By Dominic Carter
Japan is a Unique International Market
The Japanese market is rich with opportunity, but it is also full of unique challenges and risks not faced in other international markets. Japan has a dense population composed of the most educated, capricious, and quality conscious consumers in the world. Because of these reasons, many companies find it essential to conduct extensive research with their future customers before entering the market. So, after more than twenty years in the business, it still comes as a surprise to me when a company downplays the role of market research.
Why Companies Don’t Do Market Research
As you might imagine, I’ve heard many objections from companies over the years about why they can’t or won’t do market research but one of the biggest challenges is that market research is expensive. With a small-ish project costing at least around US $15–20,000 and a decent stab at a market appraisal costing beyond US $100,000, the investment in market research requires some confidence that the learning will be worth it.
Market research also takes time. For instance, an average qualitative research project (e.g., using one on one depth interviews or focus groups), will often take at least one to two months from project kick-off to complete. After the results are known, clients will need time to decide how to incorporate the information we’ve gathered into their business planning and execution. And when our work reveals how far apart the client’s desired result is from current consumer perception, jumping into the market may take even longer.
So Why Should Companies Invest in Market Research?
Long-term results. Listening and acting on consumer feedback tenders successful results. It may sound like an exaggeration, but rarely have I seen a motivated, properly-resourced client fail when they have responded to the market without bias to the insights and opportunities their target respondents provide.
A company will pay for market research one way or another. In my experience, companies who stick with their tried-and-true global playbooks on their initial approach to the Japanese market, often find themselves needing to do extensive market research in the end, disappointed that the welcome mat has not rolled out as far as they expected. In a market like this one, investing in research from the outset can be the difference between entering the marketplace with a swan dive or falling into a belly-flop from which it will be painful to recover.
Consumer trust. When clients conduct formal market research, they are in effect reaching out to the consumer. They are giving them a voice and the consumer knows that they’re listening. A market research firm’s interaction with consumers on a client’s behalf lets consumers know that they can influence the actions of businesses, governments, and NPOs that otherwise might not factor their needs and viewpoints into their decision-making.
When a client chooses to invest in market research, they are playing an important social role above and beyond the benefits that consumers gain from what clients decide to do with the findings.
There’s No Excuse for Doing No Research
If a company isn’t ready or able to make the investment, there are still numerous informal, less structured approaches they can take to immerse in the market and get close to the buyer.
I’m always happy to point people in the direction of free research methods and I recommend these activities to everyone, even clients with the budget to do more formal research.
Get out there. Interact with the buyer. No amount of market analysis or research can replace seeing the world of the buyer firsthand. This experience is something money can’t buy and is available to all of us if we get out of our comfort zone and spend time with the ‘other’.
Explore JMEC, a business plan writing competition sponsored by a group of foreign chambers of commerce in Japan. The participants in this mini-MBA program are mostly working professionals who desire to up-skill their strategic planning abilities. For clients, it provides an extremely cost-effective way to have thorough market research carried out, as well as gather some genuinely new thinking.
The last thing I want to do is downplay the wisdom a company has gleaned as a global player in other markets. My only aim is to encourage them as they step into this one.
As someone who was once a stranger in a strange land I know how valuable and effective it can be to take the time from the outset to get to know all the local players. Even if a company has never had to do market research in their home market, the payoff of listening objectively with new ears is always disproportionate to the cost, especially in Japan.
Originally published at https://www.linkedin.com on April 3, 2018.
CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.
We believe that, although the terrain you face in building a successful marketing strategy and activation path sometimes seems obscure, the path to success is knowable and that the consumer is the guide who will show you the way.
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