goldfish in japan - final
TRANSCRIPT
Ideas to Actuality (I2A)
MKTG 335 | December 4, 2014
Team MembersOlivia Aschenbrenner, William Hettler, Jacob Van Driel, Brandi Bawek, Jerad Lester, Tyler
Loomis
Table of ContentsExecutive Summary..............................................................................................................................4
Goldfish Introduction............................................................................................................................5
Researched Countries............................................................................................................................5
Japan.................................................................................................................................................5
Nicaragua..........................................................................................................................................6
Poland...............................................................................................................................................6
Final Selection......................................................................................................................................7
Chosen Brand........................................................................................................................................7
Challenges in Entering the Japanese Market.........................................................................................7
How Will Pepperidge Farm Benefit from Entering the Japanese Market?............................................8
Country Analysis..................................................................................................................................9
Economic Environment.........................................................................................................................9
Current Economic State....................................................................................................................9
Exports and Imports........................................................................................................................10
Economic Freedom.........................................................................................................................10
Cultural Environment..........................................................................................................................11
Language.........................................................................................................................................11
Religion...........................................................................................................................................12
Holidays, Traditions, and Rituals....................................................................................................12
Gender Equality..............................................................................................................................13
Cultural Dimensions – In Comparison to the U.S...........................................................................14
M-Time versus P-Time...................................................................................................................15
Significant Meanings of Colors.......................................................................................................16
Human Development Index............................................................................................................16
Cultural Values and Business Norms..............................................................................................17
Political Environment.........................................................................................................................18
Type of Government.......................................................................................................................18
Level of Democracy........................................................................................................................18
Assessment of Political Vulnerability.............................................................................................19
Legal Environment..............................................................................................................................21
Modern Day Legal System..............................................................................................................21
Cyber Law.......................................................................................................................................22
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Health and Labor Laws...................................................................................................................22
Starting a Business in Japan............................................................................................................23
Competitive Environment...................................................................................................................24
Japan’s View of Competition..........................................................................................................24
Product Improvement......................................................................................................................25
Current Competitive Environment..................................................................................................25
Competitors:....................................................................................................................................26
Orchids Chips..............................................................................................................................26
RITZ Crackers.............................................................................................................................27
Calbee Jagariko...........................................................................................................................28
SWOT Analysis..................................................................................................................................28
Strengths.........................................................................................................................................29
Weaknesses.....................................................................................................................................29
Opportunities...................................................................................................................................29
Threats............................................................................................................................................31
Marketing Plan and Implementation...................................................................................................32
Modes of Entry and Physical Distribution..........................................................................................33
Selecting a Mode of Entry...............................................................................................................33
Cultural Dimensions Influencing Mode of Entry............................................................................34
Economic Factors Influencing Mode of Entry................................................................................34
Looking Towards the Future...........................................................................................................34
Product and Branding.........................................................................................................................35
Brand Associations..........................................................................................................................35
Target Market Considerations.........................................................................................................35
Product and Brand Considerations..................................................................................................36
Existing Flavors:.........................................................................................................................36
New Flavors:...............................................................................................................................36
Country Considerations...................................................................................................................36
Promotion...........................................................................................................................................38
Advertising......................................................................................................................................38
Sales Promotions.............................................................................................................................39
Alternative Methods of Promotion..................................................................................................39
Price....................................................................................................................................................40
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Active versus Static Pricing............................................................................................................40
Price Skimming Vs. Price Penetration............................................................................................40
Variable Cost versus Full Cost........................................................................................................41
Price Customization versus Price Standardization..........................................................................42
Projected Results.................................................................................................................................42
Market Share...................................................................................................................................42
Profitability.....................................................................................................................................43
References...........................................................................................................................................46
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Executive SummaryAfter researching three countries (Japan, Nicaragua, and Poland) we selected to
pursue Japan as a viable new market for Goldfish crackers. This decision was made after
thorough consideration of a number of factors including the country’s economic, cultural,
political, legal, and competitive environment. In terms of economy, Japan is the third largest
in the world, behind the United States and China. This impressive statistic is made even more
impressive when the small land mass is taken into account. This geographic feature can even
be used as an advantage in terms of marketing and promotional activities. The cultural
dimensions of Japanese consumers differ from the United States in almost all aspects. This
will create some hurdles in terms of reaching the target market effectively. However, through
proper research and creative strategies it is not overly difficult to overcome. Japanese
consumers will also need to be persuaded to purchase the Goldfish brand over other snack
food competitors. Since the flour-based cracker market is relatively small, competitors
include companies that produce products like rice crackers and potato chips.
Following the selection and analysis of the country, certain marketing activities and
strategies needed to be determined. The mode of entry is perhaps the most important
consideration, since this determines how the product enters the country. Goldfish will be
manufactured in the United States, and we plan to use the services of an export management
company to act as a merchant in Japan. This form of indirect marketing will decrease the risk
involved, and decrease import barriers. Once the product is in the market, the brand will be
targeted towards children and their mothers who have the purchasing power. A variety of
promotions will be used to further entice consumers. These include television advertisements
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and flavor competitions. Consumers will purchase the product at a full-cost pricing strategy
at comparable prices to the United States.
As a result of our research and marketing decisions, we expect Goldfish to be
successful in Japan. The target population is large enough that market share is expected to be
sufficient enough for Goldfish to realize a profit. Through analysis of expenditures, revenues,
and other competitors, Goldfish crackers should be a valuable brand in Japan.
Goldfish IntroductionResearched CountriesAs a group we decided to research Japan, Nicaragua, and Poland as potential countries.
JapanJapan has a population of 126,659,683 people. This is a very densely populated area,
considering it is only 145,925 square miles. Of the entire population, native Japanese citizens
make up 98.5%. Considering that the Japanese love to idea of Americanization, there is a lot
of opportunity for an American company to strive. Japan’s economy has boomed recently,
with the election of Prime Minister Shinzo Abe in 2013. The Prime Minister enacted a new
plan to stimulate growth. Japanese citizens know this plan as Abenomics. After six months in
office, the price of the yen dropped significantly. This led to more competition in overseas
markets. Japan’s economy is experiencing an economic growth that it has not seen in years.
Despite the economic upswing, marketing is not a widely practiced in Japan, so introducing a
new product is more challenging. There are different reasons for this, a big one being lack of
marketing education. This, and the fact that there is no direct translation of the word
marketing in Japanese language. If you can make ads that appeal to the Japanese, you have a
good chance at your ad being successful.
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NicaraguaOne of the countries we chose to analyze for the placement of our product is the
Republic of Nicaragua. Nicaragua is located in the Central American region of Latin
America and the official language in Spanish. The population of Nicaragua is 6,071,045 and
has a population density of 51/km2. The recent history of Nicaragua has been filled with both
domestic and international conflict. These conflicts have made it difficult for the
infrastructure to develop and has actually caused the destruction of infrastructure. Other than
human conflict, Nicaragua is located in a very active seismic area called the Ring of Fire,
which has also caused destruct of infrastructure. For example; in the year of 1972, a very
deadly earthquake actually leveled the capital city of Managua and required the entire city to
be rebuilt. The current government of Nicaragua is a democracy, however, the political
culture in Nicaragua is extremely volatile and can sometimes result in very violent social
movements.
PolandAnother country we chose to evaluate was the Republic of Poland. Poland has a
population of approximately 38.5 million (2013) people. They joined the European Union in
2004 and are also a part of many international organizations such as the World Trade
Organization, Organization for Economic Cooperation and Development, United Nations,
etc. Impressively, Poland was the only country to avoid recession due to the 2008-09 global
financial crisis. Despite this economic achievement GDP per capita and unemployment rates
have remained below the EU average. Due to Poland’s past fight to become a free and united
country, the residents consider themselves members of a community. In Poland, there are
five different cultural regions that have different associated dialects, which would be an issue
when it comes to marketing.
