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MARKETING FUNDAMENTALS OF EXPORTING FROM JAPAN Japan is one of the leading countries in the world exporting numerous goods such as chemicals, oil, gas, fish, engines, electronics, automobile and motorcycles. Japans success was in a big part attributed by their marketing and management principles. Some of them included life-time employment, promotion of employees with experience to higher positions, recruiting skillful employees all over the world, mutual co-operation of managers and employees, performance appraisal after ten years in order to motivate their employees, promotion of quality control of their products. Japans tremendous market boom originates from the annual staging of The Japanese Fair.
From the strictly local market in the days of the Emperors, the fair involved through the early centuries to the focal point of the international commerce favored, by its strategic location in the Eastern Asia. Foreign merchants were warmly welcomed to Japan and given a safe conduct guarantees. The primacy of Japanese fair was confirmed in the early centuries. The Emperors issued letters of imperial protection to the Japanese merchants embarking the arduous trips all over the Indian Ocean while trading. Even before these deeds of protection over the conquered territories, there were Indian merchant who made their journeys to Japan bringing silk and velvets, tropical fruits in exchange for weapons and jewelry. Responding to the requests of the citizens who found a single annual fair insufficient to cover the demand for goods, the Emperors had to grant Japan the privilege of holding fairs.
The official fairs of the Emperors allowed Japan to develop more than any other country in Eastern Asia. There has been only one cancellation of a scheduled fair in 1935, because of World War II. WWII had additional impacts on Japanese economy and trade. Because of the war, Japan was forced to withdraw its military forced from the territorial conflicts. Those forces, in turn, were directed on the industrial growth, developing county's technology, fishing, agriculture, textile, etc. to the modern standard.
Automobile industry in Japan is the largest and most profitable one, it is what Japan is known for its cars. Japanese market their cars as durable, innovative, and able to satisfy demands of all segments from the cheapest to the most luxurious and expensive. Japanese guarantee quality and quantity to reach the demands of every country (Fields, 1990). Automobiles are exported to virtually all countries of the world. There is a market of both new and used Japanese cars.
Developing countries mainly import second-hand Japanese cars because those countries have very poor infrastructures (e. g. bad roads, poor car service, etc. ). Also, the price of the cars is relatively low and can be afforded in those countries. In Europe, as well as in the USA Japanese automobiles are among the most popular ones, and Toyota, for example, is a best-selling brand virtually all over the world.
Chemical industry of Japan has also grown tremendously to reach the demand of technology in the modern world. Products like chemical oil, gas, etc. are exported the counties like USA, Russia, EU, Canada, south Korea, etc. through pipe lines. Japan pays much attention to the growing industries as agriculture and its chemical industry works on providing fertilizers to increase agricultural production. In addition to fertilizers, Japan has now implemented other ways to boost its agricultural production such as green housing, hot culture, for-culture, etc.
Most chemical companies in Japan have now accepted the effective business model with much communication and shared responsibility. Business managers and product safety specialists have now started sharing responsibility for making sure that sales teams understand their critical downstream in the supply chain in order to promote their marketing strategies of the chemical products. Japan holds conferences and chemical fairs every year, inviting thousands of people from all over the world. The country also helps other developing countries gas and oil through giving out scientific scholarships and grants. Another important industry in Japan is fishing it occupies leading place in Japans economy. This is the most historic industry for Japan, which is favorable located in the Indian Ocean.
Various methods of fishing are used: trawling, drifting nets, etc. Driftnets operate by using two boats to catch heeling and catfish, which is carried out all year round. The major fishing companies include Taiyo Fishery Company Limited. Leading importing countries for Japanese fish are South Korea, USA, EU and Russia. In addition to the fishing industry, there are satellite industries such as packaging and processing industries. Fish is also auctioned to wholesalers, exporters and the fish processing factories in order to reach out to the market demand of fish worldwide.
