Jamie Dodge Company’s Entry into Japanese Market

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Table of Contents

Introduction
Choice of Product
Justification for Target Country
Justification and Evaluation of Selected Target Market
PEST Analysis
Market Entry Method
Marketing Mix Recommendations
Conclusion
References

Introduction

Jamie Dodge is a known British biscuit brand that has dominated the British biscuit market for a long time. Burton’s Food Company makes Jamie Dodge biscuits. However, the company also produces other biscuit brands such as Waggon Wheels, and Viosciount (Smith 2007). All these brands have created their individual product portfolios, which rival Jamie Dodge’s market dominance in the biscuit market. For over 50 years, Jamie Dodge has been able to command a significant market presence in Britain, because Report Linker (2012) estimates that about 30% of all households in the United Kingdom (U.K) purchase this brand. This sizeable market share has elevated Jamie Dodge as the most popular children’s biscuit brand in Britain.

The global expansion of the Biscuit market has brought new opportunities for Jamie Dodge. Like other international brands, Jamie Dodge has the opportunity to expand beyond its traditional markets to venture into the global biscuit market (Nowak 2010, p. 8). This way, the product increases its brand recognition and brand awareness in the international market. Moreover, the opportunity to expand into the international market offers it an opportunity to increase its market share beyond its traditional and saturated markets.

Drawing on the understanding of global market topics, this paper provides an outline of Jamie Dodge’s entry into the Japan biscuit market. Concisely, this paper identifies the reason for choosing Jamie Dodge as the main product for this study, the justification, and selection for choosing Japan as the target market, the justification, and evaluation of the selected market, and the right marketing mix that ensures a successful entry of the Jamie Dodge brand in the Japanese market.

Choice of Product

Biscuits represent a natural part of human recreation – eating. For children, biscuits are fun and an important part of their delicacies. Indeed, children like snacks, and as many adults would attest, biscuits form an important part of their childhood experience. Depending on a product’s branding, biscuits may represent more than a delicacy. Indeed, there is a huge potential for biscuits to represent a culture and a social revolution hinged on recreational activities (Sutton 1991, p. 479). For example, since the coffee drinking culture forms a strong part of the western culture, there is huge potential of merging biscuits with this culture because biscuits represent a natural reorientation of the coffee culture. The same may also occur in Japan if European marketers adopt successful market strategies. Comprehensively, biscuits have a dual market potential, where it can appeal to children and adults at the same time. This potential makes it a high potential product that may yield massive market success if marketed well.

Justification for Target Country

The Japanese biscuit market is a lucrative market. Report Linker (2012) estimates that this market generated about two billion dollars in 2010. This revenue mirrored an increased annual growth rate of about 1.3%, which observers reported between in 2010. Most of this growth stems from the increased sales of wafer biscuits. Indeed, wafer biscuits accounted for about $923 million of the total sales reported in 2010 (Report Linker 2012). Depending on the market branding strategies for specific biscuits brands, the success of wafer biscuits show that Jamie Dodge biscuits may also achieve the same level of brand success that other unique brands in the Japanese biscuit market have achieved.

Besides the tremendous profitability that the Japanese Biscuit market promises, Japan’s sound macroeconomic environment also shows that there is a huge potential for achieving significant success in this market. Indeed, as Karan (2010) contends, the Japanese economic environment bases its principles on free-market ideals, which allow for the entry of new products, regardless of their origin. Therefore, unlike heavily regulated markets, it is easier to launch a foreign product in Japan, and compete favourably with similar products.

Japan’s population also has a high potential for forming a promising market considering its purchasing power is attractive for the launch of a new product. Japan’s high per capita income mirrors this market potential. World Bank (2012) estimates Japan’s per capita income is $45,903. Compared to other Asian countries, this per capita income is relatively high. Moreover, a per capital income of 45,903 is very close to the same index witnessed in highly developed nations such as the U.S which has a per capita income of $48,442 (World Bank 2012). Based on Japan’s high per capita income, there is enough reason to believe that its consumers have the purchasing power to buy, not only foreign products, but also premium products as well. From the lucrative nature of the Japan biscuit market, the feasible economic prospects of the country and the increased growth of some of its market segments, demonstrate a lot of potential for new biscuit companies to profit from this market. This is the motivation informing the introduction of the Jamie Dodge brand in Japan.