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Final SelectionAfter comparing the different aspects of each possible country, Japan is the country
that will provide Pepperidge Farm with the best opportunity in a new market. When
compared to Nicaragua and Poland, Japan has a stronger economy and more reliable
infrastructure. The unitary parliamentary constitutional monarchy in Japan and political
history offers Pepperidge Farm with a stable socio-political atmosphere to operate under.
Both Nicaragua and Poland have very chaotic socio-political histories and current
environments. The high population density will also allow Pepperidge Farm to maximize
profits while limiting costs on mass advertisement.
Chosen BrandFor this project, we have chosen to pursue the Goldfish Crackers brand. Goldfish are
manufactured by Pepperidge Farm, which was founded in 1937 as a commercial bakery in
Norwalk, Connecticut. The company was eventually acquired by the Campbell Soup
Company in 1961, but still maintains its original identity. Pepperidge Farm has an impressive
global presence; the company offers products in over 45 countries and has relationships with
over 40 distributors in over 85 retailers around the world. Unfortunately for the residents of
Poland, Nicaragua, and Japan though, those markets have yet to be breached by Pepperidge
Farm. We chose this brand due to how versatile the cracker is, and the opportunities for new
flavors targeted at the Japanese market.
Challenges in Entering the Japanese MarketAmerica and Japan have fairly drastic cultural differences. This can be seen in the
way that businesses market and advertise their products in the Japanese market. Such cultural
difference can cause foreign companies to have difficulties when entering the market if they
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are not well informed of Japan’s cultural norms, history, politics, and more. Japanese culture
is evident in all types of advertising throughout the country and it is important to research
before marketing. Women are seen as the dominant group of consumers in Japan and most
companies will market towards woman more than men. Companies also tend to focus more
on humor and grabbing their customers attention instead of informing them of the actual
product when they advertise. This is different than American advertising which often focuses
on the product and informing the viewer. Finally, the language barrier between English and
Japanese is extremely different and cause problems to appear. Communication can become
difficult at times and the product and marketing strategy may need to be adjusted to work
with the different language.
Japan has the largest vending machines per capita in the world and convenience
stores are a frequent stop for most Japanese residents. Convenience stores have little floor
space to store their products and because of this they must choose carefully which products
they display. This has caused a short-life cycle among many snack products seen in
convenience stores and can cause problems with unprepared businesses. Consistent
advertising and marketing while creating new products is important to keep afloat in the fast
and competitive world of marketing in Japan.
The two main competitors look to be Kamdeda (#1 rice crackers and snack supplier in
Japan) and the exclusive Ritz crackers that have four different flavors (plain, cheese filled,
strawberry, and peanut butter) excluding seasonal flavors.
How Will Pepperidge Farm Benefit from Entering the Japanese Market?
As mentioned in the above paragraph, Pepperidge Farm products are offered in a
large number of countries worldwide. Since Pepperidge Farm is already present in the Asian
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market, expanding to Japan would be easier since the company wouldn’t have to start
completely from scratch; the overall cost wouldn’t be as high. The fast-paced society of
Japan is conducive for easy, to-go foods. That cultural aspect, coupled with the large number
of vending machines, provides Pepperidge Farm with a number of marketing opportunities.
In addition to this, Goldfish Crackers can increase their appeal to Japanese consumers by
expanding their flavor offerings, specifically in the “Flavor-Blasted” line. Goldfish has the
opportunity to offer flavors not currently offered in Japan which will help the brand to
distinguish itself from other snack foods, thus driving sales.
Country AnalysisEconomic EnvironmentCurrent Economic State
Japan has the world’s third largest economy, right behind China and the United
States. This was helped created by Japan’s ability to quickly recover and grow from World
War II especially in their automobile and electronics industries. Although their electronics
industry has fallen over the years their automobile industry is still ranked third in the world,
again right behind China and the United States. Their main exports include vehicles,
computer parts, chemicals, scientific instruments, and watches. Their exports made up
around $794 billion dollars while their imports are around $793 billion dollars. Japan
currently has a large public debt of around $10.46 trillion dollars and the CIA states that this
is 214.3% of their GDP. Surprisingly Japan has no loans or debts from the IMF and actually
has lend the IMF $100 billion to help strengthen the IMF.
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The current exchange rates for the American dollar is around 97.44 yen. Japan has a $4.6
trillion GDP which is about a 1.8% drop since last quarter after a sales tax hike hit the
nation’s household spending fairly hard. They currently have a 4.4% unemployment rate and
their inflation rate was recorded at 3.3 in 2014, a 0.1 drop from 2013. Also their average
monthly wage was around 542.09 USD in July 2014. They have been a member of WTO
since January 1995 and a member of GATT since September 1955. Japan also has economic
partnership agreements with the following countries: Singapore, Mexico, Malaysia, Chile,
Thailand, Indonesia, Brunei, ASEAN, Philippines, Switzerland, Vietnam, India, Peru, and
Australia. They currently have economic partnership agreement negations with Mongolia,
Canada, Columbia, China, Republic of Korea, and the European Nations. (Ministry of
Foreign Affairs of Japan)
Exports and ImportsThe labor force occupations are split up into the following categories: agriculture
(3.9%), industry (26.2%), and services (69.8%). Japan's biggest export partners are China
(18.1%), America(17.8%), South Korea (7.7%), Thailand (5.5%), and Hong Kong (5.1%)
while their biggest import partners are China (21.3%), America (8.8%), Australia (6.4%),
Saudi Arabia (6.2%), and UAE (5%). Their largest imports include crude petroleum (16.8%),
petroleum gas (10%), and refined petroleum (3.5%) Japan has restrictions on a few imports
such as narcotics, firearms, explosives, counterfeit currency, pornography, and different
types of agricultural and meat products. Other than these few restrictions Japan is fairly open
to exports and imports.
Economic FreedomThe 2014 Index of Economic Freedom rated Japan as the 25th “freest” rated
economy, and 6th out of 41 countries in the Asia-Pacific region. Unfortunately Japan’s lack
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of progress towards more economic freedom and a large public debt ($10.46 Trillion) has led
to their economy beginning to lag behind other countries that have been growing. Japan's
economy has fallen into recession three times since 2008 due to natural disasters and a sharp
decline in business investment and global exports. The government has slowly helped
recover from these incidents, however they are still not fully recovered. Although it is fairly
simple to start a business in Japan, certain licensing requirements and a cultural aspect to
guarantee lifetime employment can discourage business growth. Japan has a low average
tariff rate though (1.3%) and has high trade and investment freedom.
Cultural EnvironmentLanguage
Japanese is the official language of Japan. However, because English is a mandatory
part of the education system curriculum, many Japanese people have the ability to write and
speak English as well. Japanese vocabulary has been influenced by English as well as
Chinese and therefore contains many loanwords from these languages. When writing, the
Japanese use four different writing systems; Kanji (Chinese characters), Hiragana (phonetic
alphabet for native words), Katakana (phonetic alphabet for foreign words), and Romaji
(western alphabet used to write Japanese). With these writing styles, texts can be written in
two different ways. They can be written in the Western style which is writing horizontal rows
from the top of the page to the bottom, or in the traditional Japanese style which is writing in
vertical columns from the right to the left side of the page. Both writing styles exist in Japan
today. Depending on whom you’re talking to, an unknown person/superior or a child, family
member, or close friend, different words and expressions are used. For example, there are
more than five different Japanese words for the English word “I” depending on the context.
