JIN-465 -- Coke Japan

J@pan Inc Newsletter
The 'JIN' J@pan Inc Newsletter
A weekly opinion piece on social, economic and political trends
in Japan.
Issue No. 465 Wednesday May 14, 2008, Tokyo

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Coke Japan

Coca Cola is ubiquitous and Japan is no exception. Last year,
the company celebrated its 50th anniversary in the Japanese
market boasting a total of 60 brands and over 200 sparkling
and still beverages. In the non-alcoholic beverage sector here
Coke is the market leader and its range of products include ones
that have been tailored especially for the local market as well
as its global trademarks.

The Coca Cola Japan Company has slowly been strengthening its
control of bottling partners in Japan acquiring a 34% stake in
its oldest partner, the Tokyo Coca Cola Bottling Company, last
year. However, tieups between bottlers, such as that between
Kinki Coca Cola in Osaka and Fukuoka-based Coca Cola West in
2005, mean that the bottlers have also consolidated their
position. They also allow other corporations a stake in the
business - Kinki Coca Cola was part owned by Kirin Brewery Co
and Coca Cola West was owned over 20% by Ricoh Co. The latter
two companies retain shareholdings of 15.9% and 11% respectively
of the newer entity, the Coca Cola West Holdings Company.

In a press conference yesterday, Coca Cola Company President and
COO (soon to be CEO), Muhtar Kent, explained how Japan has been
a challenge, 'Japan calls for constant innovation, constant
reinvention.' Kent recalled how in 1975 it was Japanese
consumers’ demand for ready-to-drink coffee that sparked the
genesis of Georgia coffee, a leading brand now available in 17
flavors and a source of half the company's profit in Japan.
Another brand, Sokenbicha (a blended ice tea), has also proved
popular although it recently suffered a setback after it was
reported that police found weed killer in some bottles.

As Kent set out, Coke has at least three major global trends
working in its favor: rapid urbanization, the rise of middle
class consumers and the natural conversion to ready-to-drink
beverages. These trends suggest that growth may be fastest in
emerging/BRIC markets, but Japan is a stable source of profit,
estimated to be a fifth of its total. Moreover, there has been
no lack in focus in terms of marketing here; Coke Zero has been
heavily advertised and from vending machines to TV, and events
to Web 2.0, Coke and all of its associated brands maintain a
high profile presence.

Its marketing in Japan has been appropriately innovative and
distinctive, often following a common theme. For example, giving
away Mercedes Benz miniatures with cans of Georgia coffee
created a typical buzz and, for the Coca Cola brand, it recently
started a popular promotion involving mini radio-controlled cars
http://tinyurl.com/5hzh3c. However, it has also had its share of
difficulties, most topically concerning its sponsorship of the
Olympics. In Japan, the company abandoned its plans to have a
sponsored float running alongside the torch relay. Nonetheless,
Muhtar Kent remained firm in the company’s support for the
Olympics in general, which dates back to 1928, and his belief in
the event to act as a catalyst for positive political and
economic consequences. All other Olympics merchandising and
sponsorship, such as limited edition bottle designs with free
mini-mascots, remain unchanged.

In terms of working with partners, Coke in Japan has been
somewhat promiscuous – it has enjoyed joint marketing campaigns
and promotional projects over the years with most major Japanese
brands including DoCoMo, Itochu, Shiseido, Edy, JAL, Suica,
Tokyo Disneyland, and, most recently, iTunes Japan

Ultimately, we don't need Mr Kent and the media echo to tell us
that Coke will keep getting bigger in all of its markets - as
Kent openly acknowledges, Coke has been simultaneously a key
driver and beneficiary of economic globalization. It thus sees
further market liberalization as both inevitable and positive.
In Japan, where consumers tend to be relatively wealthy,
remarkably brand conscious and place a premium on convenience,
the ready-to-drink beverage sector is surely a happy market to
be in, and, with innovations such as the
shake-to-fizz 'Fanta Furufuru Shaker,' the Coca Cola marketers
seem ever-ready to embrace the challenge of novelty.

Peter Harris

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-------------------- ICA Event - May 15 ------------------

Speaker: Ron DiCarlantonio, founder and CEO of iNAGO Group

Topic: How are Japanese companies innovating
in Customer Service?

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

Date: Thursday, May 15, 2008
Time: 6:30 Doors open includes open bar and light buffet
Cost: 4,500 yen (members), 6,000 yen (non-members)
Open to all - venue is The Foreign Correspondents'
Club of Japan


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

Start a Company in Japan

Entrepreneur's Handbook Seminar 31st of May, 2008

If you have been considering setting up your own company,
find out what it takes to make it successful.
Terrie Lloyd, founder of over 13 start-up companies in Japan,
will be giving an English-language seminar and Q and A on
starting up a company in Japan.
This is an ideal opportunity to find out what is involved,
and to ask specific questions that are not normally answered
in business books.
All materials are in English and are Japan-focused.

For more details: