DELISSA IN JAPAN MEMBERS OF « FOCUS NANTAI »

1. DELISSA IN JAPANMEMBERS OF « FOCUS NANTAI » MOUACI ANISSA MA1N0244 JESSIE 潘子惇 MA1N0104 EMIL MAZAN MA1N0211

2. I- INTRODUCTION • The company Agria was founded in 1973  a group of Swedish cooperatives  develop and sell a line of fresh dairy products. • Delissa line was launched in 1980. • Including Yogurts, desserts, freshcheese and fresh cream. • By 2001 , more than 1.1 billion Delissa yogurts and desserts were consumed per year in worldwide. • In fiscal year 2000, Delissa had sales of $2.9 billion and employed 4,400 people in and outside Sweden. • Danone is the biggest competitor in worldwide.

3. I- INTRODUCTION • Delissa Objectives in Japan… • Agria’s Japanese joint-venture  Nikko! • The total yogurt market in Japan for 1986 600 million cups. • In 1991, the expected market grow 8%. • Company’s launch strategy would be based on expected growth rate of 10% or 15% for the total market. • It plan to cover the three main metropolitan areas Tokyo Osaka Nagoya ( geographicsegmentation : cities) • Delissa’s goal: develop a high quality range of yogurts in Japan.

4. I- INTRODUCTION Consumption in Japan… Per capita consumption of yogurt…  in Japan is estimated at 5.3cups per person per year in Japan  versus 110 in Sweden 120 in Finland. • Seasonal sale in Japan are from March to July. • The highest sales have been recorded in June • 80 % of yogurt is sold through supermarkets.

5. COMPETITION (JAPANESE COMPANIES)…

6. JAPAN IS ATTRACTIVE FOR FOREIGN COMPANIES… • Lack of space  60% of the population concentrated on 3% of the surface! • 85% of the population lives in towns urban! • Younger Populationdisposal income high Potential market for profit. • Main target: JapaneseHousewives  shop daily • So expect “fresh milk products” high potential for growth. • 30% of household budget is on food  attract foreign companies to establish in Japan. • Japanese potential consumers attracted by “Western” products So, opportunity for foreign companies. • Japanese market : competition is very strong!

7. COMPETITOR: BULGARIA IN JAPAN… • Bulgaria Yogurt  Dominates 60% of Japanese Market. • 40 M people regularly consume the product. • LB Bulgaricum Plc. & Japanese company Meiji Dairies • working successfully • 3 licensing contracts • Development of dairy produce based on sourbacteria. • The 2 companies signed an agreement for cooperation in relation to branding the yogurt as "Bulgaria" throughout the Asianregion. • Joint-venture: Meiji-Bulgaria

8. Competition (foreign companies) • Nestlé • Kraft Foods • Unilever • Mars Incorporated • Sara Lee • Danone

9. Main competitor : Danone • MNC is a french food-products. • It claims world leadership in fresh dairy products. • 2007: 2nd producer of cereals and biscuits in the world. Joint ventures Strategy of growth through joint ventures, • particularly in fast-growing emerging markets • It built an attractive portfolio in emerging market (30% of its sales). joint ventures with companies such as… • Al Safi in Saudi Arabia (2001 • Yakult in India (2005) • Vietnam (2006) • Alqueríain Colombia (2007) • Mengniu in China (2006). Danone signed an agreement with Ajinomoto  Joint-venture: Ajinonomoto-Danone

10. MAIN COMPETITOR : YOPLAIT • Yoplait is French group  franchised brand of yogurt jointly owned by US food conglomerate General Mills and French dairy cooperative Sodiaal. • It has signed a license contract with Meiji group • The agreement covers the "exclusive use" of Yoplait's brand and trademarks, "technologicalknow-how" and dealership of products in Japan, a statement reads.

11. Main competitor: Nestle • Nestlé is a Swiss MNC of snack food and health food (baby food, water, coffee, dairy products, ice cream, pet foods and confectionery) • It is the largest food company in the world measured by revenues. NestleSnow Brand joint venture company in Japan! • Annual sales : 1billion Swiss francs (about $ 1.1 billion) including Nespresso, Nescafé, KitKat, Smarties, Nesquik, Stouffer's, Vittel, and Maggi. • 450 factories • 86 countries • Employs around 328,000 people. • Main shareholders of L'Oréal.