An honorific language level (keigo) is still in common use today for formal situations.
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ReligionJapan does not identify with any one religion, but three major religions are widely
accepted and/or practiced: Shinto, Buddhism, and Christianity (Christianity is the least
practiced of the three). It is not uncommon for a Japanese citizen to pull from multiple
religions and form a sort of hybrid, individualized system of beliefs; this practice is known as
syncretism. While religion does not play a major role in Japanese culture, religious
ceremonies are still held for certain life events such as the birth of a child, weddings, and
funerals.
Holidays, Traditions, and RitualsThere are 15 official public holidays observed in Japan annually:
January 1 - New Year's Day (Ganjitsu)The second Monday in January - Adult's Day (Seijin-no hi)February 11 - National Founding Day (Kenkoku Kinen-no hi)March 20 or 21 - Vernal Equinox (Shunbun-no hi)April 29 - Showa Day (Showa-no hi)May 3 - Constitution Memorial Day (Kenpou Kinenbi)May 4 - Greenery Day (Midori-no hi)May 5 - Children's Day (Kodomo-no hi)The third Monday in July - Marine Day (Umi-no hi)The third Monday in September - Respect-for-the-Aged Day (Keirou-no hi)September 23 or 24 - Autumnal Equinox (Shuubun-no hi)The second Monday in October - Health/Sports Day (Taiiku-no hi)November 3 - Culture Day (Bunka-no hi)November 23 - Labor Thanksgiving Day (Kinrou Kansha-no hi)December 23 - Emperor's Birthday (Tennou Tanjoubi)
It is also important to note that for each holiday that falls on a Sunday, that Monday is also
reserved as a day to observe the holiday.
Japan is a culture that has many traditions and rituals. Some of these rituals are
ceremonial, while some of them are taken very seriously, and individuals can be offended if
others do not follow them. One serious Japanese ritual is bowing. Bowing is a sign of
respect, and must be done as a greeting and a goodbye. The deeper and longer the bow, the
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more respect is being shown. Another custom of Japan is as an individual enters a premise,
they must remove their shoes. This holds true not only for households, but also at businesses
and hotels. Something that could be foreign to Americans is that tipping is not only not
expected, but it is actually insulting. Some customs of Japan can be confusing. In the United
States, it is considered rude to slurp liquids loudly as they are being eaten. This is the
opposite of true in Japan, where slurping loudly is a sign of gratitude and enjoyment. While
in public, however, individuals must be on their best behavior; it is considered rude to be on
a cell phone or to eat in public, and blowing one’s nose in public is considered extremely
offensive. These are just some examples of Japanese traditions, and as one can see, they are
very complex, and even things that seem insignificant to most Americans can be very
significant to the Japanese.
Gender EqualityThere is a slight difference in males/females in Japan. At birth, there are 1.06 males
per females of the category. Males are slightly higher than females until age 24, then females
outnumber males slightly for every age category following. The median age in Japan is 46.1,
with a life expectancy of 84.46 years.
The age structure is as follows:
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Cultural Dimensions – In Comparison to the U.S.
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Japan and the United States vary greatly when it comes to their cultural dimensions.
The United States is an information-oriented country, while Japan is more of a relationship-
oriented country. This can be determined by comparing the two countries’ Hofstede cultural
dimensions. While the United States scores higher than Japan in individualism and
indulgence, Japan scores much higher in masculinity, uncertainty avoidance, and
pragmastism. Japan also scores higher than the U.S. in power distance. Japan’s high score in
power distance suggests that they are a borderline hierarchial society. While this is true, they
are not hierarchial compared to the countries in their surrounding area. This is also true
pertaining to individualism. Japan’s low individualism score indicates that it is a collectivist
society, which is true. However, they are not as collectivist as their surrounding neighbors.
While Japan scores high in masculinity, this is not typical masculinity behavior shown in
most countries. The most competition is between groups of people. This is due to the
collectivist nature of their society. Japan’s uncertainty avoidence score is one of the highest
in the world, and this can be explained because of all the natural and man-made disasters that
have occurred in Japan’s history. This caused the Japanse prepare for almost anything. Japan
also scores very high in pragmatism, as the Japanse see this life as their one and only, and
must make the most of it. They also take a much more long term approach in corporate
Japan, seeking long-term gains for future generations rather than obsessing over quarterly
profits. Lastly, Japan scores low in indulgence, and have a culture of restraint. This is typical
for countries with more collectivist societies.
M-Time versus P-TimeThe Japanese work on both polychronic and monochronic time, however, polychronic
time is more dominant in Japanese, Middle Eastern, and Latin American cultures. In Japan,
train times, appointments, and scheduling are followed very closely and are run on very
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precise time schedules (monochronic time characteristics). When meetings begin,
polychronic time behaviors are followed and business decisions can take a very long time.
When dealing with foreigners and technology, the Japanese work on a monochronic time, but
work on a polychronic time in almost all other situations. They are polychronic when looking
and working inward, but have adopted the dominant monochronic time schedule when
working outward with the world. The Japanese are very flexible and comfortable with
compromises in order to satisfy the needs of a variety of people.
Significant Meanings of ColorsIn Japan, colors play a very important part in the culture and hold many meanings.
Black is a very powerful color representing death, destruction, fear, mourning, and
misfortune. It has also traditionally been a color of formality and has grown to represent
elegance because of Western influence. White is a blessed and auspicious color representing
purity and cleanliness. Red is a powerful color representing strong emotions rather than
ideas. It is the color of energy, heat, vitality, and power as well as love and intimacy. Yellow
represents courage, beauty and refinement, aristocracy, and cheerfulness. Orange in Eastern
cultures represents happiness and spirituality. When looking at the flag of Japan, the colors
white and red are present. In the flag, the white represents the honesty, integrity, and purity
of the Japanese people. The red disk sun (circle) represents the sun goddess, “Amaterasu,”
who is the founder of Japan and the ancestor of its emperors. It symbolizes the bright future
for Japan.
Human Development IndexJapan ranks 17th on the human development index. They have an index of 0.89. This
high rank means that Japan is a highly developed area, with higher average life expectancy,
better education rate, and higher incomes. Japan has an infant mortality rate of 2 per 1000
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live births. The adult mortality rate, female, is 46 per 1000. The adult mortality rate, male, is
84 per 1000. This statistic is particularly interesting because twice as many males die per
1000, per year. In terms of education, the average Japanese person attends school 11.49
years, however, the expected number of schooling is 15.3. 3.78% of GDP is spent on
education. It is said that literacy (age 15 and over can read and write) is 99% in Japan.
Cultural Values and Business NormsThe first aspect of business culture to take note on deals with business cards. Business
cards in Japanese business culture is huge! You better have a proper business card when
doing any sort of business deal in Japan. It is important to hand business card with two
hands, with Japanese language side facing forward. Keep them in a carrying case when not in
use.
The business attire is very conservative. Men should wear dark suits (October-April)
and gray suits (May-September). Absolutely do not wear a black suit with a black tie, as they
are reserved for funerals. Women typically wear trouser suits or longer skirt suits.
There are certain rules to follow for business meetings in Japan. You want to call an
hour or two before a meeting to confirm. Arriving early is expected (10 minutes). If you are
meeting with senior members, arrive even earlier. You must wait to be seated, as they have a
certain order of seating based on seniority. Note taking is expected, and lots of them!
Some of the shared values that Japanese people share are; doing your best, not giving
up, respecting your elders, knowing your role, and working in a group. These values are
taught early on, and continued throughout youth to develop the model Japanese citizen.
