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Marketing Plan for Blue Apron Expansion into Japan November 15, 2016

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Table of Contents

Executive Summary----------------------------------------------------------------------------------------- 2 Introduction & Company Background ----------------------------------------------------------------- 3 Current Business Model ----------------------------------------------------------------------------------- 3 Objectives of Marketing Plan ----------------------------------------------------------------------------- 4 Environment in Japan -------------------------------------------------------------------------------------- 4 Market Analysis & Consumer/Business Behaviour -------------------------------------------------- 7 Industry Analysis and Competition --------------------------------------------------------------------- 7 Mode of Entry ------------------------------------------------------------------------------------------------ 8 Segmentation, Targeting and Positioning -------------------------------------------------------------- 9 Marketing Strategy - The 4 P’s ------------------------------------------------------------------------- 11 Financial Analysis ----------------------------------------------------------------------------------------- 14 Implementation and Control ---------------------------------------------------------------------------- 15 Conclusion -------------------------------------------------------------------------------------------------- 16 Timing ------------------------------------------------------------------------------------------------------- 16 Bibliography ------------------------------------------------------------------------------------------------ 17 Appendix ---------------------------------------------------------------------------------------------------- 21

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Executive Summary Blue Apron is an emerging brand that is revolutionizing the way Americans think about meal preparation. Blue Apron is not only easing the life of its American consumers through its service, it is also making meal preparation fun and exciting by offering recipes from all around the globe. Due to Blue Apron’s success in the American market, we have decided to take Blue Apron overseas to Japan, where Japanese cultural, economic and social demands are quickly adapting to American norms year after year. Japan has been a model of consistency in terms of economic power and growth over the past several decades. That coupled with strong ties to the U.S. both politically and economically make Japan a relatively safe option for expansion. Additionally, many of the Japanese youth have boasted expanded taste preferences to Western style cooking, leading to increasing sales in both breads, pastas and other “western” style foods in Japanese. Due to this growing trend, Blue Apron’s large menu and ability to offer fresh ingredients to prepare not only Japanese favorites, but western style meals will resonate greatly with the Japanese popular. Our goals include creating value added relationships with local farmers to ensure our ingredients are local and fresh as well as targeting the city of Tokyo, which has the highest urbanized population at just over 38 million people. Many of the people who work in this urban center can work up to 49 hours per week (McCurry, 2015), meaning they have little time to go grocery shopping every single day. If Blue Apron can succeed in the most populated urban center in Japan, expansion into other highly urbanized areas will be easier to accomplish, Blue Apron’s unique value added service offers not only convenience, but affordable gourmet meals for a low price. This will allow Blue Apron to beat out competitors through an image of high quality, thereby leading to higher brand recognition. The following marketing plan outlines findings that support our claims and how Blue Apron will successfully perform in the Japanese market.

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Introduction & Company Background Blue Apron has decided to take their products and services overseas to Japan. Both the Japanese and American lifestyles boast similarities in the heaviness of work-life balance. Blue Apron offers a solution to a busy schedule and long day, making home cooking easier and more accessible to the working person. Blue Apron was founded in the summer of 2012 by Matt Salzberg, Ilia Papas and Matt Wadia. Their mission is to “make incredible home cooking accessible to everyone” (, enabling great dishes to be made from an intimate and comfortable home setting. Their product is affordable, sustainable, and places quality of ingredients as a high priority. Blue Apron is unique in its business model due to the fact that it is both a product and a service brand. On the tangible side, Blue Apron provides fresh ingredients and original recipes that are conveniently delivered right to the consumer’s doorstep. The ingredients are perfectly measured for each recipe, and recipes are never repeated in the same year, ensuring that the consumer will have a diverse culinary experience every time. Additionally, there is free delivery throughout the continental United States. The ingredients arrive in a biodegradable refrigerated box to maintain the freshness of the product while staying true to their value of sustainability. Blue Apron provides everything a person would need in order to cook a gourmet meal for themselves in the comfort of their own home, no matter how busy their schedule is. Blue Apron boasts the use of “fresh, seasonal ingredients from trusted farmers and artisans” ( creating a sense of quality and freshness that consumers can trust. Current Business Model Blue Apron strives not only to provide people with convenience in their lives, but also to help them become better chefs by providing recipes and the ingredients necessary without the hassle. The two-person plan is priced at $9.99 per person per meal. Blue Apron includes free 38shipping within the continental United States. Each meal is 500-700 calories and takes less than 35 minutes to prepare, only adding to their model of consumer convenience (Meijers, 2013). Blue Apron’s pre-prepared meals saves the customer both money and time. Individual ingredients can be expensive and are sometimes not worth the investment as the consumer may only use them once. Through the use of Blue Apron, customers will not have to spend as much time shopping for food and can save time cooking. The ingredients needed are shipped to customers’ doorsteps in an insulated cooler to keep them fresh. Additionally, Blue Apron sources their ingredients locally from each region. They provide recipes that use fresh, in season ingredients based on the time of year and availability of such ingredients. In order to help maintain freshness and seasonality, Blue Apron establishes regional, refrigerated warehouses and distribution centers that additionally offer flexible packaging options. By sourcing locally and establishing regional distribution centers, this allows Blue Apron to keep costs low and helps maintain a positive brand image.

