From: OVERSEAS BUSINESS REPORTS (JAPAN 1)
University of Missouri-St. Louis
National Trade Data Bank
ITEM ID : IT MARKET 111091833
DATE : Oct 28, 1996
AGENCY : USDOC, International Trade Administration
PROGRAM : Market Research Reports
TITLE : JAPAN - DESTINATION JAPAN (1) - OBR9405
Program key : IT MARKET
Update sched. : Monthly
End year : 1995
Date of record : 19950321
JAPAN - DESTINATION JAPAN (1) - OBR9405
SUMMARY
This article is derived from a report dated May 1994, prepared at the U.S.
Department of Commerce - Washington, DC. The article consists of 48 pages
and includes the first part of a discussion of the economic and commercial
climate in Japan, with emphasis on information useful for potential U.S.
sellers and investors. It includes the following sections:
FOREWORD
KEYS FOR BUSINESS SUCCESS IN JAPAN
JAPAN COUNTRY FACT SHEET
THE JAPANESE ECONOMY
THE OPPORTUNITIES
THE CHALLENGES
MARKETING STRATEGY
JAPANESE BUSINESS CULTURE
NEGOTIATING WITH THE JAPANESE
Destination Japan:
A Business Guide For The 90's
(Second Edition)
Prepared by the
Japan Export Information Center (JEIC)
Office of Japan Commercial Programs (OJCP)
Eric Kennedy
With Cynthia Campbell, Allan Christian,
Edward Leslie, Cantwell Walsh, and Bob Francis
Contributing Organizations:
U.S. and Foreign Commercial Service, Japan;
U.S. Department of State Economics Section, Tokyo;
U.S. Patent and Trademark Office;
and the National Center for Standards
and Certification Information
U.S. DEPARTMENT OF COMMERCE
International Trade Administration
International Economic Policy
May 1994
TABLE OF CONTENTS
FOREWORD
KEYS FOR BUSINESS SUCCESS IN JAPAN
JAPAN COUNTRY FACT SHEET
THE JAPANESE ECONOMY
THE OPPORTUNITIES
THE CHALLENGES
MARKETING STRATEGY
Assessing Your Product's Potential in Japan
Assessing Your Company's Potential in Japan
Market Research
The U.S. Government
Japan External Trade Organization (JETRO)
Industry/Trade Associations
International Consulting/Market Research Firms
The Export Hotline
Market Entry Alternatives
Establishing an Office in Japan
Representatives, Agents, and Distributors
Licensing
Joint Ventures
Direct Marketing
Franchising
Choosing Your Method of Market Entry
The Agent/Distributor Service (ADS)
The Gold Key Service (GKS)
Trade Events
Other U.S. Department of Commerce Programs
USA-Japan Trade Expansion Center
State Representative Offices in Japan
Industry/Trade Associations
Export Trading/Management Companies
The American Chamber of Commerce in Japan (ACCJ)
Japan Chamber of Commerce and Industry
Japanese Department/Chain Stores
Japanese Government Programs
Special Note on Importer Databases and Lists
Attracting a Japanese Business Partner
Choosing a Japanese Business Partner
Keeping a Japanese Business Partner
Replacing a Japanese Business Partner
Distribution and Sales Channels
Pricing Practices
Sales Service and Customer Support
Advertising/Consumer Education
JAPANESE BUSINESS CULTURE
NEGOTIATING WITH THE JAPANESE
JAPANESE REGULATIONS, STANDARDS, QUALITY MARKS,
AND CERTIFICATION SYSTEMS
INTELLECTUAL PROPERTY PROTECTION
GETTING YOUR PRODUCT THROUGH JAPANESE CUSTOMS
METHODS OF PAYMENT
JAPANESE BANKS
EXPORT FINANCING
Export-Import Bank of the United States
U.S. Small Business Administration
Japanese Entities
TAXATION IN JAPAN
INVESTMENT IN JAPAN
BEST U.S. EXPORT PROSPECTS
REGIONAL OUTLOOK OUTSIDE THE TOKYO AREA
THE JAPANESE GOVERNMENT
JAPANESE IMPORT PROMOTION MEASURES
U.S. DEPARTMENT OF COMMERCE JAPAN EXPORT
PROMOTION PROGRAM (JEPP)
U.S. DEPARTMENT OF COMMERCE SPECIAL INFORMATION PRODUCTS
AND BUSINESS FACILITATION SERVICES FOR JAPAN
Japan Country Marketing Plan (CMP)
Japan Market Information Reports (JMIR's)
US&FCS Japan Services Guide
Business Facilitation
Obtaining Legal Assistance in Japan
JAPANESE TRADE BARRIERS
WHERE TO RECEIVE EXPORT COUNSELING
WHERE TO RECEIVE MARKET INFORMATION AND TRADE LEADS
GUIDANCE FOR BUSINESS TRAVELERS
RELEVANT PUBLICATIONS/DATABASES
LIST OF SELECTED JAPANESE BUSINESS TERMS
EXPORT CHARTER
ARE YOU READY TO EXPORT?
INTERNATIONAL TRADE ADMINISTRATION/US&FCS DISTRICT OFFICES
FOREWORD:
The Secretary of Commerce directed the creation of the Japan Export
Information Center (JEIC) in the spring of 1990. The JEIC was mandated to
sharpen the focus and refine the quality of the business counseling and
commercial information provided by the Department of Commerce to the U.S.
business community in support of expanding exports to Japan. Within a few
weeks, we realized that we were missing an essential resource for the
successful accomplishment of our mission. We did not have a basic guide for
potential exporters to Japan. The first edition of Destination Japan
corrected this deficiency by providing a handbook for approaching the
Japanese market. The guide was considered a great success by the U.S.
business community because it was specifically tailored to assist U.S.
suppliers and traders with practical guidance and concrete information on
doing business in Japan.
In preparing this second edition of Destination Japan, we have incorporated
many suggestions from our readers and additional information that was an
outgrowth of our experiences in using the guide for business counseling. No
book can provide an answer to each and every question, but our guide will
enable you to find accurate and substantive information on the most
important issues in selling to Japan. The publication also comes with an
invitation to use the services of the JEIC. We are in business solely to
help you establish a permanent and profitable presence in Japan.
U.S. Department of Commerce
Japan Export Information Center
Room 2320
14th Street and Constitution Avenue, N.W.
Washington, DC 20230
Phone: (202) 482-2425
Note: The term "U.S. and Foreign Commercial Service/Japan (US&FCS/Japan)"
refers to U.S. Department of Commerce operations in Japan. The Department
maintains five offices in Japan in Tokyo, Osaka, Nagoya, Sapporo, and
Fukuoka. The JEIC works closely with these offices to help U.S. companies
export to Japan.
U.S. Department of Commerce programs are accessible to people with
disabilities. This document will be converted to an appropriate alternative
form for applicants with disabilities. Requests for these or other
assistance and accommodation should be directed to the Trade Information
Center. Voice telephone number: 1-800-872-8723. Telecommunications Device
for the Deaf (TDD): 1-800-833-8723.
KEYS FOR BUSINESS SUCCESS IN JAPAN:
BE COMMITTED TO THE MARKET: Japan is a very expensive country in which to
do business. Commitment is generally demonstrated through a firm's
willingness to develop a presence in the market. The management of your
company must be committed to spend money on market research, travel, product
modifications, advertising, intellectual property protection,
warranties/discounts, translators/interpreters, trade shows, renting office
space, and shipping to Japan.
BUILD A POSITIVE COMPANY IMAGE: To succeed in Japan, it is very important
to keep promises and to respond promptly to communications from Japanese
business and trading partners, especially when problems or emergencies
arise. Reliability contributes to ensuring a permanent place in the
market. The Japanese need to know that you will be in the market for the
long term. Ship on time and install quality control mechanisms both before
and after shipment. It is important that you demonstrate to your potential
Japanese partner or customers that your firm is a well-run and
quality-driven operation. Convince the Japanese that they are your most
important customers.
DEMONSTRATE PATIENCE: Entering the Japanese market requires a long-term
approach; negotiations are likely to be lengthy, initial costs are high, and
returns may be slow in reaching profitable levels. Do not expect immediate
results.
DO YOUR HOMEWORK: You must research the market for your particular
product. You need to know not only market demand, but methods of
distribution, competition, regulations and standards, consumer preferences,
pricing, and sales service.
ASSESS YOUR PRODUCT: Is your product unique in the Japanese market?
Quality, technology, innovation, design/engineering, concept, style,
color/fashion, warranties and customer support, packaging, and price are all
factors that could separate your firm from the competition.
APPOINT A MANAGER FOR JAPAN OPERATIONS: Your success in the Japanese market
largely depends on the quality of your people working on that market.
Ideally, the Japan portfolio should be your manager's sole responsibility.
Select a manager who is attuned to Japanese business customs and practices.
DEVELOP PERSONAL RELATIONSHIPS: Successful business in Japan is dependent
upon the quality of your relationship with your Japanese customers and/or
business partner. For your relationship to grow, you must travel to Japan
on a regular basis.
FIND, ATTRACT, CHOOSE, AND KEEP A QUALITY JAPANESE BUSINESS PARTNER: If you
are not prepared to establish your own operation in Japan, spend a great
deal of time exploring all your options and selecting the best possible
business partner who meets your specific needs. Make sure that your
business partner is not your competition and will have your interests in
mind. You must be able to trust and communicate comfortably with your
business partner. If not, don't sign the contract. Look elsewhere. It is
very difficult to change partners in Japan once a relationship begins.
FOLLOW-UP IS ESSENTIAL: Maintain steady correspondence by fax with
potential Japanese business partners or customers that you are introduced to
or meet at trade shows. Traveling to Japan on a regular basis is expensive
but also necessary.
CREATE A WIN/WIN SITUATION FOR BOTH YOUR FIRM AND YOUR PARTNER: Motivate
your Japanese business partner to work hard for you. If your business is
mutually profitable, your Japanese partner will work harder to sell your
product. Understand their problems and difficulties and offer possible
solutions.
LISTEN TO YOUR JAPANESE PARTNER AND CUSTOMERS: If you trust your partner
and have a good relationship, then listen to his or her advice or guidance
on marketing, standards, product modifications, distribution, and
intellectual property protection. Your partner is your Japan expert, not
just a trade facilitator.
ADAPT YOUR PRODUCT TO THE JAPANESE MARKET: Product modifications in order
to meet Japanese regulations, standards, or consumer preference or tastes
are usually necessary to compete effectively. Translation of all relevant
product literature is a must.
PRICE TO SELL AGAINST YOUR JAPANESE COMPETITION: With many products, the
acceptance of your product in Japan is based more on its quality and
after-sales service than its price. However, price has now become an
important factor in Japan. In the final analysis, make sure your final
retail price is competitive with that of your competition.
PROVIDE QUALITY SALES SERVICE: Your potential Japanese customers look at
before, during, and after-sales service just as much as at the product
itself. If you do not make arrangements for sales service, you are putting
your product at a serious disadvantage vis-a-vis your Japanese competition.
BE FLEXIBLE: Japan is not like the United States, Latin America, Europe, or
even the rest of Asia. The management of your company must be flexible
enough to learn and possibly adopt new marketing strategies and techniques
for Japan.
USE THE JAPANESE DISTRIBUTION SYSTEM TO YOUR BENEFIT: The Japanese
distribution system is often complex and generally inefficient. To
effectively utilize the system or develop an innovative approach to
circumvent existing distribution practices, you must know and understand how
the system operates for your specific product. Networking with and
providing product presentations for wholesalers and retailers/end-users is
an excellent marketing strategy to build support for your product.
EXPECT SMALL ORDERS AT FIRST: Small initial orders are a natural outgrowth
of competition and very common in Japan. The companies and people involved
with a new product must assure themselves that the item will meet the
specific needs of the customer by testing the market.
SELL AN IDEA OR A CONCEPT: In Japan, perceptions and images are
everything. Your firm should work with Japanese advertising/
market support agencies to produce a strong, positive product and company
image in Japan.
EDUCATE YOUR CUSTOMERS: Many products from the United States are conceived
and designed to sell in a cultural or an industrial environment that may not
currently exist in Japan. Uniqueness is what often gives U.S. products the
edge. However, in marketing to Japan, you must educate your customers about
the product's purpose, use, and quality.
RESPOND QUICKLY TO MARKET CHANGES: You must constantly respond to changes
in the market in order to remain competitive. Stay ahead of your
competition. Innovation in product design and marketing approach are
critical.
BE CULTURALLY SENSITIVE: An understanding of the Japanese business
mentality, negotiating style, and a willingness to accommodate Japanese
consumer preferences are extremely important. Learn about Japan -- about
its culture, history, and especially its business practices. The
information will greatly assist your efforts in the Japanese market and help
prevent costly cultural mistakes.
