Professional Documents
Culture Documents
Introduction
After the Second World War the country of Japan was devastated and nearly destroyed. Within the last 40 years, Japan has evolved into a strong competitive force in world markets and now has the second largest economy in the world. Although it is the size of Montana and has only one-half the population of the USA, Japan may have the number one economy in the world by the year 2010 (Kirkland, 1992, p. 60). During the 1980s, Japan emerged as a powerful international force that capitalized on global marketing opportunities. This has resulted in unprecedented growth for the country. In a recent Fortune article, author Richard Kirkland (1992) describes where Japan is in the early 1990s:
Japans economy was less than 10 per cent the size of Americas in 1960 and it is now over 60 per cent; their trade surplus has doubled in seven years despite a SO~ increase in the value of its currency; it habitually spends 70 per cent to 100 per cent more of its gross domestic product on capital investment than the US and 33 per cent more on nonmilitary R&D; its household savings rate is more than three times that of Americas; and when compared to the US employs 70,000 more scientists and engineers on R&D in its labs, and ten times the number of robots on its assembly lines (p. 60).
Japan also has a unique partnership between its government and businesses. The businesses in Japan have benefited from the role of supportive government policies and subsidies. Japans powerful trading companies and its businesses access to low cost financing from its banks further help to explain some of Japans global success. Other business factors have greatly influenced its success within global markets, Japans low wage rates for its workers, its unfair dumping practices within different countries, its protected markets (which are extremely difficult to penetrate) and its almost zero industry cost for defence have contributed further to the ability of Japan to become the highly successful global competitor it is today. However, an extremely important factor in Japans global success is its skill in sound marketing strategy formulation and implementation. What are the keys to Japans marketing success in the international markets? lt has been stated that Japan came to the USA to study marketing principles and philosophy and then applied the textbook principles with unparalleled success. The Japanese carefully decide which industries to enter, which market segments to serve and the appropriate approach to penetrate those markets (Kotler and Fahey, 1982, p. 4). The Japanese marketing strategy revolves around the management of product market evolution. They choose and sequence the markets they decide to enter, the products they decide to produce and the marketing tactics they decide to adopt for the market segment. However, the most important factors in their international marketing success are their acceptance, understanding and application of marketing principles to the markets they decide to enter.
During the first six months of 1992, Japans trade surplus, which is measured as goods pass through customs, stood at US$49.03 billion, up 52 per cent from a year earlier (Rosenberger, 1992). Japans trade surplus rose in June for the 18th consecutive month and its exports have increased for the 25th consecutive month (Rosenberger, 1993). A combination of many different factors play a role in Japans global success. Japan has unique business practices that are not found in many other countries. Its just-in-time (JIT) production techniques, quality circles (QCs), ringi and nenko are business practices that are deeply rooted in its business culture and have helped to shape the countrys strong competitive presence in the global marketplace.
Cultural aspects
The conceptual basis for the Japanese international marketing strategy can be traced back to its origin in the Samurai. The Japanese are adept at market flexibility. Cultural Buddhist thinking emphasizes that nothing is
Marketing Intelligence & Planning, Vol. 13 No. 11, 1995, pp. 36-46 MCB University Press Limited, 0263-4503
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permanent, that life is ever-changing. Samurai warriors in Japan learned several martial arts, always choosing the best means to attack or defend (Kotler and Fahey, 1982). The way of the samurai is characterized by total dedication to the objective of victory with every waking moment dedicated to training, conditioning and concentration. The Japanese culture developed in relative isolation from other countries and different cultures. This isolationist development led to a homogeneity in race, language, lifestyle and culture for the Japanese people (Yunker, 1990, p. 213). The collectivist orientation of Japanese society has been deeply ingrained; and a part of their culture for hundreds of years. It continues to be stressed strongly within the family, work group and in the formal education system in Japan.
