DELISSA IN JAPANMEMBERS OF « FOCUS NANTAI »

EMIL MAZAN

MA1N0211

JESSIE 潘子惇

MA1N0104

MOUACI ANISSA

MA1N0244

I- INTRODUCTION The company Agria was founded in 1973 a group of Swedish cooperatives develop and sell a line of fresh dairy

products.

Delissa line was launched in 1980.

Including Yogurts, desserts, fresh cheese and fresh cream.

By 2001 , more than 1.1 billion Delissa yogurts and desserts were consumed per year in worldwide.

In fiscal year 2000, Delissa had sales of $2.9 billion and employed 4,400 people in and outside Sweden.

Danone is the biggest competitor in worldwide.

I- INTRODUCTION• Delissa Objectives in Japan…• Agria’s Japanese joint-venture Nikko!• The total yogurt market in Japan for 1986

600 million cups.

• In 1991, the expected market grow 8%.

• Company’s launch strategy would be based on expected growth rate of 10% or 15% for the total market.

• It plan to cover the three main metropolitan areasTokyoOsaka Nagoya ( geographic segmentation : cities)

• Delissa’s goal: develop a high quality range of yogurts in Japan.

I- INTRODUCTIONConsumption in Japan…Per capita consumption of yogurt… in Japan is estimated at 5.3 cups per person per year in Japan versus 110 in Sweden 120 in Finland.

•Seasonal sale in Japan are from March to July. •The highest sales have been recorded in June •80 % of yogurt is sold through supermarkets.

COMPETITION (JAPANESE COMPANIES)…Company Presentation & Products Turnover

in 1989

Snow Brand Milk Products

Is one of the largest dairy companies in Japan.Drinking milk, Cheese, Frozen foods, biochemical. 2000: 14,000 people sick from old milk sold by Snow Brand contaminated

643,322 million Yen

Meiji Milk Products

Dried milk for babies, Ice cream, Cheese & chocolates. 2011: radioactive cesium was found in Meiji baby formula.

610,674 million Yen

Morinaga Milk Industry

Candy and other Confectioneries, Drinking milk, ice cream, Instant coffee.

1960: the company advertised that women should give chocolates to men on Valentine’s Day.

561,783 million Yen

JAPAN IS ATTRACTIVE FOR FOREIGN COMPANIES… Lack of space 60% of the population

concentrated on 3% of the surface! 85% of the population lives in towns urban! Younger Populationdisposal income

high Potential market for profit. Main target: Japanese Housewives shop daily So expect “fresh milk products” high potential

for growth. 30% of household budget is on food attract

foreign companies to establish in Japan. Japanese potential consumers attracted by

“Western” products So, opportunity for foreign companies.

Japanese market : competition is very strong!

COMPETITOR: BULGARIA IN JAPAN… Bulgaria Yogurt Dominates 60% of

Japanese Market. 40 M people regularly consume the

product. LB Bulgaricum Plc. & Japanese company

Meiji Dairies working successfully 3 licensing contracts Development of dairy produce based on sour

bacteria. The 2 companies signed an agreement for

cooperation in relation to branding the yogurt as "Bulgaria" throughout the Asian region.

Joint-venture: Meiji-Bulgaria

COMPETITION (FOREIGN COMPANIES)

Nestlé Kraft Foods Unilever Mars Incorporated Sara Lee Danone

Main competitor : Danone MNC is a french food-products.It claims world leadership in fresh dairy products.2007: 2nd producer of cereals and biscuits in the world.Joint venturesStrategy of growth through joint ventures,

particularly in fast-growing emerging markets It built an attractive portfolio in emerging market (30% of its sales).

joint ventures with companies such as… Al Safi in Saudi Arabia (2001 Yakult in India (2005) Vietnam (2006) Alquería in Colombia (2007) Mengniu in China (2006).

Danone signed an agreement with Ajinomoto Joint-venture: Ajinonomoto-Danone

MAIN COMPETITOR : YOPLAIT

Yoplait is French group franchised brand of yogurt

jointly owned by US food conglomerate General Mills and French dairy cooperative Sodiaal.

It has signed a license contract with Meiji group

The agreement covers the "exclusive use" of Yoplait's brand and trademarks, "technological know-how" and dealership of products in Japan, a statement reads. 

MAIN COMPETITOR: NESTLE Nestlé is a Swiss MNC of snack food and health

food (baby food, water, coffee, dairy products, ice cream, pet foods and confectionery)

It is the largest food company in the world measured by revenues.

Nestle Snow Brand joint venture company in Japan! Annual sales : 1 billion Swiss francs (about $

1.1 billion) including Nespresso, Nescafé, KitKat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi.

450 factories 86 countries Employs around 328,000 people. Main shareholders of L'Oréal.

MIX MARKETING OF DELISSA BEFORE 1994…

Products 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

Price Following the top brands in Japan to respect a high-class image Should be affordable for the house-wife Delissa could be priced at 15% above competitive products.

