GROUP I
DELISSA IN JAPAN
NGUYEN PHAM NHUT
THIEN (Tina)
M987Z240
NADIA NILA SARI
M987Z250
VU THI AI VAN
M987Z256
COMPANY
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Agria was founded in 1973 when a group of
Swedish airy cooperatives decided to create a
united organization that would develop and
sell a line of fresh dairy products.
Delissa line was launched in 1980. This was
one of the few “national” lines of dairy products
in Sweden.
Including Yogurts, desserts, fresh cheese and
fresh cream.
By 2001 , more than 1.1 billion Delissa yogurts
and desserts were being consumed per year
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.
DELISSA OBJECTIVES IN JAPAN
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The total yogurt market in Japan for 1986 is
approximately 600 million cups.
Next five years’ expected market grow is at least 8%.
Company’s launch strategy would be based on expected
growth rate of 10% or 15% for the total market.
First year, target of market share is 5% and 10% share of
market within three years of launch.
Company’s plan to cover the three main metropolitan
areas, Tokyo, Osaka, and Nagoya, within two years
period and the rest of the country within the next three
years.
Delissa’s share of the total yogurt market had fallen to
2% in 2001.
CONSUMPTION IN JAPAN
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Per capita consumption of yogurt in Japan is
estimated at around 5.3 cups per person per
year in Japan, versus 110 in Sweden and 120 in
Finland.
Seasonal sale is in Japan through March to
July.
The highest sales have been recorded in June so
ideal launch date would be at the end of
February.
80 % of yogurt is sold through supermarkets.
TYPES OF YOGURT IN JAPAN
Plain
yogurt
39 % of the
market in
volume
Flavored
yogurt
45 % of the
market in
volume
Fruit
yogurt
16 % of the
market in
volume
COMPETITION
Company
Products
Turnover in 1989
Snow Brand Milk
Products
Drinking milk, Cheese
Frozen foods,
biochemicals
Pharmaceuticals
643,322 million Yen
Meiji Milk
Products
Dried milk for babies,
Ice cream, cheese
610,674 million Yen
Morinaga Milk
Industry
Drinking milk, ice
cream,
Instant coffee
561,783 million Yen
The Japanese also consume a yogurt drink called ‘’
which is often included in statistics on total yogurt
consumption as it competes with normal yogurt.
4P’S BEFORE 1994
Products
 Plain (packs of 2 and 4)
 Plain with sugar (packs of 2 and 4)
 Flavored with vanilla, strawberry
an pineapple
 All three types were to be sold in
120 ml cups
Promotion
Television, newspaper, magazine,
 Street shows
 In-store promotions,
 Test trials
 Outside retail stores
Price
 Following the top brands in Japan
to respect a high-class image
 Should be affordable for the
house-wife
 Delissa could be priced at 15%
above competitive products.
Place
Cover the three main metropolitan
areas: Tokyo, Osaka, Nagoya
ENTRY STRATEGY
”
new milk-related products” SRT International advertising
Agency help Delissa entry new market
The concept “natural dairy food is good to taste”helped Agria
saturate the market with Delissa brand and compete with its
competitors.
Nikko made distinguish its products from those of earlyentry dairy” new and natural and quite different from any
other yogurts”
The core target group has been defined as families with
babies. However, the products are consumed by a wider age
bracket from young children to high school students.
The concept “ freshness” will capture the consumers’ interest
as well as clearly differentiate Delissa from other brands and
the message “ healthy products direct from the farm and
sophisticated taste from Sweden” attract housewives in Japan.
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Japanese housewives were becoming more diet
conscious so it might be advisable to mention the dietary
value of Delissa
To reinforce the product’s image and increase brand
awareness SRT always use specific visual and verbal
messages be used throughout the promotional campaign
“refreshing nature of Delissa Swedish yogurt; it is so
fresh when it’s made at the farm”
THE FRANCHISE CONTRACT
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In late 1989 Nikko and Agria had signed an industrial
franchise agreement permitting Nikko to manufacture and
distribute Delissa products under license from Agria.
Agria was to provide manufacturing and product knowhow, as well as marketing, technical, commercial and sale
support. Agria would receive a royalty for every pot of
yogurt sold.
In 1990 Agria provided Nikko with advice on technology,
machinery, tanks, fermentation process, etc.
Nikko cooperative would form a separate company for the
distribution, marketing and promotion of Delissa products.
