IT DID NOT HAPPEN OVERNIGHT FROM NICHE TO MAINSTREAM Yixiang dal 17300180005 Course: English for Academic Purposes(Business) Date: 19 December 2018
1 “IT DID NOT HAPPEN OVERNIGHT”: FROM NICHE TO MAINSTREAM Yixiang DAI 17300180005 Course: English for Academic Purposes (Business) Date: 19 December, 2018
Case summary Firstly, a brief introduction of the company and the leading character will be given. Kenko, the largest producer of rice crackers in Japan, hoped to kick-start growth and globalization plans. Riku, the leading character in this case, takes charge of the U.S division of Kenko with bringing his family to America. Both of his wife and daughter were getting homesick. Secondly, Kenko USAs growth was well below projections and the division, which was supposed to be self-sustaining after five years, was still losing money. Thirdly, there are three available options faced with Riku. They are listed below Pattys Pantry, a national grocery chain, put forward a deal to produce a private label line Rikus mentor at headquarters, Fusao Saito, was pushing more direct-to-consumer outreach. Chief snack buyer for Clementine's always provides the option of paying a higher slotting fee Problem identification Riku is asked to give a formal recommendation by next week. It is reasonable to refer to the key problem as making a recommendation for riku Information assessment The deal with Patty's Pantry can lead to getting out the current adversity efficiently but losing control of the cracker retailing strategy in the US. According to the text, the deal between Patty's Pantry and Kenko USA was mainly about producing a private label line. A private label product features being sold under a retailer's brand name. Moreover, the retailer specifies everything about the product- what goes in how it's packaged, what the label looks like and pay to have it produced and delivered to your store. As for a proven American retailer, it has a great portion of the whole market. It will be very likely to help Kenko USA start to profit. More specifically, Kenko USA can replace expense of sampling, slotting fees and advertising with profits from the retailers sales volume. Taking Rikus family factor into account
2 Case summary Firstly, a brief introduction of the company and the leading character will be given. Kenko, the largest producer of rice crackers in Japan, hoped to kick-start growth and globalization plans. Riku, the leading character in this case, takes charge of the U.S division of Kenko with bringing his family to America. Both of his wife and daughter were getting homesick. Secondly, Kenko USA’s growth was well below projections, and the division, which was supposed to be self-sustaining after five years, was still losing money. Thirdly, there are three available options faced with Riku. They are listed below: Patty’s Pantry, a national grocery chain, put forward a deal to produce a private label line. Riku’s mentor at headquarters, Fusao Saito, was pushing more direct-to-consumer outreach. Chief snack buyer for Clementine’s always provides the option of paying a higher slotting fee. Problem identification Riku is asked to give a formal recommendation by next week. It is reasonable to refer to the key problem as making a recommendation for Riku. Information assessment The deal with Patty’s Pantry can lead to getting out the current adversity efficiently but losing control of the cracker retailing strategy in the US. According to the text, the deal between Patty’s Pantry and Kenko USA was mainly about producing a private label line. A private label product features being sold under a retailer’s brand name. Moreover, the retailer specifies everything about the product – what goes in it, how it’s packaged, what the label looks like – and pay to have it produced and delivered to your store. As for a proven American retailer, it has a great portion of the whole market. It will be very likely to help Kenko USA start to profit. More specifically, Kenko USA can replace expense of sampling, slotting fees and advertising with profits from the retailer’s sales volume. Taking Riku’s family factor into account
it is the most efficient way to have his promotion mission done and to take his family home. However, Kenko has to cease to set up their own brand in america due to the special property of private label product mentioned above, which may disappoint Kenko's ceo Another option faced with Riku, is time-and-money-consuming but well under Kenko's control. Direct-to-consumer outreach is referred to as grassroots marketing which generally means promoting a specific good by oneself. As can be interpreted from the case Sabra, they did widely-ranged sampling and tweaked their packaging which demanded patience and persistence. Since grassroots efforts must be done step by step, Kenko USA can take fully charge of packaging and improving the crackers taste, which will do Kenko a favour for establishing their brand in America As can be learned from the conversation between Riku and Dave Knight, a higher slotting fee allowed rice crackers into the main food aisle. Slotting fee is a one-time, lumpsum payment to a retailer by a supplier in exchange for which the retailer allocates retail space for the supplier's products, often new products Compared with other two options Riku, this option was right on the target but risky Raising the entry fee hort cut to enter the mainstream market. it will drain so much money that Kenko USA must exacerbate profit losses. It is not sensible for a project commander to take such a risky step As for a business professional, Riku is under pressure. Riku doubted whether Kenko's CEO still believed in his capacity, which irritated him. Besides, He must make a final decision as soon as possible. As a constructive solution requires deep thought, it is not sensible for Riku to choose an option out of those faced with him. The grassroots efforts seemingly take an advantage over the deal given by Pattys Pantry, concerning the CEOs tendency As for a breadwinner, Riku must calm his family. From this perspective, making a deal with a local retailer is the better choice. On earth, Riku is a professional dedicated in business. It is common sense that no one talks about human sympathy LaRose, Edward C Poff and Patrick ], "Slotting Allowances and the Emerging Antitrust Enforcement Debate. Florida Bar Journal Vol. 74 Issue 10(Nov 2000): 42
