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Japanese Way of
Marketing No.2:
Development of Japanese
Marketing after the
Second World War
Kazuo Usui
Doctor of Commerce
Dean, Professor of Marketing
Faculty of Economics, Saitama University, Japan
Represents the route
of main influences
Figure Int.1 The concept of consumption patterns
Note: The consumption pattern is composed of the mode of consumption and consumption choices. The marketing system mediates between the mode of
consumption and the consumption choice, by taking and utilising some elements from the mode of consumption and shaping attractive marketing
strategy.
The domain of availability
of offerings,
the places for purchase,
and the ways of use
and disposal
The relationships of consumers
with others
during the act of consumption and
with consumption itself
Consumption choices
Represents the
route of reactive
influences
Agenda
III.After the SecondWorldWar
5. ‘Super’ (not supermarkets)
6. Convenience stores
Represents the route
of main influences
Figure Int.1 The concept of consumption patterns
Note: The consumption pattern is composed of the mode of consumption and consumption choices. The marketing system mediates between the mode of
consumption and the consumption choice, by taking and utilising some elements from the mode of consumption and shaping attractive marketing
strategy.
Consumption
patterns
Marketing system
The domain of availability
of offerings,
the places for purchase,
and the ways of use
and disposal
The mode of consumption
The relationships of consumers
with others
during the act of consumption and
with consumption itself
Offerings
The places
for purchase
The ways
of use
The ways
of disposal
Consumption choices
Represents the
route of reactive
influences
5. “Super”
High Economic Growth Period
The picture shows a migrant group composed of new graduates, who have appointments
for new jobs in the Tokyo area, just leaving their hometown, Fukushima.
A Migrant Group just Leaving a Rural Station of
Fukushima (1st April 1956)
After the defeat at
World War II,
a new Westernized
lifestyle rapidly
spreading during
the 1960s
Large-sized housing complexes (danchi)
constructed to solve a shortage of housing:
Hibari-ga-oka Danchi 1959
A young couple eating Japanese food while sitting
on chairs by a Western-styled table of higher
height, and not kneeling on tatami-mats as before.
They wore Western-styled clothing as well.
The Crown Prince and
Princess visited danchi 1960
The So-called “Dining Kitchen”
1956
Start of Self-service in Japan
A fruit shop started in 1910
Kinokuniya began to sell vegetables/fruits to the PXs (Post
Exchanges), the stores inside the bases of the American occupational
army around 1947, and
Observed the self-service food store, named Commissary, there.
NCR Japan began to support the introduction of self-service stores in
order to sell their cash registers to retailers.
NCR Japan decided to choose Kinokuniya as a possible model case and
proposed the idea to Kinokuniya’s owner in 1953.
NCR Japan
Kinokuniya
Preparing many new factors untried by traditional Japanese retailers, such as gondolas to
display goods, price tags, shopping bags made of craft paper, shopping carts, and sales
floors made of terrazzo that could cope with the weight of shopping carts, Kinokuniya
opened the first self-service store with 132m2 sales floor space in November 1953.
Piggly Wiggly Store:
The First Self-service Store
In 1916, Clarence Sanders
founded Piggly Wiggly Store in
Memphis, Tennessee.
Piggly Wiggly was a complete
self-service operation in which
consumers used large
handbaskets to carry the items
they selected from the shelves
to the checkout counter, paid
for them in cash, and then took
the groceries home themselves.
Piggly Wiggly was successful.
The company was operating
2,660 stores and posting sales
more than $180 million a year.
However, Saunders lost control
in a famous Wall Street crash in
1929, and his company was
soon carved up and sold off.
Start of the self-service retailing in the USA 1920s
Michel J. Cullen and Supermarkets
In 1930, Michel Cullen, an employee of the second largest chain grocery-
operator, Kroger, wrote a letter to the President to propose the creation of
a new kind of food store and ask in interview to explain his view further.
The letter is now called “The Bible of Supermarket.”
Cullen did not even get a hearing from the president.
Cullen resigned forthwith and, with the backing of a vice-president of the
Sweet Life Foods Corporation, opened the first unit of the King Kullen
Grocery Company in August 1930, at 17th Street and Jamaica Avenue in
Queens, New York.
KING KULLEN
World Greatest
Price Wrecker
Start of supermarket in the USA 1930s
2 stores in 1954
The number of self-service
stores increased 40 in 1955 to
139 in 1956, 283 in 1957, 562
in 1958, 1,036 in 1959, and
1,442 in 1960, according to
the Supermarket Association
of Japan
1,442 stores in 1960Spread of self-service stores
The Central
Canteen at Yahata
Steel Factory 1956
Hatoya (later Nichii, then
Michael, Aeon) began to sell
clothing by self-service
Store of the Consumer
Cooperative Society, Kikuna,
Yokohama 1954
M. M. Zimmerman, a leading
professor of supermarket in the USA,
visited Kinokuniya in 1960
Start of Daiei
In September 1957, Isao Nakauchi (1922 – 2005) opened a drug store with 53m2
sales floor, named “Daiei, the Store for Housewives” was opend in Senbayashi, Kobe,
Non self-service method
In April 1959, “Daiei San’nomiya Store” opened a food store with 396 m2 sales floor
First introduction of the self-service method
Isao Nakauchi, Discount is My
Philosophy, Tokyo: Nikkei Newspaper
Publishing, 1969.
“Moneymaking is possible only by
respecting consumers”
Introduction of the concept of SSDDS: Toward the Japanese “Super”
In 1962, Uichi Kitazato introduced “SSDDS” in the magazine Economist (a
Japanese journal).
Uichi Kitazato was a pen name of Hajime Sato.
A famous business commentator, part-time lecturer of Tokyo University, the Head of
Research Institute on the Distribution Industry established by Seibu Group
“If we could recognise supermarkets, which were born in the 1930s and
merged into the American way of life as far as eating habits are concerned, as
the flag-bearer of the first commercial revolution, it is the SSDDS that should
be the real champion of the second commercial revolution (Kitazato 1962: 8).
Inspired by development of a discount department store, E. J. Kovett, which
expanded a chain network composed of 17 discount department stores around New
York from 1954 to 1962, Kitazato emphasized ---
Start of the SSDDS
Seiyu Store started the SSDDS in Tokyo, 1962
Ito Yokado developed the SSDDS, 1962-63
Daiei changed the San’nomiya Store to the SSDDS, 1963
6th floor Parking lot
5th floor
Bargain space, fabric, fabric for women
4th floor
Gifts, stationery, toys, sporting goods
3rd floor
Japanese kimono, clocks, camera, hats for ladies,
accessories, shoes for ladies, Japanese sandals, records,
precious metals, clothing for rent, seals and stamps
2nd floor
Clothing for women, underwear for women, lingerie,
foundation, swimming suits for women, notions for
women, miscellaneous goods for women
1st floor
Imported goods, sweets, juice, bread, dairy products,
instant coffee, canned products, mix powder, luxury
drinking
Basement
Meat produced in Kobe, Hams and sausages, eggs,
fruit, food boiled down in soy (tsukudani), seasonings,
bar for light meals
Start of the
SSDDS
The new format, SSDDS started:
In September 1962, Seiyu
Store started the SSDDS in
Takadano-baba, Tokyo
In 1962-63, Ito Yoado
developed the SSDDS
In May 1963, Daiei changed
the San’nomiya Store to the
SSDDS with 5,672 m2
Daiei San’nomiya Store, the first SSDDS
People began to wear ready-made Western-style clothing,
especially made of synthetic fibres, almost all the time, not only
on some special occasions.
