note: strategic location relative to sea lanes between Atlantic and Pacific Oceans (Strait of Magellan, Beagle Channel, Drake Passage); Atacama Desert is one of world's driest regions
PeoplePopulation: 16,454,143 (July 2008 est.)
Age structure: 0-14 years: 23.6% (male 1,987,962/female 1,899,489)
15-64 years: 67.6% (male 5,556,867/female 5,563,666) 65 years and over: 8.8% (male 602,789/female 843,370) (2008 est.)
Median age: total: 31.1 years male: 30.1 years female: 32.1 years (2008 est.)
Population growth rate:
0.905% (2008 est.)
Birth rate: 14.82 births/1,000 population (2008 est.)
Death rate: 5.77 deaths/1,000 population (2008 est.)
Net migration rate:
NA (2008 est.)
Sex ratio: at birth: 1.05 male(s)/female under 15 years: 1.05 male(s)/female 15-64 years: 1 male(s)/female 65 years and over: 0.72 male(s)/female total population: 0.98 male(s)/female (2008 est.)
Infant mortality rate:
total: 7.9 deaths/1,000 live births male: 8.7 deaths/1,000 live births female: 7.06 deaths/1,000 live births (2008 est.)
Life expectancy at
birth:
total population: 77.15 years male: 73.88 years female: 80.59 years (2008 est.)
Total fertility rate:
1.95 children born/woman (2008 est.)
HIV/AIDS - adult
prevalence rate:
0.3% (2003 est.)
HIV/AIDS - people living
with HIV/AIDS:
26,000 (2003 est.)
HIV/AIDS - deaths:
1,400 (2003 est.)
Nationality: noun: Chilean(s) adjective: Chilean
Ethnic groups: white and white-Amerindian 95.4%, Mapuche 4%, other indigenous groups 0.6% (2002 census)
Religions: Roman Catholic 70%, Evangelical 15.1%, Jehovah's Witness 1.1%, other Christian 1%, other 4.6%, none 8.3% (2002 census)
Languages: Spanish (official), Mapudungun, German, English
Literacy: definition: age 15 and over can read and write total population: 95.7% male: 95.8% female: 95.6% (2002 census)
School life expectancy (primary to
tertiary education):
total: 14 years male: 14 years female: 14 years (2006)
Education expenditures:
3.2% of GDP (2006)
GovernmentCountry name: conventional long form: Republic of Chile
conventional short form: Chile local long form: Republica de Chile local short form: Chile
Government type:
republic
Capital: name: Santiago geographic coordinates: 33 27 S, 70 40 W time difference: UTC-4 (1 hour ahead of Washington, DC during Standard Time) daylight saving time: +1hr, begins second Sunday in October; ends second Sunday in March
Administrative divisions:
15 regions (regiones, singular - region); Aisen del General Carlos Ibanez del Campo, Antofagasta, Araucania, Arica y Parinacota, Atacama, Biobio, Coquimbo, Libertador General Bernardo O'Higgins, Los Lagos, Los Rios, Magallanes y de la Antartica Chilena, Maule, Region Metropolitana (Santiago), Tarapaca, Valparaiso note: the US does not recognize claims to Antarctica
Independence: 18 September 1810 (from Spain)
National holiday:
Independence Day, 18 September (1810)
Constitution: 11 September 1980, effective 11 March 1981; amended 1989, 1991, 1997, 1999, 2000, 2003, and 2005
Legal system: based on Code of 1857 derived from Spanish law and subsequent codes influenced by French and Austrian law; judicial review of legislative acts in the Supreme Court; has not accepted compulsory ICJ jurisdiction; note - in June 2005, Chile completed overhaul of its criminal justice system to a new, US-style adversarial system
Suffrage: 18 years of age; universal and compulsory
Executive branch:
chief of state: President Michelle BACHELET Jeria (since 11 March 2006); note - the president is both the chief of state and head of government head of government: President Michelle BACHELET Jeria (since 11 March 2006) cabinet: Cabinet appointed by the president elections: president elected by popular vote for a single four-year term; election last held 11 December 2005, with runoff election held 15 January 2006 (next to be held in December 2009) election results: Michelle BACHELET Jeria elected president; percent of vote - Michelle BACHELET Jeria 53.5%; Sebastian PINERA Echenique 46.5%
Legislative branch:
bicameral National Congress or Congreso Nacional consists of the Senate or Senado (38 seats; members elected by popular vote to serve eight-year terms; one-half elected every four years) and the Chamber of Deputies or Camara de Diputados (120 seats; members are elected by popular vote to serve four-year terms) elections: Senate - last held 11 December 2005 (next to be held in December 2009); Chamber of Deputies - last held 11 December 2005 (next to be held in December 2009) election results: Senate - percent of vote by party - NA; seats by party - CPD 20 (PDC 6, PS 8, PPD 3, PRSD 3), APC 17 (UDI 9, RN 8), independent 1; Chamber of Deputies - percent of vote by party - NA; seats by party - CPD 65 (PDC 21, PPD 22, PS 15, PRSD 7), APC 54 (UDI 34, RN 20), independent 1; note - as of 8 January 2008: Senate - seats by party - CPD 18, (PDC 5, PS 8, PPD 2, PRSD 3), APC 16 (UDI 9, RN 7), independent 4; Chamber of Deputies - seats by party - CPD 57 (PDC 16, PPD 19, PS 15, PRSD 7), APC 53 (UDI 33, RN 20), independent 10.
