Friday, February 08, 2008

The Japanese way of thinking

Reading this article will tell you a lot about the Japanese mind and the way they approach or would like to approach a business discussion overseas. Look at the extent of preparation that is advocated by the author!. Emphasis is also laid on "human relations" underscoring the Japanese approach that we all know. This article appeared in JETRO newsletter Vol.47 Jan. & Feb. 2008 TTPP NEWS For International Business Matching and is authored by Ms.Yoko Kawaguchi, President, Y's Worth Corp. Editor
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The other day, I took part as a lecturer in seminars in Vietnam for local exporters on how to enter the Japanese market. I also attended business meetings for a buying mission from Japan organized by the Vietnamese Embassy in Japan. I would like to summarize my thoughts, based on those experiences, on how to make effective use of such buying missions and business meetings.

1. Consider in advance the sales channels, prices, and volumes of the products purchased

Beginning buyers in particular tend to end up spending all of their energy on finding and importing the products. They leave questions like how to sell the products at home and how to make a profit from them for later and therefore fail in many cases.

To order to determine if your firm can handle certain products, you have to
think of who you are going to sell the imported products to. And in which way?
Then you have to think at first about profit structure (purchasing prices,
sales prices and volume, and resulting profits). A business which studies and plans for this in advance can make full use of the free time at the country visited to tour factories, uncover more new products, and return successfully.

2. Prepare materials introducing your business in advance to facilitate mutual understanding

When the potential business partner is from a developing country or a small
business, some people take a condescending attitude to them. Do not forget that you can only do business if they supply their products to you. Further, it is not enough to just obtain information on the counterpart. It is important to introduce your own business by preparing corporate brochures in English, photographs and samples so as to accurately describe your business to the future business partner as well.

Without mutual understanding, good human relations cannot be built and good business will not result. A Vietnamese businessman I met the other day started as a craftsman in a small farm town but in a few years time grew to a manager of a business with annual sales of US$10 million. Anyone can succeed in that way, so it is important to be humble when talking with others.

3. Examine not only the products, but also the reliability and flexibility of the manager

I often see Japanese buyers who just look at the products offered by exporters and instantly repeat words such as "Yes, I will buy" or "No, I will not buy". In other cases they say only "Yes, the products would sell in Japan" or "No". How about asking the exporters questions like "Can you make this type of product?" or "Can you change the product in this way?"

This should be the natural consequence if observing the rule of the first point above.When I talk business, I always look at not only the product, but also whether the manager can be relied on and whether he is flexible enough to work positively with me by nature. This helps to avoid risks. Try it by all means.

4. Develop an "eye" for new products on a regular basis

Developing an "eye" for new products is a something that has to be worked on daily. Do not say it is too much trouble or that you will not find anything even if going somewhere. It is important to take every opportunity to go out and carefully examine new products in order to develop an eye for them.

Right before I left for Vietnam this time, I had a meeting in the Vietnamese Embassy in Japan and saw a product which I thought I could sell well in Japan. In Vietnam, I coincidentally found the manufacturer on one of my tours. I learned that he had received a US$5 million order from a large mass merchandiser chain in Europe and that the product was selling well in a branch of that chain in Japan.

The manufacturer told me that when he previously exhibited the products at an international trade fair in Japan, he failed to receive any inquiries from Japanese businesses. This is probably because in general the booths of developing countries lack refinement in display skills and the manufacturers have little information about the Japanese market, so fail to showcase the products suitable for the Japanese market.

5. Use "buying missions" and "business meetings" of official organizations and commerce and industry associations

Joining a "buying mission" organized by a public organization, foreign embassy in Japan and commerce and industry association offers you many merits over going on your own. Since these are package tours, the travel costs are lower and you do not have to arrange for flights or hotels. Reputable local firms are introduced. You can get support from the mission attendants. Highly skilled interpreters are arranged. All of this is convenient for private entrepreneurs and small businesses. The content of the mission will differ with each mission, but the other participants will all be professionals so even if the industry or the products handled differ, there will be much to learn from them.

Even if not traveling overseas, Japan hosts many international trade fairs and business meetings inviting exporters from overseas. Interestingly, you can sometimes learn from exporters about trends in Japanese industry which you cannot see while in Japan. Let's make positive use of buying missions and business meetings as places to meet new companies, find new products, and pick up new information!

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