From the
pharmaceutical sector
Subsidiary of
department stores
From the clothing
sector
Daiei Seiyu
ItoYokado,Aeon,
Uny
“Super” (SSDDS-type stores) provided everything
that people needed in their usual life
Esp. Clothing
The origin of “super” was not food merchants
The percentage of sales of clothing was high at first
Migrated consumers to urban areas needed not only foods, but also
Western-style ready-made clothing and other everyday items
“Super” as General Super (“Sogo Super”)
The SSDDS format spread all over Japan
These stores were simply called “super”
It introduced the self-service or semi self-service system
Departmentalized sales floors in a several-story building
The store networks expanded as cooperate chains to all over Japan
Appeal of low prices in the early stage
This format was called “general super” to distingusish from supermarkets
focusing on foods (“foods super”) like Yaoko or Maruetsu
UK Superstore:
Sainsbury
Foods plus nonfoods, but in a one-story building
Private Brand Strategy
The jointly developed
brand with Nisshin
Seifun
“Groceries Flour”
Daiei sold private brand flour
“Venus”, sourced from leading
manufacturer, Nissihin Seifun,
the top manufacturer of flour
milling, and sold a 1 kilogram
package at 59 yen (national
brand sold at 62 yen) in 1965
This was the early attempt for
joint brand development with a
leading manufacturer
The jointly developed
brand with Toyobo,
the top manufacturer
of synthetic fiber
“Blue Mountain
Cutter Shirt”
Buying at 565 yen and
selling at 680 yen in 1961
Sold 1,000,000 for 3 years
The jointly developed
brand with Gunze
the top manufacturer
of underwear
“Bunze Blue
Mountain”
50% of underwear were
Blue Mountain brand by
1965
Private Brand
TV “BUBU”
Daiei introduced some electric appliances under the
private brand “BUBU”, including TVs, electric fans
and electronic calculators
TV with 13 inches was sold less than 50,000 yen in
1970 by merging the manufacturer, Crown.
The reputation was huge, but actual sales volume
was not so good.
TV “BUBU”
Sold “BUBU” at San’nomiya Store
Electric fan
“BUBU”
The format SSDDS and
Shopping Centres
In 1968 Daiei developed the
first shopping centre, Kori
(香里)Store at a
suburban area in Osaka
This was located in a rural
area and had a parking lot
for 400 cars
The premise of shopping
centre was 11,500 m2 and
had a 4 story building for the
SSDDS and a 2 story
building for specialty stores
Daiei’s strategy was changing from a discounter to a
mature retailer appealing quality and services
1960 1966 1972
Rank Company Sales Outlets Company Sales Outlets Company Sales Outlets
1 Mitsukoshi 45.3 10 Daimaru 113.4 4 Daie 305.2 90
2 Daimaru 45.3 4 Mitsukoshi 104.4 10 Mitsukoshi 292.4 12
3 Takashimaya 38.5 3 Takashimaya 99.3 4 Daimaru 213.1 6
4 Matsuzakaya 37.0 5 Matsuzakaya 80.7 5 Takashimaya 199.4 4
5 Tobu Dept Store 29.6 3 Daiei 58.0 34 Seiyu Store 166.8 96
6 Isetan 23.4 2 Seibu Dept Store 50.1 6 Seibu Dept Store 155.0 10
7 Hankyu Dept Store 20.9 4 Isetan 47.0 2 Jusco 155.0 131
8 Seibu Dept Store 18.5 2 Hankyu Dept Store 47.0 5 Matsuya 149.3 6
9 Sogo 15.1 3 Tokyo Dept Store 39.8 2 Nichii 144.2 156
10 Matsuya 12.0 3 Seiyu Store 32.0 35 Yuni 126.4 108
1996
Rank Company Sales Outlets Net Profits
1 Daiei 2,505.5 375 0.591
2 Ito Yokado 1,546.4 158 69.645
3 Jusco 1,295.4 240 29.865
4 Michael 1,124.7 142 16.034
5 Takashimaya 1,093.9 19 15.941
6 Seiyu 1,004.6 199 8.502
7 Mitsukoshi 767.2 14 10.704
8 Uni 710.0 133 13.278
9 Seibu Dept Store 618.7 19 5.089
10 Daimaru 509.6 7 4.906
Unit: billion yen, the number of outlets
Changes in the Top 10 Retailers in terms of Sales Volume
The table shows that “super”,
composed of SSDDS-typed
stores, became dominant
in Japanese retailing
shows “super”.
Represents the route
of main influences
Figure Int.1 The concept of consumption patterns
Note: The consumption pattern is composed of the mode of consumption and consumption choices. The marketing system mediates between the mode of
consumption and the consumption choice, by taking and utilising some elements from the mode of consumption and shaping attractive marketing
strategy.
Consumption
patterns
Marketing system
The domain of availability
of offerings,
the places for purchase,
and the ways of use
and disposal
The mode of consumption
The relationships of consumers
with others
during the act of consumption and
with consumption itself
Offerings
The places
for purchase
The ways
of use
The ways
of disposal
Consumption choices
Represents the
route of reactive
influences
5. Convenience Stores
The Beginning of the Convenience Store
The concept of the convenience store format
was born in the USA
Southland Ice Company in Dallas, Texas,
established in 1927
Originally selling blocks of ice to refrigerate foods
Began to offer milk, bread and eggs on Sundays and
evenings while the grocery stores were usually
closed
The Tote'm Store was the first name of this outlet
Because customers "toted" (carried) away their
purchases
Putting up a totem pole in front
In 1946, Tote'm was renamed to 7-Eleven
In order to reflect the stores' new extended hours:
7am until 11pm, seven days a week.
Country Number of
Stores
First Store
Opened Country Number of
Stores
First Store
Opened
Japan 12,105 1974 Singapore 435 1983
USA & Canada 6,840 1968/1969 Australia 378 1977
Taiwan 4,800 1980 Philippine 368 1984
Thailand 4,778 1989 Norway 183 1986
South Korea 1,995 1989 Sweden 96 1978
Hong Kong, Shenzhen,
Guangzhou & Macau
1,440
1981, 1992,
1996 & 2005
respectively
Denmark 131 1993
Malaysia 1,013 1984 Beijing, PRC 65 2004
Mexico 969 1971
World-wide 7-Eleven Stores
As of 1st January 2009
Total: more than 28,900 stores in 14 countries
Global Licensing System by 7-Eleven
Southland Ice Co.
(Dallas Texas, USA)
Japan Licenser
7-Eleven Japan
(Franchiser)
(Franchisees)
Licensee
Taiwan
統一超商
7-Eleven Uni President
(Franchisees) (branch stores)
Licensee
(Franchiser) (Head office)
Thailand
CP (Charoen
Phokphan) Group
(Sub-area
licensing)
(Branch
stores)
(Fran-
chisees)
Licensee
(Franchiser) (Head office) (Licenser)
(Licensee)
ItoYokado
(Parent company)
(Subsidiary)
Licensing the exclusive operation in a country
“Super”
Convenience
Store
Original parent
company
Current parent
company
Number
of stores
Sales
volume
(mil.Yen)
1 7-Eleven Ito Yokado
Seven & i
Holdings
12,298 2,762,557
2 Lawson Daiei
Mitsubishi
Trading Co.
9,527 1,558,781
3 Family Mart Seiyu Itochu Group 7,404 1,334,048
4 Circle K Sunkus
Uni
Nagasakiya
Uni 6,166 1,095,201
5 Mini Stop Jusco Aeon 1,772 302,911
Top 5 Convenience Stores in Japan (2008)
Source: Nikkei Marketing Journal 2009
Top 5 convenience stores were originally started
by large-sized “super”
Why “supers” entered the convenience store business?