Judicial branch:
Supreme Court or Corte Suprema (judges are appointed by the president and ratified by the Senate from lists of candidates provided by the court itself; the president of the Supreme Court is elected every three years by the 20-member court); Constitutional Tribunal
Political parties and
leaders:
Alliance for Chile (Alianza) or APC (including National Renewal or RN [Carlos LARRAIN Pena] and Independent Democratic Union or UDI [Juan Antonio COLOMA]); Coalition of Parties for Democracy (Concertacion) or CPD (including Christian Democratic Party or PDC [Jorge BURGOS], Socialist Party or PS [Camilo ESCALONA Medina], Party for Democracy or PPD [Pepe AUTH], Radical Social Democratic Party or PRSD [Jose Antonio GOMEZ Urrutia]); Communist Party or PC [Guillermo TEILLIER]; Humanist Party [Marilen CABRERA Olmos]
Political pressure
groups and leaders:
Roman Catholic Church; United Labor Central or CUT includes trade unionists from the country's five largest labor confederations other: revitalized university student federations at all major universities
International organization
participation:
APEC, BIS, CAN (associate), FAO, G-15, G-77, IADB, IAEA, IBRD, ICAO, ICC, ICCt (signatory), ICRM, IDA, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, LAES, LAIA, Mercosur (associate), MIGA, MINUSTAH, NAM, OAS, OPANAL, OPCW, PCA, RG, UN, UNASUR, UNCTAD, UNESCO, UNHCR, UNIDO, Union Latina, UNMOGIP, UNTSO, UNWTO, UPU, WCL, WCO, WFTU, WHO, WIPO, WMO, WTO
Diplomatic representation
in the US:
chief of mission: Ambassador Mariano FERNANDEZ chancery: 1732 Massachusetts Avenue NW, Washington, DC 20036 telephone: [1] (202) 785-1746 FAX: [1] (202) 887-5579 consulate(s) general: Chicago, Houston, Los Angeles, Miami, New York, Philadelphia, San Francisco, San Juan (Puerto Rico)
Diplomatic representation
from the US:
chief of mission: Ambassador Paul E. SIMONS embassy: Avenida Andres Bello 2800, Las Condes, Santiago mailing address: APO AA 34033 telephone: [56] (2) 330-3000 FAX: [56] (2) 330-3710, 330-3160
Flag description:
two equal horizontal bands of white (top) and red; a blue square the same height as the white band at the hoist-side end of the white band; the square bears a white five-pointed star in the center representing a guide to progress and honor; blue symbolizes the sky, white is for the snow-covered Andes, and red represents the blood spilled to achieve independence note: design was influenced by the US flag
EconomyEconomy - overview:
Chile has a market-oriented economy characterized by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports account for 40% of GDP, with commodities making up some three-quarters of total exports. Copper alone provides one-third of government revenue. During the early 1990s, Chile's reputation as a role model for economic reform was strengthened when the democratic government of Patricio AYLWIN - which took over from the military in 1990 - deepened the economic reform initiated by the military government. Growth in real GDP averaged 8% during 1991-97, but fell to half that level in 1998 because of tight monetary policies implemented to keep the current account deficit in check and because of lower export earnings - the latter a product of the global financial crisis. A severe drought exacerbated the situation in 1999, reducing crop yields and causing hydroelectric shortfalls and electricity rationing, and Chile experienced negative economic growth for the first time in more than 15 years. In the years since then, growth has averaged 4% per year. Chile deepened its longstanding commitment to trade liberalization with the signing of a free trade agreement with the US, which took effect on 1 January 2004. Chile claims to have more bilateral or regional trade agreements than any other country. It has 57 such agreements (not all of them full free trade agreements), including with the European Union, Mercosur, China, India, South Korea, and Mexico. Over the past five years, foreign direct investment inflows have quadrupled to some $17 billion in 2008. The Chilean government conducts a rule-based countercyclical fiscal policy, accumulating surpluses in sovereign wealth funds during periods of high copper prices and economic growth, and allowing deficit spending only during periods of low copper prices and growth. As of September 2008, those sovereign wealth funds - kept mostly outside the country and separate from Central Bank reserves - amounted to more than $20 billion.
