Japan brand management: Saatchi & Saatchi Japan CEO Philip Rubel talks about Lovemarks in Japan

saatchi & saatchi eurotechnology.com

Japan brand management: brands often work differently in Japan. Saatchi & Saatchi Japan CEO Philip Rubel explains Lovemarks in Japan

Philip Rubel, CEO of Saatchi & Saatchi Fallon Tokyo KK gave a talk about “Lovemarks”, a concept in branding developed by Saatchi & Saatchi CEO Kevin Roberts.

To understand Japan’s media landscape read the “Japan’s media” report.

The argument is that traditional “brands” are losing relevance because in our advanced “post-industrial” societies, function and technology are given, and can usually be rapidly reproduced or overtaken by competitors. Therefore, advertising based on function or technology does not work anymore. Another factor is the shift from traditional one-way media such as TV and print, to social media and peer-to-peer interactions, where anyone can publish anything about “brands” and “brands” cannot do anything about it directly. Thus traditional brands are dead. So, how can we get people to attach irrationally, beyond reason? Lasting relationships are not based on rational thinking.

Japan brand management: Lovemarks create loyalty which goes beyond reason

“Lovemarks” counter these effects: the concept of Lovemarks is to “create loyalty which goes beyond reason”. To create love for the Lovemarks. To get there, Saatchi & Saatchi believes in the “unreasonable” power of creativity: creativity can create loyalty beyond reason.

Philip Rubel showed us several examples of campaigns, mainly in Japan, which were successful far beyond expectations. These campaigns are based on creativity, incorporate surprise, appeal to emotion, and aim to exploit viral sharing on social media such as facebook and YouTube. Creativity is used to replace expensive traditional top-down one-way media such as TV and print, by social media, internet, YouTube and viral sharing and engagement. Here are some examples:

BMW films by Fallon

The issue was to develop the BMW brand in USA with limited budgets. BMW Films was a series of films created by famous directors and famous actors, which was uploaded to the BMWfilms.com website for download. BMW Films became famous, actors volunteered to appear, and download figures were far beyond plan.

SONY Bravia balls in San Francisco

Making of SONY Bravia balls

SONY Bravia paint

Godiva Love & Hug project for Valentine’s day 2013

For Valentine’s day 2013, Saatchi & Saatchi built a hugging robot, which people could hug, and the hugs were measured, rated, and photographed, and the results could be displayed on social network sites etc. The campaign is explained here on Saatchi & Saatchi’s website.

https://www.facebook.com/GodivaLoveandHug

De’Longhi coffee campaign: Michelangelo’s David

De’Longhi had the issue of competing with much more powerful Nestle’s campaign centered on George Clooney. De’Longhi decided to use Michelangelo’s David, who is immensely popular in Japan – and who does not require actor’s fees…

Reebok Rajio Taiso

Radio Taiso is a morning gymnastics series, which Japan’s national radio and TV system NHK started back in 1928. Saatchi & Saatchi created an imitation of Radio Taiso using professional acrobats, and relied on viral marketing. The advertised brand name appears only very briefly at the end of the video clip – enough to create response far beyond expectations:

T-Mobile “Life’s for sharing” campaign

T-Mobile “Life’s for sharing” Royal Wedding episode currently has 27,539,402 views on YouTube:

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EU Japan investment stock totals about EURO 230 billion and is expected to increase

EU Japan investments total about EURO 230 billion. European direct investments in Japan are stable, while Japanese investments in EU increase rapidly

EU Japan investment stock is expected to increase with the future Economic Partnership Agreement

EU Japan Foreign direct investment (FDI) stock between EU and Japan
Foreign direct investment (FDI) stock between EU and Japan

European direct investments into Japan, European acquisitions in Japan

EU investments in Japan have been relatively constant around EURO 80 billion. There has been a marked reduction in EU investment in Japan in 2006 due to the withdrawal of Vodafone from Japan with the sale of Vodafone KK to Softbank for approx. EURO 12 billion (find details of the Vodafone-SoftBank M&A transaction here). This reduction of EU investment stock in Japan is clearly visible in the graphics below in 2006 and 2007.