LEARN HOW THINGS ARE DONE IN JAPAN: Only by learning from the Japanese and
how their system works will you be able to develop innovative approaches to
the market. Moreover, more general lessons learned in Japan sometimes may
be applied successfully in other foreign markets or even in the U.S.
domestic market.
JAPAN COUNTRY FACT SHEET
PROFILE:
A. Population: 124.764 million
B. Religions: Shintoism, Buddhism, Christianity 1%
C. Government: Parliamentary Democracy
D. Head of State: Prime Minister Tsutomu Hata
E. Language: Japanese
ECONOMY:
1991 1992 1993
A. GDP ($B, Real) 3,088 3,323 3,788
B. GDP Growth Rate (Real, 1985 Base) 4.3 1.1 0.1
C. GDP per Capita ($, Real) 24,898 26,698 30,362
D. Gov't Spending as a % of GNP 15.7 16.6 18.1
E. Inflation (CPI, %) 3.3 1.7 1.4
F. Unemployment Rate (%) 2.1 2.2 2.5
G. Foreign Exchange Reserves ($B) 69.0 68.7 95.6
H. Average Exchange Rate (1$=) 134.71 126.65 111.20
I. Official Discount Rate (Yr. End) 4.50 3.25 1.75
J. Labor Productivity Index (1990 Base) 102.5 97.1 95.5
K. Domestic Demand (Real, % Growth) 5.0 2.5 1.1
L. Household Savings Rate (%) 13.4 10.2 9.3
TRADE:
A. Total Japanese Exports ($M) 314,525 339,650 360,911
B. Total Japanese Imports ($M) 236,737 233,021 240,670
C. Total U.S. Exports (FAS, $M) 421,614 448,156 464,767
D. Total U.S. Imports (CV, $M) 487,870 532,498 580,544
E. U.S. Exports to Japan (FAS, $M) 48,147 47,764 47,950
F. U.S. Imports from Japan (CV, $M) 92,333 97,181 107,268
Principal U.S. Exports: wood in the rough, automatic data processing
machines, aircraft and parts, electronic integrated circuits and
microassemblies, corn, parts for office machines, cigars and cigarettes,
motor vehicles
Principal U.S. Imports: motor vehicles, automatic data processing machines,
parts and accessories for motor vehicles, electronic integrated circuits and
microassemblies, parts for office machines
Foreign Supplier Share of Japanese Imports, 1993:
1. Southeast Asia: 25.2% 4. Middle East: 11.4%
2. United States: 23.0% 5. China (PRC): 8.5%
3. European Community: 12.5% 6. Australia: 5.1%
Current Account Balance: 1991: $ 72.90 billion
1992: $117.55 billion
1993: $131.35 billion
Trade Balances with Leading Partners ($B), 1993:
1. United States: -59.32
2. Southeast Asia: -56.83
3. European Community: -26.26
IMPORT POLICY:
Tariffs: The average applied Japanese tariff is low (2.9 percent), but on
specific items, particularly foodstuffs and leather goods, both tariffs and
quotas are trade restrictive. Japan has recently eliminated the import
quotas on several agricultural products and foods.
Taxes: On April 1, 1989, the commodity tax was replaced with a general
consumption tax of 3 percent, 4.5 percent on autos, which is levied on the
c.i.f. plus duty value at time of entry.
Licensing of Technology: In cases where a foreign company wants to grant a
license to an independent Japanese corporation, to its wholly owned
subsidiary, or to a joint venture corporation to manufacture in Japan, the
Japanese Ministry of Finance must be notified through the Bank of Japan as
required in the Japanese Foreign Exchange and Foreign Trade Control Law.
Notification must be made within 15 days after the execution of the
licensing agreement. In some instances, it may be necessary to also notify
the Japanese Fair Trade Commission. More stringent regulations apply to
"designated technologies" that have been determined to have significant
influence on the security of the nation and the national economy.
BEST U.S. EXPORT PROSPECTS: electronic components, electrical power
systems, industrial chemicals, building products, franchising, automotive
parts and service equipment, computers and peripherals, telecommunications
equipment, medical equipment, aircraft and parts, and direct marketing
services
INVESTMENT:
-- Foreign Ownership Restrictions: One hundred percent foreign capital is
allowed in principle except for the following sectors: broadcasting;
telecommunications; electric power generation; domestic rail and air
transportation; arms; gun powder; atomic energy; aircraft; space
development; narcotic manufacturing; vaccine manufacturing; security
guard services; agriculture, forestry, and fisheries; petroleum refining
and marketing; leather and leather product manufacturing; and mining.
-- Total U.S. Direct Investment in Japan, Cumulative: $22.5 billion, 1990;
$24.9 billion, 1991; $26.2 billion, 1992
-- Principal Sectors: Wholesale trade, petroleum, machinery, chemicals and
allied products, and finance.
-- U.S. Share of Foreign Direct Investment in Japan: 42.0% (Japan
FY'1951-1992), 40.5% (April 1, 1992 - March 31, 1993)
-- Japan's Foreign Direct Investment in the United States, Cumulative:
$83.1 billion, 1990; $92.9 billion, 1991; and $96.7 billion, 1992
THE JAPANESE ECONOMY:
With a nominal gross national product (GNP) of $3.8 trillion in 1993, Japan
is the world's second largest economy after the United States. Over the
past several decades, the country has generally enjoyed growth rates higher
than the industrial country average, and many of its export sector producers
have achieved competitive preeminence. However, the Japanese economy is
also marked by widespread structural rigidities -- exacerbated by residual
effects of government policies designed to protect inefficient producers
from foreign and domestic competition -- which impede imports or impair
their price competitiveness (i.e., the complex Japanese distribution
system). These structural rigidities, combined with the macroeconomic
policies pursued since 1990, have tended to slow domestic demand growth and
have contributed to the renewed expansion of persistent external trade
surpluses.
Between 1987 and the first half of 1991, Japan experienced relatively strong
real economic growth, marked by low unemployment. However, growth slowed
significantly beginning in the middle of 1991 and has continued at a rate
well below potential in 1993 and into early 1994. Japan's real GNP growth
rate for 1993 was 0.1 percent. The slowdown was prompted largely by
monetary tightening, leading to the rapid deflation of stock and land
prices, which has helped to slow successively residential investment, plant
and equipment investment, and, lately, personal consumption. The economy is
expected to remain sluggish through at least the first half of 1994.
Together, the United States and Japan account for about 40 percent of the
world's GNP/GDP (gross domestic product). The most striking component of
our bilateral relationship is the United States' chronic merchandise trade
deficit with Japan. While Japan is the second largest overseas market for
U.S. merchandise exports ($47.9 billion in 1993) behind Canada, we have had
an annual merchandise trade deficit with Japan that has exceeded $40 billion
for much of the past decade; it stood at $59.3 billion in 1993. Japan has
also run large global merchandise trade surpluses that hit $106.6 billion in
1992 and increased to $120.4 billion in 1993. The large surpluses have
caused friction with many of Japan's trading partners.
Japan still has a relatively low level of intra-industry trade with the
United States and the world. It traditionally has exported manufactured
goods, and imported raw materials, food, and a low level of manufactured
goods. This situation is due in part to Japan's acknowledged excellence in
producing manufactured goods. However, it also stems from a market
structure and business practices resulting from a policy of economic
self-reliance that was followed for much of the period since the end of the
Second World War. Although the policy has largely ended, the residual
effects remain. Japan's propensity to import manufactured goods is
increasing, but is still relatively low.
Changes that have important implications for U.S. export promotion prospects
are taking place rapidly in Japan. Yen appreciation has reached the point
where the United States is a relatively low-cost producer of manufactured
products. Recession has depressed overall demand, but real change has also
begun. Consumers, hard hit by recession, are suddenly much more cost
conscious. Keiretsu (Japanese industrial groupings) supply and distribution
relationships are weakening as Japanese companies trade across keiretsu
lines. Trade negotiations have opened previously protected sectors, and the
distribution system is restructuring. Firms are increasingly producing and
sourcing overseas. Rents and the price of land have decreased. Absent
residual market restrictions, U.S. companies should be selling much more in
the "best prospect" sectors such as electronic components, electric power
generation equipment, industrial chemicals, building products, auto parts,
computers, telecommunication equipment, and medical equipment where U.S.
companies are world leaders.
Despite Japan's continuing strong export performance, there is concern in
the Japanese business world over the effect of the rapidly appreciating yen
on export sales, as Japan's economy remains in a downturn. Real exports
have begun to drop and even dollar-denominated sales increases are now
slowing. Commercial real estate prices in Tokyo dropped 22 percent during
1992. The Japanese Government has moved to stem the decline with economic
stimulus packages in 1992, 1993, and 1994. However, it is unclear whether
these packages will have the desired effect of substantially increasing
domestic demand. Although the Japanese Government has committed to reducing
the personal income tax rate, it remains to be seen whether and to what
extent the direct tax cut will be offset by increased indirect taxation. It
also remains to be seen what effect the strengthening yen will have on
Japan's GDP growth.
Notwithstanding the economic stimulus packages and the proposed tax cuts,
fiscal policy in Japan has remained relatively tight since 1982, when the
Japanese Government began to take steps to constrain the growth of
government debt. The general government budget (central and local
governments plus social security) has been in surplus since 1987, even
though tax receipts have recently fallen off due to the recession.
After a period of tightening beginning in late 1989, monetary policy moved
into an easing cycle in mid-1991. Seven successive decreases in the Bank of
Japan's official discount rate have brought the rate to a record low of 1.75
percent in September 1993. Lending rates have also fallen, but corporate
borrowing remains weak -- partly due to lack of demand for funds in the
recession, and partly due to credit tightening by banks facing falling asset
prices and a large-scale overhang of bad debt. Money supply growth remains
moderate.
The Japanese economy continues to undergo transition and structural change.
This situation has primarily been a market-driven response to the
fundamental exchange-rate realignment of the mid-to-late 1980s. Another
central factor has been the focus on deregulation of the economy,
particularly the privatization of public telecommunications and railway
companies and simplification of product standards. Despite progress in this
area, Japan's economy remains heavily regulated, reinforcing business
practices that restrict competition and thus keep prices high. Price
controls remain on certain agricultural products, and bureaucratic obstacles
to the entry of new firms into businesses such as trucking, retail sales,
and telecommunications also have slowed the economy's structural adjustment.
The Japanese Government has made some progress in deregulating portions of
its distribution system, specifically, the reform of the Large-Scale Retail
Store Law. In the area of land use, the government has eliminated tax
preferences for agricultural land in major urban areas. However, additional
deregulation is crucial to progress in opening markets further and reducing
trade and current account imbalances.
Japanese Government spending policy has given an indirect boost to the
competitiveness of a number of Japanese industries. In the past, the
government directed considerable public and private resources to targeted
industry sectors, but has been moving away from such industrial policy
measures, partly in response to criticism of Japan's export-oriented
policies by its major trading partners. The Japanese Government continues
to promote high technology cooperation among firms and plays a direct role
in organizing these efforts, using off-budget resources and small amounts of
appropriated funds to contribute to investment projects and
government-private sector efforts. By encouraging the spread of technology
throughout Japan, the government allows Japan's huge keiretsu to focus on
the fiercely competitive Japanese marketplace and overseas markets.
THE OPPORTUNITIES:
Exporting is about making money, about expanding the number of customers for
your product and making a profit from the increased demand. By ignoring
foreign markets, you are turning away millions of potential customers -- you
are automatically relinquishing sales and market share to your domestic and
foreign competition. Expanding your world sales will improve your economies
of scale and lower your production costs. Companies in this position can
lower prices, spend more on research and development (R&D), and concentrate
on quality improvement and innovations. For a company in today's global
environment, ignoring foreign markets is no longer tenable.
Where are the bulk of your future customers? Where are profits to be made
in the 21st century? What part of the world has been experiencing
phenomenal economic growth rates for the last several decades? The answer
to all three of these questions is Asia. Asia is where the greatest
potential for future customers and future profits lie. Asia is experiencing
tremendous growth in population, discretionary income, infrastructure
development, R&D, and manufacturing. Past and present export success and
economic development policies on the part of Asian countries have led to an
unprecedented surge in national wealth. Given the fact that increased
infrastructure development and R&D expenditures, along with a continued
emphasis on manufacturing, will only strengthen these economies, this
economic success will likely continue into the next century.
Growth in Asia has come at a cost. Asian consumerism has had to take a
backseat to production-oriented government and export-oriented corporate
policies. However, as standards of living have risen and more and more
Asians have had a taste of a better life, their appetite for more consumer
goods has become voracious. Asia, as a marketplace, is any company's dream
come true. More Asians will be spending more money on the widest selection
of consumer products imaginable. Moreover, with much emphasis still on the
development of a manufacturing base and infrastructure, sales of industrial
goods and high technology products will continue to advance.