Regulation by the Large-sized Retail Store Law (1974 – 2000)
The Large-sized Retail Store was defined as a store with 500 m2
of sales floor space or more
New opening of large-sized retail stores
*Large-sized stores have to have have holidays 44 days (after
1994, 24 days) or more a year.
* They also have to close the stores by 8.00 pm basically.
Definition
Regulation
Regulation
Only convenience stores could open and operate their stores
with no regulations
Dense Locating Strategy
When the franchiser recruits a new convenience store, they intentionally select the
nearer one in order to concentrate the franchisee’s shops in a certain neighborhood.
[Meaning of the “primary trade area”]
Those who live within the circle may come to the shop on foot on the spur of the
moment to buy something, although those who live outside the circle may be too lazy
to come.
[Effects]
* Consumers’ cognition on 7-Eleven will increase, leading to enhance the probability
for consumers to enter the shops
* Advantageous for the frequent delivery system and heavy human supports in
terms of costs and time
Each black dot represents a
7-Eleven shop. A circle
painted in light black is in a
radius of 500 meters from
the shop. This is called the
“primary trade area.”
Koenji
Nakano
AsagayaOgikubo
Nishi-Ogikubo
JR Chuo Line
Comparing with the USA
People go shopping by
car
More than half stores
of convenience stores
are located at gas
stations.
Different meanings of
locating “near a
residence”
USA: near by car
Japan: near on foot
[Urban Planning] In
the USA, the zoning
system, which defines
the use of lands, is
very strict.
7-Eleven in Seattle USA (2010)
24 hours TESCO(Edinburgh)
A picture
at 11.30am
New category of “fast foods” at 7-Eleven Japan
[A] Lunch box with rice (obento)
This example is called ‘makunouchi bento’,
composed of a slice of salmon, a fried
prawn, a Japanese flavoured omelette,
boiled foods (right side), and rice with
sesame and a pickled plum topping (left
side).
[B] Rice ball (onigiri)
This rice ball has salmon roe
(ikura) soaked in soy source inside,
and is covered by a layer of
seaweed (nori) outside [right
picture]. The left picture shows the
package of this rice ball.
Development of Japanese-type “fast food” by convenience stores
Pictures reproduced courtesy of Seven & i Holdings.
Onigiri Producer
Electronic Ordering System
Reordering products are decided not by the EPOS System automatically,
but by person who is responsible for buying.
 In the stock book system, stock volume of products should be counted
regularly by hand in order to adjust the volumes kept on the book to the actual
stock volume (called “stocktaking”)
 Similar to this stocktaking activity, actual reordering should be made by
person, not automatically by the EPOS system, to avoid decision making based
on fictional volumes of stock
The person who makes reordering
takes a look at actual stock volume of
products on the shelves, and decides
what items he should reorder and
how many, referring on figures and
charts of sales trends shown on the
electric ordering device
The Bar-code Label Must be Preprinted
In order to get information on sold items, the bar-code labels must be
preprinted on the surface of products or packages
Japan set the standardized code, The Japanese Article Number (JAN) Code,
which is compatible with the Universal Product Code (UPC), used by about
100 countries in the world.
The JAN code was set as the JIS (Japan Industrial Standards). However, the
JIS is not the law, so that it has no power to force companies to adopt it.
(a) 9-digit manufacturer code
Standard type code (13 digits)
(b) 7-digit manufacturer code
Shorter code
(8 digits)
Standard type code (13 digits)
The EPOS is the system for retailers, not for manufacturers.
The manufacturers were reluctant to preprint the bar-codes in the
process of manufacturing, because it needed extra costs for manufacturers
The problem: Who bells the cat? (An Aesop’s Fable)
In 1982, 7-Eleven Japan declared that they
will introduce the EPOS system into all of their
stores
 They declared they would not buy
the products that had no bar-code
preprinted
 Other convenience stores and
superstores followed it
Spread of Source-marking
by Buying Power of 7-Eleven
Electronic Point-of-Sales
(EPOS) SystemUnit Store
Store
Controller
Franchisees
Headquarter
Data processing
Unit Store
Store
Controller
Unit Store
Store
Controller
The JIT Delivery
(Small-lot and Frequent Delivery)
Joint
Delivery
Center
Start Output
Order
SpeculationPostponement
11am
Head Office
Franchisee’s Store
4pm/6pm
Franchisee’s Store
Franchisee’s Store
“Onigiri” Producer
10am
Noon/1 am4am
11am
Order
Delivery
7-Eleven delivers fresh foods three
times a day to each store
Small-lot &
Frequent Delivery
Box lunches with boiled rice,
sandwiches & various kinds of bread
7-Eleven … 3 times a day
Lawson … 3 times a day
Family Mart … 3 times a day
Side dishes, Daily food
7-Eleven … twice a day
Lawson … twice a day
Family Mart …Twice a day
Frozen food, processed food
7-Eleven … 3 times a day
Lawson … 3 times a day
Family Mart … 3 times a day
Sweets
7-Eleven … twice a day
Lawson … 3 times a day
Family Mart … 3 times a day
The different concept of the sales floor
Selling Area
Back
Room
Back RoomSelling Area
Japanese: Convenience store Western: Warehouse retailing
The classical idea
about the selling
area and the back
room
Efficiency of 7-Eleven Japan
Stock volume
Average sales per day
Average gross margin
1976 19901982
EOPS
System
Human Support System: OFCs
Salesman, who is called the OFCs (Operation
Field Counsellors), is responsible for 7 or 8
franchisees
He frequently visits each franchisee to give
advices, recommendations and information to
franchisees
All of salesmen were summoned to the 7-Eleven
headquarters in Tokyo every Tuesday
General Meeting
district Meeting
zone Meeting
The company spent about 3 billion yen a year
for these gatherings
Global Licensing System by 7-Eleven
Southland Ice Co.
(Dallas Texas, USA)
Japan Licenser
7-Eleven Japan
(Franchiser)
(Franchisees)
Licensee
Taiwan
統一超商
7-Eleven Uni President
(Franchisees) (branch stores)
Licensee
(Franchiser) (Head office)
Thailand
CP (Charoen
Phokphan) Group
(Sub-area
licensing)
(Branch
stores)
(Fran-
chisees)
Licensee
(Franchiser) (Head office) (Licenser)
(Licensee)
ItoYokado
(Parent company)
(Subsidiary)
Licensing the exclusive operation in a country
7-Eleven, Inc.Japan Licenser
7-Eleven Japan
(Franchiser)
(Franchisees)
Licensee
Taiwan
統一超商
7-Eleven Uni President
(Franchisees) (branch stores)
Licensee
(Franchiser) (Head office)
Thailand
CP (Charoen
Phokphan) Group
(Sub-area
licensing)
(Branch
stores)
(Fran-
chisees)
Licensee
(Franchiser) (Head office) (Licenser)
(Licensee)
ItoYokado
(Parent company)
(Subsidiary)
Licensing the exclusive operation in a country
(Parent company)
(Subsidiary)
GlobalLicensingSystemby 7-Eleven
7-Eleven in the USA is changing
Report by Nikkei MJ, 10 February 2004
“The largest convenience store in the USA, 7-Eleven under the umbellate of
Ito Yokado Japan, has increased sales by changes in assortments. Similar to
the Japanese way, the stores have introduced “fresh foods” such as
sandwiches, the products delivered everyday, and added diet-oriented foods
and original beers to the product lines. As a result, sales increased 5.2%
during October–December comparing with the same period last year. The
sales has steadily increased for these 19 quarters.”
