Technology Marketing in Japan
Mr. Bill McGee, Security Channels Manager, Cisco

In November of 2002, we presented the “The Six Secrets to Success in Japan” . Our article focused on the key strategies for competing in Japan and was based on one of the presentations from JETRO (Japan External Trade Organization) San Francisco’s “Locking up Opportunity: Network Security Japan” event. This month we bring you a second installment from that event, this time concentrating on the more specific aspects of technology marketing in Japan. This month’s Bridge Builder features Mr. Bill McGee, Security Channels Manager at Cisco whose “Marketing in Japan” presentation provided excellent insight into the particular requirements of the Japanese customer.

The unique conditions of the Japanese market are the starting point, according to Mr. McGee. The whole concept of a “bubble burst” is epitomized by Japan’s economic slide, which started a full decade before the Internet bubble burst of recent memory. This recession, combined with Japan’s growing unemployment and layoffs mean that Japanese corporate customers are increasingly benefit oriented with regards to new purchases. And with the recent environment of deflation, these customers are highly concerned with price.

Yet just as important as the market, says Mr. McGee, is the unique Japanese business culture. An important concept to know: “Shima-Guni Konjo” or “island country mentality”- a Japanese saying that refers to the Japanese sense of being separate and different from the rest of the world. “Shima-Guni Konjo” manifests itself clearly to US vendors in the form of Japan-specific product and operational requirements. For example, in many cases a Japanese customer will simply not do business with a firm without a local office.

Another example is extra testing: often the product tests done for the US market are simply not enough for Japan. Another key concept is “Nemawashi” or “wrapping the roots”. This expression comes from the process of moving a tree- you need to wrap the roots of the tree so carefully that you can move the tree without harming it. Applied to business, the concept means that all big decision-making (like the purchase of IT solutions) require consensus and take time. The advantage of Japanese “nemawashi” is that decisions tend to stick. The disadvantage is that decisions, once made, can be difficult to reverse.

There are several specific marketing strategies that can be employed to effectively market products in Japan, according to Mr. McGee. The first is to improve quality by establishing an additional testing infrastructure in the Japanese market. The second is to establish a “high touch” sales model with complete Japan localization – even hardware needs to have a Japanese OS. Finally, incorporation in Japan is a common sense but critical aspect of being a market player. Nihon Cisco Systems K.K. today has over a thousand employees, Japanese management, and products that are fully available and supported in Japanese.

For more information on JETRO events and how to work with JETRO, please contact Ms. Miyuki Doi, Director of Trade and Investment Promotion, at 415-392-1333 or visit the JETRO San Francisco website at www.jetro.org/sanfrancisco .

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