For a listing of major European direct investments and acquisitions into Japan, consult The EU to Japan Direct Investments Register.

Japanese direct investment in Europe, Japanese acquisitions in Europe

Japanese investments in EU are steadily increasing, as Japanese companies are seeking to grow business outside Japan’s saturated market, and as Japanese companies acquire European companies for market access, technology and global business footprint. In 2012 the total investment stock of Japanese companies in the EU-27 has reached around EURO 150 billion.

For a listing of major Japanese direct investments and acquisitions into Europe, consult The Japan to Europe Direct Investments Register.

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

EU Japan investment and acquisition flow and M&A

EU-Japan investments and M&A

EU Japan investment flow is mainly from Japan to Europe and totals about EURO 10 billion per year

Investment flow between EU and Japan shows strong impact from the Lehmann shock economic downturn, and was very quiet between 2008 and 2010. In recent years, mainly Japanese investments to Europe have picked up, and currently about EURO 10 billion per year flow from Japan to Europe, Japanese companies acquiring European companies to globalize and also to pick up known-how and technologies.

Investment flow from EU to Japan remains at relatively low levels around EURO 1 billion annually, while investments by Japanese companies in the EU are on the order of EURO 10 billion per year currently.

Japan to Europe direct investment register:

Investment flow recently is almost one way from Japan into Europe.

For an overview of M&A transactions by Japanese companies in Europe, consult the Japan to Europe direct investment register.

Europe to Japan direct investment register:

For an overview of M&A transactions by European companies in Japan, consult the Europe to Japan direct investment register.

EU Japan investment flow is mainly from Japan to Europe and totals about EURO 10 billion per year

EU Japan investment - Foreign direct investment (FDI) flow between EU and Japan
Foreign direct investment (FDI) flow between EU and Japan

With the expected Economic Partnership Agreement (EPA) we expect investment flows to increase in both directions.

The pressure to globalize, and saturation of Japan’s markets drives Japanese corporations to invest in Europe, therefore we expect the future Economic Partnership Agreement between Japan and EU to stimulate further Japanese investments in Europe more than in the Europe -> Japan direction.

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

EU Japan trade totals about EURO 160 billion/year and is expected to increase with the future Economic Partnership Agreement

EU Japan trade is balanced and totals about EURO 160 billion/year. EU Japan trade is expected to grow with the future Economic Partnership Agreement.

EU Japan trade adds up to about EURO 160 billion/year if both directions are added up

Combining the amounts of trade for merchandise and commercial services, EU exports to Japan and Japanese exports to EU have reached equal levels, so that the trade between EU and Japan is now balanced around EURO 80 billion in each direction, i.e. a combined trade of EURO 160 billion.

EU Japan trade: EU is traditionally stronger in the export of commercial services while Japan is stronger in the export of manufactured goods

Japan is traditionally stronger in the export of manufactured goods, while EU is stronger in the export of commercial services. Combining both merchandise and services, the trade between EU and Japan is now balanced.

EU Japan trade: the trade deficit is balanced out now

There used to be a trade deficit and trade friction: Japan used to export much more to Europe, than Europe exported to Japan. Recently, Europe has increased exports to Japan considerably, and the trade is now balanced in both directions.

Trade in goods plus services between EU and Japan
Trade in goods plus services between EU and Japan

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

SOMPO, member of the Japanese Insurance group NKSJ Holdings acquires UK reinsurer Canopius Group Ltd

SOMPO, a Japanese insurance company owned by NKSJ Holdings, acquired Canopius in order to globalize

In order to globalize, Japanese insurance company Sompo Japan (株式会社損害保険ジャパン), part of the insurance group NKSJ Holdings (NKSJホールディングス株式会社, TSE / JPX: No. 8630) announced yesterday the acquisition of 100% of the UK re-insurer Canopius Group Limited, operating on Lloyd’s for UKL 594 million (US$ 972 million), from the current owners. Current majority owner of Canopius is Bregal Capital.