Formerly, the top sales item at 7-Eleven was tobacco. The
second was milk.
Fresh foods were rarely sold at the convenience stores in the
USA.
45
Developmentof Japanese-styleMarketingin the 20th Century
‘Keiretsu’ Retailing Manufacturers organized retail chain stores
The Japanese way of Self-service
Stores
Department Stores
‘Super’
Convenience Stores
Powerful Modern Retailers and
the Anti-Department Store Movement
Born in America and Revised in Japan
Convenience stores everwhere
1910s to 1930s
1910s to 1930s
1960s to 1970s
1970s/80s to
Current Time
Will small-sized shops be simply dying out?
1,079,728
1,189,045
1,201,273
1,244,629
1,288,292
1,271,975
1,304,536
1,375,394
1,432,436
1,471,297 1,495,510
1,548,184
1,614,067
1,673,667
1,721,465
1,628,644
1,619,752
1,591,223
1,499,948
1,419,696
1,406,884
1,300,057
1,238,049
1,137,859
1,033,358
78,989
118,597
123,200
123,342
130,855
139,533
156,433
174,627
211,929
237,463
265,686
293,923 332,238
380,973 435,822
449,309 503,728
564,642
581,207
586,627 607,401
583,899 578,426 565,969
582,122
1,000,739
1,070,448
1,078,073
1,121,287
1,157,437
1,132,442
1,148,103
1,200,767
1,220,507
1,233,834
1,229,824
1,254,261
1,281,829 1,292,694
1,285,643
1,179,335
1,116,024
1,026,581
918,741
833,069
799,483
716,158
659,623
571,890
451,236
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Total number of retail establishments
The number of sole proprietorships
The number of corporations
Changes in the number of retail establisments in Japan
Sources: Statisitcs Bureau website (1952 - 2004), e-Stat website, Economic Census 2012 (2007 - 2012)
Year
The number of
establishments
Innovation by small-sized retailers:
Importance of Hand-made shops
Source:Census of Commerce
Bread Shops
22,074
24,248
26,246
19,439
16,047
12,896
9,518
6,771
4,742
26,332
21,555
4,0373,164
3,800
8,688
9,165
10,586
11,055
12,591
11,432
11,744
7,340
0
5,000
10,000
15,000
20,000
25,000
30,000
19741972 1976 1979 1982 1985 1988 1991 1994 1997 2002
Bread shops
(Hand-made or bakery)
Bread shops
(Not Hand-made)
The case in Japan
Similar tendency …
108,112
136,712
127,488
125,234
114,928
90,433
81,339
69,048
52,488
41,457
28,931
32,20232,41733,19533,039
31,379
32,895
31,07530,35629,05128,013
32,107
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1972 1974 1976 1979 1982 1985 1988 1991 1994 1997 2002
Sweets shops (Not Hnad-made)
Sweets shops (Hand-made)
Sweets Shops
Source:Census of Commerce
Target customers
4Ps
(marketing mix)
Product
Price
Place
Promotion
What kind of product do customers want?
Features, Quality, Usage, Design, Color,
Packages, Brands, Atmosphere, etc.
Product
Price
What level of prices will the customers pay?
Appealing to discounting prices
Fascination of high prices, such as luxury brands
Place
Where can customers obtain the products?
Can you buy automobiles at department stores? If not, why?
Vending machines or internet, instead of retail shops
Communication to customers
Advertisements
Publicity (Information reported by the independent mass media)
The roles of traveling salespeople and sales clerks
Promotion
A key is entrepreneurship by marketers
As early as the sixth century, in fact, there was
what might be called ‘a Chinese Japan’; and since
1868 there has been a highly successful ‘Western
Japan’. Nevertheless, both these key influences
have merged into a ‘Japanese’ Japan.
Braudel, Fernand, A History of Civilization, London: The Penguin
Press. (Translated from French into English by Richard Mayne, 1994,
p. 276.)
The Essential and Analytical Point of View on
Modernisation, Westernisation and Japaneseness
Modern Japanese marketing
and consumption originally
developed inspired by the
discourse of westernisation/
Americanisation, but also
created the Japanese versions
of them.
Japan looks to be so close to the
West, and yet so far away.
Kazuo Usui
Marketing and Consumption
in Modern Japan
Routledge, UK
2014
52
Graduate
School of
Humanities
and Social
Sciences
Department of Japanese
and Asian Studies
New Graduate School
Department of
Economics and
Management
Department of Cultural
Environment
Master-degree level
Master of Arts (MA)
Program in Japanese
and Asian Culture
Master of Economics
(MEcon) Program in
Japanese and Asian
Economics and
Management
Saitama University
Saitama Prefecture is
located in the northern
suburb of Tokyo
Saitama Prefecture is
a commuting are to
Tokyo
Easy access to Tokyo
Taking about one
hour from JR Tokyo
Station to Saitama
University
One of the national universities
in Japan
Each prefecture has one
national university
Saitama University is only
one national university in
Saitama Prefecture
Undergraduate Schools Graduate Schools
Master-degree Doctor-degree
In total
Japanese 7,315
In total
Japanese 927 135
International 159 International 183 111
Faculty of
Liberal Arts
Japanese 809 Graduate School of
Cultural Science
Japanese 58 18
International 24 International 49 8
Faculty of
Economics
Japanese 1,543 Graduate School of
Economic Science
Japanese 54 34
International 53 International 25 6
Faculty of
Education
Japanese 2,068 Graduate School of
Education
Japanese 149 ―
International 11 International 12 ―
Faculty of
Science
Japanese 899
Graduate School of
Science and
Engineering
Japanese 666 83
International 14
Faculty of
Engineering
Japanese 1,996
International 83 97
International 57
54
SaitamaUniversityhas 8,377Japanesestudentsand 477 internationalstudents
with455teachersas of 1stMay2014.
Scholarship (Government)
I. MEXT* Scholarship
* Ministry of Education, Culture, Sports, Science and Technology
http://www.jasso.go.jp/study_j/documents/scholarshipse_mext.pdf
On the recommendation of:
Embassy Recommendation (Japanese embassy or consulate general recommends
someone)
http://www.mext.go.jp/a_memu/koutou/ryugak/boshu/ 1333463.htm
Domestic Selection (Japanese university in which the student is currently enrolled if
he/she is privately-financed and already studying in Japan recommends someone)
II. JASSO** Scholarship
** Japan Student Services Organization
http://www.jasso.go.jp/study_j/documents/scholarshipse_jasso.pdf
Reservation Program for MEXT Honors Scholarship for Privately Financed
International Students
55
Government Scholarship
Scholarship (Non-government)
Scholarships Available for International Students in
the MEcon Program
I. ILEC* Scholarship
* Institute of Labor Education and Culture
Awarding a scholarship equivalent to two years’ tuition fees to one
international student who demonstrates excellent academic performance.
II. Economics Society** Scholarship
** The Economics Society at Faculty of Economics, Saitama University
Awarding a scholarship equivalent to two years’ tuition fees to one
international student who demonstrates excellent academic performance.
III. Partial Scholarship by the Economics Society**
** The Economics Society at Faculty of Economics,
Saitama University
Awarding 200,000 yen each to ten first-year international students who
demonstrate excellent academic performance
56
Non-Government Scholarship
IV. Non-Government and Private Scholarship
Every year, approximately 30 private organizations award scholarship to
students.
We proactively advertise and recommend international students for these
private scholarships.
57
Scholarship (Non-government 2)
We welcome your participation
with our graduate school !
