Introduction:

The abstract of this essay is about launching of Australian Beverage Company

Two Dogs in Japan. Some of the issues are discussed that Two Dogs faced while
entering in Japanese market such as difference in cultural norms, strict
administrative and economic situation, recession in Japan and other difficulties
the Australian firm faced in Japan related to product packaging and pricing
strategies.
On the other hand it has also discussed in the essay that what are the potential
problems Two Dogs may face if it enters in Vietnams market. PEST analysis has
been used as a tool to analyze Vietnamese market situation.
Issue 1 - Cultural Difference:
While entering into Japan's Market, some big challenges for Australian Two Dogs
were: unknown culture, different social behavior, lifestyle and choices of
beverages in Japanese market. In order to understand Japanese cultural norms
TDI conducted market researches for one and half years. Previously TDI
successfully launched in UK and USA, both were modern English Speaking
countries with similar cultures as Australia. To overcome the hurdles of cultural
differences TDI decided to have joint venture with renowned local firm Kirin-
Seagram.
Another important factor was different social behavior. Japan is a collectivist
society where people are used to enjoy foods and beverages with families. While
TDIs previous markets were individualist societies where consumers usually enjoy
their drinks in bars. It led Two Dogs to enhance their distribution gradually from
bars to major convenience stores to let Japanese people enjoy their beverage at
home.
TDI's "Black Currant Brew" did not get recognition because Japanese were not
familiar with the word "Black Currant" so TDI had to replace it to "Cassis Brew".

Issue 2 - Economic Situation:
The prolonged state of recession in Japan for the last couple of years was also a
considerable problem for TDI to enter in the Japanese Market where the demand
for private sector was already getting down.
In the light of such uncertain economic situation Two Dog could have faced
survival problems to launch the foreign luxury product in Japan.
Though per capita income of Japanese consumers was very high, the stagnant
economy led to fundamental changes in business structures in Japan. Considering
the survival problems of existing Japanese business at that time it was a challenge
for Two Dogs to be launched in Japan.
Issue 3 - Political and Legal Environment:
In spite of high level political stability, Japanese Government had direct
involvement in the operations of private sector. The tight supervision of
regulatory authorities might be a hurdle for Two Dogs in Japan.
However deregulation trend was in favor of foreign exporters e.g. the customs
duty abolished on alcoholic beverages in 2002, the Japanese strict administrative
guidelines were not good signs for a company like Two Dogs.
Issue 4 - Product and Packaging
After conducting surveys, TDI reached to the conclusion that Japanese consumers
liked the taste and unique concept of naturally fermented lemon brew, Two Dogs
had to launch other flavors specifically for the requirements of Japanese market
such as Black Currant and Lychee Brew to satisfy the particular taste of Japanese
consumers.
The conventional green colored glass bottle had to be replaced with clear glass
bottle because Japanese thought clear glass bottle was easy to recycle.
Another big problem was cap shape of Two Dogs bottle in Japan. When TDI
extended to convenience stores they needed to change their traditional crown-
seal cap because that required a bottle opener, then TDI replaced that with ring-
pull cap, In short time it was observed that Japanese consumers were not familiar
with ring-pull cap and were facing difficulty to open, finally the product was
changed to "screw cap" as found on soft drinks.
Recommendations:
The emerging market of fruit beverage in Japan shows the suitability for the
launch of Two Dogs other flavor products such as Orange, Apple and Raspberry
brew.
Keeping in mind the Japanese fluctuating consumer preferences TDI needs to
emphasis on innovation to overcome the threat of substitutes.
TDI may conduct research to localize its products and to make its products more
familiar to the Japanese consumers. Names of fruits may replace with local terms
as they did in black currant case.
Considering economic recession and decreasing consumer purchasing power in
Japan Two Dogs should work on producing some cheaper products besides
existing luxury products.
Entrance in Vietnam
If Two Dogs enters into Vietnams market, it may face following political,
economic, social and technological barriers:
Political:
Being a single party communist state, Vietnam is likely to be higher government
control and less autonomy. Two Dogs may face problems if they will be unable to
make good relationships with local government.
It has commonly observed that third world countries have massive corruption
issues, same problem Two Dogs may face in Vietnam in the shape of Bureaucratic
difficulties especially in customs and documentation.
Advertisement of alcohol is prohibited in Vietnam. Local companies usually use
different ways such as sending promotional staff to public places etc. This is
another barrier for Two Dogs who loves to cover masses through ATL activities.
Economic:
Vietnam is a developing economy and widely considered as a poor nation, it is
almost impossible for Two Dogs to apply the same strategy of high cost premium
product in Vietnam as Japan.
Vietnam has been fluctuating in lower ranks of the mostly un-free economy for
two decades. Weak judiciary, political influence in band corruption would be
major issues Two Dogs have to face while entering in Vietnam.
Though alcohol beverage is one of the fastest growing industries in Vietnam, per
capita income is $1755 per year which is much lower than previous markets of
Two Dogs e.g. Australia $67,036, UK $38,514 & Japan $46,720 (World Bank 2012)
Social:
In spite of the fact that alcohol is widely consumed in Vietnam, the majority of
consumers belong to low income group and residence of countryside. While
entering in Vietnam Two Dogs has to face tough price competition from local
Vodka, Rum and Liquor manufacturers.
Just a small minority of higher income-people in bigger cities is users of imported
alcohol in Vietnam. Two Dogs being a premium quality and high price product
may have to struggle to grab this minority as well as for creating demand for the
remaining market.
In the other hand drinking alcohol is primarily a male activity. The population of
Vietnam is over 7 million contains up to 50% of female. Its another issue for a
company like Two Dogs for entrance in Vietnam where market segments are not
favorable.

Technological:
Vietnam's infrastructure capacity does not meets international standards, cost of
logistics are almost double as compare to developed countries.
high piracy rate is also a barrier for Two Dogs as the situation of intellectual
property protection is pathetic in Vietnam, keeping in mind the successful launch
of TDI in Japan after R&D of one and half years, it could be assumed that research
and development would be nothing but waste of resources when there is no
protection for intellectual property.
Conclusion:
It has been observed that Two Dogs which was a known and reputable brand of
Australia and successfully grabbed UK and USA market, experienced couple of
challenges at the time of entrance in Japan.
Japan, being a Southeast Asian country had various differences from Two Dogs
previous markets. Two Dogs had to spend eighteen months for research and
development to get familiar with Japanese market trends, their culture and social
behaviors.
Despite acceptance of the lemon brew idea, TDI faced unacceptability for its
product size and packaging. Two Dogs was compelled to make various changes in
their product size, name of one of the products and packaging styles.
Another important factor was the economic recession in Japan. TDI has
successfully created brand recognition for its premium quality brews. But there is
a need of launching some economical products as well to prepare for the time
when luxury products would wipe-out from market due to upcoming threat of
high recession.
As far as Vietnam's market is concerned PEST analysis has been conducted in the
essay to discuss the potential political, economic, social and technological issues
Two Dogs may face while entering in Vietnam.