Kameda Seika Brand Management

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Introduction

Kameda Seika Co., Ltd. is a rice cracker manufacturer headquartered in Niigata, Japan. It obtained a leading position in the Japanese confectionary market; however, since the local market was not expected to grow, the company decided to go global and expand to the US market. Yet, the US customers were not familiar with the Kameda brand and rice crackers, which is why the firm struggled to gain the desired share in this market.

Consumer Insights

Kameda decided to expand to the US market because of the shrinking Japanese market. In Japan, its rice crackers were mostly popular among the elderly who were looking for a familiar taste. As for Kameda’s savory snacks, they were mainly consumed by individuals in their 30s and 40s. Since the company aimed at targeting younger customers, it considered the opportunity to enter the US market. In the US, savory snacks are viewed as a quick way to boost one’s energy in a busy life. At the same time, US consumers are increasingly concerned with their health, which is why they have to search for a balance between fast and healthy food. For this reason, they often choose crackers: these snacks are both enjoyable because of their crispy texture and healthy because of their low-calorie content.

Furthermore, in the US, the trend for gluten-free food is on the rise. Such food is popular mostly among people with celiac disease, but some consumers buy it because they consider it fashionable. Gluten-free customers are a profitable segment as, according to the case, they spend about $100 per shopping occasion, in comparison to regular shoppers spending $33 per visit. Apart from the gluten-free feature, customers buying crackers expect this product to be delicious, savory, crispy and contains no trans fats. Non-Asian consumers also value such characteristics as baked, organic, whole grain, and certified GMO-free. Kameda’s customers prefer to consume Kameda Crisps as a snack after lunch, after dinner, or at work. At the same time, US customers are not very familiar with Kameda’s brand, making it challenging for the company to increase its share in the US market.

Market Insights

According to the case, the Japanese confectionary market size was $20 billion in 2015, with the rice cracker segment being $3 billion in retail sales. In this market, Kameda’s share was 30% for about 40 years. In addition, the company had the highest brand recognition compared to competitors, with an unaided recall level of 60%. These findings indicate that Kameda’s product has a high demand and the potential to succeed in other markets.

The US savory snack market was even larger in 2015, amounting to $30 billion. The largest segment was processed snacks, including such products as tortilla chips and corn chips; its market share was 40%. The non-sweet biscuit segment was represented mainly by crackers and accounted for $7.6 billion in sales. Furthermore, among baked snacks, 77% of the US households consumed crackers, and 68% purchased cookies. The US market also showed a growth in the trend for gluten-free food: up to 10% of the US population included such products in their diet. The gluten-free market was projected to increase to $2.5 billion by 2019. Additionally, a preference for Japanese food could be noticed in the US market. Such products as sushi, tofu, soy sauce, and edamame have become popular among Americans, and the number of Japanese restaurants has been increasing.

Competitor Insights

In the savory snack market, PepsiCo was the leading player with a market share of over 30% in 2012 and almost 40% in 2015. In comparison, Kameda ranked seventh among the world’s largest manufacturers of savory and sweet snacks in 2012. Further, there are two Japanese companies that have successfully expanded their presence in the US market. The first one — Calbee — entered the market with “Snapea Crisps,” a snack made from peas. The sales increased after major retail chains, including Walmart and Costco, began distributing the product. Calbee managed to raise its sales even more after entering a business alliance with PepsiCo. The second company — Ito En — came to the US market with an unsweetened tea brand, Teas’ Tea. The firm succeeded after it put much effort into educating the US market about its product and presented a new brand, Oi Ocha, which was viewed by customers as an authentic Japanese brand.

Recommendations about Segmentation, Targeting, and Positioning

Kameda can segment the market according to demographic and psychographic characteristics. Demographically, customers can be divided into Asian and non-Asian, and into children, young adults, middle-aged people, and the elderly. The most relevant psychographic characteristic is consumer preferences: customers can be either health-conscious or not health-conscious. Kameda should target young, non-Asian, health-conscious individuals. The choice of this segment is explained by several factors. First, Kameda has already won over the Asian part of the US population, while non-Asian customers are still not very familiar with its products. Second, Kameda’s products are gluten-free, baked, and GMO-free, which makes them an excellent choice for wellbeing-oriented people. Therefore, the company should position its rice crackers as a healthy snack alternative for young adults who want to get some energy in their busy active lives.

