Background
Japan has a stable economic system, which presents opportunities for new product launches. Although peanut butter is not a traditional Japanese food, it has gained popularity among the Japanese. The country’s political, social, legal, and cultural factors are central to determining the success of launching peanut butter. This paper explores the factors central to determining the feasibility of the peanut butter launch in Japan.
Country Analysis
Characteristics
The country is officially known as the State of Japan, consisting of a chain of islands in the Pacific Ocean. Honshu, Hokkaido, Kyushu, and Shikoku are the four largest islands in Japan, and they have a population of millions (Suyama, 2022). Japan underwent a series of rapid modernizations in the 19th century, making it one of the most powerful countries in the world (Suyama, 2022). Located in the northeastern part of the Asian continent, Japan is bordered by the Pacific Ocean, lying to the east of the Korean Peninsula, Russia, and China.
The Japanese lifestyles, culture, and customs are primary to their choice of food. According to the United States Census Bureau (2023), Japan has a population of 123.7 million. The Japanese lifestyle and culture involve a strong work ethic, discipline, and respect for hierarchy and traditions (Suyama, 2022). The country’s official language is Japanese, which consists of kanji, hiragana, and katakana.
With the Japanese yen as its currency, Japan is economically developed with a GDP of about 4.941 trillion U.S. dollars (Wu et al., 2023). The country follows the civil law legal system, and its government is a constitutional monarchy with a parliament. Analysing the identified characteristics will help understand the social and political factors affecting the Japanese market.
Issues to be Considered
Various issues must be considered when determining the feasibility of a successful peanut butter launch in Japan. Socially, Japan has a hierarchical structure that emphasizes respect for authority, age, and seniority. On the other hand, similarly to the U.S., the country consists of both criminal and civil courts that help in litigating cases (Fondrieschi, 2022).
Adopting a monarchical and parliamentary political system emphasizes respect for the rule of law. While in the U.S., the political and governing system is presidential, business etiquette is vital in both countries. However, Japan has a more formal and group-oriented business culture.
The political, social, and legal structure differences between Japan and the U.S. can lead to various cross-cultural communication issues. Unlike the U.S., Japan has a civil law system, which may encumber interpretations of various company legal provisions that arose from the common law principles (Fondrieschi, 2022). Additionally, the differences between the Japanese and English languages may cause communication barriers, making it difficult to launch new products. Furthermore, the different political ideologies adopted by the U.S. and Japan can limit foreign companies’ enjoyment of business opportunities in Japan. Countering the cross-cultural communication issues can help achieve a successful peanut butter launch in Japan.
Competitive Product Analysis
Peanut butter is rapidly becoming popular in Japan. Although consumption is not as widespread as in the U.S., some companies sell peanut butter to the Japanese. Kobe Bussan Co., Ltd, and Jif, among others, process and sell peanut butter in Japan (Indexbox, 2023).
Consequently, the American company will not be the first in the region. Although competitors exist, they have failed to saturate the market, leaving room for potential market entry by the American company. Therefore, exploiting the opportunity in the Japanese peanut butter market can benefit new entrants.
While peanut butter is not a traditional Japanese food, the existing sellers in the country have been successful. Competitors such as Jif emphasize product quality and follow traditional Japanese cuisines. A report by 6Wresearch (2022) shows that companies that sell peanut butter in Japan have been successful due to the increasing demand for the product by the locals. Moreover, the product’s market is forecasted to reach 14 million U.S. dollars in retail prices by 2025 (6Wresearch, 2022). Therefore, there is a possible profit increase among peanut butter sellers and manufacturers in Japan.
While some companies have adopted a competitive pricing approach, others are value-based. On average, peanut butter is sold at 1600 Japanese yen per kilogram, indicating the price that a typical consumer may pay for the product (Indexbox, 2023). The sales potential of peanut butter in Japan is likely to increase due to the increased popularity of the product in the country (6Wresearch, 2022). Barriers such as cultural differences, consumer preferences for local flavours, and complexity in the supply chain can encumber a successful entry into the Japanese peanut butter market. Consumers’ preferences for local flavours pose a significant risk to market expansion since many Japanese want foods consistent with their culture and tradition.
Company Analysis
Key Production and Fiscal Considerations
Logistics, supply chain, and raw materials sourcing are key in establishing a peanut butter company in Japan. Proximity to the target market and access to skilled labour will help in the effective production of peanut butter. Therefore, manufacturing operations will occur in Tokyo since it is the country’s capital and has sufficiently skilled labourers. Meanwhile, taxation policies and currency exchange rates will be key fiscal considerations that will help determine business profitability (Bhalla et al., 2022). Compared to the Japanese yen and total taxes due, the U.S. dollar value will help determine whether the venture is profitable.
Management Structure, Legal, and Political Environment
The recommended management structure will include a local team and partnerships with local distributors with broad knowledge of the Japanese market. The internal working elements must be carefully considered, including supply chain management, quality control, financial management, and marketing strategies (Bhalla et al., 2022). The legal rules to be considered are the Japanese import regulations, safety standards, and labelling requirements. Some of the forms to be filed include the registry certificate and the articles of incorporation of the parent company. Japan’s existing social and cultural structures and hierarchies will positively affect the proposed management structure by promoting strong work ethics and respect for senior company leaders.
Product Launch and Promotion Strategy
The product launch strategy will involve partnerships with retail stores and small businesses in Japan. The partners will display and offer the new product at discounted prices to attract clients. Meanwhile, the promotion approach will involve digital media (Kurdi et al., 2022). Some of the digital media to be used are social media platforms and mainstream television networks.
Advanced technology and a readily available market are opportunities present for the venture. However, resistance from the locals and increased competition may pose significant risks for the venture. Launching peanut butter in Japan is feasible due to favourable market conditions.
References
6Wresearch. (2022). Japan peanuts market (2022-2028) | trends, outlook & forecast. Web.
Bhalla, N., Kaur, I., & Sharma, R. K. (2022). Examining the effect of tax reform determinants, firms’ characteristics and demographic factors on the financial performance of small and micro enterprises. Sustainability, 14(14). Web.
Fondrieschi, A.F. (2022). Dealing With the Unpredictable: The impact of the COVID-19 crisis on lease agreements in the Italian and Japanese legal systems. European Review of Private Law, 30(Issue 5), 871–902. Web.
Indexbox. (2023). Peanut butter price in Japan – 2023 – charts and tables – Indexbox. Web.
Kurdi, B. A., Alshurideh, M., Akour, I., Tariq, E., AlHamad, A., & Alzoubi, H. M. (2022). The effect of social media influencers’ characteristics on consumer intention and attitude toward Keto products purchase intention. International Journal of Data and Network Science, 6(4), 1135–1146. Web.
Suyama, S. (2022). Cultural and social overview of Japanese islands. In S. Suyama, T. Sukeshige, & H. Miyauchi (Eds.), Insularity and Geographic Diversity of the Peripheral Japanese Islands. Springer. Web.
United States Census Bureau. (2023). Population clock: Japan. Web.
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