Market Entry: Japan Market Entry

Market Entry: Japan Market Entry There are four main ways in which to enter the Japanese market -- exporting, licensing, joint venture and direct investment (QuickMBA, 2007). Perhaps the simplest is a straight export venture. We would ship product to Japan, and utilize third-party distribution and retail channels. This option would give us some flexibility to choose our partners but would also not give us certainty with respect to success in the market. The second market entry option would be to find a local partner for licensing.

The local partner would handle the retailing, distribution and marketing functions. This would give us local market knowledge, but would also bind us to one specific partner, necessitating a thorough partner search. Product would also be conducted by this partner, removing some control over that function. A third option is to produce a joint venture. A joint venture would give us more control over production, but instead of paying a percentage fee, we would share ownership of the subsidiary with our local Japanese partner.

The fourth option would be to set a greenfield subsidiary. This option would allow us total control over the venture. It is the most expensive, however, and we would lack local knowledge and contacts and therefore need to build that information within our company. Modes of Advertising Japan as a market is heavily saturated with advertising. It is the world's second largest market for advertising, after the United States. This means that the options for advertising modes are limited only by our imagination.

The traditional media are available, such as newspapers, magazines, radio and television. Newspapers in particular are widely read and are therefore considered a more effective medium than in North America, accounting for 20% of all advertising in Japan (Asahi Shimbun, n.d.). Billboards and other public advertising such as on buses and subways are also a viable option. Japanese are wired, so advertising through popular Internet portals is a possibility. Also, mobile phone advertising is a possibility.

However, it is worth noting that the preferred medium for advertising is highly dependent on the type of product or service offered. Therefore to some extent the ideal channel will be dictated by industry norms (Ibid), unless we choose to buck the trend. Promotion of Product The Japanese market is intensely competitive for most products, since it is a mature market with only limited growth prospects. Promotion can be very aggressive as a result. Japanese consumers are price sensitive, but they are equally sensitive to quality.

Thus, it is best to enter the market with either a cost leadership strategy or a differentiated strategy. The company's position on the value proposition curve must be carefully managed. Promotion should focus heavily on advertising. Although it can be.