Japan is a key center of business for the entire region. The Japanese
Government and Japanese corporations play a leading regional role in
industry, trade, finance, and technology. Japan's industrial and trade
success is the envy of other Asian nations that aspire to match Japan's
economic success. Japanese investment and foreign aid (which is
administered through the Japanese Official Development Assistance program)
is aggressively sought by countries throughout Asia. These financial flows
give the Japanese Government and Japanese corporations an important economic
presence in Asia.
Japan would make a great springboard for your company in expanding its
business throughout the entire region. American companies with successful
track records in Japan find it relatively easy to expand throughout the rest
of Asia. However, it is also important for your firm to realize that Japan,
by itself, represents a tremendous opportunity for your business. The size
of the Japanese economy, $3.8 trillion in 1993, is not only the largest in
Asia, it is the world's second largest economy after the United States. In
fact, the economies of certain geographical regions in Japan are larger than
the GDP of many countries in the world. Japan imports more from the United
States than from any other country. In 1993, after Canada, Japan was the
largest single importer of American products in the world. Japan has a
highly educated and efficient labor force, a stable government, an economy
driven by high levels of household savings and capital investment, and a
huge and growing domestic market.
Over the next several years, despite the current recession, Japan will offer
many new business opportunities -- in infrastructure build-up, as the
tremendous economic growth has brought a need for airports, roads, bridges,
and housing; in leisure, as the Japanese worker finds more time and money to
spend off the job; in retirement communities and health care with the
graying of Japanese society; in changing and broadening consumer tastes, as
the average Japanese consumer has become more cosmopolitan with greater
exposure to foreign products; and in Japan's large Official Development
Assistance projects, as Japan assumes a larger role in international
burden-sharing.
Most importantly, the recent rapid appreciation of the Japanese yen against
the U.S. dollar (the endaka) provides tremendous opportunities for American
products and services through increased price competitiveness. Many
Japanese consumers and businesses are looking for new suppliers, often
overseas, for the first time. As Japan has become a high-cost producer,
many Japanese firms are now finding it necessary to import in order to
remain profitable. Moreover, a liquidity crunch has forced many Japanese
buyers to terminate comfortable, yet inefficient, supplier relationships in
order to maximize profits. Structural changes are also now occurring in
Japan's inefficient distribution systems. All these changes are opening
doors that had long been closed to U.S. exporters.
Market presence in Japan should be a vital goal of your company's
international marketing strategy for reasons other than profit. More and
more U.S. companies are learning that the best way to respond to Japanese
competition at home and in world markets is to become involved in the
Japanese market. By competing with the Japanese on their own turf, your
firm is denying your Japanese competitors a safe haven and comfortable
margins in their home market to bankroll advances into other markets.
In Japan your firm will gather information on your Japanese competition and
new Japanese technology. Japanese companies spend a tremendous amount of
time and resources in creating new technologies and innovations. Your firm
needs to keep abreast of these developments in order to plan appropriate
countermeasures.
Experience gained in Japan responding to the demands of the Japanese market
can result in improvements to your products manufactured and sold throughout
the world. Many American companies, reacting to Japanese consumer demands,
have developed new products or innovations in their product line that have
led to tremendous successes in other markets. Moreover, competition in
Japan is so fierce that your firm's marketing tactics and skills will
undoubtedly improve simply by competing and learning. Many U.S. companies
have discovered from experience in the Japanese market that an emphasis on
quality, sales service, innovation, and buyer/seller relationships can lead
to a winning business mix in all markets.
When faced with the challenge of entering and establishing a sustained sales
presence in Japan, many U.S. exporters have determined that large profits
can be realized more quickly with less effort by focusing attention on
markets not as difficult to initially penetrate. However, in making this
decision, two important elements are often overlooked. First, the arena of
economic growth, commercial development, and strategic importance is
shifting from the Atlantic to the Pacific Basin. East Asian economies will
create the largest growth in demand for consumer and industrial goods well
into the next century. Second, U.S. suppliers must realize that
head-to-head competition with Japanese exporters is absolutely unavoidable
in the U.S. domestic market and third country markets around the world --
especially in Asia.
THE CHALLENGES:
As the old saying goes, nothing worthwhile is ever easy. Why is it
difficult to export to Japan? The media conveys the impression that the
Japanese Government has erected numerous trade barriers that make it
virtually impossible for your company to export to Japan. We hear over and
over again that the Japanese employ unfair trade practices that put American
products at a disadvantage vis-a-vis their Japanese competition.
The reality is that there are relatively few formal trade barriers in Japan
imposed by the Japanese Government. The average applied tariff in Japan is
now one of the world's lowest at 2.9 percent, and for many manufactured
products, nonexistent. Moreover, there are very few product areas that are
still affected by a quota system. This is not to say that there are no
problems in the form of formal trade restrictions in Japan. Many
agricultural goods and a few nonagricultural goods such as leather footwear
do confront high tariffs and quotas. Nevertheless, when you compare the
formal trade restrictions your company may face in other foreign markets
with the ones in Japan, you will find that Japan does not seem to be such a
difficult market to enter.
If all of this is true, why does the United States have such a huge trade
deficit with Japan? The answer is complicated. It is true that Japan is a
difficult country in which to do business. The reasons for this situation
vary and will be discussed throughout this guide. Our advice is based on
our interaction with hundreds of U.S. companies that have done business or
that have attempted to do business in Japan. We have learned from their
successes and their failures. Our intention is to pass on these experiences
so that your firm can benefit. We hope your company will then avoid the
pitfalls that have defeated previous attempts by some U.S. firms to export
to Japan and learn the techniques that have made some U.S. firms so
successful.
The following is a descriptive outline of challenging elements your company
will face in trying to do business in Japan. While these conditions may
seem insurmountable, many can be overcome with patience and hard work. The
key is to accurately identify what the potential difficulties are and then
develop strategies that address them. If your company spends the right
amount of time and effort in correctly analyzing the situation and devising
a viable market strategy, your firm will substantially improve its chances
of gaining market share and making money.
NEGATIVE IMAGE OF FOREIGN PRODUCTS AND COMPANIES: Foreign products and
companies suffer from an image problem in Japan -- too many Japanese have
the outdated and inaccurate opinion that foreign products are inferior and
that foreign companies are not reliable business partners. This mind-set
cannot only hamper your ability to sell your product in Japan, but also your
ability to develop a relationship with a potential Japanese business
partner. Two frequently heard criticisms of American companies in Japan are
that U.S. companies do not understand the unique characteristics of the
Japanese market and do not adapt their product to the market. American
firms are often perceived to be impatient, legalistic, short-term oriented,
and difficult to work with. On the positive side, this image may be
changing as U.S. products, services, and companies are now once again being
considered among world-class leaders and they are again price competitive.
DOING BUSINESS THE JAPANESE WAY -- BUILDING SUCCESSFUL RELATIONSHIPS:
Japanese business executives tend to be very conservative. They prefer to
deal with individuals and companies that they feel they can rely on and
trust. Consequently, the Japanese do business not solely on traditional
capitalist motives such as buying the best product at the lowest price, but
also on the quality of the relationship between buyer and seller. From
their perspective, this century-old system has created a business
environment of mutual understanding and cooperation. Japanese business
executives believe that a sense of harmony must exist for business
arrangements to be truly successful over the long term. The Japanese tend
to shy away from potential business partners who they sense will be
unreliable or difficult to relate to. They equate poor relationships with
excessive and unpredictable costs and lost business.
Thus, success in Japan has a direct correlation with the strength of your
company's personal relationships with your Japanese business partners and
customers. Although you might have a high-quality, innovative product, at a
competitive price, your company will not succeed unless you build and
cultivate good personal relationships. It is strongly recommended that your
firm establish a presence in the market by establishing a representative or
branch office in Japan. If this is not possible, your Japanese partner
(agent, representative, distributor, joint venture partner, etc.) will be
the key to your success in the market.
JAPANESE DISTRIBUTION SYSTEM: Japanese distribution systems are very
different from our own in the United States. They can be inefficient, are
often complex, and usually rely on personal relationships. It is not
uncommon to have two or three wholesalers for your product between importer
and retailer with a price mark-up at each step. These wholesalers, who
wield a tremendous amount of influence with retailers, are often tied in
with each other, Japanese manufacturers, or Japanese trading companies.
Especially frustrating is the difficulty most foreign companies face when
trying to circumvent this nontransparent system. Structural changes are now
occurring in the distribution system that should make it easier for U.S.
exporters to penetrate the Japanese market.
KEIRETSU: Understanding keiretsu is extremely important in understanding
how the Japanese economic system works. Keiretsu, or integrated corporate
groupings, are a structural arrangement of Japanese firms that are
characterized by close business relationships intertwined with long-term
commitments among their members. Keiretsu firms are tied in with one
another through cross shareholdings, long-standing buyer-supplier
arrangements, interlocking directorates, the exchange of personnel among
member firms, access to credit and marketing channels, management ties
through presidents' clubs, and the sharing of information concerning product
development and distribution.
There are two kinds of keiretsu: horizontal and vertical. Horizontal
keiretsu are headed by a major Japanese bank and often include an insurance
company, a general trading company, a shipping line with supporting
companies, a real estate firm, and groups of companies in chemicals, mining
and metals, electric products, heavy industry, and other industrial and
service sectors. The six major horizontal keiretsu are Mitsubishi, Mitsui,
Sumitomo, Fuyo, Dai-Ichi Kangyo, and Sanwa. Vertical keiretsu connect
manufacturers and parts suppliers, and/or manufacturers, wholesalers, and
retailers. Major vertical keiretsu include Toyota, Nissan, Hitachi,
Matsushita, and Nippon Steel.
To outsiders, the behavior pattern of these industrial groupings is similar
to that of monopolistic industrial conglomerates. Member firms are often
given preferential treatment, vital information is shared, inexpensive
capital is readily provided, and price fixing occurs. A key advantage for
these economic giants is their large pool of available capital and the lack
of pressure to maximize profits for the short term. Keiretsu banks are
willing lenders to support the long-term market strategies of their
manufacturing affiliates. Cross-shareholdings by keiretsu affiliates also
reduce the need for short-term profits.
Thus, keiretsu can afford to sell their products at or below cost, focusing
on market share rather than seeking immediate profit -- although recent
economic conditions are adversely affecting their ability to continue this
practice. Once the market is secured and competition weakened, profits can
be maximized. The keiretsu system also provides a security blanket. For
instance, a keiretsu company will not have to constantly prove its
reliability or creditworthiness to other member companies. Long-term ties
allow for innovations that put greater demands on suppliers, including the
just-in-time delivery system. The Japanese Government is permissive of the
keiretsu's monopolistic/oligopolistic behavior and antitrust is not readily
enforced in Japan. The keiretsu are also protective of their own,
epitomizing "the old boy network" in the Japanese business world. They
represent a considerable business barrier to nonmember Japanese firms and a
considerable trade barrier to foreign exporters.
Cracks have recently appeared in the keiretsu structure. Because of yen
appreciation and a greater emphasis on maximizing profits due to the
liquidity crunch, keiretsu members today are now more likely to buy products
from non-keiretsu member suppliers (both foreign and Japanese) than ever
before. Some U.S. companies have successfully penetrated keiretsu and have
enjoyed some of the advantages of membership.
PROVIDING FOR SALES SERVICE AND CUSTOMER SUPPORT: Japan is so competitive,
and Japanese consumer expectation levels are so high, that companies doing
business in Japan differentiate themselves not only on the basis of product
quality and price, but sales service and customer support. It is one of the
most important aspects of the "product package" that the Japanese buyer has
come to expect. If no consideration has been given to sales service
(before, during, and after the sale), your product will be severely
disadvantaged vis-a-vis your competitors' products.
REGULATIONS, STANDARDS, AND CERTIFICATION SYSTEMS: Complying with foreign
regulations, standards, and certification systems is simply one of the costs
of doing business overseas. Japan is no different. Unfortunately, Japanese
regulations, standards, and certification systems do not always conform to
international norms. Some U.S. companies have had difficulties in obtaining
approval for innovative products or the use of certain materials. Others
have found the costs to modify their products to meet Japanese requirements
excessive. Standards and certification problems in Japan can be classified
into one of three general categories: (1) lack of transparency, (2) lack of
acceptance of foreign test data, and (3) lack of harmonization with
international standards.
EXPENSE OF DOING BUSINESS IN JAPAN: Japan is an extremely costly place to
do business. Everything having to do with Japan seems expensive: market
research, travel to Japan, entertainment charges, participation in a trade
show, office space, advertising, legal assistance and guidance, and freight
and import broker charges.
MARKETING STRATEGY:
The key to your success in Japan is the commitment of your resources --
including your time, money, and personnel -- to develop a market for the
long term. If you prepare well, exercise patience, and demonstrate
commitment, then you will likely reap substantial benefits from your efforts.
ASSESSING YOUR PRODUCT'S POTENTIAL IN JAPAN: The first question your firm
must answer is, why would the Japanese buy our product? Your product may
sell well in the United States and other countries, but that does not
necessarily mean it will be well received in Japan.
