Kikkoman Corporations Marketing Strategies - Case Study Example

Kikkoman Corporation Methods: 1. A firm has been selected as the Kikkoman Corporation ,the firm fulfill all the requirements as a successful firm from a banker,s view point. 2. Kikkoman Corporation is an international company in the field of food and drink based in Japan and has its operations at many renowned business centers of the world. The corporation has adopted viable and profitable marketing strategies for the introduction and expansion of the corporation's products globally for ensuring the sustainability and growth as in favor of the business firm. The marketing strategies as applied by the corporation has influenced the financial outputs as in profitable mode and these strategies need their replication by other similar business organizations for securing similar economic performances in specific time periods. 3. The corporation has specific brand name in the fields of soy sauce, Mirin, shochu, food seasoning and flavoring, juice and other beverages for their sale among the customers. In addition, the corporation has also entered into the fields of pharmaceuticals, restaurant management and the supply of other food items for the satisfaction of the customers. The corporation was initially founded in 1917 as in its initial stages and had attained the status of Multinational Corporation with net sales of 285,690 million yens during the financial year 2009-2010 with a net income of 8,602 million yens during the period. 4. The marketing strategy as designed and implemented by the corporation has different priorities and business tools for the different products. For example for the promotion of the sales of soya sauce, the company has adopted an aggressive marketing initiatives for the expansion of the product for its value addition and similarly, the corporation has offered the product as in gift products to promote the sales of soya sauce among the valuable. 5. The marketing strategies are designed by the corporation for the introduction of the products among the customers as a part of the business strategies. The corporation as a part of the globalization has exercised the mechanism like outsourcing, exporting, licensing and direct investment in different parts of the world as to implement the Global Vision 2020 as has been formulated by the Kikkoman Corporation. Successful implementation of these marketing strategies will help in the achievement of all four global strategies as have been included in the major basic strategy for the global vision 2020. The business organization like Kikkoman Corporation has the capacity to select a marketing strategy through a set of marketing strategy for its implementation for the achievement of the objectives and goals of the corporation. The marketing strategies move from low to high bands for the ownership of foreign operations and similarly, from low to high as in the field of cost to enter foreign operations. Exporting is at the lowest ebb for both the ownership of foreign operations and Green field Venture as high for both the ownership of the foreign operations and cost to enter foreign operations. The Kikkoman Corporation has applied a variety of marketing strategies for the introduction and acceptance of their products at the global level. These strategies include outsourcing, exporting licensing and franchising. These strategies controlled by the top leadership of the corporation through their leading, decision making, motivating and controlling characteristics. The corporation has forecasted a net income per share as 19.38 millions of yen in the category 6. Marketing strategies are having their relationship with the financial results as the adoption of a particular marketing strategy has its influence on the financial health o the corporation through an enhancement or decrease in the net sales of the corporation. Both of these fields of economy that is marketing strategy and financial performances move in an integrated fashion and are having positive or negative co-relationship on the basis of the nature, size and mode of implementation of the marketing strategy as an overall part of the business strategy of the corporation. The organizations like Kikkoman Corporation work for the achievement of their mission with the utilization of the financial and human resources as on optimum basis, their processing with the help of business tools and strategies for the synthesis of the final products as outputs for their sale in the open market. The financial results are the direct outcome of the marketing strategies as are adopted by the corporation for pursuing their economic agenda and the financial results of the Kikkoman Corporation are indicative of the fact that the corporation has adopted a set of profitable marketing strategies during the previous years of its implementation. During the financial year 2009-10, starting from April 1 and ending on March 31 have shown the net sale during the period remained at the level of 285,690 million yen. The figures have shown a decreasing trend on year-to-year basis as 38.8% as compared to that of the previous financial year. However, the operating income of the corporation has shown a growth at the level of 3.5% with 21085 million yen and net income of 8602 million yen with an increase of 213.2% as on year-to-year basis. The corporation has its business operations in Japan, United States of America, Singapore, Taiwan, Netherlands and China. The corporation has attained the most popular brand of soya sauce in the United States of America and Japan and the corporation has formulated a Global Vision 2020 for making Kikkoman Soya Sauce as a Truly Global Seasoning Product with its worldwide acceptance. The corporation will execute the business in the new markets with the assistance of a single management authority to take strategic decisions and to ensure profitable financial results as in favor of the corporation. The Kikkoman