Download - Uncrustables
UncrustablesVenturing Forth to Japan
Team JapanStephanie SmootCharles Hobing
Ronita FarriaJared HoldenChris Chester
Potential Market? Consumer Demand (similar economic strength as the
United States) Traditionally, parents & grandparents fixed
meals throughout the day In recent years, frozen foods & fast foods have
gained significant market share as Japanese interests have shifted toward convenient foods
Ready-to-Go-Meals similar to Uncrustables are slowly being implemented into the culture
Competitors have already introduced similar products Mothers are working outside the home and children
are attending a vast array of activities outside the classroom
More difficult to schedule & prepare meals
Direct Competitor Yamazaki
Today, its products include bread, sweet buns, Japanese-style confectionery, Western-style confectionery, processed bread, and prepared rice and side dishes, as well as jam, desserts and prepared foods in retort pouches.
Blueberry Jam Sandwich! (Japan 1998)Another great idea from Yamazaki Bakeries in Japan. A simple slice of white bread is transformed into a snack treat with a schemer of blueberry jam!
Leading Competitors Nestle & Yayoi & ITOCHU
Ajinomoto Katokichi Nihon Suisan & Nichirei Nichiro Sunfoods
Nestle, Yayoi & ITOCHU
Joint venture in 2000, the two made new frozen brand called Buitoni. This product is an Italian pasta The companies have also added
frozen personal pizza, gratin, and other frozen small pasta dishes.
Ajinomoto
“For over 90 years, we’ve been the brand Japanese food-lovers rely on for the freshest, best-tasting, and most convenient ingredients seasonings and entrées.”
In Japanese jam market with Welch’s Japanese # 1 in brand recognition. Competitive with rice bowls and other rice
snacks. Joint ventures worldwide with companies like
Kraft and Kellogg.
Katokichi Katokichi has extended its
product range into confectioneries, dairy products, soft drinks as well as a vast array of frozen foods.
Such products include breaded shrimp, potato croquettes, seasoned rice and Japanese style buckwheat noodles.
Katokichi aims to maintain high sales by focusing on providing balanced-nutrition, calorie-controlled, safe food.
Frozen Goods
Market Share
Deep Fried Seafood
30%
Wheat and Buckwheat Noodles
45%
Okonomiy-aki and Takoyaki
35%
Nihon Suisan & Nichirei
Both companies are large in Japan, especially in frozen goods and fish products.
These companies have gone global and have made joint ventures with other global companies, some even from the US.
Nichiro Sunfoods Traditional company which relies on
brand loyalty Retains quality under the motto of
“providing products that will satisfy its customers”
Over 46% of Nichiro’s sales are generated within frozen foods.
The Group’s main business areas include the manufacturing and selling of processed foods, as well as the catching, purchasing and selling of marine products.
Frozen foods marketCategory % Share
Frozen meat, fish and seafood
54.10%
Frozen ready meals 24.20%
Frozen fruit and vegetables
14.80%
Frozen potato products
5.00%
Frozen bakery products
1.10%
Frozen desserts 0.80%
Market Share & Potential
Uncrustables are categorized under frozen ready meals nearly 25% of the frozen foods
market and growing With growing capacity of frozen
foods market, a reliable means of distribution will be necessary
Distribution Smucker’s Locations:
Nearest production facility to Japan is located in Australia
Transportation possibilities Shipping from Australia
Other major facilities in: United States (Uncrustables manufacturing location) Canada Brazil United Kingdom
Distribution & Imports Tariff 2%-3.4%
One of the lowest in the world Inexpensive to ship to Japan
Possibilities for Distribution Include: Ship Uncrustables from Scottsville plant
Expensive Logistics chain required to complete transfer
Produce Uncrustables in Australia and ship to Japan Expensive
Purchase new capital to manufacture product Produce in Japan
Joint Venture Merger & Acquisitions Franchise
Distribution cont… Importers, such as Smucker’s, often distribute directly
to the retailer. In Japan, 30% of snack foods and confectionaries, such as
Uncrustables, are delivered in this manner. The remainder distribute to wholesalers.