Social status is huge in Japan. Japanese people will interact differently with people
based on their age, social status, gender, and sibling rank. It is important to know who you
will be dealing with when going into a business meeting in Japan.
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Political EnvironmentType of Government
An important part of our analysis to bring Goldfish to Japan was to assess its political
environment and stability. Japan operates as a constitutional monarchy, similar to the United
Kingdom, Canada, Spain, and Australia. This type of governing system places power in the
hands of a monarch, but restricts their control through a constitution. In Japan, this monarch
is the Emperor. While the Emperor is the monarch of Japan, it is only a ceremonial title. He
holds no real power within the government of Japan, and is relegated to ceremonial duties.
This is unlike most constitutional monarchies in that the Emperor is not in line for any sort of
power within the government (like the VP or Secretary of State in the U.S.) and is viewed as
“a symbol of the State and the unity of the people.” The true power held by the government
lies within the three main branches – the executive, the legislative, and the judicial branches,
much like that of the United States. The executive branch is led by the Prime Minister, whose
role within the government is akin to that of the President of the United States. The
legislative branch is comprised of the House of Representatives, which is comparable to the
same-named organ in the U.S.; and the House of Councilors, which is comparable to the
Senate in the U.S. Finally, the judicial branch is comprised of the Supreme Court, and four
levels of lower courts – high courts, district courts, family courts, and summary courts – in
descending hierarchical order. Japan has followed this form of government since the end of
World War II, when they enacted the current Constitution of Japan. The political structure of
Japan is one that should be familiar to and easily entered U.S. corporations.
Level of DemocracyJapan enjoys a very high level of democracy, especially for a country in the Asia-
Pacific region, which averages 38% democratic freedom and only 5% freedom of the press,
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according to Freedom House. Also, Japan ranked 1.0 (on a scale from 1 to 7, 1 being best) in
three different categories – political rights, civil liberties, and their overall freedom ranking,
the same rankings as the United States. Japan is similar to the U.S. in other aspects of their
democracy as well, including internet freedom and freedom of the press. A few comparable
statistics are as follows –
Topic (0=best, high
value=worst)
Japan United States
Internet Freedom (0-100) 22 17
Obstacles to Internet Access (0-
25)
4 4
Limits on Content (0-35) 7 1
User rights violations (0-40) 11 12
Press Freedom Score (0-100) 24 21
Political environment (0-40) 14 10
While the United States has better rankings, Japan’s are comparable, and are extremely high
compared to the area.
Since Japan ranks so closely with the United States in all categories, the level of
democracy in Japan should not be a deterrent for corporations looking to enter the
marketplace.
Assessment of Political VulnerabilityLastly, we need to assess the political vulnerability in Japan. Japan has enjoyed a
relatively calm political environment. The last major change in the government of Japan was
at the end of World War II, when they went from being part of the Axis Powers to
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surrendering to the Allies, and adopting a similar form of government to that of the Allies.
Japan declared the Constitution of Japan on May 3rd, 1947. According to
theglobaleconomy.com, Japans index for political stability 0.98 (-2.5 – 2.5). While this may
not seem to a good value, it actually is better than most countries, as seen in the figure below.
Japan has been a member of the United Nations since 1956, and the World Trade
Organization since 1995. Since joining the WTO, Japan has globalized more and more,
improving relationships with other countries. Currently, Japan scores 89.96 out of 100 in
Political Globalization, a vast improvement since 1993, when they scored only 60.95. While
there are many different political parties in Japan, there are two main parties – the ruling
Democratic Party of Japan, and the opposing Liberal Democratic Party. These parties a split
for control in Japan much like the U.S., with the DPJ controlling the majority of the House of
Councillors and the LDP controlling the House of Representatives. Though these two
political parties are vying for control, they are not undermining the political stability of the
country. Currently, Japan is in trade disputes through the WTO with many countries.
Counties that have brought cases to the WTO against Japan are currently the U.S., the E.U.,
Canada, and the Republic of Korea. Conversely, Japan has brought many more trade disputes
to the WTO against other countries. Currently they include the U.S., the U.N., Canada,
Brazil, Argentina, Indonesia, China, Russia, and the Ukraine. Finally, Japanese nationalism
must be considered before entering the marketplace. Since the declaration of the Constitution
of Japan, modern Japan has more similarities to countries of the west than almost any other
eastern countries. Some consider the 1998 adoption of the anthem and flag as state symbols
to show an elevated level of nationalism in the country, as these symbols are associated with
Japanese nationalism during World War II. While nationalism in Japan may be on the rise,
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there is no indication that it will turn into animosity towards other countries.
Comprehensively, the vulnerability of the political environment of Japan is not something
that should greatly concern companies wishing to enter Japan.
Overall, Japan is a great country for a U.S. firm to expand into. Not only does Japan
have good relations with many other countries, it has a similar government to that of the
U.S., and is politically stable. These similarities to the United States makes Japan very
appealing to U.S. companies looking to expand globally.
Legal EnvironmentModern Day Legal System
The modern day legal system of Japan operates under a civil law system. This means
that the Japanese legal system relies on codified rules on laws. The Japanese law system has
been adapted with some influences from America and Germany before and after the end of
World War II. The influence from Germany can be seen in the civil code style of law. Japan
received influence from the American legal system which becomes apparent in the Japanese
constitution, labor laws, corporate law, and criminal procedure. Japan has adapted some
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aspects of its legal system to reflect its cultural beliefs. Codes on topics such as civil
procedure and bankruptcy have been edited in the most recent years. Japan has a very
different look to lawyers as well. Due to Japanese culture trends, there are not as many
lawyers per capita in Japan as in the United States. In Japan there is about one lawyer to
every 4,000 people and in the U.S. there is about one lawyer to every 250. The system for
trademarks and copyrights uses the civil code style of law, the first individual to officially
register their desired trademark, copyright, or patent with the government has the rights to
that item.
Cyber LawCyberterrorism in Japan is treated as any other crime and has severe fines and
punishments for anyone who is caught infringing on Japanese Cyber Law. For example,
anyone who is caught damaging documents or electronic-magnetic records that are currently
under public use can face up to seven years and no fewer than three months of jail time.
Fines related to cyber terrorism can change depending on the severity of the crime. Simply
using or providing another person a user’s credentials can result in a fine of no more than
500,000 yen and a year of penal servitude.
Health and Labor LawsThere are a variety of laws and health codes that apply to our business venture. Japan
has a long history of strict food codes that have been established since 1947 when the
Ministry of Health and Welfare was created. The Ministry of Health and Welfare, which is
now the Ministry of Health, Labor, and Welfare, enacted the Food Sanitation Act (FSA) in
1947. This Act was a comprehensive guide to food safety/hygiene and create a list system
for food additives. This list defined what additives are considered in Japan, how to measure
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them, standards for food coloring, and defined the process of the Designation of Food
Additives.
There are four major, modern laws in Japan that pertain to our food production.
These four laws are; the Food Safety Basic Law, Food Sanitation Law, Japan Agricultural
Standards Law, and Health Promotion Law. The Food Safety Basic Law is responsible for
the food safety regime and also created the Food Safety Commission. The Food Sanitation
Law created the Ministry of Health, Labor, and Welfare and ensures food in Japan meets
safety and sanitation laws. These acts are important to our company, because as a cheese
cracker manufacturer, there are many guide lines that we will have to follow to ensure that
our products do not violate any safety, sanitation, or labelling.
