Ben & Jerry's—Japan: Strategic Decision by an Emergent Global Marketer
Marketing students thrive on identifying an ideal foreign market for a product and devising a plan to launch and promote the product. As elegant as the plans may be, though, resources are constrained, and firms that are just emerging in the global marketplace may have a correspondingly constrained range of options available. The decision of Ben &' ferry's whether to enter the Japanese market—and if so, how—illustrates the strategic thinking behind such a constrained decision, focusing on an increasingly feasible option of partnering with a single retailer for the market entry. The case covers a wide spectrum of strategic issues faced by a branded consumer goods manufacturer in the early stages of venturing beyond its domestic market Students can assume the role of the chief executive officer in (1) balancing the attraction of a potentially strong market against the mission and resources of the firm, (2) balancing the lack of resources (both financial and managerial) for a companycontrolled brand-building strategy against the apparent hazards in granting brand development rights to a licensee, (3) making the best of the increasing consolidation and strength of the retailer sector, and (4) developing trust with a local partner. It was fall of 1997, and Perry Odak was just entering his tenth month as chief executive officer (CEO) of the famous ice cream company named for its offbeat founders, Ben & Jerry's. Far from company headquarters in Vermont, he was setting down his chopsticks in a quiet Tokyo restavirant to give full attention to the staff he had brought with him: the company's newly appointed head of international, the head of production, and a trusted expert on Japan. The question on the table for this group was whether to enter the Japanese market by granting a countrywide license to an enterprising JapaneseAmerican, to enter the market by giving a convenience store chain exclusive rights to carry Ben & Jerry's products in all of its 7000 stores, or to pass on trying to enter the Japanese market for the upcoming summer 1998 season. The decision was not isolated; rather, those involved had to consider the very history and mission of this well-known company. Brooklyn schoolmates Ben Cohen and Jerry Greenfield started their ice cream company in a defunct gas station in Burlington, Vt., in 1978, when both were in their mid-20s. The combination of their anticorporate style, the high fat
James M. Hagen
THE JAPAN ENTRY DECISION
Submitted July 1999 Revised December 1999 January 2000 © Joumal of Intemational Marketing Vol. 8, No. 2, 2000, pp. 98-110 ISSN 1069-031X
content of their ice cream, the addition of chunky ingredients, and catchy flavor names, such as Cherry Garcia, found a following. In addition to selling by the scoop, they hegan selling pints over the counter, and the husiness grew. The company went puhlic in 1984 and came to be traded over the counter with the symbol BJICA. Cohen and Greenfield determined that their company would be socially responsible, and as part of its objective of "caring capitalism," Ben & Jerry's committed to giving 7.5% of pretax profits to causes such as the Center for Better Living, which assisted the homeless. The company's mission statement was organized into three objectives: social, economic (serving shareholders and employees), and product (producing products of the finest quality). Indeed, the product Cohen and Greenfield were selling was exceptionally rich (at least 12% butterfat, compared with approximately 6%-10% for most ice creams). It was also very dense, which was achieved by a low overrun (low ratio of air to cream in thefinishedproduct). This richness and density qualified it as a super premium ice cream. Haagen-Dazs, the only major competitor in the super premium market, promoted a sophisticated image, whereas Ben & Jerry's...