week 5 final paper-selling dairy in japan

Running head: ORGANIC DAIRY IN JAPAN 1

Week five final paper: Marketing Dairy in Japan

Janeen Vurro

BUS 343 International Marketing

Instructor: John LaCasse

December 7, 2015

ORGANIC DAIRY IN JAPAN 2

Developing a well thought out detailed international marketing strategy requires a great

deal of research and planning. Among many others some of the most important details to acquire

knowledge on are whether there is a demand for that product in the chosen country, the country’s

economic stance, and trade sector impact. Knowledge on political, legal, and socio-cultural

environment are of importance. Then for the planning process a study of competitors and a

detailed list of marketing objectives towards the target market are significant. Finally the last

steps to planning out a marketing strategy are descriptions of the promotional, distribution, and

pricing decisions that will best fit the product.

Dairy products are considered to be extremely vital to diets of many different cultures.

Products that are considered dairy are milk, butter, yogurt, cheese, cream, and whey protein.

Many countries have different variations of each types of diary product. Internationally

marketing of not just dairy products, but natural and organic dairy products can be very

beneficial to a number of countries. Japan is suspected to increase its share of imports of dairy

products in the future (Christou, 2005). With this knowledge marketing organic dairy products in

Japan can be a successful mission. Natural organic dairy consumption can be beneficial in that it

promotes stable weight control, lessens the chance of coronary disease, diabetes, hypertension,

and many other cancers (Prentice, 2014). The idea behind the promotion of these dairy products

is also a promotion of good health. With the vast availability of dairy in the United States

exporting these goods can be successful and beneficially to Japan.

Before the development of an effective marketing strategy of natural organic dairy

products in Japan, there are many other aspects to this country that are vital to know. First a

study of the Japanese history is in evident. Throughout time Japan has exhibited a strong sense of

loyalty. This is seen in the text, International Marketing the 15 th Edition as Phillip Cateora (2011)


explains “Historically, loyalty and service, a sense of responsibility, and respect for discipline,

training, and artistry were stressed to maintain stability and order” (p. 56). This is great to know

in that if you are good and respect the Japanese they will do the same to you, and a bond can

easily be formed. When marketing a product in Japan one key to remember is to treat them

kindly.

Another good aspect to conduct research on are the issues Japan currently faces. For

example food consumption and weight control is a big problem in Japanese culture today. In

2008 a health survey conducted by Ministry Health concluded that 26 percent of women in their

20s leave home without eating breakfast as well as 22 percent of women in their 30s, 30 percent

of men in their 30s, and 27 percent of men in their 40s. Other results indicate that 36 percent of

men in their 40s and 30 percent in their 20s are overweight, while 22 percent of women in their

20s and 17 percent in their 30s are underweight or extremely underweight (Assmann, 2011).

These results indicate a demand for healthier living in Japanese culture. With the introduction of

more natural dairy products and the benefits that arise from consuming these products indicate a

possible successful notion of selling dairy internationally in Japan.

Introducing natural organic dairy products can be of great interest to the Japanese in

one main way. Since milk and bread had become popular in Japan after World War II, dairy has

become important to their diet, but has also caused many to become overweight (Cateora, 2011).

It is already proven that the Japanese enjoy consuming dairy, in fact Japan currently imports a

volume of 113 billion dairy products, which even more exemplifies their demand for dairy

(AHK, 2010). It has also been stated that cheese is becoming popular in Japan and is expected to

increase in value (Euromonitor International, 2015). Furthermore by introducing the Japanese a

healthy version of these products there is a good chance at a victory, for varieties and healthy


options are popular in Japan. Likewise by focusing on the natural organic healthy dairy protects

this helps support Japan’s focus on healthy food intake. To further establish the seriousness of

Japanese health Japan has recently developed several programs to teach the importance of

healthy eating (Assmann, 2011). Marketing healthier food options in Japan has the ability to go a

long way.

Japan’s economic stance is also a big concern when constructing an international

marketing plan. It is important to have a general understanding of the country’s economy in

which you intend on doing business in to be aware of what people can afford. First it is necessary

to research the gross domestic product (GDP) per capita to learn the domestic growth in Japan.

As of 2013 Japan had a GDP per capita of 37,100 dollars (CIA World Factbook, 2015). This

GDP per capita value explains Japan’s purchasing power divided by population and displays

high standards of living, meaning many people of Japan can afford high end products. Therefore

if the value of the natural dairy offered is worth the price the Japanese can afford to pay it.

