Your product is considered a luxury product, but the fact that your product is a luxury brand does not guarantee that it will sell well in Asian markets. Despite this obvious fact, many companies bring products to market with bogus conclusions and biased strategic plans, often failing to execute on their business objectives. These companies develop broad conclusions about how they should approach economies at the macro level, but fail to execute on the results because they don’t see the details at the micro level. Many leaders may even suffer from “change blindness” because they focus on one aspect of the business and all of its players, but don’t see the 800-pound gorilla in the room. To avoid these pitfalls, leaders must develop an objective approach toward a more analytical perception of reality and all its complexities. This article is the show that will clarify and break down the important details of consumer behaviors in Asia’s largest markets: China and Japan. Although these two countries have different tastes, they both have a growing demand for luxury items. Companies that make luxury brands are increasing their investments and gaining market share despite a world in economic recession. Therefore, it is imperative that companies penetrate these emerging markets to gain their own market share and have a planned strategy to execute a clear strategic vision.

In marketing, the goal is to find out what people want and what people are buying and develop a strategy to deliver results to consumers and increase market share. The Asian market can be complex; however, there are similarities and trends one can identify to capitalize on a growing consumer segment. The challenge is that many US companies miss the mark when trying to penetrate Asian markets because they approach the market with a broad brush in the hope that some good ideas will stick. A major fallacy is that corporate America lump the three countries together and assume they all have similar tastes and preferences, moderated by different income levels. The solution, therefore, is to conduct a comparative analysis of consumer behaviors that can help companies identify effective marketing strategies and enable them to successfully penetrate these Asian markets.

To ensure success, companies must set aside narrow and risky assumptions and adapt country-specific strategies to target these consumers. The two main countries targeted by luxury brands are Japan and China. Both countries have unique mechanisms that correlate with purchasing behaviors, such as:

(1) brand orientation

(2) aspects related to domestic vs. Foreign

(3) quality and price.

brand orientation

First of all, Japan of all developed countries, this is the most conscious of the brand and status. It’s also intensely style-conscious: consumers love high-end luxury goods (especially products from France and Italy), buying items like designer handbags, shoes and jewelry. It seems that a down economy has not inhibited its consumers. Japan has highly group-oriented consumers who are apt to select prestigious merchandise based on social class standards and prefer products that enhance their status. Consequently, they place more importance on the reputation of the commodity than on their personal social classes. Japan’s influence has spread to neighboring countries such as China and Korea. In Shanghai or Seoul, the influence of Japanese fashion trends and products can be seen (Jiang, Crystal and Kotabe, Masaaki, 2006).

China, approximately 10 million – 13 million Chinese consumers prefer luxury items. Most of them are entrepreneurs or young professionals working for foreign multinational companies. Recent studies found that 24% of the population, mostly in their 20s and 30s, prefer new products and see technology as an important part of life. With higher education and purchasing power, this generation is brand and status conscious. Consider that luxury items are personal achievements, they bring a higher social status. In China, purchasing behavior tends to vary regionally. Consumers in metropolitan areas follow fashions/trends/styles, prefer novelty items, and are aware of brand image and product quality. These consumers live on the East Coast, in major cities like Shanghai, Beijing, Shenzhen, and Dalian.

domestic vs. Foreign

Second, Japan, although it is mainly dominated by local companies that are well established, such as Canon, Sony and Toyota, many global companies have managed to gain market share. In this market, Haagan Dazs Japan Inc managed to exit Ben and Jerry’s, dominating the premium ice cream market with a 90% market share. It has successfully conveyed the message of a “lifestyle enhancing product” through word of mouth advertising. The company prospered by promoting high quality with local appeal (Jiang, Crystal, and Kotabe, Masaaki, 2006). Chinese companies can no longer see the youth of this country through the lens of traditional cultural values. This generation considers international taste to be a key factor in decision making (Jiang, Crystal, & Kotabe, Masaaki, 2006).

Quality and price

Third, Japan, compared to Chinese and Korean consumers, has much higher expectations for products and is willing to pay higher prices for them. The slogan like Walmart’s “everyday low price” philosophy does not seem to appeal to Japanese consumers, because they offer low price associated with low quality: yasu-karou, warukarou-cheap price, cheap product. Case Study: McDonalds Although McDonalds is known as a low-cost food in the US, McDonalds in Japan has positioned itself as a luxury item. Today, McDonalds Japan has grown to become the largest fast food chain in the country (Jiang, Crystal, and Kotabe, Masaaki, 2006).

Business leaders must embrace three important concepts to have a successful marketing campaign.

• Successful products must be FBI: Functional Design – Beautiful Results – Imaginative Style

• Stick to your strategy and values ​​in an economic downturn

• Be a thought leader: stick to your values ​​and redirect the focus of marketing strategy.

In the midst of the global recession, companies are targeting emerging Asian markets, targeting customer loyalty through mindful marketing that focuses on building trust with their current customer base. For many companies, turning to Asia for growth has also paid off. Many companies are putting more than 60 percent of their investments in Asia Pacific.

In conclusion, business executives must remember that not all countries are the same. By understanding and learning to appreciate the differences and similarities between these three Asian purchasing giants, companies from other countries can seamlessly immerse themselves in their organizations.