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Objectives of Marketing Plan Blue Apron currently only delivering to the continental United States. Japan will be the first country outside of the United States in which this recipe delivery system will be introduced to, which is quite exciting. The company is valued around $2 billion dollars. In order to be as successful in Japan as Blue Apron has been in the U.S., Blue Apron has developed these marketing objectives. In the U.S., Blue Apron announced in November 2015 that it was now selling 5 million meals per month. Blue Apron was founded in 2012. With this information, we based our goal off comparing the population of Japan and the United States with the 3 year sales. 1. Forge personal relationships with 10 local farmers in Japan by the end of Quarter 4 in 2019 to develop market tests. 2. Achieve high brand recognition in Tokyo, Japan with 3 million meal sales per month by Quarter 4 of 2020. Environment in Japan Economic Japan has the third largest economy in the world, only trailing behind the United States and China, which are their largest import partners. Japan has a very large manufacturing industry in which they largely benefit from, including consumer electronics, automobile manufacturing, optical fibers, and copy machines. The booming success of Japan’s manufacturing industry adds to the country’s exports, with the island nation’s main exports are their automobiles and consumer electronics. Japan’s GDP per capita in 2015 was $38,100, which is 42nd in the world. It was the leading force in Asia for a long time, but China has been developing rapidly economically, and surpassed Japan. The unemployment rate is only 3.3%, and the population below poverty line is 16.1% as of 2013. Japan’s economy is developed and stable (CIA, 2016). Geographically, Japan is located in Eastern Asian, and it is part of the island chain between the North Pacific Ocean and the Sea of Japan, east of the Korean Peninsula. It has a 29,751-km coastline. They have very limited natural resources, and most of them are negligible mineral resources, and fish. There are no natural energy resources in Japan. 68.5% of the land is forest, and 12.5% are agricultural land (CIA, 2016). As an extremely populated island nation, Japan does not have the best land for a booming agricultural industry. However, their “main crop is rice and it is heavily subsidized so that they are self-sufficient and there are high tariffs on any rice imported to decrease competition in the market” (“The Japanese Economy,” 2016). The main goods that Japan imports are raw materials, oil, and food goods, such as meat and wheat, that cannot be produced in bulk on the mainland.

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Cultural Japan has an extremely unique culture, developed from centuries of isolation followed by rapid technological advancement. As a very nationalist country, the Japanese love to maintain and promote their extensive heritage. Additionally, it is one of the most difficult countries to immigrate to. The theory behind their success in the economic realm is due to the cultural principle called “Nemawashi.� This principle promotes adaptability, respect, and cohesiveness within a company, because it requires decision makers to collect the opinions of employees of both high levels and low level employees in the company. Additionally, Japanese companies value work experience over degrees, so it takes more time and work experience to advance to a higher position. Being overly ambitious may be frowned upon for disturbing the cohesiveness of a company. In rural areas, Japanese people are more traditional. For example, they would have rice, miso soup, fish etc. for breakfast, lunch, and dinner. In bigger cities, there is a wide variety of eating habits introduced by Western culture. It is common to see cuisine from all over the world, such as pizza, burgers, Chinese, Southeast Asian cuisine, and Italian. Urbanites love this diversity of food culture (Introduction to Japanese Meals). They are willing to pay a premium for higher quality food, which differs from many other cultures that would prefer a discount of common ingredients. Thus, the presence of high quality food ingredients is key to being successful in Japan. Local products are always important due to their love for their national culture and people. (Daily Japanese Meals). Japanese people tend to eat raw, steamed, or hot boiled food, instead of cooking food with fats and oil, common in western cuisine. This method of cooking makes their food typically much healthier. This is one of the reason that Japan has the highest life expectancy among all major countries. In their culture the senses of family is also important. Typically, Japanese families cook and eat dinner together as a family. Dinner is usually the main meal of the day (Japan Has The). Social Japan’s population is 126,702,133 as of July 2016. It is the 11th most populated country in the world with the oldest population. Ethnic groups are comprised of 98.5% Japanese people, 0.5% Korean, 0.4% Chinese, and 0.6% of others. This is a highly homogenous ethnic population. The national language is Japanese, with little influence of other languages besides English. Religions include Shintoism, which is 79.2% of the population, 66.8% people are Buddhists, 1.5% are Christians, and 7.1% of others. There is a large percentage of elderly who are 65 and older, which is 27.28% of the entire population, and its population growth rate is -0.19%, which is 214th in the world. They have one of the lowest birth rate globally. Japan also has one of the highest populations living in urban, developed areas with 93.5% of their population in these cities. Tokyo, their largest city, has 13.001 million people. Their life expectancy at birth is extremely high, which is 85 years, and it is the 3rd of the world, again adding to their aging

