Japan Market Update - February 2007 Edition

February is already upon us and promising to be a busy month. While Super Bowl, Valentine's Day, and President's Day are celebrated throughout the United States, the Japanese will observe the national holiday, Kenkoku Kinenbi (National Foundation Day) on February 12. On February 14, many Japanese women will follow the western tradition of bestowing Valentine's Day treats on their friends, partners, and even co-workers, while men are expected to reciprocate a month later -- on March 14 -- a purely Japanese invention known as "White Day."

Knowledge of Japanese trends and buying patterns such as those on Valentine's Day enables businesses to capitalize on consumer behaviors regardless of economic and market conditions. Online surveys to monitor these trends are becoming a crucial market research tool -- especially with the Japanese public. In 2006, for example, more than 1500 Japanese answered PacRim's online www.hawaii-arukikata.com ONOLICIOUS survey about restaurants in Hawaii. The Cheesecake Factory in the Royal Hawaiian Shopping Center was voted the best in three categories -- Best Taste, Restaurant for Family, and, Restaurant Overall -- indicating a change in consumer attitudes. Japanese usually prefer smaller portions, but The Cheesecake Factory proves that great food and atmosphere at reasonable prices attract the Japanese. (Other popular restaurants included Eggs 'n Things, Mariposa, Alan Wong's, and Leonard's Bakery that ranked 5th overall but first place for "great places for sweets" category. Click here for more information.)

PacRim Marketing, with its wholly-owned sister company, PRTech http://www.prtech.com, offers a variety of online research options. Surveys can be custom-developed on the popular Japanese web site, www.hawaii-arukikata.com or on your own web sites. Other services include monitoring blogs, on-line chat and BBS (Bulletin Board Systems), and sending information to opt-in online user panels to query them on client-specific products and services. In addition, PacRim conducts its own online surveys on www.hawaii-arukikata.com on an on-going basis.

Off-line, in-person surveys continue to prove to be an effective marketing tool as well. PacRim conducts interviews and exit surveys in multiple languages with research partners at airports, stores, or at clients' properties. PacRim has conducted more than 1000 in-person personal surveys, of over 20 minutes each, with Japanese travelers in Hawaii. These have all been posted on www.hawaii-arukikata.com. PacRim also has worked with research partners on in-store surveys in different languages.

Let us help you monitor consumer and customer trends that affect your business. To find out more about how to develop your own customized surveys and/or include your questions in existing surveys, contact me at 949-4592, ext. 833, or Joseph Bozzelli, Vice President, PRTech, at 949-4592, ext. 845.

Warmest regards,
Dave Erdman
derdman@pacrimmarketing.com

*Japan Market News
-----Travel: Hawaii one of top destinations in 2007
-----Travel: HTJ unveils Hawaii marketing plan
-----Business: Coach plans Japan expansion
-----Business: Hawaii's tree gets a hefty raise from Hitachi
-----Business: Toyota to build ultra-budget car
-----Business: Natto sales skyrocket
-----Business: Japanese patissiers win gold in France
-----Society: "Travel" and the color "red" key for 2007
-----Society: Pollers predict "senior-centric" 2007
-----Technology: Japanese unaffected by iPhone
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: HAWAII ONE OF TOP DESTINATIONS IN 2007

Popular among men, Hawaii's "family friendly" impression a major factor
An online survey by Rakuten, one of Japan's most popular Internet portals, ranked Hawaii among top three desirable destinations for 2007. The mainland U.S. ranked first at 22.7 percent, followed by Italy at 22 percent, then Hawaii at 21.7 percent. The U.S., Canada (6th), and Hawaii were most popular among married men in their 20s, while Italy was the favorite choice among women in their 30s and 40s. Among married men in their 20s, Hawaii's image as a "destination the whole family can enjoy" is believed to be the main contributing factor to its popularity. Finland (16th) showed unexpected popularity among unmarried women in their 30s, and just one rank under Guam. As for domestic destinations, the northern island of Hokkaido, and the southernmost island of Okinawa, were undisputed favorites across all age groups.
(Source: research.rakuten.co.jp 12/26/06)
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TRAVEL: HTJ UNVEILS HAWAII MARKETING PLAN