Corporation has maintained current assets during the year 2009 as 113,353 million yens and during the financial year ending on March 31 2010 at the level of 114,590 million yen with an increase of 1.09%. The figures are indicative of the facts that in spite of low net sales that is equivalent to -30.8% has shown an increase in the total current assets which shows that the marketing strategy has played a key role in the achievement of these financial results. The corporation has forecasted its total sales equivalent to the level of 300 billion yen in 2020 with a 12% share by volume. The corporation has identified Africa and South America as potential markets for the corporation in the coming years and the aggressive marketing strategies would help in the achievement of the forecasted results within the specified time. The Kikkoman Corporation has emerged as Multinational Corporation, which has the capacity to manage integrated worldwide business systems in the field of food and beverages. The corporation in its hometown that is in Japan has attained a mature phase with the promotion of high value edit products to the customers as on economical basis in the North American region the corporation has passed through a period of stable growth through launching high value edit products as to meet the requirements of the customers. The corporation has developed food services and industrial markets in the North American region and the same strategy will be implemented in the coming years. The Corporation has attained a continued double-digit growth rate in Europe and has decided to develop new markets in Central and Eastern Europe and in Russia. These four sub-strategies included global soya sauce strategy for the promotion of the products throughout the world, as the global operations for Kikkoman Corporation are profitable deals in the field of soya sauce that is the core model for the corporation. The other three strategies include global strategy for oriental Food Whole Sale along with its distribution system, Del Monte Business Strategy that has the capacity to strengthen the business in many parts of the world including Japan and other parts of Asia and finally health related business strategy for the expansion of Kikkoman's health related businesses. The identification of South America and Africa as potential market for the corporation is an expansionist marketing strategy and would pass through a critical initial business phase as in favor of the corporation. The introduction of new products in a conservative business environment will need extra effort and administrative support from the top executives of the corporation. The administration will have to adopt a plausible marketing strategy such as direct investment by the corporation in the newly identified markets. The strategy for the regions as South America and Africa will be implemented with the assistance of e-marketing and e-business techniques will help the administrators and the top executives to take difficult decisions as in favor of the corporation. Like other multinational corporation, the Kikkoman Corporation has presumed to exercise a marketing strategy at the global level through the globalization marketing strategy. The presence of the corporation at the global level will help in the expansion of the business strategies in six major business centers of the world. These business centers include Europe, Japan, Asia, North America and China. The corporation will move forward for the initiation of the businesses in the African and South American regions of the world. The global learning will help the corporation to learn across the borders and to understand the likings and disliking of the diverse communities of the world. The Kikkoman Corporation will be in a position to launch the marketing strategies in the new potential markets as Japanese culture encourages adoptability and learning from different geographical zones of the world and the organizational arrangement of the corporation will assist the managers to formulate their regional strategies for the achievement of desired results as in favor of the corporation. The non-current assets of the corporation has increased to the level of 97955 million yens in the financial years 2009-2010 as compared to that of 96671 million yens during the financial year 2008-09. These figures show that the corporation has the capacity to formulate marketing strategies with the status of a multinational corporation with growth rate in the positive zone. Marketing strategies and their financial impacts The business organizations formulate like Kikkoman Corporation formulate their marketing strategies for the promotion of their products among the potential customers. These marketing strategies are the segment of the overall business strategy of the corporation for a specific period and successful implementation of these strategies result in the shape of better financial results. The following economic indicators will illustrate that the Kikkoman Corporation has adopted viable plausible marketing strategies for the execution of the business plan as in favor of all the stakeholders. These results are in the form of an increase in the net sales, an enhanced level of income to all the stakeholders and better financial position of the corporation. These results are encouraging as for as the financial year 2009-2010 is concerned like: 1. Business performance for the financial year has demonstrated a positive trend with increased operating income, increased ordinary income and increased net income as in favor of the corporation. The operating income has increased from the level of 20,368 millions of yen in the year 2008-2009 to the level of 21,085 in the year 2009-10 with 3.5% increase. 