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population. Health expenditures are 10.2% of GDP in 2014, which is 22nd in the world (CIA Factbook, 2016). The educational system includes primary school, junior high school, high school, universities and up. Education expenditures is 3.8% of GDP, and school life expectancy average is 15 years (CIA, 2016). Political A broad explanation of Japanese politics is: “Japan is a constitutional monarchy (like Britain) where the power of the Emperor is very limited. As a ceremonial figurehead, he is defined by the constitution as "the symbol of the state and of the unity of the people". This is a dramatic contrast to the situation prior to Japan's wartime defeat by the Americans when the Emperor was regarded as divine. The Prime Minister is chosen for a term of four years, although the political turbulence of the Japanese system is such that he rarely serves a full term” (Darlington). It is stable political system regarding the structure of its policies and laws, though the Prime Minister changes quite often, thus it is also a stable environment for business. Due to Japan’s geographic location, it has very limited natural resources and land, so it relies on heavy import of raw materials. Because of Japan has the biggest number of elderly people, so the government implemented a health system called the metabolic syndrome checking system in 2008 to check people’s health for those who are 40 and over, and it is mandatory for qualified citizens. Thus, Japanese consumers became more health conscious over the review period. The government also aims to raise people’s awareness of lifestyle diseases and improve early prevention. Legal One of the biggest legal issues of Japan with the rest of the world is about hunting and eating whales. Japan is one of the three countries in the world that can legally hunt whales. The international legal department has trying to address this problem for some time, but whaling in Japan is still not banned as they state it is for science research. Another issue is the problem of illegal hunting dolphins. In the market, many distributors use dolphin meat as whale meat to sell to consumers, which in turn contains a large amount of radiation. Blue Apron will not be participating in these markets and will avoid the distribution and use of whale and dolphin meat in our recipes.

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Market Analysis & Consumer/Business Behavior The Japanese food market has changed with their increasingly busy lifestyle. Their ageing population and decrease in family sizes, which are due to less people having children or getting married, has increased their pace of life. Today 33% of households are single person homes and 28% of households are two-person households. Only 38% of households are families with children, primarily only one child per family. This decrease in family size has led to decrease in the amount of time people spend cooking, making ready meals more popular. In 2014, ready meals increased in sales by 4% (Agriculture, 2015, pg. 8) Although the amount of time people spend cooking has decreased, the overall amount of people who cook meals at home has increased. This is most likely related to the health trend that has become popular throughout Japan. People are becoming more aware of the sugars and fats in their foods and often elect to eat healthier meals prepared at home than dine out. For this reason, they are also willing to pay a premium for healthy, convenient food. An example of a stable in their diet that embodies both aspects that they value in food preparation. Traditionally, most of Japanese cuisine involves eat rice and soup with most meals. This trend is still very prevalent within their culture, but younger generations are also interested in Western-style cooking. For this reason, there has been an increase in sales of bread and pasta. The trend of eating a large breakfast has also decreased with younger generations, as their schedules become busier it is becoming more common for them to skip meals like breakfast and instead eat a large meal at the end of the weekday. This is a trend that is common in the United States with younger generations as well (World Atlas). Industry Analysis and Competition In 2014, Japan’s food retail sales totaled to 45,590,000,000 JPY versus that of 44,026,000,000 JPY in 2012; total food retail sales saw an increase of 1,564,000,000 JPY. “Japan’s grocery sales account for approximately 30% of the total retail market, and this proportion will likely remain the same during the 2015-2019 period” (Euromonitor International, 2015). Additionally, in 2014 the retail food industry experienced growth in all three of the major sectors of the food industry: large scale supermarkets and conventional supermarkets, convenience stores, and department stores. Convenience stores are now trying to develop an online store so that it may appeal to “young customers always on the go, create ready to eat meals for working mothers, and provide delivery services for the fast-growing elderly population (60 years old and over)” (Euromonitor International, 2015). Happily, the industry is projected to continue to grow over the next five years. To compete with the convenience stores, larger supermarket chains have launched smaller neighborhood stores neighborhood stores to create an association of convenience with their brand. Also, some conventional grocery stores are now offering a home delivery service for little to no charge. Many of the grocery store chains, specifically AEON Retail Companies

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and Seven & I Holdings are making the elderly their target market. Japan also has many specialty supermarkets that carry imported food products, such as Kinokuniya (the first selfservice supermarket) and Meidi-ya (the first supermarket to specialize in imported products). As stated previously, convenience stores are very popular in Japan, mainly due to the proximity in which they are to citizen’s places of residence, which allows for them to feel more connected to their neighborhood. These convenience stores also offer home delivery services. For example, 7-Eleven offers a “Seven Meal bento” delivery service. They have a website dedicated to this service. The customer simply chooses from a bento menu the day before they would like their order. The bento menu is different every day. Another example of the convenience store delivery services is Family Mart, which not only offers food delivery, but has a staff that will check up on its senior customers. The most popular products in the convenience stores are processed food and ready meals. Home Meal Replacement is a very important trend. This trend includes foods, such as ready to eat bento boxes. Frozen foods (¥150-500) are also very popular, such as thaw and serve bento boxes and frozen noodle and rice dishes. Besides home delivery by the convenience stores, home delivery services from restaurants (like the Postmates website) are popular in Japan. The number one delivery service for restaurants in Japan as an English speaker option is the Maishoku, which has no charge for delivery. The services that are primarily Japanese are services such as Damaecan, fineDine, and CoCo Curry House. “Seven & I Holdings Co Ltd leads all grocery retailers with their popular brand of 7-Eleven which holds 11.9% of the overall grocery retail market share. They also had the most retail outlets (7-Eleven) with just under 16,000 outlets in 2013. Combined, the top five companies (just looking at their major brands) of Seven & I Holdings Co Ltd (7-Eleven), Lawson Inc (Lawson), FamilyMart Co Ltd (Family Mart), AEON Group (MaxValu) and Wal-Mart Stores Inc (Seiyu) accounted for 26.4% of the total market share in 2014” (Euromonitor International, 2015). Industry Growth Chart: See Appendix 1 SWOT Analysis: See Appendix 2 Mode of Entry Japan is a very proud and nationalist country that takes great pride in their businesses. It is relatively difficult to enter the market as a foreign company into the Japanese market without partnering with a local company. For this reason, Blue Apron is going to use a joint venture approach to enter the market. Though we plan to partner with ten local farmers in Japan by the Quarter 4 in 2019, we also need to be sure we have a reliable way to package and distribute our food to our customers. This is our motivation for partnering with a Japanese company that specializes in logistics services called Matsuoka Co., Ltd. This company specializes in three areas: (1) Importing of marine products and manufactured marine products, (2) Planning, manufacturing and sales of marine products, and (3) Total Logistics Service (storage / transport,