GDP (purchasing
power parity):
$252.9 billion (2008 est.)
GDP (official exchange
rate):
$181.5 billion (2008 est.)
GDP - real growth rate:
4% (2008 est.)
GDP - per capita (PPP):
$15,400 (2008 est.)
GDP - composition
by sector:
agriculture: 4.8% industry: 50.5% services: 44.7% (2008 est.)
Labor force: 7.32 million (2008 est.)
Labor force - by occupation:
agriculture: 13.2% industry: 23% services: 63.9% (2005)
Unemployment rate:
7.5% (August-October 2008)
Population below poverty
line:
18.2% (2005)
Household income or
consumption by percentage
share:
lowest 10%: 1.4% highest 10%: 45% (2003)
Distribution of family income
- Gini index:
54.9 (2003)
Investment (gross fixed):
23.7% of GDP (2008 est.)
Budget: revenues: $46.5 billion expenditures: $37.7 billion (2008 est.)
Fiscal year: calendar year
Public debt: 3.8% of GDP (2008 est.)
Inflation rate (consumer
prices):
8.8% (2008 est.)
Central bank discount rate:
6% (31 December 2007)
Commercial bank prime
lending rate:
8.67% (31 December 2007)
Stock of money:
$16.6 billion (31 December 2007)
Stock of quasi $80.42 billion (31 December 2007)
money:
Stock of domestic
credit:
$127.1 billion (31 December 2007)
Market value of publicly
traded shares:
$212.9 billion (31 December 2007)
Industries: copper, other minerals, foodstuffs, fish processing, iron and steel, wood and wood products, transport equipment, cement, textiles
Electricity - production:
50.37 billion kWh (2006 est.)
Electricity - consumption:
45.52 billion kWh (2006 est.)
Electricity - exports:
0 kWh (2007 est.)
Electricity - imports:
1.628 billion kWh (2007 est.)
Electricity - production by
source:
fossil fuel: 47% hydro: 51.5% nuclear: 0% other: 1.4% (2001)
Oil - production:
11,610 bbl/day (2007 est.)
Oil - consumption:
253,000 bbl/day (2006 est.)
Oil - exports: 32,500 bbl/day (2005)
Oil - imports: 222,900 bbl/day (2006 est.)
Oil - proved reserves:
150 million bbl (1 January 2008 est.)
Natural gas - production:
1.8 billion cu m (2007 est.)
Natural gas - consumption:
4.2 billion cu m (2007 est.)
Natural gas - exports:
0 cu m (2007 est.)
Natural gas - imports:
2.4 billion cu m (2007 est.)
Natural gas - proved
reserves:
97.97 billion cu m (1 January 2008 est.)
Current account balance:
-$1.574 billion (2008 est.)
Exports: $69.1 billion f.o.b. (2008 est.)
Exports - commodities:
copper, fruit, fish products, paper and pulp, chemicals, wine
Exports - partners:
China 14.8%, US 12.5%, Japan 10.5%, Netherlands 5.8%, South Korea 5.7%, Italy 5.1%, Brazil 5% (2007)
Imports: $59.17 billion f.o.b. (2008 est.)