Canopius will keep the brand, company name, and management team.

Canopius, is an insurance group, one of the top ten insurers in the Lloyd’s market, was founded in December 2003, almost exactly ten years ago, via a Management Buy-Out (MBO) with UKL 25 million capital, which grew about twenty-fold to about UKL 500 million today, and today has about 560 employees.

Canopius is named after Nathaniel Canopius, native of Crete, who studied at Balliol College, Oxford, apparently introduced coffee drinking to Oxford around 1637 (according to the Canopius website), and later became Archbishop of Smyrna (Source: “Anglicans and Orthodox, Unity and Subversion, 1559-1725”, by Judith Pinnington, 2003, ISBN 0-85244-577-6, page 15).

A wave of Japanese acquisitions in Europe

Japanese companies continue to acquire European companies at the rate of about EURO 10 billion/year, while European investments in Japan are in a steady state with few acquisitions.

Reasons for Japanese investments in Europe are globalization, acquiring a global foot print, and acquisition of know-how and technologies. Consult our EU to Japan direct investment register for a listing of some of the Japanese acquisitions since 1988.

Sources: press announcements by the companies, websites.

Copyright·©2014 ·Eurotechnology Japan KK·All Rights Reserved·

Japanese management – why is it not global? asks Masamoto Yashiro at a Tokyo University brain storming event

Masamoto Yashiro eurotechnology.com

Japanese management – why is it not global? What should we do? Keynote speech by Masamoto Yashiro at brainstorming by President of Tokyo University

Masamoto Yashiro is a legend in Japan’s banking and energy industry. He built Shinsei Bank from the ashes of the bankrupt Long Term Credit Bank of Japan, and served in leadership positions (Chairman, CEO, Board Member) in Esso, Exxon, Citibank, Shinsei Bank, and the China Construction Bank.

Tonight a small group of about 60 people were invited to join Masamoto Yashiro and the President of The University of Tokyo, Professor Junichi Hamada, for an evening workshop and brainstorming event about globalization of Japanese corporations at The University of Tokyo. Participating were a selected group of The University of Tokyo graduates, faculty, and selected alumni from several elite Universities associated with The University of Tokyo, and currently working at major Japanese trading companies, Ministry of Finance, financial firms, global consulting firms and other global firms.

After The University of Tokyo President Junichi Hamada’s introductory words, we heard Masamoto Yashiro’s fantastic overview of how he thinks Japanese companies need to change and why, followed by Q&A, then by a brainstorming session in the format of changing groups of four on about 15 separate tables between the participants, and then followed by buffet and drinks reception.

Topic of the evening was the globalization issues of Japanese corporations, also discussed in our work about Japan’s Galapagos issues:

About Masamoto Yashiro (八城政基)

Wikipedia pages:

Masamoto Yashiro graduated from Kyoto University (Law Faculty) in 1954 and The University of Tokyo Graduate School in 1958, and entered Standard Vacuum Oil Company. In 1964 he became Director of Esso, and later Special Assistant to the Chairman of Standard Oil New Jersey, and in 1986 President of Esso Sekyu KK.
In 1989, Masamoto Yashiro moved to become Japan representative of Citibank NA, and Chairman of Citicorp Japan in 1997.
IN 1999, Masamoto Yashiro became CEO of New LTCB Partners CV, the company emerging from the bankruptcy proceedings of the Long Term Credit Bank of Japan, and was in charge of the revival of LTCB as Chairman and CEO, with investment from Ripplewood Investment Fund, creating today’s Shinsei Bank.
He resigned as CEO of Shinsei Bank in 2005, but returned as Chairman and CEO in 2008, from which he retired in 2010.
In 2004, he was appointed Director of the China Construction Bank.