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inventory management). Blue Apron plans to utilize the third part of their services. Matsuoka will take care of everything in logistics from start to finish. At their distribution centers, Matsuoka provides upstream to downstream services within the logistics system with their Transfer Center (TC), their Distribution Center (DC), and their Third-Party Logistics system. Matsuoka has nine distribution centers in major cities throughout Japan. Because we are specifically focusing on Tokyo, we will be utilizing their distribution center services at their Tokyo Bay Distribution Center, “situated in Higashiogishima, which is a highly convenient distance from the capital city of Tokyo” (“About Our Business”, 2016). This facility boasts the largest storage capacity in the nation with “cutting edge technology,” such as chilled spaces and a refrigerator room. This will help to ensure that our food is kept fresh. Additionally, the Tokyo Bay Center contains sampling rooms “fully fitted with the wide variety of equipment necessary for the defrosting, sample pick-up, and testing of beverage products, in addition to carrying out accurate inspections of frozen and chilled foods” (“About Our Business”, 2016). The center also has Blast Freezing technology that quick-freezes meat to respond to changes in demand or weekly orders. Besides the amenities that their logistics center provides, Matsuoka offers delivery services that consist of a “total IT solution” in receiving, gathering, and delivering orders with their chartered trucks. This will ensure that the delivery for Blue Apron’s product will occur efficiently and effectively. Segmentation, Targeting and Positioning Segmentation Demographics - Japan has a very dense population for the size of the nation. The total population as of July 2016 is 127,702,133 people. Of those 128 million people, 93.5% of them live in an urban setting. About 50% of the population is within the age range of 25-64, the prime working years for the Japanese. Additionally, roughly 28% of the population is over the age 65. Japan also has 4 major cities with populations over 5 million. These cities include Tokyo (13.001 million people), Osaka-Kobe (20.238 million people), Nagoya (9.406 million people) and Kitakyushu-Fukuoka (5.51 million people). The median age of the Japanese is 46.9 years old. The sex distribution of the population of Japan is 51% female and 49% male. In terms of family demographics, there were just under 52 million private households, with 57% being nuclear family households. Additionally, there were 21.5 million households with members 65 years of age or older, with about 15 million being elderly households of more than one person. All demographics were found by in 2016 by Index Mundi and the Japanese Statistics Bureau. Psychographics - Most the Japanese population is within the working age range of 25-64 years old. The Japanese lifestyle focuses heavily on working and creating an image of loyalty to employers. The working culture is a stressful environment, as “about 22% of the Japanese population works 49 hours a week.” (McCurry, 2015) To put that into perspective, only about 16% of Americans work 49 hours a week. Additionally, the Japanese government allots 18.5

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days of paid time off for Japanese employees; however, workers “typically use only 9 of their 18.5 average entitlement.” (McCurry, 2015) The Japanese live very busy lifestyles and have little time to waste on trivial tasks. As an additional note, the Japanese also have expanded their food preferences over the past several decades, as they eat foods from North America, Europe and other parts of Asia. They also have access to fast foods, thereby expanding their palates to a wider range of flavors. Targeting As we expand into Japan, we have decided to target the upper working class and the elderly segment of the Japanese population. As shown by the psychographics, the Japanese workforce works long hours. They have very limited time to go grocery shopping but still want to prepare something new several nights of the week. With Blue Apron, they will be able to accomplish just that. We will deliver prepackaged meals that simply need to be cooked. All the ingredients will be measured out for the consumer, just as they are here in the U.S. With the ever-expanding tastes that the Japanese are becoming accustomed too, we will not only be able to push traditional Japanese flavors, but also incorporate flavors from other parts of the world as well, thereby keeping the tastes fresh and unique. With their hectic work lives, being able to come to a meal that can be prepared in 35 minutes or less will add a layer of convenience and help alleviate any stress of wondering what they are going to be eating for dinner. Japan has one of the oldest populations in the world and it is projected to grow even larger over the coming years. Blue Apron is a perfect fit for the elderly segment. At times, the elderly either do not have the desire or are not physically able to go grocery shopping on their own. Blue Apron allows them to continue to prepare great tasting meals with fresh ingredients without ever having to leave the comfort of their home. As stated previously, Blue Apron delivers the ingredients right to their doorstep in an insulated box, allowing for the ingredients to remain fresh. The recipes are simple as well and the right proportions of ingredients are measured out, making preparation easy and simple. Overall, these two segments of the Japanese population would be a perfect fit for subscriptions to Blue Apron. Positioning Our positioning in the Japanese market would look like our positioning in the U.S. market, a slightly more expensive, but healthier option to ready-to-eat alternatives and fast food options while still being cheaper than full scale grocery shopping. Compared to other ready-toeat manufacturers in Japan, we would be about $1.97 more expensive than the next comparable product. Lawson Fresh sells about 600 meal kits per day for ¥832; at the current exchange rate, that equates to $8.02. These meals also take anywhere from 5-8 minutes to prepare (“Ready-toCook Meal Kits”, 2016). However, the quality of the ingredients is not as good as what Blue Apron offers and is only about the size of a side dish. Although with Blue Apron the preparation time is much longer, the consumer gets a full meal for two people per order, thereby giving them better nutritional value and bigger portion sizes. Blue Apron can utilize a local consumer culture