Wholesalers are crucial to the food distribution industry in Japan.
Their services are in high demand The industry leaders are SAN-ESU Inc., Yamaboshiya Co.,
Ltd and Takayama Co. Possible business relations
Products are bought at small profit margins by larger supermarkets such as Daiei, Ito-Yokado, Jusco, or convenience stores such as Seven-Eleven, Lawson
Similar to U.S. wholesaler distribution methods
Role of Wholesaler Vital role due to warehousing capabilities
in limited storage market and excellent delivery standards.
Retailers are currently cutting back on the merchandise that they stock in inventory.
Convenience Factor Wholesale companies are willing to handle all
supplier issues and paperwork that retailers wish to avoid. Convenience is the number one priority of the retailer.
Distribution Channel
Price of Distribution
Product importers generally set profit margin of 10-15%.
After import tax and transportation costs, companies expect to sell their product to wholesalers for 40% of the retail price. Example
About 45 yen every 100 yen asked for as the sticker price.
Market Segmentation Demographics-
Total Population: 127,215,000 Life expectancy : 82 years
Age Children ages 5-14: 9.6% Parents ages 25-44: 27.6%
average female marriage age 27.3 yrs average make marriage age 30.0 yrs. Rarely bear children before marriage
Grandparents ages 60-74: 17.08% Nearly 65% grandparents live with family
Gender Male (48.9%) Women (51.1%)
Race: Japanese (99%) Korean & Brazilian & Pilipino (1%)
Distribution of Wealth: Gross Domestic Product (2003E): $4.3 trillion (2004F): $4.8 trillion Real GDP Growth Rate (2003E): 2.5% (2004F): 4.5%
Religion: Shinto & Buddhism
Segmentation cont… Psychographics
Activities/Interests Large Spectator sports:
Baseball & Soccer Heavy Emphasis on exercise
Jogging, skiing, martial arts “after school, kids stay to participate on
athletic teams” Opinions
Health conscious: “Lunches are very well balanced meals. The
Japanese eat a lot of protein and carbs. They aren’t really dairy and sugar people”
Segmentation cont…
Geographic's Live in urban areas: 78.7%
Provides highest density of supermarkets and advertising capability
Rural & work in agriculture: 6% Maintains cultural biases towards Western
products 50% live on 2% of the land
Highly dense Cities Tokyo: 14 million
Buyer Behavior Japanese do not buy in bulk
Purchase groceries for only a few days in advance
Eat smaller portioned meals Not many large grocery chains “Peanut Butter isn’t readily available”
Eat fresh foods more often Diet consists mainly of rice and fish
Eat fast foods less often Mainly Japanese style fast food
Fresh foods & not fried as American Smaller portions & more expensive
Targeting
Smucker’s does not target kids Products in America targeted towards
parents Children carry strong influence in what is
bought
In Japan, 65% of the elderly live with their children Major role as caregiver for grandchildren
“I can’t see a grandma in Toyama buying some Uncrustables”
Current Positioning Brand Equity
Americans recognize JIF & Smucker’s Americans associate these names with:
Quality & expertise in product category Family oriented organization
Lunch sandwich for children Snack between school and activities
Fast and convenient American “soccer moms” on the go Easy to make, children can make without
assistance
Positioning in Japan No Brand Recognition
Smucker’s products are not presently in the country
Similar products are available and can be compared against
Implementation through the 4 P’s Distribution Product Promotion Price
Distribution
Retail environment Fewer large chain grocery stores
Reach people with Western food interests Carries specialty items such as Peanut Butter More assortment and shelf space
More local groceries/convenience stores Reach wider range of people more frequently Carries more traditional rice and fish products Less shelf space
Product Core Product Concept-
PB&J and Grilled Cheese without crust Peanut butter is not accessible White bread and sweets are not consumed
as heavily as in the U.S. Strawberry jam and jelly are prominent in
pastry dishes Grilled cheese is only consumed in Western
Style Restaurants There are a number of people who really like
Western food
Product cont…
Brand No Brand Recognition
Smucker’s and JIF not currently in the country
Possibility for brand image Building Recognition and Awareness is
costly Keep current image
Smucker’s traditional American image Alter image
Product cont… Labeling
Requires brand name to be printed in Japanese
Japanese translation of brand name may not equate American meaning
No regulation on ingredients listed and nutrition facts
Can be in Japanese or English because both languages are taught throughout schooling
Products cont… Packaging
Japan's packaging laws were designed in conjunction with waste management and recycling initiatives in mind.
