How Successful or Unsuccessful has Delissa Been in Japan - Essay Example

Q.2     How would you evaluate Delissa’s present position in Japan?

Even though the Japanese are not dairy product consumers or despite Delissa’s failure in the market, Agria’s dairy products still have a good potential of being able to capture the market shares from its competitors (Snow Brand, Meiji, Morinaga, and Yakult) (p. 9–3) through proper market positioning, differentiation, and advertisement.

With a total population of 11, 2, and 2 million in Tokyo, Osaka, and Nogaya respectively (p. 9–4), the Japanese market can be considered as large.  Given that consumers’ brand loyalty is low (p. 9–9), Delissa could easily penetrate the market shares of its competitors.

Q.3     Analyze Delissa’s strategy for the entry into Japan.  Was the choice of Nikko as  Agria’s partner in Japan appropriate?  Was Delissa’s initial marketing plan appropriate?  Why or why not?

A franchise contract can be beneficial on the part of Delissa in the sense that Agria could easily penetrate the Japanese market through its business partner Nikko.  At the same time, Delissa could easily make use of Nikko’s existing market distribution to deliver Delissa’s yogurt in the market. 

One of the main factors that contribute to the failure of Delissa’s business strategy of entering the Japanese market has something to do with the communication/language and culture gap.  There is basically no single stakeholder on the part of Nikko who could speak English. For this reason, it becomes a challenge for the two companies to establish a clear vision and implement market strategies to increase the business’ profitability.  Due to lack of communication, mistrust between the two parties becomes unavoidable. (p. 9–11)

The initial marketing plan that was implemented is inappropriate due to the fact that it was not effective in establishing a good market position and differentiation for Delissa’s product line.  Based on the research survey result, 55% of the respondents were not clear on what the company is trying to communicate with regards to Delissa's product. (p. 9–11)   Based on the company’s recent media planning, Delissa is targeting children and young people between 13 to 24 years of age.  For some reason, Nikko and SRT International Advertising Agency have been running TV spots between 11:15 to 12:15 at night.  Obviously, the company’s target consumers are mostly asleep around that time. (p. 9–10) 

Aside from the ineffective advertising campaign used in the business, the ordering system and market distribution of Dalissa products are very slow due to some internal bottlenecks that cause a delay in the delivery of products in the market. (p. 9–8)

Q.4     How did Agria manage its Japanese partner over time?

Ole Bobek – Agria’s director of international operations was constantly negotiating with Nikko regards to the business franchise.  Even though Nikko finally signed the contract with Agria, it was never clear to Agria how Nikko really thought about them as business partners.  There was no clear vision as to how both companies could strengthen their brand name in the Japanese market. (p. 9–5)

Q.5     Should Agria pull out of Japan? If yes, explain why; if not, what should Agria do?

No.  Agria should not pull out of Japan only because of the communication barrier or cultural gap.  Instead of accepting defeat, Agria should develop a good strategy that could enable them to narrow down the communication and cultural gap between Agria and Nikko. 

For instance, Agria could hire an interpreter who could speak the Japanese language and has the technical knowledge or background in handling business.  By keeping a hold of the interpreter, Agria could have additional manpower who could serve as the eyes and ears on behalf of Agria.  As soon as the communication and the cultural gap have been narrowed down, it will be much easier for both companies to share their business opinions and thoughts upon developing a better business strategy that will enable them to capture a bigger market share.