Year-long plan focuses on creating an image of Hawaii as a place of "depth and quality"
In an effort to reverse the declining number of Japanese tourists to the islands, Hawaii Tourism Japan announced an $8 million plan that focuses on revitalizing Hawaii's image as a top-quality destination. Part of the plan includes marketing Hawaii as an "evolving" destination, with more Waikiki hotel rooms and entertainment on the horizon, in light of the anticipated completion of Outrigger's $535 million Waikiki Beach Walk redevelopment project. The plan also proposes specific purposes for visiting Hawaii, including Walking & Running, History & Art, Hula, and Romance. Succeeding ukulele virtuoso Jake Shimabukuro as the official spokesperson, or "personality" of the year-long campaign will be Mayumi Sada, a popular Japanese singer and actress. Sada symbolizes Japan's affluent and trend-setting "women in their 30s," who are known for their penchant for travel and shopping.
(Source: Travel Journal International 1/17/06; Outrigger Hotels)
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BUSINESS: COACH PLANS JAPAN EXPANSION

Japan market still "vital," despite competition and higher growth in U.S.
Coach sales in Japan grew 17 percent in 2006 - not as robust as before, but strong enough to warrant more expansion, according to CEO Lew Frankfort's message to financial analysts in January. Frankfort said Coach will drive growth in Japan primarily by opening between 15 and 20 new stores in Japan this fiscal year, as well as expanding at least ten of Coach's most productive retail and factory locations. The luxury accessories market is weakening and competition from other brands is "as intense as ever" according to Frankfort, as Japanese consumers are spending money elsewhere. But despite a 5 percent overall contraction for imported brands during the holiday period, Frankfort said Coach achieved about 17 or 18 percent growth. Moving forward, Frankford calls a 15 percent market share "realistic" over the next few years, in addition to about 10 to 15 percent growth in the second half of 2007.
(Source: Yahoo!Finance 1/24/07)
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BUSINESS: HAWAII'S TREE GETS A HEFTY RAISE FROM HITACHI

Moanalua Gardens' monkeypod will remain Hitachi's corporate icon
A magnificent, 50-foot monkeypod tree that has been a trademark image for Japanese electronics company, Hitachi Ltd. since 1975, has fetched a nearly twenty-fold raise. Moanalua Gardens' new owner, Kaimana Ventures Ltd., will receive $400,000 a year for the next 10 years for allowing Hitachi to use the famous monkeypod tree in its advertising. Over the last three decades, the so-called "Hitachi tree," or "Hitachi no ki," as it is known in Japan, has appeared in TV commercials as a backdrop to the company's long marquee list of enterprise businesses. Japanese tourists visit Moanalua Gardens year-round to pay homage to the well-known tree. The first Hitachi symbol was in fact a cartoon tree, until Hitachi chose the majestic arbor at Moanalua Gardens as their corporate symbol. In the years following, the Hitachi tree briefly changed hands to a giant mango tree on the Big Island, then a banyan tree in Singapore, on to a California oak in Orange County, Calif. By popular demand, the torch returned to the original monkeypod in 1984, after which the tree "earned" $20,000 a year for its service.
(Sources: Honolulu Advertiser 1/26/06; hitachinoki.net)
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BUSINESS: TOYOTA TO BUILD ULTRA-BUDGET CAR

Japan's no.1 automaker plans "radical" overhaul of production and design
Toyota Motor Corp., pioneer of the environmentally-friendly hybrid vehicle, Prius, as well as the luxury Lexus line, announced plans to build a new low-cost car that would undercut Renault's budget mobile, the Logan. Renault began production of the Logan, which will cost around $6,200, catering to emerging economies such as China and Russia. Toyota has yet to set a price or name for the low-cost car, but commented it would be "at least" less than the Logan. Toyota CEO Katsuaki Watanabe said his company would control the price by targeting costs throughout production, including ultra-low-cost design, and if necessary, developing new materials to meet the budget.
(Source: Associated Foreign Press 1/22/07)
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BUSINESS: NATTO SALES SKYROCKET

The modest soybean gets a jolt after being linked to weight loss
Probably for the first time in recorded history, natto - a pungent, fermented-soybean food staple, and a common accompaniment to white rice - is selling out in Japan. A television program claiming natto aids weight loss sparked a buying frenzy across the country, causing some manufacturers - and certainly, supermarkets - to run out of the product. The television program focused on the fact that natto contains isoflavone, which increases a specific type of hormone in the body that helps shed fat. Natto, known for its stringy texture, is as common a form of protein in the Japanese diet as cheese is, for instance, in the western world. It can be found in sushi rolls, or at stores, (usually) stock-piled in the refrigerated section.
(Source: Mainichi Daily News 1/11/07)
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BUSINESS: JAPANESE PATISSIERS WIN GOLD IN FRANCE