(Cateora, 1990, p. 236). Also, they have ingrained in their teachings and beliefs a need for stability and order that occurs through a sense of responsibility, a respect for discipline and training. The Japanese have the highest literacy rate (99.8 per cent) in the entire world (Yunker, 1990, p. 213). Education is considered to be the pathway to achieving a secure life, because it will allow an individual eventually to enter positions in larger organizations with higher status and power (Yunker, 1990, p. 215). Their emphasis on education, collectivism and loyalty allow the management of Japanese organizations to have a highly literate, group-oriented and cohesive workforce at their disposal to accomplish the organizations goals and effectively design and produce the products needed for their global markets. The Japanese use a group-oriented consensual process of decision making called ringi within their organizations. This process involves the original draft of the decision proposal started at the lower level of management and then the circulation of these proposals to various horizontal and higher units for inspection and approval to those units that will be affected and required to cooperate in the implementation of the proposed decision (Yunker, 1990, p. 217). If it is approved by all affected units, the ringi is returned to the original drafter of the proposed decision for implementation. The larger companies of Japan offer nenko, or lifetime employment, to some of their employees. However, only 30 to 35 per cent of Japanese workers are under this system (Yunker, 1990, p. 221). This system came into use after the Second World War as a stabilization method to reduce the high employee turnover among Japanese skilled workers. The nenko system involves the strategy of offering low salary to junior employees of the organization and forcing early retirement at the age of 55 to the senior employees. These employees are generalist in nature and move laterally rather than vertically within the organization. This process of slow promotion and the formation of close bonds among managers of the same seniority helps to form strong cohesiveness among managers and results in the group-oriented, collective teamwork that is a hallmark of Japanese organizations (Yunker, 1990, p. 225). The cultural aspects the Japanese have shaped are a strong part of organizations within Japan. However, it is not only the cultural aspects within organizations, but the understanding, acceptance and effective application of the principles of marketing that have made the Japanese so effective and successful in the international markets. The Japanese apply textbook principles of marketing philosophy by carefully studying consumer needs and wants in international markets, developing products incorporating desired features and putting effective marketing programmes in place to support them (Lazer et al., p. 71 ).
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The Japanese have four concepts that are rooted in the social-cultural nature of this group-oriented, collectivist society that are always at work in their marketing approaches and practices. The concepts of pseudoharmonism, eclecticism, exceptionism and nonfunctionality help the Japanese to adjust American marketing principles to their own culture. The concept of pseudo-harmonism stresses the importance of maintaining harmony while at the same time acknowledging the existence of an underlying current of discord and disagreement (Lazer et al., 1985, p. 71). The need for human harmony within decisions is also emphasized by the concept of eclecticism but it underscores the ever implied trade-off of economic costs (Lazer et al, p. 71). Exceptionism stresses the exceptions of policies and procedures that have been established, which permits the ability to change and to be flexible and adaptable within the markets. Economic nonfunctionality stresses that Japanese marketing activities consider human factors rather than merely economic efficiency and business profits, even though they acknowledge the importance of the economic factors in the long run (Lazer et al., 1985).These continuing adjustments to American marketing principles have resulted in a Japanese marketing approach that incorporates the marketing concepts, ideas and practices that apply to the market they are considering, or of which they are already a part.
