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What everyone gets wrong about branding in Japan

What everyone gets wrong about branding in Japan

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 Japan market entry is hard. Consumer tastes are different, business culture is different, and market needs can be radically different from those anywhere else. Entering the Japanese market is a challenge for even the strongest and best positioned brands. Today we sit down with Ernie Higa, the man behind two incredibly successful market entries, Dominoes Pizza and Wendys, both of which looked like extreme long-shots at the time. We talk about when to localize and when to stay true to the brand, the importance of repositioning, and how to find startup opportunities in Japan today. It's a great conversation, and I think you'll enjoy it. Show Notes How to determine the kind of startup you can create How to sell to Japanese enterprises even when you are not fluent The importance of focusing on difficult things How Ernie knew that pizza would sell in Japan when all evidence said otherwise How Japanese and US consumers measure quality differently When to localize in Japan and when to stay true to the brand Rethinking pricing and positioning for the Japanese market Why Wendy's could re-enter the Japanese market when others failed Japan's changing approach to shareholder value How Japanese attitudes abotu failure are changing in Japan Links from the Founder Everything you ever wanted to know about Higa Industries Leave a comment Transcript Welcome to Disrupting Japan, Straight Talk from Japan's most innovative founders and VCs. I'm Tim Romero and thanks for joining me. Perhaps the most common question my non-Japanese listeners ask me is, what kind of a startup should I start in Japan? You know, I want to be helpful, but the answer to that question depends not just on market opportunities, but the skills and the temperament of the specific would be founder in question. The right question to ask is really what is the best startup for me personally to start right now? And no one can really know that except for you. But there are some things that remain true and some strategies that remain effective for all people and across decades. Well, today we sit down with Ernie Higa, a man who's kind of a legend among those of us who really study Japan market entry. Ernie brought both Domino's Pizza and Wendy's to Japan. And although both of those ventures seem like extreme long shots at the time, Ernie made them both work and prosper. Ernie and I talk about how to identify entrepreneurial opportunities, how to know what needs to be localized for the Japanese market and what needs to remain true to the brand and what so many people misunderstand about brands and branding in Japan. But, you know, Ernie tells that story much better than I can. So let's get right to the interview. Interview Tim: So, we're sitting here with Ernie Higa, the representative director of First Kitchen and Wendy's Japan, but best known as the man who first brought Domino's Pizza to Japan. So thanks for sitting down with us. Ernie: Well, thank you, Tim, for having me. Tim: I really appreciate this. I wanted to get you on the show for a very long time. So, you founded Domino's back in 1985, but let's step back a bit before then. Many young founders today are looking to Japan, trying to figure out where they fit in, what value they can add. So in your case, why Japan? Ernie: Well, back in those days, Japan was becoming the second largest economy in the world and was really growing fast. So, there was opportunity here. Having said that, as an entrepreneur, the last thing you want to do is do something that large companies were already doing. So, the idea was to pick a niche business where I felt that I had a more of a competitive edge and leverage my understanding of both Japan and the US. And learning about Japan dedicated myself to learn the business here, learn the language, learn the culture, but to find an area where the large companies, say for example, the Mitsubishis of the world, Mitsubishis of the world were not doing, or they were not so adept. Just to give an example the first business I got involved in was in the lumber business in the 1970s, a little bit different than today. There was the US Japan trade wars. The US companies were trying to figure out how to break into the Japanese marketplace. And there's also some geopolitical pressure as well too. And one of the things was in the lumber business the normally large trading firms would import logs from the United States and have it cut in Japanese sawmills for the Japanese housing size and specifications. But the US said, well, we want the value done in US sawmills. So, you might ban the export of logs to Japan. And of course that was great, except that in the US houses are built on what they call two by four construction. And so there are different sizes, different quality requirements, and the Japanese housings sizes were built upon what they call post and beam. And even further, there was a huge prefabricate home building market that was using lumber, and they had even more difficult...
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