酸素 Chuck O’Drobinak Qualitative Director Research International Japan Fusion Event 30 November, 2006 東京物語 Tokyo Tales

Today’s Presentation A global economic force… … But constantly changing at an ever faster pace… … How does the Japanese marketer stay up to date?

A global economic force…

… But constantly changing at an ever faster pace…

… How does the Japanese marketer stay up to date?

Japan, a global economic force A few facts $30,500 $5,600 $40,100 $29,400 GDP/Capita 16.5 1,306.3 295.7 127.4 mln Population 41,000 9,597,000 9,631,000 378,000 km 2 Size Nederland China USA Japan

Cultur al Influence on the World From anime to karaoke…

From anime to karaoke…

… to gaming and filmmaking … Cultur al Influence on the World

… to gaming and filmmaking …

… to fashion and trends … Cultur al Influence on the World

… to fashion and trends …

… and to exporting food around the world and beyond! Cultur al Influence on the World

Changes in Japan…three generations

Inheritance…what inheritance?

The silver babyboomers This generation has postponed self-enjoyment their whole life. But now they are ready to enjoy! They are ready to spend their hard-earned savings on themselves, rather than on their children. So what they seek are high quality, well-serviced, targeted luxury products to pamper themselves and make life more convenient. These couples are looking for new hobbies, new activities, new role models to give the remainder of their life meaning. It is also a time for couples to rediscover each other, with a renewed focus on “silver relationships” or new substitutes for that relationshp.

This generation has postponed self-enjoyment their whole life. But now they are ready to enjoy!

They are ready to spend their hard-earned savings on themselves, rather than on their children.

So what they seek are high quality, well-serviced, targeted luxury products to pamper themselves and make life more convenient.

These couples are looking for new hobbies, new activities, new role models to give the remainder of their life meaning.

It is also a time for couples to rediscover each other, with a renewed focus on “silver relationships” or new substitutes for that relationshp.

The End of the ‘Salaryman’

The Sons and Daughters of the Babyboomers Young people live longer with their parents Because of this they are richer than their counterparts in other countries They take day trips Not having to pay for a house or car, they spend on premium brands that are in tune with their values Many of the young do not want to compete in the corporate rat race Freeters, Neeters – Those who work reject the life of a “salaryman” and work only to support their interests in music, enjoying life with friends, or don’t even work at all Mobility between jobs – no more “ 我慢” (gaman) Young women split between those who aspire to be independent, single, professional and successful, and those who can’t wait to get married and stop working

Young people live longer with their parents

Because of this they are richer than their counterparts in other countries

They take day trips

Not having to pay for a house or car, they spend on premium brands that are in tune with their values

Many of the young do not want to compete in the corporate rat race

Freeters, Neeters – Those who work reject the life of a “salaryman” and work only to support their interests in music, enjoying life with friends, or don’t even work at all

Mobility between jobs – no more “ 我慢” (gaman)

Young women split between those who aspire to be independent, single, professional and successful, and those who can’t wait to get married and stop working

Trendsetting Youth Harajuka girls, damn they got some wicked style (Gwen Stefany)

The Post-Dankai Juniors Many worldwide trends have their roots among the young (post-Dankai juniors) in Japan These Post-Dankai juniors look for interaction, premium individuality and personification. For these consumers, the keitai is a primary means of personal expression and a protective barrier between themselves and the world Today they are moving away from individualism in fashion to more general fashion opening up bigger opportunities for brands such as Gap and Banana Republic.

Many worldwide trends have their roots among the young (post-Dankai juniors) in Japan

These Post-Dankai juniors look for interaction, premium individuality and personification. For these consumers, the keitai is a primary means of personal expression and a protective barrier between themselves and the world

Today they are moving away from individualism in fashion to more general fashion opening up bigger opportunities for brands such as Gap and Banana Republic.

And what does the Japanese marketer do to jump on those trends?

Brain Trainer Sold 400K units in the last week of 2005 The number 1 ‘videogame’ since its release That same week, Nintendo DS with its Brain Age software sold nearly 400K units More than 80% of all users are over 40 years old Reasons for Success Brain training boom in Japan No stigma on child activities Good price Win the mother’s heart and win the child’s wallet

Sold 400K units in the last week of 2005

The number 1 ‘videogame’ since its release

That same week, Nintendo DS with its Brain Age software sold nearly 400K units

More than 80% of all users are over 40 years old

Reasons for Success

Brain training boom in Japan

No stigma on child activities

Good price

Win the mother’s heart and win the child’s wallet

Yumel YUMEL … A “healing” toy that tracks your sleep rhythm and proactively interacts with you with more than 1,200 soothing phrases. Price: 8,500 One of the most popular toys on the market and targeted towards older woman 90% of buyers/users are women mostly over 50 “ If you lead an orderly life, Yumel will be in a good mood, singing songs or pleading with you to do something like buying him toys.”

