JIN-461 -- Please take one

J@pan Inc Newsletter
The 'JIN' Japan Inc Newsletter
A weekly opinion piece on social, economic and political trends
in Japan.
Issue No. 461 Wednesday April 16, 2008, Tokyo

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Giving away products for free is an interesting marketing strategy. It was perhaps most famously employed by Gillette who gave away razors—a cost which was easily covered by sales of the blades that had to be purchased separately. Other strategies involve attempting to add value to products via a complimentary gift or the free distribution of a product paid for by advertisers. In the post-web world, the latter has become a hugely important market force with sites such as YouTube, Google and Mixi, all providing services free of charge to the end-user and then monetizing that community to advertisers. In both online and print, media organizations (including ourselves) are also increasingly likely to make content freely available in order to compete for attention. The last decade has thus seen a large increase in the number of free papers, email newsletters, websites and magazines and even books funded in a similar way.

In Japan, the business of give-away has some interesting features. For example, there is tissue marketing; walk around any major city center and it is hard to avoid having a packet of tissues pushed into your hand carrying a small notice, or simply a logo, from the sponsor. According to one Japanese company that have taken ‘free tissue marketing’ global, research indicates that the read and retain rate for leaflets is only 4.2% but for tissues it is 81.6% (www.freetissues.com/thestory.html).

Covering this topic in her excellent ‘So, what the heck is that’ column in the Japan Times, Alice Gordenker traces the origin of this marketing tactic back to the late 1960s when a paper goods manufacturer was trying to expand demand for paper products (http://search.japantimes.co.jp/print/ek20070821wh.html). The packs of tissues cost next to nothing and are thus an attractive form of direct marketing. A survey conducted by GMO research found ‘that 43% of pocket tissue adverts are loans or related to finance. Other runner-ups include travel (4.4%), real estate (7.2%) and adult content (13.4%).’ Although this form of marketing has been tried in other countries, it remains significantly more popular in Japan and relatively limited to tissues, although hand held fans in the summertime must surely come in at a close second.

More promotional products tend be dreamt up by company’s creating their own marketing materials, from the ubiquitous logo-stamped match boxes at bars and restaurants to the bog-standard company pen. In Japan, another common promotional accessory is the ‘keitai strap,’ – a small tag or object on a string that can be attached to a mobile phone. Health and beauty salons have also in the past been known to give out nail files and bath salts while small, branded cuddly toys have also proved popular. The most unusual promotional item that has come to our attention is the portable ashtrays, mailed out by the organizers promoting Japan Fashion Week.

Meanwhile, some corporations seem to be able to get people to actually pay for things that also carry their brand name. The most obvious example is Disney who manage to have product lines in almost every retail sector in Japan from kitchen appliances to luxury brand jewelry. Other characters such as Hello Kitty are also ‘marketing prostitutes’ in the sense that if a high enough license fee is paid, any manufacturer can use them to add interest to their product. When Japan held the Aichi Expo back in 2005 the two characters created especially for the event, Morizo and Kiccoro, were sold in every possible shape or form and can still be bought to this day (http://morizo-kiccoro-ecoshop.com).

But back to the free stuff, it seems that we can be prepared to get an increasingly varied (if not more useful) range of products up for the taking in return for a few seconds of our attention. It is interesting to ponder the limits of this. Could we end up with free loaves of bread baring logos on every slice? Or, will we be able to download sophisticated software applications in return for detailed personal information about our habits? Sounds eerily familiar.

Peter Harris

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Marcus Evans Events - Supported by J@pan Inc

Customer Relationship Excellence, 15th - 16th April 2008, Tokyo
Featuring speakers from American Express International and others

Compensation and Benefits Forum, 27th - 28th May, Tokyo
This event provides Japanese firms the 'how-to' of investing in
their employees to sustain their businesses.
Supported by JSHRM

3rd Annual LNG World, 15th - 16th July 2008, Tokyo
This event focuses on key operational aspects of LNG business and
current market dynamics to succeed in this competitive market.

'J@pan Inc readers are entitled to a 10% discount upon
registration with Ms. Esther Wong.'
Contact: +603 2723 6736 Email: estherw@marcusevanskl.com

------------------- ICA Event - April 17 ------------------

Speaker: Brent Reichow and Andrew Anderson
Co-founders of Blueshift Consulting

Event: The Growing Data Protection Market
-What's Changing and Why?

Details: Complete event details at http://www.icajapan.jp/
(RSVP Required)

Date: Thursday, April 17, 2008
Time: 6:30 Doors open. Includes open bar and light buffet
Cost:4,500 yen (members), 6,500 yen (non-members)
Open to all-Venue is The Foreign Correspondents' Club of Japan