An Introduction to marketing FMCG brands in Japan
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Transcript of An Introduction to marketing FMCG brands in Japan
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
An Introduction to Building Consumer
Goods Brands in
Japan Interferogram of Mt. Fuji, Japan
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Topics • Health warning! • Japan overview • History & Language • Consumers • Why Japan is attractive
to FMCGs • Trade structure • Product adaptation • Inside a Japanese
company • Thought starters for
launching in Japan
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Health Warning! This presentation is designed as a short introduction to the
marketing and sale of consumer products in Japan. We have written this for those
individuals and companies who have limited experience of this market. The focus of
the presentation is the packaged food & beverage
categories.
We welcome your comments and suggestions and
encourage you to contact us should you have any
questions.
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Japan is an island nation with an island mentality • 4 main islands
– Honshu is the largest • Mountainous
– 60 active volcanoes • Urban
– Greater Tokyo has a population exceeding 30 million. Largest metropolitan area in the world
• Wide variations in climate between the regions – Large snowfalls in Hokkaido – sub-tropical in the South
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Japan�s history dates back to 10000bc
• Early Chinese influence • 16th Century first contact
with western world • Closed to outsiders until
1853 • Meiji era: a period of
enlightenment • Pacific war • Rapid post-war growth
– World class infrastructure & public transport
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
• Japanese is a difficult language for foreigners • 3 different character sets
– Katakana, Hiragana and Kanji
• Over 10,000 Kanji • Kei-go
– �Queen�s English�
• Most Japanese are unable to speak English, or any other language
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Japan’s population is 126.5m • Consumers are
notoriously fickle – More demanding than most
other developed countries – Quality and attention to
detail is critical • Aging population
– Growing demand for products & services for elder people
• Consumer preferences can vary between regions
• Increasing polarisation between premium and economy brands
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Why Japan is attractive to FMCGs
• 3rd biggest economy in the world. High GDP/capita
• Can be very large & profitable – Coca Cola
• No 2 market worldwide. High retail price/litre
– Nestlé • One of the most profitable markets
– Haagen Dazs • US$300m sales. Biggest market after
the US • Japanese consumers love brands
– Louis Vuitton: Japan 35% of worldwide sales
• Source of global innovation • An opinion leader for Asia
– Japanese goods have credibility across the region
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Many foreign brands enjoy a premium image in Japan
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Retail Channel Structure
CVS Super market
Dept Store
Home Centre GMS Drug Import Vending Liquor
shop Railway Online
Grocery Impulse Specialist Discount E
xam
ples
of
Cha
nnel
s E
xam
ples
of
chai
ns
Pro
duct
R
ange
P
ricin
g
100 Yen shop
Agricultural
Fresh to ambient to frozen, �take home� items
Limited. Top brands. Immediate
consumption
Wide range within a given category
Limited, Take Home
Premium to economy. Monthly and weekly bargains common
List prices, almost no discounts
Standard to premium
Discount
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
FoodService Channels
5 Star Hotels
Fast Food Bars Top
Restaurants Airlines Coffee Shops
B2B Offices factories Schools Hospitals
Home delivery Parlours
Travel E
xam
ples
of
Cha
nnel
s E
xam
ples
of
Cha
ins
Pro
duct
R
ange
P
ricin
g Leisure Industrial
Inns
Wide. Fresh to ambient to frozen. Branded and
generic
Limited. Branded items with proven history.
Ingredients/commodity
Premium - Standard Premium - Standard Economy
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Understanding the Trade structure takes time
• Fragmented – Largest retail groups (Aeon, 7&I holdings, Daiei)
account for less than 10% of sales combined – Most manufacturers have large sales teams
• Many chains are regional • Supply is typically through a plethora of
wholesalers – Some moves to direct trading in recent years
• Many manufacturers invoice through Shosha (trading houses)
Careful selection of which trade channels to launch in is a key success factor
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
There is a whole retail channel selling imported goods in Japan Examples include • Seijyo Ishii • Ikari Super • Daimaru Peacock • Pantry • Sony Plaza • Most department stores • Catalogue/internet sites
Generally speaking less product and packaging adaptation is required
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
To become a �mass market� brand in Japan, local adaptation is often necessary
• �Georgia� is Coca Cola�s biggest brand – This brand is unknown outside Japan
• Haagen Dazs has a Japan R&D centre – Developed best selling Green Tea, Royal Milk
tea and Azuki flavours • Taste preferences quite different from
Western palate – Less sweet – Few additives or colourings
• Local packaging – Smaller pack sizes – Labelling and claims
New entrants must have a very strong understanding of their competitors
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Features involving food and drink are common in the media
• 6 main TV stations – Chat shows dominate – High media costs
• Large range of newspapers and weekly and monthly magazines
• Most advanced market in the world for mobile technology
• High broadband penetration and highest level of fibre in OECD
Mainstream media is not a realistic option for small brands. Instead more targeted marketing like in-store demos and events is often more effective
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Inside a Japanese company… • Focus on customer service • Little attention given to
shareholders� interests • Structure can be different
from Western companies – Many Japanese
companies don�t have a �Marketing Department�
• Initiatives often start from the �bottom�
• Group decision making – Consensus is crucial – �nemawashi�
Negotiations take time. Many people are involved. Patience and resilience is required!
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Thought starters for launching in Japan
• Gather a team which includes people who have relevant experience and contacts in the market
• Research the market thoroughly – Products, retail channels… – Understand the key success factors in your category
• Be very clear about what you are bringing new to the market – Product, brand, positioning, technology…
• Test market before full-scale launch • If importing pay very close attention to quality
– Most retailers will delist quickly if there are problems • Stay focused
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
Examples of FMCG categories where foreign brands have succeeded…
• Pet Care • Coffee • Ice Cream • Confectionery & gum • Vitamins, Minerals, Supplements • Toiletry • Home Care • Mexican sauces • Canned goods • Yogurt • Meats • Wines & liquor • McDonalds, Pizza Hut
© 2014 Exigo Marketing (S) Pte Ltd. All rights reserved
An introduction to building consumer goods businesses in
Japan
+81 80 5630 9805
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