No one expected the past twelve months to be easy in Japan. But while consumer spending remained sluggish and adspend continued to fall for a second consecutive year (by 11.5 per cent according to figures from Dentsu), certain brands have clearly turned the situation to their advantage.
According to Nicolas Menat, president of Beacon in Tokyo, the downturn has allowed challenger brands to come to the fore. Indeed, Japan is the only market where Panasonic trumps Sony in the rankings.
"We are seeing an erosion of big, well-established brands that may be soft in terms of purpose," he says. "On the other hand, fresher brands with a different message, if not dominating the market, are at least eating a bigger share of their categories. Big brands are losing out to strong brands - big does not necessarily equal strong."
In other words, the downturn has made clarity of brand purpose more critical than ever. Menat points out that people are still willing to pay a premium for a product if they are given a compelling reason to do so. While the automotive sector is undoubtedly struggling - Toyota has dropped out of the top 20 altogether, from tenth position last year - Menat notes that Audi has enjoyed significant growth thanks to consistency of product, communications and service. "Mercedes and BMW seem to have lost clarity," he explains. "But Audi has worked its image extremely consistently through communications to point-of-sale. The brand has a very systematic approach in appearing where people don't expect it. It is talking to young people, associating with artists and using digital strategy, and it is paying off."
Other winning brands in the market include McDonald's, which is growing despite premium positioning - in contrast to Wendy's, which was forced to withdraw from Japan at the end of 2009 - and Marlboro, which is enjoying its highest market share ever, at the expense of domestic leader Mild Seven. "These brands are not cheap, but everyone knows what they stand for," states Menat.
"People are cutting back on commodities with no personal reward, but if they believe in the brand and enjoy it, they will buy."
Going forward, spending power looks set to continue to rise among increasingly empowered female consumers, who Phil Rubel, CEO of Saatchi & Saatchi Fallon (SSF) in Tokyo, says are "spending more and enjoying life as men cut back". And unsurprisingly, the grey dollar is destined to grow. "But not in prevention and care," notes Dave McCaughan, regional strategic planning director at McCann Worldgroup. "More in maximising life. Beauty, fashion and technology companies are targeting new products and services geared around enjoying life at the 65 to 90 age range."
Japan Top 20 brands
19 Kuroneko Yamato
3 Fuji Television
4 TV Asahi
5 TV Tokyo
1 Yomiuri Shimbun
2 Asahi Shimbun
3 Chunichi Shimbun
4 Nikkei Shimbun
5 Mainichi Shimbun
This article was originally published as part of the 2010 Top 1000 Brands report.