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positioning strategy to capture market share in Japan. By building relationships with local farmers and sourcing products locally, Blue Apron will attain notoriety as a local brand and become engrained in the minds of Japanese consumers. Marketing Strategy - The 4 P’s Product The product that we are trying to bring into fruition in the Japanese market is one part food, but also one part service and experience first and foremost. The food aspect of Blue Apron includes high quality, fresh ingredients that are perfectly measured out. The service includes fast, convenient delivery right to the customer’s door in a refrigerated box, while the experience aspect is giving the customer the tools they need to feel confident cooking and to be able to prepare a successful meal that a gourmet chef might make. These are the product differentiators that will help us to stand out when entering the Japanese market The Blue Apron “Cookbook” consists of 3 main categories: main ingredients, cuisine, and seasonal recipes. The main ingredients are based off seven different kinds of protein bases that include beef, fish, lamb, pork, poultry, shellfish, and vegetarian options. The cuisine category consists of recipes for 27 different types of cuisine varying from African to Egyptian to Moroccan. The Japanese cuisine category alone currently has well over 50 Japanese recipes to choose from of authentic dishes consisting of healthy options packed with protein and vegetables. The seasonal recipes category carries recipes for winter, spring, summer, and fall. It also includes the option to view recipes from last week, this week, and future weeks that customers may choose from ( On the menu of selections for the week, there are 6 choices for a 2-person plan and 4 choices for a 4-person plan. Because the Japanese appreciate the food that their culture provides, but also have an expanding palette, Blue Apron will offer 4 Japanese choices and 2 choices of other cultures for the 2-person plan. For the 4-person plan, we will offer 3 Japanese choices and 1 choice of another culture (See Appendix 7). Price The prices of Blue Apron are somewhat expensive for a country with citizens that have an average household net-adjusted disposable income per capita of $27,323 a year. The gap between the richest and the poorest of the country is quite lofty as well. “The top 20% of the population earn more than 6 times as much as the bottom 20%. A decent meal at a restaurant in Japan costs between ¥1,000 and ¥3,000 (“Living Cost”, 2016). When you compare this to the price per recipe in the 2-person plan (¥2,075.15), it only costs ¥1,037.58 per person (about 10 USD), which is quite good. Because we are targeting the upper working class, we stress that customers are paying for the convenience and freshness of the food as well. In keeping our prices the same, we are using ethnocentric pricing when entering the Japanese market for simplicity. However, as we gain consumer reactions, we will consider adjusting our prices as needed (See Appendix 8).

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Place The first place we will take our product is to consumers in the city of Tokyo, which is quite the obvious choice for a place that caters to the busy, hustle-and-bustle environment that Blue Apron thrives in. As stated in Segmentation, Targeting, and Positioning, the greater metropolitan area of Tokyo has a population of 13.001 million people. However, we will begin our entrance into the Japanese market by only entering Tokyo, with a population of 13 million. The population of the city of Tokyo has the perfect market for on-the-go, working people. “The age breakdown of Tokyo's population is skewed toward working age. The most recent official demographics for Tokyo were released in 2010, and they show that 68.2% of Tokyo residents are aged 15-64” (“Tokyo’s History, Geography, and Population”, 2010). Additionally, 20.4% of people are age 65 years and older, while the 11.4% of Tokyo’s population is age 0-14. This will give Blue Apron the opportunity to test the market to see if the Japanese will respond positively to our product. As Blue Apron gains market share beyond 2020, we have a goal of expanding to to the greater metropolitan area of Tokyo as well as other highly populated cities of Japan, such as the area of “Keihanshin,” consisting of the cities Kyoto, Osaka, and Kobe, with a population of over 19 million people (Spacey, 2016). (See Appendix 9). To reach our goal of forging personal relationships with 10 local farmers in Japan by the end of Quarter 4 in 2019 to develop market tests, we plan to build contracts with farms on Honshu, the central and largest island where the city of Tokyo is located. We will look specifically in the cities Sendai and Niigata in Japan, as they are two of Japan’s major agricultural areas (“Trip Report - Japan Agricultural Situation”, 2012). Blue Apron will also consider Pasona O2 in Tokyo, Japan, which is a center for high-tech urban farming. This will create an element of convenience for distribution all the regions. Before creating contracts with any of these farmlands, Blue Apron plans to send representatives out to survey each of the conditions and implications of the areas, under the guidance of our partner in our joint venture, Matsuoka. (See Appendix 10) Promotion Our promotion plan for Blue Apron consists of creating a strong element of brand awareness and using the right kind of advertising that will entice the Japanese population. Blue Apron is not a store that a consumer can just walk into, look around, and decide to buy. It is a product-service that consumers will have to trust to deliver on its promise of convenient, fresh, high-quality ingredients. We want to convert non-users in this market into users who have full confidence in the Blue Apron brand and promise. One way we will create brand awareness and promote Blue Apron in Japan is through promoting the message of our mission “to make incredible home cooking accessible to everyone.” Though Japan is not as much of a collectivist culture as its Asian neighbors, it is still largely focused on the use of “we” in their society and normally puts “harmony of group above