Imports - commodities:
petroleum and petroleum products, chemicals, electrical and telecommunications equipment, industrial machinery, vehicles, natural gas
Imports - partners:
US 16.7%, China 11.2%, Brazil 10.3%, Argentina 9.9% (2007)
Economic aid - recipient:
$0 (2006)
Reserves of foreign
exchange and gold:
$21.99 billion (31 December 2008 est.)
Debt - external:
$64.57 billion (31 December 2008 est.)
Stock of direct foreign
investment - at home:
$108.9 billion (2008 est.)
Stock of direct foreign
investment - abroad:
$29.98 billion (2008 est.)
Currency (code):
Chilean peso (CLP)
Currency code:
CLP
Exchange rates:
Chilean pesos (CLP) per US dollar - 509.02 (2008 est.), 526.25 (2007), 530.29 (2006), 560.09 (2005), 609.37 (2004)
CommunicationsTelephones - main lines in
use:
3.379 million (2007)
Telephones - mobile
cellular:
13.955 million (2007)
Telephone system:
general assessment: privatization begun in 1988; most advanced telecommunications infrastructure in South America; modern system based on extensive microwave radio relay facilities; fixed-line connections have dropped in recent years as mobile-cellular usage continues to increase, reaching a level of 85 telephones per 100 persons domestic: extensive microwave radio relay links; domestic satellite system with 3 earth stations international: country code - 56; submarine cables provide links to the US and to Central and South America; satellite earth stations - 2 Intelsat (Atlantic Ocean) (2007)
Radio broadcast
stations:
AM 180 (8 inactive), FM 64, shortwave 17 (1 inactive) (1998)
Radios: 5.18 million (1997)
Television broadcast
stations:
63 (plus 121 repeaters) (1997)
Televisions: 3.15 million (1997)
Internet country code:
.cl
Internet hosts: 847,215 (2008)
Internet Service
Providers (ISPs):
7 (2000)
Internet users: 5.57 million (2007)
TransportationAirports: 358 (2007)
Airports - with paved
runways:
total: 79 over 3,047 m: 5 2,438 to 3,047 m: 8 1,524 to 2,437 m: 22 914 to 1,523 m: 25 under 914 m: 19 (2007)
Airports - with unpaved runways:
total: 279 2,438 to 3,047 m: 2 1,524 to 2,437 m: 12 914 to 1,523 m: 49 under 914 m: 216 (2007)
Pipelines: gas 2,550 km; gas/liquid petroleum gas 42 km; liquid petroleum gas 539 km; oil 1,002 km; refined products 757 km; unknown (oil/water) 97 km (2007)
Railways: total: 6,585 km broad gauge: 2,831 km 1.676-m gauge (1,317 km electrified) narrow gauge: 3,754 km 1.000-m gauge (2006)
Roadways: total: 80,505 km paved: 16,745 km (includes 2,414 km of expressways) unpaved: 63,760 km (2004)
Merchant marine:
total: 44 by type: bulk carrier 9, cargo 7, chemical tanker 8, container 1, liquefied gas 2, passenger 4, passenger/cargo 2, petroleum tanker 7, roll on/roll off 1, vehicle carrier 3 registered in other countries: 40 (Argentina 7, Brazil 1, Cyprus 1, Isle of Man 6, Marshall Islands 4, Norway 2, Panama 12, Singapore 6, Venezuela 1) (2008)
Ports and terminals:
Coronel, Huasco, Lirquen, Puerto Ventanas, San Antonio, San Vicente, Valparaiso
MilitaryMilitary
branches:Army of the Nation, Chilean Navy (Armada de Chile, includes naval air, marine corps, and Maritime Territory and Merchant Marine Directorate (Directemar)), Chilean Air Force (Fuerza Aerea de Chile, FACh), Carabineros Corps (Cuerpo de Carabineros) (2008)
Military service age
and obligation:
18-45 years of age for voluntary male and female military service, although the right to compulsory recruitment is retained; service obligation - 12 months for Army, 22 months for Navy and Air Force
Manpower available for
military service:
males age 16-49: 4,242,912 females age 16-49: 4,182,509 (2008 est.)
Manpower fit for military
service:
males age 16-49: 3,542,448 females age 16-49: 3,500,059 (2008 est.)
Manpower reaching militarily
significant age annually:
male: 147,518 female: 141,139 (2008 est.)
