Behavioural economics, Japanese culture and brands

Daniel Kahneman's book Thinking, Fast and Slow is a fascinating and readable account of 40 years of experimental psychology. He summarizes  many of the foundational tenets of behavioural economics: the desire for cognitive ease, coherent stories and illusions of truth, how impressions become beliefs and impulses become behaviours.

He illustrates how intuition is simply advanced recognition: our tendency to ignore absent evidence or answer a different question than the one we are really facing. He explains the availability heuristic and the impact of 'availability cascades' (such as media coverage) in our assessment of the significance of a story—that we operate on the premise that 'If I can think of it, it must be important'. Subjective confidence is determined by the coherence of the story constructed, not by the quality and amount of information that supports it.

Fast and slow thinking refer to what Kahneman calls System 1 and System 2.

• System 1: Fast, automatic, frequent, emotional, stereotypic, subconscious: associative memory and 'intuition'.
• System 2: Slow, effortful, infrequent, logical, calculating, conscious: the 'check' on System 1.

Ultimately he extrapolates this into the concept of two selves—the self which experiences, and that which remembers, processes, collates, and interprets.

Reading the book in Japan, I began to wonder about the universality of the relative influences of System 1 and System 2 thinking. Do cultures valorize, encourage and prioritize them to different degrees? Do people in different countries assess value and make choices in different ways because of cultural norms and narratives? And what does that mean for how brands need to act to engage people?

Japanese society is highly systemized. In its linguistic forms, in relationship networks, and in material terms. Note for example the highly sophisticated train system, the rules and codes that can calibrate such simple things as going to the bathroom, the repeat set phrases used so often in the service industries and the maintenance of a level of craftsmanship and attention to detail to a degree that is disappearing in other advanced economies.

And then there are overt 'System 1' environments. Bespoke, often leisure-oriented, spaces which seem designed specifically to facilitate fast, emotional, easier interactions, perhaps as a counterpoint or escape. The pachinko parlor, karaoke box, love hotel, the izakaya.

How are brand choices made in this context?

David Bain, strategy partner at BMB in London, spoke recently of how brands have traditionally spoken to System 1 thinking: They are 'pleasurable fictions' based on errors of judgment. It's a neat articulation of how brands were conceived, and worked, in the West for several decades.

He goes on to say that the power of these fictions is on the wane. And we're certainly seeing the global emergence of a more suspicious, agile, consumer—a more independent mindset that wants to make meaning and interrogate traditional authorities, someone who is more calculating than the highly emotive consumer the branding industry likes to lionise.

In Japan, and other cultures in East Asia, a more pragmatic relationship with brands has long been the norm. Here are some hypotheses about how brands work in Japan that I've observed:

• Brands in Japan have a relatively weak role in identity formation. There are so many matrixed, nuanced and close social relationships and groups that there's less space or need for brands to play that role.
• When brands do have a role in conferring identity, it is often as social cyphers: "Whom do I associate with?"
• Brands act as providers of fantasy, play, escape and entertainment: an emotional interaction, but a shallow one.
• Brands act as vehicles for new-product development in the battleground of point-of-sale and trade relationships. Awareness is heavily driven by distribution channels.
• Metaphor and direct, visual, emotional impact is more prevalent than narrative in the primarily 15-second ad break market.
• The sensory elements of marketing—great shops, great product design, great packaging, rituals, activities that add value to people's lives—are very important.
• Product review forums such as cosme.net contain in-depth and influential assessments of functional performance.
• It is not enough to talk about an idea or relationship—you have to live it, demonstrate it, build it. Talk is cheap: it's better to help or add value to interpersonal relationships. Be present and tangible, execute meticulously in the right contexts.

So how does this tie back in to Kahneman's System 1 and System 2? It feels like successful brands in Japan need to speak to both ways of thinking, in quite distinct ways—and potentially different channels. The Japanese / East Asian construct of a brand is arguably ahead of the game globally: the 'pleasurable fiction' has always been in a more balanced relationship with verifiable realities.

Of course brands need to use creativity, emotion, metaphor and exaggeration to be noticed, to entertain and make that initial connection and get into the consideration set. Whether that's ATL or more experiential activity.

But crucially, brands must not neglect the slightly less sexy System 2 mindset—the kind of information or experiences that are consumed in more considered, personal ways. They must speak to the part of the consumer that is looking for real quality and value truths, for peer endorsement, for clarity and reassurance, for facts, for genuinely great services, experiences and products—not just a 'concept'.

Chris Francis is managing director of Flamingo Tokyo.