Boots in Japan

Japan has proved to be one of the most difficult markets for foreign firms to break into. The combination of regulatory barriers, unique business practices and distinctive cultural traits has proved insurmountable for many firms. Boots, however, has succeeded in gaining a foothold there by forming a joint venture with Mitsubishi and by being meticulous in adapting its style of retailing to the Japanese market. It has not all been plain sailing, though. Boots usually takes 18 months to 2 years to prepare for its entry into a new market. In Japan, the process took more than 3 years. The company has been unable to bring in many of its products and had to reformulate more than 2000 others to gain a Japanese licence. It has also had to adjust its marketing strategies to the unique cultural features of the Japanese market. It has introduced seating at its cosmetics counters, as is usually present in Japanese department stores. It has had to change the packaging of its products to serve the Japanese preference for lavish presentation; and while its 'buy two, get one free' campaign, offering customers one free item for every two that they buy from certain product lines, has been a huge success in the UK, it failed dismally in Japan. Many Japanese customers are single or have small families and therefore have no need to buy things in bulk. Although the Japanese market is a tough one to crack and Japanese customers are exceptionally demanding, it offers great opportunities. Boots estimates that the Japanese health and beauty market is worth £17 billion, making it four times the size of the UK market. Furthermore, Japanese women in the 18-35 age group tend to be well educated, influential in the healthcare market, have large disposable incomes and a willingness to try new products, making them a key target for Boots' marketing strategy.

The consumer movement

The 'consumer movement' is the name given to the set of individuals, groups and organizations whose aim is to safeguard consumer rights. For example, the Consumers' Association in the UK campaigns on behalf of consumers and pro­vides information about products, often on a comparative basis, allowing consumers to make more informed choices between products and services. This information is published in the organisation's magazine Which?

As well as offering details of unbiased product testing and campaigning against unfair business practices, the consumer movement has been active in areas such as product quality and safety, and information accuracy. Notable successes have been the Campaign for Real Ale (CamRA), improvements in car safety, the stipulation that advertisements for credit facilities must display the true interest charges (annual percentage rates), and the inclusion of health warnings on cigarette packets and advertisements.

Such consumer organizations can have a significant influence on production processes. For example, pressure from environmental movements in Finland and Germany on UPM-Kymmene, Finland's largest company and Europe's biggest paper-making firm, ensured that the number of new trees planted matched the number of trees felled. German customers (which constitute the firm's biggest market) such as Springer now have clauses on forest sustainability and biodiversity written into their contracts with paper companies.

The consumer movement should not be considered a threat to business but marketers should view its concerns as offering an opportunity to create new products and services to satisfy the needs of these emerging market segments. For example, in the detergent market, brands have been launched that are more environmentally friendly. This issue will be explored in more detail when we examine the physical environment later in this chapter.