Japan has started giving loan, grants, free gifts to the needy countries like in Africa, Iraq, Indonesia, etc. Although there has been tremendous increase in the fishing industry, there is a major problem with nuclear testing of USA and the North Korea. The conflict between USA and Japan on Sublime waters has greatly affected the fishing industry. Marketing in a Japanese firm tends to be obsessed because of four major factors: market share, a production-based economies-of-scale mentality, a "strike at the corners" niche strategy, and a follow-the leader mandate. The use of these particular factors can be traced back to traditions in ancient Japan during the samurai period. In ancient Japan, prestige was based more on the number of retainers or the amount of land a lord had (i.
e. , market share equivalent) than on such a paltry thing as money, which only vulgar merchants coveted. The Japanese exploit markets by using a penetration (market share) pricing strategy -- a low entry price helps build up market share and establish a long-run dominant market position. Market penetration was a much more important pricing objective than quick profit-taking with a skimming approach. Market share, not profitability -- which is the popular American motivator, is the primary concept in Japan. In Japan, it is typically regarded as unsound to sell shares of companies to the general public.
Incorporation is grudgingly accepted, but control remains totally vested in the family head; the shares owned by other members of the family are held in what is, in effect, a family voting trust. As for non-family members holding shares, they are not allowed any voice in management (Cappiello, 1982). Therefore, Japanese industry is financed primarily by what legally are bank loans in the form of short-term indebtedness but economically they are equity investments in the business. A Japanese business must earn enough money to pay the interest on the bank loans, As long as the interest on these loans is paid, the bank is satisfied.
The Japanese business executive has high costs of capital, and his most rational business objective is, therefore, to minimize the cost of capital. Maximizing profit makes no sense to him; there is no benefit to his company (and with little chance for stock options, there is no direct benefit to the manager). Therefore, Japanese business strategy focuses on profit only to the extent to which it satisfies a minimum requirement. The strategy also tends to be propagated as a direct result of the lifetime employment system, which affords automatic increases with seniority and job security until retirement. Thus, labor for the Japanese becomes a fixed expense, not a variable one as seen in the West.
If wages increase automatically with length of service and independently of job or skill, and if employees have to be kept on the payroll until retirement, then increasing volume is the only way to increase productivity rapidly. Failing to do so leads to loss of competitive position. The business that can expand faster than its competitors has a tremendous advantage in labor costs (since all marginal labor will be at the entry [lowest salary] level). However, the business that cannot increase its volume adequately finds itself losing productivity. Therefore, the rationale for the Japanese strategy is to encourage volume, which leads to market share, and to de-emphasize short-term profitability in favor of long-term share (Drucker, 1981).
Profits can be obtained either by increasing the margin or by increasing the quantity sold even with smaller margins. Managers pull out the stops to increase sales even with modest profits with an eye toward much bigger profits later on. Once a company has conquered market share and the surviving oligopoly organizes into a cartel, it can raise prices and live happily ever after. That is, at least, what happens in Japan -- but very few other places. When operating overseas, Japanese firms usually maintain the goal of pursuing market share rather than profits. Most local companies cannot do this because not economically logical in their eyes.
As long as Japanese corporations have adequate financial backing (and they usually do, being a part of a larger keir etsu family), they are odds-on favorites to win. A Japanese company puts emphasis on market share and rank within an industry as the primary factors in strategic planning. Its primary concern is how it stands against the competition in terms of market share and position. It is this desire to retain corporate face by not allowing the company's standing in the industry to decline that often causes Japanese firms in the same industry to act in lockstep. Bibliography: Amine Lyn S. , Tamer S. Cavusgil, and Robert I.
Weinstein. (1986). "Japanese So Shosha and the U. S. Export Trading Companies. " Journal of the Academy of Marketing Science 14 / 3: 21 - 32. Cappiello Thomas. (1982). "The Changing Role of Japan's General Traders. " Journal of Japanese Trade and Industry 4 / 4: 18 - 30.
Drucker Peter F. (1981). "Behind Japan's Success. " Harvard Business Review 25 / 1 (January/ February): 83 - 92. Fields George. (1990). "Buy Domestic or Buy Foreign: What's the Story in Japan?" Tokyo Business Today, 58 / 7 (July): 11 - 20. Golding Michael. (1990). "International Marketing: Testing Japan. " Catalog Age 7 / 4 (April): 71 - 74. Graham John L. , and Yoshihiro Sano. (1989). Smart Bargaining: Doing Business with the Japanese. New York: Harper Business.
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