Justification and Evaluation of Selected Target Market

Unlike most conventional products, two target markets (children and adults) form Jamie Dodge’s market. Children are usually the end-consumers, but their parents make the purchase. Therefore, it is important for children’s products to appeal to both target markets (adults and children) (Lamb 2011, p. 277). Jamie Dodge’s market strategy similarly has to follow this principle because its initial market strategy targets children (Hunt 2012, p. 1). However, because of the new opportunity to market the product differently in Japan, this paper proposes that the target market also needs to encompass adults (who buy the products for the children). However, reaching both target markets without alienating one group is difficult, considering both markets have different market dynamics. As Hunt (2012) observes, this challenge not only applies to the introduction of Jamie Dodge alone because other brands that target children similarly face this challenge. From this analysis, they key to Jamie Dodge’s Japan entry lies in striking the right balance between its adult and children’s markets. Already, the product has a strong market leadership as a Children’s brand. Jamie Dodge therefore needs to expand its market leadership by appealing to adults as well.

Complementarily, Jamie Dodge’s marketers have realised the importance of adopting the dual market strategy by investing more than 2,000,000 Euros to market the brand as a lunchbox and playground favourite (in Europe) (Hunt 2012). This campaign has increased the product’s brand awareness, and effectively included parents as part of the target market. Since the launch of this initiative occurred recently, its full potential has not been fully realised yet. In Japan, the potential to launch a successful marketing campaign that targets both children and their parents exist. The success of such a campaign depends on the campaign’s structure and content. However, as will be seen in subsequent sections of this paper, a careful sensitivity to Japan’s culture also forms a key component for guaranteeing the success of such a campaign.

PEST Analysis

Simply, the PEST analysis refers to the analysis of political, economic, social, and technological forces in a market. This analysis provides a credible macroeconomic framework for the analysis of the market environment. Therefore, the process of formulating strategic management policies for the advancement of corporate or economic objectives eases.

Political

Unlike most developed countries, Japan has a government that stems from a constitutional monarchy system (Jain 2005). Albeit undemocratic, the constitutional monarchy system of Japan has guaranteed a stable and firm political leadership process that embraces some of the ideals of democratically elected governments (such as free-market enterprising). Therefore, unlike other undemocratic countries, Japan’s political system has no bearing on the economic activities of the country. Therefore, businesses operate without any political interference. Instead, the country’s political systems aid in improving business processes by eliminating unnecessary bureaucracies hindering trade. Therefore, Japan’s political system does not hinder the launch of Jamie Dodge as a foreign product in the Japan market; instead, it complements it (Jain 2005).

Economic

Unlike other developed nations, Japan’s level of foreign investment is low. Indeed, comparatively, developed countries like France, Britain, Germany, and the United States have higher levels of foreign direct investments. Therefore, compared with many industrialised nations, Japan’s level of foreign investment is among the lowest in the developed world (Jetro 2012). The low level of foreign investment signifies different prospects for the launch of Jamie Dodge. On one hand, the low level of foreign investment in Japan means there would be minimal competition from other foreign brands in the market. On the other hand, the low level of foreign investments in Japan may mean Japan’s economic environment poses significant hurdles for foreign companies to thrive (Karan 2010). Therefore, after considering Japan’s macroeconomic dynamics, the probability for success and failure (regarding the launch of Jamie Dodge) are equal.

Social

Over the years, Japan’s social environment has significantly changed. Indeed, from the prehistoric days of the Jomon period, Japan has learned to embrace the sociocultural dynamics of other regions around the world (such as North America, Europe, and the wider Asian peninsular). In addition, over the decades, Japan has evolved its dining experience to be more sophisticated and dynamic. Coupled with a selection of natural foods, the Japanese people have promoted local delicacies as the main type of food in Japan.

