Multinationals struggle to localise in Japan

JAPAN: MULTINATIONALS STRUGGLE TO LOCALISE

With a few exceptions, international brands have a perennially difficult time in Japan, replete as it is with highly-regarded brands of its own that understand the minutiae of local preferences. But with the approach of Tokyo 2020 and the uncommon sense of optimism it has brought, many have faced the market with renewed interest in recent years. 

While it is difficult to accurately determine marketing spend among multinationals as a unit, their level of interest in Japan is reflected in some of the changes they have brought about. Major advertisers such as P&G, Nestlé and Unilever continue to put pressure on the country’s biggest agency groups to provide full transparency in digital media buying by conducting thorough audits.

Their demands for accountability have also prompted innovation in the more traditional media space. Live Board, an out-of-home media (OOH) division within Dentsu, is in the process of developing a new system of programmatic OOH alongside Docomo. It aims to address the extreme fragmentation of the sector—which has thousands of owners and formats—by offering standardisation, audience measurement and targeting via mobile devices. Ichiro Jinnai, who is leading the project, says the lack of metrics has meant international FMCG advertisers have refused to put serious money into the medium, but that they are now reassessing it.

Standardised global systems are desirable when it comes to media investment, but less advisable when it comes to brand communications. Part of the reason foreign brands struggle to make an impression in Japan is an inability—or sometimes an arrogant refusal—to localise. But attitudes appear to be changing.

Apple, which ranked second again this year behind Panasonic, has succeeded in Japan largely on the merit of its products and its international standing, but as conditions become more challenging, it is showing a greater willingness to produce branding work specifically for the local market. A series of short films released earlier this year called ‘Behind the Mac’ profiled students at work on various creative endeavours.

Google Home, which has struggled to gain traction in the market since entering in 2017, jumped 31 places to 177. It has revised its method from matter-of-fact advertising that lacked engagement value to a more humorous approach that continues to show the role of its products in people’s lives (even if the spacious living environments it presents might not match those of its average target consumer).

Amazon continues its strategy of making its brand relatable through touching scenes that reflect the lives of its users in the market. The company has an in-house brand advertising and production division specifically for Japan, which is warranted given the amount of revenue the market generates (around $14 billion last year).

Airbnb also launched a bid to go mainstream last year following the legalisation of home-sharing in June with a high-profile TV campaign showcasing usage of the platform, which is much less well understood than in many other advanced markets. A global adaptation would likely have been ineffective in this context.

Of course, localising is no guarantee that esteem for your brand will rise. Both Amazon and Airbnb dropped this year. But it can be seen as a hygiene factor to ensure that a brand remains something people can relate to. The bolder the localisation, the more chance there is of it making an impression. In the FMCG space, P&G’s Pantene (which climbed 13 places this year to 170) has not shied away from involving itself in local issues, such as questioning regimented systems that get in the way of self-expression.

The need for local adaptation can apply to products as well as communications. Ganesh Kashyap, managing director of Mondelez Japan, says he is looking at ways for the company’s brands to take advantages of changing attitudes to snacking, which he describes as “increasing focus on functional benefits”. In all cases, “we adapt to the needs and tastes of the local consumer,” he says. Oreo, for example (which admittedly fell this year from 213 to 268), is less sweet in Japan than in the US, and available in smaller packages to cater to the market’s tendency towards “mindful snacking”.

In terms of creative work, Kashyap says Mondelez strives to retain Oreo’s “playful” heritage and put a local spin on it, which recently involved a panda-themed campaign that would probably have seemed dubious elsewhere. “It was uniquely Japanese,” he said. “I’m not sure if the panda would resonate as such a symbol of playfulness in the US or Australia, but it’s an example of how you take a concept and bring it to life in a local market. We’ve made a pivot towards greater focus on the local consumer and local behaviour and it applies to the ways we think about our brands very much. We think about brand strategy at a global level but execution at a local level.”