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the expression of individual opinions” (“Geert Hofstede-Japan”, 2016). The word “everyone” will hopefully spark the interest of the Japanese, relating back to their collectivist culture. Additionally, in Japan, celebrity endorsements are very important and have a great influence on consumers. “In both South Korea and Japan, it is thought that as many as 70% of commercials now feature a celebrity” (“Celebrity Power and Its Influence on Global Consumer Behaviour”, 2014) by partnering with and using a Japanese character that caters to the kawaii or “cute” culture in Japan and popular among the public, we will have a better chance of reaching more consumers. The Japanese character Rilakkuma was created by Aki Kondo and produced by the Japanese company San-X. Rilakkuma “has ranked the fifth most popular character in Japan” (“Rilakkuma-History”, 2016) and would be an exciting way to advertise Blue Apron to the Japanese. Additionally, the name Rilakkuma is a “combination of the japanese pronunciation for Relax (rila) and Bear (kuma)” (“Rilakkuma-History”, 2016). By using this character in our brand, consumers will associate the ability to relax with Blue Apron, as they will not have to worry about all aspects of meal preparation. (See Appendix 4) Blue Apron plans to play to one of the biggest strengths of our brand, which is that our ingredients are healthy, fresh, and convenient. This must be stressed to the Japanese consumers as there are other options for food delivery in Japan, but they aren’t as healthy. Using advertisements that have brightly colored vegetables and ingredients will catch the eye of consumers. As discussed earlier, getting the Japanese consumer to try our brand will be the toughest part of reaching them in the market. To get consumers to try it and sign up, we will offer a discount sales promotion of 50% off the consumers first purchase of a week of meals for Blue Apron. Lastly, because there are 115,000,000 internet users in Japan (“Japan Internet Users”, 2016) with a heavily used social media landscape, we will put a lot of emphasis on internet advertising. The three most heavily used social media sites by the Japanese are Line, Twitter, and Facebook. Line is Japan’s top mobile messaging app, with 50 million monthly active users (40% of Japan’s population). For brands, Line is mostly used for advertising deals. Twitter is the second most popular social media channel, with 26 million monthly active users that have a deep connection with Twitter. Facebook is also popular, with 22 million monthly active users. (Wong, 2016), (See Appendix 3). Wall Street Journal says, “The Japanese just prefer to send emails, a function that mobile Internet services like NTT DoCoMo Inc.’s i-mode service has enabled that for years. While the proliferation of smartphones has made sending emails on the go more common in the U.S. and Europe, the usage figures still trail that of Japan. The report says 54% of Japanese send emails from their phones, compared with 28% of Americans and 19% of Europeans” (Wakabayashi, 2010). To cater to this, we will also implement the use of email to promote our products, by offering one free recipe a week if you sign up for our emails. (See Appendix 11)

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Financial Analysis The financials laid out in this section are based off the limited public information of Blue Apron. Since they are a private company, their official financial statements are not available to the public, but they have released their annual revenue amounts. Sales Forecast: Based on these numbers, we conservatively estimated that our profit will increase 50%, 30% and 20% respectively each year (Mitra). Overall, the grocery industry in Japan has been increasing drastically at about 10% each year (Aoki, 2014). Using both numbers it was estimated that the overall growth of both the industry and Blue Apron growth would be 10% for the first year, since it is only industry growth, then 60%, 40% and 30%. The price of each meal is ÂĽ1,037.58, which is equivalent to $10. For our sales forecast, we used the USD$ as all Blue Aprons previous forecasts and reports have only been in dollars. Blue Apron Sales Forecast










Industry and Blue Apron Growth





Price per Meal








Meals per month 1,311,189

Marketing Costs per year: Marketing Event


Rilakkuma Partnership


Twitter and Facebook Ads


Email Campaign


Japanese Social Media Sites


Marketing Research


Total Cost:


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These are estimates of the marketing cost for the first couple years of the business. From the sales forecast, about $25,000 a year is all that can be allocated for marketing expenses and how they will be separated individually. The Rilakkuma partnership will be the most expensive part of our marketing expenses. The rest of our marketing expenses will be primarily online and social media. Facebook and other Japanese social media advertisements will make up $7,000 of the marketing expenses. This expense is important as social media and smartphone usage in Japan is high (Poushter, 2016). This is also why we are dedicating $2,000 for an email campaign. The last marketing expense is to conduct marketing research for $1,000. Marketing research will be important for the company to continually update their overall strategy and understand the market. Currently, there are no specific marketing research campaigns planned, but it is important to allocated the resources before necessary. Implementation and Control Implementation: Once Blue Apron establishes in Japan, Blue Apron has officially gone global. Some of the issues we might face is because Japanese people love their own brands and would rather pay extra money for premium quality products, thus Blue Apron would partner with Japanese local farms and providers, and presenting high quality products and raw materials. Per the Japanese Times, there is an increase FDI in Japan, both the government and the prime minister are trying to establish policies to give foreign businesses to invest in Japan. They predict that investments will reach $1.85 trillion in 2016 (Japan Times). As a business for Blue Apron, the implementation in Japan should be successful especially with the government and laws. The policies should be beneficial for foreign companies to go into Japan. For our customers, once the Japanese people see how convenient it is for them to make incredible home cooking meals with premium local raw materials, they would love Blue Apron as well. Control: Blue Apron will be closely monitoring the consumer behavior, such as which meal plans they are choosing from the website, and which local providers’ products are more popular, how well does the delivering system working. Since we will be partnered with local farms and providers, we need to pay close attention to monitor the quality as well as price. With our marketing plans: 1. Achieve 3 million meal sales per month by Quarter 4 of 2020. 2. Forge relationships with ten local farmers in Japan by the end of Quarter 1 in 2019 to be able to develop market tests. Thus, we will follow up and evaluate with our progress every half a year to see whether we can achieve our goals with local farms and revenue by the end of the time that we set up.

