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TMCVocabulary

How to Segment the Japan Market

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By Davis Huang

How Strategic Marketing Course Concepts Apply
Entering the Japan FLASH market as a late-comer, we faced a number of challenges that strategic marketing concepts helped us address. In the conservative and tightly knit Japanese business culture the first and only basis for even considering a new supplier is Differentiation. The supplier must offer something unavailable from the incumbent, typically a component suppler owned by the Keiretsu.

Once unique value is demonstrated the supplier then begins a multi-year sales effort to build the required relationship and establish trust. Segmentation principles of divide and conquer are critical when market entry will be based on personal relationship with competing Keiretsu. The business culture forces selection of a primary focus for market penetration - one Keiretsu or Community. Also, a critical element of success in Keiretsu relationship building is to bond with and secure the cooperation of the community's Opinion Leader, in our case, the very incumbent semiconductor supplier that we were trying to displace.

Strategy
Our Company was determined to participate in the Japan market, but now realized that our revenue opportunity would depend initially on our success in serving a single segment or Keiretsu, and that the process of penetrating that single community would potentially require sales and support investment without return for a few years. We felt we could not turn away from the market, but we had to find a way to profitably accomplish our objectives.