Marketing applied

to a different culture

The Japanese example.

UnderstandUnderstand local local specificitiesspecificities … …

Approaching Japan’s specificities

Demographics

Culture

HistoryHistory

Education

Geography

Language

Geography

Population density

Geography : hypercentralization

« Greater Tokyo » Area :

35 Mn people, world’s most populous

urban area

Geography Lesson #1 : open H.Q in Tokyo !

� 25% of national population

� > 40% population below 40 years old

� most key companies (advertising, distribution, law)

have their H.Q. in Tokyo

Advantage : need only 1 office in Japan to address most

of market, especially for consumer goods, fashion,

hightech, telecoms…

Hurdle : highly competitive environment :

Geography #2 High Density

Scarce Space

Innovation

Geography #2 High Density

Innovation : capillary Distribution

(CONVENIENCE STORES ‘conbini’)

Geography #2 bis High Density � Urban Sprawl

Convenience stores @

Avg. 2 hours train /day � CAPTIVE MARKET FOR :

Mobile phone services

Convenience stores @

train stations

Geography #2 bis

� The mobile phone’s tiny screen is

capturing an increasing part of people’s

time. « Economics of attention »

http://asie.atelier.fr/telecom/mobilite/article/chiffres-2006-de-la-telephonie-mobile-au-japon

Japan- mobile penetration

Geography #2 bisMobile phone services :

Mangas, TV, Social

Networking

Geography Lesson #2 : Distribution strategy

� « Conbini « rather than supermarkets

http://www.youtube.com/watch?v=reGN92nSNbQ

Location Access Frequ. Of

visit

Avg.

Purchase

Surface References

Supermarket City Car 1-2/week $100 >1000sqm >10,000Supermarket(France, USA)

City outskirts

Car 1-2/week $100 >1000sqm >10,000

Conbini(Japan)

<5m.Fromsubwaystation

Foot 2-3/day $10 100sqm >1000

Geography Lesson #2 : Distribution strategy

43,667 convenience stores in Japan [2007] :

7-Eleven, Lawson (Mitsubishi Corp.), FamilyMart...

Items offered :

-most items found in supermarkets (“100 sq meter, 1000 items”)

- And : * Courier, or postal service, photocopying, fax.* ATMs.* Utilities and other bills ; tax payment.* Tickets :concerts, theme parks, airlines etc

Geography Some failed experiences :

http://www.telegraph.co.uk/finance/2726058/Boots-ends-Japanese-venture.html

4 stand alone stores, too expensive (partner : Mitsubishi Corp)

Vodafone’s failure & takeover by Softbank (Jp)

Geography Lesson #2 : Distribution strategy

DANONE relies on Mitsubishi Corp to distribute Volvic

The key role of Trading houses (GTC) in Distribution

sōgō shōsha?総合商社総合商社総合商社総合商社

>50 % of Japan's foreign trade - Domestic sales of the nine largest = 31% GDP- Mitsubishi Corp. : largest company in Japan

The GTC : a key partner to access Japanese Market?

Transportation Real Estate

Geography #3 Expensive urban real estate

A large market for

Luxury brands …

why ? In Tokyo :

Parking space, NOT covered

€400/mois

Studio, 30 sqm

€1100/mois

Avg Salary (30y university graduate : €2000)

Geography #3 Lesson #3 :

� a large majority of young urban professionals

(especially female) live with their parents until mariage,

� these ‘parasite single’ have very large purchasing

power

Geography #3 Lesson #3 : the main market is young

women living in Tokyo !!E

lega

nt

casu

al

‘selfish’

popularhttp://107gou.seesaa.net/category/5172585-1.html

Geography #3

Catering for young urban female employees…

Louis Vuitton

Hermès

Demographics-The longest life expectancy

-1 Mn people turn 65 every year since 2002

- Population starts declining

INNOVATION

Demographics

Language and signs

Retailing of household & consumer goods

Distinguished by design minimalism, recycling, no wasteand no-logo or "no-brand" policy.

*Mujirushi Ryōhin = No Brand Goods

Language and signs Lesson : Innovating by seeking simplicity

http://www.youtube.com/watch?v=qKVA_aM_Bgs

Shop in Paris

Culture History +

Centuries of ACCULTURATION:

(1)Discover/import a foreign product, concept (ceramics, tea, just in time)

(2)Improve and innovate on original product/concept

#1 : A relentless curiosity towards whatever is FOREIGN :

Fine foods

Brands

Traveling (‘la route des vins en Bourgogne’…)

#2 : seek PERFECTION in Services, Products, wrapping

� very high standards in the services industry :

a challenge to foreign newcomers on the market

� expectations in products quality.

Culture History +

� expectations in products quality.

� packaging / wrapping .

出る釘は打たれるderu kugi ga utareru

« the nail that sticks up gets hammered down »

Culture History +

#4 : Gregarious purchasing behavior :

Culture History +

#3 : a culture of gift making, celebration of effort and

shaming of difference.

Culture History +

Sankin kōtai (参勤交代 / "alternate attendance")

#5 : Leisure and Tourism bring you shame :

Culture History +

In 1999; 56% of trips <5day ; 29% : 6-10days

http://www.chusho.meti.go.jp/pamflet/hakusyo/h13/gif/13213432.gif

旅の恥はかきすて(« conceal this shameful journey » )

Lesson #4

-A niche : alibi-seller

Culture History +

http://query.nytimes.com/gst/fullpage.html?res=9C02E7D9123CF932A25754C0A96F958260&sec=&spon=&pagewanted=all

-A niche : alibi-seller

http://query.nytimes.com/gst/fullpage.html?res=9C02E7D9123CF932A25754C0A96F958260&sec=&spon=&pagewanted=all

Distribution

-Types channels japan -Train malls : Yokohama queens square

-http://www.qsy.co.jp/english/index.htm

--

Subway station.

Problem : how to get pedestrian

to come to the new commercial area,

‘Ebisu Garden Place’

‘Ebisu Garden Place’

Subway

Airconditioned, covered Walkway

« Garden Place »

Roppongi HillsAtago

Reinventing the city : verticalizing the city’s functions

ShiodomeShanghai

Marketing applied

to a different culture

http://www.foodnavigator.com/Legislation/Snow-Brand-Milk-scandal-spirals-downwards

Dr Luc BEAL

IDRAC-ICAR January 2009

The Japanese example.