Japan is a well-developed, industrialized country with a very high standard
of living. Competition for most types of products, ranging from consumer
goods to high-technology industrial products, is extremely fierce. It is
difficult to sell a commonly available product with no outstanding or unique
feature or price differential. As a rule of thumb, your product must be
unique or different to find a market in Japan. Quality, technology,
innovation, design and engineering, concept, style, color or fashion,
warranties and product support, packaging, and/or price are all factors that
could separate your product from both Japanese domestic and foreign
competition.
The Japanese preach quality constantly. It is the single most important
factor about your product that potential Japanese importers and customers
will consider. Today, many Japanese are convinced that only the Japanese
can manufacture products of superior quality. You must demonstrate to your
potential business partners that your product quality is on par with the
Japanese. Quality includes reliability, consistency, craftsmanship, and an
aesthetic balance between material, form, and color. Quality must be a
strength of your product, not a liability.
Quality control should be monitored before and after shipment to Japan. Be
certain that your shipping companies in Japan take great care when
delivering the merchandise. If your product arrives damaged or late, your
Japanese customers will not care who is responsible; they will however take
their business elsewhere. It is not uncommon for Japanese importers to
refuse to accept entire shipments if one defect or damaged item is
detected. Too many U.S.-Japan business relationships have soured because of
damaged or defective products. Don't take any chances. In the end, it will
cost you more to fix the problem than it would have cost to prevent the
problem.
Another important factor you must assess is can you adhere to mandatory
regulations and meet the voluntary product standards? Both domestic and
foreign-manufactured products must comply with Japanese Government
regulations that guarantee safety and quality control. If your firm's
product does not presently meet these requirements, you must adapt your
product. See the section titled "Japanese Regulations, Standards, Quality
Marks, and Certification Systems" for more information.
While U.S. companies do not like to hear often that modifications to their
product may be necessary, redesigning the product or making changes on the
production line could be necessary. It may mean the difference between
successfully developing a market in Japan and a few initial export sales.
Remember, in order for your product to sell well in Japan, it must meet
Japanese tastes and preferences. Adapting to these tastes and preferences,
when necessary, will only increase the appeal of your product with Japanese
consumers (i.e., scaling down furniture or apparel sizes, "Japanization" of
computer software, etc.). Your firm would do no less when selling in the
United States. In fact, product modifications for the Japanese market have
often led to the development of a superior product in the U.S. domestic
market.
Another consideration to keep in mind is that the Japanese will look at more
than just the product itself. The entire product package, including price,
sales service, and delivery are important factors for the Japanese business
person in deciding whether or not to import the product. Will the American
company provide assistance in marketing and advertising the product? Will
warranties or product support, including replacement of defective products
and repairs, be provided? The answers to these questions will largely
determine the Japanese's decision on whether or not to do business with your
company. In some cases, sales service and product support will be handled
by the importer/distributor/representative. In other instances, your firm
may have to make arrangements (with the guidance and consent of your
Japanese business partner, of course) for a third party to handle some sales
or other product support services.
ASSESSING YOUR COMPANY'S POTENTIAL IN JAPAN: The second step required is
for your firm to develop a written export strategy. Make no mistake about
it, exporting to Japan is very difficult without a comprehensive marketing
plan. Poor planning will most likely lead to poor sales and will alienate
you from your Japanese business partner. Written plans highlight strengths
and weaknesses more readily and are a great help in formulating and refining
an export strategy. They indicate to potential financial lenders and
Japanese business partners that your company is making a serious entry into
the market. In the end, a solid export strategy will not only save your
firm time and money, but it will significantly increase your chances for
success in the market.
Commitment is the first key and it must start at the top. Is your firm's
top management committed to the Japan export effort based on a realistic
assessment in terms of time and money required to penetrate the market?
Commitment to the Japanese market will entail costs; Japan is not a cheap
place to do business. It will probably cost your firm at least $20,000 to
obtain customized market research, find potential business partners, and
visit Japan twice during initial market entry. Subsequent visits to Japan,
at least twice per year, will strengthen business relationships and help
promote your product. Additional costs include product modification,
registration of patents and trademarks in Japan, compliance with Japanese
standards and regulations, translation services, interpreters, and employing
a qualified team of advisors (advertising agency, accounting firm, attorney,
freight forwarder, and banker). Trade shows -- an excellent medium to
collect market research, promote your product, and find potential partners
-- are a costly venture. In order to make money in Japan, you must spend
money. There are no short cuts into the Japanese market.
Your expectations should not be concentrated on immediate payback -- getting
established and developing relationships in Japan takes time. You may have
to wait one to two years to turn a profit. If exporting is viewed as a
quick fix for a slump in your domestic sales or will be neglected when
domestic sales pick up, you may wish to rethink your decision to approach
the Japanese market. Once you are established in Japan, the rewards can be
immense.
Your management must be able to adapt to the unique market conditions in
Japan. Listen to the advice of your Japanese partner. Do not go into Japan
believing that the same sales and marketing techniques that made your
company successful in the United States or other foreign markets will ensure
success in the Japanese market. This belief is a common mistake of American
firms seeking to enter the Japanese market and can lead to potentially
disastrous consequences for your company. Listen to and read about business
executives who have succeeded or failed in Japan -- learn from their
strategies. The typical U.S. firm, regardless of size, is not well informed
about how business is done in Japan. An experienced marketer can usually
tell if a foreign company will succeed in Japan simply by listening to the
company's management. If management actually shows an active interest in
learning about the complexities and differences of the Japanese market and
is willing to adopt a marketing approach better suited to this market, then
the company has half the battle won.
However, at the same time, it is not always necessary to do everything "the
Japanese way." Often, the Japanese partner's interest differs from that of
the U.S. company (i.e., high price, low volume). The Japanese way may only
reflect the business interests of the Japanese partner and may run counter
to the interests of the U.S. company. You should be flexible, but you also
should follow common sense. After all, we hope part of the attraction for
your product or service is its uniqueness. If everything is done the
Japanese way, your firm may lose the factors that distinguish your firm from
your competitors. If you are unsure of your partner's advice, rely on
professional market research firms to provide you with the answers.
Ideally, your firm should appoint a proven manager for its Japan
operations. Most importantly top decision-makers should consult with this
"Japan expert" before making decisions since he or she will be the
individual most intimate with the conditions surrounding the market. If not
resident in Japan, he or she should visit Japan at least twice a year. This
person should be in constant communication with your Japanese partner and
keep management up-to-date on the latest developments and be able to handle
crisis situations. Remember, market conditions may dictate modifications in
your firm's product. Your Japan manager's input into this kind of decision
may determine the success of your firm's efforts. In addition, when selling
the product or providing for product support, a company representative who
knows the product, not just the marketing strategy, should be in Japan to
answer specific technical questions or hold seminars.
Potential Japanese business partners will also look at the track record of
your firm both in the United States and other foreign markets. Is your
company recognized as a well-managed, quality-driven organization? Does it
have previous export experience? What is the history of your company and is
it a financially capable creditworthy business partner? What is your
company's market position in the United States? These are all questions
your potential Japanese partners will ask. They will be looking for a
solid, dependable business partner with a successful history.
Be certain your company can cover the costs of financing an export
transaction. In order to compete in Japan, your firm must present
attractive trade financing options to Japanese importers. Many Japanese
companies use promissory notes (yakusoku-tegata or yakute), which act as
I.O.U.'s with a promise to pay at a later date -- typically 90 to 120 days.
Japanese banks often provide their Japanese clients with short-term
financing by discounting the notes or providing a rollover to avoid cash
flow problems. Your deal with a Japanese importer may hinge on similar
terms. Never assume that your bank will provide financing once you receive
a purchase order. You should meet with your bank early on in the
negotiating process to discuss your export strategy and potential financing
needs. It may be necessary to obtain the support of the Export-Import Bank
of the United States or use a nontraditional financing tool such as
forfaiting or factoring. For more information, see the sections titled
"Methods of Payment" and "Export Financing."
MARKET RESEARCH: As mentioned previously, the first step for your company
is to determine if there is a market for your product in Japan. Substantial
preparatory homework will be essential to analyze your product's potential
in Japan, including such factors as competition, distribution channels, and
the best way to gain sales exposure in the market. Market research will
help you make good strategic decisions and prevent expensive mistakes.
Market research will also help your firm identify prospective importers and
customers. Most importantly, it should answer the all important question of
whether of not your product has potential in Japan.
If your preliminary research seems to indicate that Japan may be a promising
export market, you should seek more detailed information to confirm it.
Some market research is available for free from the U.S. and Japanese
Governments, but your firm will probably need to know more specific
information regarding your product than a general report can provide.
Obtaining customized market research is very expensive in Japan. However,
before you start making travel plans, it could save your company a lot of
time and effort if you can confirm first that your product is potentially
viable in Japan.
Here are five possible sources of market research on Japan for your company:
The U.S. Government: Many of the various U.S. Government agencies produce
market research for American companies interested in exporting products
overseas. In particular, the U.S. Department of Commerce (for manufactured
products and fishery products) and the U.S. Department of Agriculture (for
agricultural commodities and processed food products) can provide
sector-specific market research for free or at a nominal fee. Other
agencies such as the U.S. Department of Transportation and the U.S.
Department of Energy may also be of assistance, if appropriate.
The U.S. Department of Commerce makes available to U.S. exporters
industry-specific market research on manufactured products, fish products,
and services for most foreign markets. The reports, titled Industry
Sub-Sector Analyses (ISA's), provide information on various specific product
markets and include sections on statistical data, market assessment, best
sales prospects, competitive situation, market access, and a list of key
organizations, trade events, and publications. In addition, the Commerce
Department also prepares valuable International Market Insight (IMI)
reports. These smaller, spot reports contain more time-sensitive
information on recent industry-specific market developments, trade
opportunities, and intra-country regional conditions. Both ISA's and IMI's
are available on the National Trade Data Bank (NTDB). If ISA's or IMI's do
not answer your company's specific questions, it may be necessary for your
firm to contract out for more specialized and customized market research.
Two resources that we regularly refer to throughout this guide and strongly
recommend that you obtain are the National Trade Data Bank (NTDB) and "A
Basic Guide to Exporting." The NTDB is a "one-stop" source for export
promotion and international trade data collected by 17 U.S. Government
agencies. Updated each month and released on two CD-ROM, the NTDB enables a
user with an IBM-compatible personal computer equipped with a CD-ROM reader
to access over 100,000 trade-related documents. The NTDB contains (1) "A
Basic Guide to Exporting," (2) country and industry specific market
research, (3) the "World Fact Book," (4) "The Industrial Outlook," (5) the
"Foreign Trade Barriers Report," (6) "Business America Magazine," (7) the
Foreign Traders Index, (8) foreign trade and employment trends, (8) the
"Export Promotion and Trade Event Calendar," and much, much more. The NTDB
is also available at over 1,000 federal depository and university libraries
nationwide. The NTDB can be purchased for $35 per monthly issue or $360 for
a 12-month subscription. For a listing of local federal depository or
university libraries equipped with the NTDB, call the U.S. Department of
Commerce's Trade Information Center at 1-800-USA-TRADE. For ordering and
other specific information, call the NTDB staff at (202) 482-1986.
The 1992 edition of A Basic Guide to Exporting helps business develop an
export strategy, find economic market research, ship overseas, complete
export documentation, respond to overseas inquiries, and take advantage of
available government export assistance programs. A Basic Guide to Exporting
is a publication of the International Trade Administration, U.S. Department
of Commerce. To order a copy, call GPO at (202) 783-3238. Ask for stock
number 003-009-00604-0. The cost is $9.50.
The Commerce Department offers the Customized Sales Survey (CSS), a more
comprehensive service for those companies that are prepared to make a
serious initial commitment to the Japanese market. The CSS is a custom
market research service designed to provide advice and key facts about your
product potential in Japan that cannot be found in broader industry surveys.
The CSS provides answers to nine key marketing questions about your product
in Japan: (1) Does the product have sales potential in the market? (2) Who
is supplying a comparable product locally? (3) What is the usual sales
channel for getting this type of product into the market? (4) What is the
going price for a comparable product in this market? (5) Are purchasers of
such products primarily influenced by price or other competitive factors,
such as credit, quality, delivery, service, promotion, brand, etc.? (6) What
is the best way to get sales exposure in the market for this type of
product? (7) Are there any impediments to selling this type of product in
this market, such as quotas, duties, or local regulations that might impede
sales? (8) Who might be interested and qualified to represent or purchase
this company's product in the market? and (9) If a licensing or joint
venture strategy seems desirable for this market, who might be an interested
and qualified partner for the U.S. company?
Answers to these questions are obtained from on-the-spot, personal
interviews conducted by private-sector market research firms in Japan. The
researchers conduct a CSS by interviewing expert local sources, such as
importers, distributors, end-users, or local producers of comparable
products. The final CSS will be completed and sent to you in approximately
60 days. The CSS in Japan costs $3,500.
