Chateau des Vaults   Emerging into the Japanese Market Presented by: Natalie DeNike Ally Hemenway Katie Adkins Caitlin Car...
Objective <ul><li>The following market analysis and recommendations aim to inform the client how to successfully enter the...
Chateau des Vaults <ul><li>Client: Madame du Pontbriand, Chateau des Vaults </li></ul><ul><li>Location: Loire Valley, Save...
Overview <ul><li>Demographics </li></ul><ul><li>Japanese Culture </li></ul><ul><li>Market Analysis  </li></ul><ul><li>Stra...
Demographics <ul><li>Population: 126, 804, 433 </li></ul><ul><li>Major Cities: Tokyo, Hokkaido, Kobe, Akita, Sapporo, Send...
Demographics Demographics
<ul><li>Drinking Age: 20 years </li></ul><ul><li>15% tax rate </li></ul><ul><li>Liquor Law Tax </li></ul>Tax & Regulation
Trade <ul><li>Japan is the EU’s 2nd most important trade partner in Asia </li></ul><ul><li>Japan has the 3rd largest marke...
Importation <ul><li>$499.7 billion imports per year </li></ul><ul><li>France carries the strongest image for wine in Japan...
Importation Imports
History of Wine in Japan <ul><li>In the 1950’s and 1960’s wine was seen as an exotic drink </li></ul><ul><li>Increase in c...
Japanese Culture <ul><li>Traditions and culture very important </li></ul><ul><li>Saving face is crucial </li></ul><ul><li>...
Business Practices <ul><li>Business Relationships </li></ul><ul><li>Gender Roles </li></ul><ul><li>Key words for wine indu...
Japanese Consumer <ul><li>Interest in health and organic products </li></ul><ul><li>Tend to agree with opinions of others ...
Target Market <ul><li>Typically between the ages of 30 - 39 </li></ul><ul><li>Women (40% of women drink wine at least once...
Recessionary Spending Behavior <ul><li>The “New” Japanese consumer </li></ul><ul><li>Flock to discount and online retailer...
Japanese Consumer Japanese Consumer
Consumption <ul><li>Wine Consumption </li></ul><ul><li>Wine Preferences </li></ul><ul><ul><li>Red Wine </li></ul></ul><ul>...
Competition <ul><li>Alcoholic Beverages in Japan </li></ul><ul><li>60% of imported bottles come from France </li></ul><ul>...
Market Entry <ul><li>Japan Wine Challenge </li></ul><ul><li>BioFach Exhibit </li></ul><ul><li>Restaurant based promotions ...
Distribution Channels <ul><li>Multiply sales channels </li></ul><ul><ul><li>Private brand store, Internet sales, restauran...
Pricing <ul><li>Gradual shift from inexpensive wines to mid-range wines  </li></ul><ul><ul><li>¥1,000 - ¥1,500; $11.23- $1...
Product Packaging <ul><li>Japanese consumers prefer a humble design in products </li></ul><ul><li>Standard bottle is 750ml...
Organic Wine <ul><li>Japanese Organic Standards </li></ul><ul><li>BioFach Exhibit </li></ul><ul><li>Currently consumer dem...
Branding <ul><li>Increase awareness of Loire Valley wines </li></ul><ul><li>Market as a region </li></ul><ul><ul><li>Loire...
Wine Tourism <ul><li>In 2010 approximately 12,500,000 Japanese tourists traveled abroad </li></ul><ul><ul><li>8.5% increas...
Wine Tourism Wine Tourism
Wine Tourism Wine Tourism
Website <ul><li>Online Ordering </li></ul><ul><ul><li>Increased interest in online retail </li></ul></ul><ul><ul><li>89% o...
Navigating the Market <ul><li>Distributor </li></ul><ul><li>International lawyer </li></ul><ul><li>Regional translator </l...
Future & Expansion <ul><li>Once the product is integrated into the Japanese market, there is a higher opportunity to reach...
SWOT Analysis Market SWOT Analysis Strengths Mature wine market Lack of domestic wines Weaknesses Language and culture bar...
The Marketing Mix  <ul><li>Product: Chateau des Vaults  </li></ul><ul><li>Price: €18 - €22 </li></ul><ul><li>Place: Urban ...
