Digital Marketing Strategies in the Japanese Market by Foreign Companies

Success Stories of Global Enterprises like Coca-Cola and IKEA

The Japanese market presents a significant hurdle for foreign companies due to language barriers, distinct cultural norms, and practices. Among these challenges, there are success stories of global enterprises in the Japanese market through the adept use of digital marketing. Coca-Cola, IKEA, ZARA, IBM, and Amazon are notable examples. Let’s delve into the success stories of Coca-Cola and IKEA.

Coca-Cola’s foray into Japan dates back to 1957. They adapted to the Japanese market by continuously developing original products, achieving hits, and becoming a beacon of digital marketing success for multinational companies. Coca-Cola leverages Twitter to enhance product awareness upon launching new items. For instance, they utilize hashtags (#), encourage retweets, conduct quiz polls, and engage in social sampling. Additionally, while vending machines are Coca-Cola’s most profitable channel, obtaining direct user information posed a challenge. To address this, they developed the “Coke ON” app, enabling direct data acquisition from vending machines. This mechanism allows visualization of user behavior, contributing to reinforced promotional strategies.

IKEA also entered the Japanese market early, in the 1970s. However, they initially struggled to adapt and were compelled to withdraw. Nevertheless, in 2002, they re-entered the Japanese market, achieving success by installing model rooms in their stores tailored to Japan’s housing conditions. This strategic move led to an expansion of stores nationwide. Initially recognized for their suburban large-format stores, IKEA now increasingly incorporates smaller stores in urban centers. This transition was made possible by leveraging digital marketing, creating pathways to e-commerce and mobile apps. With limited space in smaller stores that restrict showcasing large furniture and limited purchases, IKEA strategically utilizes these smaller outlets as touchpoints for brand engagement with customers.

Localization is Essential in the Japanese Market

A survey conducted on the digital marketing practices of foreign IT companies based in Japan revealed an almost equal split among those adopting similar promotional strategies to other countries and those employing unique Japanese strategies. Companies opting for global strategies highlighted the success of these strategies on a global scale as the reason behind their adoption. Conversely, some companies focused on Japanese-specific strategies or localized approaches despite having global standards.

Nearly 60% of the companies surveyed partnered with external entities such as advertising agencies. Additionally, when considering a case-by-case approach, a higher number collaborated with external partners, indicating a prevalent trend of working closely with external partners. Several companies collaborated with external partners to overcome challenges related to low market awareness in Japan and bridging the gap between global strategies and Japan-specific marketing.

According to surveys, there are challenges in reaching the Japanese market and localizing strategies when simply adopting global strategies. Obtaining high-quality leads while increasing brand awareness is a crucial mission. It seems imperative to implement digital marketing strategies deeply rooted in Japan. This requirement extends beyond the IT industry and is likely relevant to various sectors, including consumer goods, fashion, and restaurants.

In Conclusion

A commonality among successful foreign companies in Japan like Coca-Cola, IKEA, and others is the adoption of unique Japanese marketing strategies. These global companies localize extensively in every aspect, as represented by the 4Ps (Product, Price, Place, Promotion) and 4Cs (Consumer value, Cost, Convenience, Communication). However, these strategies are more feasible for financially strong global enterprises and pose challenges for small and medium-sized enterprises. Digital marketing, on the other hand, presents a lower entry barrier due to its comparatively lower implementation costs and higher cost-effectiveness in the digital realm, making it more accessible for companies contemplating entry into the Japanese market.

At BizMOWA, we conduct research services specifically for foreign businesses interested in Japanese companies. We offer research on specific industries, companies within those sectors, and business models, aiming to facilitate your effective entry into the Japanese market.

If you need further assistance with your research, feel free to ask here.