Breaking into the Japanese market presents unique challenges to international
vendors. Understanding the cultural differences and what users need are imperative to launch a company in Japan. A&S Japan sat down with local players and successful foreign companies to hear what they had to say about entering this highly demanding market.
BY Veronica Chen

Just mention Japan to any multinational company, and the majority of them will shake their heads to say, "What a tough market!" When asked just how tough the market is, the common response is that Japan is a highly individualized market, difficult for outsiders to understand. By the time they do, their start-up revenue has dried up. As a newcomer to Japan, I understand, as culture shock occurs frequently in my work and life. But as a difficult market to penetrate, is there something else beyond just culture shock? I spoke to several manufacturers and an

Innumerable Demands for Substantial Quality

When discussing the Japanese market, the most common observation is the rigorous standards Japan has for quality. However, the driver behind this exacting demand is not merely quality, but for the reliability of substance,
coupled with quality. Substance refers to a product's craftsmanship, high resolution, variety of functions and ease of use - -all demanded by the Japanese market. In Japan, substance also reflects a commitment to reliability. The Japanese have a proverb, "Three days, three months and three years more," intended to encourage persistence and long-term commitment to finish a task. Thus, reliability is a key indicator for the Japanese to evaluate a person or event.

By the same token, the Japanese market judges a product for more than its test performance, needing three days, three months and three years more to completely embrace the product. For a product to be considered a good one, it
must stand up to constant, prolonged use, in order to be declared a truly good product that can be relied on. Quality is an even higher consideration, reflecting on the supplier's character and its commitment to its products. Japan values timely, thoughtful and on-site servicing of products after installation, more so than any other market. This is because good service reflects the provider's belief in its product quality and an attitude of long-term commitment. Japanese clients despise foreign companies who disappear after making a quick buck.

From their perspective, business should be a lasting relationship, rather than a one-time transaction. Name any major Japanese brand, and it is hard to spot one that does not have a decade-long history, if not longer. These companies have proven themselves over the years, putting users at ease about doing business with them and relieving concerns about technical issues going unanswered. Cost sensitivity is less of an issue, as Japanese products are considered trustworthy. As a result, local brands constitute more than half of the domestic market.

Distrust of Unfamiliar Brands

For an unknown international brand, even if it has top quality and competitive pricing, it holds limited charms for conservative Japanese buyers. A case I was told about concerned a corporation wishing to upgrade its security system. Its system integrator recommended a cheaper system, with the same functionality, offered by a foreign vendor. In the end, the foreign system was rejected,
with the corporation purchasing a new system from its existing local vendor. Why so? The user candidly said, "I do not want to worry about technical issues stemming from other systems. Should anything happen, it will be my responsibility. I would rather spend more money for added peace of mind. And on another level, I need to report to my superior. He will ask me why I selected a brand no one has ever heard of before."

Japan is more sensitive to branding than any other market. A brand represents trust and a secure investment. Especially for users unfamiliar with technical
knowledge and who do not know how to judge product quality, choosing a known and established brand is the way to go. Thus, the first step for all international vendors is to establish themselves as

a brand and be known in the market. The common misconception of multinational brands is that their company name is as respected in Japan as it is everywhere else in the world.This does not hold true for the Japanese market, which is unlike any other. In order to be a major brand in a locally dominated market, international brands must start from the bottom to make their mark in the industry.

Proving Your Worth Through Installations
The quickest way to be known to Japanese users is to name installations, proving a brand's ability. I asked a system integrator how he managed to promote international brands in the Japanese market. He said,
"I prepared many case studies, telling users that this solution has been applied at multinational IT companies. Once clients see these applications, they have an easier time accepting the system I recommended." While talking to him, I noted three key points for selling to Japan:

1. Partners are necessary. For the system integrator, his technical expertise and experience helped him localize foreign solutions. He did not just translate the basic interface, but even made recommendations to international
brands to tweak system processes, making them more palatable to Japanese users.

2. Cases studies are a boon. The ones the system integrator provided not only showed his professionalism, but also helped the foreign brands he distributed
to be adopted more quickly by Japanese users. With the professionalism of the case studies, users were more likely to believe that international brands
provided indispensable tools.

3. Branding is powerful. Wisely promoting users' brands can boost international brands as well. As a result, success in Japan for international brands means thinking of ways for users to know and trust you. When international brands come across a good installation--even an unpaid or low-paying one--it is imperative for them to persuade the user to support
them and their partners. This gives foreign companies a chance to get their foot in the door with a local installation, then publish what was done as a case study. Should a foreign company not have any local installations, it best to prepare case studies from other markets, preferably applications of well-known users. Once these are provided to local partners, case studies can boost a
brand's market awareness.

Strategic Partnerships Open Many Doors
Japan is a highly networked society, with introductions frequently taking place. This network of relationships is an important survival lesson in Japan. The security industry emphasizes relationships even more. Through Person A introducing you to Person B, these introductions are the origin of many projects. For international vendors, developing a network of market relationships is as crucial as locating a Japanese business partner.
The principles of operating in the Japanese market include understanding the local culture, finding the right partner, localizing solutions and increasing brand
awareness for products. Japan is not that different from other markets--just that its people hold to their business principles more firmly and demand they are enforced. For international brands to make the cut in the exacting
Japanese market, they must pass the test of reliability.