Masamoto Yashiro
Masamoto Yashiro (former Chairman of Shinsei Bank, Chairman of Citicorp Japan and President of Esso Japan, Director of China Construction Bank)

Japanese management – why is it not global? What should we do? asks Masamoto Yashiro

Note: this record was reviewed personally by Masamoto Yashiro, who made some corrections.

Japanese management – why is it not global? Outline:

  • Some people may argue that Japanese companies need not be global. Why?
  • We must accept that English is an essential tool for international communication.
  • Some impediments that Japanese companies face:
    1. The traditional approach is not effective in developing future leaders.
    2. The Japanese-style board structure is not appropriate to ensure sound corporate governance.
    3. Management structure needs to be changed to suit a global business.
    4. The current limited role of foreign nationals in the management and board structure
  • What should be the most important corporate objective?
  • Concluding remarks
Masamoto Yashiro (right hand side) presenting and President of Tokyo University Junichi Hamada (sitting on the left) listening
Masamoto Yashiro (standing at the podium on the right hand side) presenting and President of Tokyo University Junichi Hamada (sitting on the left) listening

Summary of Masamoto Yashiro’s talk:

Some people may argue that Japanese companies need not be global. Why?

Some superficial discussions about “Japanese companies” contrast “permanent employment” and excellent pensions in Japanese companies with job-hopping and bad pensions in other countries, however, Masamoto Yashiro points out that during his time at Esso and later Exxon, most employees stayed 20-30 years at Exxon, and received excellent pensions, so “permanent longterm employment” or pension system has nothing to do with globalization, and Japanese leading companies are no different than leading companies in other countries in these respects. We have to search elsewhere for the causes of current problems most Japanese companies are facing.

Around 1990, about 20 years ago, Japan was extremely self-satisfied by the successful reconstruction after the war and economic growth and success, and Japan felt that Japan does not have anything to learn from others. This time is now over, Japan is in stagnation, and many Japanese companies are not globally competitive, and Japan and Japanese companies must change to become competitive again.

We must accept that English is an essential tool for international communication.

Masamoto Yashiro is convinced that Japanese companies must globalize, and must make English a business tool. He feels it is a great disadvantage that Japanese political and corporate leaders, when participating in international conference, such as Davos, mostly need to use interpreters, and this reduces their global impact and exchange of ideas dramatically.

Some impediments that Japanese companies face:

1. The traditional approach is not effective in developing future leaders.

The traditional approach in Japan is to rotate career employees every two years between totally different functions, in order to “develop well-rounded managers”. The result of this process are non-experts, which are not expert in anything.

As an example, during his leadership at Shinsei Bank, Masamoto Yashiro once requested a meeting with the IT Department leadership. To his great surprise 60 people turned up for the meeting (he had expected 2 or 3). He asked the Department Chief for particular information, and he could not understand the question and could not answer, same result one management lower. Only at the third layer from the top, Masamoto Yashiro could get his question answered – the top two management layers could not answer his questions about the work of the IT Department.
Quite generally there often far too many people at meetings at Japanese companies.

When at Exxon in the US as a relatively junior manager, Masamoto Yashiro, was asked about his opinion regarding the termination of a particular joint-venture relationship with a mid-size petroleum refining company in Japan known then as ゼネラル石油精製 who had financial trouble. Exxon had a 50% interest in this company and its relations goes back to very late 1950’s. In late 1985 at the Exxon Management Committee meeting in New York, all other managers favored to terminate the relationship with this joint venture partner in trouble in order to limit financial exposure, while Masamoto Yashiro argued that it was better to support the troubled partner and assist him with Exxon staff and expertise to return to profitability. To his great surprise the Chairman and his superiors at Exxon sided with his recommendation and changed their previous position following his advice. Generally he felt that in the USA his opinion as a Japanese manager was highly valued, because it provided a different view point.