YUMEL … A “healing” toy that tracks your sleep rhythm and proactively interacts with you with more than 1,200 soothing phrases. Price: 8,500

One of the most popular toys on the market and targeted towards older woman

90% of buyers/users are women mostly over 50

Raku raku

Toto

Women only

Back to Black Companies such as Kao and Shiseido picked up on the emerging rediscovery among the young of their Asian and Japanese identities and launched new “Asian” brands of shampoo such as Asience and Tsubaki to compete head-to-head with the “Western beauty” of Lux

Back to Black

Online Shopping An online clothing shop in Tokyo sold more than 10MM ($100,000 USD) in one night, half through mobile online Girlswalker.com, increased revenue last year by 60% to $35MM and expects a further increase to $45MM this year

An online clothing shop in Tokyo sold more than 10MM ($100,000 USD) in one night, half through mobile online

Girlswalker.com, increased revenue last year by 60% to $35MM and expects a further increase to $45MM this year

Paying for Oxygen There is strong growth in health products with young workers spending 120 to 200 euros on such products per month Luxury spas and expensive massage clinics are now a business of 780MM euros, 11 times the size it was 4 years ago In line with this trend, there has been a fast increase in oxygen bars. For 5 euros you get a 10 minute boost of 95% oxygen in a bar in Ginza In shops you can buy cans with 35 shots of 2 second concentrated oxygen Also, shops sell water with 5 times as much oxygen as tap water

There is strong growth in health products with young workers spending 120 to 200 euros on such products per month

Luxury spas and expensive massage clinics are now a business of 780MM euros, 11 times the size it was 4 years ago

In line with this trend, there has been a fast increase in oxygen bars. For 5 euros you get a 10 minute boost of 95% oxygen in a bar in Ginza

In shops you can buy cans with 35 shots of 2 second concentrated oxygen

Also, shops sell water with 5 times as much oxygen as tap water

Reinventing a category Meiji Seika is turning the chocolate industry on its head, from its flagship antenna store between Ginza and Tokyo station where 56 types of chocolates are offered differentiated by area of origin of the cacao, level of milk content and flavors. Capitalizing on the polyphenol content of dark chocolate, they have also introduced a range of “cacao” products in convenience stores that are striking a chord with health conscious consumers.

Some hits of 2006 Nintendo DS Tsubaki Mixi – SNS Kagome’s Lovely The Da Vinci Code – The book not the movie Sharp WZERO3 Keitai Kirei no Misto Cacao Chocolate Series

What’s in store for 2007? Doctor’s restaurants Anti-fatigue Tokuho Yogurt differentiated by blood type New “mixi” type games for Nintendo’s Wii Digital high vision video camera Cross casual men’s clothing Mobile entameherusu

W hat does this mean for the Dutch marketer? 4 5 3 2 1

Get (much) closer to your consumer Understand (socio) demographic trends and what trends are developing in highly developed and competitive markets such as Japan and the US Dig deeper for the real reasons for purchase –don’t be content with rationalizations for purchase Be creative in observing consumers (consumer safaris, home visits, trend scouts, networks, on-line ethnology, etcetera) Create your own user panel

Understand (socio) demographic trends and what trends are developing in highly developed and competitive markets such as Japan and the US

Dig deeper for the real reasons for purchase –don’t be content with rationalizations for purchase

Be creative in observing consumers (consumer safaris, home visits, trend scouts, networks, on-line ethnology, etcetera)

Create your own user panel

Observations An older woman cooks dry dog food in a broth made with a chicken breast. She then uses the chicken breast to top the meal From trends to human insights Older women keep a dog as a substitute for the husband who is never home and for the kids who have moved out of the home. Her love for them is now projected on to the dog. Translated into category insights I want to make my dog happy. I want to put time and effort into preparing a tasty meal for my dog. It should not be too easy. Finally translated into new product ideas Different tasting topping that come with bags of dry dog food. It requires a little more effort, but it gives the satisfied feeling of doing something extra and doing it yourself. From observations, trends, insights to innovation – An example

Observations

An older woman cooks dry dog food in a broth made with a chicken breast. She then uses the chicken breast to top the meal

From trends to human insights

Older women keep a dog as a substitute for the husband who is never home and for the kids who have moved out of the home. Her love for them is now projected on to the dog.

Translated into category insights

I want to make my dog happy. I want to put time and effort into preparing a tasty meal for my dog. It should not be too easy.

Finally translated into new product ideas

Different tasting topping that come with bags of dry dog food. It requires a little more effort, but it gives the satisfied feeling of doing something extra and doing it yourself.

Involve the consumer in concept development Co-creation, networking, build an innovation panel Involve your target consumer in ideation ….. Think of innovation distribution and marketing

Co-creation, networking, build an innovation panel

Involve your target consumer in ideation …..

Think of innovation distribution and marketing

Build your brand creatively Japanese youth spend less time in front of the television (and HDD allows consumers to skip advertising) Much time is spent… Staring at mobile screens Chatting, dating, blogging and gaming on the internet Playing on- and offline mobile games Reading manga Shopping at convenience stores and drugstores Traveling on public transport So be creative building your brand. A 30-second ad can be less effective in reaching the hearts of your consumers

Japanese youth spend less time in front of the television (and HDD allows consumers to skip advertising)

Much time is spent…

Staring at mobile screens

Chatting, dating, blogging and gaming on the internet

Playing on- and offline mobile games

Reading manga

Shopping at convenience stores and drugstores

Traveling on public transport

So be creative building your brand. A 30-second ad can be less effective in reaching the hearts of your consumers

Be prepared for shorter product cycles Faddish nature of consumers Early adopter mentality Short life span of products Japanese build innovation gateways with stringent gates Concept databases Idea databases Volume forecasting

Faddish nature of consumers

Early adopter mentality

Short life span of products

Japanese build innovation gateways with stringent gates

Concept databases

Idea databases

Volume forecasting

In summary Build brands creatively 4 Be prepared for shorter lifecycles … innovate 5 Translate insights into high quality products 3 Link observations to trends 2 Come see for yourself 1