q q
Cross-cultural analyses
In several cross-cultural marketing strategy analyses between Japanese and Western firms (Abegglen and Stalk, 1985; Doyle et al., 1988; Doyle et al., 1991; Kotabe and Okoroafo, 1990; Wong et al., 1987) the Japanese marketing and business practices tend towards the following characteristics: q A stronger competitive drive than most Western companies. q Japanese pursue market share, aggressive growth, market domination strategies. q They are more adept at exploiting strategic windows opportunities created by new market segments, changes in technology, or new distribution channels. They are encouraged by the Ministry for International Trade and Industry (MITI) and enthusiastically endorsed by many Japanese companies (Wong et al., 1987). q They prefer market adaptation rather than innovation. They are not technological pioneers and are a risk-averse culture. Redesign, upgrading and rapid commercialization of innovations made elsewhere appears to be a common priority. They search for new or emerging market niches and do not attack the market leaders head on but rather
q q
spot emerging segments not yet prioritized. They pursue a follower not a leader strategy. They pursue more aggressive marketing mix tactics. This usually involves low prices, rapid product line extensions and high expenditures on advertising, promotion and dealer incentives. They are market focused rather than functional organizational structures. They are more professional and clearer in their objectives. Overseas moves are part of a planned global expansion. They concentrate on long-term profits and market share. Western managers, however, are usually oriented towards short-term profits and productivity improvements and are often willing to lose market share to boost profit performance. Japanese subsidiaries have extremely high market share objectives and they are willing to make longterm sacrifices to achieve their objectives. The Japanese typically do not see profit as the central objective but rather the result of satisfying the aspirations of customers and achieving market share. They prefer volume to stimulate primary demand. Their principal means of expanding volume is by entering newly emerging market segments (niches). They increase market share by winning over competitors customers. They concentrate marketing resources and efforts on the high potential segments (i.e. on the quality value added high end). Japanese firms are most concerned about new products and the quality levels being developed by their competition.They perceive superior quality and reliability as key competitive advantages. The Japanese view customer service as their major differential advantage. Their product policy emphasizes superior quality over their competition. They tend to spend more heavily on promotions than personal service. They believe in a high level of dealer support as manifested in ample stock for immediate delivery, more technical and training support to dealers and frequent underwriting of promotional and advertising spending by dealers. Theirs is an extensive co-ordination of networks of sourcing activities on a global scale to reap economies of scale. Their level of product adaption is less while sales volume is more important. A Japanese firms emphasis on product quality and manufacturing process innovations encourage them to pursue customer satisfaction by way of
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continual improvement in the product line to meet customer needs and/or exceed them. q They are likely to market simultaneously in all the triad regions. q Japanese firms succeed by pushing the fundamentals to the extreme. They believe competitive strengths lie in quality, reliability, innovation, service and support. q Theirs is a bias towards growth. Japanese managers believe profit performance in the long run is assured by a focus on volume expanding into new market segments or aggressive market penetration. A focus on increased volume now would enable them to build competitive cost structures, to generate the resources to sustain product development and to control their distribution channels in the future. q They have a preoccupation with competitors, especially other Japanese competitors. Japanese often only view other Japanese companies as their major competitors. In fact, much of the actual competition results from the bitter rivalry between Japanese companies which fight one another for market share. Without really knowing it or intending it, they manage to expand largely by driving weaker local firms out of the market altogether. q They believe in the creation and ruthless exploitation of competitive advantage. Market dominance is characteristically their central objective. Japanese firms and their managers are more committed to a market than Western managers. The Japanese have smaller, simpler business units focused around a single product line or market and with clear marketing plans aimed at building long-term market positions, focusing on quality, service and continuous incremental innovation. What usually occurs in the West, is that US companies retreat into the small high-tech premium niche markets while the British stick with the low value added bottom end of market. The Japanese end up capturing the mass market and moving upwards into the premium segments. By withdrawing, the Westerners have provided the Japanese with a foothold into the market with which to build experience, cash flow and distribution capabilities; and allowed them to create a base from which they can move up into the niches. Typically: q The Japanese have marketing performed by a local not a Japanese director. q Japanese firms follow strategies which may be suboptimal to the members of the group in the short run but optimize the group performance in the long run. Information is quick to pass among members of a group but slow to leak outside.
Cost plus profit equals price is not the recognized price setting formula for the typical Japanese company. Management must first set the price and then see how costs can be brought into line. This is similar to the learning curve approach. The selling price is dictated by competition with other companies in the same industry. The company must then reconcile costs with selling price. The main weapon of the marketing/sales department is low price: a strategy of aggressively setting low prices to win domination of a market and then rapidly improving production to bring costs in line with prices. Japanese primary vision has been the civilian application of technology. Improving the methods of production and process innovation are dominant. This knowledge is usually acquired from abroad. Companies have been encouraged by the government to place emphasis on finding ways to absorb and add to the imported technological knowledge more rapidly so as to improve efficiency and product quality.