In his experience in Japan the situation is totally opposite: Japanese senior management generally does not listen to junior employees, and particularly not to foreign nationals in the rare cases that there are any in Japanese companies. In fact, the most frequent question senior management at Japanese banks ask, is not for original ideas or creativity from junior staff, but instead: “What do other banks do?”

This deplorable Japanese situation even contrasts strongly with the situation in China, where Masamoto Yashiro was a Director of the China Construction Bank: in China leaders moved from Government agencies and Ministries to Banks, and to private industries and back.

Generally Masamoto Yashiro expressed the view, that the development of leaders is totally inadequate in Japan, and is better in China than in Japan.

In addition to the inadequate development of leaders in Japanese companies, the number of foreign nationals in management, Board and other leadership positions in Japanese companies is minute, there are no programs to attract and develop foreign nationals in leadership positions. On the contrary, when Shinsei Bank showed losses in the aftermath of the Lehman shock, Japan’s Financial Services Agencies ordered that Shinsei Bank must pay all foreign nationals on exactly the same pay levels as Japanese employees. Since foreign nationals typically have much higher schooling and other costs in Japan than Japanese staff, essentially all non-Japanese staff at Shinsei Bank left soon after.

Leaders can make a real difference.

How leaders are selected is of utmost importance.

At Exxon, senior management devote specially reserved time to identify suitable candidates for future leadership positions, “who can potentially be our CEO in the future”. The selected candidates are given special attention and special opportunities to train and develop their leadership abilities. Masamoto Yashiro has never heard about such special leadership development programs at Japanese companies.

2. The Japanese-style board structure is not appropriate to ensure sound corporate governance.

In Japan, Board Members are almost always managing employees of the company, so the question arises who’s interests they represent on the Board. Do they represent the interests of the institution (the company), the employees or the interests of the shareholders.

In Japan often the CEO of the company after his retirement remains as a Chairman for several years, keeps his office, secretary and company car, and creates large other expenses. Why? Probably because Japanese CEO pay is too low, so that the CEO does not wish to retire gracefully.

This is totally different in Western companies where retired CEOs leave the company and have no further role in the company in most cases. Masamoto Yashiro mentioned the retired Chairman of Exxon, who after his retirement naturally travelled by taxi. In Japanese it would be unthinkable according to Masamoto Yashiro that the retired Chairman of a major corporation would travel by ordinary taxi cab like ordinary people (Masamoto Yashiro did not mention subway or bus, or driving his own personal car….)

3. Management structure needs to be changed to suit a global business.

In non-Japanese companies in almost all cases have a thorough performance evaluation system. When performance is evaluated, the resulting distribution must be similar to a normal distribution, i.e. with considerable part of employees at the high end and substantial numbers at the low end of the performance curve. If this is not done, top performers cannot be sufficiently rewarded and will leave the company, while low performers would hold the whole company back.

In most Japanese companies on the other hand, if a thorough performance evaluation is done at all, in most cases a huge proportion of employees are just evaluated as average, satisfying performance, without clear distinctions between top and bottom performance.

Promotion and salary on the other hand in traditional Japanese companies is purely according to age, which leads to many problems, and causes under-performance of the whole company.

These problems are increased by the fact, that Japanese companies typically do not give the same evaluation or opportunities to non-Japanese nationals.

4. The current limited role of foreign nationals in management and board structure.

Even in the rare cases where foreign nationals are employed by Japanese companies in management or leadership positions e.g. in foreign subsidiaries, often junior Japanese employees which much lower rank and local knowledge do not respect and bypass non-Japanese management, and there is typically no fair evaluation system, evaluating Japanese and non-Japanese management according to the same standards of performance.

The change of this mindset (to keep non-Japanese out of management or leadership positions at Japanese corporations) is extremely important.

The change of mindset (to keep non-Japanese out of management or leadership positions at Japanese corporations) is not difficult at all and can be done quickly.