Although there are no bans on any type of packaging material in Japan, the government has strongly encouraged businesses and industries to use recyclable packaging materials.
Bright, colorful packaging is tasteful to Japanese consumers
Promotions in the U.S. Advertising message
Quick and easy snack or meal Family values shown, adult and child
interaction Ex. Picnic lunch
Current Message Grilled Cheese: “Kids and Adults Agree:
Grilled Cheese is the #1 hot Sandwich” PB&J: “Kids and Parents Agree: PB&J is #1 in
lunch time Sandwiches”
U.S. Promotion cont… Types of promotion
Sales Promotion Price discounts
coupons in print ads in magazines and news papers Samples, at specifically designated locations Bonus packs Contest and sweepstakes
Smucker’s 2004 Cookie Classic, free gifts with catalog subscription
Event sponsorship Smucker’s stars on ice: represents wholesome family
entertainment Feed you Imagination give-away: could win an all
inclusive trip to see stars on ice
U.S. Promotion cont… Public Relations
Smucker’s Holiday Classics: a contest to win festive Holiday gifts
Direct Marketing Free Smucker’s online store catalog Free Smucker’s Recipe Booklet
Promotion in Japan “The real key to success… is good advertising
that emphasizes taste and wellness messages”
Current emphasis on family values relates to wellness
Comparison advertising is culturally frowned upon
Belief in harmony and peaceful coexistence Current message of # 1 disrupts harmony
TV ad’s can not exceed 18% of weekly broadcast time – minimized to 10% during primetime hours
Promotion in Japan cont… Types of promotion
Sales promotion used throughout Japan Price discounts
Coupons Contest & Sweepstakes
Japanese enjoy contests and game show prizes Event Sponsorships
Seen as appropriate method of advertising Public Relations
Public opinion large factor in overall acceptability of product
Direct Marketing Value knowledgeable salespeople Catalogs frequently used throughout country
Media AdsTypes of Media Available
Time $ advertising expenditure
Television 30 sec primetime and weekend
$18,100
Radio 20 second $407.25-$633.5
Internet One year $10,860-$18100
Outdoor SitesStyles Avg Monthly
$Minimum Booking
Billboard $11,312.28 12 month
Mega-Vision $14,299 2 weeks
Bus wrapping $63,350 1 day
Station poster $3,278.51 7 days
Hanging poster in train
$498,700.25 2 days
Car card in train
$19,475.6 1 month
Promotion in Japan Public transportation is the largest form
of transit Geographic coverage consists of dense
urban areas that efficiently accommodate advertising Subways: conducive to advertising Buses: interior and exterior advertising Billboards: found in consumer districts of
major metropolitans
Pricing
Currently $2.19- $2.79 (varies by retailer)
Only packs of 4 are currently being sold In Japan, the number 4 is a
representation of death Changing units in package will change
cost Changing package design will change cost
Pricing in Japan 241.995-308.295 Yen (Uncrustables) Supermarkets, grocery stores, and
convenient stores prices vary Lunch meals range from 280 Yen to 500 Full dinner meals
-inexpensive range from 500 to 1000 Yen-expensive range from 1000-3000 Yen
Questions?