My goal is to give someone else every week an opportunity to share insights about Japan. Globally Japanese companies, with a few exceptions like Sony, Toyota, Bandai.., are not so known much on a global stage. Consequently I am very happy this week to present Patrick Budmar. He has a lot of experience of sales and marketing promotion the Toyota Way. With his support I would like to explore the different strategies of Japanese companies for PR.
Sibylle Ito: On a global stage, I do not perceive Japanese companies so strong in PR. What do you think? Any noteworthy examples?
Patrick Budmar: PR in Japan has up to now received a medium-to-low amount of attention by companies, which is reflected in the roughly one percent it occupies in the country’s overall advertising industry. In recent years, Japan’s PR market has shown further signs of stagnation and shrinking, as the domestic heavyweights in Japan’s economy have been a bit slow to appreciate the importance of strategic communication
However, several trends are expected to shake things up and foster growth in the PR sector. Japan’s ageing and shrinking population has forced companies to reassesses their target markets and ways to communicate with them. With Japan still in a recession, companies are also looking towards globalization as a solution, especially in growing regions such as China. Consumption of digital media is constantly increasing and is expected to play a more prominent role in PR activities than ever before.
Japanese companies have so far made good use of traditional media for PR, such as leveraging the high level of credibility of national newspapers and TV broadcasters, which are often affiliated with each other, to get their message out to the public. However, despite a strong push by companies in online advertising, implementation of digital PR in the online sphere has so far been slow. This is expected to change once companies recognize the value offered by this non-traditional means of promotion.
SI: I am always impressed by the speed of response of the management, if something really happens related to a product. I believe Japanese management is very quick to apologize. Is really speed such an issue?
PB: The “apology gap” between the U.S. and Japan not only highlights the difference in culture, but also corporate responsibility. For example, we have Goldman Sachs CEO Lloyd Blankfein’s somewhat stilted and artificial apology in November 2009 for the firm’s role in contributing to the U.S.’s financial woes, while in contrast, Japan Airlines CEO Haruka Nishimatsu personally declared himself responsible for the airline’s bankruptcy in January 2010, apologized to all of Japan and bowed profusely twice to communicate his sincerity to the public.
While it is good that Japanese companies are quick to apologize in the event a mistake has been made, it would be more beneficial to all stakeholders if the actually problem was communicated quicker. If the situation allows it, companies should communicate the problem with its stakeholders in a timely manner, because if a company waits too long and other news sources break the story first, the public might feel that they were misled and the reputation of the company might suffer in the process.
SI: Let’s talk about a worst case scenario, when a company has to rebuild their image in the market. Are Japanese customers really willing to forgive and be as loyal as before?
PB: It really comes down to how well a company communicates the problem and implements the solution. The most famous example I can think of is Snow Brand, a premier dairy foods company in Japan and the food poisoning outbreak it suffered in 2000. Despite being faced with such a severe crisis, its initial response to the problem was somewhat evasive and its sales dropped drastically. Despite Snow Brand President Tetsuro Ishikawa and seven executives resigning in atonement, consumer confidence had evaporated to such a degree that the company had to close several of its factories.
It was only once new President Kohei Nishi was appointed that the situation turned around. Since the main criticism of the company was that it had failed to recall quickly, Nishi’s clear statements of regret and commitment to improving quality assurance as part of the restructuring plan went a long way to rebuilding trust with consumers. While Snow Brand owned a market share of around 45 percent before the incident, this fell to a single figure during the height of the scandal. However, the continuous efforts by management in rebuilding trust with the public helped them recover it up to around 30 percent.
SI: From the time you have started your career in PR until now, do you have any comments in regard to “I wish I had known this before I started”.
PB: I personally would have liked to have known more about using Consumer Generated Media as a marketing tool back when I started out, since it is becoming an increasingly important tool for PR, especially in Japan. With the rise of the Internet, Social Networking Services, message boards, blogs, and photo and video-sharing websites are growing in popularity and changing the way people interact with products and companies. Additionally, blogging should not be considered independent of traditional forms of media such as television and newspapers, but as another tool that is able expand and complement existing ones.
Patrick I really appreciate your insights, especially as you truly compared local events from a global perspective. Furthermore I had not fully understood the already existing local strength of newspapers and TV as the PR tool. I guess now with the increased use of Twitter in Japan more companies will shift to a more direct interaction with the public.
Brought to you by Sibylle Ito (シビル伊藤）