Global Marketing Article 1

Claims of Exceptional Performance May Create Suspicion

A Dutch insurance company found it difficult to convince German customers to buy their life insurance, even though their product had done exceptionally well in recent years. In their advertising campaign they stated that their customers' capital investment had grown as much as 20 percent annually. German customers were not convinced; such an exceptional increase in the price of shares could not be trusted to continue. To win over German customers, the Dutch company had to change their marketing strategy and promise a much lower return on investment.

Village Life and Inefficient Retailing

Japanese social life and consumption patterns are much more particularistic than in most western nations. Tokyo, for example, is a collection of "villages," each with its shopping center. Because houses and refrigerators are small and fresh fish and vegetables are greatly prized, the Japanese shop daily. They go by bicycle or on foot, and shop in thousands of mostly small, mom and pop stores supplied by two tiers of wholesalers. Service is very personal and friendly, and the predilections of individual customers are well known.

Supermarkets and chain stores are hindered by the Large Scale Store Law and its application by local governments. Small shopkeepers are an important constituency and are protected. Quite a few used to work in companies that produce the goods they currently sell. They can exchange defective goods quickly, preventing unfavorable publicity for the company. But such a system is not without its costs. Supermarkets are fewer, standardization is less, and distribution costs are higher. Even successful foreign chains, like Kentucky Fried Chicken, employ twice as many people in Japan as they do in the States. The additional workers wrap the chicken carefully, bow, and smile. Japan spends on honorifics, people whose main task appears to be greeting and thanking customers.

The 24-hour economy has an impact on daily life in Japan. Convenience stores that are open late in the evening are now starting to boom.

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