JOINT VENTURE COMPETITORS
The company signed an agreement with a
Japanese partner, Ajinomoto. Their joint venture
, Ajinomoto-Danone Co.ltd, is run by a French
expatriate together with several Japanese
directors.
 Ajinomoto has a very successful joint venture
with General foods for “ Maxwell House” the
instant coffee.
 However, Ajinomoto had had no experience at all
in dealing with fresh products before entering the
joint venture with Danone
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1994 : DELISSA AFTER THREE YEARS IN
JAPAN
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Three years after launch, Delissa – with 2 % of
Japanese yogurt market.
Product slow progrees in Japan.
DISTRIBUTION / ORDERING SYSTEM
DAY
ORDERING SYSTEM
Day 1 a.m
Each salesman sent an order
to his depot
Day 1 pm
Each depot order went ti the
Yokohama depot
Day 2 a.m
The Yokohama depot
transmits the order to the
factory
Day 2 p.m
Yogurt was produced at Nikko
Milk Processing
Day 3
Delivery to each depot
Day 4
Delivery to stores
•Delivery
process is to long for fresh product.
PROMOTION
Advertising not too successful, advertising
message are not too cluttered.
 Result cutomer research survey showed :
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4% unaided awareness
 16% had any recall at all
 55 % respondent didn’t know what the TV
commercial were trying to say.
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Survey said that advertising effectiveness
indicated that we should stress the fact that
Delissa tastes good ( delicious ).
SITUATION LEADING UP TO 2001
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Had less than 3 % in total market 2001 , the result has
been far below expectation
Discover limited distribution network outside major
metropolitan area ( small cities, town and rural area )
Japanese market brand loyalty is low
Lack of marketing, distribution is one of the most
problem.
PRODUCT
In 2001 plain yogurt 43 % in the total Japanese
market. And grown 50% in this past 3 years.
 1998 fruit yogurt segment growth 25%, should be 23%
next year.
 Yogurt with jelly : 1.2 million cup 3 month after
introduction.
 Custard and chocolate pudding sales disappointed.
 Plain yogurt is very good.
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Mid Year result :
 55 million 120 ml ( 2002 )
 Present date only 42 million.
Stores covered
 In Nikko’s store Delissa sell about 71 %.
 7000 store cover in Great Tokyo.
Product Return
 April 2000 to March 2001 :
5.06% vs almost 0% in Scandinavia and the international
standart of 2% to 3%.
 The average shelf life in yogurt in Japan is 14 days.
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MEDIA PLANNING
Delissa target is :
 Young people between 13 -24 y.o
 Children
 Nikko and agency running TV spots for young people
and children – from 11.15 to 12.15 at night.
 With this late night spot Nikko try to reach customer
and distributor.
 Target group is children but they spot in late night.
 The price of 15 second spot in Tokyo are between Yen
1.25 million and Yen 2.3 million in 2000.
Largest segment in
Japan :
1. Plain yogurt
2. Flavored
3. Fruit
Brand Awareness :
Unaided Brand
awareness :
1.Meiji Bulgaria
2. Morinaga Bifidus
3. Yoplait
4. Danone
5. Delissa
People
Focus on house-wives in
Japan
Package
Packs of 2 and 4 for Plain
Yogurt
Packs of 2 and 4 for Plain
with sugar
 Packs of 2 for Flavored with
vanilla, strawberry and
pineapple
Advertising Awareness
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Top ranking :
1.
Bifidus 43%
2.
Bulgaria 41%
3.
Delissa 36%
4.
Danone 28%
5.
Yoplait 26%
Advertising for Delissa :
1.
TV 94 %
2.
In-store promotion 6 %
3.
Newspaper 4 %
4.
Magazine 4 %
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65% Delissa ads recall something about the content and current ads
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9 % recalled previous adv.
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55 % did know what the advertising trying to say.
CONSUMPTION
In fruit
segment :
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Yoplait ( 10 % )
Bulgaria ( 8 % )
Delissa ( 5 % )
Dannone ( 4% )
Brand mainly
consumed by
respondent:
1. Bulgaria
2. Bifidus
3. Delissa
1.
2.
3.
4.
5.
