Why Japanese companies need a new mindset to win globally

Each month, Campaign Japan will look in detail at a central theme affecting the Japanese marketing business. This month's feature, by David Blecken, executive editor, Campaign Japan, begins by examining the increasing efforts of Japanese companies to turn themselves into global brands, not just manufacturers. 

Many Japan-headquartered firms have for years felt a nagging sense that ‘going global’ is in their best interests, if not actually the key to their survival. But many of those companies have chosen to put it off. Why? Because globalising can seem an impossible task for organisations with legacies and limited international experience—not just from a language perspective, but from a structural, attitudinal and branding one.

It’s only now, as Japan regains its stature on the international stage, that real steps are being taken to bring about real change and ultimately growth. It won’t be easy, and there is a scramble to catch up. But a number of brands are admitting what they don’t know and moving in the right direction.

Branding is not an add-on

When Mitsui Chemicals wanted to enter the US healthcare space last year, for example, it knew it couldn’t take the same approach as in Japan. At home, the emphasis for a lot of firms is still typically on product, with branding in many cases an afterthought. In the US, products are no less important, but rarely see the light of day without a clear brand proposition to support them.

Mitsui worked with J. Walter Thompson to launch Whole You, a healthcare service for people with sensory and mobility difficulties, in December 2015. The work involved a documentary and inspiring photography by a blind man, but minimal reference to the product itself. At the time, Hiromi Inagaki, the chief innovation officer for the brand, who splits her time between Japan and the US, said the aim of the campaign was to “redefine health as the ability to enjoy life to the fullest”.

It’s a bold, but necessary, statement for a brand that no one’s heard of. The concept did not come out of thin air, but was the result of numerous workshops to discuss the roots of the brand and establish what it stood for. Direct interaction with consumers and healthcare professionals was also an important part of the process.

“In Japan, there’s a belief that brands are organic,” says Amy Naoko Morita, J. Walter Thompson’s global and corporate marketing director. “Clients think product equals brand. It’s important for them to understand the differences when trying to bring a brand outside to different markets.”

Inagaki admits consumer-centricity is not a Mitsui strongpoint. Marketing at the company can tend to be a bit more “like the sales department”, she says. “We have good knowledge about where the market’s moving, but are not necessarily used to looking at the mind of consumers.”

She says after lots of effort convincing Mitsui’s leadership of the value of a new, seemingly more abstract approach, the company has made a “big commitment” to think more in terms of brands, how they appear to their audiences, and the role they can play in people’s lives. 120 people are assigned to work on the Whole You brand alone, and the aim is to take it global. A big driver of that will be thought-leadership activities.

“It’s not just about selling the product, but a way of life,” Inagaki says. “I think Japanese people need this kind of optimistic approach.”

Distillation process

Though operating in an altogether different sector, Citizen took a similar approach to defining its brand for an international audience. Wieden + Kennedy conducted a large number of detailed interviews for the watchmaker with staff at all levels of the company to “distil what they stand for”, according to John Rowe, the agency’s Tokyo MD.

The resulting mantra, ‘Better starts now’, also formed the basis of a brand book that is as much about giving staff an understanding of the brand they represent as it is to sell it to the outside world. After nearly a century in operation, Citizen had arrived at a point where it felt it needed to streamline its message and communications in order to resonate internationally.

Rowe and colleagues at Wieden + Kennedy agree with the sentiment that branding is often a secondary concern for Japanese companies. Wholesome positioning and “being nice and hardworking” can take precedence over having a strong point of view, says Tota Hasegawa, the agency’s ECD. CMOs are also sometimes non-existent, or just tasked with making ads.

That might be OK domestically, but “outside, Western brands are competitive and it’s a completely different battlefield,” Rowe says. “They’re facing organisations where there’s a CMO in the executive suite; where every day senior decisions are being made about the role of the brand. Japanese brands are not necessarily working that way because there’s no one at the table thinking about that function.”

Balancing Japanese and global

One obvious thing apparently standing in their favour is nationality: Japan’s heritage and the perceptions of quality associated it can potentially go a long way.