Military expenditures:
2.7% of GDP (2006)
Trans-National IssuesDisputes -
international:Chile and Peru rebuff Bolivia's reinvigorated claim to restore the Atacama corridor, ceded to Chile in 1884, but Chile has offered instead unrestricted but not sovereign maritime access through Chile to Bolivian gas and other commodities; Chile rejects Peru's unilateral legislation to change its latitudinal maritime boundary with Chile to an equidistance line with a southwestern axis favoring Peru, in October 2007, Peru took its maritime complaint with Chile to the ICJ; territorial claim in Antarctica (Chilean Antarctic Territory) partially overlaps Argentine and British claims; the joint boundary commission, established by Chile and Argentina in 2001, has yet to map and demarcate the delimited boundary in the inhospitable Andean Southern Ice Field (Campo de Hielo Sur)
Illicit drugs: transshipment country for cocaine destined for Europe and the region; economic prosperity and increasing trade have made Chile more attractive to traffickers seeking to launder drug profits, especially through the Iquique Free Trade Zone, but a recent anti-money-laundering law improves controls; imported precursors passed on to Bolivia; domestic cocaine consumption is rising, making Chile a significant consumer of cocaine
Total Sales
Toothpaste Sales in Chile, last six years (Millions of USD)5
years
ago
4 year
s ago
3 year
s ago
2 year
s ago
Previous Year
Current
Year
Sales per capita (USD)
59 65 69 78 78 83.1 5.16
Competitive Market Shares (%) in Chile
Company
Mfg. Sales (US$ -
M) B & B Caremore Driscol Evers Locals RegionalsMarket Share 83.1 11.5 0 0 0 56.8 31.6
Marketing Strategies of Competitors
Brand Formulation
Economy WhiteHealth
y Kids Smal
lMediu
m Large Tub
ePum
p PasteGel
Britesmile 3 3 3 2 3 3 2Local One 3 3 3 3 3 3 3 Regional One 3 2 3 3 3 3 3 3 Clean & White 2 2 2 2 2 Local Two 2 2 2 2Total 6 9 6 0 11 13 8 0 13 0 0 11 4
1st WhiteMedium Tube
Paste
2ndEconomy/Healthy Small Gel
3rd Large
Most common is whitening, medium size, tube, paste Next is Economy/Healthy, small size, tube, gel Competition does not market towards kids Pump is not used, only tubes
Benchmarking
Britesmil
eLocal One
Regional One
Caremore
Mfr. Sales (mill. CLP) 12,107.6
20,687.3 12,607.4 2,712.7
Allowance Expense 1,912.2 1,424.5 1,310.2 434.0
Cost of Goods Sold 5,431.410,464.
4 5,083.0 1,197.3Freight/Tariffs 259.3 105.5 47.6 67.0Gross Profit 4,504.7 8,692.9 6,166.6 1,014.4 Promotion 472.4 617.9 420.2 682.0Advertising 1,384.4 1,106.9 1,188.6 0.0Sales Force 663.1 496.9 504.0 124.9Administrative 861.0 798.4 871.5 273.6Total Marketing 3,380.9 3,020.1 2,984.3 1,080.5 Contr. After Mkting 1,123.8 5,672.8 3,182.3 -66.1 Fixed Costs 369.2 369.2 369.2 369.2Net Profit 754.6 5,303.6 2,813.1 -435.3
NET PROFIT Year One -612.5 7,488.3 4,366.2 0.0Year Two 809.7 8,268.8 3,328.6 -1,296.4Year Three 754.6 5,303.6 2,813.1 -435.3
Net Loss/Gain 951.821,060.
