Brand Localisation: Italian Success in the Japanese Market
Last month, we explored the basic principles of successful brand localisation and what to consider when planning to sell products in Japan. To see this in action, let’s consider the experience of De’Longhi - a well known European brand. When entering the Japanese market they faced great competition, but the localisation agenda they developed helped them to become a bestseller in Japan.
The Rise of Italian Consumer Electricals in Japan: De’Longhi
Japan is world renowned as a producer of reliable electrical goods for the home. Despite the growing international competition, the Japanese market continues to be dominated by domestic manufacturers with very familiar names, such as Panasonic, Sony, Mitsubishi, Hitachi and so on. (Consumer electronics industry in Japan - statistics and facts | Statista)
But Italian brand De’Longhi has managed to break this trend. The company has led sales of oil heaters in Japan for the last 12 years. In fact, it has held the top market share spot with an incredible 90%. Its rise to dominance can illustrate the process of high-quality localisation in action. Of course, this did not happen overnight. De’Longhi invested time, thought and money to achieve this success.
Language matters
De’Longhi established its Japanese subsidiary in 1995 and made the decision to employ experienced Japanese personnel. Knowing the local preference for Japanese goods, this was a necessary move. It wanted a workforce familiar with the big brand competitors and able to communicate effectively with potential customers. Understanding how to speak to retailers and consumers with the correct tone and degree of politeness is essential when doing business in Japan.
This approach worked well. A traditional sales channel, an appropriately written catalogue, was very effective when De’Longhi first entered the Japanese market. But sales began to stagnate in the 2000s, so they looked for new approaches.
Consider your product information
De’Longhi Japan primarily imported and sold oil-filled heaters, with a limited selection of other small consumer electricals. They marketed their products as an introduction to a chic European lifestyle and Italian design.
In 2010 the current CEO, an experienced market researcher, was hired to improve their market presence. Market research revealed that only 50% of Japanese consumers considering purchasing a heater were aware of the De’Longhi brand. To reinvigorate sales it was necessary to reach that half of the market that did not know about De’Longhi.
Understanding the value that Japanese consumers place on detailed product information, it was vital to take a renewed look at what they had previously made available. The key sources of product information at that time were catalogues, stockists’ shop floors and call centres. Everything needed updating.
Cluttered shop floors were cleared, removing anything unnecessary to focus on a sophisticated Italian design.
The customer calls that were managed by De'Longhi internal sales team were outsourced to a call centre, which improved the response rate and allowed information to be managed centrally.
De’Longhi invested in a local technical facility to fulfil repair requirements.
The product message was streamlined to highlight the benefits of using an oil heater in the bedroom, including a focus on safety and air quality.
Clear information on the benefits of the De’Longhi oil-filled heater significantly increased local consumer knowledge and with it, confidence. It made purchasing from the lesser-known Italian manufacturer a far less risky prospect to the cautious Japanese consumer.
Modify products for the specific market
At first, the uniqueness of their product and the novel idea of bringing Italian design into Japanese homes was enough to bring De’Longhi some success. But soon sales stalled. When the current CEO was appointed, streamlined product information and effective communication helped sales start to recover.
However, De’Longhi Japan also had research to convince the head office in Italy to invest in Japan-specific products, which met the specific needs of the local people. For oil-filled heaters this included:
a digital display panel showing room temperature, target temperature and timer information;
remote control as standard (today the newest models can be controlled via an app);
making products lightweight and easy to move between rooms;
making a product switch off automatically should it fall on its side (avoiding a potential fire risk in Japan where earthquakes are more common).
Gradually De’Longhi launched Japan-specific items in other ranges. These included 0.75-litre electrical kettles (European standard is 1.0 to 1.7 litres), 0.50-litre coffee makers, and a subscription service to encourage a population who were still relatively new to drinking coffee. Many of these models are also now sold in other Asian markets as the standard sizes.
Choose the right communication channels
De’Longhi also decided to invest in TV advertising. All its major competitors spent a lot of their PR budgets on TV commercials and it was necessary to match if De’Longhi Japan wished to gain the same levels of brand awareness.
But over time, Japanese consumers have changed their viewing habits and the De'Longhi approach has evolved too. De’Longhi Japan now has its own YouTube, Instagram, Facebook and LINE accounts to communicate directly with Japanese customers. This marketing localisation has allowed the company to be where its potential customers are already looking for information.
De’Longhi has recently launched a global media campaign for its coffee machine, hiring Brad Pitt as the brand ambassador. It will be interesting to see how this initiative is presented in their global marketing and adapted to local markets around the world.
Stay mindful of regulations
Complying with national and local regulations is a basic necessity, so employing local experts is very useful. But should there be a noncompliance issue, it is important to rectify it quickly and communicate effectively through official media and customer service channels. Having an established local presence, as De'Longhi do, helps to make this process efficient and minimise any potential damage to the brand image.
Bespoke Marketing Localisation Services
No single approach will fit all businesses, but there is a lot to learn by researching the experience of other European companies in Japan.
Getting your localisation strategy right for the Japanese market requires expert knowledge in many fields and the ability to ask the right questions.
Pointblank Promotions Ltd. supports companies aiming to expand their services into Japan and other markets. Please feel free to contact us to discuss your needs using the enquiries link below.