Additional Recommendations <ul><li>Cultivation of Tokyo market </li></ul><ul><li>Strengthen Loire Valley brand </li></ul>A...
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Chateau des Vaults - International Market Entry Strategy

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Japanese market entry strategy researched and presented in an International Business Administration course to real client Chateau des Vaults.

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  • Prepare an executive for international business transactions in Japan. Successfully enter the target market in Japan. Prepare the client to successfully enter the Japanese wine market.
  • Location: Island chain in Eastern Asia Area: 377, 915 sq km Comparable to California Ethnic Groups: Japanese 98.5% Koreans (0.5%), Chinese (0.4%), and other (0.6%) Population Growth Rate: -0.242% Median Age: 44.6 years Life Expectancy: 82.17 years
  • GDP: $5.068 trillion GDP per capita: $32,700 Currency: Yen (JPY) Exchange Rate *** Japan is currently in communication with the EU in plans to discuss trade agreement - April or May 2011 Only barrier - tariffs on wine Trade restrictions on services, telecommunications, postal services, electricity and transport - not on wine
  • France carries the strongest image for wine in Japan, market share continues to decline due primarily to competition from new world wines Import/export Imports: $499.7 billion Exports: $542.3 billion FDI Stock of FDI at home: $151.5 billion Stock of FDI abroad: $747.1 billion Why Imports? The product is not available in Japan The product is a specialty item from the country For increase in social status To enjoy the lifestyle of the country of origin
  • this shows a decrease of French wine imports in 2009 - think we include this chart?
  • The 1998 boom followed reports of red wine increasing heart health
  • Non-verbal communication: Expressions to watch out for include inhaling through clenched teeth, tilting the head, scratching the back of the head, and scratching the eyebrow Non-verbal communication is so vital there is a whole book for foreigners on how to interpret the signs It is disrepectful to stare into another person’s eyes, especially a person who is senior to you because of age or status Japanese are very conscious of age and status Everyone has a distinct place in hierarchy Language: Japanese Translator Religion: Shintoism (83.9%), Buddhism (71.4%), Christianity (2%), and other (7.8%)
  • Greetings are very formal and ritualized Show respect Wait to be introduced, impolite to introduce yourself Bow but foreigners shake hands Business Cards
  • If they cannot afford high priced items, they will often purchase “near-luxury” items. Japanese people tend to agree with the opinion of others, so growing popularity of products can result in increased sales
  • 40% of women drink wine once a month, only 31% of men Most wine drinkers are found in cities rather than rural areas - 60% of wine consumption in 2009 was in Tokyo Older generation tends to consumer traditional alcoholic beverages such as sake and beer.
  • The new Japanese consumer More and more people are eating at home, trying to save money 60% of wine consumption is off-sight.
  • Why will Japanese choose white wine for consumption? Will there be crowding out from local wines? What competition is there from local wines? What competition from other French wines? Other foreign wines? How will you compete? How will you keep up with the trends? Household Income Lowest 10%: 4.8% Highest 10% 21.7%
  • Competition from foreign countries (new world wines): France, Italy, Chile, Spain, Germany, Australia, United States Import volumes of French wines declined only 2.5% from 2009, the total value of French wine declined 18.5%.- can be attributed to cautious consumer spending which reduced demand for premium French wine in both retail and HRI sectors Domestic almost half volume (800,000 hectoliters /1.23 million hl), but セ is made with imported ingredients and blended majority is targeted to the low price segment (below 11.23)
  • Dates?
  • The Japanese Internet retail market is expected to grow by $50 billion by 2015 Internet users: 90. 91 million 3rd largest amount of Internet users in the world
  • Consumers 35 and under generally accept screw cap bottles Very important to have long lasting tradition- determines quality Nice packaging- do not favor bright colors or smell- discrete perfumes and suits Translate label completely into Japanese
  • Under the Food Sanitation Law, the Japanese Ministry of Health, Labor and Welfare (MHLW) outlines the permissible quantities of wine coloring agents and preservatives used as additives. Currently consumer demand exceeds domestic supply for organic products in Japan.