Blue Apron: Japan 16

Conclusion In conclusion, Blue Apron will utilize its advantageous supply chain, fresh and quality local ingredients, promotion plans and other strategies to successfully enter Japan. With a willing target market and competitive pricing, Blue Apron can count on consumers buying the service. By appealing to the hustle and bustle, busy life of the upper-class Japanese worker, Blue Apron offers a convenience and solution to the problem of not having enough time to shop, pick out a recipe and measure ingredients. Japanese cooking relies on the simplicity of ingredients and recipes, which would mean fewer ingredients and therefore a price that can be afforded by our target market. An expansion into the foreign market offers great opportunity for additional partnerships and profit for Blue Apron, which is currently U.S. based. In addition to continuously doing market research, Blue Apron will continue to monitor and grow its understanding of the Japanese market and the needs and wants of the people it serves. Timing Regarding timing, Blue Apron currently has a very wide opportunity to enter the upperclass Japanese working market. To complete our objective of 3 million meal sales per month by Quarter 4 of 2020, establishing Matsuoka comes first. After securing a supply chain partner, research must be conducted in order find local farms in the Sendai and Nigata regions to get ingredients from. Once the first initial farms have been found and partnered with, Blue Apron will then expand to find more partners and expand the types of produce and food for the menu and increased variety, as well as foster a deeper web of connections through the sourcing community and industry. These objectives will be completed by Quarter 4 of 2019. After ensuring that the supply chain has been created successfully, Blue Apron will begin promotion materials, including the Rilakkuma advertising campaign beginning in 2019. Additional advertisements highlighting fast, bright and local food will also be aired to entice the Japanese consumer, who lives a fast and local life. In addition to the advertisements, discount sales will be offered for first-time users, which will give incentive for Japanese consumers to go beyond their own country’s brands and experiment with a newer and American company and product Gantt Chart: See Appendix 6

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Bibliography About Our Business. (n.d.). Retrieved October 27, 2016, from 15/national/ready-to-cook-meal-kits-a-hit-with-dual-income-families/ - .WABAjDKZOCQ Aoki, S., Oakley, A. (2014, April 4). GAIN Report: Japan, Retail Foods, Japan Retail Industry. Retrieved on October 13, 2016 from Aoki, S. T. (2014, December 30). Japan's Retail Market Remains Attractive for U.S. Exports. Retrieved November 13, 2016, from GAIN Publications/Retail Foods_Tokyo ATO_Japan_12-30-2014.pdf Bernard, S., Cadman, E., Harding, H. (2016). The Japanese Economy at a Glance. Retrieved on October 5, 2016, from Blue Apron. Cain, G. (2014, June 17). Japan Has The Highest Life Expectancy Of Any Major Country. Why?. Retrieved on October 12, 2016 from Celebrity Power and Its Influence on Global Consumer Behaviour. (2014, March). Retrieved November 14, 2016, from Central Intelligence Agency. (2016). Japan. In the World Factbook. Retrieved on October 12, 2016 from Crook, J. (2015, June 9). Blue Apron Eats Up $135M At A $2B Valuation. Retreived October 3, 2016, from Darlington, Roger. "Japanese Political System." Japanese Political System. N.p., 16 Sept. 2016. Web. 13 Nov. 2016. <>. Daily Japanese Meals. Retrieved on October 12, 2016 from

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EnAble Japan. (2016, February 26). Top Tokyo Food Delivery Services. Retrieved on October 13, 2016 from Encyclopedia Britannica Online. (). Chukyo Industrial Zone. Retrieved on October 20, 2016 from The Japanese Economy. (n.d.). Retrieved October 16, 2016, from Geert Hofstede-Japan. (n.d.). Retrieved October 20, 2016, from "Increasing FDI in Japan | The Japan Times." Japan Times. N.p., 23 July 2014. Web. 13 Nov. 2016, from Japan population (2016) FACTS, CHARTS AND EXPLANATIONS. (2016, June 22). Retrieved November 14, 2016, from Japan Demographics Profile 2016. (2016, October 8). Retrieved October 13, 2016, from Japan Internet Users. (n.d.). Retrieved October 25, 2016, from Konrad, A. (2015, November 2). Blue Apron's Got Big Plans For Dinner - But So Do Its Hungry Rivals. Retrieved October 3, 2016, from Living Cost. (n.d.). Retrieved October 30, 2016, from Maine International Trade Center. (2015, June). Agriculture and Food Opportunities in Japan and China. Retrieved October 4, 2016, from