The CSS is confined to standard, off-the-shelf products, rather than
specialty or custom-built products. Standard products are typically shown
and priced in catalogs, are influenced by normal competitive factors, have
relatively straightforward distribution channels, and have a number of
suppliers and potential agents that can serve as contact points.
If you wish to order a CSS on your product, you will be asked to provide
answers to the following specific questions:
(1) What is the product and how does it work?
(2) What special features, attributes, and advantages does it have that
distinguish it from the competition?
(3) What is it used for?
(4) Who needs the product?
(5) How is this product typically distributed and marketed in the United
States and, if applicable, in other countries?
(6) What types of firms or individuals would you suggest be contacted in
the target country to provide answers to the nine CSS survey questions
(i.e., agents, distributors, retailers, physicians and like
professionals, plant engineers, etc.)?
(7) Are you currently represented in the market, and if so, who is your
agent?
Clear and concise answers to these questions are needed, as the researcher
must have a full understanding of your product and its marketing
characteristics to conduct a thorough comparison with other competing
products in the market. For further information and an application for the
CSS, contact your nearest U.S. Department of Commerce district office (see
the section titled "International Trade Administration/US&FCS District
Offices" for contact information).
The CSS, like other U.S. Department of Commerce products and services,
promotes products made in the United States. Products manufactured outside
the United States will only be considered if they are distributed and sold
in the name of a U.S. firm, and if the U.S. content is more than 51 percent
of the value of the finished product.
The Japan External Trade Organization (JETRO): JETRO, a Japanese Government
organization, produces industry-specific market research reports on the
Japanese market for U.S. and other foreign exporters. Of particular note
are its market research reports under the series heading of "Your Market in
Japan." These reports range from general consumer goods to high technology
products and include sections on market overview, market trends,
distribution system, import system, advice on approaching the market,
standards and regulations, and related organizations and trade events. You
should call JETRO and ask for an up-to-date publications list on all
available documents. Each JETRO office has an extensive commercial library
that includes many valuable resources. JETRO is now placing much of its
information in electronic databases. The six current JETRO databases are:
the Potential Importers Database (contacts of Japanese importers), JETRO
Publications in English Database (listing of over 300 trade-related
publications), Market Trends in Japan Database (over 800 reports on the
Japanese market for specific products), Your Market in Japan Database
(electronic version of the market research series), Japan Trade Directory
Database (listing of Japanese importers, exporters, and service companies),
and the Japan Regional Investment Guide Database (overview of regional
investment environment in Japan). See the section titled "The Japanese
Government" for a listing of JETRO offices in the United States.
Industry/Trade Associations: Some associations have very good international
trade divisions that produce reports on various foreign markets or market
conditions. Your association may also keep current information on the
latest foreign regulations, standards, and trade statistics. Association
members might provide valuable information and guidance on approaching the
Japanese market, including cost assessments, finding potential partners,
intellectual property protection, and other matters related to exporting to
Japan. Several U.S. industry associations have established offices in Japan
to support their members' export activities.
International Consulting/Market Research Firms: Like the Commerce
Department's Customized Sales Survey (CSS), international consulting and
market research firms can generally provide customized market research
specific to your product and the Japanese market. Unfortunately, customized
market research for Japan is expensive. The $3,500 cost of a CSS is likely
more economical than private consultants or market researchers who will
often charge double that rate. However, if your firm wants to seriously
approach the Japanese market and substantially increase the chances for
success, market research is necessary. You need to be informed of all
variables and conditions that will affect your marketing efforts.
Of course, your company will want to compare costs and benefits of each
option. You should carefully examine the capabilities of the
consulting/market research firm that you may employ in order to determine
whether or not it is capable of providing advice on exporting to Japan, and
in particular, exporting the type of product that your firm manufactures. A
list of market research and business consulting firms in Japan is available
in a U.S. Department of Commerce publication titled Business Support
Organizations in Japan, 1992. The guide has been placed in the National
Trade Data Bank.
The Export Hotline: The Export Hotline is a private-sector, fax retrieval,
international trade information service designed to help companies learn
about strategic global markets, including Japan. Using a new fax-on-demand
technology, the Export Hotline allows callers to use their fax machines to
request and receive reports on a single call. By calling 1-800-872-9767
toll free from their telephone, callers immediately receive back on their
fax machines a four-page brochure which includes instructions on how to use
the service, a registration form, and the menu and codes of available
reports. The information is free. Users pay only the cost of the fax
transmission. A typical report is fairly brief, averaging 6-10 pages, and
much of the information is summarized from U.S. Department of Commerce
Industry Sub-Sector Analyses and other country specific reports.
MARKET ENTRY ALTERNATIVES: There are many vehicles for market entry into
Japan, each offering greater or lesser profits, control, and risk. Your
decision on which market entry alternative to use must be guided by your
financial resources, commitment to the market as it relates to your global
sales strategy, intellectual property protection considerations, and time
horizon. Regardless of the method, you should be taking a long-term
approach to Japan.
Establishing an Office in Japan: If your company can afford the investment,
you should seriously consider establishing a representative or branch office
in Japan. This office will allow your firm the most direct control of its
operations in Japan and will help ensure the quality of sales service and
general marketing efforts, such as advertising and
wholesaler/retailer/end-user support and relations. Moreover, an office
provides your company with a base for gathering firsthand information on the
competition, emerging technologies, and developing market trends. Setting
up operations in Japan is the ultimate proof of your commitment to the
market. Realistically, this is the most pragmatic way for your firm to
develop effective personal relationships with your customers. Your Japanese
competition is constantly making the rounds and talking with your potential
customers in order to build relationships and promote their products. Your
firm needs to pursue the same strategy. The Japanese are more likely to do
business with those people who they like, and trust, and who they feel are
committed to the market.
Establishing an office in Japan can prove to be an expensive proposition
primarily because office space is not cheap, and salaries for Japanese
nationals are high. Most U.S. companies hire Japanese nationals because of
their intimate knowledge of the local culture and business practices and
their expertise in a particular industry sector. Japanese nationals are
also more cost effective than dispatching Americans with no industry
contacts in Japan. However, in many cases, Japanese nationals are reluctant
to work for foreign companies because they are worried that they will not
have stable employment. Nevertheless, hiring quality personnel is
absolutely essential as they will be your eyes and ears in the market.
Most American firms that set up in Japan tend to establish their offices in
Tokyo. In some cases, especially if you intend to network with Japanese
Government ministries, this might be the preferred method. However, U.S.
firms should look at alternatives such as Osaka in the Kansai region,
Sapporo in Hokkaido, Fukuoka in Kyushu, or Nagoya in Aichi Prefecture.
These locations offer a number of different advantages over Tokyo. First of
all, for many industry sectors, the Tokyo market is already saturated by
foreign companies. Thus, Japanese interest in foreign companies in Tokyo
tends to be less than it might be in other regions. Also, since many
foreign companies seek agents/representatives/importers in Tokyo, many
quality distributors will have already signed agreements with your foreign
or domestic competition. Second, the cost of opening up an office in other
regions tends to be dramatically lower than Tokyo. Recognizing the current
downturn in the Japanese economy, some of these regions can offer real
bargains. Important organizations in Kansai and Hokkaido are very
interested in attracting foreign direct investment and offer special
incentives to attract foreign business.
The Commerce Department publication Business Support Organizations in Japan,
1992 lists some executive office support and executive search firms in both
the Tokyo and Kansai regions. This publication is available on the National
Trade Data Bank (NTDB). The Commerce Department's U.S. and Foreign
Commercial Service (US&FCS) in Osaka has prepared a two-part report on the
rental market in the Kansai, which is also available on the NTDB. For more
information on this subject, see the section of this guide titled
"Investment in Japan."
REPRESENTATIVE OFFICE: A foreign company that wishes to collect information
or to facilitate contacts in Japan should consider establishing a liaison or
representative office. This liaison office could be used to obtain market
data, provide information to potential clients, and develop relationships
with key elements in the distribution system to provide the necessary
promotional and service support. A representative office is not subject to
Japanese taxes, and it is not necessary to obtain special approval from the
Japanese Government to be established. However, a representative office
must not involve itself in commercial transactions (as defined in the
Japanese Commercial Code) or generate income; therefore, it cannot handle
orders directly. The liaison office may function by providing guidance and
support to an agent, and managing all marketing activities except for the
formal sale.
BRANCH OFFICE: To go a step beyond a representative or liaison office, you
can establish a sales or branch office. A branch office can engage in
trading, manufacturing, retailing, services, or other business. To set up a
branch office, your company must appoint a resident representative in Japan
and must register with the Legal Affairs Bureau of the Ministry of Justice.
In addition, the establishment of a branch office is considered a direct
investment under the Foreign Exchange and Foreign Trade Control Law.
Because of this designation, your firm must also notify the Ministry of
Finance through the Bank of Japan within 15 days after the establishment of
the branch office. For certain regulated sectors, obtaining a license is
not possible for foreign firms. These regulated sectors include
broadcasting; electric power generation; domestic rail and air
transportation; arms; gun powder; atomic energy; aircraft; space
development; narcotic manufacturing; vaccine manufacturing; security guard
services; agriculture, forestry, and fisheries; petroleum refining and
marketing; leather and leather product manufacturing; shipbuilding; and
mining. In addition, significant restrictions remain for foreign firms in
the financial services and telecommunications sectors. For these sectors,
Ministry of Finance notification must be made prior to the establishment of
the branch office.
A branch office may take and fill orders, and is liable for payment of
Japanese taxes. Moreover, a branch office may carry out a full marketing
program, including arranging for advertising, recruiting a sales force, and
performing all necessary promotional activities.
SUBSIDIARIES: Another alternative is to incorporate your own subsidiary
company in Japan. For most sectors, the Japanese Government allows the
establishment of a wholly owned subsidiary corporation. However, as with
establishing a branch office, certain sectors are restricted. Setting up a
wholly owned subsidiary is much more complicated and will involve more time
and expense, but it can offer an effective means for your company to
manufacture locally, guarantee better protection for proprietary
information, and penetrate some markets which have subtle but substantial
barriers to imports. Moreover, there is a perception in Japan that
companies that establish subsidiaries are more committed to the market than
companies that set up representative or branch offices.
ALTERNATIVE OPERATIONS: A fourth approach is to pool resources of several
firms that have complementary product lines and want to sell in Japan. Such
a group might establish a marketing association, consortium, or jointly
owned export management company, and set up a sales and service office in
Japan. This operation may take the form of a liaison office that handles
contacts with agents, distributors, and customers. Considering the
importance of brand image in Japan, group members may wish to consider
adopting a group logo that would be a universally recognized and accepted
identity for their product line. This approach is not widely used by U.S.
firms in Japan, but has been successfully employed by a number of European
groups. You may also consider piggybacking your product with a
complementary line of a firm which is successfully exporting to Japan.
For additional information on establishing an office in Japan, hiring
Japanese nationals, living, or investment in Japan, refer to the following
publications (listed in chronological order):
Setting Up an Office in Japan. American Chamber of Commerce in Japan
(ACCJ), 1993. This and other ACCJ publications are available through the
U.S. Chamber of Commerce at (202) 463-5460.
Cost of Doing Business in Japan. U.S. and Foreign Commercial Service/Japan
(US&FCS/Japan), 1993. Available on the National Trade Data Bank.
Living in Japan. ACCJ, 1993.
Establishment of a Representative Office in Japan. Japan External Trade
Organization (JETRO), 1992. New York Office -- (212) 997-0400.
Setting Up a Business in Japan: A Guide for Foreign Businessmen; Questions
and Answers. JETRO, 1992.
JETRO White Paper on Foreign Direct Investment. JETRO, 1992.
Employment Practices of American Companies in Japan. ACCJ, 1991.
Finding a Home in Tokyo. ACCJ, 1991.
Setting Up a Business in Japan: A Manual. JETRO, 1991.
Guide to Investment in Japan. Industrial Bank of Japan, 1991. Washington,
D.C. Office -- (202) 835-0455.
Guide to Direct Investment in Japan. Japan Development Bank, 1991.
Washington, D.C. Office -- (202) 331-8696.
Survey of Direct U.S. Private Capital Investment in Research and Development
Facilities in Japan. National Science Foundation, 1991. Washington, DC
Office -- (202) 357-9558.
Japanese Takeovers: The Global Contest of Corporate Control. W. Carl
Kester, published by the Harvard Business School, 1991.
A Guide to Entry, Residence and Registration Procedures in Japan for Foreign
Nationals. Ministry of Justice, 1990. Available through Overseas Courier
Service (OCS) America at (703) 528-4500.
Employment of Foreign Nationals; Questions and Answers. Ministry of
Justice, 1990. Available through OCS America.
Acquiring Japanese Companies: Mergers and Acquisitions in the Japanese
Market. Kanji Ishizumi, published by Basil Blackwell, Inc., 1990.
