Japan8
01-17-2004, 11:46 AM
What does the norm of American companies trying to sell in Japan have anything to do with Japanese companies selling in the US? American companies (particularly auto manufacturers) have met with very little success in trying to sell their products outside of North America. Some of the problems they have had have been due to incompetence and/or arrogance (and just bad decision making), but they have also been hamstrung by protectionist Japanese government policies. Whatever the reasons, though, US auto makers have not found a way to sell product in large numbers in Japan.
Japanese auto makers, OTOH, have had great success in the American market for over 30 years. While they've had some misses, overall, they have been very good at it, and are only getting better. Most Japanese auto makers now have design and production facilities in America that are designing and building cars that are only for the American market.
Regarding surveys and sample groups...Do Japanese auto makers not hold focus groups in the Japanese markets like they (and everyone else) do in the US markets long before new products are introduced? The sample sizes are small but usually present a very good and accurate cross section of the targeted demographic. The information gathered from these sessions is used with data collected about sales of competing/similar products and past history. Like I said before, they don't always get it right, but they are usually very, very close with only small tweaks required through the product cycle. Perhaps I overstepped in assuming that the same process was used in other markets as well? Still, the process is not without risk. There have been some famous failures. Recently, in the US market, the Chrysler Pacifica was initially offered with a higher level of standard trim than buyers wanted to pay for. When DC saw that the vehicles weren't selling, with the help of dealer feedback, a less expensive version was introduced that was not nearly as well appointed as the first ones. Once those started making it to dealer lots, they started to move (very aggressive incentives from DC haven't hurt either). Compare to a car like the RX-8 which has been selling close to Mazda's targets.
In the end, where is the incentive for them to change anything when they are already making their numbers?
Selling cars in Japan is my "WTF" that you responded to. I commented why does Mazda offer sunroofs on the RX-8 and Protege5 in the US, but not in Japan. So my response to your post has everything to do with that topic.
If I was clear and you fully read my post, just because you are "making the numbers' doesn't mean you are getting it right. I just means it's not ALL wrong. Like I said... your target is selling 100 cars, and you manage to sell 120. So you think great I'm doing my shit right and sit back on your laurels. It's the same thinking that had the big 3 get their asses handed to them in the 80's and the European luxury car makers in the 90's. So no... just because Mazda may be "making their numbers" does really mean a lot. Not if it may be possible to sell 150 cars instead of 120 by doing simple things like offering an extra option. That's their incentive. Their incentive is that you should constantly be looking for ways to further improve sales... to not just make your numbers, but to takeover your competition's share of the market. That is how you get ahead and STAY ahead. That is how Lexus took the market.
The problem with the surveys and sample groups is... is your "targeted demographic" the right one? Are you really including the necessary groups of people that would be potential buyers? I'm betting that it's gotten better, but they're still off from how good it could be. Why? Because you are ditctating who will be buying what type of car. It works well enough so that everyone is making their money, but it has enough flaws in it that they could still do better and even make more money. What I refer to are things like race, income and just what people want.
Why can't American companies overwhelmingly succeed in Japan? We own the American market and did well in Europe. Our product is less expensive and offers more power than the local product. You don't understand why it isn't selling. Here's why...
I won't say that the system isn't a difficult one to deal with, but
in this day and age not being able to sell is just about entirely the company's own fault. There is crazy red tape in Japan... but it applies to everyone. Learn the written and especially unwritten rules... once you've figured how it works... you just have to follow the rules. Japan is most definitely a culture of rules.
QA matters. Do it and do it right... don't cut corners and half-ass it. Selling products that are defective right out of the box, especially on the Enterprise business level, that is just a big No No. You'll lose the trust of your customers and after that it's nearly impossible to get it back.
Don't skimp on support. It'll cost plenty of money to establish things... but it has to be this way. Japanese people will hesitate from buying a foreign car because if something breaks they have to wait several weeks to a month for the part to be shipped to Japan. If something breaks fix it the first time... repeated support calls/visits to fix a problem is a No No. You'll lose the trust of your customers and after that it's nearly impossible to get it back.
Marketing... are they even doing any market research before trying to sell something here??? Do the US managers even listen to the Japan office?(usual they don't) Just because it was successful in America and even Europe, it means jack and shit in Japan. Do you know why most cars have a 2L engine or less? taxes and inspection. The bigger your engine and heavier your car the more it costs you. A 2L engine car runs you $400 a year in tax, plus another $1000 or so for the bi-annual inspection.
