The Role Of Strategic Marketing Management In A Japanese ...
The Role Of Strategic Marketing Management In A Japanese Community-Driven
Development Program, Michi-No-Eki (Road Station)
Tadayuki Miyamoto, Richard Grainger, Curtin University of Technology, WA
Kunihiko Iwasaki, University of Shizuoka, Japan
This paper describes a unique Japanese community-driven development program, Michi-no-
Eki, (in English, Road Station), a program which takes advantage of the main roads system to
distribute various public services and promote community-driven development. The growing
importance of strategic marketing management in successful operation of the Michi-no-Eki is
discussed before an analytic framework is proposed for the study and practice of strategic
marketing management of the Michi-no-Eki.
Keywords: Japanese community-driven development, marketing, value innovation
Japan is a nation with the economic superpower status. Although retaining an international
reputation since the 1980s, Japan has gone through drastic socio-cultural, economic and
political transformation over the two decades. In particular, changes during the 1990s are
noteworthy as a catalyst for the country’s current self-renewal efforts. In the Western
management and marketing literature, the decade is variously described as post-
industrialisation fueled by progressive ‘servitisation’ of businesses (Vandermerwe and Rada
1998), an era of postmodern consumerism driven by nostalgia to archaic tribal sociality (Cova
2002), or a period of ever-diversifying customer needs and wants (Normann 1991). In
addition to these market phenomena of mature economies, Japan has also faced growing
socio-cultural, economic and political pressures from an aging population (prolonging life
expectancy and declining child birth rate) and ever growing gulf between vibrant urban and
listless rural communities (Ministry of Health, Labour, and Welfare 2002). Against this
background the Japanese government was forced to give in to a decade-long call for a
paradigm shift in the policy making and state administration system through decentralisation
of power to local governments and civil society (see Barrett, 2000). The Michi-no-Eki is a
community-driven development program which emerged as a manifestation of this paradigm
Michi-no-Eki (Road Station)
Literally translated, Michi-no-Eki (MnE), denotes a dedicated ‘space’ along a community’s
main road which is equipped with various service facilities for its visitors. Its conceptual
origin came out as a policy recommendation at a rural community development symposium in
regional Japan – i.e., to build stations (like train stations on railroad track) along main roads
which can be used as hubs for community networks? (Road Management Technology Centre,
Following a social experiment in three local prefectures, the concept was officially adopted as
part of a nationwide road safety program in 1993, but more recently has gained wide public
recognition and support as a community-driven development enabler as well as a tourist
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destination (Road Bureau, MLIT, n.d.a,). Recognition of the MnE potential is not confined to
Japan. For example, following MnE pilot-studies in Kenya and China, the World Bank has
recently developed Guidelines for Road Stations “Michinoeki” to promote sustainable social,
economic and environmental development movement in less developed nations (World Bank
The Michi-no-Eki Development Model and Three Core Functions
Figure 1 depicts a Japanese MnE development model as well as three core functions. The
model defines the following three stakeholders as founding blocs of the MnE development,
namely a MnE managing organisation (i.e., a municipality or other approved organisation1); a
road administrator (i.e., central or prefecture government); and various central and/or
prefecture government agencies. It is the partnership (between the state and civil society) that
has made the MnE project a highly successful community-driven development program.
A community’s enthusiastic interest and involvement in their own development alone is often
not sufficient for a successful outcome. This especially applies to start-up programs which
are generally in need of capacity building. In a MnE project, financial support (i.e., funding
and loan) from a road administrator (either at a state- or prefecture-level), as well as support
from other government agencies is indispensable for the community’s capacity building.
While the former financially supports construction of MnE facilities relating to road safety,
the latter aids construction of unique interface facilities between the local community and
visitors for their cultural, social, and/or economic exchanges at a MnE.
‘Michi-n o- Eki’
Road Administrator Central and Prefecture
central or prefecture Government Agencies
Figure 1: Michi-no-Eki Development Model
For successful registration and annual renewal, a typical Japanese MnE must comply with a
set of requirements in the Road Bureau’s Guidelines (The RMTC 1993). According to those
guidelines, a MnE must perform the following three core functions:1) provide a safe,
comfortable and convenient resting space and facilities for visitors; 2) offer traffic, emergency
medical and tourist information as well as information on neighboring communities and
MnEs; and 3) provide an interface between visitors and the community for their cultural,
social, and/or economic exchanges. These conceptual requirements are then operationalised
into a service infrastructure which includes at least 20 free parking bays, a minimum of 10
accessible clean toilets which are accessible on a 24 hour basis, public telephones, (ideally
staffed) information centre, and a services infrastructure which facilitates unique cultural,
The Road Bureau’s guideline qualifies the following three organisations as a possible alternative Michi-no-Eki
managing organisation to a municipality: a prefecture government, a legally qualified social enterprise, and a
social enterprise recommended by a municipality.
