1. White Oak Lavender Farm: Expansion to Japan
IBUS 480
Alex Anthony: antho2am@dukes.jmu.edu
Dylan Deibel: deibeldp@dukes.jmu.edu
William Griffin: griff2wc@dukes.jmu.edu
Elena Spriggs: spriggem@dukes.jmu.edu
Jeff Thompson: thomp6jm@dukes.jmu.edu
1. Executive Summary
White Oak Lavender Farm is located in Harrisonburg, VA in the heart of the Shenandoah
Valley. The company has been in business for roughly a decade and has been run for its
entirety by the Haushalter family, the farm’s owners. Currently, the company operates in
the agritourism industry; markets a vast variety of lavender products through retail and
online, and has become a staple in the Virginia Lavender Community. Although White
Oak has experienced growth and success, management believes that expanding into
foreign markets could be the most viable route to ensure future success. Japan was
chosen as the country to export to due to to its high volume of imported lavender

2. products and low levels of production. The Asian-Pacific region is projected to
experience the highest growth in the global essential oil market, and Japan has extremely
healthy trade and political relations with America. The Essential Oil Roller, Lavender
Facial Moisturizer and Lavender Facial Cleanser were chosen as the products to be sold
in Japan due to their uniqueness and viability to be sold in Japan’s cosmetic market,
which is the largest in the world. White Oak plans to use Make-Up Inc as their wholesale
distributor to solicit these products to retailers in the Japanese market.
Introduction
A. Short History of Company: White Oak Lavender Farm is owned by the Haushalter
family and is located in Harrisonburg, VA. Julie Walton Haushalter started growing
lavender as a hobby on the farm and soon started making products for her family and
friends. Soon after, Julie realized the viability and versatility of selling lavender products
and their associated derivatives in Harrisonburg and the surrounding areas. Eventually,
her mother and mother-in-law became involved and helped Julie fabricate additional
lavender products such as: lavender pillows, eye masks, neck wraps, and lavender-filled
sock monkeys. Their products became very popular at the Downtown Harrisonburg
Farmer’s Market. Operations expanded into the agritourism industry and the farm became
a destination known for its tours, lectures, classes, petting zoo, and lavender gift shop.
Within the past couple years, a segment of the company associated with wine-making has
begun under the name ‘Purple WOLF Wines’. Julie, her husband Rick, and their daughter
Rebecca operate the business full time and the company has been in full operation for
around a decade.
B. Current Export Goals/Situation: White Oak Lavender Farm currently does not export
their products. However, they hope to begin exports within the calendar year. They are
interested in infiltrating the lavender market in a country where demand is high and
supply is low.
C. Products White Oak Wishes to Export: The company produces many consumer
products that can be easily mass produced and exported. The main product categories the
company feels would be most successful in a foreign market are: Essential Oils &
Aromatherapy products and Lavender Bath & Body products. Specifically within these
segments, White Oak plans to retail the Essential Oil Roller. Lavender Facial Cleanser,
Lavender Facial Moisturizer and Travel Size Lavender Lotion Kit. This is due to their
uniqueness as products, as well as their viability to be sold in foreign markets due to high
quality and high desirability.
2. Country/Area Analysis
A. Demographics/Basic Country Characteristics: Japan’s population has remained steady
around 127 million, according to the Census Bureau. 99% of the inhabitants are of

3. Japanese origin, and only 1% are of Vietnamese or Chinese descent. The country is also
very a very collectivist society, and values the benefit of the group rather than the
individual benefit.
B. Politics: Due to the historically unchanging political environment according to the World
Bank, White Oak Lavender does not anticipate drastic change with these importing
policies. America and Japan are both members of the WTO, and trade relations have been
steady for a lengthy period of time.
C. Economy: Japan has the 3rd largest economy in the world and since 2012 the country has
had an annual growth rate of 1%. According to Japan Macro Advisors, the Japanese
economy experienced shrinkage in two of its quarters in 2015. Although, despite the
shrinkage Japanese policy makers project no negative change in business activity.
D. Society/Culture: The Japanese are heavily influenced by Chinese and Korean culture.
Over 84% of the population is Shinto or Buddhist, with the second largest religion being
Confucianism at 15.3%. Japanese society is highly educated, with a 99% literacy rate for
many of the past decades. Surprisingly, 98.5% of the residents in Japan are Japanese. The
lack of foreigners means one can see many cultural norms being practiced today in
business and society. The Japanese are a collectivist society, meaning individuals belong
to a group, whether it be a family or corporation. Success is attributed to the whole group
and not an individual. Everyone that is not in the group are considered outsiders. This
means to do business with the Japanese you must have established relationships, or
someone who can bring you into the group. The Japanese are also nervous toward people
who do not look or act Japanese, so foreigners must try to develop bonds carefully based
on trust and mutual benefit. Modesty and humility are important in Japan; a person may
say, “It is nothing” when giving a gift to someone, even if the gift is expensive. When
doing business in Japan it is important to realize from this example that there is no direct
correlation between what is said and what is meant. The Japanese have one of the longest
life expectancies in the world, however, healthcare is not equipped to handle the rapidly
aging population. As a result, consumer goods offering a health benefit are sought after,
and health and fitness among women is extremely popular.
E. Technology/Infrastructure: Japan is one of the most technologically advanced countries
in the world. As a fully developed country, they offer many services that are technology
based. Japan leads the world in robotics production and use, possessing more than 20% of
the world’s industrial robots as of 2013. The government also invests heavily in research
and development, where nearly 700,000 researchers share a $130 billion budget, which is
the third largest in the world. Japan has invested heavily in infrastructural development.
There are over 1.2 million kilometers of paved road functioning as the main means of
transportation. The Japanese also have a highly developed railway system through dozens