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Maki. (2010, January 10). Bento Tidbits From Japan: 7Meals, 7-11â&#x20AC;&#x2122;s Healthy Bento and Meal Delivery Plan. Retrieved on October 13, 2016 from Meijers, N. (2013, December 16). Blue Apron on Its Business Model, Scaling Distribution & Sourcing. Retrieved October 2, 2016, from Minister of Agriculture and Agri-Food. (2015, June). Modern Grocery Retailing in Japan. Retrieved on October 13, 2016 from Mitra, S. (2016, August 23). 2016 IPO Prospects: Blue Apron Cooking up an IPO. Retrieved November 13, 2016, from Poushter, J. (2016, February 22). Smartphone Ownership and Internet Usage Continues to Climb in Emerging Economies. Retrieved November 13, 2016, from Rilakkuma-History. (n.d.). Retrieved October 30, 2016, from Spacey, J. (2015, June 1). Keihanshin Metropolitan Region. Retrieved on October 20, 2016 from Statistics Bureau of Japan. (2016). Statistical Handbook of Japan 2016. Retrieved on November 7, 2016 from Trends, Insights, and Top Players. (n.d.). Retrieved October 16, 2016, from Tokyoâ&#x20AC;&#x2122;s History, Geography, and Population. (n.d.). Retrieved October 17, 2016, from Trip Report - Japan Agricultural Situation. (2012, August 17). Retrieved November 13, 2016, from

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Wakabayashi, D. (2010, October 08). No Text (Messages) Please, Weâ&#x20AC;&#x2122;re Japanese. Retrieved October 27, 2016, from Wong, K. (n.d.). Japanâ&#x20AC;&#x2122;s Social Media Landscape in 2016. Retrieved October 25, 2016, from World Atlas. (2016, July 8). 10 Biggest Cities In Japan. Retrieved on October 20, 2016 from Yoshizuka, S. (2016, July 25). Introduction to Japanese Meals. Retrieved on October 12, 2016 from (2016, August 15). Ready-to-Cook Meal Kits a Hit With Dual-Income Families. Retrieved on October 13, 2016 from

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Appendix Appendix 1: Industry Growth Chart (in Revenue)

(“Trends, Insights, and Top Players,” 2016) Appendix 2: SWOT Analysis

Strengths 1. There are no other brands identical to Blue Apron in Japan (Euromonitor International, 2015). 2. Fresh, pre-measured ingredients ( 3. Weekly delivery right to the customer's door (

Weaknesses 1. Longer prep time-many Japanese people might opt for a take out delivery service. (Euromonitor International, 2015) 2. Price-Blue Apron may be considered a high price for some Japanese people (Euromonitor International, 2015).

Opportunities Threats 1. Many Japanese citizens are in need of a 1. Frozen foods and other convenient quick option to satisfy their meal plan services are cheaper than Blue needs (Euromonitor International, Apron (Euromonitor International, 2015). 2015). 2. Many Japanese people have been more 2. Restaurants in Japan with similar health conscious in 2016 (World Atlas). prices to Blue Apron (“Living Cost”, 2016).

Blue Apron: Japan 22

Appendix 3: Japanâ&#x20AC;&#x2122;s Social Networks (Wong, 2016)

Blue Apron: Japan 23

Appendix 4 -Rilakkuma Blue Apron mascot

Appendix 5- Japan Population Pyramid

Blue Apron: Japan 24

Appendix 6- Gantt Chart

Objective Gantt Chart Objective 1



2017 (Objective 1) Q2


2017 (Objective 2) Q2



2019 (Objective 1)





Finalize Relationships with addtional three farms





Use existing relationship with farms to find 5 more farms who source different types of ingredients. Some for produce, seafood, meat/poultry, dairy, spices, etc. Q1




2018 (Objective 1

Finalize Relationships with addtional five farms Q3

2018 (Objective 2)


Analyze which ingredient areas we are lacking relationships in.




Make decision based on analysis of market research to promote advertisements. Develop additional discount promotion plan. Develop email and social media advertising campaign. Q3

2020 (Objective 1)


2020 (Objective 2)

Implemet promotional plans - Rilakkuma, discount, ad campaign.


Execute production, shipping and sourcing of products.


Develop advertising material and conduct market research on Consult with San-X to gain partership and use of Rilakkuma for Blue prime time television and Apron's ad campaign. Japanese advertising patterns.


Forge personal relationships with 10 local farmers in Japan by the end of Quarter 4 Form Conduct marketing research and Finalize in 2019 to develop relationship with anlaysis to find two local farms in relationship with market tests. Kohyo. Japan to source ingredients. first two farms. Objective 2

Achieve 3 million meal sales per month by Quarter 4 of 2020. Q1


2019 (Objective 2)

Review market analysis and target reminaing three farms we Form relationships with the last would like to three farms to be in our partner with. distrubution model. Q1

Implemet promotional plans - Rilakkuma and discount.

Blue Apron: Japan 25

Appendix 7-Sample Menu

Blue Apron: Japan 26

Appendix 8-Price Sheet

Appendix 9-Tokyo Population Breakdown

Blue Apron: Japan 27

Appendix 10-Map of Japan, highlighting Sendai and Niigata

Appendix 11-Social Media Ad

Blue Apron Marketing Plan  
Blue Apron Marketing Plan  

With the help of several classmates, we developed a marketing plan for Blue Apron to expand into the Japanese market.