Segmenting the Japanese market

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Table of Contents

Introduction
The segmentation process
Conclusion
References

Introduction

The Japanese market is unique when compared to other markets of the world. Therefore, there is a need for careful evaluation prior to segmentation of the market. This is because Japanese consumers are highly knowledgeable when it comes to products.

Most of them often take their time before buying and prefer not to stand out; they have a need to belong to a group and they are also not moved by prices (Johansson, 2007). Income gaps are not very high between Japanese consumers so given these key characteristics, it is best that they be segmented into baby boomers, scientific seikatsusha, coalition families and amembo kids.

The segmentation process

These four categories have been selected because they are the most attractive for target marketing to be done. These segments are highly distinct from one another in terms of the marketing mix and the elements that drive the members of each group. These segments will be able to serve specific marketing needs.

They can also be translated into profitable ventures by the said companies because they reflect the patterns inherent in Japanese society. The sizes and the purchasing power of these segments are quite measurable and should therefore make things quite convenient for the companies that will be using these products (McDonald & Jenkins, 1996).

The first type of segmentation variable chosen in order to come to the respective decisions is the demographic variable. In this case, age has been specifically chosen as a segmentation variable. The Japanese people are generally proud of their ages. Consequently, most of them will change their behaviour in order to match their generational expectations.

For example, the kinds of food eaten by one age group will be dramatically different from that of another. Other things such as preferences for entertainment and mode of dressing will also change noticeably depending on the age of an individual. It therefore makes sense to segment according to age. However, in order to ensure that the right group is targeted, it is essential to look at the patterns in population growth within Japan. Statistics show that the population of Japan is aging.

The baby boomers who were born between 1945 and 1950 are taking up the largest portion. Currently, the numbers indicate that persons between the ages of forty five and sixty represent the highest population. These individuals all belong to the baby boom generation (Meyer-Oyle, 2001). The junior baby boomers are 35-40 years while the senior baby boomers are 60-65. Therefore, having a market segment targeting them is definitely a good idea.

Another age variable that has been chosen for the segmentation of Japanese consumers is Amembo kids. These are children between the ages of ten and fourteen. Although their proportion compared to that of other groups is much lower, this does not mean that they are not capable of providing a thorough market for goods or services offered to the Japanese population. First of all, these children are highly opinionated and have very specific tastes.

Analysts have even asserted that it is almost as if they want to skip a certain age and become adults especially judging by their behaviour. These children also have very strong purchasing power. Most of them are given reasonable allowances every month. They are also entitled to gifts during the holidays and these may surmount to 29, 900 yen. Additionally, over seventy percent of these children boast of a savings account where they have accumulated about 108, 300 Yen.

These children also have many technological possessions such as video games and software. Over eighty percent have bicycles and twenty six percent have their own cameras. To this end, these children are a strong incentive to most marketers because they can provide such a huge market for their commodities (Meyer-Oyle, 2001).

The third variable falls under the psychographic variables; this is specifically segmentation according to lifestyle. The Coalition family is the specific example. Here, purchasing decisions are made depending on the nature of the product or service under consideration and the status of the member of that family.

For example, when making buying decisions about small household items like toothpaste and toilet paper, the wife will be responsible for these decisions. On the other hand, when making decisions about cars and beer and other sorts of equipment, the husband will decide on these items, where to buy them and at what rate to buy them.

Things like toys and snacks are highly determined by children as they have a known preference for certain brands. When it comes to investment in properties such as land, or life insurance, wives and husbands will collaborate with one another in order to come to the final decision. Lastly, wives will seek the opinions of their husbands for certain long term goods (Rapaport, 1990).

This means that the coalition family is one in which the opinions of other family members matter and they play a role in determining the kind of products consumed. Consequently, having market segment for such a group will make a lot of sense since their joint decisions ultimately determine the kind of choices being made.

The last variable is a type of behavioural segmentation which is known as the scientific seikatsusha. The kind of buyer behaviour influencing this group of purchasers is technology. In other words, they are attracted to those services and goods that are perceived as high tech. For example, they will be seen buying a digital camera over an analogue and will look for the latest or most technologically advanced model. Such members will not simply grab an item at the counter and place it in their shopping counter.

Instead, they will take their time to read instructions, find out about the process of making the item and discover new ways of using it. They pay careful attention to instructions and are often eager to try out new products. Studies show that this kind of behaviour has been encouraged by rapid advances in the knowledge economy as well as in technology. It should be noted that the Japanese have spearheaded several innovations as most of them embrace technology in almost all facets of their lives.

Consequently, the scientific seikatsusha represent a large proportion of the population. Their preference for high quality, technologically advanced products means that other conventional factors such as price will tend to mean very little to these kinds of people (Herbig & Borstoff, 1995). This means that companies can target them and benefit greatly from their willingness to try out new things.

Conclusion

It is not right to presume that these four market segments have covered the entire Japanese market. Although consumers in this country are relatively homogenous compared to other markets of the world, it is essential to remember that there are still certain buying patterns that are unique to Japan.

The key thing is to choose a pattern that will represent a wide section of the Japanese consumer market. This was the reason why types of demographic, behavioural and psychographic variables were selected as the preferred segments. These segments are designed to cater for the divergent needs and buying habits of the Japanese population as was understood by analysts working on this market. Two types of demographic segments were chosen because their needs are divergent as well.

References

Johansson, J. (2007). Japanese consumers; what foreign marketers should know. International marketing review, 37(1-7)

McDonald, M. & Jenkins, M. (1996). Market segmentation: organisational archetypes and research agendas. European Marketing journal, 31(1), 17-32

Herbig, P. & Borstoff, P. (1995). Japan’s Shinjinrui: the new breed. International journal of social economics, 22(12), 49-65

Meyer-Oyle, H. (2001). Segmenting the Japanese market, Department of Japanese studies, 1-51

Rapaport, C. (1990). How the Japanese are changing. Fortune, 24^th September, 15-22

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Segmenting the Japanese market

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