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Marketing will be important differentiator for most companies in 2011

By: Debbie Howard

After the past few years of poor economic growth and constrained consumer purchase behavior, 2011 promises to be a challenging one from a marketing viewpoint.

For starters, distribution channels are evolving relatively rapidly into a new and much more varied landscape. The rise of new retail channels is at the expense of Japan’s department stores, which have suffered declining sales continuously for the past 14 years. New-style mall and entertainment centers, 24-hour convenience stores and pharmacies, discount stores — as well as online shopping channels — are all battling it out as Japan’s distribution channels shift, also placing pressure on the companies who sell through these channels.

Consumer points-of-contact are also broadening. Communications efforts must be increasingly well-orchestrated in the “real” world (supermarket shelf, flagship store, special events, etc.) as well as in the “digital” world (educational and/or informational websites online shops, social networking, etc.) — and in between. In addition, companies must now not only generate their own content, but also carefully monitor the non-company-generated content which is constantly being created by others, contributing to the overall image of any given company or brand.

With both sales/distribution channels and communications channels morphing rapidly (not to mention a price-conscious consumer mindset overall), one might say that it’s the “perfect marketing storm.” Clearly, companies must work even harder than before in order to capture and maintain customer favor. Two of the most visible manners of differentiating a company or brand is via distribution and communications.

Another important manner of differentiating a company or brand is through market segmentation; there are three broad segments that each represent a huge area of opportunity and hence should be of interest to most companies.

In the past, I’ve mentioned the changing Japanese consumer mindset. Japanese consumers have changed dramatically over the years and are becoming more jaded about what they purchase as their access to information increases. They are now not only discerning; they are also more confident about judging products, and they are definitely “in charge” when it comes to making purchase decisions. At the same time, we are seeing that a wider range of products and services are more easily accepted by Japanese consumers of all ages. This bodes well for “new” products ranging from food and beverage to cosmetics to financial products and services and onward to healthcare and pharmaceuticals.

Another key target segment for companies to consider is that of “seniors.” As has been widely reported, the government forecasts that by the year 2025, about 30% of Japan’s population will be aged over 65 — that’s compared to 20% right now. The demographic tidal wave that has made Japan the most aged society in the world represents a foundational shift affecting the overall economic and social fabric.

Ditto for “women.” Now, I’m not saying that every company can or should target women specifically; however, considering the growing economic importance of women in Japan — both as customers and as influencers in purchase decision-making — it seems to make sense to at least explore how women are being accommodated within overall marketing strategies.

Leveraging distribution and communications channels while exploring new, more fertile segments should help companies set themselves apart from competitors in 2011 and beyond.

Originally Published in Nikkei Weekly, 11th January 2011

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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