Cracking the Japanese market takes time-and patience

Succeeding in small business

February 03, 1992|By Jane Applegate | Jane Applegate,Los Angeles Times Syndicate

President Bush's recent trip to Japan, dampened by his bout with the flu and tense discussions with big-business leaders, prompted many small-business owners to wonder whether he might have fared better if he'd taken a group of open-minded entrepreneurs along.

Knowing how tough it is for big business to crack the Japanese market, is there any hope for a small business? The answer is yes -- if you are patient, flexible and willing to learn how business is really done in Japan.

"In the U.S., buyers and sellers are pretty much equal in social status, but in Japan, the customer is God," said Christopher Engholm, author of "When Business East Meets Business West," published by John Wiley & Sons.

Another key difference: While price is king in America, the relationship between two companies is more important in Japan. American business people don't realize that Japanese business relationships are carefully forged to last a long time. According to Engholm, changing suppliers is a major decision for a Japanese company, even if what you are offering is cheaper and better.

The Japanese also believe in keeping business at home whenever possible.

Cheryl Rowley, a West Los Angeles interior designer, learned this the hard way when she was hired to take over the furnishing of the 600-room Yokohama Grand Inter-Continental Hotel.

"All of our design specifications were written for U.S. goods," Rowley said. "But countless times, the Japanese owners made decisions to use Japanese-made products even though they cost more or were not always the highest quality."

After much discussion, she was permitted to order U.S.-made furniture for the hotel's public areas and buy American accessories and lighting fixtures. Rowley also insisted that a San Francisco company be permitted to install a mural which is the centerpiece of the grand ballroom.

However, the carpets were Japanese-made, and all the guest room furniture she designed was produced by Japanese crafts people.

One of the most challenging aspects of the project, which brought in a six-figure fee to her small firm, was dealing with strict chains of command.

"The people I worked with were terrified by my need to make a decision right away," said Rowley, who adjusted to the decision-making style.

American business owners who have been successful in Japan said although details, such as the right way to present a business card (with both hands), are important, the key thing is ++ to realize that creating a relationship with an Asian firm takes time and patience.

One of the easiest ways for a small business to gain a toehold in Japan is to find a distributor or agent there, according to Engholm, principal of Pacific Rim Ventures in Rancho La Costa, Calif.

"Try to sign a performance contract to test your product in their market for a short time," Engholm advised. Many Japanese companies are also interested in investing in American companies, offering a cash infusion as well as valuable business connections.

Another tip: If you want to pitch a product or service to Japan, you don't have to speak fluent Japanese.Knowing a few polite phrases is helpful, but English is widely spoken.

In fact, the big rage in Japan is to learn how to speak English at one of scores of private language schools opening up across the country.

If you are ready to test the Japanese market, which is flooded with about 30,000 new products a year, do your homework first.

"Honoring the Customer -- Marketing and Selling to the Japanese," a new book by Robert March (published by John Wiley & Sons), is packed with interesting anecdotes and suggestions.

For comprehensive, practical trade information, consider attending the 5th Annual Asia/Pacific Business Outlook Conference, March 16-18 at the University of Southern California.

The conference, co-sponsored by the U.S. Department of Commerce, brings together the senior commercial officers from 15 U.S. embassies in the Asia-Pacific region with scores of experts and hundreds of business owners from across the country. There will be more than 150 workshops and seminars to attend.

The fee is $850. For registration information call (213) 740-7132 or fax a request to (213) 740-7559.

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