International Consumer Management

‘Fukubukuro’The Thrill of the Unknown

Bettina Iversen, Jenny Lee, Pru Owlarn, Alex Stepanov, Nicholas Trombert

福 袋

10BN935E 10BN945F 10BN943M 10BN946J 10BN947L

Content

•Theoretical Background

• Generation Shifts• Youth Culture

•The Japanese Shopping Experience

• Overview of Fukubukuro• History• Retail Perspective• Consumer Perspective• Japanese Characteristics• Reference Group• Segmentation• Recent & Future Developments

Generation Shifts

Culture: Sum of learned beliefs, values, and customs that serve to regulate the consumer behavior of members of a particular society

1959-1964 New Human Kind‘ Shinjinrui’ ‘Yuppies’ – different norms and values

Between two World Wars – MilitaristicUrban Immigration

(Kawasaki 1994: Japanese Youth and Popular Culture)

Youth Culture - Affected by Parents norms and Values Baby Boom Jr first generation brought up on different values and lifestyle

1972-1976 Baby Boom Junior

1946-1950 Baby Boom

1980’s Generation Y

Pre-Industrial Period pre-1870’s

Rise in Education. Strict Social Class

Birth of Urban Culture: 1880’s to 1950’s

Economic growth1950’s-1975

Consumption culturePost 1970’s

1990’s Generation Z (Schroer )

Rise of Youth Culture in Japan

Youth Culture

A more Adaptable Youth:

Emergence of Individualism

Similarities between US and Japanese modern youth

Shared meaning of consumer culture and globalisation

› ‘boys no longer dream of becoming salarymen like their fathers, and there is no "guaranteed path to contentment’

(Akuhodo Institute of Life and Living)

Generation X, Y, Z

Post 1970’s - Grow up on affluence of Post 1950’s Mass consumption Wave, 40 Years after Western Countries (Kawasaki 1991)

Demographics, Adaptabiltity and Individualism - Baby Boom Jr generation has more influence than previous youth groups

(Kawasaki 1991)

Kikokushijo (Goodman 1990) Japanese international children influencd by living abroad

Overview ‘FUKUBUKURO’ 福 袋

‘Fukubukuro’ 2011

What is it? ‘Lucky Bag’– Mystery/Gift Bag filled with unknown random contents sold for a substantial discount (50%) off the total list price of items

Who does it? Ranges from department stores to specialty stores Major Brands targeting Generation Y (16-29)

Most popular are young women’s clothing Brands

When? ‘Hatsuuri’ On january 2nd – Marks January Sales

HistoryOrigin

Started by Matsuzakaya Department store in Ginza around late Meiji period (ca. 1912)

Initially a method to unload excess and unwanted merchandise from the previous year

Offered assortment of old products – often for household items

Development

Adopted by all stores as Marketing Strategy to kick off January Sale

• Evolved into a nationwide marketing Event

Market Research*(2008): 22.8% - of

Sample bought fukubukuro38.3% - from

Department Store16% -

online purchase37.5% - spent

between 1-5,000 Yen

*Goo Research Monitor Group

Retail Perspective>Fukubukuro has become a New Year shopping tradition

which Japanese Consumers expect <

Marketing Strategy:› Increases brand image and awareness of products sold in store

– Differentiation strategy › Established as effective product launch tool –

Old products are mixed increasingly with new products› Attracts people to the store

› Communication Tool – Strong Word of Mouth & Social Networking Reach Reference Groups Constant Innovation

Twitter ‘Lucky Bag’ Search Engine to scout best deals ‘tweeted’

Consumer Perspective

Tradition in Japan – Starting a New Year › Hatsumōde – first event of the year

( Watch sunrise/ go to shrine/ choose fortune paper)› Fukubukuro fits this tradition – initially opportunity to trash old items and start

the new year ‘clean’ with new items

Chance

› fortune of being part of something great and feeling special

Same as fortune Paper. A lucky ‘Fukubukuro’ promises a good Year

Excitement factor › Thrill of the Unknown and Novelty Factor› Japan recognised for high rate of new product launches and short product life

cycle› The consumer must be stimulated

Gift giving culture – Lucky Bag often bought as a New Year gift

› No need to make a decision – bear no responsibility› Japanese gift giving culture: importance to where you buy the gift rather than

the product itself

More than 35 Billion Nengajou (Cards) sent20% of all annual postal revenues

TraditionMillions of Japanese visit The Meiji Shrine in just Three days

Amazon offers 15 books on Japanese gift wrapping

Gift Giving

Consumer Perspective

Excitement & NoveltyJapan has some of the shortest Product Lifecycles in the World