Considering Japan’s traditional blend of local foods, there is little potential to introduce processed foods, or brands such as Jamie Dodge, except for a few opportunities exiting in the western-oriented eating habits of young Japanese people. (Chiba 2011). Japan’s social landscape therefore offers little opportunity to market processed foods (such as Jamie Dodge) to Japanese children. Aside from the upcoming adopting of western-styled eating habits among Japan’s young population, the potential for marketing Jamie Dodge only exists in certain social ceremonies like the Japanese tea ceremonies

The Japanese tea ceremonies involve the preparation of a strong and powerful green tea, which is drank in social tea gatherings. Though considered a light meal, these tea ceremonies may last up to four hours (Chiba 2011). Such gatherings provide a good ground for the introduction of biscuits as a complementary item in the Japanese culture. Depending on the effectiveness of the marketing strategy, European marketers may introduce Jamie Dodge as a complimentary meal (not a children’s snack) to take advantage of the widely respected Japanese tea ceremonies. If this marketing approach forms a part of a wider strategy to market Jamie Dodge as a popular snack among Japan’s young population, the dual approach for marketing Jamie Dodge (to young and old populations in Japan) materialises.

Technological

Japan is among the leading technology powerhouses in the world. Indeed, Information Communication technology (ICT) forms an important pillar of Japan’s economy (Watanabe 2009, p. 104). Therefore, Japan’s technology penetration rates are extremely high. This highly sophisticated technological environment poses tremendous marketing opportunities for Jamie Dodge considering the immense potential existing in online marketing and distribution. Japan’s sophisticated I.T infrastructure therefore offers the right tools for creating, managing, and exchanging information between marketers and their customers. For example, Japan’s technological advancement means there is a sizeable population in the country, which is I.T savvy and can understand online marketing products available online. Moreover, Japan’s technological advancement means that country’s internet penetration is sufficient to make online marketing a great marketing tool for promoting Jamie Dodge (Watanabe 2009).

Market Entry Method

There are increased fears among market analysts that the Japanese biscuit market has passed the maturity stage. Therefore, experts expect little growth in this market (Euromonitor International 2011). Moreover, researchers paint grim prospects for the Japanese biscuit market because they say the Japanese biscuit market is difficult to penetrate. Indeed, although Japanese volume sales project a faster growth rate, compared to other Asian-pacific states, there is a low growth rate in Japan (especially in the biscuit market). However, based on the substantial growth prospects identified in this paper, Jamie Dodge may exploit some of the emerging and unexploited opportunities existing in the market. Therefore, considering the minimal growth prospects in the Japanese biscuit market, there is a strong need to adopt a tactful market entry strategy.

This paper proposes the adoption of a joint venture strategy for the introduction of Jamie Dodge in the Japanese biscuit market. Already, a Japanese local product (Pocky) produced by Ezaki Glico commands a high market share in the Japanese biscuit market (Euromonitor International 2011, p. 1). Besides entrenching its roots in the Japanese culture, the Japanese people widely celebrate Pocky as a Japanese local product. Based on the tendency for Japanese people to appreciate their local foods, it is difficult for foreign brands to compete for the same market share as local products. Therefore, owing to such market dynamics, this paper proposes a joint-venture strategy between Burton Food (Jamie Dodge) and Ezaki Glico (Pocky). There are several benefits derived from this partnership. One advantage is the shared risk between both companies (Trost 2011). This way, Burton will not suffer significant financial losses if the initial launch of Jamie Dodge fails in the Japanese market. Moreover, Burton Foods will enjoy increased market sharing knowledge that Ezaki Glico has. This way, it will know the market dynamics existing in the Japan biscuit market (and consequently position itself to avoid the challenges existing in the same market). However, some disadvantages may occur from the joint-venture strategy. One such disadvantage is the loss of managerial control by Burton Foods. The possibility of a slow-decision making process and the high chances of disagreement among the partners are also possible disadvantages that may plague the joint venture.