4. of rail companies that compete regionally and locally. Over 250 high speed Shinkansen
trains connect major cities and are renowned for their safety and punctuality. There are
over 175 airports in Japan; the largest domestic airport, Haneda Airport, is Asia’s second
busiest airport. In May of 2015, Prime Minister Shinzo Abe unveiled a plan to expand
Japan’s financing for infrastructure in Asia by 30%, or roughly $110 billion
3. Market Analysis
A. Tariffs/Quotas: Japan’s tariff rate is on average 2% - one of the lowest in the world
(Hong Kong Economy Research). With regard to tariffs and taxes, Japan grants most-
favored nation (MFN) or preferential treatment to a country or territory that meets one or
more of the following criteria: is a member of the WTO, is covered by a provision of the
Cabinet Order under Article 5 of the Customs Tariff Law, or has a bilateral treaty with
Japan. The U.S meets these criteria, and therefore is considered a MFN. Lavender oils
have a general tariff rate of 2.2%, (Customs.go.JP).
B. Non-Tariff Barriers: The US government has closely coordinated with Japan among the
past few years to remove non-tariff barriers impeding trade. The ‘United States-Japan
Economic Harmonization Initiative’ is a program created in November of 2010 to address
these very concerns. This program is geared towards “promoting cooperation to
harmonize approaches that facilitate trade, address business climate and individual issues,
and advance coordination on regional issues of common interest”. Japan created the
‘Office of the Trade and Investment Ombudsman’ in 1982 to further address the
protectionist policies which had been in place in Japan. Japan has a system in place where
certain cosmetic products need premarket approval from the government to be sold.
These products are classified as ‘quasi-drugs’ under the Pharmaceutical Affairs Law and
can be very difficult to be cleared. The approval process includes requisites that are
“burdensome, lack transparency and do not appear to enhance products safety, quality or
efficacy”. In addition to these requirements, many cosmetic products sold in Japan have
strict advertising restrictions on informing companies of product benefits. Despite this,
both governments are working to enhance communication to lead to closer coordination
among the cosmetic industry in which White Oak Lavender operates.
Shipping goods through Japanese ports has been a problem for US companies. There is a
lack of competition between shipping companies, a lack of transparency and rigorous
licensing regulations which hamper US businesses ability to conduct business in Japan.
Newcomers to Japan’s markets are disadvantaged due to a desire among Japanese
companies for stability,continuity, predictability and long term relationships
(EastAsiaForum.com).

5. C. Trade Agreements: Japan imported $65 billion worth of goods from America in 2014. It
is the fourth largest trading partner for America, totaling $204 billion of total revenue as
of 2013 (USTR.gov). In 2011, United States exports of cosmetic goods to Japan totaled
$373 million. In response to heavy pressure from the public, Japan’s government took
unilateral action in the 1980’s to significantly reduce tariff barriers between the countries
(Crawford.ANU.edu). The Trans-Pacific partnership was created to improve multilateral
trade among countries bordering the Pacific, and includes Japan and America. This
agreement is seen by Japan as the prerequisite to a Free Trade Area of the Asia Pacific;
an occurrence which would eliminate most tariffs and regulations which exist between
America and Japan. Japan grants Most-Favored Nation status to countries which it has a
bilateral trade agreement with - a requirement which America fulfills. This is all
beneficial for White Oak Lavender in a sense that trade is much easier to facilitate
between the two countries than it has been historically.
D. Import Restrictions: A pre-market approval inspection is now required after the passing
of the Pharmaceutical Affairs Law. Although this is not technically an import restriction,
it is in in fact a product restriction. The manufacturing requirements for the cosmetic
product category in Japan are very similar to the U.S. manufacturing requirements and
White Oak should anticipate no problems with the product approval.
E. Documentation and Certification: Documentation of Imports: According to the Japan
Customs website, Japan is a member of the WTO, and therefore many import procedures
are uniform with the other members of the WTO, but there are certain procedures specific
to Japan. The website also denotes specific regulations for imports. The general
guidelines are as follows: Any person who imports goods into Japan must declare them to
the Director-General of Customs and obtain an import permit after necessary examination
of the goods in question. The first step to successfully documenting an import is attaching
an import declaration and end with issuance of an import permit after the goods have
been inspected to the satisfaction of the port to which they are entering and the excise
taxes have been settled. There are 7 requirements that must be included with a tentative
import. They are:
1) Invoice
2) Bill of lading or Air Waybill
3) The certificate of origin (where a WTO rate is applicable)
4) Generalized system of preferences, certificates of origin (Form A) (where a
preferential rate is applicable)
5) Packing lists, freight accounts, insurance certificates, etc. (where deemed
necessary);
6) Licenses, certificates, etc. required by laws and regulations other than the
Customs Law (when the import of certain goods is restricted under such laws and
regulations);