Your application will be accepted by the end of May.
Please check the website:
http://www.eco.saitama-u.ac.jp/graduate/sasem/ryugaku/
58
We welcome your participation
with our graduate school !
Your application will be accepted by the end of May.
Please check the website:
http://www.eco.saitama-u.ac.jp/graduate/sasem/ryugaku/
Studying with Japanese Working People
The Main Body of Graduate Students of the
Department of Economics and Management (called
Saitama School of Economics and Management,
SASEM) are working people.
They work for Japanese companies, government offices
or non-profit organizations, and study at our graduate
school in the evening of week days and Saturday.
We have arranged a satellite campus, called ‘Tokyo
Station College’
You will have several opportunities to talk with them
directly through collaborate workshops or other
events
Tokyo Station CollegeJR Tokyo Station

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Development of Japanese Marketing after World War Ⅱ

  • 1. Japanese Way of Marketing No.2: Development of Japanese Marketing after the Second World War Kazuo Usui Doctor of Commerce Dean, Professor of Marketing Faculty of Economics, Saitama University, Japan
  • 2. Represents the route of main influences Figure Int.1 The concept of consumption patterns Note: The consumption pattern is composed of the mode of consumption and consumption choices. The marketing system mediates between the mode of consumption and the consumption choice, by taking and utilising some elements from the mode of consumption and shaping attractive marketing strategy. The domain of availability of offerings, the places for purchase, and the ways of use and disposal The relationships of consumers with others during the act of consumption and with consumption itself Consumption choices Represents the route of reactive influences Agenda III.After the SecondWorldWar 5. ‘Super’ (not supermarkets) 6. Convenience stores
  • 3. Represents the route of main influences Figure Int.1 The concept of consumption patterns Note: The consumption pattern is composed of the mode of consumption and consumption choices. The marketing system mediates between the mode of consumption and the consumption choice, by taking and utilising some elements from the mode of consumption and shaping attractive marketing strategy. Consumption patterns Marketing system The domain of availability of offerings, the places for purchase, and the ways of use and disposal The mode of consumption The relationships of consumers with others during the act of consumption and with consumption itself Offerings The places for purchase The ways of use The ways of disposal Consumption choices Represents the route of reactive influences 5. “Super”
  • 5. The picture shows a migrant group composed of new graduates, who have appointments for new jobs in the Tokyo area, just leaving their hometown, Fukushima. A Migrant Group just Leaving a Rural Station of Fukushima (1st April 1956)
  • 6. After the defeat at World War II, a new Westernized lifestyle rapidly spreading during the 1960s Large-sized housing complexes (danchi) constructed to solve a shortage of housing: Hibari-ga-oka Danchi 1959 A young couple eating Japanese food while sitting on chairs by a Western-styled table of higher height, and not kneeling on tatami-mats as before. They wore Western-styled clothing as well. The Crown Prince and Princess visited danchi 1960 The So-called “Dining Kitchen” 1956
  • 7. Start of Self-service in Japan A fruit shop started in 1910 Kinokuniya began to sell vegetables/fruits to the PXs (Post Exchanges), the stores inside the bases of the American occupational army around 1947, and Observed the self-service food store, named Commissary, there. NCR Japan began to support the introduction of self-service stores in order to sell their cash registers to retailers. NCR Japan decided to choose Kinokuniya as a possible model case and proposed the idea to Kinokuniya’s owner in 1953. NCR Japan Kinokuniya Preparing many new factors untried by traditional Japanese retailers, such as gondolas to display goods, price tags, shopping bags made of craft paper, shopping carts, and sales floors made of terrazzo that could cope with the weight of shopping carts, Kinokuniya opened the first self-service store with 132m2 sales floor space in November 1953.
  • 8. Piggly Wiggly Store: The First Self-service Store In 1916, Clarence Sanders founded Piggly Wiggly Store in Memphis, Tennessee. Piggly Wiggly was a complete self-service operation in which consumers used large handbaskets to carry the items they selected from the shelves to the checkout counter, paid for them in cash, and then took the groceries home themselves. Piggly Wiggly was successful. The company was operating 2,660 stores and posting sales more than $180 million a year. However, Saunders lost control in a famous Wall Street crash in 1929, and his company was soon carved up and sold off. Start of the self-service retailing in the USA 1920s
  • 9. Michel J. Cullen and Supermarkets In 1930, Michel Cullen, an employee of the second largest chain grocery- operator, Kroger, wrote a letter to the President to propose the creation of a new kind of food store and ask in interview to explain his view further. The letter is now called “The Bible of Supermarket.” Cullen did not even get a hearing from the president. Cullen resigned forthwith and, with the backing of a vice-president of the Sweet Life Foods Corporation, opened the first unit of the King Kullen Grocery Company in August 1930, at 17th Street and Jamaica Avenue in Queens, New York. KING KULLEN World Greatest Price Wrecker Start of supermarket in the USA 1930s
  • 10. 2 stores in 1954 The number of self-service stores increased 40 in 1955 to 139 in 1956, 283 in 1957, 562 in 1958, 1,036 in 1959, and 1,442 in 1960, according to the Supermarket Association of Japan 1,442 stores in 1960Spread of self-service stores The Central Canteen at Yahata Steel Factory 1956 Hatoya (later Nichii, then Michael, Aeon) began to sell clothing by self-service Store of the Consumer Cooperative Society, Kikuna, Yokohama 1954 M. M. Zimmerman, a leading professor of supermarket in the USA, visited Kinokuniya in 1960
  • 11. Start of Daiei In September 1957, Isao Nakauchi (1922 – 2005) opened a drug store with 53m2 sales floor, named “Daiei, the Store for Housewives” was opend in Senbayashi, Kobe, Non self-service method In April 1959, “Daiei San’nomiya Store” opened a food store with 396 m2 sales floor First introduction of the self-service method Isao Nakauchi, Discount is My Philosophy, Tokyo: Nikkei Newspaper Publishing, 1969. “Moneymaking is possible only by respecting consumers”
