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Educator Insights:
Ben & Jerry's?Japan: Strategic Decision
Itwas fall of 1997, and Perry Odak was just entering his tenth
James M. Hagen month as chief executive officer (CEO) of the famous ice
cream company named for its offbeat founders, Ben & Jerry's.
Far from company headquarters in Vermont, he was setting
The Japan Entry Decision down his chopsticks in a quiet Tokyo restaurant to give full
attention to the staff he had brought with him: the company's
newly appointed head of international, the head of produc
tion, and a trusted expert on Japan. The question on the table
for this group was whether to enter the Japanese market by
a license to an
granting countrywide enterprising Japanese
American, to enter the market a convenience store
by giving
Submitted July 1999
chain exclusive rights to carry Ben & Jerry's products in all of
Revised December 1999 its 7000 or to pass on to enter the Japanese mar
stores, trying
January 2000
ket for the upcoming summer 1998 season. The decision was
? Journal of International Marketing
Vol. 8, No. 2, 2000, pp. 98-110
not isolated; rather, those involved had to consider the very
ISSN 1069-031X
history and mission of this well-known company.
98
content of their ice cream, the addition of chunky ingredi
ents, and flavor names, such as Garcia, found a
catchy Cherry
following. In addition to selling by the scoop, they began sell
ing pints over the counter, and the business grew. The com
Ben & Jerry's made its first foreign entry in 1986, when the
company gave a Canadian firm all Canadian rights for the
In short, Ben & Jerry's fell into several foreign markets oppor
not as part of a strategic The company had
tunistically, plan.
never developed a conventional marketing plan in the
United States, and it lacked the commitment and managerial
resources to put together a for entering
marketing campaign
the markets. As a result, 1997 Ben & Jerry's inter
foreign by
national sales were just 3% of total sales. Although the com
pany had nearly caught up with H?agen-Dazs in U.S. market
share, H?agen-Dazs was ahead in the non-U.S.
light-years
markets. Given declining profits and domestic market share
at Ben & Jerry's, it seemed to be time to give serious attention
to international market opportunities.
In the 1994-96 period, when Ben & Jerry'swas having its first
Opportunities in Japan taste of a professional CEO, it struggled with the prospects of
targeting a foreign market and a mar
strategically developing
keting plan for its fledgling overseas operations. In particular,
the company made inquiries about opportunities in Japan,
the world's ice cream market, with annual
second-largest
sales (including food service) of approximately $4.5 billion.
The market was not only big but also daunting. Japan was
known to have a highly complex distribution system driven
its barriers to foreign were
by manufacturers, products high,
and the distance for shipping a frozen was immense.
product
Ben & Jerry's would be a late entrant, more than ten years af
ter H?agen-Dazs a foothold in the market. In addition,
gained
there were at least six Japanese ice cream manufacturers sell
When asked whether Ben & Jerry's should enter Japan, stu
dents can
readily identify several considerations, whereas Educators' Note: Deciding
others may not be so apparent. In support of entry, the market Whether to Enter the
is strong, with excellent That Ben & Jerry's
growth potential. Japanese Market
is a relative latecomer may seem but the poten
problematic,
tial growth in the market lessens that concern. More impor
tant, Ben & Jerry's can enter with assurance that there is a
market for its product and without needing to educate con
sumers about the category. The market thrives on new intro
ductions, which suggests potential for Ben & Jerry's to chip
away at H?agen-Dazs's share. Although a micro look at mar
kets in Japan may be positive, the students could be encour
to undertake research to an of
aged enough gain impression
the Japanese economy at the time. July 1997 was when the
Thai currency depreciated, which sent a ripple effect of fi
nancial crisis through the Asian economies. The Japanese
economy had already been languishing, and there was no
sign of recovery. On the positive side, small, affordable luxu
ries can do well in times when major luxuries move beyond
the reach of consumers.
ably, 7-Eleven could similarly cut off Ben & Jerry's at some
future date.
James M. Hagen
would help build the category, and super premium was a
high-margin category.
The retailer thought it could sell at least six cups per day
at each store, which would be the minimum to justify contin
uing to stock Ben & Jerry's. Looking at the size of 7-Eleven's
ice cream freezer cases suggested that this would require that
approximately 10% of 7-Eleven's cup ice cream sales be of
Ben & Jerry's Ben & Jerry's was as yet unknown in
products.
Japan, and it did not have the budget for a marketing cam
paign there. Sales would have to rely primarily on promo
tional efforts by 7-Eleven, but the company was making no
specific commitment to such efforts.
Jerry's?Japan (case #9A99A037) would be even more important. Giving up control of a brand
from Ivey Publishing at the Richard for a potentially huge market would perhaps be even more
Ivey School of Business, difficult for Ben & Jerry's than formany other consumer food
University of Western Ontario manufacturers. The brand embodied many unique qualities
(e-mail: cases@ivey.uwo.ca). (caring, social mission, fun, funkiness, and even Cohen and
Greenfield themselves) that would be difficult for a licensee
to maintain and build on.