Economic rationale
The Japanese have built and are running exceedingly successful businesses, yet their basic business strategy not only violates everything a Western executive knows but it is incompatible with the economists theories of economic behaviour and microeconomics. Nonetheless, the business strategy of a Japanese enterprise while indeed different is not irrational. It optimizes in perfectly rational fashion the specific structural realities in which
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Japanese businesses operate, especially banking and capital markets and wage system and wage structure. The profitability of the average Japanese business enterprise appears low. Measured as a percentage of sales, Japanese business enterprises, especially large businesses, perform at a much lower rate of profitability than Western enterprises in similar lines of business. Profit in reality does not matter much to the business enterprise. The profit that matters to the economy is what the banks return. The typical pattern in Japan is that it is unsound to sell shares of enterprises to the general public; an enterprise has to be completely controlled by one man. Incorporation is grudgingly accepted but control remains vested totally in the family head. The shares owned by other members of the family would be held in what in effect was a family voting trust. As for non-family outsiders holding shares, management is impossible for them. Therefore, Japanese industry is financed primarily by what (legally) are bank loans, in the form of short-term indebtedness. A Japanese business must earn enough money to pay the interest on the bank loan (but economically it is an equity investment in the business and industry). As long as the interest on these loans is secure, the bank is satisfied. Business earnings over and above what is needed to cover the interest charge are of no benefit to the bank. The Japanese business executive has high capital costs and his most rational business objective is to minimize these. Maximizing profit makes no sense to him; there is no benefit to his company (and with stock options virtually unknown to Japanese management, no benefit personally to the manager). Therefore, Japanese business strategy focuses on profit only to the extent to which it represents a minimum requirement.
salary level). However, the business that cannot increase its volume sufficiently finds itself losing productivity. Therefore the rationale for Japanese strategy is to encourage volume which leads to market share and a deemphasis on profitability (Drucker, 1975). The Japanese exploit markets by using market share pricing strategy; low entry price to build up market share and establish a long-run dominant market position. Oligopolistic industries in the USA are (and always have been) particularly popular targets due to size of market, sluggishness of competitive response, market reaction time and pricing sensitivity. Japanese firms become the price quality leader and then squeeze competitors profit margins through low-cost pricing. They can and do accept losses in early years, as to the Japanese this is seen as an investment in long-run market development. This they can accomplish because Japanese industry is supported or owned by banks or other financial institutions with much lower capital costs.
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During 1964 to 1969 Japans phase of marketing acceptance and diffusion occurred. During this period, Japan had spreading affluence and mass consumption among its consumers, which further emphasized the need for and acceptance of marketing approaches. Japanese manufacturers began to cultivate international markets and diversify their domestic product lines. From 1970 to 1973, Japan saw market expansion and the extension of its marketing domain. Japanese marketing thought became concerned with social issues and responsibilities during this period of market expansion. The Japanese began to place emphasis on productivity and efficiency among their manufacturers and continued the effort to expand their markets by exports from these manufacturers. The period from 1974 to the present is the phase of global marketing. Japan began to focus its marketing strategies and strategic planning on international markets. As a result, Japan has become a global marketing success. This international focus has become one of the most important factors to shape Japans marketing mix and has prepared it to become a strong global force within the world markets.
gain experience in competing within international markets. Japanese firms look carefully at the targeted industrys evolution. These firms look for industries where market leaders are underfinanced or complacent and their served customers are dissatisfied. The Japanese analyse the industrys market segments and search for market segments that exhibit strong economies of scale and strong experience curve effects (Kotler and Fahey, 1982, p. 6). Their strategy is to enter this market segment with a lower priced product that has improved features, capture a market share and during this process lower their manufacturing costs.
