Take a quick look around on any morning commuter train in Tokyo and the love affair between Japanese consumers and expensive, foreign fashion brands becomes evident. Whether its Louis Vuitton, a brand for which it is claimed that one in four Japanese women own at least one piece, or the US luxury brand Coach which has shot up to second place behind its French competitor, Japan is the land of must-have luxury brands.

Japan is a generally middle class market of some 127 million people, who form the second largest economy in the world and fourteenth by per capita income. As such the country is viewed by luxury brand marketers as being a key location for researching consumer insights, given that the Japanese are said to account for over 25% of the purchases of all luxury brands in today's global economy.

A clear sign of the continued growth of the sector is seen in the recent opening of Giorgio Armani's new 12-story tower in the Ginza district of Tokyo. The store itself is surrounded by an array of prestige brand boutiques including the new 10-story Chanel landmark. While both luxury brand towers focus on marketing high-margin handbags and accessories, they also incorporate restaurants and concert venues.

This growth trend has also been seen in the form of the new luxury hotels opening up in Tokyo during the past year. The most recent entry is The Peninsula Hotel located between the contrasting glitz of the Ginza and the historical heritage of the Imperial Place. This has been followed by the new Ritz-Carlton in the flashy night spot district of Roppongi, where an ultra-luxury hotel experience would set you back 100,000 yen (900 US$) per night and requires minimum six-month advance reservation.

A common factor for success in luxury business ventures is premium location and distribution, combined with impeccable customer service. This coupled with intense attention to detail in terms of product visibility on premise, is vital to justifying the premium pricing to Japanese consumers who may not always have high levels of disposable income, but are sure to aspire to the wealthy lifestyles that luxury products suggest.

While these luxury brands tend to carry connotations of tradition, authenticity, quality and premium-ness for Japanese consumers, there is also a very strong hedonistic, self-indulgence aspect that drives their appeal. In this sense the emotional value sub-consciously associated with these luxury products goes beyond their monetary value. This emotional component is important to capture in market research and best investigated using in-depth qualitative exploration. This may incorporate projective techniques and a semiotic interpretation of findings in order to uncover these sub-conscious, emotive connections to brands.

From a marketing communications perspective, the focus is the massive 2,200+ published magazines published in Japan. For this, demographic segmentation and topic editorial classification can provide a measure for the target reach of luxury brand campaigns. Market visibility is achieved through special back and inside cover pages.

Buzz-marketing can also be effective for engaging consumers in luxury brand experiences. For example, Armani's flagship launch included flying in global celebrities for entertaining, trend-setting events - while media coverage and word-of-mouth (WOM) extended the reach of the events themselves to an larger, eager audience. Tracking research using cell-phones can be powerful in this regard both for capturing such buzz-marketing touchpoints but also in assessing the consumer journey through to purchase.

While the explosive growth in the luxury brand and experience sector seen in Japan offers potentially lucrative returns to luxury marketers, a strong understanding of the emotive, and often fickle, needs of Japanese consumers remains a key factor for success. In this respect, a well-structured program of market research covering consumer needs and perceptions, brand touchpoints and customer satisfaction is essential to creating and maintaining a position in Japan's burgeoning luxury market.

For more information about luxury brand research in Japan, please contact Jeff Matsui.