Setting Up & Operating a Business in Japan: A Handbook for the Foreign
Businessman. Helene Thian, published by the Charles E. Tuttle Company, 1988.
Labor Pains and the Gaijin Boss: Hiring, Managing and Firing the Japanese.
Thomas J. Nevins, published by The Japan Times, 1984.
Representatives, Agents, and Distributors: An overseas sales representative
is the equivalent of a manufacturer's representative in the United States.
A representative develops sales on behalf of the company represented. The
representative usually avoids handling competitive lines and concentrates on
complementary lines. The sales representative usually works on a commission
basis, assumes no risk or responsibility, and is under contract for a
definite period of time (renewable by mutual agreement). The contract
defines territory, terms of sale, method of compensation, reasons and
procedures for terminating the agreement, and other details. The sales
representative may operate on either an exclusive or a nonexclusive basis.
Often widely misunderstood, an agent is a representative who normally has
authority to make commitments on behalf of the firm which is represented.
Many companies in the United States have stopped using the term and instead
rely on the term representative, since agent can imply more than intended.
Any contract should state whether the representative or agent does or does
not have legal authority to obligate the firm to sales transactions or
agreements.
The foreign distributor is a merchant who purchases merchandise from a U.S.
exporter and resells it at a profit. The foreign distributor generally
provides support and service for the product, relieving the U.S. company of
those responsibilities (but this should be discussed and formalized in the
contract). The distributor usually carries an inventory of products, a
sufficient supply of spare parts, and maintains adequate facilities and
personnel for normal servicing operations.
Selecting a representative, agent, or distributor is the most common option
for market entry by U.S. firms. On the positive side,
representatives/agents/distributors should be able to educate you if you are
unfamiliar with the Japanese market, distribution channels, regulations and
standards, and business practices. On the negative side, your success in
Japan largely depends on your Japanese business partner's capability and
level of interest in selling your product. In addition to not being able to
directly control your own business in the market, you will also have to
share a greater percentage of the profits with your partner.
In most instances, it is not required to notify the Japanese Government of
the appointment of a Japanese representative/agent/distributor. The only
two exceptions are in cases of exclusive agreements of over one year in
which the distributor is a competitor with a 10 percent or greater market
share and/or possesses the third or higher market share position within the
distributor's industry in Japan or the distributor agreement contains
restrictions on the resale prices of the distributor. In such instances,
the distributor agreement must be filed with the Japanese Fair Trade
Commission within 30 days after the execution of the agreement.
Licensing: Licensing product technology is an alternative with considerable
appeal. A firm can immediately contribute to its bottom line with little
investment or direct cost. What is often overlooked, however, is the missed
opportunities and the indirect costs of licensing.
Licensing is a very limited form of market participation. High potential
returns from marketing and manufacturing efficiencies are lost, and very
little market information is gained. Often licensing agreements prove to be
short-lived as the licensee develops the ability to become a competitor to
the licensor in all markets. Indirect costs of managing and policing the
licensing agreement are also often overlooked. There are many cases of
licensees underreporting sales and under-remitting royalty payments. The
wisdom of licensing technology depends on the status of a company's patents
in Japan, together with the degree to which the company must disclose trade
secrets to its licensee. Licensing as a route of market entry into Japan
has become increasingly unpopular with American companies in certain
industries. There is a long history of Japanese companies improving upon
American products and technologies and then exporting the improved product
back to the United States -- becoming a major competitor.
The key to success in a licensing agreement is to have a partner whose goals
coincide with your own. Indirect expenses should be anticipated, and the
contract should provide for a cross-technology exchange between licensor and
licensee. To properly manage the licensing agreement, you must have a
highly qualified individual administer the contract. This individual should
maintain close contact with the licensee and keep current on the Japanese
market by visiting Japan regularly. A carefully constructed and executed
licensing agreement can prove beneficial, but the risks and costs should be
thoroughly investigated and fully considered.
Royalties paid by the Japanese licensee to the U.S. licensor are subject to
a 20 percent withholding tax which may be reduced to 10 percent if the
necessary documentation is filed under the U.S.-Japan Tax Treaty.
According to the Foreign Exchange and Foreign Trade Control Law, foreign
companies interested in granting a license to an independent Japanese
corporation, its own wholly owned subsidiary, or joint venture corporation
in order to manufacture in Japan must notify the Ministry of Finance through
the Bank of Japan within 15 days of the execution of the licensing
agreement. However, notification must be made in advance of the execution
of the licensing agreement in those cases involving the transfer of
specially regulated and/or designated technologies, in which case a report
must be filed with the Ministry of Finance and other appropriate Japanese
ministries.
Special regulations apply to the following sectors based on the U.S.-Japan
Treaty of Friendship, Commerce, and Navigation and the Code of
Liberalization of Capital Movements of the Organization for Economic
Cooperation and Development: broadcasting; telecommunications; electric
power generation; domestic rail and air transportation; arms; gun powder;
atomic energy; aircraft; space development; narcotic manufacturing; vaccine
manufacturing; security guard services; agriculture, forestry, and
fisheries; petroleum refining and marketing; leather and leather product
manufacturing; and mining.
Moreover, the Japanese Government has specified the following 12 areas as
the designated technologies which have significant influence on the security
of the nation and the interest of the national economy: aircraft, arms, gun
powder, atomic energy, space development, electronic computers, electronic
parts for electronic computers for next generation, appliances for laser
processing and light communication, innovative materials, salt electrolysis
by nonmercurial methods, petroleum production at sea bottom, and leather and
leather products.
In addition to the regulations already mentioned, if the license agreement
is exclusive, extends beyond one year, and the licensee is a competitor with
a 10 percent or greater market share and/or is ranked third or higher in the
respective Japanese industry, notification must also be given to the
Japanese Fair Trade Commission.
Joint Ventures: The advantages of establishing a joint venture partnership
in Japan are greater ease in identifying and hiring local personnel and
securing immediate access to your partner's distribution system and
customers. This entry vehicle will also require your company to share
profits and control with your Japanese partner. As with selecting agents or
distributors in Japan, you must also be able to trust and communicate
comfortably with your partner. Make sure that the interests of you and your
joint venture partner coincide. A joint venture partnership involving
technology transfer agreements with a Japanese business partner with whom
you do not have confidence or with a principal competitor will probably not
be a good strategic business decision by your firm. Exporting American-made
products, as opposed to joint ventures that manufacture in Japan, helps
reduce the risk of releasing proprietary know-how that gives the U.S.
company a competitive edge. The value of your joint venture arrangement may
diminish as your Japanese partner improves on or becomes less dependent on
the technological innovations your company developed.
It is possible to set up a joint venture in Japan through an unincorporated,
contractual joint venture; acquiring stock in an existing corporation
(although this can prove to be extremely difficult unless you have the
consent of the Japanese corporation); or through the establishment of a
newly incorporated company in which the Japanese and U.S. corporations
mutually decide upon management control and the roles and responsibilities
of each party. If the joint venture is intended to last more than one year,
the joint venture agreement must be submitted to the Japanese Fair Trade
Commission for review within 30 days after its execution. In addition,
similar to establishing a branch office, the Legal Affairs Bureau of the
Ministry of Justice and the Ministry of Finance (through the Bank of Japan)
must be notified.
Direct Marketing: A relatively recent development has been the significant
growth of direct marketing in Japan. Direct marketing is becoming accepted
as an alternative sales channel for suppliers attempting to reach the
increasingly affluent Japanese consumers, while bypassing the traditional
middleman. Japan is already the world's largest door-to-door sales market,
with automobiles, cosmetics, detergents, cleaning supplies, and other home
and kitchen items enjoying substantial growth. Moreover, the demand for
shopping through the mail or by telephone has grown tremendously in Japan in
recent years.
Many successful catalog sales and telemarketing companies in Japan are
leading retailers, manufacturers, wholesalers, newspaper and magazine
publishers, broadcasting stations, advertising agencies, banks, credit card
issuers, and finance companies. Retail and catalog sales are still
inseparable in the minds of both merchants and consumers. Japanese
consumers may be reluctant to try catalog shopping if the credibility or
track record of the catalog company is unknown or questionable. The
Japanese customer demands top quality for every product and is meticulous
about the packaging and condition of the package on arrival. Traditionally,
returning goods for exchange and claims is very common. That is why many
successful Japanese catalog companies have retail shops where the customer
can examine the product and return it if necessary. Since customers take
these services for granted, regardless of whether they buy at a retail shop
or through mail order, direct marketing should not be considered a perfect
escape from the Japanese distribution system and customer service.
Moreover, all cost factors such as postage, distribution, warehousing,
delivery, and personnel must be considered.
Without a well-established and well-recognized market position, it is
unrealistic for a U.S. company to expect to buy a mailing list, send an
English-language catalog directly from the United States to individual
Japanese customers, and be inundated with orders. U.S. companies aiming to
enter this market should at least be prepared to make an investment in
service functions -- a representative in Japan can act as a liaison with the
U.S. supplier to handle receipt of claims, customs clearance, public
relations, and the preparation of a Japanese-language catalog. Warehousing
and delivery can also be managed by the representative. Additional
information on direct marketing in Japan is available on the National Trade
Data Bank. An excellent publication on direct marketing overseas, with an
overview section on Japan is, U.S. Postal Service International Direct
Marketing Guide (with 1993 Addendum), published by Braddock Communications,
Inc., 1992 (Phone: 703-549-6500).
Franchising: The franchising industry has become a multibillion dollar
business in Japan. Originally developed in the fast food area, it has
expanded into a variety of new sectors. U.S. participation in the Japanese
franchising industry is highly visible under familiar names such as
McDonald's, Kentucky Fried Chicken, Mr. Donuts, Subway Sandwiches, Denny's,
and Sizzler among others.
Because successful franchises tend to depend heavily on the long-term
investment capability and marketing expertise of a Japanese partner, many
U.S. companies select a joint venture operation as the method to enter the
market. In general, the details of a master franchise agreement are not
disclosed. However, there are certain similarities among franchise
agreements. Most U.S. franchisors usually do not try to recruit actual shop
operators in Japan directly from the United States. Instead, U.S. firms
concentrate their efforts on finding a master franchisee, which is usually
either a Japanese company or a joint venture between the U.S. franchisor and
a Japanese company. In some cases, it may even be a wholly owned subsidiary
of the U.S. company. The master franchise holder is then responsible for
the actual recruitment of Japanese franchisees. Usually, the master
franchisee will provide to the U.S. company a lump-sum payment, payable over
a certain period of time, in addition to royalty payments which range from
around 1 to 5 percent of the sales. Of course, the more assistance the U.S.
company can provide, such as point-of-sale systems, the higher the
percentage. Special attention should be paid to expectation levels of both
parties to avert future problems. Terms should be formalized for
contractual rights and responsibilities, trade mark protection, and
marketing methods.
CHOOSING YOUR METHOD OF MARKET ENTRY: If you have determined that both your
product and your company are right for the Japanese market and have done
your homework, including market research, then comes the difficult task of
market entry. Considering the unique character of the Japanese market and
the complexity of the distribution and regulatory systems, a presence in the
Japanese market is absolutely essential for new-to-market exporters. This
presence can be in the form of a representative or agent (an individual or
organization that represents you and your product, or an actual physical
presence by your firm), a representative or branch office, subsidiary, or
joint venture. Of course, our best recommendation for your firm would be to
operate and staff your own office in Japan. Having your own office would
guarantee direct control over your Japan operations and help you better
contain the costs of product marketing and distribution.
If your company is not ready to open an office in Japan, then you must find
an appropriate Japanese business partner. This partner is the organization,
company, or person with whom you will work to develop and sustain a market
presence in Japan. This partner could be an agent, representative,
importer, distributor, manufacturer, licensee, franchisee, or joint venture
partner. Your cooperation, attention to detail, and involvement will
determine their success, and yours.
Why is a Japanese intermediary or business partner even necessary? Wouldn't
it be much cheaper and more efficient to approach the end-users or retailers
directly with your product? Business in Japan is dependent on the personal
relationships within the Japanese distribution system. These relationships,
while influenced by motivations of profit, are reinforced by factors such as
reliability, trustworthiness, personal loyalties, friendships, and
tradition. Japanese end-users and retailers are very conservative in making
their buying decisions. They are not likely to switch suppliers, especially
to "unreliable" foreign ones, when they are satisfied with their present
business relationships -- even if a supplier can offer cheaper prices.
A well-respected Japanese agent/distributor/importer who has long-standing
ties in a particular Japanese distribution system would have a much easier
time finding buyers for your product. To risk-averse Japanese buyers, these
Japanese middlemen serve as insurance in guaranteeing suitability of a new
business partner and can help ensure the timely delivery of a quality
product with the appropriate level of sales support and service.
Not only do Japanese buyers often prefer to have their foreign suppliers
work through a Japanese middleman, but working through the middleman may
also be your firm's best market entry tactic. You need someone in Japan to
market and advertise your product, take orders, resolve potential delivery
problems or bottlenecks, and implement customer support and sales service.
Your partner is essential for obtaining information on Japanese regulations,
standards, and quality marks, and might also make decisively important
suggestions on product modification with respect to consumer taste. Your
partner is there to physically import the product, arrange payment, and keep
you informed of market developments. This last point is one to remember and
take advantage of. Products cycles are relatively short in Japan. What is
an advanced product or in fashion today can be outmoded and unfashionable
tomorrow. Your firm must be continuously kept aware of market trends and
product developments to remain competitive in Japan. You must have a
representative make the rounds and maintain good relations with wholesalers,
retailers, and end-users. Your partner must regularly promote your product
with these players in order for your product to receive appropriate
attention and support. Since personnel of your Japanese competitors are
visiting distributors and customers nearly everyday to emphasize their
commitment, they have an inherent advantage over your firm unless you
establish a presence in the market.
Finding the appropriate Japanese partner is a challenge. A common mistake
made by many U.S. firms is to try to use a list of importers as a means of
first contact. Fax machine or correspondence inquiries will not work in
Japan. The Japanese prefer to do business with someone only when they have
been properly introduced and meet face-to-face. You should find a respected
third party to provide a proper introduction (aisatsu) for your firm to
potential buyers of your product. Because the Japanese are so conservative
in their approach to looking at new suppliers, a persuasive endorsement
about the quality of your product, the dependability of your firm, and the
character of your staff will help open closed doors. In reality, the third
party is serving as a guarantor of the reliability of your firm as a trading
partner, and the third party introduction will help dispel reluctance on the
Japanese side. Appropriate third parties can be other Japanese firms, U.S.
companies that have successfully done business in Japan, banks, trade
associations, chambers of commerce, U.S. federal and state governments, the
Japanese Government, or other business intermediaries.
The following is a list of different methods and services to locate
potential Japanese business partners:
The Agent/Distributor Service (ADS): The U.S. Department of Commerce's ADS
is an overseas search service to identify potential agents, representatives,
or distributors for your product in the Japanese market. U.S. and Foreign
Commercial Service (US&FCS) officers in Japan prepare a customized list
identifying up to six Japanese prospects who have expressed an interest in
representing you in the market. Since the processing time at the U.S.
Embassy ranges from 30 to 45 days, you should allow for sufficient lead
time. When filing for the ADS, you should give as much information as
possible about your product and company; this is the only way US&FCS/Japan
can perform a refined search for appropriate partners. Every ADS package
should include product and company literature (preferably in Japanese) and a
sales letter. Note that illustrations or photographs of products can be
crucial in overcoming the natural resistance of some potential Japanese
business partners to reading sales information written in a foreign
language. The sales letter should start "Dear Sir/Madam" and provide
answers to the following questions, where appropriate:
(1) What is the background of your company in the United States? You should
provide information on year established, number of employees, capital,
annual sales, a reference bank, and a history of your company. Also, it
helps to know what other types of products your firm manufactures and
the markets where your company is currently exporting.
(2) Why are you interested in exporting to the Japanese market? Has your
firm already developed a marketing plan/strategy for the market? What
are your company's goals/vision for success in the Japanese market?
(3) Why would the Japanese buy your product? What separates it from the
competition or makes it unique to the market? Which aspect of your
product are you most proud?
(4) Does your company have the flexibility to alter the design, size, or
style of the product to meet Japanese standards or consumer tastes?
Modification would include metrification of products, manuals, and sales
literature.
(5) Are you prepared to translate product literature?
(6) If your firm does not manufacture the product, do you have authorization
from the manufacturer you represent to sell in Japan?
(7) Are you prepared to visit Japan to meet the company and hold further
discussions?
(8) What type of business partner are you looking for in Japan (agent,
representative, distributor, manufacturer, etc.)? IMPORTANT NOTE: The
ADS does not include a search for a licensee or joint venture partner.
(9) Does your firm presently have a Japanese partner? If so, why are you
seeking a new one? Does your original partner understand that you are
seeking new arrangements? If you already have representation in Japan,
your original partner might not be happy with you looking for additional
partners, and this could lead to potentially disastrous business
conflicts (see the section titled "Replacing a Japanese Business
Partner").
An introductory letter enables Japanese companies with limited English
language proficiency to quickly comprehend, direct, and process the more
detailed information contained in the literature. While it may appear as an
unnecessary formality to a company unfamiliar with the Japanese market, it
is essential for being taken seriously as an ADS applicant. Of course, it
would aid your efforts if the letter were also professionally translated
into Japanese. Finally, you need to provide a price list (f.o.b. and/or
c.i.f.). The cost of an ADS is $250 per product. Contact your local U.S.
Department of Commerce district office to initiate an ADS (see the section
titled "International Trade Administration/US&FCS District Offices" for
contact information).
Many manufacturing firms have exclusive marketing agreements or their own
sales channels in Japan. If any of these manufacturers have given exclusive
distribution rights in Japan to another firm, the U.S. Department of
Commerce is precluded from performing the ADS. Sales by an unauthorized
distributor could lead to trade disputes and possible legal action.
The Gold Key Service (GKS): The GKS is a business facilitation initiative
of the U.S. Department of Commerce. It focuses on making appointments for
U.S. business executives visiting Japan. Through the GKS, the Commerce
Department can arrange up to four appointments per day for you with
potential agents, distributors, or importers that have been identified in an
Agent/Distributor Search (ADS) or by yourself. If you wish, appointments
can also be arranged with industry associations, Japanese Government
officials, and other key contacts. The appointments are set up by a
private-sector contractor. A comprehensive briefing by US&FCS/Japan is
included in the GKS basic package. This consultation will include a
briefing on the market for your product in Japan, provide you with
background information on each appointment, and alert you to developments in
your industry sector in Japan.
To initiate the GKS, send the following documents at least four weeks prior
to any meetings to be scheduled through the GKS (to arrange meaningful
appointments and organize a briefing for the user, US&FCS/Japan requires a
minimum of four weeks to prepare for the GKS):
(1) The Gold Key Service Application Form, which you may obtain from
US&FCS/Tokyo by fax (011-81-3-3589-4235).
(2) 10-15 packages of your product literature (preferably translated into
Japanese), including price lists. Each package must include an original
cover letter (addressed to "Dear Sir/Madam:") describing in detail the
purpose of your trip.
The Gold Key Service Application Form will ask for the following information:
(1) Please provide traveler's name, title, company name, address, telephone,
and fax as well as the date(s) requested for the GKS. Please also
provide the following company information: year established, size,
annual sales, and bank reference.
(2) Please describe your company and your company's main products or
services.
(3) Please describe the products or services you wish to sell in Japan and
their uses. What special features, attributes, and advantages do they
have that distinguish them from the Japanese, U.S., and other
competition?
(4) What are your company's objectives in the Japanese market?
(5) What is the purpose of your visit to Japan?
(6) What are your objectives for requesting the Gold Key Service? What
types of business contacts are you looking for?
(7) Please identify any current representation or prior experience of your
products in Japan.
(8) What type of distribution do your products have in the United States?
(9) Please describe your current competitors in the United States and Japan.
(10) Please describe any special features of your company's operations, or
interests in Japan, that would help US&FCS/Japan in identifying
Japanese contacts for you.
(11) Please list the names of any potential agents, distributors, or
importers with whom you would like US&FCS/Japan to set up appointments
for you.
(12) Please list the names and/or types of any other companies, government
agencies, or organizations with whom you would like US&FCS/Japan to set
up appointments for you.
(13) Please rate your ability in spoken Japanese (none, basic greetings,
simple conversation, or advanced)? Will you need an interpreter
arranged for your GKS meetings?
The Commerce Department cannot always guarantee a full schedule of
appointments since the number of appointments made depends on the interest
in your company and products in the Japanese market, and the timing of your
visit. The rates for the basic GKS are 30,000 yen (approximately $270 at
110 yen/dollar) for the one-day service and 20,000 yen (approximately $180)
for the half-day service plus the 3 percent Japanese national sales tax
(Consumption Tax). Payment may be made after arrival in Japan directly to
the International Transaction Center, Ltd., in yen or by American Express,
MasterCard, Diners Club, or by VISA credit cards. The basic service rate
will be the same for Tokyo, Osaka, and Nagoya.
If you require additional services such as interpreters, translation,
secretarial support, temporary office space, meeting rooms, etc., US&FCS can
arrange these through the contractor, the International Transaction Center,
at an additional cost. Please be aware that the December 27 - January 8 New
Year's holidays, the April 24 - May 8 "Golden Week" holidays, and the August
8 - 20 "o-bon" holiday period should be avoided when traveling to Japan on
business.
Allow five days for the materials to reach Tokyo by air courier. By
international mail, allow seven days. Send to:
US&FCS Gold Key Service
U.S. Embassy, Tokyo
1-10-5 Akasaka, Minato-ku
Tokyo 107 JAPAN
Alternatively, you may use U.S. domestic express mail (allow three days), or
U.S. domestic first-class mail (allow seven days). Send to:
US&FCS/Tokyo
Gold Key Service
U.S. Embassy, Tokyo
Unit 45004, Box 204
APO AP 96337-0001
The GKS is not a substitute for the ADS. The search and the fees are
separate. If you would like to search for potential agents or distributors
that you would like to meet as part of the GKS, you should apply for an ADS
search. This clarification is necessary to prevent confusion in
distinguishing between the ADS and GKS. Because relationships and proper
introductions are so important in Japanese business culture, the GKS can
really open doors for U.S. companies seeking contacts in Japan.
Trade Events: Trade events provide an excellent opportunity for your
company to introduce itself and its products to the Japanese market. U.S.
companies that participate in trade fairs, trade missions, and matchmaker
trade delegations in Japan can accomplish several key marketing objectives.
Making contacts with Japanese importers, distributors, and agents is an
obvious benefit. Many business partnerships have been formed through these
initial introductions. Participation would also enable your firm to gauge
the interest of the Japanese in your product, specifically by learning which
product qualities appeal most (or least). This interaction is an
opportunity to listen to suggestions on how the product can be better
adapted to the Japanese market. Many exhibitors will also use this
opportunity to publicize their local sales outlets. In addition, trade
shows will provide you an opportunity to observe the product presentation of
your competitors and assess the effectiveness of their techniques.
The U.S. Department of Commerce, including US&FCS/Japan, is actively
involved in organizing and recruiting for trade fairs in Japan, and
organizing and leading trade missions and matchmaker trade delegations to
Japan. To obtain a listing of Commerce-sponsored trade events, refer to the
Japan Country Marketing Plan (which will be replaced by the Japan Country
Commercial Guide in fiscal year 1995). Both reports are/will be made
available on the National Trade Data Bank. The Department also certifies
trade fairs in Japan organized and recruited by reputable American private
management companies. In addition, the Department recruits Japanese buyer
missions to visit private sector-organized-recruited trade fairs held in the
United States. Descriptions of various types of trade events follow:
TRADE FAIRS: Trade fairs are product or service demonstrations for a
particular industry sector or theme. When the U.S. Department of Commerce
organizes/recruits a show, it will establish a U.S. section or pavilion,
featuring American-made products and their exhibitors. Some of these trade
fairs feature only American exhibitors. The Trade Development (TD) area of
the Department's International Trade Administration (ITA), which houses
industry specialists, and the US&FCS unit of ITA are the organizers and
recruiters of Commerce trade fairs. For information on these type of
events, contact the Japan Export Information Center (JEIC) at (202) 482-2425.
If the trade fair is a Commerce Department certified event, the private
sector show organizer will establish a U.S. pavilion or offer U.S. companies
booth space amongst exhibitors from other countries. Certified trade fairs
offer U.S. companies the opportunity to participate in trade events that
have been given the official support and approval of the U.S. Department of
Commerce. For information on certified trade fairs, contact the Trade Fair
Certification Program in the Office of Export Promotion Services at (202)
482-2525.
TRADE MISSIONS: Trade missions to Japan often encompass meetings with
potential importers, agents or distributors, Japanese and American industry
associations/representatives, Japanese Government officials, and
US&FCS/Japan. Trade missions are sometimes scheduled to coincide with a
major trade fair of interest to the mission companies. These events not
only give a U.S. firm an opportunity to initiate business contacts with
potential importers and distributors, they also provide an ideal opportunity
to gather valuable insights while surveying the market potential for the
company's product line. ITA's Trade Development unit recruits and organizes
trade missions for Japan and other international markets. For information
on Commerce-organized-recruited trade missions to Japan, contact the JEIC at
(202) 482-2425.