  • 12. Introduction of the concept of SSDDS: Toward the Japanese “Super” In 1962, Uichi Kitazato introduced “SSDDS” in the magazine Economist (a Japanese journal). Uichi Kitazato was a pen name of Hajime Sato. A famous business commentator, part-time lecturer of Tokyo University, the Head of Research Institute on the Distribution Industry established by Seibu Group “If we could recognise supermarkets, which were born in the 1930s and merged into the American way of life as far as eating habits are concerned, as the flag-bearer of the first commercial revolution, it is the SSDDS that should be the real champion of the second commercial revolution (Kitazato 1962: 8). Inspired by development of a discount department store, E. J. Kovett, which expanded a chain network composed of 17 discount department stores around New York from 1954 to 1962, Kitazato emphasized ---
  • 13. Start of the SSDDS Seiyu Store started the SSDDS in Tokyo, 1962 Ito Yokado developed the SSDDS, 1962-63 Daiei changed the San’nomiya Store to the SSDDS, 1963 6th floor Parking lot 5th floor Bargain space, fabric, fabric for women 4th floor Gifts, stationery, toys, sporting goods 3rd floor Japanese kimono, clocks, camera, hats for ladies, accessories, shoes for ladies, Japanese sandals, records, precious metals, clothing for rent, seals and stamps 2nd floor Clothing for women, underwear for women, lingerie, foundation, swimming suits for women, notions for women, miscellaneous goods for women 1st floor Imported goods, sweets, juice, bread, dairy products, instant coffee, canned products, mix powder, luxury drinking Basement Meat produced in Kobe, Hams and sausages, eggs, fruit, food boiled down in soy (tsukudani), seasonings, bar for light meals
  • 14. Start of the SSDDS The new format, SSDDS started: In September 1962, Seiyu Store started the SSDDS in Takadano-baba, Tokyo In 1962-63, Ito Yoado developed the SSDDS In May 1963, Daiei changed the San’nomiya Store to the SSDDS with 5,672 m2 Daiei San’nomiya Store, the first SSDDS
  • 15. People began to wear ready-made Western-style clothing, especially made of synthetic fibres, almost all the time, not only on some special occasions. From the pharmaceutical sector Subsidiary of department stores From the clothing sector Daiei Seiyu ItoYokado,Aeon, Uny “Super” (SSDDS-type stores) provided everything that people needed in their usual life Esp. Clothing The origin of “super” was not food merchants The percentage of sales of clothing was high at first Migrated consumers to urban areas needed not only foods, but also Western-style ready-made clothing and other everyday items
  • 16. “Super” as General Super (“Sogo Super”) The SSDDS format spread all over Japan These stores were simply called “super” It introduced the self-service or semi self-service system Departmentalized sales floors in a several-story building The store networks expanded as cooperate chains to all over Japan Appeal of low prices in the early stage This format was called “general super” to distingusish from supermarkets focusing on foods (“foods super”) like Yaoko or Maruetsu
  • 17. UK Superstore: Sainsbury Foods plus nonfoods, but in a one-story building
  • 18. Private Brand Strategy The jointly developed brand with Nisshin Seifun “Groceries Flour” Daiei sold private brand flour “Venus”, sourced from leading manufacturer, Nissihin Seifun, the top manufacturer of flour milling, and sold a 1 kilogram package at 59 yen (national brand sold at 62 yen) in 1965 This was the early attempt for joint brand development with a leading manufacturer The jointly developed brand with Toyobo, the top manufacturer of synthetic fiber “Blue Mountain Cutter Shirt” Buying at 565 yen and selling at 680 yen in 1961 Sold 1,000,000 for 3 years The jointly developed brand with Gunze the top manufacturer of underwear “Bunze Blue Mountain” 50% of underwear were Blue Mountain brand by 1965
  • 19. Private Brand TV “BUBU” Daiei introduced some electric appliances under the private brand “BUBU”, including TVs, electric fans and electronic calculators TV with 13 inches was sold less than 50,000 yen in 1970 by merging the manufacturer, Crown. The reputation was huge, but actual sales volume was not so good. TV “BUBU” Sold “BUBU” at San’nomiya Store Electric fan “BUBU”
  • 20. The format SSDDS and Shopping Centres In 1968 Daiei developed the first shopping centre, Kori (香里)Store at a suburban area in Osaka This was located in a rural area and had a parking lot for 400 cars The premise of shopping centre was 11,500 m2 and had a 4 story building for the SSDDS and a 2 story building for specialty stores Daiei’s strategy was changing from a discounter to a mature retailer appealing quality and services
  • 21. 1960 1966 1972 Rank Company Sales Outlets Company Sales Outlets Company Sales Outlets 1 Mitsukoshi 45.3 10 Daimaru 113.4 4 Daie 305.2 90 2 Daimaru 45.3 4 Mitsukoshi 104.4 10 Mitsukoshi 292.4 12 3 Takashimaya 38.5 3 Takashimaya 99.3 4 Daimaru 213.1 6 4 Matsuzakaya 37.0 5 Matsuzakaya 80.7 5 Takashimaya 199.4 4 5 Tobu Dept Store 29.6 3 Daiei 58.0 34 Seiyu Store 166.8 96 6 Isetan 23.4 2 Seibu Dept Store 50.1 6 Seibu Dept Store 155.0 10 7 Hankyu Dept Store 20.9 4 Isetan 47.0 2 Jusco 155.0 131 8 Seibu Dept Store 18.5 2 Hankyu Dept Store 47.0 5 Matsuya 149.3 6 9 Sogo 15.1 3 Tokyo Dept Store 39.8 2 Nichii 144.2 156 10 Matsuya 12.0 3 Seiyu Store 32.0 35 Yuni 126.4 108 1996 Rank Company Sales Outlets Net Profits 1 Daiei 2,505.5 375 0.591 2 Ito Yokado 1,546.4 158 69.645 3 Jusco 1,295.4 240 29.865 4 Michael 1,124.7 142 16.034 5 Takashimaya 1,093.9 19 15.941 6 Seiyu 1,004.6 199 8.502 7 Mitsukoshi 767.2 14 10.704 8 Uni 710.0 133 13.278 9 Seibu Dept Store 618.7 19 5.089 10 Daimaru 509.6 7 4.906 Unit: billion yen, the number of outlets Changes in the Top 10 Retailers in terms of Sales Volume The table shows that “super”, composed of SSDDS-typed stores, became dominant in Japanese retailing shows “super”.
  • 22. Represents the route of main influences Figure Int.1 The concept of consumption patterns Note: The consumption pattern is composed of the mode of consumption and consumption choices. The marketing system mediates between the mode of consumption and the consumption choice, by taking and utilising some elements from the mode of consumption and shaping attractive marketing strategy. Consumption patterns Marketing system The domain of availability of offerings, the places for purchase, and the ways of use and disposal The mode of consumption The relationships of consumers with others during the act of consumption and with consumption itself Offerings The places for purchase The ways of use The ways of disposal Consumption choices Represents the route of reactive influences 5. Convenience Stores
  • 23. The Beginning of the Convenience Store The concept of the convenience store format was born in the USA Southland Ice Company in Dallas, Texas, established in 1927 Originally selling blocks of ice to refrigerate foods Began to offer milk, bread and eggs on Sundays and evenings while the grocery stores were usually closed The Tote'm Store was the first name of this outlet Because customers "toted" (carried) away their purchases Putting up a totem pole in front In 1946, Tote'm was renamed to 7-Eleven In order to reflect the stores' new extended hours: 7am until 11pm, seven days a week.
