Two British companies are setting the pace for innovation in two very different markets in Japan. One, Grand Metropolitan’s HÃÂ¤agen-Dazs, has long been front-runner for premium ice-cream. As in many countries, vanilla flavour is the most popular in Japan.
But now a quintessentially Japanese flavour is upsetting the status quo. This season’s hit ice-cream flavour is tea – green tea, of the bitter-tasting “macha” variety used in the traditional Japanese tea ceremony. A Tokyo test of HÃÂ¤agen-Dazs’ first traditional Japanese flavour has gone so well that the company plans to expand sales nationally in September. Almost 1.5 million cups of the new ice-cream have been sold in the Tokyo area since its launch last December.
Bitter flavours are relished in Japan, even in ice-cream. Other top flavours include sesame, red adzuki bean, cherry petal and wasabi (the powerful Japanese version of horseradish that goes well with Sushi). You can also get a green-tea sorbet and green-tea ice-cream sandwiched between two sugar cookies, a novel take on afternoon tea and biscuits.
HÃÂ¤agen-Dazs predicts sales of its tea ice-cream could double within a couple of months when the flavour goes national. If this target is reached, then vanilla’s days may be numbered.
Meanwhile, British Petroleum plans to enter the retail gasoline market in Japan. As with any other retail operation, location is the key to success. Naturally, all the prime sites have long been snatched up by other operators. So BP plans to achieve its goals by linking with a retailer – it will set up petrol filling stations on the premises of the Iseya network of retail chain stores run by Beisia Co, which has 1,126 retail outlets, including shopping malls and convenience stores throughout Japan.
BP will become the first major player to enter Japan’s gasoline retailing business in the post-war era. BP’s three major international competitors in Japan – the RoyalDutch/Shell Group, Mobil and Exxon – have run their gas retail businesses in Japan since before World War Two. Under the agreement, BP will open its first gas station in Japan as a tenant inside the 30,000-sq m shopping mall by the end of the year. The two companies eventually want to expand the network of BP-run filling stations to 100 after opening five to six stations by the end of 1998 in the Tokyo metropolitan area.
BP decided to enter the gasoline retail business in Japan following a series of decontrol measures in relation to petrol imports and retail business over the past year.
The different paths Grand Met and BP have taken to building business in Japan are both made possible by two factors.
First, the accumulated effects of measures to decontrol and deregulate parts of the Japanese economy are making many markets easier to penetrate than they were a decade ago. And second, more Western companies have now accumulated sufficient knowledge and experience of marketing in Japan to be able to spot niches and opportunities that will give them leverage, a mirror image of the strategy many Japanese companies employed in the West.