6. 7) Detailed statement on reductions of, or exemption from Customs duty and
excise tax (when such reduction or exemption is applicable to the goods);
Customs duty payment slips (when goods are dutiable).
Descriptions of these 7 requirements are available on the Japanese Customs website, and
all licenses and customs tax forms are available from the Japanese Customs Department
as well.
Certification of Imports: When importing items into Japan, there are generally lower-
security port rules and many items (once thoroughly inspected) will pass through customs
with no trouble. Generally, certifications are not needed for lower-risk products such as
those produced by White Oak Lavender. For this reason, the company should have no
real issues with importing their product.
F. Patent & Trademark Laws in Japan:
Patents: According to the Japan Patent Office, there are 17 key steps an inventor or
proprietor must go through in order to obtain a production process patent. Among these
include the initial application, the publication of the patent, examination for approval,
either approval or rejection, payment of registration, and many others. These patent
requirements are for products or processes that are new or previously unpatented. White
Oak Lavender products will not need a patent on the product or process because they are
not considered “new inventions,” they are simply selling the product in a new market.
Trademarks: According to the Japanese Patent Office, there are 16 steps a business or
proprietor must go through in order to obtain a trademark of any kind for a product or
service. This trademark is recognized worldwide and is defined as a recognizable sign,
design, or unique expression that differentiates it from other products or services. The
steps for obtaining a trademark are similar to those for obtaining a patent, with a series of
applications, fees, approval or denial, and then a lengthy appeal process for denied
applications. There are two main reasons why trademarks do not meet the criteria. The
first consists of trademarks that do not enable consumers to differentiate the goods or
services from others. The second consists of trademarks that are unregistrable due to
public interest or private interest protection. White Oak Lavender will need to carefully
examine the current Trademark the company maintains and follow all regulations in order
to gain a Trademark for their brand in Japan. After a trademark is granted, the owner
(White Oak Lavender) will have exclusive rights to this with respect to their products and
brand.
G. Cultural Business Practices of the Japanese
Japan is considered a borderline hierarchical society. All the decisions must be confirmed
by each hierarchical layer and finally by the top management in Tokyo, however, there is
no one man who can make the final decision like in more hierarchical societies.

7. The Japanese are extremely relationship oriented, therefore, it is important that White
Oak Lavender should foster a relationship before trying to penetrate the market. White
Oak Lavender may have to make a trip to Japan to initially find the right business partner;
Japanese businessmen (and women) will often socialize in teams after work. Dinner and
drinks are an important work and social function and are appropriate for a new business
relationship.
In corporate Japan, a lot of time and effort is put into feasibility studies and all the risk
factors must be worked out before any project can start. To do business with the Japanese
you must realize that this avoidance of uncertainty is a reason for prolonged business
negotiations and wariness toward very forward Westerners.
In contrast to most Americans, the Japanese are focused on the long-term. In corporate
Japan, you see long term orientation in the constantly high rate of investment in R&D
even in economically difficult times, higher own capital rate, priority to steady growth of
market share rather than to a quarterly profit, and so on. They all serve the durability of
the companies. The idea behind it is that the companies are not here to make money
every quarter for the shareholders, but to serve the stakeholders and society at large for
many generations to come (e.g. Matsuhista). White Oak Lavender must be willing to
focus on growth rather than profits, otherwise, it may be difficult to find mutually
beneficial business relationships.
Japanese Meetings
Punctuality is important and shows respect for the attendees; like the U.S. you should arrive at
least 10 minutes early to a meeting. However, due to the consensus nature of decision making in
Japan, allow for more time than allocated to achieve goals. When entering the room, wait to be
seated as there is predetermined sides of a table.
There is a period of non-business related talk before meetings that tries to establish rapport and
lighten the mood; expect to talk about mutual contacts, the merits of your companies, or even
Japanese food. This is essential to relationship building in Japan.
Wa—best translated in English as “harmony” is essential during meetings. Searching for a
solution is important, however, Japanese will not offer a strong opinion which may cause
confrontation therefore disturbing Wa. Japanese decisions are reached through a process of
consensus-building meetings, each of which is concerned with the preservation of Wa. This
means that the decision-making process can seem very long and drawn out.
Business Cards—It is important when doing business in Japan that you have a plentiful supply of
business cards with information printed on the back in Japanese. Cards are presented at an early
stage and in order of seniority. Present and receive the card with two hands and a slight bow
(present your card Japanese side up with the letters facing the recipient). Treat your Japanese