  • Ex. Bordeaux wines
  • In France the highest number of Japanese tourists in Europe by at least 800,000: 1,603,000 – almost as much as US
  • Suggestions: Intern-specifically for computers, website, online orders internship from cooking or wine school or IT- experience exchanged for labor Angers-30,000 students, good labor force for interns Multiply sales channels Private brand store, Internet sales, restaurants 60% of wine purchased through retailers 89% of Japanese consumers shop online Compared to 63% in the U.S. and 56% in France
  • Find a distributor with knowledge of the Japanese wine market Translator from the region
  • Recommendations based on the “Marketing Mix” model
  • Chateau des Vaults - International Market Entry Strategy

    1. 1. Chateau des Vaults Emerging into the Japanese Market Presented by: Natalie DeNike Ally Hemenway Katie Adkins Caitlin Carroll
    2. 2. Objective <ul><li>The following market analysis and recommendations aim to inform the client how to successfully enter the Japanese wine market. </li></ul>Objective
    3. 3. Chateau des Vaults <ul><li>Client: Madame du Pontbriand, Chateau des Vaults </li></ul><ul><li>Location: Loire Valley, Savennières region </li></ul><ul><li>Product: (list 3 white wine titles) </li></ul>Chateau des Vaults
    4. 4. Overview <ul><li>Demographics </li></ul><ul><li>Japanese Culture </li></ul><ul><li>Market Analysis </li></ul><ul><li>Strategy </li></ul><ul><li>Future Expansion </li></ul>Overview
    5. 5. Demographics <ul><li>Population: 126, 804, 433 </li></ul><ul><li>Major Cities: Tokyo, Hokkaido, Kobe, Akita, Sapporo, Sendai </li></ul><ul><li>Urban Population: 66% of total population </li></ul>Demographics
    6. 6. Demographics Demographics
    7. 7. <ul><li>Drinking Age: 20 years </li></ul><ul><li>15% tax rate </li></ul><ul><li>Liquor Law Tax </li></ul>Tax & Regulation
    8. 8. Trade <ul><li>Japan is the EU’s 2nd most important trade partner in Asia </li></ul><ul><li>Japan has the 3rd largest market in the world </li></ul><ul><li>12th out of 181 countries in doing business </li></ul>Trade
    9. 9. Importation <ul><li>$499.7 billion imports per year </li></ul><ul><li>France carries the strongest image for wine in Japan </li></ul><ul><li>Market share continues to decline due primarily to competition from new world wines </li></ul>Imports
    10. 10. Importation Imports
    11. 11. History of Wine in Japan <ul><li>In the 1950’s and 1960’s wine was seen as an exotic drink </li></ul><ul><li>Increase in consumption in 1998, 2004 and 2007 </li></ul><ul><li>The 1998 boom followed reports of red wine increasing heart health </li></ul>History of Wine in Japan
    12. 12. Japanese Culture <ul><li>Traditions and culture very important </li></ul><ul><li>Saving face is crucial </li></ul><ul><li>Non-verbal communication </li></ul><ul><li>Hierarchy </li></ul>Japanese Culture
    13. 13. Business Practices <ul><li>Business Relationships </li></ul><ul><li>Gender Roles </li></ul><ul><li>Key words for wine industry </li></ul><ul><li>Time </li></ul><ul><li>Hofstede’s Dimensions </li></ul>Business Practices
    14. 14. Japanese Consumer <ul><li>Interest in health and organic products </li></ul><ul><li>Tend to agree with opinions of others </li></ul><ul><li>Interest in new products and private label foods </li></ul><ul><li>Respond to impulse offers </li></ul><ul><ul><li>Limited editions </li></ul></ul><ul><ul><li>One-off deals </li></ul></ul>Japanese Consumer
    15. 15. Target Market <ul><li>Typically between the ages of 30 - 39 </li></ul><ul><li>Women (40% of women drink wine at least once a month) </li></ul><ul><li>Urban population </li></ul><ul><li>Medium income </li></ul>Target Market