The labor laws in Japan are very modern and are quite comparable to the U.S. labor
laws with the protection it offers laborers. Some of the protections found under Japanese
labor laws include proper working conditions, equal treatment of workers, equal wages for
men and women, no forced labor, elimination of exploitation, and a guarantee of Civil Rights
to all individuals working in Japan. The minimum wage of Japan is currently set at ¥764 per
hour on average, but a revision to the current tax system is expected to cause a ¥15 increase
to the average minimum wage in Japan. Following the Transparency Index from
transparencey.org Japan has a score of 74. The higher the score the less corrupt a country is,
according to Transparency.org. This high score places Japan in the 18th highest spot out of
177 countries in the world for being the least corrupt.
Starting a Business in JapanWhen it comes to starting a business in Japan, it is currently ranked 29th out of 189
countries in the world for ease of starting a business. According to the World Back Group,
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the total process of starting up a company in Japan would take about 11 days. The process
for legitimizing a business in Japan starts with obtaining the certificate of seal registration
from the Legal Affairs Bureau for one day. Followed by the creation of the company seal and
registering at the Legal Affairs Bureau of the Ministry of Justice, both of which take three
days. The next three steps all take one day and involve filing documents with different
government offices. These steps include applying for the incorporation of your company, the
creation of a payroll office, applying for tax returns, notifying the municipal or prefectural
government for the commencement of the business, and filing for the appropriate labor
insurance and employment rules at the Labor Standards Inspection Office. The last two steps
take less than one day and are online procedures. These steps include setting up appropriate
health insurance, public welfare pensions, and employment insurance for the company and
the employees.
Competitive EnvironmentJapan’s View of Competition
In general, Japan is not the most competitive country. They embrace competition, just
not excessive competition. It has been getting better with time. According to Douglas E.
Rosenthal, there are three reasons why Japan is becoming more open to competition, “First,
there is already greater acceptance of free market ideas in Japan today than is generally
understood in the West.” Japan has been easing the restrictions on foreign trade and
international business. This is allowing competition to start forming in Japanese markets. The
second reason, “although Japan has been dramatically more protectionist than either the
United States or Europe, progress has been made over the last 10 years in increasing market
access, especially for many foreign consumer goods, although less so for durable goods or
services.” This has allowed for foreign companies to enter Japanese markets. It is a good
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opportunity for companies with products unique to Japan to succeed. Lastly, “dialogue is
possible because Japanese ideas of protection and market regulation are not qualitatively
different from corresponding ideas in the West.” The ideas they have about using barriers
such as tariffs are similar to ours. They just feel they should be used at a higher volume than
Western countries.
Product ImprovementJapan, with having such a high population, has many firms in each industry. A larger
economy has the ability to accommodate a greater number of firms per industry. This leads to
high levels of competition among local firms. Add in foreign firms trying to get their piece,
and it leads to intense competition in Japan. One source states, “While, for tradable goods,
foreign firms could pose even greater challenges, the domestic rivalry that occurs within
proximate areas can be more intense, given smaller differences in transaction/transport costs
facing firms and the home consumers more informed of domestic products.”
Having this high competition leads to great advances in technology. “Fierce domestic
rivalry and competition among firms lend themselves to high R&D intensity, and it would
have positive effects on advances in technology.” This is why we see many products coming
out of Japan that have never been worked up in the U.S. Japan works the best of the best, and
their products reflect that.
Current Competitive EnvironmentThere is a high amount of competition in certain aspects of Japanese business.
GlobalTrade.com says, “Japan’s industrialized, free market economy is the second-largest in
the world. Its economy is highly efficient and competitive in areas linked to international
trade, but far lower in protected areas such as agriculture, distribution, and services.” There
are several reasons why Japan has such a competitive environment in the area of international
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trade and international business. Japan is highly populated with small land mass. “Japan’s
reservoir of industrial leadership and technicians, well-educated and industrious work force,
high savings and investment rates, and intensive promotion of industrial development and
foreign trade produced a mature industrial economy.” This environment has led to many
foreign companies to consider Japan as a viable market to enter. Although competition exists
in areas of international trade, Japan’s protected areas such as agriculture, distribution, and
services tend to be much more cooperative.
The agriculture market in Japan works on the basis of cooperatives. According to
Yamashita Kazuhito of Nippon.com, “Due to food scarcity following World War II, the
government needed to take action to prevent rice from being sold on the black market for
high prices. To do so, the government formed the JA by reorganizing an entity that used to
regulate all aspects of farming villages during the war, from agriculture to finance.” It works
on a member system. If you are a member of the JA, you can use their services. These coops
even have their own banking system. They are authorized to provide loans and insurance.
They gained membership from a lot of small farming operations, and grew tremendously. So
instead of having a different companies competing in the agriculture market, everyone goes
through one source. That is why the agriculture and service industry is thought to be more
cooperative in Japan.
Competitors:We have identified three major brands as competitors to our Goldfish Cracker: Orchids Chips, Ritz
Crackers, Calbee Jagariko.
Orchids Chips
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Orchids Chips come in many flavors including cheese,
lentil pea, and shrimp. While they are both considered
snack foods, Goldfish would be able to position
themselves as more of a cheese flavored cracker, as
opposed to a cheese flavored curl. Goldfish also comes in a
variety of flavors, so the cracker can match, or even
exceed, Orchid’s diverse options.
RITZ Crackers
The second product that would be our competition is RITZ
crackers. RITZ is another multinational company that has marketed
its products in Japan. RITZ has formulated several products that
appeal to Japanese consumers like the RITZ cheese sandwiches or
RITZ Bitz Mango. In order to stay competitive with RITZ, we
would have to come up with unique flavors for this target market. Goldfish have the potential
to be a popular snack food product in Japan, but may have to be modified to appeal to their
taste pallet.
Calbee Jagariko
Jagariko are flavored potato stick snacks. They are very
popular in Japan, as they are made by one of the most
popular chip brands. They come in many flavors including;
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butter soy sauce, cheese flavor, and butter. They are 100% vegetarian. We will have to
position our product as a cracker, not potato chip/stick. If we have flavors similar to theirs,
we may be able to get their customers to shift to eating crackers. If we also advertise different
ways to pair the goldfish snack with other food (soups, dinner dishes, ect.) we could get more
people using our product in ways other than as a snack.
SWOT AnalysisStrengths Weaknesses
Orange = happiness, spirituality Already an international company Unique shape Multitude of flavors Fun snack
No correlation to health Structurally unsound (crumbly)
Opportunities Threats Expand into new, American-style
cracker market Concentrated population Roughly $794 billion in both imports
and exports each Easy to start a new business High population Comparable freedom of press/content Increasing interest in foreign
competitions High population of skilled workers Low land mass High population – large potential
consumer base Stable political environment Comparable political system to the
United States High level of democracy Low corruption
Licensing requirements Lifetime employment norm Large public debt Wide array for rituals, customs,
traditions Food and Safety Laws High protectionism American-style crackers aren’t
currently popular High uncertainty avoidance Low indulgence
StrengthsGoldfish crackers have a number of strengths in regards to this product’s ability to
enter the Japanese market successfully. For starters, the crackers themselves are orange,
which symbolizes happiness and spirituality in Eastern cultures. This factor alone lends a
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strength factor to the product, as the item will be viewed in a more positive light. The unique
fish shape is fun and helps attract consumers as a result of how playful it is. Not only do the
crackers look good, but they taste good as well. This is only emphasized by the large flavor
variety of Goldfish, so if a consumer happens to dislike one of the flavors they have others
they can turn to.
In addition to the product itself, Goldfish is already an international brand, which will only
help the brand expand to the Japanese market.