8. contact's card with respect — the card is a literal extension of the man. Don't write on it or leave
it behind, as this would show disrespect. It is disrespectful to put a card in your back pocket or
wallet. During the meeting, place the cards carefully on the table in front of you with the senior
person's card on the top.
Gift giving is an integral part of Japanese business life and should not be confused with bribery
and corruption. Gifts should not be too lavish but should always be of good quality. It is
recommended to take a number of small gifts to Japan to distribute to new and existing contacts.
Gifts should always be wrapped and avoid giving gifts in quantities of four or nine as these are
unlucky numbers. Anything sharp could signify the desire to end a relationship. Alcohol,
especially good single malt whiskey, is always an appreciated gift in Japanese culture.
Japanese Communication Styles
Japanese communications are evidenced by subtlety and nuance. How one appears and what one
publicly states (tatemae) and what one really thinks (honne) are worlds apart. There is often a
huge distance between the expressed 'tatemae' and the felt 'honne' — they can often even be
contradictory. This is extremely important in doing business with the Japanese; everything
should be questioned in order to ensure that clear understanding has been achieved and check
back several more times if anything remains unclear. In addition, Japanese body language is very
minimal, making it difficult for the untrained observer to read. The Japanese seem to be very still
in meetings, sitting in a formal upright posture. It is rare for any reaction or emotion to be
visible. It is recommended that when doing business in Japan to hire an interpreter who can
speak fluent English and Japanese. Much of what is said by English speaking businessmen in
cross-national meetings is simply not understood or even worse, misunderstood. The
combination of Japanese vagueness and lack of comprehension leads to enormous problems,
which make problem-solving and decision-making very difficult for the inexperienced
American.
4. Consumer Preferences
Consumer preferences in Japan consist of traditional specificities. Japanese culture and society
influence these preferences as Japanese consumers expect products to be tailored to their needs.
Japanese consumers are relatively price sensitive depending on the product. They enjoy novelty
products and are less price sensitive when purchasing these items. Japanese consumers are also
willing to pay high prices for high quality goods. Unparalleled attention is given to “brand
information, service, delivery, packaging, and advertising” when assessing quality (The Japanese
Consumer Mindset).
Although traditional specificities hold true to Japanese consumers, there have been changes in
their consumer preferences. In recent years, Japanese consumers have slowly shown similar
preferences to their American and European counterparts. Japanese consumers are now more

9. willing to travel in order to shop at discount stores and malls. Imported goods are also
increasingly popular among Japanese consumers. American products, especially apparel and
cosmetics, are particularly popular because Japanese consumers associate them with the
American lifestyle.
The U.S Commercial Service presents four different consumer profiles that make up the 2015
Japanese consumer. The four consumer profiles consist of: The Japanese High School Student,
The Japanese University Student, The Japanese Housewife, and The Senior Market. The
Japanese High School student primarily purchases “cosmetics, stationery products, clothing, and
character goods” (An Introduction to the 2015 Japanese Consumer). The Japanese University
Student prefers a combination of luxury and affordable goods. They typically spend money on
apparel, beauty products, and entertainment activities. The Japanese Housewife conducts all
major household purchases, making her a very important consumer. She puts emphasis on high
quality, discounts, and customer service. Finally, The Senior Market consists of the Baby
Boomer Generation. This consumer group focuses on being healthy and living longer; therefore,
primary purchases consist of outdoor goods, beauty, and health products. Japanese seniors enjoy
health and beauty products that contain natural ingredients.
The Japanese consumer has progressively been more open to foreign products, making it easier
for White Oak Lavender Farm to expect sales of its export goods. Consumer expenditure in
beauty and personal care products is a growing sector in Japan, and is driven by Japanese
consumers over the age of 50. Skin care products are particularly popular amongst this group,
projecting an increasing demand for our product in the future.
5. Potential Buyers
Potential buyers for White Oak Lavender products can include large online retailers, department
store retailers, and specialty cosmetic product stores. Rakuten is an online retailer which sells a
wide variety of personal care products and essential oil products as well. Department stores such
as Mitsukoshi, Isetan, Takashimaya, Kintetsu and others are also considered potential buyers.
These retail locations provide customers with many specialty products and higher end goods
such as White Oak Lavender’s quality products. One of Japan’s most popular specialty product
retailers is “Cosme Kitchen,” which not only offers organic beauty products, but teas, and other
eco-friendly products from around the world, making it a perfect buyer and retailer for White
Oak Lavender. These buyers are all considered very popular retailers among Japanese
consumers, and demand for the products they carry is high among this audience.
The global essential oil industry measured over 165 kilotons in 2014, and is projected to grow at
a rate of 8.6% from 2015-2022. The industry is also projected to reach $11.67 billion by 2022.
Of this growth, the Asian-Pacific market is expected to experience the highest growth rate out of
any region in the world, at 9.2%. Research from Grand View Research shows evidence that the
Asian Pacific market will receive its highest growth in the relaxation, food and beverage and