  • 24. Country Number of Stores First Store Opened Country Number of Stores First Store Opened Japan 12,105 1974 Singapore 435 1983 USA & Canada 6,840 1968/1969 Australia 378 1977 Taiwan 4,800 1980 Philippine 368 1984 Thailand 4,778 1989 Norway 183 1986 South Korea 1,995 1989 Sweden 96 1978 Hong Kong, Shenzhen, Guangzhou & Macau 1,440 1981, 1992, 1996 & 2005 respectively Denmark 131 1993 Malaysia 1,013 1984 Beijing, PRC 65 2004 Mexico 969 1971 World-wide 7-Eleven Stores As of 1st January 2009 Total: more than 28,900 stores in 14 countries
  • 25. Global Licensing System by 7-Eleven Southland Ice Co. (Dallas Texas, USA) Japan Licenser 7-Eleven Japan (Franchiser) (Franchisees) Licensee Taiwan 統一超商 7-Eleven Uni President (Franchisees) (branch stores) Licensee (Franchiser) (Head office) Thailand CP (Charoen Phokphan) Group (Sub-area licensing) (Branch stores) (Fran- chisees) Licensee (Franchiser) (Head office) (Licenser) (Licensee) ItoYokado (Parent company) (Subsidiary) Licensing the exclusive operation in a country
  • 26. “Super” Convenience Store Original parent company Current parent company Number of stores Sales volume (mil.Yen) 1 7-Eleven Ito Yokado Seven & i Holdings 12,298 2,762,557 2 Lawson Daiei Mitsubishi Trading Co. 9,527 1,558,781 3 Family Mart Seiyu Itochu Group 7,404 1,334,048 4 Circle K Sunkus Uni Nagasakiya Uni 6,166 1,095,201 5 Mini Stop Jusco Aeon 1,772 302,911 Top 5 Convenience Stores in Japan (2008) Source: Nikkei Marketing Journal 2009 Top 5 convenience stores were originally started by large-sized “super”
  • 27. Why “supers” entered the convenience store business? Regulation by the Large-sized Retail Store Law (1974 – 2000) The Large-sized Retail Store was defined as a store with 500 m2 of sales floor space or more New opening of large-sized retail stores *Large-sized stores have to have have holidays 44 days (after 1994, 24 days) or more a year. * They also have to close the stores by 8.00 pm basically. Definition Regulation Regulation Only convenience stores could open and operate their stores with no regulations
  • 28. Dense Locating Strategy When the franchiser recruits a new convenience store, they intentionally select the nearer one in order to concentrate the franchisee’s shops in a certain neighborhood. [Meaning of the “primary trade area”] Those who live within the circle may come to the shop on foot on the spur of the moment to buy something, although those who live outside the circle may be too lazy to come. [Effects] * Consumers’ cognition on 7-Eleven will increase, leading to enhance the probability for consumers to enter the shops * Advantageous for the frequent delivery system and heavy human supports in terms of costs and time Each black dot represents a 7-Eleven shop. A circle painted in light black is in a radius of 500 meters from the shop. This is called the “primary trade area.” Koenji Nakano AsagayaOgikubo Nishi-Ogikubo JR Chuo Line
  • 29. Comparing with the USA People go shopping by car More than half stores of convenience stores are located at gas stations. Different meanings of locating “near a residence” USA: near by car Japan: near on foot [Urban Planning] In the USA, the zoning system, which defines the use of lands, is very strict. 7-Eleven in Seattle USA (2010)
  • 30. 24 hours TESCO(Edinburgh) A picture at 11.30am
  • 31. New category of “fast foods” at 7-Eleven Japan [A] Lunch box with rice (obento) This example is called ‘makunouchi bento’, composed of a slice of salmon, a fried prawn, a Japanese flavoured omelette, boiled foods (right side), and rice with sesame and a pickled plum topping (left side). [B] Rice ball (onigiri) This rice ball has salmon roe (ikura) soaked in soy source inside, and is covered by a layer of seaweed (nori) outside [right picture]. The left picture shows the package of this rice ball. Development of Japanese-type “fast food” by convenience stores Pictures reproduced courtesy of Seven & i Holdings.
  • 33. Electronic Ordering System Reordering products are decided not by the EPOS System automatically, but by person who is responsible for buying.  In the stock book system, stock volume of products should be counted regularly by hand in order to adjust the volumes kept on the book to the actual stock volume (called “stocktaking”)  Similar to this stocktaking activity, actual reordering should be made by person, not automatically by the EPOS system, to avoid decision making based on fictional volumes of stock The person who makes reordering takes a look at actual stock volume of products on the shelves, and decides what items he should reorder and how many, referring on figures and charts of sales trends shown on the electric ordering device
  • 34. The Bar-code Label Must be Preprinted In order to get information on sold items, the bar-code labels must be preprinted on the surface of products or packages Japan set the standardized code, The Japanese Article Number (JAN) Code, which is compatible with the Universal Product Code (UPC), used by about 100 countries in the world. The JAN code was set as the JIS (Japan Industrial Standards). However, the JIS is not the law, so that it has no power to force companies to adopt it. (a) 9-digit manufacturer code Standard type code (13 digits) (b) 7-digit manufacturer code Shorter code (8 digits) Standard type code (13 digits)
  • 35. The EPOS is the system for retailers, not for manufacturers. The manufacturers were reluctant to preprint the bar-codes in the process of manufacturing, because it needed extra costs for manufacturers The problem: Who bells the cat? (An Aesop’s Fable) In 1982, 7-Eleven Japan declared that they will introduce the EPOS system into all of their stores  They declared they would not buy the products that had no bar-code preprinted  Other convenience stores and superstores followed it Spread of Source-marking by Buying Power of 7-Eleven
  • 36. Electronic Point-of-Sales (EPOS) SystemUnit Store Store Controller Franchisees Headquarter Data processing Unit Store Store Controller Unit Store Store Controller
  • 37. The JIT Delivery (Small-lot and Frequent Delivery) Joint Delivery Center Start Output Order SpeculationPostponement 11am Head Office Franchisee’s Store 4pm/6pm Franchisee’s Store Franchisee’s Store “Onigiri” Producer 10am Noon/1 am4am 11am Order Delivery 7-Eleven delivers fresh foods three times a day to each store
  • 38. Small-lot & Frequent Delivery Box lunches with boiled rice, sandwiches & various kinds of bread 7-Eleven … 3 times a day Lawson … 3 times a day Family Mart … 3 times a day Side dishes, Daily food 7-Eleven … twice a day Lawson … twice a day Family Mart …Twice a day Frozen food, processed food 7-Eleven … 3 times a day Lawson … 3 times a day Family Mart … 3 times a day Sweets 7-Eleven … twice a day Lawson … 3 times a day Family Mart … 3 times a day
  • 39. The different concept of the sales floor Selling Area Back Room Back RoomSelling Area Japanese: Convenience store Western: Warehouse retailing The classical idea about the selling area and the back room
  • 40. Efficiency of 7-Eleven Japan Stock volume Average sales per day Average gross margin 1976 19901982 EOPS System
  • 41. Human Support System: OFCs Salesman, who is called the OFCs (Operation Field Counsellors), is responsible for 7 or 8 franchisees He frequently visits each franchisee to give advices, recommendations and information to franchisees All of salesmen were summoned to the 7-Eleven headquarters in Tokyo every Tuesday General Meeting district Meeting zone Meeting The company spent about 3 billion yen a year for these gatherings
  • 42. Global Licensing System by 7-Eleven Southland Ice Co. (Dallas Texas, USA) Japan Licenser 7-Eleven Japan (Franchiser) (Franchisees) Licensee Taiwan 統一超商 7-Eleven Uni President (Franchisees) (branch stores) Licensee (Franchiser) (Head office) Thailand CP (Charoen Phokphan) Group (Sub-area licensing) (Branch stores) (Fran- chisees) Licensee (Franchiser) (Head office) (Licenser) (Licensee) ItoYokado (Parent company) (Subsidiary) Licensing the exclusive operation in a country
  • 43. 7-Eleven, Inc.Japan Licenser 7-Eleven Japan (Franchiser) (Franchisees) Licensee Taiwan 統一超商 7-Eleven Uni President (Franchisees) (branch stores) Licensee (Franchiser) (Head office) Thailand CP (Charoen Phokphan) Group (Sub-area licensing) (Branch stores) (Fran- chisees) Licensee (Franchiser) (Head office) (Licenser) (Licensee) ItoYokado (Parent company) (Subsidiary) Licensing the exclusive operation in a country (Parent company) (Subsidiary) GlobalLicensingSystemby 7-Eleven
  • 44. 7-Eleven in the USA is changing Report by Nikkei MJ, 10 February 2004 “The largest convenience store in the USA, 7-Eleven under the umbellate of Ito Yokado Japan, has increased sales by changes in assortments. Similar to the Japanese way, the stores have introduced “fresh foods” such as sandwiches, the products delivered everyday, and added diet-oriented foods and original beers to the product lines. As a result, sales increased 5.2% during October–December comparing with the same period last year. The sales has steadily increased for these 19 quarters.” Formerly, the top sales item at 7-Eleven was tobacco. The second was milk. Fresh foods were rarely sold at the convenience stores in the USA.
