Marketing Strategy: What to consider before putting together a plan to attract Japanese consumers

Japan is a beautiful place and known as the country of the rising sun. More and more foreign entrepreneurs have shown interest in investing in different areas from trading consumer goods, establishing language schools, opening restaurants, running hospitality facilities such as hotels,… to investing into startups or innovation hubs especially in the field of finance, where new technology is being used effectively.

Additionally, according to the Japan External Trade Organization (JETRO ) the number of inbound tourists crossed the highest ever figure of 28 million in 2017, as Japan was getting ready to host the Tokyo 2020 Olympics and Paralympic Games, which was postponed for up to one year due to the current coronavirus outbreak.

On the other hand, Japan has been opening up to more foreign direct investments while the Japanese population has been experiencing a significant decline in recent years. This situation has created a necessity for foreign labor, which in some cases started to result in businesses such as convenient store franchises being owned by former foreign staff or simply by foreign investors.

Points to consider before planning a marketing strategy for Japan:

Now, despite the wide range of opportunities that foreign investors can take advantage of, the main question remains: what should a foreign entrepreneur or investor keep in mind while planning PR and marketing strategies?

The first and foremost piece of advice is learning how Japanese culture works. After analyzing the common consumer or purchasing behavior in Japan, there are mainly three aspects to consider: brand quality, brand value and brand cost.

Brand “Quality”
First off, this is what Japan is known for: the quality of products and services. People would pay a big amount of money for a well-designed and well-presented commodity. Of course, people sometimes blindly buy because of friends and family influence. However, this is the most important element to think and rethink before taking any action to promote what is going to be sold in Japan, as it has to do with the reputation and trust of the brand.

Brand “Value”
On the other hand, following the trends of a certain type of product or service that could potentially be popular in the marketplace is important. However, Japanese consumers put a lot of importance on the value that the asset represents. Probably, this is related to the spirit of “omotenashi”or hospitality that Japanese people have kept for so long and keep passing onto young and future generations. Therefore, any product or service coming from outside of Japan should respect this aspect because it is deep within Japan’s culture. So, that being said, the promoted product or service should either add value to customers’ daily lives or can offer them more convenience in how they enjoy life. Therefore, it can be assumed that “the value is more important than just the cost”!

Brand “Cost”

Finally, many customers buy costly items or pay a lot for a good quality service in Japan. Nonetheless, the cost in most cases is usually related to the brand as people tend to attach a lot of value in it. However, things have changed as competition is always trying to to continue providing good quality, while trying to keep prices relatively lower specially to attract younger generations or mainly students.

Concretely, Japanese young adults are considered as trendsetters meaning that they give much importance to trends especially in the fashion industry. This is more likely due to the influence of world-known Japan designers such as Yohji Yamamoto, Issey Miyake and Rei Kawakubo. So, basically, the point here is to gain young adults’ attention in order to be capable of succeeding in the Japanese market. There are few examples of brands that became popular among young people that we can refer to such as Dandelion Chocolate , Lululemon or Brooklyn Charm.

As an example, this is insight into Dandelion Chocolate Japan’s success story

Dandelion Chocolate, a craft chocolate firm from San Francisco, is well known in the US for its commitment to manufacturing quality chocolate. In 2016, the company decided to establish their first shop and cafe in Tokyo. Since then, they have opened other shops and have been featured in Japanese media as well.

In an article on the aforementioned “3 Successful Brands Popular Among Japanese Gen Y”, it is said that: “Surprisingly Dandelion Chocolate chose Tokyo, not another city inside the US, as a place to expand after San Francisco”. It was reported in the same article that the founder, Mr. Todd Masonis revealed the 3 main reasons for Dandelion’s success:

  • Japanese value “craftsmanship”, a core value to Dandelion Chocolate products
  • Many Japanese tourists who have visited San Francisco’s Dandelion shop asked him to open a shop in Japan because there is a high demand for similar products there.
  • Regulations around processing food are less strict in Japan than in the US.
    From the above, craftsmanship in confectionary business was absolutely the foundation on which the CEO based his decision to launch their next shop in Japan. Of course, the quality of products was unquestionable. However, the added value or the money value was obvious for customers to go and check out the new chocolate experience in town.

In a nutshell, it is indispensable to highlight that consumer behavior in Japan is a bit different compared to other markets. A deep consideration of Japanese culture in general, and local subcultures in particular, is more than important in the design, presentation and promotion of a foreign brand in Japan.