    16. 16. Recessionary Spending Behavior <ul><li>The “New” Japanese consumer </li></ul><ul><li>Flock to discount and online retailers </li></ul><ul><li>Majority of people eat at home </li></ul>Recessionary Spending Behavior
    17. 17. Japanese Consumer Japanese Consumer
    18. 18. Consumption <ul><li>Wine Consumption </li></ul><ul><li>Wine Preferences </li></ul><ul><ul><li>Red Wine </li></ul></ul><ul><ul><li>Sparkling Wine </li></ul></ul><ul><ul><li>White Wine </li></ul></ul>Consumption
    19. 19. Competition <ul><li>Alcoholic Beverages in Japan </li></ul><ul><li>60% of imported bottles come from France </li></ul><ul><li>Competition from “New World” wines </li></ul>Competition
    20. 20. Market Entry <ul><li>Japan Wine Challenge </li></ul><ul><li>BioFach Exhibit </li></ul><ul><li>Restaurant based promotions </li></ul>Market Entry Strategy
    21. 21. Distribution Channels <ul><li>Multiply sales channels </li></ul><ul><ul><li>Private brand store, Internet sales, restaurants </li></ul></ul><ul><li>60% of wine purchased through retailers </li></ul><ul><li>89% of Japanese consumers shop online </li></ul><ul><ul><li>Compared to 63% in the U.S. and 56% in France </li></ul></ul>Distribution Channels
    22. 22. Pricing <ul><li>Gradual shift from inexpensive wines to mid-range wines </li></ul><ul><ul><li>¥1,000 - ¥1,500; $11.23- $16.85; € 9.21 - €13.81 </li></ul></ul><ul><ul><li>CDV price point: €18 - €22, ¥1,953 - ¥2,170 </li></ul></ul>Pricing
    23. 23. Product Packaging <ul><li>Japanese consumers prefer a humble design in products </li></ul><ul><li>Standard bottle is 750ml </li></ul><ul><li>Organic labeling </li></ul><ul><li>Japanese translation </li></ul>Product Packaging
    24. 24. Organic Wine <ul><li>Japanese Organic Standards </li></ul><ul><li>BioFach Exhibit </li></ul><ul><li>Currently consumer demand exceeds domestic supply for organic products in Japan. </li></ul>Organic Wine
    25. 25. Branding <ul><li>Increase awareness of Loire Valley wines </li></ul><ul><li>Market as a region </li></ul><ul><ul><li>Loire Valley </li></ul></ul><ul><ul><li>Savennières wines </li></ul></ul><ul><li>Wine tourism </li></ul>Branding
    26. 26. Wine Tourism <ul><li>In 2010 approximately 12,500,000 Japanese tourists traveled abroad </li></ul><ul><ul><li>8.5% increase from 2009 </li></ul></ul><ul><li>An average 1,603,000 Japanese tourists visit France each year </li></ul>Wine Tourism
    27. 27. Wine Tourism Wine Tourism
    28. 28. Wine Tourism Wine Tourism
    29. 29. Website <ul><li>Online Ordering </li></ul><ul><ul><li>Increased interest in online retail </li></ul></ul><ul><ul><li>89% of Japanese consumers shop online (Compared to 63% in the U.S. and 56% in France) </li></ul></ul><ul><li>Japanese/English/French </li></ul><ul><li>Sales Intern </li></ul>Website
    30. 30. Navigating the Market <ul><li>Distributor </li></ul><ul><li>International lawyer </li></ul><ul><li>Regional translator </li></ul>Navigating the Market
    31. 31. Future & Expansion <ul><li>Once the product is integrated into the Japanese market, there is a higher opportunity to reach more Southeast Asian markets </li></ul>Future & Expansion
    32. 32. SWOT Analysis Market SWOT Analysis Strengths Mature wine market Lack of domestic wines Weaknesses Language and culture barrier Distance Opportunities Stronger image Expanding market Threats Competition Taxes Economic Downturn Other alcohols
    33. 33. The Marketing Mix <ul><li>Product: Chateau des Vaults </li></ul><ul><li>Price: €18 - €22 </li></ul><ul><li>Place: Urban areas </li></ul><ul><ul><li>Tokyo, Yokohama, Nawasaki, Osaka, Kobe, Kyoto </li></ul></ul><ul><li>Promotion: online, restaurants </li></ul>The Marketing Mix
    34. 34. Additional Recommendations <ul><li>Cultivation of Tokyo market </li></ul><ul><li>Strengthen Loire Valley brand </li></ul>Additional Recommendations

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