Marketing Trends Tokyo
Tokyo`s New Marketing Trends
By Dr. Parissa Haghirian and Paul Gaspari
In the Western discussion of Japanese management, two topics are dominant: the production management of Toyota and lifetime employment as well as other particular aspects of Japanese human resource management. One aspect of Japanese management which has never hit Western media or scholarly research journals is Japanese marketing.
It is not quite clear why marketing in Japan has never created any interest in the West. Maybe cultural differences are perceived to be too large. However, Japanese marketing strategies are definitely an issue worth investigating. All of us living and working here in Japan are quite amazed and amused by the advertising and media campaigns of Japanese firms.
But Japan and foremost Tokyo is in some sense the marketing capital of the world. No other business location is as competitive or evolving within such a limited geographic area. There are more than a million enterprises and 160,000 restaurants in Tokyo alone, competing for the attention of around 35 million consumers. Trends therefore come and go on a weekly basis.
Japanese companies have to stand out in order to create attention and keep consumers interested. To do this, companies either need to follow an ongoing trend right away or start one for themselves. Tokyo has therefore become a very innovative and evolving marketing laboratory of sorts.
Brands in Japan are reinventing themselves
Japanese consumers love brands and Japan is said to be the world`s only luxury mass market. The most favorite brand of all is long-time seller Louis Vuitton. Almost half of all Japanese women are said to have at least one item of the expensive brand.
However, Japanese brand consumers are not brand loyal. Once a brand becomes “uncool” or does not offer the expected value anymore, consumers easily switch to a competitive brand. And in a market where everybody likes and buys expensive brands, marketers of luxury goods face a unique challenge. How can brands stay exclusive, if everybody buys them. In order to combat this problem, Japanese brand managers have developed a number of ideas to keep their brands attractive and the talk of the town.
Leading again here in this area is Louis Vuitton. The company opened its first concept store in Tokyo, in cooperation with the Seibu Department store chain. Louis Vuitton Underground in Ikebukuro presents LV products in a rather unusual environment. The store interior is designed to mirror an actual construction site. Other brands have entered a completely new field: the service industry. Bulgari on Omotesando is serving food and offers hand-made chocolate with Italian flavors. Real Bulgari fans can even take a sojourn at a Bulgari resort in Bali. Furla, the Italian leather manufacturer, also offers coffee at its Ginza shop and invites customers to Furla Yoga in Aoyama. Chanel teamed-up with France`s chef Alain Ducasse to give Chanel customers the chance to wine and dine in an exclusive restaurant on top of the Chanel building.
Brands represent their customers` lifestyle. The overall brand experience is enriched by these new activities and ideas. Customers can now feel and experience the brand with all of their senses. This is improving brand loyalty and gives many traditional brands a new, cooler and younger image.
Consumers Involved in Product Design
Consumers are increasingly interested in customized and individualized products. Business models, which help customers to design their own products, are booming. As consumers are seeking out more unique and personalized products, they are also interested in customizing the products they buy. Bling Me, a company which helps customers to personalize their mobile phones, bicycles, etc. with shiny stones, has even based their business model on the wishes of customers to create their own products. Some brands even go a step further and include customers in their product design processes. Soup manufacturer Maruchan and beverage company Calpis even let their consumers vote on their favorite flavors each year.
Integrating customers in product development processes comes with rewards. Customers feel more attached to the products and show more interest in the overall brand. The company meanwhile can create greater customer feedback and launch campaigns that specifically target their customers` wishes and ideas.
Social Networks go offline - consumers do not like to be alone any longer
As in every major city, Tokyo has a growing number of customers who live alone. The number of single households or households without children in Tokyo has steadily increased over the past several years. People are increasingly lonely and desire more social interaction and contact with one another.
This request is being answered by Japanese companies that are creating social networking beyond the “classic” internet networks. They are trying to connect consumers in real life. Leading in this field are the numerous Japanese railway companies. Seibu Train Company started their first hiking day a few years ago, and this was soon followed by Tokyo Metro and other major railway lines around the capital. The companies organize guided tours in certain locations for all customers interested. These events are free but have developed a seriously growing fan base.
Another famous example for social networks developed by a company is the sports good producer Asics. The company is famous for sponsoring the Tokyo sightseeing run, which covers all major sights of Tokyo in a 15 km run. Other runs target women, beginners, and early morning runners, and are offered every day. Again, all of these events are free of charge, but its evident that consumers become avid fans of them and eventually of the companies offering them.
Social meetings of consumers also support difficult purchase decisions. Tokyo real estate developers for instance offer seminars for women (their new target group) who plan to buy apartments. These seminars allow potential buyers to meet each other and often lead to more positive purchase decisions in the end.
Connecting consumers has a positive effect on company’s long-term strategy. Consumers become fans of the brand which in turn will positively influence their purchasing decisions in the future.
Simplifying Product Choices
Tokyo is the biggest market in the world overflowing with offers and new products. But also in other places around the world, the number and speed of new products being introduced is dramatically increasing. More and more consumers find it difficult to make purchase decisions, simply because they are worried about buying the wrong product or to miss a bargain they have not discovered yet. These overwhelmed consumers tend to buy products later or not to buy them at all. This is a trend not only in Tokyo, but in most industrialized countries. Shoppers are feeling increasingly out of the loop when it comes to new products and the advanced technologies that often accompany them.
The Japanese have realized this buyer dilemma and started developing products or business models supporting customers in making quick and simple purchase decisions. KDDI, for example, introduced the Kantan Keitai, a mobile phone that strips away all the complicated and high-tech gadgets that are the standard for most Japanese mobile phones these days. The company`s target group are consumers who want to simply buy and use the talk feature of a mobile phone.
Simple and low risk product choices are the base of Ranking-Rankqueen`s business model. The company targets consumers, who might shy away from buying simply because the choice of potential products is too massive. Based on the bestseller of its parent company, the Tokyu department store chain, Ranking-Rankqueen produces a ranking of the most popular products each week. The hit products in each category are announced in the shops and consumers do not have to think about which product is the best. The concept has already been copied by big retail chains, which also started to point out their bestselling products. This lowers customers` risks of buying a product that might turn out to be wrong or of low quality. Customers show higher satisfaction with their purchases and place greater trust in the company.
These trends are only a few that can be discovered in Tokyo every single day. Tokyo, being the biggest marketing capital of the world, offers a wide variety of innovative marketing techniques and strategies that are constantly evolving due to high competition. Tokyo’s consumer groups represent the future of all industrialized societies. Baby Boomers, singles and overwhelmed consumers are increasing around the world. The way Tokyo caters to these groups and adapts products to them are a lesson for other advanced nations.
As knowledge about the marketing innovation currently being done in Japan becomes more widespread, Japanese marketing may become the new focus in Japanese management study over the next couple of years.
Author Information
Dr. Parissa Haghirian is an Associate Professor of International Management at the Faculty of Liberal Arts at Sophia University in Tokyo. She is the editor of “J-Management; Fresh Perspectives of the Japanese Firm in the 21st Century.” www.parissahaghirian.com
Paul Gaspari is a Master Student in International Business and Development at the Faculty of Liberal Arts at Sophia University in Tokyo. He is doing his research on Foreign Entrepreneurs in Japan. www.paulgaspari.com