7 10,507.9 -1,731.7
Local One is leader Caremore performed poorly every year
Market share
Year Three Economy White Healthy Kids TotalUnit Sales (Mill.) 28.2 32.8 27.5 8.6 97.1
Allsmile 7.7% 15.5% 29.8% 100.0% 24.8% AllsmileBritesmile 0.0% 46.3% 0.0% 0.0% 15.7%Clean + White 0.0% 12.0% 0.0% 0.0% 4.0%Local One 67.3% 0.0% 46.7% 0.0% 32.7% Local OneLocal Two 0.0% 16.2% 0.0% 0.0% 5.5%Regional One 25.0% 10.0% 23.5% 0.0% 17.3% Year Two Economy White Healthy Kids TotalUnit Sales (Mill.) 35.0 29.6 28.1 2.0 94.7
Allsmile 1.5% 2.7% 4.1% 100.0% 4.7%Britesmile 0.0% 42.1% 0.0% 0.0% 13.2%Clean + White 0.0% 18.3% 0.0% 0.0% 5.7%Local One 75.3% 0.0% 68.2% 0.0% 48.1% Local OneLocal Two 0.0% 23.9% 0.0% 0.0% 7.5%Regional One 23.2% 13.0% 27.7% 0.0% 20.8% Regional One Year One Economy White Healthy Kids TotalUnit Sales (Mill.) 45.2 8.8 29.6 0.0 83.6
Britesmile 0.0% 100.0% 0.0% 0.0% 10.5%Local One 69.5% 0.0% 69.8% 0.0% 62.3% Local OneRegional One 30.5% 0.0% 30.2% 0.0% 27.1% Regional One
Local One consistently has largest market share Regional One runner up until third year Allsmile gained 100 percent of kids market by year two
Retail Sales
Year Three Retail Sales Traditional
Self Serve HyperMarket
Web/Other Home Overall
Total Sales (mill. CLP) 26,266 18,888 28,316 1,916 75,385Average Retail Discount 2.6% 4.6% 14.0% 13.9% 7.7% Allsmile 20.8% 27.0% 19.6% 0.0% 21.4%Britesmile 0.0% 15.7% 35.1% 57.0% 18.6%Clean + White 0.0% 0.0% 10.8% 0.0% 4.1%Local One 65.8% 19.9% 6.7% 0.0% 30.4%Local Two 13.4% 3.9% 0.7% 0.0% 5.9%Regional One 0.0% 33.5% 27.1% 43.0% 19.7% Total 100.0% 100.0% 100.0% 100.0% 100.1%
Hypermarket and Traditional sales most popular Local One dominates Traditional market Local One claimed most sales overall
Product Pricing
Year Three Year Two Year One
Three year Average
Average MSRP (CLP)
Average Allowance
Average MSRP (CLP)
Average Allowance
Average MSRP (CLP)
Average Allowance
Average MSRP (CLP)
Average Allowance
Small Britesmile 866 12.0% 797 12.0% 714 12.0% 792 12.0%Clean + White 782 12.0% 687 12.0% 735 12.0%Local One 642 5.0% 604 5.0% 577 5.0% 608 5.0%Local Two NA NA NA NA NA NARegional One 754 8.0% 714 9.0% 659 10.0% 709 9.0% Medium Britesmile 1047 12.0% 962 12.0% 852 12.0% 954 12.0%Clean + White 978 12.0% 852 12.0% 915 12.0%Local One 782 5.0% 742 5.0% 714 5.0% 746 5.0%Local Two 866 5.0% 824 5.0% 845 5.0%Regional One 959 8.0% 897 8.7% 824 10.0% 893 8.9% Large Britesmile 1257 12.0% 1113 12.0% NA NA 1,185 12.0%Clean + White NA NA NA NA NA NALocal One 950 5.0% 907 5.0% 879 5.0% 912 5.0%Local Two NA NA NA NA NA NARegional One 1146 8.0% 1085 8.5% 989 10.0% 1,073 8.8%
Three year market average price for small is (CLP) 711 Three year market average price for medium is 870.60 Three year market average price for large is 1056.67
Advertising
Year Three
BrandBudget
(mill. CLP) TargetBenefits Message
Britesmile 1,322.8 Younger WhiteLocal One 1,014.6 Families EconomyRegional One 1096.3 Older Economy
Year Two
BrandBudget
(mill. CLP) TargetBenefits Message
Britesmile 893.7 Younger WhiteLocal One 1,037.8 Families EconomyClean & White 926.6 Families HealthyRegional One 1140.5 Older Economy
Year One
BrandBudget
(mill. CLP) TargetBenefits Message
Britesmile 918.0 Younger WhiteLocal One 1,055.6 Families Economy
3 Year Totals Britesmile 3,134.5 Younger WhiteLocal One 3,108.0 Families EconomyRegional One 2,236.8 Older EconomyClean & White 926.6 Families Healthy
Britesmile only competitor to target younger market Regional One only competitor to target older market Economic benefit dominates