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the professional market these two companies were serving, but simplified the product, lowered the price and rapidly took the growing amateur camera market (Doyle et al., 1991, p. 15). After the Japanese were successful in capturing this market, they rolled back into the professional market segment and then used their newly won scale and experience advantage to sweep aside their German competitor (Doyle et al., 1991, p. 15). The Japanese do not target industries that are strong and serving their existing market segment well. They will choose to market to product sectors where they feel that the existing industries are unable or unwilling to respond vigorously to their market entry. The Japanese also look for existing industries that will withdraw their entire market sectors if they enter. This is a strong competitive strategy they use to their advantage. The frequent withdrawal (and resulting effect) from the market segments was evident in a comparative study by Doyle et al. (1991) on the different international marketing strategies of US, Japanese and British companies. When attacked by Japanese competitors, the American and British companies frequently withdrew from the mass, volume market. The American companies defended their withdrawal from these markets by focusing on niche strategies. The Japanese used the volume markets they withdrew from to build experience, cashflow and distribution capabilities that were then utilized to penetrate the niches held by the American companies (Doyle et al., 1991, p.15). Japans attack strategy on niche markets has proved to be very successful. When they enter a niche market they upgrade their products from the low end to stretch their product to the upper end of the market while not abandoning the low end of the market (Kotler and Fahey, 1982, p. 8). While many American and British companies focused on small volume, higher margin segments they found that these were not sustainable for a long period of time against the Japanese competitors. The results of the comparison study between the different firms showed the Japanese strategy in this area was built on their previous market experience. Skilful competitors with substantial resources and scale economies built on mass market dominance, can move into the niches using their advantages to lower cost, accelerate the rate of product introductions and match the quality and features of the products of their smaller competitors (Kotler and Fahey, 1982, p. 8).
industry specialists) to help determine the appropriate market entry strategy. Within any market they enter, the Japanese frequently choose a local to help develop and oversee their marketing effort, rather than a Japanese director. After a market entry strategy has been determined, the Japanese focus on clear objectives and plans for that market segment. They are oriented towards long-term market objectives and strongly commit their efforts to success within that market. The Japanese focus remains on efforts, products and services that will suit that chosen market. The Japanese organizations are highly committed to success within those markets and this transcends into perceived security and confidence among their employees (Doyle et al., 1986, p. 24). They create highly flexible organizations, which provide a framework for innovation, teamwork and mutual problem solving (Doyle et al., 1986, p. 24). One common market entry strategy is to bring out a smaller version of an existing product. Xerox saw its share of the US copier market drop from 80 per cent in 1976 to 13 per cent by 1982 because of a smaller version of its copier offered by the Japanese (Dumaine, 1991, p. 162). American manufacturers traditionally tend to encourage larger products, because their profits are greater on larger-sized products. Japanese companies also enter market segments at the low price end and then move upwards into the higher value added segments as was discussed earlier (Doyle et al., 1991, p. 12). They offer new product features on existing products within the market segment and sometimes offer fewer product features at a substantial cost saving to the consumer to gain market share. Another market entry strategy is to sell their own product to a private brander and after it has achieved a market share, they will introduce their own brand of the same product. Often it will be a product that will have higher quality, more features and a better design. Frequently the Japanese will simply price the same product lower than the private brand. The Japanese place a high emphasis on quality and service. Their emphasis on and reputation for, high quality and reliable products became a marketing tool that they have used successfully in the international markets since 1980. When entering a new market, they can capitalize on this reputation and actually produce a higher quality product than is being produced for the market. Since the Japanese use more automated production methods and implement more quality assurance systems this is an extremely strong marketing strategy and tool (Kotler and Fahey, 1982, p. 7). Even though the Japanese produce a high quality product, they provide excellent service centres for their products to help ensure customer satisfaction. If a problem arises with their products, the Japanese locate service centres within the markets they enter so that their
Entering a market
When the Japanese decide to enter a market, they spend several months analysing the feasibility of that market. Their study teams evaluate the market and then determine an appropriate strategy for market entry. When entering an American market, the Japanese will hire American professionals (consultants, executives and
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products can be repaired quickly to ensure that their reputation for quality and exceptional customer service remains intact. The Japanese are masters of the marketing mix. After they develop an excellent product and establish service centres, they place a tremendous emphasis on integrating distribution into the marketing mix (Kotler and Fahey, 1982, p. 7). Their distribution system is designed with their markets, which have been developed region by region, having strong distributors located in each market segment. Along with strong distribution they back their products with strong advertising and promotions to help bring their products to the consumers attention and differentiate their products from those of their competitors.
