Vol. 29 No. 3 Part 2
Developing Effective Marketing Strategies for the Japanese Market: A Review of the Literature Shinichi Hirokawa Argosy University Tsai-Ling Wu Argosy University Japan, as the world’s third largest economy, continues to be attractive to international exporters and investors. It is our argument that the forces of change that led originally to new and bigger opportunities remain the same, despite surface differences. This paper explores some of the key issues related to entering this market. It provides an examination of effective marketing strategies and how the marketing knowledge can be used to enter and succeed in Japan. It outlines six specific marketing strategies: tailoring to the market, finding opportunities in the declining Japanese market, not underestimating the domestic competition, offering a unique product and positioning, utilizing a brands’ foreignness, and using alliances wisely. It also provides recommendations for avoiding the common pitfalls that many firms experience when entering Japan such as an outdated perception and the distinctive characteristics that actually affect the market structure. Marketing managers who wish to do business in Japan must take into consideration a changing social and political environment. They have to weigh the benefits of launching wholly owned subsidiaries as opposed to engaging in mergers and acquisitions. The paper concludes with a summary of the major implications of the analysis for the contemporary multinational marketer.
Marketing in Japan: Challenges and Opportunities
In 1998, Williams-Sonoma ended its decade-old joint venture with Tokyu Department Stores and left from Japan. Many examples of the challenges for foreign companies can be seen in entering Japan in the current economic environment. The only problem was that while Williams-Sonoma’s business was flagging, Lands’ End Japan’s business was booming (Morgan, 2007). When Lands’ End entered Japan in 1994, it established its own office to handle catalog production, warehousing, and fulfillment operations in contrast to Williams-Sonoma’s joint venture. Its local operations facilitated customization of the catalog to the market, more rapid response times and more control over the overall quality of the customer interaction. (Morgan, 2007). Throughout Japan’s recent history, foreign entrants with similar skills have different experiences. Coca-Cola thrived while Pepsi faltered. Domino’s success while Pizza Hut stumbled. Amway has been very successful in building its business through direct, door-to-door sales, but Avon has had a tougher time in Japan. Even some former victime has risen to become dominant because of a better understanding of the Japanese market. Gillette, the leader in shaving products in most of the world, is a distant second to Schick in Japan, which has 70 percent of the market compared to Gillette’s 10 percent. Kodak, which founded the Japanese film market, watched Fuji take over the market and become a powerful global rival (Delios, et al. 2007).
International Journal of Management
Vol. 29 No. 3 Part 2 Sept 2012
The differences between winners and losers in this market demonstrate no simple method for success. In fact, they show the many severe challenges presented for foreign entrants. Ultimately, as this paper will demonstrate, the new entrant who understands the traditional rules of marketing in Japan and the ways these rules are changing has a greater chance of success.
Japan continues to be an attractive market. Even though a long recession during and disorder in the Japanese financial system in 90’s, foreign companies are flooding into Japan. The Japan Bank reports that foreign direct investment in Japan increased by 167 percent in 2006 to reach $48 billion (Morgan, 2007). A study of foreign firms in Japan by the Japanese External Trade Organization (JETRO) (2006)...