Japan Marketing News

Heineken Japan taps a cool new angle

Historically, international beer companies have faced some difficult challenges in Japan, especially when it comes to getting distribution in restaurants, pubs and clubs. Oftentimes local proprietors receive very strong incentives (cash!) to stock the brews of just one Japanese company or distributor, and that means that the door can be slammed shut on international brands—and other Japanese brands—right from the start.

Things can be rough even if a bar or restaurant is open to the idea of serving competing beers. International brands have to go head to head with Japanese companies offering a multitude of excellent brews, to say nothing of fighting it out with other world players.

What's a foreign company to do?

Japanese businesses losing confidence in country's economic performance

According to Nikkei Shibun's latest cross-sector survey of businesses (known as the Nikkei DI), things aren't looking too rosy for the Japanese economy in the short run. The survey showed that just 10% of respondents felt that the current business environment is "good."

A number of factors are coming together to shake commercial confidence. Among these:

Japan's pension debacle
In a mind-boggling display of (insert your own descriptor), the Japanese government has lost track of the pension records of over 60 million Japanese citizens. A huge portion of the population is concerned whether they're ever going to see the money they paid into the system and this worry is cramping the commercial sector as well.

America's sub-prime loan crisis
American companies and consumers aren't the only ones wringing their hands over this fiasco. The problem is reverberating through economies worldwide.

Fuel price increases
Increased demand from quickly growing economies like China's combined with uncertainties linked to the war in Iraq have resulted in record-breaking oil prices. Since Japan is an island nation with few resources, the country relies very heavily on imports of everything from industrial materials to foodstuffs—all of which must be transported to Japan in ships that burn a lot of expensive fuel.

Japanese consumers: starved for better quality of life?

Marketing is all about addressing people's needs, so I thought it might be interesting to post a bit of related data recently collected by Dimsdrive, one of Japan's research companies that does nationwide online polls.

Last month, Dimsdrive asked 3,546 Japanese of all ages the question "What do you lack [most] now?" The results were released on the firm's website on May 15.

"What do you lack [most] now?"

1 Money 30%
2 Sense of drive, desire to act 15%
3 Time 13%
4 Sense of extra capacity, time for oneself 8%
5 Physical strength, energy 7%
6 Sleep 6%
7 Stamina 6%
8 Tenacity 6%
9 Economic power 5%
10 Intelligence, knowledge 5%

N=3,546
Research conducted by Dimsdrive
April, 2007

While 35% of respondents said they need more money or economic power, a whopping 60% seem merely worn out. With so many Japanese pressed for time and lacking physical or emotional strength, it's no wonder that quality of life services like day spas are flourishing and brands are tapping into the trend with related products and promotions.

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Ritz Carlton voted best luxury hotel in Japan

According to a national online survey conducted by J.D. Power Asia Pacific in October, Japanese domestic travelers rated the Ritz Carlton tops amongst hotels charging ¥30,000 or more per night.

For accomodations costing between ¥15,000 and ¥29,999, the Rhiga Royal Hotels were awarded first place.

Finally, amongst lodgings with nightly charges less than ¥15,000, Roynet Hotels took top honors.

The Power research examined eight factors to determine overall guest satisfaction: the room, costs and fees, the staff, hotel facilities, food and beverage, hotel services, reservations and check-in/check-out.

One of the most important findings of the study was that while costs and fees are a critical factor for hotel guests, a lower room rate does not necessarily lead to higher guest satisfaction. According to a Powers executive, “to be successful in the competitive (Japanese) hotel market, it is more important that hotels provide guests with an excellent overall experience than to compete with low prices.”

Interestingly, facilities offering luxury accommodations have been the subject of much interest in Japan for the past few years. Since 2003, Tokyo has seen the opening of a number of top-notch facilities, including the Grand Hyatt Tokyo, the Strings Hotel, the Villa Fontaine and the Mandarin Oriental. The Ritz Carlton Tokyo is slated to open at the end of March.

For many years Japanese hotels such as the Okura and the Imperial were considered Japan's best accommodations, particularly amongst the Japanese. However, discriminating foreign travels, whose tastes have differed from the Japanese, often gravitated toward other Tokyo properties like the Seiyo Ginza or the Park Hyatt.*

In the coming years, it will be interesting to see how Japanese tastes are influenced as more and more consumers have the chance to check out the newly broadened choices in high end facilities.

* The Grand Hyatt, Mandarin Oriental and Park Hyatt were included in the study, but were not ranked due to small sample sizes

How to survive and thrive in Japan

The fact that you're here is proof of your interest in the Japanese market.

I'm glad that you read Japan Marketing News. We do our best to deliver a range of information, news and analyses related to products, marketing and advertising in Japan.

However, no website can cover every category and every brand in detail.

If you want to survive and thrive in Japan, you need in-depth market intelligence.

The optimal approach is to conduct tailor-made research on the market, your competitors and the consumer. But this can cost hundreds of thousands of dollars.

What to do?

A good first step is to tap into publicly available sources. The problem is that most of this information is available only in Japanese, and only from sources that highly-experienced marketers know exist.

We can help.

We've handled information gathering and analyses for trusted international brands like Microsoft, COACH, Bruno Magli, and many others. We can do the same for you.

We can also help with marketing strategy, product localization issues, advertising production and partnerships.

For details, e-mail us.

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