Business

Foreign firms listen close to Japan's tough consumers

by Shigemi Kotaka

Kyodo News

Many major international companies including L’Oreal of France and Procter & Gamble of the United States are focusing on trying to satisfy Japan’s demanding consumers, not only for their business in Japan itself but also because they say it helps their efforts in other markets.

They say they view Japanese consumers as “instructors” for making top-quality items because they have a good sense of evaluating commercial products.

Some marketing experts, in fact, argue that Japan’s corporate strength stems partly from healthy entrepreneurial competition and partly from a need to please the nation’s notoriously persnickety consumers.

L’Oreal’s local Japanese unit, Nihon L’Oreal, set up a test center in Tokyo’s upscale Aoyama district last year to assess needs for cosmetics, and some 20 monitors arrive at the center daily.

Marc Guerin, vice president of Nihon L’Oreal, said the company listens seriously to such monitors because Japanese consumers top the list in terms of making specific demands for products.

Marketing experts also note it is difficult for top companies to remain major players unless they can produce innovative products that meet consumer needs, as opposed to placing priority on mass production and efficiency.

Guerin says Japanese purchasers have reputations for being among the most accurate globally in assessing products and he could not ask for better in terms of getting comments.

Yoshihiko Fujii, head of research and development at Dentsu Communication Institute, said Japanese consumers were able to hone their demanding taste in the bubble economy of the 1980s, when the younger generation in particular had ample access to the best products from around the world.

Called a “new breed” of Japanese, they were among a generation more focused on individuality than a sense of group. Even after the bubble economy burst and Japan entered a prolonged recession, they were able to spend freely on top-quality automobiles and cosmetics. Now in their 40s, they remain a vanguard among the nation’s consumers.

In addition, the income gap in Japan is narrow compared with many other countries, which has helped give rise to a relatively large number of “instructors” whose remarks can prove useful to global manufacturers.

A L’Oreal official termed the environment in Japan “ideal for the creation of value.”

Procter & Gamble remembers the marketing mistake it made in Japan in the 1970s with its Pampers diapers and has vowed not to repeat it.

The diapers proved popular in the United States, but P&G lost the top spot in the paper-diaper market several years after it started selling them in Japan because a Japanese company came up with a better product — one that was thinner yet more absorbent.

P&G had shrugged off complaints from Japanese parents that its diapers were too thick and troublesome to carry around, apparently believing that products that sold well in the United States would do so anywhere in the world.

The winning formula in Japan, however, proved different, and it went on to become popular elsewhere in the world.

The company now listens more attentively when Japanese consumers speak, with one example being developments that were made in the technology for improving diaper production.

Werner Geissler, a former president of P&G’s Japanese unit, changed the winning formula in Japan to one that now reads that success in Japan will lead to success anywhere in the world.

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