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Ina Food Industry (2): Marketing Strategies in a Deflationary Environment  
 
Product Ref: 13/531C Company: Ina Food Industry Co.

Product Type: Case Industry: Packaged Foods

Related Product(s): Teaching Note
Authors: Mitsuru Misawa   
Ina Food Industry Co. Ltd. (¡§Ina Food¡¨) is situated in the city of Ina, Nagano Prefecture, and surrounded by the soaring mountains of the Japanese Alps. Hiroshi Tsukakoshi, Ina Food¡¦s 75-year-old chairman, has led the company through an incredible 55 years of continuous revenue and profit growth. The company is a leading manufacturer of powdered agar, a traditional gelatin product derived from seaweed.

In the summer of 2012, Tsukakoshi is looking through the windows of his office in Ina City. He is thinking about how he aims for his company to be a corporation that is conscious of the global environment. He feels he has done a good job so far. The business has prospered and does not present any urgent problems. However, he also feels that he should not simply sit back and savor his success. He is facing his retirement and has concerns about the long-term growth of the company. He is thinking it might be the right time to introduce some new marketing strategies for the company. There is also another reason for concern: Japan¡¦s deflationary environment, persistent for 20 years now. He is interested in increasing sales volume and profit by raising prices when most other companies are lowering theirs under deflation. In this environment, even keeping prices constant means a relative increase of price. Tsukakoshi believes that, in essence, as long as a company is confident in the competitiveness of its products, there are always methods to raise prices and increase profits. The key is raising the prices of merchandise and services in a way that the customers can accept.

Raising prices in a difficult economic climate is a risky decision. Nevertheless, the company is successful in raising the price under deflation. While the Japanese economy faces serious difficulties, the company has obtained successful results thanks to marketing, producing, financing, and allocating resources.
Functional Area : Marketing

Learning Objective: The case allows students to:
1.Identify what deflation means.
2.Identify the factors that managers should consider in a pricing strategy.
3.Identify what the price elasticity of demand means and how it is alculated.
4.Identify an interesting and noteworthy principle as a basis of success¡X¡§contrarianism.¡¨
5.Rethink what a good company is.
Length: 13 pages Country: Japan

Pub. Year: 2013 Level of Difficulty: 2
         
This product type is available in the following language(s):      English
         
Related Information: N/A
 
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