12. MIX MARKETING OF DELISSA BEFORE 1994…

13. TO ENTER NEW MARKET… SRT International advertising Agency help Delissa to penetrate new market  Slogan “natural dairy food is good to taste”. Nikko distinguish its products from others yogurts. The target families with babies. However, the products are consumed by a wider age bracket from young children to high school students Segmentation by age Strategy of differentiation… strong fashionable image: packaging with fashionable design  “diet concept” so reinforce the image!  “ fresh” so attract consumers!  “healthy” so attract new consumers! ”naturalness”/ “simplicity”/ ”friendliness”/ “fanciful taste”  Productsfromfarm so increase brand awareness! Sophisticatedtaste from Sweden so attracthousewives in Japan.

14. 1989: Nikko and Agria signed an “industrialfranchiseagreement” Thus, Nikko can manufacture and distribute Delissa’s products under license from Agria. Agria provide…  Manufacturing  Product know-how such as… • Marketing • Technical support • Commercial support • Sale support • Technology knowledge transfer (machinery, tanks…) Agria receive royalties for each pot of yogurt sold. • Nikko cooperative form a separate company for the distribution, marketing and promotion of Delissa products.

15. Delissa signed an agreement with a Japanese partner, Ajinomoto… • joint venture : Ajinomoto-Danone. • joint venture : Ajinomoto - Maxwell House • 1994: Delissa represent 2 % of Japanese yogurt market. • Slow progress in Japan. Promotion need to be improve… Advertising is not so successful because messages are cluttered...Advertising for Delissa : • TV 94 % • In-store: promotion 6 % • Newspaper 4 % • Magazine 4 %

16. Distribution / Ordering System Delivery process is to long for fresh product.

17. WEAKNESS… • 2001: Delissa represent less than 3 % in total market. • Custard and chocolate pudding sales failed • Discover limited distribution network outside major metropolitan area: small cities town rural area • Japanese market brand loyalty is low • Lack of marketing & distribution

18. STRENGTH… • 2001: “plain yogurt” represent 43 % of the total Japanese market  very successful • 1998 “fruit yogurt” segment represent 25% of the total Japanese market.  “Yogurt with jelly” : 1.2 million cup were sold 3 month after the introduction! • In Nikko’s store  Delissa sell 71 % of its products. • 7000 stores in Tokyo. The main target of Delissa is… • Children (segmentation: age) • Young housewives (segmentation: gender) • Young people between 13 -24 years old (segmentation: age) Example: Nikko and agency running TV spots for young people and children – from 11.15 to 12.15 at night.

19. RECOMMENDATIONS… Since Japan represent a potential market… Delissa should stay in Japan… for that, they need to shift their strategy... • Resolve “Partnership problem” (franchise or joint venture) • Agria and Nikko should do some compromise by trying to understand each other  can use mediator! (external agency) • Evaluation of partnership. • Reduce cultural gap (Swedish and Japanese) lack of knowledge! • Must not underestimate the complexity of the Japanese market! • Understand better each other. • Build a relationship based on trust. • Resolve problem together. • Combine their knowledge and resources to work as a single team. • Improvethe “effective information system” better share of data. • Improve communication (language & cultural barriers)

20. RECOMMENDATIONS… • Improve marketing strategy  Segmentationdividing a target into subsets of consumers (common needs & desires)  using media. • Develop different ways of imagining market segments, and create product differentiation strategies to exploit these segments  commercial advantage  more effectivematch between target customer and product. • Find a niche market (distinct benefits) to gain more market share not a lot of competitors! • Increase the price of products  less competition smaller quantity profit! • Propose different prices  different segments (higherprices to those segments willing and able to pay more and charging less to those whose demand is price elastic). • Develop target market(group to aim ) improve marketing efforts • Perfect the target market and the marketing mix variables • Product, • Place • Distribution (improve the delivery procedure) • Promotion • Price.

21. RECOMMENDATIONS… • Correct mass marketing  radio, television and newspapers  to reach broad audience. • Developdifferentiatedmarketing  provide separate offerings to each different market segment that it targets  unique benefits to different segments increase sales. • Recreate/change the image or identity in the minds of the target market for the products & brand  “re-positioningconcept”. • reposition the entire company, not just the product line or brand change perception of consumers. • Making hard decisions about how a market is shifting firm's competitors will react. • Improve “autonomy” of the company  address directly the Japanese consumers  without going through an intermediary ! • Reduce the turnover of managers  manage better the company!

22. THANK YOU!!!