WeaknessesGoldfish crackers, as a product, do not have many blatant weaknesses. Most
importantly, the snack does not have any correlation to health. While it is better for an
individual’s health than potato chips, the crackers do not have any benefits for the consumer
other than taste. In addition to this, the crackers are essentially hollow. This makes them
prone to being crushed, and can create a mess in the packages.
OpportunitiesIn a broad sense, flour-based crackers are not abundantly produced in favor of the
more widely-accepted rice cracker. This gives Goldfish an innovation factor and the power to
be the leader in the new market. The concentrated population creates an opportunity for a
number of advertising campaigns. Since each campaign has a high likelihood of being seen
in a shorter amount of time, campaigns can be retired sooner, and new ones can be launched.
This advertising turnover can help stimulate interest in the product. Furthermore, the country
has similar freedom of press and content laws in relation to the United States. This means
that the content of each advertisement (while it will still need to be modified), won’t create
too many barriers for us as a company. We will be able to exploit these similarities to our
advantage. Japan is also active in international trade (roughly $794 billion in imports and
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exports each). This gives businesses more opportunities to sell to countries outside Japanese
borders, and therefore allows them to be more successful. Businesses are relatively easy to
start up in Japan; it requires less steps than in the United States. The total process, when done
correctly, only needs to take 11 days.
Japan is also experiencing an increasing interest in foreign competition. This is
helpful because it means that the country’s economy is in a good place, which increases the
likelihood that a new business will succeed. The high population of skilled workers located
in Japan will make it easier to open offices and a manufacturing plant in the country. In
general, Japan has a high population of people. This, combined with the low land mass,
makes advertising to a large number of individuals a more attainable goal at a lower cost. As
a whole, Japan’s political environment is strong as well. Currently it is in a stable state, and is
comparable to the political system of the United States. This will make it easier to transition
Goldfish from the U.S. overseas to Japan. Also similar to the U.S., Japan is among the top
countries on the transparency index, which means it is among the least corrupt countries in
the world. This is beneficial as it means that business practices will be more fair and easier to
navigate.
ThreatsGoldfish crackers face a number of dangers in expanding to the Japanese market.
There a certain licensing requirements that may hinder the growth of the business, and
increase the business development timeline. The food and safety laws, while important for
health reasons, will need to be reviewed in excess, and could create barriers to beginning
production and ultimately selling our product. This further threatens the timeline to achieving
actual sales. There is also a cultural norm of guaranteeing lifetime employment. This low
employee turnover rate could mean a lack of fresh, new, innovative ideas. The wide array of
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rituals and customs may be difficult to navigate as well. The threat of accidentally crossing
some cultural boundary is very real, and needs to be watched closely. Lastly, Japan currently
has a tremendous amount of public debt (10.46 trillion U.S. dollars), which could lead to
economic hardships, thus threatening the success of Goldfish crackers.
Japan’s people feel a high sense of protectionism over their country and the goods
produced nationally. The market may not view Goldfish crackers as a good product to invest
in due to its foreign roots. Also, from a product standpoint, American-style crackers are not
especially popular. While this is partially an opportunity, it may prove to be problematic if
consumers are not aware of their need or desire for this particular food. Unfortunately, Japan
scores high on the uncertainty avoidance dimension, which means individuals are less likely
to try something new. It may be more difficult to break into a new market as a result. In
addition to this, Japan scores low in the indulgence dimension, which means Japanese
individuals are less likely to spend money on items they don’t need.
Marketing Plan and Implementation Our target market in Japan for Goldfish will be families with children. Goldfish is a
fun snack for the entire family to enjoy. The reason we are targeting families with children is
because Japan is a very collective society and family input strongly influences decisions. We
want to target families, specifically with children, because Japan is also very high in
uncertainty avoidance. Children would be much more open to trying new things and would
then be able to influence their family members to try it as well. These families will live very
busy lives and therefore quick snacks on the go will work perfectly with their lifestyles. We
are targeting middle class families because Goldfish are reasonably priced. High class
families will more than likely buy more premium snacks and the low class might not be able
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to afford Goldfish. They will shop quite often because shelf life is relatively short in Japan.
This is perfect for Goldfish as a snack because then trying a package won’t be a very big
investment. By targeting this market, it will allow easy access to the children in Japan who
will then grow up consuming our product. This will allow for growth in the future as our
target market gets older.
The primary competitor for Goldfish in Japan is the Kameda Seika Company.
Kameda Seika Co. is the number one manufacturer of rice crackers and snacks in Japan with
the Kameda brand occupying more than five out of the top ten bestselling brands in the
Japanese rice cracker/snack market. Kameda Seika’s product development capabilities and
their manufacturing technologies allow them to cater to the constantly changing consumer
tastes of Japan. Their distribution capabilities also allow for 200 different rice cracker and
snack items to be available at market places all over Japan. They are a very old and
established company who holds a very strong presence in Japan. With Japan having a very
high uncertainty avoidance rating, Kameda Seika Co. is a trusted company.
Modes of Entry and Physical DistributionSelecting a Mode of Entry
In order for Goldfish to be successful in Japan, it is important that the correct mode of
entry into Japan is decided. There are many different factors, both about the company and the
country, that play important roles in determining the right mode of entry. After taking these
into consideration, it is our recommendation that Goldfish use indirect exporting to enter the
Japanese market. More specifically, Goldfish should hire an export management company to
act as a merchant in taking title and risk to the product and selling it to potential buyers in the
Japanese market. It would be safer for Goldfish to use an EMC as a merchant rather than an
agent because of Japans very high import tariffs on processed foods. Goldfish is an
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established brand, so we feel that they have enough brand equity to be appealing to a
merchant EMC. It will important for Goldfish to both choose a suitable EMC to work with
and monitor to make sure their product is being sold the way they want. Goldfish is a unique
product line of Pepperidge Farm, which is a global company that specializes in cookies and
other snacks. One advantage that Goldfish has is that Pepperidge Farm already offers their
products in over 45 countries worldwide, and maintains relationships with over 40
distributors and over 85 retailers around the globe. Some of these distributors and retailers
are also already located near Japan; including locations in Korea, Taiwan, Hong Kong, and
Guam. Japan does a lot of importing and exporting, and while Japanese tariffs are relatively
low for the most part, tariffs specifically pertaining to processed foods, like Goldfish, are
relatively high. It is for this reason that indirect exporting would be more beneficial than
direct exporting.
Cultural Dimensions Influencing Mode of EntryAnother reason for choosing indirect exporting is Japan’s cultural dimensions. In
particular, Japan is a relatively collectivistic culture, and also has extremely high uncertainty
avoidance. These two factors can contribute to individuals either not trying the product, or if
their friends don’t like it, it is not likely to be accepted by the group. This is a risk for
Goldfish to enter the Japanese market any more than exporting. If Goldfish invests a lot of
capital in Japan, and the product isn’t successful, they will lose much more than only
exporting their product. Indirect exporting lowers the risk for Goldfish by allowing them to
use established channels without spending additional capital.
Economic Factors Influencing Mode of EntryJapans unemployment rate is extremely low, coming in at around 4.3 in 2013, and
their gross national income is $46,140, which is higher than average for even high income
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countries. This means that the workforce in Japan already has jobs, and expendable income.
This presents risk for Goldfish if they want to become more directly involved in the Japanese
market, such as licensing, joint ventures, or foreign direct investment. While a higher
expendable income means that more people have money to buy their product, it also means
that if they want to penetrate the market more than exporting there is a risk that they won’t
find the labor force to be successful in Japan. Indirect exporting reduces this risk because
Goldfish won’t need to invest any more capital.
