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International brands often need significant adaptation if they are to be accepted by Japanese consumers. Indeed Japanese consumers have the reputation of being perhaps the most demanding in the world. Now some foreign companies are using this to their own advantage; they are first developing new products in Japan and then rolling them out to overseas markets. JMI takes a closer look.
Walk through the Shibuya, Ginza and Shinjuku districts of Tokyo on a Sunday afternoon and you’ll be confronted by a mass of Japanese humanity, all immersed in the country’s number one past time: shopping.
Whether they're looking for high-end cosmetics or everyday detergents, Japanese consumers are demanding. Very demanding. Famous brands, new innovations, 100yen deals - you name it, they're hunting for it.
And unsurprisingly, given that this is the world's second largest economy, consumers are faced with a bewildering array of choices, sold through an equally bewildering array of retail channels. |
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The shelves are literally crammed with offerings from both homegrown and international manufacturers. In Japan, the consumer is king.
Bringing it to Japan.
Until recently, foreign companies looking for a piece of this consumer action, mainly sought to introduce their international brands to the Japanese market. Product development for Japan therefore mostly meant adapting these mixes to meet local Japanese tastes. Often those tastes are quite different from the global norm.
Consider for moment a few Japanese idiosyncrasities. Generally the Japanese do not like to stand out and prefer to blend into the crowd. They have a passion for cute items and novel gadgets that help them to conduct everyday jobs. When it comes to food, they tend to avoid harsh tastes, and favor lighter, more natural flavors.
These preferences show up in the localization efforts of foreign manufacturers. For example, the makers of king-sized chocolate bars have developed packs containing small bite sizes specially for the Japan market. Even Oreos became mini-Oreos:
For the manufacturers of deodorants, fragrances needed to be made lighter or completely scent-free. Deodorant meant no odor. While the for manufacturers breakfast cereal, tastes needed to be made less sweet.
In all cases, foreign brand names have to be made short, allowing for easy identification and recall. Usually this implies 2-3 syllables of Japanese script at most.
All this local adaptation required much in-depth market research of Japanese consumers and fine-tuning of the product mix. Sometimes the fusion between eastern and western tastes resulted in the bizarrest of outcomes - Pizza with Eel topping being one extreme example!
Made in Japan. but not Japanese
So on to the latest generation of product development by foreign companies in Japan. This sees manufacturers going much further than just localizing their international mixes. For some time new brands and products have been developed specifically for the Japan market, in Japan. But the latest marketing trend takes this a step further and some of these "Japan mixes" are finding their way overseas...
Effectively, Japan is starting to emerge as an international development base for western companies. These companies see the benefit of the close scrutiny that Japanese consumers place products under. They are also using some of the differences in Japanese tastes as a source of innovation.
A recent example of this phenomenon is P&G's upscale line of skin care products, SKII.
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Japanese women spend thousands of dollars on skincare products every year and the market is hugely complex and competitive. Product selection is rigorous and usually involves much discussion and checking with "store councilors" in order to arrive at the optimal solution for a given skin condition |
Max Factor developed SKII in Japan. Max Factor was then subsequently acquired by P&G. The brand's main claim is that of anti-ageing, though a sub-range dealing with skin lightening is also available. Recently SKII has started showing up in department stores in New York.
The US website (http://sk2us.com/index.htm) for the brand includes a Japanese zen monk, meditating upon skin care, in the tranquility of a rock garden. Having struggled over many years to break into the Japan market, P&G is now exporting products developed in Japan back to the US!
Another example of a Japan developed brand finding its way overseas is Coca Cola's Qoo.
Qoo is a little blue cartoon character and a noncarbonated juice drink. It was invented in Japan and today is the number one juice drink in the country. The world of Qoo is that of Japanese cuteness and this is best understood by visiting the brand's homepage (click opposite). |
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In fact, Qoo was so successful that Coca Cola has rolled the brand out to other Asian markets including Korea, Hong Kong, Taiwan and Singapore. The brand sparked a consumer sensation in these new markets. In China, Qoo was so popular it sold a million cases within its first 2 months! Now it's headed out of Asia, first stop Germany.
Japanese consumers lead the way.
Its not only products that are being rolled out from Japan, but also advanced consumer understanding. Nokia has been using consumer research conducted in Japan to show how Multimedia Messaging Services (MMS) are likely to develop in western markets. based upon the experience of Japan, the world's lead market for MMS.
Research showed that among Japanese respondents, over 90% of cameraphone owners send multimedia messages to other cameraphones; only 68% send to email accounts. For those sending MMS, it is important that they feel the recipient is able to open the image and share the moment immediately.
With this in mind, Nokia has announced altogether five different phones with integrated cameras and more than new 15 MMS-enabled color phone models. Experience from Japan suggests that once users adopt MMS on a mass scale, it will create demand for much richer content services. This in turn paves the way for evolving 3G-based offerings |
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in Japan even dogs have video phones... |
Nokia maintains that the research supports its expectations that MMS will rapidly evolve into a true mass-market technology for both personal and professional use.
Meanwhile, back at P&G, its not only Japan-developed cosmetics that are finding their way to North America. Swiffer Dusters comprise of soft, fluffy fibers that can change shape in a go-anywhere form. Since their launch into the US in January 2003, P&G see them as being instrumental in driving the growth of the "quickclean" market. But were Swiffer Dusters developed in the US? Well, no. In fact they were the result of a strategic partnership in Japan between Unicharm and P&G. Another case of made in Japan, but not Japanese.
... and overseas consumers are asking for more
What are we seeing are perhaps just the earliest examples of a movement whereby more product innovation is conducted in Japan by western companies and then exported overseas.
To date the results have been very successful with non-Japanese consumers. In fact, in some cases, the consumer seems to be moving ahead of the manufacturers and clamoring for more. In a US tribute site for Japanese snacks (www.japanesesnacks.com) one recent product review went as far as to say:
"It's safe just to say that all of the Oreo products out of Japan are, as usual, superior to the boring Oreo cookies here in the states. I can only hope that U.S. Nabisco decides that we're bored enough with their same old Oreos to market these in the United States because they would sell like mad."
Consumers demanding new product launches? That'll be the day. Until then . where did I put that ticket for Tokyo...?
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