Market Share currently less than 3%. Reason?
One of the following decision should be made:
Maintain Delissa’s presence in Japan and stay with current Franchises New Franchise partnerships
Pull out from the market
Delissa has wide international experience in marketing their product through franchise model. USA launch date: 1977, market share is 12.5 percent.
Germany launch date 1980, market share is 14 percent.
U.K. launch date 1982, market share is 13.8 percent.
France launch date 1983, market share is 9.5 percent.
Delissa has established a successful, global operation, with sales in USA, Europe and other Asian countries such as Taiwan, which increases its brand value. 2. Products : Four types of Yogurtwas sold:
Plain (packs of 2 and 4)
Plain with sugar (packs of 2 and 4)
Flavored with vanilla, strawberry an pineapple
All three types were to be sold in 120 ml cups
They have a wide variety of products that can be marketed to the different tastes of the consumers. The launched product was sold in appropriate quantity that can be consumed everyday. Price : Disposal Income in Japan is high. In addition, the Japanese spend over 30% of their household budget on food. Since the distribution of wealth is fairly homogenous, the pricing of the product could higher to market the product as exclusive high end product. Place: Delissa was sold mostly through supermarkets. The targeted consumers were young housewives and younger generation who shopped at supermarkets. The older generation tend to shop in traditional Japanese stores.
Consumption of Yogurt is seasonal with a peak period from March to July. Cultural Gap: Lack of understanding between Delissa and Japanese partners due to cultural gap and language barrier.Dellisa couldn’t establish their company mentality to Nikko’s workers. There are many misunderstandings. For example TV ads, Dellisa were intended for young people in the ads, however Nikko were running TV spots at late night times. No Manager from Delissa in Japan has made the effort to learn Japanese and understand the Japanese culture. Freshness of the Products: Japanese housewives expect fresh milk products everyday. The existing six tier distribution channel is too long for fresh food products particularly as the date on the yogurt cup is so important to the japanese customer. At the beginning Nikko’s ordering system was so slow. It takes 4 day to buy Delissa’s products which means loosing the freshness. Consumers lead a busy life style. They would prefer a fresh product that they are familiar. Delissa was considered less desirable than the top three in the following characteristics : taste, freshness, frequency of price discounting and good for health. Consumer behaviors were so different and Japanese consumers don’t consume that much milk like Scandinavians do. Though Delissa has a accumulated enough information about the customer preference, they do not have the right rapport with Japanese counterpart to execute their plans successfully. Moreover, there is a lack of trust between Agria and Nikko-Agria team in Japan. The language barrier has aggravated the situation. No steps have been taken to reolve the issue. AGria is an experienced, established brand and are the market leader in rest of the world, however, they have been lacking in marketing and distributing the product correctly, and have been behind in creating new, niche products in the yogurt division. They are further hurt by the unreliable information provided by Nikko on retailers. Advertising Awareness: 55% of the respondents did not know what the company was trying to convey. 9. Product Returns:
Japan is a growing market for yogurt.
The younger generation are more health conscious. Further, with the market evolving rapidly towards “Westernization”, there is a general interest in American and Europeon products, including yogurt. Delissa...