What should be the most important corporate objective?

When considering corporate governance it is important to develop a view on the objectives. When discussing the interest of shareholders, it is important to ask “which shareholders”? The interests of large shareholders who may own 10% or 20% of the corporation, or the interests of individual smaller shareholders? Other stake holders’ interests also need to be taken into account.

In general, Masamoto Yashiro expressed the view that both the institution’s (the company’s) and the shareholders interest are best served by stable long-term growth of the company. He mentioned as an example Exxon which showed triple-A rating and annual rate of growth of 15%-17% for over 100 years.

Concluding remarks.

Around 1990 Japan was self-satisfied with the economic success, and Japanese people thought that they have nothing to learn from anybody. This time is over now, and Japan and Japanese corporations much change to regain growth and to become competitive again.

Professor Junichi Hamada, President of The University of Tokyo, listening to Masamoto Yashiro's talk
Professor Junichi Hamada, President of The University of Tokyo, listening to Masamoto Yashiro’s talk

Japanese management – Q&A with Masamoto Yashiro (selected questions)

Q. You want Japanese companies to change. What are the good things you want Japanese companies to keep?

A. Loyalty. Consideration to stakeholders.

Q. Your work at Shinsei.

A. Communication was most important. When Masamoto Yashiro took over at Shinsei, the Bank has just gone through bankruptcy proceedings, so the moral was extremely low. Masamoto Yashiro had to reestablish optimism and moral. To do so, communication is most important. Masamoto Yashiro held weekly telephone conferences and every employee who wanted to could participate: from top management to cleaning staff/janitors. Everyone could come forward with his concerns.

Another fact was that there were so many traditions which made no sense. For example, female employees with University degrees would wear their own clothes, while female employees without University degrees would need to wear company uniform. There was an issue that lower paid staff had difficulty to afford appropriate clothing for bank work – so Masamoto Yashiro decided to award a clothing allowance to employees so that they could afford appropriate clothing.

Q. Many Japanese companies cannot hire young employees, because they cannot fire/discharge non-performing older employees.

A. Firing/discharge of non-performing employees can be done by paying adequate severance compensation. Considering that a non-performing employee who remains on the payroll for several years in addition to salary also creates a lot of secondary costs, it is typically cheaper to pay an appropriate severance package, and most people are happy to leave with an appropriate severance package, and often move to a more suitable position at a different company – this helps everyone. Of course some companies want to save money at all cost, and fire employees without adequate package and that can lead to problems.

Q. Having worked much of your career at global oil or energy companies, what to you think about Japanese oil companies?

A. Japanese oil companies are not really oil companies, because they do not invest enough upstream.

Q. Leadership?

A. Japanese companies must change. The mindset must change.

Q. University of Tokyo?

A. University of Tokyo at the moment I think is ranked on 30th or 40th position globally in most rankings, maybe top in Japan or in Asia, but that does not count, we need to look at the whole world, not just Japan or Asia. I think University of Tokyo should make the changes necessary be at least in the top ten globally. To get into the top ten globally, University of Tokyo needs to hire outstanding Professors where the best students from the whole world want to come and study. To get the best Researchers and Professors University of Tokyo has to pay what is necessary. Does not matter which language, English or Japanese or any other language. No outstanding student from other parts of the world wants to study Japanese first before studying at University of Tokyo. University of Tokyo should make the necessary changes so that the best students from top Universities globally also want to come to University of Tokyo.

Mr Masamoto Yashiro’s talk and Q&A were followed by a brainstorming session in groups among all participants of four about globalization, and global leadership development.

Read more about Masamoto Yashiro

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Social media marketing: Social media is revolutionizing the way we market brands (Ray Bremner, President & CEO, Unilever Japan)

Social media marketing (Ray Bremner, President & CEO, Unilever Japan)

Social media revolutionize brand marketing: people don’t want to be told what to buy, but want to discover and share

Social media marketing: Consumers have now taken control of what they watch, read and listen to and so the messages they receive are the ones they chose to receive. Brands must now deserve that attention through appealing to their needs and feelings and not simply by buying airtime on television.