Respondent had
consumed plain yogurt (
past month ) :
28 % Bulgaria
15 % Bifidus
5 % Yoplait
4 % Danone
3 % Delissa
The number
who ever tried :
• Delissa 22%
• Bulgaria 66 %
ANALYSIS & SUGGESTION
The Francisee Contract :
 Cultural gap problem
 Communication
Product
 Distribution
 Advertising
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WHAT AGRIA SHOULD DO ?
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Cancle contract & find another distribution ?
Renew the arrangement with Nikko and continue
to try to gain market share ?
Admit defeat and withdraw from Japan
completely ?
Since :
Market large and high potential
 Delissa taste in not bad as other competitor
 Delissa’s Yogurt with jelly : 1.2 million cup 3 month
after introduction.
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Our group choose to renew contract and try to gain
market in Japan. But first have to do is fix patnership
problem between Agria and Nikko for Delissa product
and then fix problem in product, distribution and
advertising.
THE FRANCHISE CONTRACT :
Before Agria renew contract with Nikko, they should
Doing evaluation on their patnership. The cultural
gap between two company may happen because of
lack knowlegde in both Different culture between
Swedian and Japanese. In this case if that’s happen
the two company should understand the cross culture
Patnership, such us different national culture and
organization culture and building trust by
communication, corperation, commitment and
conflict resolution.
But if the problem could not resolve, both company can use mediator
ways. The Franchisors and franchisees should first attempt to
resolve the issue before referring to an external agency ( mediator ).
A normal dispute resolution procedure will at first attempt
resolution informally, then by a formal written notice which will
generally include the nature of the dispute, and desired outcome to
resolve the dispute, and a timeframe for this to occur. For example
In Australia, under the Franchising Code of Conduct, serious
disputes that cannot be resolved between the franchise parties
themselves, should be referred to mediation.
PRODUCT
Market in Volume
Plain
16%
Flavored
Fruit
39%
45%
Customer like most Jelly Yogurt Flavour, it means
Delissa could create more innovating Jelly Yogurt .
Also focus production :
1. priority on flavoured yogurt,
2. in plain yogurt and
3. priority in fruit yogurt.
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Delissa has strong fasionable image, and this can be
used in their packaging provide fashionable design to
strenghtened the image.
TARGET MARKET :
Families with babies. Young housewives as principal
purchaser.
 Young people between 13 -24 years old
 Children
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DISTRIBUTOR
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Try Yakult strategy in Direct selling ( door to door
sales ) to employee. By giving discount in first or
second month subscriber.
Mass sales retailer distribution to :
 Supermarket / convenience store
 Retailer / wholeseller
 Smaller local store
Fix the transportation to distribute:
 The refrigated milk van with fairly small (less than 2
tons ) to drive down the narrow space.
DISTRIBUTION CHANNEL
Cut distribution channel :
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BEFORE : ( 6 channel )
Salesman – Depot - Yokohama depot – Factory ( produce at
Nikko Milk Processing ) – Depot – Stores
- Delivery process is to long for fresh product.
- The time should be shortened to only one day.
TO : ( 3 channel )
Salesman – factory – store ( to keep the freshness )
- Since the smaller outlets have very little storage space,
wholesalers often have to visit them more than once a
day.
ADVERTISING
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Unaided awareness and brand awareness of
Delissa is so low better than the other
competitor.
4.
Advertising for Delissa :
TV 94 %
In-store promotion 6 %
Newspaper 4 %
Magazine 4 %
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55 % did know what the advertising trying to say.
1.
2.
3.
Fix the television advertising with clear message
and bring to the customer about brand image and
positioning of Delissa : “ Fresh, fashionable and
delicious yogurt “.
 Focus on television advertising around peak
period on March to July.
 TV ads in Sunday morning or in school holiday,
during cartoon movie to target children. And
during teenagers series for the youth. With
endorsement that represent kids and youth.
 Free tester of Delissa yogurt for in-store
promotion Delissa and put Delissa near the
cashier rack to attract customer and establish
awareness for the brand.
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CONCLUSION
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We learn from the case that problem patnership (
franchise or joint venture ) could be happen, in
cross culture problem or anything else.
Both company ( Agria and Nikko ) should
understand the culture of other company (
wheather is nation culture or organization
culture ). If the problem couldn’t be solve easily
they can use mediator or even defeat and
withdraw from the company and market.
Japan market is potential, so Delissa have big
chance to growth in Japan market, with specific
and unique positioning, good advertising and fast
also effective distribution, Delissa will success in
Japan market.