2. Net income has increased which demonstrates confidence of the investorss on the business and marketing plans of the corporation within the specified period. The Net Income has increased from the level of 2,746 millions of yen as on March 31, 2009 to the level of 8,602 millions of yen as on March 31, 2010 with 213.2 % year-to-year increase. These results demonstrate the marketing strategies as implemented by the corporation have shown encouraging results as in the shape of enhanced Net Income as in favor of the corporation during FY 2009-2010. 3. Total assets of the corporation have increased with a corresponding increase in the net assets and enhanced shareholders, confidence with better yields with the implementation of the marketing strategy as on global basis with divergent business options including management services with the utilization of the leadership skills from the top leadership of the corporation. The total assets of the corporation have increased fro the level of 310,873 millions of yen on March 31, 2009 to the level of 311,175 millions of yen on March 31, 2010. 4. Non –current assets including construction in progress and others have increased during the financial year 2009-2010 with a decreasing trend in the property, plant and equipment, machinery, equipment and vehicle net as its comparison with the financial year 2008-2009 as compared to that of 2009-2010. The non-current assets have increased from the level of 96,671 millions of yen in the year 2008-2009 to the levels of 97,955 millions of yen in the year 2009-2010, which demonstrates positive impacts of the marketing strategies of the corporation on the financial results of the corporation. 5. Investment and other assets including investment securities, long-term loans receivable and deferred tax assets have shown positive results during the financial year 2009-2010. These assets have increased from the level of 68,007 millions of yen in the year 2008-2009 to the levels of 68,959 millions of yen in the year 2009-2010, which shows that the corporation has adopted right strategies even in the economic recession phase at the global level in the economic sector of the economy. The financial results of the Kikkoman Corporation shows a progressive trend in the financial year 2009-2010 with decrease liabilities during the financial year. The financial results demonstrated a combination of micro level results. The liabilities of the corporation have seen a declining trend, which shows that the corporation is in a position to clear its liabilities in the coming years of its operations. The liabilities in the FY 2008-2009 stood at the level of 48570 million yen and at the end of FY 2009 -2010 at the level of 45858 million yens, which is an encouraging sign for the corporation. The current liabilities for the year 2009 and for the year ending on March 31, 2010 along with their necessary details are as under: Current Liabilities: (Millions of yen) Liabilities As of March 31,2009 As of March 31,2010 Lease obligations 127 148 Short Term loan payable 10741 9962 Income tax payable 6169 2316 Accounts payable other 10312 12710 Notes and accounts payable-Trade 13854 14507 Provision of bonuses 2198 2190 Provision for director's bonuses 79 77 Others 5084 3943 Total current liabilities 48570 45858 Non-current liabilities have also decreased during the financial year 2009-10 as compared to that of 2008-09 from the level of 100,485 in the year 2008-09 to that of 98230 million yen in the year 2009-10. The details are as under: Non-Current Liabilities As of March 31,2009 As of March 31,2010 Long term loans payable 26209 21950 Bonds payable 60000 60000 Lease obligations 197 143 Provision for retirement benefits 3399 4017 Deferred tax liabilities 1503 3399 Provisions for director's 1340 1142 Provision for environmental measures Nil 319 Others 7834 7257 Total non current liabilities 100485 98230 Total Liabilities 149055 144089 The current liabilities have decreased at the rate of 3.33 percentages, which shows economic health of the corporation and the impact of the marketing strategies as applied by the corporation for the execution of its businesses at the global level. The incorporation of a provision for environmental measures during the financial year 2009-10 to the level of 319.00 millions of yen demonstrates the responsiveness of the corporation's commitment towards the cause of the environment and for the adaption of green technologies in the operational matters of the corporation. The value of bonds payable during the financial year 2008-09 and 2009-10 remains the same that is at the level of 60,000 millions of yen. The figures show that the corporation has not taken an effective strategy for retiring the liabilities as in the shape of bonds payable and in return, the corporation has retained a liability on the part of the accounts of the corporation. The retirement of bonds will need financial resources and the investment of these resources will help the corporation in lowering the non-current liabilities in the shape of bonds payable. The liability in the shape of payable bonds needs attention of the top executive for its retirement. The step will help the corporation to avoid extra cost in the shape of interest on the payable bonds. Similarly, a deferred tax liability during the financial year 2008-09 was at the level of 3399 millions of yen. And the same has increased to the level of 4017 millions of yen during the financial year 2009-10 is a negative signal towards the financial health of the corporation. The deferred tax liability has increased in terms of percentage as 18.1 percentages that is alarming increase in the accounts of the corporations. The financial manager work for the betterment of the corporation and the presence of deferred tax liabilities at the level of 4017 millions of yen is a dangerous figure and the trend needs arrest without any further delay. The consolidated statement of Income and the marketing strategies as adopted by the Kikkoman Corporation: The marketing strategies pave the way for the promotion of sales of the corporation's goods and services to the customers for the generation of revenues