Sterilized milk & the Japanese Market

Dairy pride, a U.S. manufacturer of milk-sterilizing equipment,wants to introduce its equipment

into Japan but has encountered numerous problems. Sterilizedmilk is a recent innovation that

offers two main advantages over fresh milk: it can be stored atroom temperature for up to three

months and has twice the refrigerated shelf life of ordinarymilk after the package is opened.

Dairy pride has developed superior equipment for sterilizingmilk that avoids the unpleasant side

effects of sterilization—a cooked and slightly burnt taste and afilminess that lingers in the

mouth after the milk is swallowed.

In searching for new markets for its equipment, the company seesJapan as a good candidate.

Japan has a large population, a low but growing rate of percapita milk consumption, and a

limited availability of fresh milk. As Dairy pride sets out tosell its equipment to large Japanese

dairies, it encounters the following obstacles:

?

It has to develop an advertising campaign to change Japanesemilk consumption habits

and convince Japanese consumers of the advantages of buying anddrinking sterilized

milk.

?

The Consumers’ Union of Japan opposes the product because ofconcerns about sterilized

milk’s safety.

?

Dairy farmers located near large cities oppose the distributionof sterilized milk. They

fear competition from faraway dairies, since sterilized milk hasa long inventory life and

can be shipped long distances.

?

Several large retailers say they will not carry sterilized milkbecause of interest-group

pressure. Milk specialty stores, which thrive on homedeliveries, also oppose the

introduction of sterilized milk.

?

The Health and Welfare Ministry and the Ministry of Agricultureand Forestry have

indicated they will wait and gauge consumer acceptance ofsterilized milk before taking

action to approve or disapprove general distribution.

Please follow the steps outlined in Megamarketing and develop aplan for successfully managing

this difficult environment.