Even though the Japanese are aware that product innovation is their key for long-term survival and profitability within their market segment, initially they use aggressive pricing strategies to help secure their market share. When their product is not clearly superior to the existing product in the market they buy time by the use of a lower pricing strategy to gain market share as they develop and begin to market a product that is superior to that of their competitors. The Japanese are known for their commitment to gaining, maintaining and expanding market share around the world through the use of product innovation strategies that challenge their resources and technology (Coe, 1990, p. 22). They invest heavily in research and development spending 3 per cent of their gross national product to create and develop products that are nondefence related (Dumaine, 1991, p. 57). Since 1983 Japan has gained shares in total patents issued in 38 out of 48 product categories (Dumaine, 1991, p. 57). The Japanese research into products is market driven. Japanese organizations must pay for 98 per cent of their research from their own revenues (Moffat, 1991, p. 88). The Japanese also have co-ordination from the MITI among Kiretsu members to help on the research and development of products for global markets. The MITI influence and industry alliance continues, as was discussed by Michiyuki Venohara in the Fortune article, Why Japan keeps on winning: R & D resources in the world are scarce: even big companies scream for these resources. If we dont collaborate, we cant advance. MITI is the third party needed to coordinate industry (Rapoport, 1991, p. 85).
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point of view. This zero feedback time allows the Japanese to determine customer satisfaction with their products and act on the improvements suggested by the feedback. The Japanese also use zero improvement time, which allows them to improve their products on a continuous basis, so their products will remain the leaders in the given market segment (Kotler et al., 1985, p. 425). Market research for Japanese product development frequently begins in their home market. Their experience within this market provides insight into customer preferences, product deficiencies and effective marketing strategies (Kotler and Fahey, 1982, p. 9). However, the Japanese export their highest quality products to other markets and keep many of their lower quality products for their own home market. The Japanese also export many of their lower quality products to developing nations. The Japanese are masters at using a product proliferation strategy. They continue to produce more and different versions of a product to appeal to all endusers at various income levels within their market segment. The Japanese saturate the market with their products and subsequently tie up distribution within those markets. The particular evolving market in which they are trying to increase market share serves as the focus for the development of their products. For the Japanese, market segmentation and market sequencing provide the impetus for and the direction for product development (Kotler and Fahey, 1982, p. 8). They spot their new market opportunities through the sequencing and segmentation across a large number of countries, which will allow them eventually to build a network of world markets and production locations (Kotler et al., 1985, p. 425). In addition to market segmentation and sequencing, the Japanese are flexible in choosing what competitive attack or weapon to use against their competitors. The evolution of the market helps to determine to what degree they will use price, product quality, product features, service, distribution, promotion, product line stretches to penetrate and gain larger shares of the market (Kotler and Fahey, 1982, p. 9). Adversarial trade is one strong competitive weapon the Japanese use against their competitors within a market segment. Drucker (1989) explains the concept of adversarial trade:
the aim is to gain market control by destroying the enemy or to obtain such predominance in a market that it is almost impossible for newcomers to challenge the market leader (p. 26)
and industries which the Japanese have pursued aggressively. Their position as a defender within a market is basically to act offensively. The Japanese continually refine their market segmentations to take advantage of any weakness their competitor might display within the market. They create an excellent defence by continuing their product development and innovation and further refining their market segmentation.