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social, and/or economic exchange between the visitor and the community. These MnE
service infrastructure and facilities need to be built based on a barrier-free space design for
children, women, the aged and the disabled (The Road Bureau, n.d.b). Apart from these
regulatory requirements, each local community is encouraged to design and develop its
idiosyncratic, attractive space and service facilities in harmony with a given topography as
well as its service offerings. Their features are widely made public through MnE websites of
the RMTC and the Road Bureau.
Proliferation of a Michi-no-Eki model: Catalyst for Market Competition
After the 22nd registration round in August this year, the MnE list now includes 830 stations
across Japan, a more than eight-fold increase from 103 in 1993 (The RMTC, n.d.). This
increase in MnE over years has also accompanied proliferation of MnE development and
business models. Generally speaking, for any form of partnership to come into existence,
there must be mutual gains between the involved parties. Under some circumstances,
however, this ‘golden’ rule has proved to be a bottle-neck to a community’s MnE
development pursuit. From the perspective of a road administrator (in a state or a local
government level) who manages a main ‘road system’, there are at least two situations where
financial support is not forthcoming: 1) when a proposed MnE site is in close proximity to an
established station, and 2) when a proposed site resides outside the system domain. In either
case, if it wishes to proceed, a community is left with no alternative but to pursue its MnE
project without a road administrator’s financial support. Against this background, determined
local communities have found another avenue to overcome funding shortages for capacity
building. This is, the creation of ‘the third sector’ through joint ventures between
municipality and social enterprises while ensuring partnership with other external funding
sources (i.e., central and/or prefecture government agencies). This new type of MnE differs
from the conventional ones for the increased autonomy in the development and management
due to the absence of a road administrator, and the consequently greater pressure on
profitability (i.e., commercial orientation) due to their greater internal funding for
Apparently, the emergence of these commercially oriented MnE managing organisations has
added a new dimension to the MnE paradigm – i.e., market competition. According to the
MnE Study Group Report (the MLIT 2001), proliferation of MnE business models has led to
the emergence of the following three types of MnE: 1) those with a strong focus in providing
rest and recuperation for travelers; 2) those in the information service function; and 3) those
in the (cultural, social, and/or economic) exchange function as a commercial tourism
opportunity. Although the MnE Study Group Report does not present a statistical breakdown
on the grouping structure, the continuous increase in MnE, in light of the aforementioned
fiscal discipline applied by the road administrators, suggests that the third group is on the rise.
This has created and been intensifying market competition for visitor traffic and spending
among MnEs within and between regions.
For the MnE managing organisations in the commercially oriented category, our logic
suggests there are three potential avenues to the future: dominate the region for visitor traffic
and spending (rise); coexist through collaboration with the neighbouring MnEs to compete
collectively with MnEs in the neighbouring regions (sustain), and demote to the second or
even the first type (fall). Given the inherent pressure on commercial viability associated with
their greater initial capital investment, only the first path can be viewed as a realistic strategic
choice, at least in the short- and mid-term. As for this growth strategy, the MnE Study Group
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(MLIT 2001) underscores the need for strategic marketing management of the MnE. The
report reveals a lack of innovation in the visitor-community exchange function and poor
management of market intelligence (i.e., generation, dissemination and application of market
intelligence) at many MnEs. As a result, they have become more or less homogenous in their
offerings despite their idiosyncratic community capital mix, with their focal domain of
visitor-community exchange failing to go beyond sales of fresh and/or processed local
agricultural produce, and/or catering services of authentic local foods. One of a few
exceptions is MnE Kunma Suisha-no-Sato, which is actively staging ‘a memorable
experience’ (Pine and Gilmore, 1999) based on its rich community capital (most notably
human, social and environmental),. They have been successfully attracting over-night trans-
community visitors from major cities who long for nostalgic, experience-based tourism
attractions (Shizuoka Chamber of Commerce, 2005).