Looking Towards the FutureJapan is suitable for direct investment or domestic partnerships, due to its stable
political and economic environments. It is a very developed country and it is relatively easy
to start a business there. However, the fact that Goldfish has access to established distribution
channels within the area suggests they should consider exporting. Since Japan has very high
tariffs for processed foods, we feel it would be best to hire an export management company.
This company would act as a merchant for Goldfish, and would buy the product directly from
Goldfish and sell to retailers. This may create risks for Goldfish in that they wouldn’t control
their product anymore, but they would be able to avoid the extremely high import tariffs in
Japan for processed foods. Once a foothold in the market has been established, Goldfish
should then look into a more direct entry into the Japanese market, like a joint venture or
direct investment.
Product and Branding Brand Associations
In the general international market, Goldfish are viewed as a fun, easy snack with a
unique shape. The slogan, “The snack that smiles back” evokes positive feelings and creates
an association to happiness and good times. The brand name itself is supported by the strong
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history of goldfish in Japan as a popular animal to breed and own. As such, it will carry out
well in the new Japanese market.
Target Market ConsiderationsThe target market in the home country (United States) versus Japan are the same. In
the United States, Goldfish are targeted toward children, families, and mothers. In Japan, we
plan to pursue the same strategy. As explained earlier in the target market section, mothers
have the purchasing power to actually buy the product, and the children have the influence to
sway the decision. Despite the demographic similarities though, there are certain
psychographic and cultural differences.
On average, Japanese consumers rate high in uncertainty avoidance, collectivism, and
nationalism. This will make it more difficult to persuade individuals to branch out of their
normal purchasing activities to buy Goldfish. To counteract these differences, we will
incorporate elements of Japanese culture in the product such as language, new flavors, and
promotional activities (described in the Promotions section).
Product and Brand ConsiderationsIn consideration of the product itself, certain aspects need to be considered and
analyzed to determine which product attributes (if any) should be modified for the Japanese
market. Fortunately, the color of the product is consistent with existing brand associations. In
Japan, orange is associated with happiness and spirituality, which helps promote positive
feelings toward the product. The brand name itself also works well in the Japanese market
since it is one simple word, and easily translatable. Similarly, the goldfish logo is simple and
easy to recognize. It is a familiar shape and is unlikely to cause confusion among consumers.
It also furthers the positive image, since Japan views goldfish in such a positive light.
Specifically, the Yamabuki gold-colored koi fish represents wealth and prosperity.
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Under the Goldfish brand are a variety of products, so it is important to determine the
specific flavors of the cracker to offer. Below is a list of popular flavors we would like to
offer in Japan, including a few new flavors designed specifically to appeal to Japan’s cultural
tastes:
Existing Flavors: Cheddar, Cheddar – Colors, Parmesan, Original
New Flavors: Kimchi, shrimp, wasabi-ginger
Country ConsiderationsAs Goldfish seeks to enter Japan, the country itself needs to be analyzed in terms of
laws, packaging legalities, cultural view of foreign products, etc.
There are no laws in place protecting the brand in any way; the Goldfish name has yet
to be established in the market, and therefore should pose no legal issues. There are,
however, certain laws that need to be followed in regards to the packaging of the product.
Fortunately, these laws align fairly closely with those of the United States. On June 28th,
2013 a comprehensive Food Labeling Law was established which dictates nutritional
labeling and mandates the inclusion of allergen information on all pre-packaged processed
foods, including imports. Also important to note, food packaging labels in Japan are allowed
to be French, Japanese, or English. We plan on using a combination of English and Japan on
the packaging of the Japanese product. Specifically, The parent brand (Pepperidge Farms)
and the brand name (Goldfish) will be in English. The slogan (The snack that smiles back)
and the additional labeling requirements will be in Japanese. Since Japanese characters are
left up to much interpretation, we spoke with a native of the country to help us determine
how the slogan should be written in a way that would communicate the message correctly:
バック笑！顔スナック. The last important label component is the inclusion of the “Made In”/Mark
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of Origin. In Japan, not all products need this, however, foodstuffs fall under this restriction. As a
result, we would need to include the phrase, “Made in the United States.”
Further items that need to be considered are country of origin effects and how a
product based out of the United States will be viewed by Japanese consumers. Fortunately,
Japan and the United States have a firm and active relationship politically, economically, and
in regards to the military. This positive relationship means that Japanese consumers are not
likely to view Goldfish as a poor brand as a result of its origins. However, Japanese
consumers rank high on the protectionism and nationalism scale, so they are still less likely
to purchase international items. We hope that by including Japanese language on the
packaging we can help distance the brand from United States association.
Since the term ‘goldfish’ already has positive connotations, it is not necessary to
change the name of the brand. The only avenue we might consider is modifying the name
from Goldfish to Koi. Koi fish have strong Japanese origins and therefore might help negate
the high level of protectionism. The concern with this modification is that goldfish and koi
are not the same fish, so the images on the package, and the actual shape of the cracker may
cause some confusion or negative consumer reviews.
PromotionAlthough the product itself is the most important aspect, the promotion of the product
is usually the make or break with whether or not the customers are aware of the product and
if the product sells. Due to Japan’s densely populated areas we will focus on two main
elements of promotion for Goldfish: advertising and sales promotions. These two areas will
allow the most amount of people to grow awareness of the Goldfish brand while also creating
the opportunity to spread via word of mouth amongst the population.
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AdvertisingAdvertising in Japan is less focused on the features of the products or service and
instead on creating aesthetics and an emotional connection between the brands and the
customers. This is usually done by using unique design that stands out as well as creating
something that sticks in one’s memory (catchy jingles, crazy plots, celebrity appearances,
etc.) Most importantly Japan is known to be constantly changing and this is same with the
advertising and marketing world. The methods used must take advantage of the current time
and day and not expect to make a lasting impression.
Television is still the best medium to be used and therefore a set of commercials will
be made that will feature a Goldfish at various famous and well known locations in Japan
reenacting several famous scenes in famous movies throughout history. Every commercial
will end with a recognizable and catchy short tune followed by the phrase: “Goldfish.
Coming to a city near you soon” like a movie trailer. This will be an excellent way to catch
people’s attention beforehand while creating an awareness of the band before they even hit
the stores. Also the commercials will be able to relate to many different types of customers
by reenacting many different types of movies. Finally, when new flavors of Goldfish are
presented these different flavors can be used in different and fun ways in this set of
commercials if desired.
Sales PromotionsSince Japan’s culture is full of constant and frequent change it is important to supply
this change to the customers to ensure they do not get bored. This can be solved by creating a
flavor contest every year where customers create different flavors, then they vote on their top
two (or five?). After the final two are voted on they are sold for a few months until a final
vote is made and the winner is kept on the shelves for good while the creator will win some
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sort of reward (Lump sum of money or percentage of sales over first year). Also while the
final two are being voted on there will be giveaways at a variety of locations where you can
try one of each flavor for free and then vote. This can be done by a traveling vehicle (giant
recognizable Goldfish) that drives from city to city to create a small booth at highly visited
locations to share the free samples of each flavor and create a larger awareness of Goldfish.
It is important to stay within the guidelines and rules of giveaways and a good
overview of these restrictions can be found at Clifford Chance (see below).
Alternative Methods of PromotionJapan, especially Tokyo, have many different types of festivals that could be taken
advantage as well. Even creating very eye catching kites to catch people’s attention during
different kite festivals is another small and unique way to create new customers. The dense
cities allow for more traditional method to be used with a higher chance of awareness with
items such as billboards, screens in major areas like Shibuya crossing, and even newspapers.