3 it is the most efficient way to have his promotion mission done and to take his family home. However, Kenko has to cease to set up their own brand in America due to the special property of private label product mentioned above, which may disappoint Kenko’s CEO. Another option faced with Riku, is time-and-money-consuming but well under Kenko’s control. Direct-to-consumer outreach is referred to as grassroots marketing, which generally means promoting a specific good by oneself. As can be interpreted from the case Sabra, they did widely-ranged sampling and tweaked their packaging, which demanded patience and persistence. Since grassroots efforts must be done step by step, Kenko USA can take fully charge of packaging and improving the crackers’ taste, which will do Kenko a favour for establishing their brand in America. As can be learned from the conversation between Riku and Dave Knight, a higher slotting fee allowed rice crackers into the main food aisle. Slotting fee is a one-time, lumpsum payment to a retailer by a supplier in exchange for which the retailer allocates retail space for the supplier's products, often new products 1 . Compared with other two options Riku, this option was right on the target but risky. Raising the entry fee is the short cut to enter the mainstream market. It will drain so much money that Kenko USA must exacerbate profit losses. It is not sensible for a project commander to take such a risky step. As for a business professional, Riku is under pressure. Riku doubted whether Kenko’s CEO still believed in his capacity, which irritated him. Besides, He must make a final decision as soon as possible. As a constructive solution requires deep thought, it is not sensible for Riku to choose an option out of those faced with him. The grassroots efforts seemingly take an advantage over the deal given by Patty’s Pantry, concerning the CEO’s tendency. As for a breadwinner, Riku must calm his family. From this perspective, making a deal with a local retailer is the better choice. On earth, Riku is a professional dedicated in business. It is common sense that no one talks about human sympathy in 1 LaRose, Edward C. Poff and Patrick J, “Slotting Allowances and the Emerging Antitrust Enforcement Debate.” Florida Bar Journal Vol. 74 Issue 10 (Nov 2000): 42
business, which means Riku may lose his job if he compromises to his family Solution and justification I would advise riku to recommend the branded market push to his executive team concerning two different angles Standing by riku, he shall accept the coming grassroots marketing efforts According to the text, Fusao Saito who is rikus mentor at headquarters, advocates pushing more direct-to-consumer outreach. Fusao is very likely at a hig position in Kenko, which does Riku a favour when making that shot. More importantly, both of Kenko's CEO and Riku's mentor preferred the branded expanding strategy. It is risky for Riku to stand opposite to the company. Roughly speaking, Riku will be capable of hitting a balance between supply and demand of rice crackers in America through the extra possible two-year working duration. The problem is with his family. An employee should always separate his personal decisions from his professional ones which the working ethics demand What's more, according to the president of Kameda USA another Japanese cracker company, Japanese companies do not leave indefinite expatriate assignments for their employees, which means the company may send another employee to the US to cooperate with Riku or success his job As for the largest rice cracker company in Japan, Kenko has confidence in establishing their brand in America. Focusing on the companys original purpose, kick-start growth and globalization plans, it is not advised to accept the deal given by Patty's Pantry. In the long term, Kenko's rice cracker is expected to become a famous brand as Lay's Chips. Turning Kenko into private label product does harm to its sustainability when launching its own branded products. In addition, the short-term profitabil ity is not necessarily required by Kenko due to its success in Japan. Kenko can handle the slow economic growth in the US division thus allowing further expanding steps. To compete with other American snacks, Kenko should maintain their cracker s recipe that features healthy and gluten-free It is the authenticity that makes Kenko a competitive company. Since Kenko owns enough capital and time, taking an action with grassroots efforts minimize the risk and maximize control over the
4 business, which means Riku may lose his job if he compromises to his family. Solution and justification I would advise Riku to recommend the branded market push to his executive team concerning two different angles. Standing by Riku, he shall accept the coming grassroots marketing efforts. According to the text, Fusao Saito who is Riku’s mentor at headquarters, advocates pushing more direct-to-consumer outreach. Fusao is very likely at a hig position in Kenko, which does Riku a favour when making that shot. More importantly, both of Kenko’s CEO and Riku’s mentor preferred the branded expanding strategy. It is risky for Riku to stand opposite to the company. Roughly speaking, Riku will be capable of hitting a balance between supply and demand of rice crackers in America through the extra possible two-year working duration. The problem is with his family. An employee should always separate his personal decisions from his professional ones which the working ethics demand. What’s more, according to the president of Kameda USA, another Japanese cracker company, Japanese companies do not leave indefinite expatriate assignments for their employees, which means the company may send another employee to the US to cooperate with Riku or success his job. As for the largest rice cracker company in Japan, Kenko has confidence in establishing their brand in America. Focusing on the company’s original purpose, kick-start growth and globalization plans, it is not advised to accept the deal given by Patty’s Pantry. In the long term, Kenko’s rice cracker is expected to become a famous brand as Lay’s Chips. Turning Kenko into private label product does harm to its sustainability when launching its own branded products. In addition, the short-term profitability is not necessarily required by Kenko due to its success in Japan. Kenko can handle the slow economic growth in the US division thus allowing further expanding steps. To compete with other American snacks, Kenko should maintain their cracker’s recipe that features healthy and gluten-free. It is the authenticity that makes Kenko a competitive company. Since Kenko owns enough capital and time, taking an action with grassroots efforts minimize the risk and maximize control over the
company's future. As can be interpreted from the assessment above, grassroots efforts require the company spread their sales scale step by step well below the companys plan. Furthermore, Sabra and Kameda which are both Japanese companies expanding abroad performed well after making the so-called grassroots efforts according to the case material. It is undoubtedly a wise choice for Kenko to follow these successful business patterns It didnt happen overnight for Kikkoman, And it wont for us", neither will Kenko
5 company’s future. As can be interpreted from the assessment above, grassroots efforts require the company spread their sales scale step by step well below the company’s plan. Furthermore, Sabra and Kameda which are both Japanese companies expanding abroad performed well after making the so-called grassroots efforts according to the case material. It is undoubtedly a wise choice for Kenko to follow these successful business patterns. “It didn’t happen overnight for Kikkoman, And it won’t for us”, neither will Kenko