A team of Japanese pastry chefs beat international competitors for cash and bragging rights
It's no surprise that the French pastry - or patisserie - boom in Japan in recent years has borne some of the greatest pastry chefs in the world. Japan's three-man team of Yukio Ichikawa (Imperial Hotel), Toshimi Fujimoto (Grand Hyatt Tokyo) and Kazuya Nagatani (Nagoya Marriott Assosia) won the gold medal, a trophy, and a check for $15,500 after placing first in the 10th annual World Patisserie Cup in Lyons, France, a competition that drew professional pastry chefs from 20 countries this year. Belgium won the second prize, and Italy placed third. Each three-man team had 10 hours to create a chocolate dessert, a chilled fruit dish, an individual dessert serving, and an ice sculpture.
(Source: Associated Foreign Press 1/22/07; The Daily Yomiuri 7/10/06)
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SOCIETY: "TRAVEL" AND THE COLOR "RED" KEY FOR 2007

Research sheds light on consumers' desires and frame-of-mind for the new year
The largest number of respondents to an online survey by Japan's leading advertising and marketing firm, Dentsu Corp., chose the color red as their "theme color" for 2007, because the passionate hue symbolized determination, success, and a will to conquer. The second most popular color was orange, which was described by many as depicting health and vitality. As for the most desired products and services of 2007, travel ranked first, followed by home electronics, knowledge and education (such as through books and classes), and telecommunications products (i.e. PC, mobile phone, video games). While "travel" kept its top spot from the same survey for 2006, "home electronics" inched up one rank from no.3 last year, and "knowledge and education" jumped three spots from no. 6.
(Source: Dentsu Trend Box Survey 12/06)
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SOCIETY: POLLERS PREDICT "SENIOR-CENTRIC" 2007

Senior-centered services and divorce rates expected to rise as boomers go mainstream
A wide-scale online survey by NTT and Mitsubishi's joint research firm, "goo," showed that 72 percent of its respondents predict an increase in the number of businesses and services catering to the senior market, which includes the "dankon" population, a well-known term for Japan's baby boomer generation that will retire en masse this year. Half of the respondents also said they expect a labor shortage as retirees make mass exits from the work force. Another trend also highlighted by the survey, was the prediction of a rise in divorce rates. For the first time, retirees' wives will be entitled to tap into their husbands social security effective this April, leading 75 percent of those polled to believe that boomer wives who have endured unsatisfactory marriages, will be serving more divorce papers this year.
(Source: research.goo.ne.jp 1/21/07)
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TECHNOLOGY: JAPANESE UNAFFECTED BY IPHONE

iPhone considered "backwards" technology, but not available to Japan anyway
Techies worldwide anxiously awaited Apple's promise to revolutionize the mobile phone industry at the latest Macworld Conference & Expo. The iPhones' touch-pad navigation did bring innovation to mobile phone design, but many Japanese scoffed at Apple Inc. CEO Steve Jobs' quote about "reinventing" the phone, since Japan's mobile phones have been operating over a wider-broadband 3G (third-generation) network. In comparison, the iPhone will be 2G. This isn't to say the Japanese aren't interested. Some IT analysts gave the iPhone thumbs-up in terms of design and usability, and did not rule out the possibility that Apple would consider tapping Softbank to join Japan's 3G network in the near future. Why Softbank? Because the other two mobile industry players in Japan - NTT DoCoMo and "au" - already service rival music-download brands napster and Lismo, respectively. Currently, iPhones won't even work in either Japan or S. Korea, because their isolated 3G networks transmit data through faster channels than the 2G, or GSM (Global System for Mobile Communications) network used in the U.S. and most other countries.
(Sources: L.A. Times 1/11/06; Digital Town on the Web 1/10/07)
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VALENTINE'S DAY
Valentine's day in Japan is very different from the United States. In Japan, February 14th is a day where women give gifts to men. These gifts are usually chocolate, and are given to a woman's loved one or a male friend. There are two types of chocolates that a woman in Japan can give: Giri-chocolate is for the man/men that a woman has a platonic relationship with. "Giri" means obligation in Japanese, and the giri-chocolate was named this because it is an expected gift. Then there are honmei-chocolates. Honmei-chocolates are for the man that the woman is in love with. These are typically more expensive.

Accompanying Valentine's Day is "White Day" that follows a month after. On March 14th, men who received gifts from women on Valentine's Day are obligated to return the favor. Men usually buy women chocolate or marshmallow, but sometimes men give women lingerie.
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