During the implementation of this strategy, Kameda may face the issue of low customer awareness of the product. In order to overcome this, the company should conduct education campaigns similar to those carried out by Ito En. This way, the firm will introduce a new product in the US customers’ lives and increase the demand for the product. This, in turn, will increase the company’s sales and market share.

Marketing Strategy Development and Implementation Issues

Kameda’s marketing strategy should be aimed at raising brand awareness, increasing product demand, and reducing the cost of goods sold (COGS) and selling, general and administrative (SG&A) expenses. All these measures are necessary to achieve the annual sales of $5 million required to justify the opening of a manufacturing facility in the US. In its turn, a manufacturing facility will allow Kameda to decrease its prices and expenditures, thus increasing sales and helping the company approach its desired overseas sales ratio of 30%.

Recommendation about Brand Strategy/Management

It is recommended that Kameda rebrand its Kameda Crisps and other products (Rice Goes Crispy and Frosted Snacks) under the name Mary’s Gone Crackers (MGC). One reason for this decision is that MGC has a high brand recognition and reputation, and its competitive advantage is that it offers products that are not only delicious but also both gluten-free and organic. Second, Kameda expected MGC products to be sold at 80–90% of grocery outlets by 2020, with an annual increase of 30%–40% in sales. In order to achieve such growth, MGC should be able to compete with larger players and increase its product offering. By adding Kameda Crisps to MGC’s product portfolio, Kameda may attain both goals. This move may help the company’s management to achieve key business goals: raising brand awareness and attaining a greater market share.

If during the implementation phase, the increase in sales will not reach $1.5 million a year, necessary for covering the company’s expenses, Kameda should consider an exit strategy. A viable option for Kameda would be the acquisition of the US department by a large player in the industry, such as PepsiCo or Nabisco. By using this strategy, Kameda will be able to negotiate the price and terms of sale, and the obtained finances may be spent on business development in other markets.

Recommendation about Product

It is recommended for Kameda to establish a new product category called “rice crisps.” This category will include all Kameda crispy products made of rice, including Kameda Crisps. The reason for this decision is that, in the US, there is no product category in which Kameda’s rice crackers could fit. As noted in the case, Americans think of crackers as a product eaten with cheese, spreads, or dips, while rice crackers should not be consumed this way. In order to implement this recommendation, Kameda will need to conduct campaigns to educate the market about its new product category. This strategy will positively affect the management’s key business goals by increasing product awareness, creating demand for the product, and driving sales.

Recommendation about Promotion

In order to promote Kameda Crisps, the company should use online and social media advertising in addition to sampling that the firm already performs. Kameda has not used this strategy so far because of the risk of wasting money, but online advertising is an effective and cheap strategy to reach the target market. A social media campaign could work because the US savory snack market is large and can accept Kameda Crisps. Moreover, the growing popularity of Japanese food among Americans allows one to expect a rising demand for rice crackers in this market. Finally, social media advertising has many opportunities for targeting specific individuals, enabling Kameda to promote its products directly to young health-conscious consumers. In order to implement this strategy, Kameda can use Facebook, where it has an account of its MGC brand with 500,000 followers. This recommendation is likely to increase the company’s brand awareness and sales.

Recommendation about Price

While the company can maintain high prices for original MGC products, it can lower prices for Kameda Crisps for a limited time to incite consumers’ interest. In particular, prices can be lowered for a period of a social media campaign. This strategy is important because Kameda has a pressing need to increase sales to be able to open a manufacturing facility in the US. With this facility, it will be able to lower the cost of Kameda Crisps to $2 per pack and receive official GMO-free certification for its products. Thus, a temporary discount seems to be a viable option for Kameda given its need to familiarize US customers with its products and evoke their interest in buying them.

Conclusion

Kameda should not place its products in the snacks section; instead, it should consider cereal or nuts sections. This is because Kameda’s products are aimed at health-conscious individuals who are unlikely to visit sections with unhealthy snacks. In addition, Kameda should distribute its products through such major retailers as Costco and Walmart. As Calbee’s case shows, this step can lead to an increase in sales, which is exactly what Kameda is trying to achieve. In order to implement this strategy, Kameda should educate retailers about its rice crackers and make a deal about the placement of the products in the proper store sections. In addition, Kameda should place its products at sporting events and bars because many customers view its rice crackers as a new party snack.

Click Here To Order Now!