Management. Oh Lord have mercy. Don't leave the Japanese people to their own devices to run the office in Japan. You're asking them to do something new... to introduce something with no company reputation, nothing at all to the Japanese market. One needs to be creative, innovative and willing to try new things. Simply... the average born and bred Japanese person is educated to not question authority, to not think for themselves and to just do as they are told. Many who seem to have become so American when they talk to you in English, they turn into a hardcore typical Japanese salaryman once they swirch to speaking Japanese. Of course there are people who can break with the Japanese norm, but they are the exception to the rule (i.e. very hard to find). BUT... the opposite also holds true... don't just leave starting the new office in Japan in the hands of some US VP who may have been successful in Europe. This person knows nothing about Japan and thus is hardly equipped to do the job. So you ask what's the answer? A very careful balance of Japanese and non-Japanese (particularly local hire non-Japanese). At the top you need to have someone with the most international experience possible from the home office to be the person where the buck stops, but day to day affairs are to be headed by a foreign educated Japanese person that is under about 45 years of age (which are sharply on the rise)... I really want to say 40... but definitely beyond 45...this person is a Fujitsu, Honda, etc. reject. They got stuck in some middle management job and so quit to become upper management/president at a foreign capitalized company. In another words... they are crappy managers. Don't take the Japanese leftovers. Middle management needs to be a fair balance of Japanese and non-Japanese, as well as the workforce. ALL... read ALL employees should at least be conversationally capable in English. Many times this isn't the case... it just leads to people running a foreign company the Japanese way... but oh... their is still the US home office and support teams, etc. to deal with... I smell trouble.
Lastly why American (and European companies) don't succeed.... spend some freakin' money people. Look... normal US business principles don't fully work here. You can't invest a small amount and wait for sales to rise before making a full investment in the Japanese office. That's short-range planning, and it simply doesn't work in Japan. If you want to enter the Japanese market, you have to plan for the long run... spend what you have to (of course making sure it is all money well spent) to make your company succeed...and it'll cost you, but if you do it right and succee... it'll come back and then some.
Getting employees that are skilled and bilingual will cost money... they command a higher salary, but guess what... it's a good investment. These people can communicate back and forth with their US counterparts, give opinions and suggestions during meetings when people visit from the US office and generally have a less typical and strict mindset from the average Japanese person. And that is VERY important when having to deal with the US. The way of doing business on both sides of the ocean is simply very different and these people whom work in your Japan office have to bridge it... so you need to hire the best people that understand both sides and can bridge that gap.
What many companies cheat on... the give the Japan office an inadequate budget, expect a miracle to happen and complain when it doesn't. Yes... the inadquate budget is a lot of money, but it's like this... Company X is opening an office in Japan. Company X's name and products are unknown... so who'll buy it? So educating the market about the company and product... getting the companies name out there is very important. However... no huge marketing budget for this effort. Sometimes marketing/PR is even attempted to be run from the US home office! This pattern continues through to the support organization, etc. And we wonder why American companies fail or can sell very little in Japan...
EDIT: Added last paragraph and the quote.
Japanese auto makers, OTOH, have had great success in the American market for over 30 years. While they've had some misses, overall, they have been very good at it, and are only getting better. Most Japanese auto makers now have design and production facilities in America that are designing and building cars that are only for the American market.
Regarding surveys and sample groups...Do Japanese auto makers not hold focus groups in the Japanese markets like they (and everyone else) do in the US markets long before new products are introduced? The sample sizes are small but usually present a very good and accurate cross section of the targeted demographic. The information gathered from these sessions is used with data collected about sales of competing/similar products and past history. Like I said before, they don't always get it right, but they are usually very, very close with only small tweaks required through the product cycle. Perhaps I overstepped in assuming that the same process was used in other markets as well? Still, the process is not without risk. There have been some famous failures. Recently, in the US market, the Chrysler Pacifica was initially offered with a higher level of standard trim than buyers wanted to pay for. When DC saw that the vehicles weren't selling, with the help of dealer feedback, a less expensive version was introduced that was not nearly as well appointed as the first ones. Once those started making it to dealer lots, they started to move (very aggressive incentives from DC haven't hurt either). Compare to a car like the RX-8 which has been selling close to Mazda's targets.
In the end, where is the incentive for them to change anything when they are already making their numbers?
Selling cars in Japan is my "WTF" that you responded to. I commented why does Mazda offer sunroofs on the RX-8 and Protege5 in the US, but not in Japan. So my response to your post has everything to do with that topic.
If I was clear and you fully read my post, just because you are "making the numbers' doesn't mean you are getting it right. I just means it's not ALL wrong. Like I said... your target is selling 100 cars, and you manage to sell 120. So you think great I'm doing my shit right and sit back on your laurels. It's the same thinking that had the big 3 get their asses handed to them in the 80's and the European luxury car makers in the 90's. So no... just because Mazda may be "making their numbers" does really mean a lot. Not if it may be possible to sell 150 cars instead of 120 by doing simple things like offering an extra option. That's their incentive. Their incentive is that you should constantly be looking for ways to further improve sales... to not just make your numbers, but to takeover your competition's share of the market. That is how you get ahead and STAY ahead. That is how Lexus took the market.
