In a recent interview with the president of MARS Japan, I had the opportunity to learn how products are introduced, stocked, shelved, sold and ultimately either kept on inventory shelves, or, let go never to see the light of day. It is a dog-eat-dog world with over 14 large consumer product manufacturers vying for new shelf space and a prominent position in Japan’s main retail stores. Over 3000 SKU’s (Stock Keeping Units, aka Products) are introduced annually, and, out of those, only 10% succeed in winning over Japanese consumers. With that high a failure rate, it is no wonder there is such an aggressive push for new product introduction, advertising and blitzing Japanese with different varieties of canned coffee, chocolate candy, pet food, and other goods.
Seasons to Introduce Products
There are two main seasons when products are introduced to the Japanese market: Spring and Fall. During these periods, manufacturers introduce their products through the Japanese Distribution Chain, starting with the wholesalers and trickling down to the retailers. Retail outlets go through the process of setting up the physical layout of their stores for the season, for example, how a genre of pet food might be displayed, its locality, proximity to other pet related products, etc.
As in real-estate and the food business, it is all about location, location, location…
It was interesting to find out that how a product is situated or displayed in the store is often times the difference between having a hit product and one that is quickly relegated to yesterday’s news. Japanese housewives are the main shoppers in the family, and it’s not uncommon for them to go to a supermarket everyday to shop and get the freshest food and products for their families. Thus, having a key position in the store, while the matriarch combs the aisles for the latest and greatest, can be a very important detail on whether your product gets snatched up or not.
How can I make sure my product gets displayed at the right place and right time?
That starts from relationships at the grass-roots level. For the manufacturers who are representing both foreign and domestic products, it is a constant game of establishing strong relationships with all the players in the distribution chain. Success hinges on the ability to create, sustain and grow business relationships, which ultimately leads to better product positioning and more sales.
Howard Ichiro Lim is the President and CEO of Incredible Consulting Group, a firm focused on helping Foreign Multinational companies develop and grow their businesses in Asia. He is based in Tokyo and San Francisco, splitting his time equally between both countries. You can reach Howard through his Linkedin profile here.