10. aromatherapy industries. There has been evidence within Japan that lavender is used in religious
and cultural contexts. Japanese consumers are more prone to buy consumer items with natural
ingredients that have historical importance within their culture, and White Oak can take
advantage of this.
6. Product Barriers to Trade (e.g. Product Specification)
In Japan cosmetic and beauty products are regulated by the Ministry of Health, Labour and
Welfare (MHLW) under Pharmaceutical Affairs Law (PAL). The MHLW and PAL set certain
requirements when evaluating cosmetic and beauty imports. Cosmetics separated in 6 different
categories in Japan and The White Oak Lavender Farm would have to follow HS Code 3304.99,
which deals directly with skin care cosmetics. These requirements include: providing samples of
the products, and they then would then go through a series of tests and inspections that analyze
components and ingredients of the products. All these tests are conducted by the Japanese
Customs Department.
7. Competitor Analysis
There are multiple different competitors in the health and beauty industry in Japan; however, this
market is divided into two categories--low end and high end. The characteristics of the White
Oak Lavender brand would compete best in the high-end market. This market consist of product
lines that are traditionally found at the beauty counters in popular department stores and are
sometimes accompanied by free product demonstrations. Shiseido is the leading brand in the
country and is known for their high prices and top of the line products. Other competitors that
compete in the high price and high quality market include Kanebo, Kose, Kao, and Pola.
Although White Oak Lavender will face the heaviest competition in the high end market, it is
important to note that leading brands in the low end market will provide competition as well.
Companies such as Cezanne and Canmake produce low-price products that can typically be
found in drugstores and convenience stores.
Another aspect of competition will involve other lavender farms in Japan that also contain
product lines. The biggest competitor in this category is Farm Tomita--a lavender farm in
Hokkaido with a smaller product line that is similarly priced in comparison to White Oak.
According to the 2011 Guidebook for Export to Japan, there are no specific statistics regarding
the volume of essential oils that are produced in Japan. Although there is lavender production in
Japan, the volume produced is relatively negligible due to its low quantity. Most Japanese
retailers buy essential oils in bulk from overseas nations who have a better climate for lavender
growth. With these bulk orders, Japanese retailers create their own products and sell them as if
they were domestically produced. This gives them an advantage in the market, due to the
tendency of Japan consumers to buy products from local retailers. The perceptual map included

11. in the appendix gives a visual representation of where White Oak should aim to position itself
within the minds of consumers.
8. Potential Market Share
Besides the United States, the vast majority of lavender products are grown in developing
countries that can utilize low cost labor. Japan is a major consumer of lavender in a global
context, accounting for 7% of annual consumption. Although Japan has small pockets within the
country where lavender flourishes, in general, they are a net importer of lavender products and
essential oils in general. From 2000 to 2005, imports of essential oil products in Japan grew from
$93,972,000 to $152,304,000; an increase of 10.14%. By 2005, the import/export difference for
lavender products in Japan reached a negative $2,070,000. This trade deficit in lavender shows
that the industry is ripe for companies who wish to export their products there. Despite not being
able to produce lavender, the Japanese clearly have a need for it in cultural and religious
contexts. In 2005, Japan imported 46% of their essential oil products ($70.8 million) from
NAFTA. This bodes well for White Oak Lavender, who can leverage this agreement in the future
to trade with Japan.
9. Recommendations
A. Channels of Distribution:
White Oak Lavender should utilize a distributor instead of a wholesaler in Japan. Distributors are
more focused on producer-distributor relationships than wholesalers, who are more focused on
wholesaler-retailer relationships. Distributors are engaged in market research and helping
producers find a suitable retailer in new markets. Entering a foreign market, especially one with
a language barrier is extremely difficult. An exclusive distribution with Make-Up Inc. will
provide White Oak with the business relationships that Make-Up Inc. has built over their 25
years of operations in the Japanese Health and Beauty Industry. This company is currently
involved in distributing more than nine global brands in the Japanese skincare segment of the
Healthy and Beauty industry alone. Make-Up Inc. can warehouse the products in Osaka, Japan
after receiving the shipment by way of ocean carrier from Long Beach, California. Make-Up
Inc, can then distribute the products to retail outlets across Japan and fulfill online orders from
Rakuten.
B. Agent/Distribution Identification:
Make-Up Inc. is a Japanese manufacturer, wholesaler, and distributor of beauty/cosmetic
products in Japan. With over five Japanese offices and operations spanning 25 years, Make-Up
Inc. has a strong foothold in the Japanese Cosmetic and Beauty industry. This company can carry
wholesale White Oak Lavender products in their warehouse, then distribute them through their
vast channels to relevant retailers. Furthermore, Make-Up Inc. is actively looking for new
business partners home and abroad. An exclusive distribution strategy should be used; limiting
Make-Up Inc. to sole distribution within the Japanese market will simplify the supply chain and