Promotion Channel
Year ThreeBritesmile
(B&B)Local One
Regional One Caremore Total
Traditional 0.0 522.6 0.0 0.0 522.6Self Serve 187.7 0.0 293.4 0.0 481.1Hypermarket 268.9 0.0 113.5 682.0 1,064.4Web/Other Home 15.8 0.0 13.3 0.0 29.1Wholesale 0.0 86.4 0.0 0.0 86.4Total 472.4 609.0 420.2 682.0 2,183.6
Year TwoBritesmile
(B&B)Local One
Regional One Caremore Total
Traditional 0.0 440.4 0.0 0.0 440.4Self Serve 102.7 0.0 308.5 0.0 411.2Hypermarket 153.0 0.0 113.1 356.4 622.5Web/Other Home 7.2 0.0 11.8 0.0 19.0Wholesale 0.0 71.1 0.0 0.0 71.1Total 262.9 511.5 433.4 356.4 1,564.2
Year OneBritesmile
(B&B)Local One
Regional One Total
Traditional 0.0 456.8 0.0 456.8Self Serve 0.0 0.0 461.9 461.9Hypermarket 353.1 0.0 160.5 513.6Web/Other Home 0.0 0.0 18.3 18.3Wholesale 0.0 71.0 0.0 71.0Total 353.1 527.8 640.7 1,521.6
3 Year TotalsBritesmile
(B&B)Local One
Regional One Caremore Total
Traditional 0.0 1,419.8 0.0 0.0 1,419.8Self Serve 290.4 0.0 1,063.8 0.0 1,354.2Hypermarket 775.0 0.0 387.1 1,038.4 2,200.5Web/Other Home 23.0 0.0 43.4 0.0 66.4Wholesale 0.0 228.5 0.0 0.0 228.53 Year Total 1,088.4 1,648.3 1,494.3 1,038.4 5,269.4
Most promotion in hypermarket Caremore markets exclusively in hypermarket Local One only company to market in wholesale
Sales Force Allocation
Year ThreeAll Star B+B
Caremore Local
Regional Totals
Traditional 5 0 0 15 0 20Self Serve 3 8 0 0 11 22Hypermarket 3 11 4 0 4 22Web/Other Home 0 3 0 0 3 6Wholesale 1 0 0 2 0 3Total 12 22 4 17 18 73
Year TwoAll Star B+B
Caremore Local
Regional Totals
Traditional 7 0 0 14 0 21Self Serve 0 4 0 0 12 16Hypermarket 7 6 12 0 4 29Web/Other Home 0 3 0 0 3 6Wholesale 0 0 0 2 0 2Total 14 13 12 16 19 74
Year One B+B LocalRegiona
l TotalsTraditional 0 15 0 15Self Serve 0 0 5 5Hypermarket 13 0 3 16Web/Other Home 0 0 3 3Wholesale 0 2 0 2Total 13 17 11 41
Hypermarket receives most sales force allocation Wholesale receives least sales force allocation
Distribution Coverage
Year ThreeTradition
al
Self Serv
eHyper
Market
Web/Other Home
Total
Outlets 1,031 307 106 111,45
5
Britesmile 0 78 64 6 148Clean + White 0 0 54 0 54
Local One 897 95 26 01,01
8
Local Two 897 95 26 01,01
8Regional One 0 156 64 6 226
Year TwoTradition
al
Self Serv
eHyper
Market
Web/Other Home
Total
Outlets 1,089 295 99 101,49
3
Britesmile 0 83 56 6 145Clean + White 0 0 46 0 46
Local One 948 91 27 01,06
6
Local Two 948 91 27 01,06
6Regional One 0 147 56 6 209
Year OneTradition
al
Self Serv
eHyper
Market
Web/Other Home
Total
Outlets 1,148 283 91 81,53
0
Britesmile 0 0 48 0 48
Local One 1,000 88 28 01,11
6Regional One 0 137 48 5 190
Accumulative TotalsBritesmile 0 161 168 12 341Clean + White 0 0 100 0 100
Local One 2,845 274 81 03,20
0
Local Two 1,845 95 53 01,99
3Regional One 0 440 168 17 625
Web/Other Home ignored except by Britesmile Local one and two focus on Traditional Clean + White focuses on Hypermarket only
Projected Sales
Prior to Market Entry
Period 1
Cross Section
% of Total
MarketSize of Market
Segment Totals
Younger/Economy 9.50% 7.94
20.48Younger/White 8.50% 7.11Younger/Healthy 6.10% 5.10Younger/Kids 0.40% 0.33Older/Economy 9.70% 8.11
18.64Older/White 4.70% 3.93Older/Healthy 6.70% 5.60Older/Kids 1.20% 1.00Families/Economy 18.30% 15.30
43.22Families/White 9.90% 8.28Families/Healthy 18.30% 15.30
Families/Kids 5.20% 4.35
Projected Sales
Upon Market Entry
Period 2 (Entry)
Cross Section
% of Total
MarketSize of Market
Est. Share of Target
