Joe Willis: Feeling the Heat in Thailand

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Country:| Period 1| Period 2| Period 3|
China| N/A| * China was chosen for largest populations, lower tariffs and shipping cost from Thailand plant (China is the largest if India is compared to). * Market attracted to economy toothpaste (our brand specialty) and sales toothpaste enormously high. | | Distribution| N/A| Huge sales force in China based on market competition; therefore in large, expensive sales force and unjustifiable promotion budget.| Product drastically decreased sales force by over 50%. Despite huge population people could not afford such a large sale force expenses. Promotional budget dropped by over 50 million CNY as well. | SKU| N/A| Toothpaste entered to SKU into China based on market preference which was chosen economy toothpaste. Product was priced based on market competition. It was stayed average to test market. | Product drastically increased prices to be highest in the market. Capacity of plant was not large enough to support any sales in China and tried to drop unit sales in order to cut cost of production.| Advertising| N/A| 100million CNY in promotional budget focused on older and younger based on shopping habits and decision criteria.We adapted marketing campaigns from Thailand to take into account language and market preference. | We cut advertising budget by 50million CNY (50%). Although budget for advertising now much lower than market competition. It main focus on for this period was minimizing cost and it did not also adapt campaign.| Production| N/A| Plant was remaining in Thailand. We did not produce new plant and there is also no change in capacity. Most of production destined for China coming from home plant, significant effect on COGS. | We tried to decrease cost and increase revenues by attempting to cut unit sales by increasing price. We were trying to reduce amount of production which is coming from home country. |
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