12. save on logistics costs. Using an exclusive distribution strategy will also allow for unified
marketing and branding across the Japanese market.
C. Transportation: White Oak Lavender will be transporting their product by way of ground
transportation to a port on the Pacific coast. From there, the products will be shipped by freighter
to a port at which the distributor, Make-Up Inc. will receive the goods and take over control of
transportation, warehousing, and distribution.
D. Pricing:
The current prices for the products White Oak Lavender Farm plans to market in Japan follow:
Essential Oil Roller - $8
Lavender Facial Cleanser - $14
Lavender Facial Moisturizer - $16
Operating in Japan will require far more costs than simply selling items from White Oak’s retail
store. Transportation was measured for 480 essential rollers at the dimension of 4x1x1 inch to be
shipped on a standard pallet of 48x40x3 inches.Transportation costs for these essential oil rollers
will cost $.40 per item which we ship through Central Transport from Harrisonburg to the Port of
Long Beach. From Long Beach to Japan, we will be using DHL to ship our items at the average
of $.48 per item. Cosmetic Products sold in Japan are classified under HS Code 3304.99. Due to
this, they will also be charged the MFN duty rate of 5.8%, and a General tariff rate of 2.2% on
essential oil products which are imported into the country. There is also a sales tax of 8%, but
this will be dealt with by retailers.
Although there is an increase in pricing, this increase will not impede White Oak’s ability to sell
products in Japan. White Oak’s products will be tailored to the Japanese market, and are unique
and of the highest quality. Currently, White Oak provides a 32% discount to bulk orders through
its’ website. Based on our shipment of 480 items, the prices we will receive are roughly in line
with this discount in terms of percentage.
The price associated with selling our items to Make-Up Inc. in Japan are FC (Final Cost)
[(Original cost of the item) + ($.88 to ship)] x 1.08 = FC
Based on research of Make-Up Inc’s share of what they take from each item sold, we plan on
selling our inventory at 40% less than what it would charge a typical consumer (MSRP), to
Make-Up Inc. This means that the equation would be changed to…
FC x .6 = Price White Oak receives per item sold.
Essential Oil Roller - $5.75
Lavender Facial Cleanser - $8.97
Lavender Facial Moisturizer - $10.94
(1 US Dollar = 106.19 Japanese Yen as of 5/2/16)
E. Branding, Labeling and Packaging:
The White Oak Lavender products are subjected to specific advertising and labeling regulations.
Japanese law requires that the label include: name and address of the importer, brand name,

13. expiration date, the list of ingredients. The ingredients must be expressed in Japanese and listed
in descending order by quantity.
It is important to consider product packaging when entering a new market; different colors
symbolically have different meanings across cultures. In Japan, white flowers represent death
and thus, the color white on packaging in general may be less favorable. Purple, symbolizes
royalty, prestige, and wealth. Packaging lotions or oils with pictures of the lavender flowers will
be interpreted as made from lavender, but also as a premium, high-quality product. Yellow
symbolizes beauty and refinement in Japan, while Green symbolizes eternal life and
youthfulness. blue, pink, and orange are also safe colors to use and carry no negative
connotations in Japan. The Japanese consumer highly values intricately designed packaging and
detailed instructions; therefore, White Oak Lavender Farm should consider modifying packaging
to tailor to the consumer.
F. Classification, Documents and Methods of Payment:
White Oak should consider using Make-Up Inc., which was touched on earlier as their distributor
in Japan to import products and sell them to retailers. Doing this will ease the introduction of
these products into the market; Make-Up Inc. has been selling related products within Japan for
more than 25 years, and has many avenues to sell White Oak products to retailers. White Oak
should plan on billing Make-Up Inc. in US dollars in order to reduce the risk of currency
fluctuations within the market. Working solely with Make-Up Inc. will ultimately simplify
operations exporting to Japan by working with one provider who will have to operate on our
terms. It will simplify the passage of documents; and most importantly, make it easy to receive
and charge invoices. This is crucial when operating in a foreign market, where working with
different methods of payment or documentation can only make the process more difficult.
G. Marketing: When marketing to the Japanese, there are a few specific considerations White
Oak Lavender must make. The demographic shift throughout Japan in recent years has allowed
the younger population to decrease while the older population has increased. White Oak
Lavender should emphasize products geared towards older individuals if they want to succeed.
The best way to infiltrate a Japanese market is by fostering relationships with businesses and
customers. Developing a good relationship with an established Japanese distribution firm (Make-
Up Inc.) that has a team within the country is one way to ensure success. The website is also very
important for a company selling products in Japan, and should be customized to Japanese
specifications. Japanese consumers are more receptive of large text bodies that explain White
Oak’s products, their benefits, and their origin in detail(in-text citation here)
H. Promotion: White Oak Lavender is selling their products to Japanese retailers through a
distribution and wholesaling company. All promotional activities will be mandated and
implemented by the retailers that sell White Oak products to the end user.

