PART D International Marketing Implementation

CASE STUDY 17.1

POODLES TO JAPAN
Les Brown

Description of the organisation

Imagine a successful international micro business run by a husband and wife team and employing casual staff when
necessary. The business is located about five hours from an international airport in a town of less than 1500 people in
inland Queensland, and is surrounded by grain farms and cattle feedlots. Do you think that the owners would have
imagined 10 years ago that they would be recognised by their peers as notable participants in a key international market
niche for Australia by 2004? Most probably not, but that was before several significant technological changes occurred
which allowed the owners to create this marketing success story by linking their prior knowledge to recent changes in
distribution and promotion.
This micro business, Sunshine Star Poodles, succeeded because in the mid-1990s the owners had an idea to
commence a business integrating their knowledge and expertise in breeding pedigreed poodles with the computing
skills and knowledge of one of the partners. It has succeeded to the extent that it won a regional award from the
Queensland Department of State Development in 2004 as a significant ‘Emerging Exporter’. Their efforts in estab-
lishing a highly credible export business utilising the owners’ skills and interests and capitalising on the globalisation of
markets through technological changes were the ingredients which led to their success.

The market for poodles as pets

Japan, one of the world’s most prosperous nations with a per capita GDP of US$35 661 per head of income, is also the
10th most populous with a population of more than 126.8 million and with the highest average life expectancy of any
country in the world (77.1 years for men and 84 years for women). These factors combined suggest that there is a
significant segment of the Japanese population with both the time and money to indulge in their love of pets, such as
dogs. The Japan Kennel Club has standards for pedigreed poodles covering four varieties, Toys, Minis, Mediums and
Standards, of which Toys have traditionally dominated the registrations. This can most probably be attributed to the
fact that many Japanese live in what are small apartments or houses by Australian and US standards. However, the
market for poodles in Japan, which is currently considered to be booming, is showing some changes in preferences with
Mediums (38 cm to 46 cm (15 to 18 inches) in height) becoming increasingly popular. These factors have led to the
emergence of a significant niche market in Japan for high-quality poodles as pets. This market segment is not particu-
larly price sensitive and there is apparently insufficient local production of such pets to meet the demand. Producing
countries such as Australia, with its strict rules about animal health and very high levels of control over animals coming
into Australia through quarantine regulations, is seen as an acceptable source of supply by Japanese authorities
concerned about animal disease problems entering the country. Furthermore, the Japanese market is generally
fastidious in their insistence on quality and product integrity across imports and can be accessed only by exporters who
are prepared to be consistent in respect of such product characteristics, otherwise the Japanese will not trade on a
continuous basis. The marketing process the company has developed has been designed to meet such demands and the
way this has been done is explained below.

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The product
The company supplies pedigreed poodle pups with their registration certificates, delivered to their owners (not pet
shops) at approximately six weeks of age. The pups are sourced from the company’s own breeding kennels or from other
reputable breeders and are promoted on the company’s website at some four weeks of age. In some cases litters are
shown not as being for sale but as representing what will become available for purchase at a later date.

The marketing process

In essence the firm airfreights poodle pups it has bred or has sourced from other reputable breeders from Australia to
Japan. These pups are promoted and sold on the Web prior to their being airfreighted direct to their Japanese buyers,
who are private individuals and not dealers or traders in pet animals. The sensitivity of six-week-old pups to the stresses
of being taken from their kennels where they have been raised, then being subjected to approximately a seven-hour
flight to a new environment, means that the welfare of the animals is paramount to the success of the business. Taking
six-week-old pups away from their siblings and the environment in which they were raised would be stressful on its own.
In addition, on the delivery flight to Japan they are not allowed to eat because of Japanese import regulations about
food products. It is therefore imperative that the journey from their home to Japan, which involves a road journey to
Brisbane as well as the flight to Japan, be very carefully managed in order to enable the animal to survive its rigours.
Although some US-based breeders promote on the Web and have at times exported to Japan, the distances and times
involved make exporting pups such as these from the USA to Japan more difficult than exporting from Australia.
Because of the risks involved in sending pups to other countries, particularly those which are more distant from
Australia or which lack the appropriate systems for expeditious receival and delivery of pups to their new owners, the
company focuses on Japan exclusively. The main reason, apart from the existing demand factor, is that it has been able
to establish an effective system of taking pups through the long journey by developing high levels of efficiency in both
the delivery and receival phases of the export transaction. Their current system has virtually eliminated risks to the pups.
The Web is the promotional medium which has driven much of the success of the organisation. A professional
photographer is employed to photograph pups available for sale at about four weeks of age and these photographs are
displayed on the firm’s website. Potential buyers in Japan then make their selection based on the photograph and
breeding details of each poodle pup. Payment occurs prior to delivery and the buyer pays the freight costs. The
exporter, however, is responsible for the transport for reasons which will now be discussed.

The delivery process

Once the pups (which have been pre-sold) are some six weeks of age they are considered ready to undertake the long
journey to Japan. They are taken from the country kennel home to Brisbane International Airport by motor vehicle
under the care of a specialist driver employed specifically for this task. An understanding of caring for the pups is
necessary because of the possibility of the pups becoming traumatised as a result of leaving their family environment.
On arrival at the airport, and after customs clearance, the pups are fed and then put into specialised containers in the
predominantly passenger-carrying aircraft. As food is prohibited to animals during the approximately seven-hour
flight, and given the need for sustenance of such young animals, they are loaded onto the aircraft at the last possible
moment and then off-loaded from the aircraft quickly on arrival at Narita International Airport and fed and cared for
immediately, and checked by customs at the airport.

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Another important factor in this whole exercise is the fact that the Japanese authorities accept the animals into Japan
without quarantine. This acceptance is due to the high regard in which the Australian Quarantine Inspection Service
(AQIS) is held by their peers in Japan: they accept without question the AQIS health clearance for the pups. In addition,
the pups, because of their immaturity, cannot be quarantined at such an early age. Without this trust the time delays
involved would make the whole enterprise unsustainable given the limited capacity of the pups to tolerate anything but
the shortest possible travel time. This is another critical reason for focusing on the Japanese market as other national
customs regimes may not have the same degree of confidence or be as efficient as the Japanese in relation to customs
clearance for sensitive animals.

Questions
1. What do you think are the principal technological drivers which have enabled this export firm to be successful in the
Japanese market for pets?
2. Can you provide up to three psychographic and economic variables which might be used to identify the segment of
the Japanese population which is the potential target market for the firm’s export activities and which may discrim-
inate against many other potential markets in other countries?
3. Why has the firm focused exclusively on the Japanese market, and what strategic moves might the firm have to
undertake if it were to broaden its markets beyond Japan?
4. Do you agree or disagree that the use of e-commerce in this particular instance is the key to the firm’s success? Please
provide at least two reasons for your position in relation to this matter.

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