Projected Sales
Younger/Economy 9.50% 9.00 1.5% 0.13Younger/White 8.50% 8.05 2.7% 0.22Younger/Healthy 6.10% 5.78 4.1% 0.24Younger/Kids 0.40% 0.38 100.0% 0.38Older/Economy 9.70% 9.19 1.5% 0.14Older/White 4.70% 4.45 2.7% 0.12Older/Healthy 6.70% 6.34 4.1% 0.26Older/Kids 1.20% 1.14 100.0% 1.14Families/Economy 18.30% 17.33 1.5% 0.26Families/White 9.90% 9.38 2.7% 0.25Families/Healthy 18.30% 17.33 4.1% 0.71Families/Kids 5.20% 4.92 100.00% 4.92
Total Unit Sales 8.77Total Market Share 9.26%
Total CLP Sales 6227.33
Total $ Sales $
12.23
Projected Sales
Period Three
Period 3
Cross Section% of Total
MarketSize of Market
Est. Share of Target
Projected Sales
Younger/Economy 9.50% 9.22 8.0% 0.74Younger/White 8.50% 8.25 16.0% 1.32Younger/Healthy 6.10% 5.92 30.0% 1.78Younger/Kids 0.40% 0.39 100.0% 0.39Older/Economy 9.70% 9.42 8.0% 0.75Older/White 4.70% 4.56 16.0% 0.73Older/Healthy 6.70% 6.51 30.0% 1.95Older/Kids 1.20% 1.17 100.0% 1.17Families/Economy 18.30% 17.77 8.0% 1.42Families/White 9.90% 9.61 16.0% 1.54Families/Healthy 18.30% 17.77 30.0% 5.33Families/Kids 5.20% 5.05 100.00% 5.05
Total Unit Sales 22.16Total Market Share 22.83%
Total CLP Sales 16370.10
Total $ Sales $
32.16
Projected Sales
Pricing
Pricing by Tube Size, Period 2 (Market Entry)
Focus on undercutting price of cost leader
Prices per item (CLP)
Size Cost Leader All Smile
Small 604 550
Medium 742 700
Large 907 870
Production Implications
In order to become successful in another company, our group will have to figure out a
few things. The first is finding what type of product customer likes. The second will be whether
or not we will not to build a factory. That may or not save money because of the benefit from
not shipping product as compared to the cost of building a factory.
When considering whether or not to build a factory, there are a few things that need to be
looked at and evaluated. First will be tariffs and duties you have to pay if you have a factory in
the United States and are shipping the toothpaste to Latin America. The second is shipping rates
for the toothpaste. Last, you have to consider what the volume of production for your company
will be.
First, let’s look at tariffs and duties. Because we are looking at market entry into Chile,
we have to look at tariffs between the US and Chile. Because of the trade treaty MERCOSUR,
there are no tariffs between the two countries. This isn’t going to have a significant pull on the
decision to produce in the US or Chile.
Next, let’s take a look at shipping rates between the US and Chile. Based on production
of product in millions of dollars, it is going to save about 11 percent as compared with
production cost to the US. In the event that we were going to branch out into other Latin
American countries, we definitely would want to create a factory in a Latin American country.
The shipping costs are about a third of the cost as if we would ship from the US.
The third factor we are going to look at is the amount of production we are going to
experience. During the practice rounds, it definitely seemed as though we were going to
experience the cost benefit. It seemed as though after the second year, we had already
experienced the cost benefits.
Based upon the prior information, I would say that creating a factory would be most
advantageous. It would cut down on the administrative costs, which is going to drop down as
soon as the factory is finished. It takes one year to create the factory.