14. 10. Limitations
Japanese industries are markets that are typically difficult to infiltrate, and with 99% of the
country being of Japanese Origin, they are much more apt to working with Japanese companies.
Companies within the country rely on business arrangements which have been built up over
many years and often last a lifetime. Trust can be difficult to attain, which enunciates even more
the need to provide top notch service and adhere strictly to japanese business customs such as
politeness, respect and responsibility. Local retailers will be more inclined to work with people
who they trust, often regardless of minor discrepancies in price. Due to these factors, foreign
companies often have difficulty breaking into the market and building durable customer loyalty.
Lavender grows best in the wet, temperate climate of the Mediterranean, and many producers
have operations originating in these locations. Although White Oak is able to match the quality
of these lavender producers, European producers have a clear advantage in terms of location
(cuts down on transportation costs) and production stability due to the ideal climate for lavender
growth. Due to these factors, producers located around the Mediterranean have clear advantages
in terms of selling to the Japanese market.
White Oak will not run into problems with currency exchange due to the fact that Make-Up Inc.
will be solely billed in US Dollars. This takes much of the risk out from operating in a foreign
market.
11. Conclusions and Recommendations
Although further exploration and research into Japan is necessary to implement expansion,
White Oak Lavender has the ability to become a strong brand within the Japanese market with
the help of an established distributor, such as Make-Up Inc. Relabeling and redesigning their
packaging to meet Japanese product specifications are two of the main components required for
this exporting process to ensure success. By utilizing the services of Make-Up Inc, the many
legal implications and issues of exporting a new product line to Japan can be alleviated. White
Oak will be able to grasp a portion of the market share by providing specialty, high quality
products that are geared towards the needs and wants of Japanese consumers. To further market
White Oak, we recommend they participate in trade shows for cosmetic products that occur each
year in Japan. The “Cosme Tokyo” show, for example, is held annually in Tokyo and is one one
of the biggest health and beauty trade shows in the world. By marketing properly, choosing
target markets effectively and utilizing all the proper resources, White Oak is posed to successful
expand the retail of their products into Japan’s market.
12. Appendices

15. Works Cited
Ikeda, Y., & Okamoto, Y. (2015, October) Introduction to the 2015 Japanese Consumer. Retrieved
from http://export.gov/japan/build/groups/public/@bg_jp/documents/webcontent/bg_jp_091246.pdf
Article: The Japanese Consumer Mindset. (n.d.). Retrieved May 02, 2016, from
http://www.eubusinessinjapan.eu/library/publication/article-the-japanese-consumer-mindset
hktdc.com – (2016). Hong-kong-economy-research.hktdc.com. Retrieved 26 April 2016, from
http://hong-kong-economy-research.hktdc.com/business-news/article/Small-Business-Resources/
Japan's Tariff Schedule ( Statistical Code for Import ). (2016). Japan Customs. Retrieved 22 April
2016, from http://www.customs.go.jp/english/tariff/index.htm
Japan. (2016). Ustr.gov. Retrieved 24 April 2016, from https://ustr.gov/countries-regions/japan-
korea-apec/japan
15 Must-Buy Japanese Brands (February, 2016) Retrieved 25 April, 2016 from
https://www.tsunagujapan.com/15-must-buy-japanese-cosmetic-brands/
Essential Oil Market to reach $11.67 billion by 2022 (8 October, 2016) Retrieved 24 April, 2016
from http://www.prnewswire.com/news-releases/essential-oil-market-size-to-reach-1167-billion-by-
2022-grand-view-research-inc-531216151.html
Removing Japan’s barriers to trade and investment. (2012). East Asia Forum. Retrieved 25 April
2016, from http://www.eastasiaforum.org/2012/11/17/removing-japans-barriers-to-trade-and-
investment/