Under the auspices of its Certified Trade Mission program, the Commerce
Department also grants official government approval for trade missions
planned, organized, and recruited by U.S. industry trade associations,
agencies of state and local governments, chambers of commerce, and other
export promotion groups. Department approval and support for these missions
is granted to applicants that agree to abide by the "Conditions of
Participation." Department support includes ongoing advice and assistance
to mission organizers; the arrangement of in-country briefings by industry
experts and US&FCS/Japan staff; setting up one-on-one business appointments
with potential agents, importers, and distributors; business receptions; and
advance mission publicity. For more information, contact the Certified
Trade Mission program in the Office of Export Promotion Services at (202)
482-4908.
MATCHMAKER TRADE DELEGATIONS: Matchmaker trade delegations to Japan are
custom-tailored introductory missions that bring together U.S. exporters and
potential Japanese business partners. These missions are recruited and
organized by the Office of Export Promotion Services. Individual business
appointments for U.S. companies are scheduled in advance; background checks
on prospective partners are provided; in-country market briefings are given
by industry specialists, Japanese Government officials, and the US&FCS/Japan
staff; and interpreting services are provided free of charge. For more
information, contact the Matchmaker Trade Delegation program in the Office
of Export Promotion Services at (202) 482-3119.
FOREIGN BUYER PROGRAM: U.S. trade shows that are selected for the Foreign
Buyer Program are an excellent forum for U.S. companies to introduce
themselves and their products to potential foreign business partners. The
Foreign Buyer Program, in conjunction with US&FCS posts in foreign
countries, recruits buying delegations from foreign countries to attend
prominent trade shows in the United States. US&FCS promotion efforts abroad
focus on publicizing the export interests of U.S. companies participating in
U.S. trade shows. The foreign buyer delegations are recruited by travel
agents who work closely with US&FCS trade specialists in planning and
organizing the trip. US&FCS trade specialists accompany the Foreign Buyer
Program groups to the United States as expert advisors and interpreters.
They also make the necessary arrangements to provide export counseling for
U.S. exhibitors, translation assistance for buyers and exhibitors,
comprehensive postings of the business interests of foreign buyers, and
conference rooms for private business meetings. For more information,
contact the Foreign Buyer Program in the Office of Export Promotion Services
at (202) 482-0481.
THE U.S. TRADE CENTER: US&FCS/Japan operates an exhibition facility called
the U.S. Trade Center, located in the World Import Mart, Sunshine City
Complex, Ikebukuro, Tokyo. The U.S. Trade Center is available to American
firms and their Japanese representatives who wish to actively promote their
products and services in the Japanese market. Its modern facility,
accessibility, and professional staff make the U.S. Trade Center highly
favored by both American and Japanese business executives, and it is ideal
for single or multi-company exhibitions, seminars, technical product
demonstrations, conferences, receptions, and other promotional events.
Other services to assist your efforts are also available. For more
information, contact:
U.S. Trade Center MAILING ADDRESS:
7th Floor, World Import Mart U.S. Trade Center
3-1-3 Higashi-Ikebukuro, c/o U.S. Embassy, Tokyo
Toshima-ku Unit 45004, Box 229
Tokyo 170 JAPAN APO AP 96337-5004
Phone: 011-81-3-3987-2441
Fax: 011-81-3-3987-2447
OTHER TRADE EVENTS: There are many trade events in Japan that do not have
any official U.S. Department of Commerce involvement. Many of these events
are large, reputable trade shows well-known within their respective
industries. However, some trade events are not always what they purport to
be, and some exhibitors have incurred significant financial losses as a
result. As a word of warning, any individual or company considering
participation in a trade fair that does not have U.S. Department of Commerce
involvement or support should check the credentials of the show organizer.
This investigation may be accomplished by asking your U.S. industry
association if they or other companies in the association are familiar with
the show organizer or the specific trade show. If your association and its
member companies are unfamiliar with the show or show organizer, then your
firm should ask the show organizer for contact information on U.S.
exhibitors who have participated in the organizer's previous trade fairs.
You should then contact these exhibitors and ask their opinion of the show
organizer's credentials.
To obtain a listing of the major trade fairs held in Japan (only some of
these events will have official U.S. Department of Commerce involvement),
contact any of the seven Japan External Trade Organization (JETRO) offices
in the United States (see "The Japanese Government" section of this
publication for contact information). JETRO publishes a guide titled List
of Trade Fairs in Japan. In addition, the Japan National Tourist
Organization also publishes a periodic guide titled Exhibitions and Events
in Japan. It can be obtained free of charge through the Japan National
Tourist Organization. The number for the New York Office is (212) 757-5640.
TRADE FAIR PRESENTATIONS: U.S. exhibitors at trade fairs should prepare
their booth displays and product presentations to convey an image of
quality. Japanese consumers place much importance on the packaging and
presentation of products. A product that is not carefully presented in a
well-designed package or booth may lead the Japanese consumer to believe
that the exhibited product is not high quality. A Japanese buyer is also
likely to think that a company which does not bother to present its product
in an appealing fashion could not be that concerned with servicing the
customer's needs.
Another consideration when preparing product displays at trade fairs is the
competition for the attention of visitors. Companies that most successfully
attract visitors to their booths are those that create interactive,
elaborate booth displays. Displays that involve participatory activities
gain the attention of visitors who might otherwise have bypassed the display.
Visitors to your booth will be interested in gathering brochures and other
literature on your company and products. It is very important that this
information be in Japanese. To many, this point is obvious, but despite
investing the time and money to attend the trade show, some U.S. companies
still do not translate their product literature. For products that need a
clear definition of their unique characteristics, leaving the literature in
English will negatively impact a company's success rate in attracting
potential Japanese importers and distributors.
Other U.S. Department of Commerce Programs: While these other Commerce
Department programs may be more economical for your firm in finding
potential Japanese business partners, they will not provide the critical
introduction by a respected third party. Nevertheless, these options do
provide a less expensive route in determining whether or not there is
interest in your product.
THE FOREIGN TRADERS INDEX (FTI): The FTI is a list of over 50,000 foreign
companies interested in doing business with U.S. firms. The list is
compiled by US&FCS officers at U.S. embassies around the world. The FTI
includes agents, importers, manufacturers, retailers, wholesalers,
distributors, licensing partners, advertising agencies, service companies,
marketing firms, banks, and trading companies. The database provides U.S.
exporters with names, addresses, products handled, company size, and other
relevant information. The FTI is available to the public on the National
Trade Data Bank.
TRADE OPPORTUNITIES PROGRAM (TOP): TOP provides U.S. companies with current
sales leads from foreign firms seeking to buy or represent products and
services. TOP leads are printed daily in The Journal of Commerce, a
privately produced trade and transportation newspaper that publishes news
and analysis on international trade (Phone: 1-800-221-3777). TOP leads are
also distributed electronically via the Department of Commerce Economic
Bulletin Board.
THE ECONOMIC BULLETIN BOARD (EBB): The EBB, a personal computer-based
electronic bulletin board, is an on-line source for trade leads as well as
for the latest statistical releases from the Bureau of the Census, the
Bureau of Economic Analysis, the Bureau of Labor Statistics, the Federal
Reserve Board, and other federal agencies. Also available on the EBB are
the latest International Market Insight (IMI) reports from US&FCS/Japan.
Subscribers to the 300/1200/2400 bps EBB pay an annual registration fee of
$35, which includes a $12 credit for access time to the system. Continued
access is billed quarterly at $0.20 per minute between 8 a.m. and 12 noon
EST, $0.15 per minute between noon and 6 p.m. EST, and $0.05 per minute at
all other times and on weekends and holidays. Subscribers to the 9600 bps
EBB pay an annual registration fee of $100, and all access time is billed
quarterly at $0.50 per minute at all times. The EBB is also available
through Internet.
Contact EBB staff at (202) 482-1986 or try the EBB as a guest user by
dialing (202) 482-3870 with your personal computer and modem (8 bit words,
no parity, 1 stop bit).
THE ECONOMIC BULLETIN BOARD/FAX: Use your fax machine to receive trade
leads and the latest trade and economic information from the Federal
Government. No subscription fees are required. Access EBB/FAX by dialing
1-900-RUN-A-FAX (1-900-786-2329) from your fax machine. The charge is $0.65
per minute. For more information contact EBB/FAX at (202) 482-1986.
JAPANESE GOVERNMENT TENDER ANNOUNCEMENTS: Japanese Government entities are
interested in purchasing a wide range of goods from telecommunications
equipment, computer equipment, and scientific and testing instruments to
other, less sophisticated products and supplies.
All Japanese Government tender documents are in Japanese. In most cases,
English documents are not available, and English is not acceptable when
submitting tender documents [Nippon Telegraph and Telephone (NTT) tenders
are exceptions in that they may be submitted in English]. To facilitate
information gathering and applications for tender documents, you should
appoint a local agent or representative (local representation, though not
mandatory, is strongly recommended because of short deadlines and the
necessity to submit bids and other documentation in Japanese). Chances of
successfully bidding on these tenders without some representation in Japan
are very limited. Prospective bidders for government procurement must also
be pre-qualified by the government agency to whom they wish to sell, and
they must pursue the tender under competitive bidding practices.
Some Japanese Government entities utilize lists of qualified suppliers -- a
selective tendering system. From December to February every year, an
announcement for qualification screening will appear in the official
Japanese Government gazette, the Kampo, with information on procedures and
criteria for becoming a pre-qualified bidder for a particular agency. To
become a qualified supplier, firms and/or their agents must apply for
qualification screening. Each agency specifies in the Kampo an open period
prior to the beginning of the Japanese fiscal year, which starts April 1
(most firms apply in January or February) for receipt of the applications.
If a company misses this open period, applications for the qualification
screening may still be submitted. However, in such a case, the validity
term will be from the date when qualification is given to March 31 of the
year given by the announcing agency.
Specific tender notices are published in the Kampo at various times,
generally 50 days prior to the time of bid. Under the provisions of the
Procurement Code of the General Agreement on Tariffs and Trade (GATT),
foreign companies are permitted to bid on specific invitations prior to
qualification provided there is sufficient time to complete the
qualification procedures.
To assist firms competing for Japanese Government procurement contracts, the
U.S. Department of Commerce has extended its Trade Opportunities Program to
disseminate summaries of translated tender announcements on the Electronic
Bulletin Board. Tender announcements also appear in the Commerce Business
Daily on a regular basis, which is a daily listing of U.S. Government
procurement invitations, contract awards, subcontracting leads, sales of
surplus property, and foreign business opportunities (for a sample copy,
call 202-482-0632). Commerce Business Daily is available in electronic form
on Compuserve and on GENIE's Air Force Forum. U.S. Department of Commerce
district offices can also assist potential U.S. bidders by identifying firms
that provide translation services.
The U.S. Embassy in Tokyo does not purchase Japanese Government tender
documents on behalf of individual U.S. firms nor does the embassy process
Japanese Government tenders on behalf of U.S. firms. All documents and all
qualifying bids and contracts must be prepared in Japanese and sent by U.S.
firms directly to applicable Japanese Government agencies. Suppliers who
are not prequalified or in the prequalification process are not eligible to
request bid solicitations. Under no circumstances should unqualified
suppliers make a request in English for bid documents.
You can contact the appropriate Japanese Government ministry through your
agent or representative in Japan. If you do not have a partner in Japan,
the following companies may be of assistance:
Mr. Robert F. Connelly Mr. William R. Connelly
Procurement Services Int'l K.K. Procurement Services Int'l, Asahi
Sanbancho Plaza #206 USA, Inc.
7-1 Sanban-cho, Chiyoda-ku 4182 Ulyses Way
Tokyo 102 JAPAN Golden, CO 80403
Phone: 011-81-3-3234-6921 Phone: (303) 898-4769
Fax: 011-81-3-3234-6915 Fax: (303) 277-9419
Mr. Kiyoshi Tsukada Mr. Noboru Kaneyasu
Chief, YDB Division Fuji Chimera Research
Yano Research Institute, Ltd. Institute, Inc.
POLA Ebisu Building FK Bldg., 2-5 Nihonbashi
3-9-19 Higashi, Shibuya-ku Kodenma-cho, Chuo-ku
Tokyo 150 JAPAN Tokyo 103 JAPAN
Phone: 011-81-3-5485-4616 Phone: 011-81-3-3664-5815
Fax: 011-81-3-5485-4681 Fax: 011-81-3-3661-5134
Mr. Y. Watanabe Mrs. Mie Teno
Vice President Managing Director
Fujikasei Co., Ltd. Deltapoint International Ltd.
Takasago Building 8F KB-6 Bldg. 6, Sanbancho
1-13-16 Awaza, Nishi-ku Chiyoda-ku
Osaka 550 JAPAN Tokyo 102 JAPAN
Phone: 011-81-6-532-7431 Phone: 011-81-3-3221-1751
Fax: 011-81-6-532-7435 Fax: 011-81-3-3221-1753
Gateway Japan, in a cooperative venture with Procurement Services
International (PSI) in Tokyo, can provide your firm with daily tender
announcements (detailed summaries in English tha