In Japanese business, the samurais rule

Melbourne Herald Sun, Thursday July 4, 2013
A career in Australian advertising inevitably means, at some stage, working for a Japanese corporation. Be it autos, electronics, machinery, watches, graphics, audio - they have created themselves as the technical miracle of the last half-century.

But something that long puzzled me has just been revealed. Let me tell you a story.

Our huge Japanese client called us into a meeting to show their latest product. A wonderfully designed machine that the engineers were proud of.

"Lovely. Who is going to use it?" we asked.
"Everyone," was the reply.
"No," we persisted, "what was the marketing reason for this product, what do you see as its niche?"
"Oh that's what you're here for. Here's the budget allocation and all the technical specifications..."

The engineers were excited by the product, the national offices around the world were allocated quotas, and in each country we had to go out and sell them. What is the large hole in this picture?

Yes, marketing. Why does the public want it? What market opportunity does it fill? Who will use it? What is the competition? How realistic is the pricing?

But no, the marketing that you need to do before you so much as draw a plan, was still not thought through as the boxes left the factory.

A recent article by Japanese specialist Robert E. Peterson of Wickaboag Consultants, Tokyo, who has advised Japanese companies for 31 years, explained a lot to me.

As I had personally observed, many high-level executives - particularly those in Japan head office - did not understand marketing. Even now, it is not a core part of their business education. The job of marketing executive is often filled by younger executives rotating through the company for experience, rather than being a key management post in the company.

So there is little opportunity for an executive core with developed skills, knowledge and experience based on a collective memory of past experiences.

Peterson introduced me to the Japanese business caste system of shinokosho. A large Japanese manufacturing corporation is run like a fortified empire of old. They may not stride around with a katana sword strapped on their backs any more, but the corporation is commanded by the highest social group, the samurai.

These are the engineers, and if you've ever worked with a Japanese company you will immediately recognise the deferential way these lords are treated. Second come the farming peasants, who grow the food. Third, the artisans and craftsmen. These fulfill the jobs of manufacturers, process workers, drivers, clerks - all the essential jobs in the middle.

At the fourth, bottom level, are the merchants. In Confucian terms they have the lowest moral purity as they produce nothing but only sell the products to make money. And guess what - that's where the marketers are. With baskets hanging off their bamboo yokes, metaphorically speaking.

Peterson claims that Japan's university education in marketing is poor, and the corporations do not have well-provisioned training programs for their recruits.

But meanwhile Japan has been suffering, financially and socially. As its population ages, the public's willingness to embrace a constant flow of new products diminishes. Reaching outside of Japan has become an imperative for the nation's future prosperity.

They have to seek new markets out in the huge growing world. We all know the skill they have to create wonderful products. But before they can be invented, manufactured and sold to eager customers, companies have to create a need for these products. The customers have to feel a desire for them and a willingness to pay. And that is generated through marketing.

ray@ebeatty.com