But opinions on the subject are mixed. It’s easy to “stress things people don’t care about,” Rowe says, but notes that it makes sense to emphasise it when talking about qualities like safety and craft—much the same as for German brands. But it depends on the sector, he says.

One company that is underscoring its Japanese-ness is Aqua. Although now owned by Haier, a Chinese firm, it is the reincarnation of Sanyo and is headquartered in Tokyo. Last year, when it tied up with the Star Wars franchise to create a moving R2-D2 replica refrigerator among other themed products, then-CEO Yoshiaki Ito (he has since left the company) told Campaign that his motivating mantra for the brand was “Japan awakens”. His goal was for Aqua to represent a new era of home appliance innovation led from Japan. The company is now developing a new corporate brand positioning to challenge the assumption that white goods have to be boring.

Alan Ng, Haier Asia’s Japan-based CMO, is realistic that “brand building is not an overnight thing”, but he says Japan’s 30 to 40-year legacy of making quality items helps. He thinks people are very aware of the nationality of the products they buy in the sector. But while “we want the halo effect, we can’t be dependent on that. We need to have our own essence that will drive us towards the future”.

In a number of Asian countries such as Vietnam, the Aqua brand has replaced that of Haier because its perception as being Japanese puts it in a more positive light than a Chinese one. But elsewhere, people are uncertain of its origins, and that is something it has to contend with. Ng believes the new positioning will help in terms of consistency.

Paul Miles, who recently became Asics’s first global head of marketing after stints at Nissan and Uniqlo, is also charged with bringing greater unity to the company’s operations and shaping a more sharply defined brand. He is in no doubt that having a clear strategy to go to market with trumps “boasting” about nationality. With the right strategic approach, awareness of heritage “comes organically from the consumer,” he says.

“People don’t associate marketing campaigns with Japan. You really want someone to recognise that DNA instead of shouting it. I don’t think Apple shouted about being American—it was just a very innovative company. That’s what’s top-of-mind.”

From Asics’s perspective, Miles says: “I hope by 2020 people realise who we are and what we stand for. If fans realise our DNA is rooted in a story from Japan and our founder, great.”

Look outside and localise

Clearly, adaptation of message, and sometimes product, is important—while remaining true to brand values. From its base in Tokyo, Line has seen impressive growth in Indonesia, Thailand and Taiwan, with 215 million monthly users worldwide. Cultural localisation has been an important part of its strategy. Initiatives have included the creation of a seasonal account for Ramadan, with themed stickers and a fasting calendar. While growth is slowing, it is now aggressively targeting the US.

“These activities are based on our core values, but are insightful reactions to the needs of users in that particular region,” says Satoshi Yajima, the company’s senior director of marketing. “Rather than where the company comes from, it’s an issue of whether you’re providing a great user experience. ‘Made in Japan’ carries an image of high quality, but if we take a product or service that has been successful here and try to sell it as-is in other countries, there’s no guarantee it will be well-received.”

A common problem is simply that Japanese companies can have excellent products and services, but fail to take the risk in taking them international early on, with a story bold and straightforward enough to engage people.

Typically, there is a gap between product and marketing that must be bridged, says Ng. He adds that for companies for which marketing equals making TVCs, it’s important to remember that brand building is a long-term exercise.

“Brands are like people,” Ng says. “You are how people perceive you over time, rather than in one instance. The idea that lots of advertising is branding shows there’s a disconnect and I would say it runs across many companies. Steve Jobs was a product guy, but not just that. He knew what a brand is.”

It might sound obvious, but marketers at Japanese companies would also do well to shift their gaze away from the confines of their own country. “Only when people experience what’s going on out there in the world do you realise how you can do better,” Ng says. “When you’re inward-looking, it might appear that sales are doing well, but you don’t feel the crisis that may be coming. Often, people talk about the challenge as being a language issue, but I don’t think it is. It’s a question of being more outward looking.”

This article originally appeared in Japanese on Campaign Japan.