The problem with the surveys and sample groups is... is your "targeted demographic" the right one? Are you really including the necessary groups of people that would be potential buyers? I'm betting that it's gotten better, but they're still off from how good it could be. Why? Because you are ditctating who will be buying what type of car. It works well enough so that everyone is making their money, but it has enough flaws in it that they could still do better and even make more money. What I refer to are things like race, income and just what people want.
Why can't American companies overwhelmingly succeed in Japan? We own the American market and did well in Europe. Our product is less expensive and offers more power than the local product. You don't understand why it isn't selling. Here's why...
I won't say that the system isn't a difficult one to deal with, but
in this day and age not being able to sell is just about entirely the company's own fault. There is crazy red tape in Japan... but it applies to everyone. Learn the written and especially unwritten rules... once you've figured how it works... you just have to follow the rules. Japan is most definitely a culture of rules.
QA matters. Do it and do it right... don't cut corners and half-ass it. Selling products that are defective right out of the box, especially on the Enterprise business level, that is just a big No No. You'll lose the trust of your customers and after that it's nearly impossible to get it back.
Don't skimp on support. It'll cost plenty of money to establish things... but it has to be this way. Japanese people will hesitate from buying a foreign car because if something breaks they have to wait several weeks to a month for the part to be shipped to Japan. If something breaks fix it the first time... repeated support calls/visits to fix a problem is a No No. You'll lose the trust of your customers and after that it's nearly impossible to get it back.
Marketing... are they even doing any market research before trying to sell something here??? Do the US managers even listen to the Japan office?(usual they don't) Just because it was successful in America and even Europe, it means jack and shit in Japan. Do you know why most cars have a 2L engine or less? taxes and inspection. The bigger your engine and heavier your car the more it costs you. A 2L engine car runs you $400 a year in tax, plus another $1000 or so for the bi-annual inspection.
Management. Oh Lord have mercy. Don't leave the Japanese people to their own devices to run the office in Japan. You're asking them to do something new... to introduce something with no company reputation, nothing at all to the Japanese market. One needs to be creative, innovative and willing to try new things. Simply... the average born and bred Japanese person is educated to not question authority, to not think for themselves and to just do as they are told. Many who seem to have become so American when they talk to you in English, they turn into a hardcore typical Japanese salaryman once they swirch to speaking Japanese. Of course there are people who can break with the Japanese norm, but they are the exception to the rule (i.e. very hard to find). BUT... the opposite also holds true... don't just leave starting the new office in Japan in the hands of some US VP who may have been successful in Europe. This person knows nothing about Japan and thus is hardly equipped to do the job. So you ask what's the answer? A very careful balance of Japanese and non-Japanese (particularly local hire non-Japanese). At the top you need to have someone with the most international experience possible from the home office to be the person where the buck stops, but day to day affairs are to be headed by a foreign educated Japanese person that is under about 45 years of age (which are sharply on the rise)... I really want to say 40... but definitely beyond 45...this person is a Fujitsu, Honda, etc. reject. They got stuck in some middle management job and so quit to become upper management/president at a foreign capitalized company. In another words... they are crappy managers. Don't take the Japanese leftovers. Middle management needs to be a fair balance of Japanese and non-Japanese, as well as the workforce. ALL... read ALL employees should at least be conversationally capable in English. Many times this isn't the case... it just leads to people running a foreign company the Japanese way... but oh... their is still the US home office and support teams, etc. to deal with... I smell trouble.
Lastly why American (and European companies) don't succeed.... spend some freakin' money people. Look... normal US business principles don't fully work here. You can't invest a small amount and wait for sales to rise before making a full investment in the Japanese office. That's short-range planning, and it simply doesn't work in Japan. If you want to enter the Japanese market, you have to plan for the long run... spend what you have to (of course making sure it is all money well spent) to make your company succeed...and it'll cost you, but if you do it right and succee... it'll come back and then some.
Getting employees that are skilled and bilingual will cost money... they command a higher salary, but guess what... it's a good investment. These people can communicate back and forth with their US counterparts, give opinions and suggestions during meetings when people visit from the US office and generally have a less typical and strict mindset from the average Japanese person. And that is VERY important when having to deal with the US. The way of doing business on both sides of the ocean is simply very different and these people whom work in your Japan office have to bridge it... so you need to hire the best people that understand both sides and can bridge that gap.
What many companies cheat on... the give the Japan office an inadequate budget, expect a miracle to happen and complain when it doesn't. Yes... the inadquate budget is a lot of money, but it's like this... Company X is opening an office in Japan. Company X's name and products are unknown... so who'll buy it? So educating the market about the company and product... getting the companies name out there is very important. However... no huge marketing budget for this effort. Sometimes marketing/PR is even attempted to be run from the US home office! This pattern continues through to the support organization, etc. And we wonder why American companies fail or can sell very little in Japan...
EDIT: Added last paragraph and the quote.