  • 45. 45 Developmentof Japanese-styleMarketingin the 20th Century ‘Keiretsu’ Retailing Manufacturers organized retail chain stores The Japanese way of Self-service Stores Department Stores ‘Super’ Convenience Stores Powerful Modern Retailers and the Anti-Department Store Movement Born in America and Revised in Japan Convenience stores everwhere 1910s to 1930s 1910s to 1930s 1960s to 1970s 1970s/80s to Current Time
  • 46. Will small-sized shops be simply dying out? 1,079,728 1,189,045 1,201,273 1,244,629 1,288,292 1,271,975 1,304,536 1,375,394 1,432,436 1,471,297 1,495,510 1,548,184 1,614,067 1,673,667 1,721,465 1,628,644 1,619,752 1,591,223 1,499,948 1,419,696 1,406,884 1,300,057 1,238,049 1,137,859 1,033,358 78,989 118,597 123,200 123,342 130,855 139,533 156,433 174,627 211,929 237,463 265,686 293,923 332,238 380,973 435,822 449,309 503,728 564,642 581,207 586,627 607,401 583,899 578,426 565,969 582,122 1,000,739 1,070,448 1,078,073 1,121,287 1,157,437 1,132,442 1,148,103 1,200,767 1,220,507 1,233,834 1,229,824 1,254,261 1,281,829 1,292,694 1,285,643 1,179,335 1,116,024 1,026,581 918,741 833,069 799,483 716,158 659,623 571,890 451,236 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 1,800,000 Total number of retail establishments The number of sole proprietorships The number of corporations Changes in the number of retail establisments in Japan Sources: Statisitcs Bureau website (1952 - 2004), e-Stat website, Economic Census 2012 (2007 - 2012) Year The number of establishments
  • 47. Innovation by small-sized retailers: Importance of Hand-made shops Source:Census of Commerce Bread Shops 22,074 24,248 26,246 19,439 16,047 12,896 9,518 6,771 4,742 26,332 21,555 4,0373,164 3,800 8,688 9,165 10,586 11,055 12,591 11,432 11,744 7,340 0 5,000 10,000 15,000 20,000 25,000 30,000 19741972 1976 1979 1982 1985 1988 1991 1994 1997 2002 Bread shops (Hand-made or bakery) Bread shops (Not Hand-made) The case in Japan
  • 49. Target customers 4Ps (marketing mix) Product Price Place Promotion What kind of product do customers want? Features, Quality, Usage, Design, Color, Packages, Brands, Atmosphere, etc. Product Price What level of prices will the customers pay? Appealing to discounting prices Fascination of high prices, such as luxury brands Place Where can customers obtain the products? Can you buy automobiles at department stores? If not, why? Vending machines or internet, instead of retail shops Communication to customers Advertisements Publicity (Information reported by the independent mass media) The roles of traveling salespeople and sales clerks Promotion A key is entrepreneurship by marketers
  • 50. As early as the sixth century, in fact, there was what might be called ‘a Chinese Japan’; and since 1868 there has been a highly successful ‘Western Japan’. Nevertheless, both these key influences have merged into a ‘Japanese’ Japan. Braudel, Fernand, A History of Civilization, London: The Penguin Press. (Translated from French into English by Richard Mayne, 1994, p. 276.) The Essential and Analytical Point of View on Modernisation, Westernisation and Japaneseness
  • 51. Modern Japanese marketing and consumption originally developed inspired by the discourse of westernisation/ Americanisation, but also created the Japanese versions of them. Japan looks to be so close to the West, and yet so far away. Kazuo Usui Marketing and Consumption in Modern Japan Routledge, UK 2014
  • 52. 52 Graduate School of Humanities and Social Sciences Department of Japanese and Asian Studies New Graduate School Department of Economics and Management Department of Cultural Environment Master-degree level Master of Arts (MA) Program in Japanese and Asian Culture Master of Economics (MEcon) Program in Japanese and Asian Economics and Management
  • 53. Saitama University Saitama Prefecture is located in the northern suburb of Tokyo Saitama Prefecture is a commuting are to Tokyo Easy access to Tokyo Taking about one hour from JR Tokyo Station to Saitama University One of the national universities in Japan Each prefecture has one national university Saitama University is only one national university in Saitama Prefecture
  • 54. Undergraduate Schools Graduate Schools Master-degree Doctor-degree In total Japanese 7,315 In total Japanese 927 135 International 159 International 183 111 Faculty of Liberal Arts Japanese 809 Graduate School of Cultural Science Japanese 58 18 International 24 International 49 8 Faculty of Economics Japanese 1,543 Graduate School of Economic Science Japanese 54 34 International 53 International 25 6 Faculty of Education Japanese 2,068 Graduate School of Education Japanese 149 ― International 11 International 12 ― Faculty of Science Japanese 899 Graduate School of Science and Engineering Japanese 666 83 International 14 Faculty of Engineering Japanese 1,996 International 83 97 International 57 54 SaitamaUniversityhas 8,377Japanesestudentsand 477 internationalstudents with455teachersas of 1stMay2014.
  • 55. Scholarship (Government) I. MEXT* Scholarship * Ministry of Education, Culture, Sports, Science and Technology http://www.jasso.go.jp/study_j/documents/scholarshipse_mext.pdf On the recommendation of: Embassy Recommendation (Japanese embassy or consulate general recommends someone) http://www.mext.go.jp/a_memu/koutou/ryugak/boshu/ 1333463.htm Domestic Selection (Japanese university in which the student is currently enrolled if he/she is privately-financed and already studying in Japan recommends someone) II. JASSO** Scholarship ** Japan Student Services Organization http://www.jasso.go.jp/study_j/documents/scholarshipse_jasso.pdf Reservation Program for MEXT Honors Scholarship for Privately Financed International Students 55 Government Scholarship
  • 56. Scholarship (Non-government) Scholarships Available for International Students in the MEcon Program I. ILEC* Scholarship * Institute of Labor Education and Culture Awarding a scholarship equivalent to two years’ tuition fees to one international student who demonstrates excellent academic performance. II. Economics Society** Scholarship ** The Economics Society at Faculty of Economics, Saitama University Awarding a scholarship equivalent to two years’ tuition fees to one international student who demonstrates excellent academic performance. III. Partial Scholarship by the Economics Society** ** The Economics Society at Faculty of Economics, Saitama University Awarding 200,000 yen each to ten first-year international students who demonstrate excellent academic performance 56 Non-Government Scholarship
  • 57. IV. Non-Government and Private Scholarship Every year, approximately 30 private organizations award scholarship to students. We proactively advertise and recommend international students for these private scholarships. 57 Scholarship (Non-government 2) We welcome your participation with our graduate school ! Your application will be accepted by the end of May. Please check the website: http://www.eco.saitama-u.ac.jp/graduate/sasem/ryugaku/
  • 58. 58 We welcome your participation with our graduate school ! Your application will be accepted by the end of May. Please check the website: http://www.eco.saitama-u.ac.jp/graduate/sasem/ryugaku/
  • 59.
  • 60. Studying with Japanese Working People The Main Body of Graduate Students of the Department of Economics and Management (called Saitama School of Economics and Management, SASEM) are working people. They work for Japanese companies, government offices or non-profit organizations, and study at our graduate school in the evening of week days and Saturday. We have arranged a satellite campus, called ‘Tokyo Station College’ You will have several opportunities to talk with them directly through collaborate workshops or other events Tokyo Station CollegeJR Tokyo Station