Ben and Jerry's market expansion in Japan

Ben & Jerry's Case Study

Bullet Points for the Case:

The central issue of the case study is one of trust. Ben & Jerry's Perry Odak and his team must determine if 7-Eleven or Ken Yamada's expertise in managing franchised American-based businesses is the better fit culturally as well as from a trust standpoint with the at-times eccentric ice cream company.

The issue of localization vs. logistics is a central one throughout the entire case study, as 7-Eleven has proven expertise in merchandising frozen foods globally, and Ken Yamada was product line experience from managing the American pizza franchise that also offers frozen desserts. The decision point of whether to define and execute a lengthy logistics supply chain from Vermont to Japan is implied in the case study.

Localized control of branding is also a key factor in the decision process, as Ken Yamada wants to redefine Ben & Jerry's identity throughout Japan, and 7-Eleven is open to having the company define their own. The implications of the company's unique product strategy and messaging must be considered in the context of Japanese tastes. This is for example a certain overlap of tastes yet research has shown Japanese consumer prefer unique, even esoteric tastes by American standards.

Variation in production sizing between the U.S. And Japan markets is significant, denoting the significantly different roles of ice cream in each society. In Japan ice cream is served in smaller, snack-like containers, while in the U.S. It is served as a family dessert. This will be a significant cost for Ben & Jerry's to contend with in customizing production for this market.

The downside of partnering with 7-Eleven is that they are also the leading distributor of the majority of competitors that Ben & Jerry's will face in the Japanese market. This includes Haagan-Dazs who commands 50% of the total Japanese market. For Ben & Jerry's there is no control for how their products will be sold within the chain, if they will be psotioned relative to Haagan-Dazs as competitive, or if they will be positioned as a loss leader.

Two additional questions:

Given Ben & Jerry's lack of international experiences prior to this, does it make sense to first consider a joint venture at the production level first? Argue for or against this strategy.

Clearly both potential companies they are working with see the potential of taking advantage of the istuaiton that Ben & Jerry's is relatively limited in their ability to scale globally. First, the 7-Eleven partnership is one that implies a loss of control over pricing and positioning, amidst the vast selection of ice cream products the chain already sells. There is the issue of trust on the part of 7-Eleven as well, as they are completely unsure of Ben & Jerry's ability to navigate the vast logistics of getting frozen products from Vermont to Japan profitably. As for Ken Yamada, clearly he sees a great opportunity to take advantage of Ben & Jerry's lack of experience in the area of retailing in Japan. Concentrating on taking control of the entire brand, Mr. Yamada can in effect redefine the company as his own in Japan. This is contrary to the concept of Domino's which enforces a very strong brand globally. Given the high level of uncertainty of each strategy and the many new processes that Ben & Jerry's will have to excel at to make this succeed it is highly recommended that both opportunities be passed up and a joint venture created to manufacture the ice cream in Japan to specific market requirements. This will not only reduce the burden of tariffs, but will also create more potential for localized market learning over time. The two options are simply too costly long-term for the company to undertake.

Assume Ben & Jerry's decides to think more strategically about all of Asia and seek a mass merchandiser to carry all distribution and share production costs. Is this a good or bad idea based on their existing distribution channel and production strategies?

Given the widespread varation in product needs across all of Asia, partnering with a Woolworth's or comparable mass merchandiser throughout the entire region may be an excellent approach to learning more about logistics and supply chain issues across countries, yet the company would need to have an in-house marketing team at the partner of choice to ensure branding consistency. The uniquely egalitarian, quirky and fun brand takes exceptional skill for anyone to manage over time, ideally someone from Vermon headqaurters would have to manage its daily strategies and initiatives. Yet the issue of selling into Asia is not inherently one of scale at the retail or supply chain level; it is one of aligning logistics, product strategies and messaging to be more effective in reaching a target audience. The company could choose to move into an aspirational value proposition, stating that they have an exceptional American ice cream that is unique. Or they could create a brand extension in an attempt to be as relevant as possible to the Asian market. The bottom line is hat Ben & Jerry's must define their marketing strategies first for the region prior to seeking out a market maker, mass merchandiser level of support in the form of joint venture.

Analyze the Japanese ice cream market. What does Ben & Jerry's have to do to succeed there?