The Journal The Authority on Global Business in Japan

Back in the 1980s, Japan did not need an official Cool Japan campaign to prove its global street credibility. Every kid wanted a Sony Walkman or a Nintendo games console, among a seemingly endless stream of hit products from Japanese companies.

But with the post-bubble slide costing Japanese corporations billions of dollars in lost brand value—not to mention the damage caused to the national image by the 2011 Fukushima nuclear disaster—can Japan get its cool back?

“Sony’s [co-founder Akio] Morita and Nintendo’s [former President and CEO Satoru] Iwata were creatives who understood what consumers wanted. They built products with broad appeal because they approached the development process from the standpoint of the guy on the street.

“Morita wanted to take his music with him wherever he went, and we got the Walkman. Iwata wanted fun, challenging games that everyone could enjoy, and we got the Super Mario Brothers video game.

“That’s not possible at Toshiba or Panasonic or Hitachi. Japan is capable of producing more Moritas and Iwatas, but the question is where should we be looking for them?” asks Daniel Fath, vice president of Tokyo-based Total Communications K.K.

IS JAPAN BACK?
Complacency and arrogance are two of the charges leveled by brand experts at some of Japan’s fallen tech giants. But at least at a national level, there is evidence that the nation of anime, manga, and a myriad mascots is starting to win back fans.

For the first time in the ranking’s history, Japan took top spot in FutureBrand’s 2014 Country Brand Index, which measured 75 countries on metrics that include value system, quality of life, business potential, heritage and culture, and tourism, based on the opinions of more than 2,500 respondents.

Japan overtook Switzerland to gain top place, with respondents rating it highly for technology, consumer electronics, automotive, household appliances, transportation, and luxury goods.

According to FutureBrand, a strong national brand provides a tangible competitive advantage. The brand strategy and design consultancy asserts that, “people are more likely to visit, recommend, and do business with a country brand. And twice as many people say they would buy products from a country brand than they would from a country.”

$9 TRILLION INDUSTRY
The value of a strong national brand is shown by forecasts that the global cultural industry, including fashion, film, and food, will reach $9 trillion by 2020.

While Cool Japan originated in 2002, it was officially adopted by Tokyo in 2011 in response to the March 2011 triple disaster.

Run by the Ministry of Economy, Trade and Industry (METI), the administration of Prime Minister Shinzo Abe has pledged $1 billion to the Cool Japan campaign over the next two decades, with the aim of earning an extra $100 million or more a year.

The Cool Japan Fund Inc.—a public–private partnership set up in 2013 with the aim of supporting and developing a market for Japanese goods and services overseas—has backed Japanese TV translations abroad, launched a Japanese food court in Singapore, and established new shopping centers in China and Malaysia, among other activities.

This follows similar moves by neighboring South Korea, which has invested $1 billion in its own global cultural war chest, and China with its Confucius Institute, a non-profit intended to promote the country’s language and culture around the world.

DEFINING COOL
However, like parents telling their kids what to wear, not everyone thinks that the government can decide what is cool.

“Cool is in the eye of the beholder: it’s not something that you can claim to be,” says Singapore-based Martin Roll, author of Asian Brand Strategy: Building and Sustaining Strong Global Brands in Asia. “Brands and countries should be very careful about referring to themselves as being cool.”

According to Roll, Cool Japan has received mixed reviews for failing to distinguish, brand, and engage with overseas audiences. Famous Japanese artists such as Takashi Murakami have reportedly distanced themselves from the program.

Eric Wedemeyer, CEO of Tokyo-based Tactus Associates Inc., helped Canada build its brand in Japan with a local branding initiative. According to Wedemeyer, Cool Japan may struggle because its proponents just do not “get” cool.

“The people running the initiative have no understanding of how cool Japan actually is. They’re just putting things into a bucket and trying to flog it, without any understanding of how brands work strategically,” he says.

While Wedemeyer says building a national brand is far more difficult than a company brand, there are common elements that could be tied together into a consistent theme for Japan. It could cover from traditional culture to high-tech monozukuri (craftsmanship), along with omotenashi (Japanese hospitality), and other elements such as anime and manga. The only problem, though, is finding someone with the authority and knowledge to drive it.

Lead1JAPAN 3.0
Competition from Asian rivals has put pressure on Japan to create “version 3.0” to regain competitiveness, argues Roll, who says Japanese companies have lost the stature they previously enjoyed.

“Japan needs to innovate further. They probably got some leeway during the recession of the ’90s and into this millennium, and Japan is still one of the biggest economies. But now, with [South] Korea showing that markets other than Japan and the US can create strong brands and globalize their industries, and with China in the making, this is putting a lot of pressure on Japan,” he says.