Ray Bremner, President & CEO of Unilever Japan gave a talk at Waseda University

To understand Japan’s media landscape read the “Japan’s media” report.

Social media marketing (Ray Bremner, President & CEO, Unilever Japan)
Social media marketing (Ray Bremner, President & CEO, Unilever Japan)

From Advertising to consumers to mattering to people

My key take-away is that social media have made the top-down “begin told” way of advertising obsolete, and replaced it by finding, sharing and engaging.

About Unilever:

  • Unilever was founded in 1929 by the merger of the British soap maker “Lever Brothers” (founded in 1885 by William Hesketh Lever, The Right Honourable The Viscount of Leverhulme), with the Dutch margarine producer “Naamloze Vennootschap Margarine Uni”, which was formed by the merger of several margarine companies, including those of Antonius Johannes Jurgens and Samuel van den Bergh. Soap brought hygiene to ordinary people, and margarine helped people who could not afford butter. Both companies, Lever and Margarine Uni had in common that they used palm oil as raw material.
  • The merger of Lever and Margarine Uni was decided over dinner in London in 1929, and written down in a 100 word merger agreement – unthinkable today for an M&A agreement.
  • About 50% of Japanese people have Unilever products at home
  • Unilever vision 2010 is: double the business, while reducing the environmental footprint. Execution of this vision is measured by 60 KPIs and the results are published.
  • Unilever vision:
    • We work to create a better future every day.
    • We help people feel good, look good, and get more out of life with brands and services that are good for them and good for others. We will inspire people to take small everyday actions that can add up to a big difference for the world.
    • We will develop new ways of doing business that will allow us to double the size of our company while reducing our environmental impact.
  • Unilever mission: building brands that improve people’s lives.
Ray Bremner, President & CEO of Unilever Japan: Social Media is revolutionizing the way we market brands
Ray Bremner, President & CEO of Unilever Japan: Social Media is revolutionizing the way we market brands

Ray Bremner: “social media are revolutionizing the way we market brands, and they are making people like me extinct”.

From 2001 to 2013, the average time Japanese consumers spend watching TV has decreased from about 3 1/2 hours/day to 3 hours/day, while the time spent with PC & mobile has tripled from 1/2 hour/day to 1 1/2 hours per day. Most Japanese age groups use social media, usage peaks at 35% for men in their 20s, and around 45% for women in their 20s, and around 30% in their 30s.

TV reaches about 88% of Japan’s population, and digital media (PC and mobile) reach about 73%.

From 2001 to 2012, advertising expenditure in Japan has decreased from about US$ 27 Billion/year to US$ 23 Billion/year, while expenditure for digital media has increased from zero to US$ 12 Billion/year. For an overview of Japan’s media markets – see “Japan’s Media“.

How to make marketing messages a pleasure rather than annoying?

How do we succeed? Crafting brands for life.

  • Put people first, not just consumers. Real people with real lives.
  • Build brand love.
  • Unlock the magic.

The brand love triangle

How do you create a conversation people want to participate in?

We use the “brand love triangle. “The people we serve” are in the center. The three edges of the brand love triangle are:

  • Purpose (brand point-of-view) <--- brand history dive
  • Product truth <--- product dive
  • Human truth <--- people immersion
Ray Bremner, President & CEO of Unilever Japan: Real people with real lives
Ray Bremner, President & CEO of Unilever Japan: Real people with real lives

“Dove Real Beauty Sketches” by Steve Miles

Brands need a purpose, a point of view. Before 2002 Dove did not have a purpose.

