Caremore Company Evaluation

Caremore Company Evaluation On Behalf of AllStar By Glenn Roose & Robert Luttio

Caremore Brands:

Clean and White: Sold in Mexico and Brazil Caregate: We have no idea or data that shows where this is sold! From this lack of data, it must be assumed that this is a newly developed product line designed to expand their market share in the countries that they already have a presence in, to have a variety or products for market entry into additional Latin American countries, or both.

Caremore Production:

Unknown, as there is no information relating to where Caremore products are produced. There is also no information regarding where Caremore is based, or if they are importing their products into the 2 countries they currently market, or if they have production facilities in both countries. It is believed that they are based outside Latin America due to the high costs they pay in tariffs and freight compared to local and regional distributors. Along this same line of reasoning, they most likely have no facilities within Latin America since Caremore has one of the highest costs in tariffs and freight. Other distributors such as Evers and B+B have costs for tariffs and freight closer to those of their regional and local competitors, implying that they at the very least have facilities in Latin America, if not based there.

Distribution:

Caremore is currently only being distributed through hypermarkets. These hypermarkets are a new style of store that would typically be found in large cities. These are usually large stores with a wide variety of goods, and they typically purchase their inventory directly through the manufacturer, in essence, becoming a distributor through their network of stores. Many of the hypermarket chains are foreign owned or allies with a global distributor, such as Wal-Mart or Carrefour.

By selling through this channel, they avoid working with a “middle-man” in distributing and selling their goods. Consumers can buy -almost- factory direct and without having to pay too much of an additional mark-up. These hypermarket stores, due to their size and network, are also able to purchase in large quantities, thus are able to negotiate a better price with the manufacturer and pass on some of these savings directly to the consumer. Advertising and Promotion:

In this section, we will need to make 2 assumptions. 1. Clean & White is toothpaste designed to whiten teeth. 2. Caregate is basic toothpaste.

With the above two assumptions, we can see that Clean & White is a toothpaste that would be marketed for brightening your teeth, which is a benefit that would be targeted to younger consumers.

Caregate is toothpaste that is marketed as a basic product for dental care. Due to the fact that it is a basic formula, the benefit would be a lower production cost for the company and a lower price for the consumer. This would be targeted towards families. The chart listed below gives us a breakdown of the product, benefit and target groups as defined by Allsmile. We believe this to be true for Caremore as well. Source: Country Manager

As we continued to research Caremore and the Clean & White brand, we were able to decipher the amounts, in terms of local currency, that is being spent to advertise each brand in Brazil and Mexico. The charts below show how Clean & White compare to other brands in terms of advertising funds.

Market Share:

We can see that in Brazil, Clean & White has a 67.7% share of the market, with only one competitor, Eversmile, in the product type it sells. Clean & White holds roughly 18.7% of all market share overall with its one product offering. In Mexico, we can see that there is only one supplier of whitening toothpaste in the market, and that is Clean & White. With that one product, Caremore maintains roughly 22.0% of Mexico’s toothpaste market overall.

The chart below shows overall market share as broken down by manufacturer and country. We can see that the numbers for Brazil and Mexico are slightly different for Caremore than in the previous charts. It is possible that this difference can be attributed to “Caregate”, but again, we have no additional information on the Caregate brand that can support this assumption. Sales Force Expenditures:

Caremore was one of the more aggressive investors in terms of sales force, most likely due to them not being locally based or having any local facilities. The figures below compare the amount of money spent on sales personnel by each manufacturer in the Six Latin American countries. These costs include both direct sales as well as indirect and support functions. Due to Caremore using hypermarket marketing as its major distribution method and based on the assumption that they have no real local presence in Brazil or Mexico, there is a definite need to invest more in sales, especially to motivate vendors to carry their product.

Sales Force by Country Consolidated, Period 1

SF Exp. All Care Dris B+B Evers Loc. Reg. (mill.USD) Star more col Argentina 4.1 0.9 0.6 1.4 1.2 Brazil 18.6 5.0 4.7 3.6 2.0 3.2 Chile 2.1 0.7 0.8 0.5 Mexico 7.1 2.1 3.6 1.4 Peru 0.8 0.4 0.5 Venezuela 0.5 0.3 0.1 Overall 33.2 1.6 7.1 9.0 3.6 6.4 5.5

Country Manager team-05