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Small Business and Startup Ideas – Learning the Japanese Consumer Behavior

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Consumer behavior (also referred to as “buyer behavior”) – or the processes of how consumers decide about choosing, using/consuming, and/or disposing products and services – together with its theories and concepts, is a very complex marketing concern as it involves the buyers’ various attitude and mindset towards product purchases. Moreover, the constant change in the living standards brought about by trends, fashion and the changing technology makes it even more complicated because these factors significantly affect not only how the consumers’ attitude towards product purchases varies; but how businessmen make marketing decisions, as well.

Different countries have different consumer behaviors that are partially attributable and are largely influenced by cultural differences. The greatest challenge for every marketer is choosing the right and appropriate marketing strategy. However, often times, a strategy that proves successful in one country fails in another –causing a waste of money. And in worse cases, carries a huge potential to damage brand reputations.

Because of this, understanding consumer behavior is one of the most necessary and important tools that marketers should learn in order to successfully meet certain sales objectives, perspectives, and purposes – such as identifying and making analysis and decisions to satisfy every consumer’s wants and needs.

The Japanese market and consumer behavior.

Today, one of the most studied country in terms of consumer behavior is Japan – that although holds the title of being the world’s second-largest retail market, imposes lots of risks for being one of the challenging countries to build a business in. As a matter of fact, many Western companies find it difficult to succeed in Japan.

The reason for the said difficulty is because the Japanese market behaves differently. That is, the Japanese specificities (i.e., demands, design taste, lifestyle, response to marketing campaigns, and service expectations) that often originated in its culture and society, are largely different from its Western counterparts – an attitude that greatly impacts the Japanese consumer behavior.

However, despite the challenge; if examined well, these specificities draw a specific Japanese mindset and impose specific service and marketing techniques that its consumers demand. And any company that is willing to retail in Japan should spot the following hints:

Japanese consumers are novelty seeking.

According to a LinkedIn article written by Philippe Huysveld, a Japan expert, Japanese consumers are a fan of new and expensive products. Unlike Westerners, they tend to eschew low-priced goods, prefer to buy from high-end department stores, and are willing to pay high prices for quality products.

This is highly evident in the Akihabara area (the town of electronics shops situated in central Tokyo) where locals’ appetite for new technologies can be observed, which holds true for other product lines as well. In Japan, owning the latest model is considered fashionable.

Japanese consumers have high-quality standards and service expectations.

Japanese consumers are said to be the most demanding consumers. Aside from being a fan of novelty, they are quality-seeking people. Factors such as brand information, advertising, packaging, and service are valued most importantly by the Japanese in making purchase decisions. Everything given to the customers should be in perfect appearance.

Furthermore, quality does not end with the product – the service during the sales process, and even after-sales, are as well valued. For example, it extends to how one reacts to input and feedback. A company that fails to address a problem that impacted an employee’s and customer’s comfort and safety will be viewed as appalling.

Japanese consumers are attracted to imported goods.

Japanese customers buy foreign goods because of the following reasons:

  1. The product is not available in Japan.
  2. The product is imported from a country famous for it. (i.e., Swiss watches, Belgian waffles …)
  3. The product is less expensive than the local brands.

It is also important to note that Japanese consumers are price sensitive. Often times, the prices of certain products indicate social status. For example, low-priced goods are for practical use whilst the high-priced ones are for luxury purchases.

The changing Japanese consumer behavior.

The specificities of the Japanese mindset listed above have long been a part of the country’s market oddity. However, as time passes by, a noticeable fundamental shift (brought about by both economic and social issues) in the Japanese consumer behavior and attitude can be observed – a sudden change that one should always be reminded to be aware of when doing business in the country.

In a report by Brian Salsberg of McKinsey, the “Japanese consumers suddenly look a lot like their counterparts in Europe and the United States.” That is, from being novelty-seeking, the Japanese “are now flacking to discount and online retailers.”

Indeed, doing business in Japan is a lot different and difficult than its counterparts – most especially compared to its economic rivals like the US – where a growing number of consumers switch from higher-priced to lower-priced goods; and China – which aside from being its rival regarding several issues (i.e., the Nanking massacre and dispute over the Diaoyu islands …), is competing with Japan with its emerging market through offering speed and cost versus Japan’s value for quality.

But despite the risks, the shift – the increasing resemblance of the Japanese consumers to its Western peers – might be a welcome news for foreign companies that have long regarded doing business in Japan difficult.