Newspapers are used fairly often still in cities throughout Japan. Finally with Japan’s culture
with technology it could be smart to take advantage of mobile apps/websites as well. It is
hard to stand out amongst the many different companies that use technology since it is a big
part of Japan’s culture.
PricePrice is an important aspect for any product. It speaks volumes about a company’s
product when compared to its competitors. The Japanese Yen is the basis for the pricing
information to follow. 118.16 Yen is equal to 1 US Dollar.
Active versus Static PricingActive pricing is when the price for a product is directly influenced by supply and
demand. If demand is high, for instance, the price would increase. Static pricing on the other
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hand is not impacted by supply and demand. It remains relatively constant. Static pricing will
be used to sell Goldfish products. The price will continually readjust to maintain competitive
position. The price will not be affected by the demand for Goldfish. With the use of sales
promotions, the price will be shifted temporarily. This will help to increase demand. Demand
does not dictate the price.
Prices of various Japanese cracker products were analyzed, and majority were in the
five US Dollar range. Goldfish will likely range from 590.8 to 707.78 Yen. The price will be
determined based on competitor prices and sales promotions.
Price Skimming Vs. Price PenetrationWhen deciding how to enter a market there are two strategies to consider. Stan Mack
states, “A price skimming strategy focuses on maximizing profits by charging a high price
for early adopters of a new product, then gradually lowering the price to attract thriftier
consumers.” Price penetration, however, is the complete opposite. Mack explains,
“Penetration pricing occurs when a company launches a low-priced product with the goal of
securing market share.” This makes it difficult for your competitors to compete with the
product in the market. You also attract many customers to your brand versus the competitor
brand.
Price penetration is how Goldfish crackers will be sold in the Japanese market. This
will allow the brand to be recognized by consumers, and ignite initial sales. When Goldfish
becomes an easily recognizable brand in the market, position in the market can be changed
according to competitor pricing. This will allow for sales promotion have a significant effect
on consumer purchases. Raising the price, while adding various promotions, can greatly
increase consumers choosing Goldfish as their cracker of choice.
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Variable Cost versus Full Cost According to International Marketing 5th Edition, “In variable-cost pricing, the firm is
concerned only with the marginal or incremental cost of producing goods to be sold overseas
markets.” No other costs associated with the firm are taken into account with this pricing
method. On the other end of the pricing spectrum, full cost pricing takes a different approach.
The full cost pricing strategy is explained as such, “Companies following full-cost pricing
philosophy insist that no unit of a similar product is different from any other unit in terms of
cost and that each unit must bear its full share of the total fixed and variable cost.” These
companies take all the costs into account, and distributes these costs throughout all locations.
Products are then priced accordingly, based on regional competition in the market. All
products are considered equal.
Goldfish will use a full-cost pricing strategy. This extension of the brand will not be
using excess production. New lines will be created in order to produce the Japanese products.
We will be creating new products to suit the Japanese taste preferences. Along with product
itself, packaging must be created to be used in Japan. Variable costs associated with these
extensions are significant, and will require the full-cost pricing strategy.
Price Customization versus Price StandardizationPrice Standardization is when a company keeps a product universally priced
throughout different markets. They standardize the price, to remain constant across markets,
and remain in the same position against competitors in every region. Price Customization is
when a company changes the price based on the location where the product is being sold.
They usually have different strategies for each region, and determine the price that way.
Goldfish will be sold using price customization. Certain food categories are much
more expensive in Japan compared to the US. There are differences between US snack food
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products versus that of Japan. The first difference is in the packaging size.
ExploringTokyo.com proclaims the following about snack foods in Japan; “… the average
bag of chips in Japan is pretty close to the American ‘fun’ size. And that Japan’s BIG size is
close to the American’s average size.” What American’s would pay for a big bag, Japanese
consumers will only get a regular size bag value. “The Japanese super market is generally
more expensive than the American counterpart.” This is especially true for snack food items.
Items that are common to Japan can be found for much cheaper in Japan than the US.
Projected ResultsMarket Share
In Japan the market share for Baked Goods in Japan comprises about 14.42% of the
market share in the processed food industry. This percentage shows the great potential that
Goldfish has in this industry to capitalize on the already established market that is found in
Japan. The venture into Japan could provide the Pepperidge Farms Company with a
knowledge of East Asian cultures and will provide a gateway to the rest of the markets found
in East Asia. Any competitive advantage that is developed in Japan will be able to be used
by the Goldfish brand to establish similar strategies in order to corner a large share of other
markets in the surrounding area. Once a solid market share is established in Japan,
Pepperidge Farms will be able to begin the production and distribution Goldfish in the other
countries found in East Asia. Based off the researched that has been completed and other
experiences we estimate that Goldfish could gain about 15-20% of the Baked Goods market
share. This will be achieved with the unique personality of the Goldfish product and a very
responsive integrated marketing campaign that will promote the product.
The research completed for our product shows that the desired target market will
include about 80% of the population in Japn. The percentage amounts to approximately 126
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million people. Japan also receives about 10 million tourists every year which brings our
total target population to about 136 million people. The target market for our product is
families with children, which we can assume will consist of two adults and at least 2
children, so our target market can be expected to spend on average 590.8 to 707.8 Yen every
week. Due to the fact that our target market research is based off their discretionary income,
it can be expected that the average family will spend 30,721.6 to 36,805 Yen annually on
Goldfish products. From this data, if of the 80% of the population that falls within our target
market Goldfish is expected to capture a 20% market share of the Baked Goods market
ProfitabilityThe forecasted results of the Goldfish cracker is determined through an analysis of
foreign and domestic baked goods competitors. The forecast can be summarized the best by
comparing the Goldfish integrated marketing campaign to the current marketing strategies
developed by the Kameda Seika Company, LTD. The Kameda Seika Company, LTD is the
number one manufacturer of rice crackers and snacks. They are occupying more than five
out of the top ten brands in the Japanese rice cracker/snack market and produces over 200
different rice crackers. The total capital worth of the Kameda Seika Company is over
1,946,000,000 yen ($16,236,285.51) and the company had a total sales of 92,832,000,000
yen ($774,535,897.54). These figures from Kameda Seika are very promising for a new and
innovative cracker to enter the baked goods market; Goldfish.
The projected budget for Pepperidge Farm’s Goldfish initial entry allows for
expenses towards sales promotions and advertising campaigns, which totals to $500,000.00.
The advertising aspect of our budget will total to a $350,000.00 and cover TV commercials
and online advertisements. Two months prior to the actual release of there will be
commercials previewing the idea of Goldfish which will amount $200,000.00 of the funds
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allocated to advertising. When the product is finally released to the consumers of Japan,
$100,000.00 will be allocated to TV commercials that feature Goldfish and the remaining
$50,000.00 will be used for the online advertisements found on social media websites. The
sales promotion aspect of our integrated marketing campaign will require $120,000.00 of
physical paper sales promotions and $30,000.00 in online sales promotions. These sales
promotions will feature printable coupons and other offers from social media websites.
There will also be $500,000.00 allocated to the renting and staffing of a quality control center
for Goldfish products in Tokyo, Japan. The total investment for the first year will require
$1,000,000.00.
Depending on the success of the first few quarters of sales towards Goldfish products,
more expenses may be incurred if joint-ventures and direct investments are explored. . If the
total sales from Baked Goods in Japan was $34,070,900,000, a 20% share of that market
would result in Goldfish sales of about $6,814,180,000. When taking these initial expenses
of $1,000,000.00 and comparing them to the projected sales, the total sales revenue will be
$6,813,180,000.00.
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