Not only is the economic stance of Japan important knowledge to acquire, but trading

sectors are essential to know as well. There are many trade barriers in place that can affect the

ability of a business to be successful internationally. In Japan there are a number of important

features to trade to recognize. Japan can be very strict on what they let into their country and

they also have very different standards than the United States, which are considered nontariff

barriers (Cateora, 2011). Another aspect to note on trading with Japan is that they currently have

high tariffs on agricultural products, which can include dairy, but their participation in the Trans-

Pacific Partnership may result in negotiating away those high tariffs (Cooper, 2014). It may be

initially expensive to internationally market organic dairy products with Japan, but that is

looking to change in the future. Depending on the dairy product tariffs range from 0-40 percent,


however, higher tariffs are placed on products with added sugar (Obara, 2005). This information

establishes that tariffs on naturally organic dairy products shall be lower. Acknowledging this

details on trading with Japan will help establish proper regulations to follow and will illustrate a

basis for cost to export to them.

Another vital detail to study is the country’s political environment and legal system. The

text International Marketing the 15 th Edition Cateora (2011) explains the importance of this when

stating, “No company, domestic or international, large or small, can conduct business without

considering the influence of the political environment within which it will operate” (p. 160).

Accepting the way the political system works in Japan is relevant in realizing the rules to follow,

and understanding how to abide by them. It is crucial to comprehend that Japan is a follower of

code law, which is an all-encompassing system that is typically guided by the codes of

commercial, civil, and criminal (Cateora, 2011). Code law includes all appropriate aspects under

the present code prescribed in a registration to determine ownership (Cateora, 2011). A thorough

comprehension of the way Japan conducts under code law is critical in abiding by their laws.

Understanding the socio cultural differences between the countries conducting business is

another important aspect to learn. In Japan there are many different cultural differences than

there are in the United States. For instance prolonged eye contact in Japan is offensive to them

(Cateora, 2011). Another great fact to learn about Japanese culture is the bow. By bowing to the

Japanese indicates your interest in their culture, and shows respect (Cateora, 2011). It is also very

important for Japanese to form relationships and be part of a group. These details of the culture

of Japan will lead to trustful way to show respect when conducting business relations.

Once appropriate background research is collected on the customs of the country, the

economic stance of the country, and the trade barriers and regulations it is then necessary to


determine a target market within that country. The idea behind internationally marketing

naturally organic dairy products in Japan is to assist in fulfilling the demand on developing a

healthier lifestyle throughout the country. Therefore one target market will be families with

children. The reason behind promoting to families with children is because mothers of all

nationalities strive to provide a nourishing healthy diet for their children. Not only do children

receive more nutrients from organic dairy, but as revealed in the article, “Organic Eating and

Your Children: The Benefits” Organica Fresh (n.d.) “In fact, a study in the British Journal of

Nutrition showed that 815 two-year-olds who ate organic dairy products had fewer incidents of

eczema and wheezing than did the control group, who ate conventionally grown dairy foods” (l.

12-15). As long as awareness of these benefits are publicized alongside these dairy products

there is a positive encouragement towards families to purchase them.

Families are proven be a great target market for these natural organic dairy products,

however, overweight individuals in Japan can also be a great target market. Becoming

overweight in Japan is a huge deal. Furthermore to help prevent the Japanese from becoming

overweight Japan as what is called The Metabo Law in place. The Metabo Law is designed to

council, teach, and motivate weight loss to those individuals that exceed the appropriate waist

limits that are set (Jayarajan, 2011). In order to promote organic dairy to these people it can be

necessary to stress that these products can help keep you way from The Metabo Law.

The next piece of information that is crucial to gain knowledge on for a potentially

successful marketing strategy are the existing competitors in that product category. Since dairy is

such a broad category there is a great amount of dairy providers in Japan. For cheese the current

leading provider in Japan is Magmilk Snow Brand Co Ltd with their extensive availabilities of

processed and unprocessed types of cheese (Euromonitor International, 2015). This company has


been successful in promoting the use of cheese when cooking. Knowing this information can

push for promoting a new variety of cheese that these families can add to their meals.

Understanding the successful measures of the major competitors will even allow for an initiative

to enhance these measures and develop new marketing ideas.

There are also several providers of milk that have been prosperous in Japan as well. The

one provider that is leading in milk sales in Japan is Meiji Co Ltd (Euromonitor International,

2015). This competitor offers a fresh milk to the market, and strives in the health category, which

is similar to the natural organic milk that is expectantly in the plan for exporting to Japan. A key

feature to collect about Meiji Co Ltd is their popular Meiji Sports Milk, with added protein this

drink is marketed towards active individuals (Euromonitor International, 2015). This information

states what aspects make Meiji Co Ltd the leading brand of milk, and also helps provide a guide

in marketing a new brand of milk.

Then there is yogurt which is the most popular dairy product consumed in Japan. Yakult

Honsha Co Ltd is currently the most successful yogurt and sour milk provider with a 24 percent

value share (Euromonitor International, 2015). While there are many other yogurt providers

Yakult Honsha Co Ltd is able to stay in the lead with their vast amount of options and their

pro/prebiotic drinking yogurt (Euromonitor International, 2015). These records help display what

it that Japanese are looking for in their yogurt. The types of yogurts that have the ability to sell

are those that are beneficial to one’s health, as well as different flavors and different ways to

consume it. Studying these top companies in Japan reveal decisions that have chances to

succeed.

