“Distribution in Japan is a typically complex, multilayered, inefficient, and highly unique distribution system. While the United States needs two people to build a car and one to sell it; Japan requires one person to build the car and two to sell it.” When selecting specific ports for a food distribution service such as Applebee's International it is imperative to not only consider the surroundings of business and trade, but also the amount of wholesalers available and required to supply the menu foodstuffs essential for business.
When selecting an appropriate port for distribution it is very evident that the main port of Tokyo would be ideal for distribution. This port, besides its large scale size, also receives a varying supply of imported food, etc which would be essential to operation. Besides a large importer of foods at this port, the agricultural networks of Honshu supply a majority of restaurants located in this area. (Japanese Distribution System)
Considering that all food must be supplied from the island or imports, the only packaging medium that must be supplied from the United States will be the uniform layout of the store as well as the kitchen and media supplies. Interior distribution and wholesaler negotiations must be established prior to the store being considered. Overall, to enter the Japanese Distribution system, a quality wholesaler and trucking must be provided to ensure customer satisfaction and initial flow. If a distribution chain is available to bypass the sometimes 5 layers of wholesalers, the level of margins will significantly decrease as well as keeping prices low and satisfaction high. (Japanese Distribution System)
Channels of Distribution
“Japan has more wholesalers and retailers per capita than any other advanced industrial nation; the per capita number of wholesalers and retailers is more than twice that found in the USA.” The relative productivity of Japanese distribution is half that of its manufacturing segment and much less than found in the USA or Europe. “A product changes hands from manufacturer to general distributor to special distributor to special sub-distributor to retailer to consumer; sometimes the product never physically changes hand merely the paperwork. Primary, secondary, and tertiary wholesalers in Japan exist with each group performing different functions in the physical and financial aspects of distribution. Often goods are trucked from one warehouse to another in the same block. All these costs are borne by the Japanese consumer.” Since Applebee's is a product consisting of foodstuffs and essentially is not product burdened the amount of distribution channels will be minimal. Japan's distribution position is one of exclusivity and reward. Each distributor is a dedicated and exclusive wholesaler for one manufacturer in each product category and they will not push, even though he may carry, any brand other than the exclusive one that he is contractually committed to sell. To the consumer this could essentially mean that while one company may produce several products, you may have to go to multiple stores to ever view all of them. In the case of a Westernized sit down restaurant, this will essentially have little effect if wholesale distribution of foodstuffs is kept to a minimal level of touched hands. (Japanese Government Industry)
While Applebee's is known as an affordable sit down restaurant, it should also be known that this price is highly dependent on the locality of distribution methods and the franchises that utilize them. Since a majority of Applebee's restaurants are noted as franchise owned the actual cost of operation is minimal but an international store front will mean a larger storage facility, possible menu additions/subtractions, and a highly skilled workforce. These additional costs will unfortunately be subjugated by the average consumer. Since the recipient of exported goods from the Applebee's Distribution Center located in the United States is well established, has a long and favorable payment record, and has been thoroughly checked for creditworthiness the most effective method of payment should be noted as an Open Account. Due to the high risks of open Accounts however the relationship is essential to eliminate time delays, possible fraud, or legal enforcement differences.
Applebee's, if introduced in Japan, will follow many other restaurants in a strong monopolistic competitive industry. While Applebee's would essentially be the first “westernized” sit down restaurant entered into the highly Sushi and rice familiar population it would offer an extensively diverse and particular menu of possibilities. While this diverse menu will cater to the delicacies of the Western palette, it should also be recognized that the main focus will not only be existing competition amongst Italian and Japanese restaurants, but will be to streamline and prioritize the profit oriented agenda utilized. By ensuring customer satisfaction of menu items maximization of profits can be developed.
The pricing strategy utilized to a market highly void of Western restaurants must be considered in a penetration method. If Applebee's is to gain a substantial foothold in a market seemingly not use to Westernized food, the food must be displayed in a delicious and highly affordable manner. Besides a fast diffusion and adoption the possibility for the element of surprise among competitors is highly likely thus adding to a delayed period of reaction. However due to pricing expectation, the duration of lower costs should not be extensive. As a possible solution, having a promotional period or initial discount coupon may tide this problem as well as allowing a greater portion of the general market to experience the restaurant, Applebee's, permitting a larger market share more swiftly.
- Japanese Distribution System (1998) European Business Review, Volume 98,Number 2, 1998 , pp. 109-121(13) Retrieved December 4, 2009, from http://www.ingentaconnect.com/content/mcb/054/1998/00000098/00000002/art00004
- Japanese Government Industry (2009) Retrieved December 4, 2009, from http://findarticles.com/p/articles/mi_m1052/is_n10_v114/ai_14321277/
- Japanese Packaging Institute (2009) Retrieved December 4, 2009, from http://www.jpi.or.jp/english/index.htm
- A new perspective on the Japanese Distribution System (1998) Retrieved December 4, 2009, from http://ssjj.oxfordjournals.org/cgi/reprint/1/1/101.pdf