Japans future
What will Japans future hold in the highly competitive world market? As the emerging world market continues to become more competitive, Japan will see many factors that will influence its position and stability within its markets. Japan has witnessed an economic slowdown and a collapse of its bubble economy, and a stock market collapse during late 1991. However even with its economic troubles, Japan is expected to emerge even stronger after this recession. As a result of this recession, Japan will have vanquished its growing inflation rate, doused a speculative fever in its financial markets, improved the quality of its workers lives and will see its real estate prices brought closer to a level that Japanese people can afford (Curran, 1992a, p. 46). This will be accomplished with Japan still having an unemployment rate under 3 per cent and its number of job offers still outnumber the number of job seekers by 25 per cent (Curran, 1992, p. 49). Japan has seen the Third World countries become tough and aggressive competitors. These countries are copying Japans approach to invading new markets and are now offering high quality products at a lower cost than the Japanese (Kotler and Fahey, 1982, p. 11). The protectionist trend in the USA and Europe that will protect local industries by import quotas and non-tariff barriers, has Japan implementing more expansion moves within those countries. In 1991, Japans building or buying of plants in the USA was up by 9 per cent from 1990. It has a total of 1,563 plants in the USA which employ approximately 350,000 people (Solo, 1992, p. 16). Japans swift response of building factories in the USA and Europe will allow it to keep goods within those markets and provide employment to some workers who have been displaced by Japanese imports (Kotler and Fahey, 1982, p. 11 ). If the protectionist trend continued and if Japan had not responded with factories being built within those market segments, their companies could have been shut out of certain markets. Japan also must contend with the growing pressure from the USA to conform to the Structural Impediments Initiative. This is a three-year effort to allow an easing of Japans barriers for importers. With the imbalance of trade, it was hoped
The Japanese intend to drive the competitor out of the market segment or industry they are pursuing by destroying their capacity to fight (Drucker, 1989, p. 25). This has occurred many times in the market segments
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the economic and trade practices that led to such large trade imbalances would be altered. At this point, only limited progress has been made with this agreement and the Japanese face growing dissatisfaction among the USA and other countries while a trade surplus in their favour continues to escalate. Within Japan, different radical groups are challenging the economic and social arrangements in Japan. Japanese leaders are now discussing and planning how to contain the growing conflict that is occurring between different interest groups. This may present a significant problem in Japans future. Even with the collapse of its bubble economy and other economic problems, competition from Third World countries and internal conflict from different interest groups, Japan will continue to become stronger but at a slower rate. Japans future and economy is changing, but it will continue to grow stronger as a result of its world-class marketing and export status, combined with its high savings rate and its ablity to adapt and respond quickly to the changing world marketplace.
choose and sequence the markets they decide to enter, the products they decide to produce and the marketing tactics they decide to adopt for that market segment. The Japanese constant acceptance, understanding and application of marketing principles to the specific market they decide to enter, has resulted in an extremely successful and powerful global leadership position. In Japan, responsibility for marketing is in the hand of a broader less sophisticated and less technically trained group. It is a group responsibility with a group approach for the performance of marketing activities. Japanese companies place less reliance on the formal and conceptual aspects of formulating marketing goals and strategies and more emphasis on the implementation and human relations aspect than do American companies. Japanese marketing activities are still goal-oriented, directed and co-ordinated and able to move swiftly towards their understood objectives. The Japanese strengths lie in implementing not formulating marketing strategies. They are typically strong in accumulating knowledge about US markets, marketing discipline and marketing practices.
References and further reading Abegglen, J.C. and Stalk, G. (1985), Kaisha, the Japanese Corporation, McGraw-Hill, New York, NY. Aldridge, D.N. (1990), Marketing strategy: the Japanese approach, Marketing and Research Today, Vol. 18 No. 4, pp. 239-44. Cateora, P. (1990), International Marketing, 7th edition, Irwin, Boston, MA. Coe, B.J. (1990), Strategy in retreat: pricing drops out, Journal of Business and Industrial Marketing, Vol. 5 No. 1, pp. 5-25. Curran, J. (1992a), Why Japan will emerge stronger, Fortune, May, pp. 46-56. Curran, J. (1992b), How to win a quality war with Japan, Fortune, July, p. 162. Doyle, P., Saunders, J. and Wright, L. (1988), A comparative study of British, US and Japanese marketing strategies in the British market, International Journal of Research in Marketing, Vol. 5 No. 3, pp. 171-84. Doyle, P., Wong, V. and Saunders, J. (1986), Japanese marketing strategies in the UK, Journal of International Business Studies, Vol. 17 No. 1, pp. 27-46. Doyle, P., Wong, V. and Saunders, J. (1991), A comparative study of the international marketing strategies of US, Japanese and British companies, paper presented at the 1991 Colloquium on Selected Issues in International Business, PAMI, Hawaii. Drucker, P.F. (1975), Economic realities and enterprise strategies, in Vogel, E. (Ed.), Modern Japanese Organizations and Decision Making, University of California Press, Berkeley, CA. Drucker, P.F. (1989), The New Realities, Heinemann, Oxford.