The next step to the international marketing process is to determine the type of marketing

objectives that will work best for the product. There are a number of different routes to take to


achieve this. First developing brand awareness is crucial. This can be accomplished by giving out

free samples at a variety of different location. These free samples can establish a basis for word

of mouth advertising. Another great way to being out brand awareness is to partner up with

already successful company in Japan. Since the idea is the promotion of healthy dairy products a

great company to team up with is Konami Sports Club. Konami Sports Club is one of the most

popular fitness centers in Japan, located from Tokyo to Osaka, Kagawa and Fukuoka (Webb,

2013). Both companies can establish a great partnership with the core of promoting a healthy

lifestyle.

Another marketing objective that can be efficient to use in Japan is enhance customer

relationships. As previously stated a big trait to the Japanese is loyalty. To establish a loyal bond

with the Japanese and these dairy products it is necessary to establish a trusting, friendly, and

caring relationship with customers. This can be achieved through the use of specialty marketing

by giving out free products. For example once a customer purchases five of the dairy products

their next purchase can be free. A lot of companies take advantage of these top of programs and

they are seen to be successful. These promotional tools are proven to work in bringing new

customers in with rewards, or just rewarding existing customers (Webb, n.d.). Everybody enjoys

getting free stuff, and by giving out free products to Japanese customers can be a pronounced

way to secure a bond.

The final step to the international marketing strategy is to develop promotional,

distribution, pricing choices. Besides word of mouth, partnering, and specialty marketing there

are many other ways that can effectively promote these dairy products in Japan. The creation of

billboards places throughout the country can also help with promotion. It is important to use as


much advertising miens as the company can afford to bring out the most awareness of the

products.

Once awareness is proclaimed, distribution then becomes the focus. Most dairy products

need to be kept cold, which can make distribution more costly and more difficult. First it is

important to secure a contract with the appropriate middlemen in which the natural products are

coming from. Then it is necessary to establish quick transportation routes from the middle men

to a quality assurance team and then to Japan. It is absolutely apparent to have refrigerated trucks

as well as refrigerated planes to transport the dairy as fresh as possible. Since the transportation

and distribution of these goods need to be done as quickly as possible it is vital to have the costly

funds to make that happen.

Finally the last portion to this international marketing strategy is to determine appropriate

prices for the products. Many aspects are evaluated in order to determine the price of a product.

Things that play a factor in this include, distribution process, advertising, number of employees,

and competition. When examining the high costs of all this aspects it is then going to require the

dairy products to have a high cost as well. However as long as the products are worth it, the

Japanese will be more willing to pay the higher price. It is also very important not to have the

price much more than the competitors’. The best way to determine appropriate price is to

research the prices that similar products are already going for.

All of this aspects and so much more are necessary in establishing a well put together

international marketing strategy. It is in evident to acquire so much information on the country

and the product that is going to be offered to them. Knowing and understanding the culture,

history, laws, trade-barrios, country’s economic stance, and the competitors that exist are only


the starting points to establishing a successful business internationally. There is so much hard

work and knowledge to obtain to become a success overseas.


References

Andreas P. Christou. (2005). Derived demand for disaggregated cheese products imported into

Japan. Agribusiness, 1-16.

Assmann, S. (2011). Food education in Japan: a review of the online representation of the

Shokuiku campaign. Asian Politics & Policy, 149-158.

Cateora, P. R. (2011). International marketing fifteenth edition. Boston, MA: McGraw-Hill

Higher Education.

Cooper, W. H. (2014). U.S.-Japan economic relations: significance, prospects, and policy

options. Congressional Research Service, 1-19.

Dairy in Japan. (2015, January). Retrieved from Euromonitor International:

http://www.euromonitor.com/dairy-in-japan/report

Factbook, C. W. (2015, June 30). Japan factbook. Retrieved from index mundi:

http://www.indexmundi.com/japan/

Jayarajan, N. (2011). The fat’s on fire: curbing obesity in Japan. Boston University School of

Public Health.

Obara, K. (2005). Dairy policies in Japan. Economic Research Service, 1-27.

Prentice, A. M. (2014). Dairy products in global public health. The American Journal of Clinical

Nutrition, 1212-1216.


Reading, F. (n.d.). Organic Eating and Your Children: The Benefits. Retrieved from Organica

Fresh: http://organicafresh.com/organic-eating-and-your-children-the-benefits/

The Japanese market for dairy products. (2010, September). Retrieved from AHK:

http://www.japan.ahk.de/en/publications/surveys/the-japanese-market-for-dairy-products/

Webb, C. (n.d.). Marketing plans for a coffee house. Demand Media.

Webb, L. (2013). Signing up for a gym membership In Japan. Gaijin Pot.

week 5 final paper-selling dairy in japan

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