Marketing Mix Recommendations

Product

Considering Japan’s cultural dynamics, the launch of Jamie Dodge may have to inculcate a few product modifications to appeal (better) to the Japanese market. Euromonitor International (2012) claims that savoury biscuits and crackers dominate the biscuit market in the Asia-Pacific regions because they are responsible for most growth in this market segment. Sweet biscuits only account for half the growth rate observed in savoury biscuits. The product development process for Jamie Dodge therefore needs to take advantage of the immense opportunities that exist from positioning the product as a savoury biscuit instead of a sweet biscuit. This way, Japanese consumers may view the product for its functional and nutritional values.

Place

Jamie Dodge needs to be available in all retail stores around Japan. Since Japan’s infrastructure is in good condition, it is possible to avail the products in all its four islands. Major retail giants operating in the country (and mostly western retail stores like Tesco and Wal-Mart) should be encouraged to stock the product. This strategy aims to avail the product at all possible locations for customers to find the product easily. Complementarily, since this paper proposes a joint-venture strategy between Jamie Dodge and Pocky, Jamie Dodge should exploit Pocky’s existing distribution.

Promotion

Jamie Dodge’s product promotion strategy hinges on an earlier concept identifying the technological advancement of the Japanese economy. Therefore, as explained in this study, promoting Jamie Dodge occurs better using online marketing because this is the best way Japanese consumers may know the product, cheaply. Indeed, online marketing is a cheaper alternative to promote products as opposed to print advertisements, television advertisements, or conducting physical campaigns.

Price

Euromonitor International (2012) says that although sweet biscuits tend to be categorised as premium brands, there is a wider concern, not only within Japan, but also within the wider global community about the health concerns of processed foods. From this trend, the unit prices of individual brands have soared with the price of biscuits now higher than the price of other snacks such as chocolates (Euromonitor International 2012). Even though experts identify the sales of savoury biscuits to be higher than sweet biscuits, their sales have significantly dipped in recent years. Considering the pressure from increased competition, the sales of savoury biscuits will not increase in the next few years. Therefore, owing to this trend, Burton Foods need to price Jamie Dodge lowly to attract more sales.

Conclusion

The Japanese biscuit market suffers from market saturation and market dominance (by a few local brands). Similarly, the Japanese culture seems to pose more challenges than opportunities to the introduction of foreign brands, especially considering the prevalence of a high level of awareness regarding the health implications of consuming processed products. However, this paper identifies unexploited opportunities in some of Japan’s social occasions (such as tea ceremonies) and the growing adoption of western culture among the young population as possible opportunities for the successful introduction of Jamie Dodge. Similarly, considering the complex dynamics posed by Japan’s socio-cultural environment (and its market dynamics), this paper proposes the adoption of a joint-venture strategy to ensure an initial successful introduction of Jamie Dodge in the Japanese biscuit market. Comprehensively, if European marketers implement these strategies carefully, Japanese consumers will embrace Jamie Dodge.

References

Chiba, K 2011, Japanese Women, Class and the Tea Ceremony: The Voices of Tea Practitioners in Northern Japan, Taylor & Francis, London.

Euromonitor International 2011, Country Report: Biscuits in Japan. Web.

Euromonitor International 2012, Biscuits Offer a way Into Asia-Pacific.Web.

Hunt, K 2012, CASE STUDY 1: Jammie Dodges. Web.

Jain, P 2005, Japan’s Subnational Governments in International Affairs, Routledge, London.

Jetro 2012, Promoting foreign direct investment (FDI) into Japan. Web.

Karan, P 2010, Japan in the 21st Century: Environment, Economy, and Society, University Press of Kentucky, Kenturcky.

Lamb, C 2011, Essentials of Marketing, Cengage Learning, London.

Nowak, C 2010, Tekrum Marketing Plan for Malaysia, GRIN Verlag, London.

Report Linker 2012, Biscuits in Japan, MarketLine. Web.

Smith, A 2007, The Oxford Companion to American Food and Drink, Oxford University Press, Oxford.

Sutton, J 1991, Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, MIT Press, Massachusetts.

Trost, T 2011, Joint Ventures: The benefits and perils – why some are successful and others fail, GRIN Verlag, New York.

Watanabe, C 2009, Managing Innovation in Japan: The Role Institutions Play in Helping Or Hindering How Companies Develop Technology, Springer, New York.

World Bank 2012, GDP per capita (current US$). Web.

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