An Analytic Business Model for Strategic Marketing Management for a Michi-no-Eki
This section discusses a proposed analytical business model framework as a basis for strategic
marketing management of those commercial oriented MnEs, which are expected to grow in
number. The model is developed based on our analysis of available descriptive information
on MnE cases in light of prescriptive literature across disciplines, namely strategic
management, marketing, and community development. Figure 2 depicts the model.
MnE Managing Community
Figure 2: n AnalyticMichi-no-Eki BusinessModel
The above model defines market intelligence, innovation and (visitor) customer value as
primary drivers of MnE strategic marketing management. Its underpinning tenet is Drucker’s
thesis which was put forward more than half a century ago. That is, ‘Because it is [the
business] purpose to create a customer, any business enterprise has two – and only these two
– basic functions: marketing and innovation’ (Drucker 1954, p. 38). Reading the thesis in
light of contemporary strategic management and marketing literature and the context of the
MnE managing organisation, we posit the following thesis:
To ensure sustainable market success, a MnE managing organisation needs to offer superior
customer value through ‘value innovation’ (Kim and Mauborgne, 1999) whereby, based on
effective management (i.e., generation, dissemination and application) of market intelligence
(or ‘market orientation’ as per Kohli and Jaworski (1990)), unique community capital and
resources are innovatively applied for the creation of superior values (Deshpandé, Farley &
Webster, 1993; Christensen, 2000).
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The model identifies three interdependent stakeholders instrumental to operations of the MnE
venture: 1) a MnE managing organisation as the facilitator of (cultural, social, and/or
economic) exchange through the effective management of market intelligence; 2) community
entrepreneurs as an idea source of successful value innovation; and 3) MnE visitors (trans-
community and intra-community). The posited interdependence among them, in particular
between the first two and the last, is evident given the visitor’s role as co-creator of customer
value (e.g., Christopher, Payne & Ballantyne, 1991, Prahalad and Ramaswamy, 2004). Not
only are they the critical source of inputs to community entrepreneurs’ innovation, they also
play a significant role as a participant in the production and delivery system of services at the
Furthermore, in relation to the stakeholders, the model proposes three organisational variables
which collectively determine idiosyncratic strategic marketing challenges and opportunities at
each MnE, namely commercial orientation, a community involvement, and a target visitor
mix. For instance, a varying degree of commercial orientation across MnE managing
organisations defines a different level of emphasis on each of the three domains of exchange
(i.e., cultural, social, and/or economic) at the MnE. The variability of commercial orientation
manifests itself more explicitly as space and resource allocation for each domain of exchange
in the MnE service infrastructure, facilities and system. Similarly, a varying extent of the
targeted trans- and intra-community visitor mix and the extent of community member
involvement with the MnE program as a community entrepreneur determines the quality of
experience, services and products offered to visitors.
Among others, MnE Galleria Kameoka in Kyoto and the aforementioned MnE Kunma
Suisha-no-Sato in Shizuoka illustrate these features. The former, which a local social
enterprise in education business manages in partnership with the municipality, defines intra-
community visitors as its target market and strives to function as a centre for education-
related services and information (including a fee-paid day care centre service and culture
classes) for the community (The Road Bureau, n.d.c ). The latter, which is managed by a
local community cooperative with the backing of the local municipality, caters for the
distinctive needs of both intra-community and trans-community visitors through an
interpersonal visitor-community interface system; it promotes economic and cultural
exchange between the community and trans-community visitors through continuous product
and process innovations, and delivers public services to the community members (e.g.,
community support for the aged). This MnE is noteworthy for its inclusive, community-wide
engagement. In this venture, every household in the community is a member of the
cooperative and, thus, all the community members are expected to think and act as a
community entrepreneur. This makes a significant contrast to many other MnE ventures
where the staff of the managing organisation all too often dominate the community’s pursuit
of innovation, generation of marketing intelligence, and community-visitor interactions.
This paper has presented a unique Japanese community-driven development program, Michi-
no-Eki, and discussed the critical role of strategic marketing management in its successful
planning and operation. The paper has also proposed an analytic framework for the study of
strategic marketing management of the MnE. Although the model itself needs to be validated
empirically through rigorous field research, we believe it will provide a useful framework for
the study and practice of strategic marketing management of the MnE.
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