Japanese Characteristics

Culture is Learned

Flourishing Youth Culture

Generation Y – ‘Trend Setting’Strong Reference Groups and Subcultures

Shaping the consumer’s Self Concept

Shibuya 109; Fashion Flagship 40,000 Youth queuing in 2011*…

… in an Ordered chaos (Japanese Culture)

*http://www.welcome.city.yokohama.jp/eng/tourism/

“Individualist and Self-expressingGeneration shaped by new values and Lifestyle’s” (Kawasaki 1994)

Reference Groups

‘Reference Groups [through perceived values of a brand] help express ourself and construct self identities’(McCraken, 1989)

‘Groups that people refer to when evaluating their [own] qualities, circumstances, attitudes, values and behaviors’

(Thompson & Hickey, Society in Focus, 2005)

Diverse Youth Culture

“Products are an integral thread in the fabric of social life” (Solomon 1995)

Paradigm: Youth all share same attributes (Hannerz 1996) through globalization

Gen X

Baby Busters

MTV Gen

Gen NextNet Gen

Gen iGen Wii

Different Names, Same Groups

Role of local spaces in youth’s lives are ignored (Kjelgaard 2002)

Existence of diverse Reference Groups

Reference GroupsSub Cultures & FUKUBUKURO

Fukubukuro Choice highlights Reference Group

Consumer Purchase Brand rather than Product

Strong Brand Relationship defines Reference Groups

Reference Groups & Brand Relationships

Fournier (1998) – Pioneered Brand Relationship Research –

‘Customers not only ascribe human-like personality traits to brands, But form meaningful Human-Like Relationships’

Typology of 15 RelationshipsFournier 1998

Best Friend

Reveals true self, honesty and intimacy Like Human Relationships, Brand

relationships fall apart unless actively maintained

Committed Partnership

Long term, Union high in love, intimacy, trust and commitment. Exclusivity Rules

Fling

Short term, high emotional reward,Devoid of long term commitment

Fukubukuro Opportunity

Reference Groups

As items are unknown, Customer segmentation is based on:

Gift givers who seek to lessen the hassle of finding the perfect gift

Thrill seekers who desire to add an element of excitement to their lives

Deal finders who are willing to take a gamble to “score” a big ticket item – Predominant Youth Characterisitc

› Challenge for department stores selling varied items to guarantee satisfied customers

› Psychographic and Usage Situation SegmentationPressure for Differentiation and customer satisfaction:

A few announce the items list prior to sale to create awareness – defeating the principle of fukubukuro

Segmentation

… Consumers seek more than Functional Attributes

Symbolic Meaning towards Act of Purchasing

(Solomon 1995)

Consumer Experience Segmentation

Thrill of surprise leads to unravelling in the streets

Creates a similar Shopping Experience for all social Layers

1000

40,000,000or

Commemorative ‘Royal Wedding’ jewellery Set -Ginza Matsushita Store*

Emphasis on the context of purchase (Transaction Utility) rather than solely on Functional Benefit

(Solomon 1995)

Yen(Wall Street Journal 2010)

Recent & Future Developments

Foreign companies adopting practice when entering Japan› Need to respect Japanese culture to connect with Japanese

consumers

Foreign or japanese companies seeing oportunity to export this culture› Apple used this technique in San Fransisco 2004 store opening -

$250 bags*

Apple Starbucks

Kinder Surprise – our experience/Low risk Factor

Apple – Possible through strong Brand Relationship

Success Potential in Foreign countries? Are People willing to spend large sums without satisfaction guaranteed?

*(Wall Street Journal)

Internationalisation

Spin-off Fukoubukuro ‘Misfortune Bags’

Experiential Marketing

‘Misukoshi Ginza offers Ad-Space in subway for displaying ‘Private Photos’10 Million Yen

Youth Culture Interest has led to a whole new dimension for Promotion:

Takashimaya - ‘Re-Enacting the Beatles Tour’Includes Recording at Abbey Road Studios5 Million Yen

Pet Accessories

Example of Japanese

Seeking New experiences and Shared reference groups

Recent & Future Developments

Death of traditional Marketing

New generations have grown up in Advertisement Saturated Environment

Increasingly Aware & Cautious of Traditional Marketing Channels

Recent & Future Developments

Future Advertising must Target Experience and Culture(S.R. Danna, 1992, Advertising and Popular Culture)

Youth Culture losing Traditional Values?

Aspect of bargain seeking & Brand Relationship will stay popular

Threat: consumers are less likely to be satisfied without prior information

> First generation to have always known internet. Expect customization and real time information providing more elaborate and accurate decision-making. Establish strong brand relationship from a young age, whilst being increasingly conscious of Marketing Strategies targeting their Reference Groups <

Generation Z – Information Age Recent & Future Developments