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Dumaine, B. (1991), Closing the innovation gap, Fortune, December, pp. 56-62. Kelley, B. (1971), Culture clash: West meets East, Sales and Marketing Management, July, pp. 28-34. Kirkland, R. (1992), What if Japan triumphs?, Fortune, May, pp. 60-7. Kogut, B. and Singh, H. (1988), The effect of national culture on the choice of entry mode, Journal of International Business Studies, Vol. 19, Fall, pp. 411-32. Kotabe, M. and Maseki, G. (1989), Sourcing strategies of European and Japanese multinationals: a comparison, Journal of International Business Studies, Vol. 120, Spring, pp. 113-30. Kotabe, M. and Okoroafo, S.C. (1990), A comparative study of European and Japanese multinational firms marketing strategies and performance in the United States, Management International Review, Vol. 30 No. 4, pp. 353-70. Kotler, P. and Fahey, L. (1982), The worlds champion marketers: the Japanese, Journal of Business Strategy, Vol. 2, Summer, pp. 3-13. Kotler, P., Fahey, L. and Jatusriptak, S. (1985), The New Competition, Prentice-Hall, Englewood Cliffs, NJ. Lazer, W., Murata, S. and Kosaka, H. (1985), Japanese marketing: towards a better understanding, Journal of Marketing, Vol. 49, Spring, pp. 68-81. Methe, D.T. (1991), Technological Competition in Global Industries, Quorum, New York, NY.
Moffat, S. (1991), Picking Japans research brains, Fortune, March, pp. 84-96. Morgan, J.C. and Morgan, J.J. (1991), Cracking the Japanese Market, The Free Press, New York, NY. Rapoport, C. (1991), Why Japan keeps on winning, Fortune, July, pp. 76-85. Rosenberger, J. (1992), Japans surplus in trade grew by 24 per cent in June, The Wall Street Journal, 14 July, p. A13. Sims, J.T. (1986), Japanese market entry strategy at work: Komatsu versus Caterpillar, International Marketing Review, Vol. 3, Autumn, pp. 21-32. Solo, S. (1992), Japans US plants up 9 per cent in 1991, Fortune, April, pp. 16-20. Wong, V., Saunders, J. and Doyle, P. (1987), Japanese marketing strategies in the United Kingdom, Long Range Planning, Vol. 20 No. 6, pp. 54-63. Woronoff, J. (1984), Japans Commercial Empire, Lotus Press, Tokyo. Worthy, F. (1991), Japans smart secret weapon, Fortune, August, pp. 72-5. Wright, L., Doyle, P. and Saunders, J. (1990), Japanese markeing strategies in their UK subsidiaries, Marketing Intelligence & Planning, Vol. 8 No. 1, pp. 11-20. Yunker, G. (1990), Issues in the Management of Human Behavior: Analyses, Explorations, and Insights, JAI, Connecticut, CT.
Alain Genestre and Paul Herbig are Assistant Professors in the Department of Management and Marketing, Graduate School of International Trade and Business Administration, Texas A&M International University, Laredo, Texas; and Alan T. Shao is Assistant Professor in the Department of Marketing, Belk College of Business Administration, University of North Carolina at Charlotte, Charlotte, North Carolina, USA.