PromotionTelevision, newspaper, magazine, Street shows In-store promotions, Test trials Outside retail stores

PlaceCover the three main metropolitan areas: Tokyo, Osaka, Nagoya

TO ENTER NEW MARKET…SRT International advertising Agency help Delissa to penetrate new market Slogan “natural dairy food is good to taste”.Nikko distinguish its products from others yogurts. The target families with babies. However, the products are consumed by a wider age bracket from young children to high school students Segmentation

by age

Strategy of differentiation… strong fashionable image: packaging with fashionable design

“diet concept” so reinforce the image!

“ fresh” so attract consumers!

“healthy” so attract new consumers!

”naturalness”/ “simplicity”/ ”friendliness”/ “fanciful taste”

Products from farm so increase brand awareness!

Sophisticated taste from Sweden so attract housewives in Japan.

1989: Nikko and Agria signed an “industrial franchise agreement” Thus, Nikko can manufacture and distribute Delissa’s products under license from Agria.

Agria provide… Manufacturing

Product know-how such as… Marketing Technical support Commercial support Sale support Technology knowledge transfer (machinery, tanks…)

Agria receive royalties for each pot of yogurt sold.

Nikko cooperative form a separate company for the distribution, marketing and promotion of Delissa products.

Delissa signed an agreement with a Japanese partner, Ajinomoto… joint venture : Ajinomoto-Danone. joint venture : Ajinomoto - Maxwell House

1994: Delissa represent 2 % of Japanese yogurt market.

Slow progress in Japan.

Promotion need to be improve… Advertising is not so successful because messages are cluttered... Advertising for Delissa :

1. TV 94 %

2. In-store: promotion 6 %

3. Newspaper 4 %

4. Magazine 4 %

DISTRIBUTION / ORDERING SYSTEM

•Delivery process is to long for fresh product.

DAY ORDERING SYSTEM

Day 1 a.m Each salesman sent an order to his depot

Day 1 pm Each depot order went ti the Yokohama depot

Day 2 a.m The Yokohama depot transmits the order to the factory

Day 2 p.m Yogurt was produced at Nikko Milk Processing

Day 3 Delivery to each depot

Day 4 Delivery to stores

WEAKNESS… 2001: Delissa represent less than 3 % in total

market.

Custard and chocolate pudding sales failed

Discover limited distribution network outside major metropolitan area:

small citiestownrural area

Japanese market brand loyalty is low Lack of marketing & distribution

STRENGTH… 2001: “plain yogurt” represent 43 % of the total

Japanese market very successful 1998 “fruit yogurt” segment represent 25% of

the total Japanese market. “Yogurt with jelly” : 1.2 million cup were

sold 3 month after the introduction!

In Nikko’s store Delissa sell 71 % of its products. 7000 stores in Tokyo.The main target of Delissa is…

Children (segmentation: age) Young housewives (segmentation: gender) Young people between 13 -24 years old (segmentation:

age)

Example: Nikko and agency running TV spots for young people and children – from 11.15 to 12.15 at night.

RECOMMENDATIONS…Since Japan represent a potential market…Delissa should stay in Japan… for that, they need to shift their strategy...

Resolve “Partnership problem” (franchise or joint venture) Agria and Nikko should do some compromise by trying to

understand each other can use mediator! (external agency)

Evaluation of partnership. Reduce cultural gap (Swedish and Japanese) lack of

knowledge! Must not underestimate the complexity of the Japanese

market! Understand better each other. Build a relationship based on trust. Resolve problem together. Combine their knowledge and resources to work as a

single team. Improve the “effective information system” better

share of data. Improve communication (language & cultural barriers)

RECOMMENDATIONS… Improve marketing strategy Segmentation dividing a target into

subsets of consumers (common needs & desires) using media. Develop different ways of imagining market segments, and create product

differentiation strategies to exploit these segments commercial advantage more effective match between target customer and product.

Find a niche market (distinct benefits) to gain more market share not a lot of competitors!

Increase the price of products less competition smaller quantity profit! Propose different prices different segments (higher prices to

those segments willing and able to pay more and charging less to those whose demand is price elastic).

Develop target market (group to aim ) improve marketing efforts Perfect the target market and the marketing mix variables

Product, Place Distribution (improve the delivery procedure) Promotion Price.

RECOMMENDATIONS… Correct mass marketing radio, television and

newspapers to reach broad audience. Develop differentiated marketing provide separate

offerings to each different market segment that it targets unique benefits to different segments increase sales.

Recreate/change the image or identity in the minds of the target market for the products & brand “re-positioning concept”.

reposition the entire company, not just the product line or brand change perception of consumers.

Making hard decisions about how a market is shifting firm's competitors will react.

Improve “autonomy” of the company address directly the Japanese consumers without going through an intermediary !

Reduce the turnover of managers manage better the company!

THANK YOU!!!