as in favor of the corporation. These marketing strategies influence the behavior of the customers as to buy the products through the promotional sales activities. The net sales of the corporation during the FY 2009-2010 have demonstrated a declining trend from the level of 412,649 million yens in the FY 2008-09 to the level of 285,690 million yens with a decrease of 30.76 % decrease. The net sales are having a direct relationship with the cost of sales and gross profit as in favor of the corporation. Decreased net sale during a particular financial year has reduced cost of sales and decreased profit during the same financial year. The cost of sales was 254,543 millions of yen during financial 2008-09 and during the year 2009-10, the figures lower to the level of 166,924 millions of yen with a decrease of 38.35% in the cost of sales. Similarly, the gross profit has decreased from the level of 158,105 millions of yen during the year 2008-09 and have witnessed a decreased number as 118,765 millions of yen with a decreased percentage of 24.88%. Total selling, general and administrative expenses are an indirect indication to the level of administrative cost, a decreased cost is a signal that the administrative control is working with lower number of staffs and hence, the overall performance of the corporation will be affected, adversely. The administrative cost during the financial year 2008-09 remained at the level of 27,882 millions of yen and the same has reduced to the level of 24,161 millions of yen with a decrease of 13.34%, the figures need cortical evaluation by the administrators and top executives of the corporation. Extraordinary losses: Extraordinary losses indicate the outcome of the economic policies of the business organizations for handling their businesses as on viable pattern. The Kikkoman Corporation has adopted marketing strategies for lowering these losses during the FY 2009-2010. The corporation owns extraordinary losses relating to the Impairment loss, which has increased from the level of 1,642 millions of yen during the FY 2008-2009 to the levels of 2,079 millions of yen during the FY 2009-2010. The loss on valuation of investment securities from the levels of 324 millions of yen in the FY 2008-2009 to the levels of 417 millions of yen as on March 31,2010 and similar other extraordinary losses. However, the extraordinary losses have witnessed a decreasing trend during the FY 2009-2010 as the total extraordinary losses remain as 4,718 millions of yen as compared to that of 5,469 millions of yen as on March 31, 2009. These results indicate that the corporation has lowered its extraordinary losses at the rate of 13.73 % during one year of its operational marketing strategy (http://www.kikkoman.com). Recommendations: The marketing strategies have helped the corporation to generate Net income of 8,602 millions of yen as on March 31, 2010 as compared to that of 2,746 millions of yen during the FY 2008-2010. These results are encouraging for an international business firm like that of the Kikkoman Corporation in the fields of Food, beverages, soya sauce and management services in the phase of economic recession at the international level. The corporation has adopted an aggressive expansionist marketing strategy for the achievement of the goals/targets as per mission of the corporation(Norio,2000). The corporation needs to initiate its businesses in the identified international markets like Africa and South America as per designs of the Global Vision 2020 of the corporation. The expansion program of the corporation will in more diversification in the businesses of the corporation with more Net Sales, increased Operating Income, enhanced Net Income and an increase in the Net income per share to the investors. These steps will pave the way for strengthening the economic indicators of the corporation through the application of marketing strategies at the global level(http://www.kikkoman.com/). Conclusion: The business organizations like the Kikkoman Corporation design and implement their marketing strategies for the achievement of the objectives of the business firm within a specific period for ensuring sustainability of the organization as in profitable mode. These steps have benefitted all the stakeholders, as on win-win basis and the continuity of the business strategy through marketing strategies will strengthen the financial indicators of the corporation. The corporation needs to initiate businesses in the new markets like South America and Africa for the generation of more revenues through the sales of the goods and services. The brand name of the corporation in the field of soy sause and other foodstuffs has their recognition in the market and the expansion program will help in the achievement of long-term objectives of the corporation as have been included in the Global Vision 2020. The marketing strategies of the corporation have proved their viability and therefore in a position for their replication by other similar organizations as part of their business plans. The Kikkoman Corporation has promoted healthy lifestyles through the application of technology and expertise as the company has accumulated in brewing and selling soy sauce to promote the economic agenda of the corporation in the global context. The marketing strategies as applied by the corporation are the real asset of the corporation and these business tools have generated improved economic scenario as in favor of the corporation. It is expected that the marketing strategies through their continuous up-gradation will serve as central hub for the achievement of the desired financial results as to work for the promotion of the mission of the corporation through the utilization of financial and physical resources as on optimum basis. Reference: 1. Tanaka, Norio. "Shōyu:The Flavor of Japan," The Japan Foundation Newsletter Vol. XXVII, No. 2 (January 2000), p. 2. 2. http://www.kikkoman.com/ Read More