Others point to the increased speed of innovation—sometimes called the speed of social—required in the modern, social media world.

“The [product] cycle used to be five to 10 years, but is now months or weeks. Look at the Chinese—[Xiaomi Technology Co., Ltd.] puts out a new phone every week. We call it the speed of social—you see it in China, you see it in [South] Korea, you see it in the States. But that’s just part of the culture that’s difficult to overcome,” says Jeremy Epstein, vice president, marketing, at US enterprise software company Sprinklr, which recently expanded into Japan.

No Japanese company made the top 10 of BrandZ’s 2015 survey of the 100 most valuable global brands, which was led by US tech giants Apple Inc., Google Inc., and Microsoft Corporation. Japan’s best placing was Toyota, ranked 30th with an estimated brand value of $28 billion, with Honda in 78th place and SoftBank ranked 98th, in a group dominated by North American companies.

Similarly, Forbes’ 2015 positioning of the world’s most valuable brands ranked Apple, Microsoft, and Google its top three. Its top Japan brand was Toyota in 8th place, with an estimated brand value of $37.8 billion, behind Samsung at $37.9 billion. Other Japanese companies to crack the top 100 comprised Honda (23rd), Lexus (66th), Canon (73rd), Nissan (75th), Sony (79th) and Panasonic (93rd).

BUILDING GLOBAL BRANDS
Asked for examples of Japan’s current top brands, Roll nominated Toyota along with Uniqlo Co., Ltd. for “taking the world by storm” in basic casual fashion, as well as technology company Canon Inc. and All Nippon Airways Co. Ltd. Wedemeyer agreed, citing carmaker Lexus and retailers Uniqlo and Muji as Japanese companies that have consciously considered branding.

“Uniqlo is a brand-oriented company in a way that very, very few Japanese companies are—they understood that from the beginning,” says Wedemeyer.

“They brought in Wieden+Kennedy, an American agency, to build a brand, something that had actual values and position, a purpose in the world, and were very disciplined about rolling that out. They succeeded 90 percent on good branding and execution, and there’s huge potential for other Japanese companies to succeed in the same way.”

Epstein cited technology firm Line Corporation, Ltd. as a “perfect example” of a successful Japanese brand, which had helped Japanese communicate in the wake of the 2011 disasters.

“Here’s a company that is a Japanese arm of a Korean company, but has a uniquely Japanese angle, and they [said to themselves]: we’ve got this earthquake that is literally a disruption; how do you respond? The phones are down, so we react at the speed of social to create this social messaging system that uses the Internet so people can communicate. Most businesses didn’t see the disruption; Line physically felt it and did something about it,” he says.

THE AGE OF SOCIAL
Amid greater demand for innovation at the so-called speed of social, how can Japanese people and companies based in the nation respond? The branding experts cited Japan’s design, technology, quality, and service culture as aspects that both local and overseas organizations operating in Japan could adapt as part of their global brand experience.

“What Japan brings is that deep appreciation for the experience, which you can really feel at Kyoto’s Zen gardens or the traditional Japanese tea ceremony. These are the cultural aspects companies can borrow from, because you can’t win alone on pure product functionality or ‘BS’ marketing,” Epstein says.

With a strong focus on localization, Epstein said his company took time in choosing the right Japanese partner and had provided its local operation with the freedom to make necessary changes. “Otherwise, you’re just the arrogant American or European who thinks you can just show up in Japan and do what you want, and you’ll get blown out of the water.”

Wedemeyer suggests the Japan brand is readily available as a tool for local companies, should they wish to use it.

“It’s an advantage for companies operating out of countries with strong brands that they have that available. You see American companies using their Americanness sometimes, and staying well away from it at other times—depending on what they want their brand to be,” he says.

Roll points to a “sea change” in Japanese boardrooms with the retirement of the older generation, suggesting this is an opportunity for innovation at some famous but tired brands.

“Imagine if Sony came up with a digital platform where they merged the best of Apple, the best of BMW, the ‘Internet of Things,’ and showed us things that go way beyond, including TV, your alarm, your insurance, school, [and] just put it all together? That could be one way that brand Japan could get back on the block, and Sony would have the muscle to move in there,” he says.

“Overall, it’s time for Japan to step up—they have the opportunity but need to shed the arrogance and complacency, and be willing to step outside the comfort zone. It’s about shedding a little of this sense of face, seniority, and tradition. South Koreans have shown they were willing to sacrifice for the benefit of a global growth story, and Japan should dare to do that to get back on the global block. I can’t see why they couldn’t do that.”
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AnthonyFensomBio
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Anthony Fensom is an experienced business writer and communication consultant with more than a decade’s experience in the financial and media industries of Australia and Asia.

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