Steve Miles talking about Dove and himself:

93% of women do not think they are beautiful – men are opposite: 93% of men think that they look just great. Dave Miles (and Dove’s) point of view is that everyone is beautiful. This point of view is expressed in “Dove Real Beauty Sketches”, which won the Titanium Grand Prize and 10 Gold Lions at Cannes 2013:

As of today, “Dove Real Beauty Sketches” has 61,767,827 views on YouTube, which is not as much as PSY’s Gangnam Style with 1,888,086,686 views, but still – pretty amazing.

Another example of brand communication is Harley Davidson, which signifies “Freedom of the Road”, independent character. Harley Davidson creates a bond to customers by presenting each customer with the “umbilical cord”, the belt with which the Harley Davidson motor bicycle was tied down during the transport from the factory to the customer.

Focus: In 2000, Unilever had 1600 brands and today 400 brands.

Q&A

Question: How many of your campaigns in Japan are global campaigns? How many are Japan-only?

Answer: practically all campaigns for all international brands of any company are made in Japan for Japan. That is not to say that global ideas do not work. In fact in most cases International Brands have the same brand and advertising positioning in Japan as elsewhere in the world. What does differ for Japan is that often Japanese consumers have different usage habits, have different views about the world and the cues within the advertising can leave different impressions on Japanese minds. The Japanese consumer is highly observant of small details in advertising ; much more so than the average European for example.

That means that we test Global campaigns but very often we have to create Japan only executions so that how we express the idea is done totally with the Japanese consumer in mind. This is more costly and time consuming but essential for success.

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Docomo postpones Tizen OS mobile handsets for the second time

Docomo postpones Tizen OS mobile handsets for the second time

Below are notes for an interview for the French newspaper LesEchos. The full article can be found here.

On Thursday January 16th, 2014, NTT Docomo announced the postponement of mobile phone handsets based on the TIZEN operating system. This is actually the second time that NTT Docomo has postponed the planned introduction of TIZEN handsets, so it might become doubtful whether NTT Docomo will ever introduce TIZEN handsets.

In the announcement NTT Docomo essentially said that with the current market situation in Japan, it makes no commercial sense for Docomo to introduce a third smartphone operating system to the market.

The French journal Les Echos interviewed me about Docomo’s repeated postponement of TIZEN OS handsets. Here some notes I wrote up to prepare for the interview:

  1. Both for handset makers like HTC or Samsung and it would be a dream to become independent of OS owners/controllers like Microsoft or Google, and for mobile operators like Orange or Docomo, it would be a dream to have an OS they can control, and where they can introduce their own services like Docomo’s “iconcier” personal digital assistant, which is to some extent competing with Apple’s SIRI and with various Google services. Its a dream but realization is a different story. Its not enough to make and further develop and maintain the full OS stack including UI, create a development environment and SDKs as easy to use and competitive with Apple’s and Google’s, app stores, build a developer community who create lots of apps. Its also necessary to make a critical mass of attractive devices, gain a critical mass of market share, create global scale, and most importantly win over all the most important Apps like Facebook, LINE, etc.
  2. With the dramatically increasing complexity and sheer size of software, it becomes harder to bring mobile services to market without global scaleability, or at least a major part of the world, which usually will need to include China. Docomo does not have this global scale, so it will become harder and harder for Docomo to introduce own software services, such as iMode or iConcier.
  3. Docomo has continuously lost market share and recently even net subscribers, and in December for the first time in recent memory succeeded to gain top position in subscriber gains, surely because of the iPhone. In addition, rumors are that Apple demands very high minimum sales shares of operator partners. So Docomo is under double pressure:
    1. to satisfy contract conditions with Apple
    2. to maintain subscriber gains

    in addition, Docomo still has a substantial part of “iMode-keitai”, also called “galake” (= “Galapagos keitai”). So Docomo already has a large variety of OS and handset styles, and has recently reduced the number of different handset it supports, so going to Tizen would go against this trend.

  4. Its not the end of Tizen. Tizen can in addition to smartphones also go into embedded applications such as cars, elevators, washing mashines etc.

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