16. The new Japanese consumer. (2010). McKinsey & Company. Retrieved 26 April 2016, from
http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-new-japanese-
consumer#Video
Article: The Japanese Consumer Mindset. (2016). Eubusinessinjapan.eu. Retrieved 26 April 2016,
from http://www.eubusinessinjapan.eu/library/publication/article-the-japanese-consumer-mindset
1803 Customs confirmation requirement concerning import restrictions in accordance with the Plant
Protection Law (FAQ). (2016). Japan Customs. Retrieved 26 April 2016, from
http://www.customs.go.jp/english/c-answer_e/imtsukan/1803_e.htm
Office, J. (2016). Procedures for Obtaining a Trademark Right | Japan Patent Office. Jpo.go.jp.
Retrieved 20 April 2016, from http://www.jpo.go.jp/tetuzuki_e/t_gaiyo_e/tr_right.htm
Import Procedures : Japan Customs. (2016). Customs.go.jp. Retrieved 27 April 2016, from
http://www.customs.go.jp/english/summary/import.htm
Japan's Tariff Schedule as of January 1 2016. (2016). Japan Customs. Retrieved 29 April 2016, from
http://www.customs.go.jp/english/tariff/2016_1/index.htm
Japan - Geert Hofstede. (2016). Geert-hofstede.com. Retrieved 25 April 2016, from http://geert-
hofstede.com/japan.html
Top Tips on Japanese Business Attitudes and Doing Business in Japan :: World Business Culture.
(2016). Worldbusinessculture.com. Retrieved 27 April 2016, from
http://www.worldbusinessculture.com/Doing-Business-in-Japan.html
LLC, V. (2016). Japanese business etiquette and doing business in Japan. Venturejapan.com.
Retrieved 29 April 2016, from http://www.venturejapan.com/japanese-business-etiquette.htm
Doing Business in Japan: 10 Etiquette Rules You Should Know. (2013). OPEN Forum. Retrieved 26
April 2016, from https://www.americanexpress.com/us/small-business/openforum/articles/doing-
business-in-japan-10-etiquette-rules-you-should-know/
ITA Gov: Market Overview in Japan and Asian-Pacific (n.d.) Retrieved 4 March, 2016 from
http://ita.doc.gov/td/standards/Markets/East%20Asia%20Pacific/Japan/Japan.pdf
The Hofstede Center. (n.d.). Retrieved May 2, 2016, from http://geert-hofstede.com/japan.html
Health: Why Women Live Longer (1 November, 2010) Retrieved 29 April, 2016 from
http://www.scientificamerican.com/article/why-women-live-longer/
SADC Trade: Trade Information Brief on Essential Oils (n.d.) Retrieved 20 February, 2016 from
http://www.sadctrade.org/files/Essentials%20Oils%20TIB.pdf
Japan Guide: Department Stores (n.d.) Retrieved 25 April, 2016 from http://www.japan-
guide.com/e/e2072.html

17. What you need to know when Marketing to Japanese Consumers (n.d.) Retrieved 30 March,
2016 from http://voicebunny.com/blog/heres-need-know-marketing-japanese-consumers
4 Best Places to buy Beauty Products from in Japan (9 June, 2015) Retrieved 4 April, 2016 from
http://www.herworldplus.com/beauty/updates/best-department-stores-and-places-shop-beauty-
products-japan
Cultural Color: Cultural Meanings of Color and Color Symbolism (n.d.) Retrieved 3 February,
2016 from http://www.empower-yourself-with-color-psychology.com/cultural-color.html
Make Up: Total Beauty Goods and Cosmetic Importers (n.d.) Retrieved 22 April, 2016 from
http://makeup-inc.com/english/deal/
Importers: Make-Up Inc. Overview (n.d.) Retrieved 22 April, 2016 from
http://www.importers.com/Importer_Exporter/ID.424988/Make-up_inc_.html
United States Lavender Growers Association: Members (n.d.) Retrieved 22 April, 2016 from
http://uslavender.org/about_us/members-public/?sort=wp_s2member_custom_fields-
mailing_state&dir=SORT_DESC&listpage=3
Trade Conflicts between Japan and the United States over Market Access: The Case of
Automobile Parts (n.d.) Retrieved 28 April, 2016 from https://crawford.anu.edu.au/pdf/pep/pep-
310.pdf
Mehra, G. (2016, February 23). Ecommerce in Japan: Marketplaces Dominate. Retrieved from
http://www.practicalecommerce.com/articles/97054-Ecommerce-in-Japan-Marketplaces-
Dominate
Maruyama, Y. (2015, October 20). 7 Things to Know About Japanese Ecommerce. Retrieved
from http://www.lyonscg.com/insights/7-things-know-japanese-ecommerce/
Infographic: Japan Ecommerce Market. (n.d.). Retrieved May 2, 2016, from
http://www.digitalriver.com/infographic-japan-ecommerce-market/
The Japan Cosmetics Market: Enormous Opportunity and Big Challenges for Foreign Brands.
(2014). Tokyo Nexus. Retrieved 26 April 2016, from
http://www.tknexus.com/content/2014/02/10/japans-cosmetics-market-enormous-opportunity-
and-big-challenges-for-foreign-brands-2/
Hong Kong Economy Research: Trade Regulations of Japan (30 November, 2015) Retrieved 29
April, 2016 from Tr-Regulations-of-Japan/sbr/en/1/1X000000/1X006N03.htm
Face time: A Digital Makeover for Japan’s Cosmetics Industry. (2016). McKinsey on Marketing
& Sales. Retrieved 23 April 2016, from http://www.mckinseyonmarketingandsales.com/face-
time-a-digital-makeover-for-japans-cosmetics-industry

18. Cosme Tokyo Trade Show. (n.d.). Retrieved May 2, 2016, from
http://www.cosmetokyo.jp/en/Home/