Gentemann on the Apple Computer Brand

I think when a product or a service kindles an emotional dialogue with the consumer the product or service can qualify to be a brand.

As advertising becomes more ubiquitous across the country, it’s increasingly difficult for companies and products to stand out from the crowd and avoid being ignored by ad-weary consumers.

The shift in thinking is from asking how a company can motivate consumers to buy a product to asking instead how the product can touch consumers’ lives. My favorite brand is Apple ever since I saw that Super Bowl ad talking about how Macintosh would change the world.

I was reminded about why I loved Apple when this copy was used when Apple launched its iMac with their famous “Think Different” ad campaign. I got a real feeling of the mission of the company as well as its vision so I kept it in my files.

This also ran and worked well in japan.

“Here’s to the crazy ones.
The misfits.
The rebels.
The troublemakers.
The round pegs in the square holes.
The ones who see things differently.
They’re not fond of rules.
And they have no respect for the status quo.
You can praise them,
disagree with them,
quote them,
disbelieve them,
glorify or vilify them.
About the only thing you can’t do is ignore them.
Because they change things.
They invent.
They imagine.
They heal.
They explore.
They create.
They inspire.
They push the human race forward.
Maybe they have to be crazy.
How else can you stare at an empty canvas and see a work of art?
Or sit in silence and hear a song that’s never been written?
Or gaze at a red planet and see a laboratory on wheels?
We make tools for these kinds of people.
While some see them as the crazy ones, we see genius.
Because the people who are crazy enough to think they can change the world, are the ones who do.”
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Copyright, Apple Computer 2001

Gentemann on Japanese Advertising Creativity

Although Western agencies have been established here in some cases over thirty years and Western clients like GE even longer, over 100 years! It is these differences that tend to mystify the foreigners who come to Japan to do business. Perhaps these differences are rooted in the Japanese culture.

Hopefully I can shed some light on the subject because it is fundamental to our belief that a contact and network here is extremely valuable. In the West advertising goes head to head, toe to toe. Especially in politics.

The logic goes a little bit like this,
Tell them why you are different.
Tell them why you are the best.
Then they will want to buy.
Then they will become hooked on you because they can justify their purchase.

In Japan the “logic” of the approach is quite different…perhaps…
Make friends with them Prove you understand their feelings
Show that you’re nice.
Then they’ll want to buy.
Then they’ll find out what’s good about you.

This whole approach characterizes how the Japanese approach business. The one element that is most important before business can be transacted is the development of a relationship.

Japanese business is an ambiance where feelings are paramount and the most important gauge to measure how clients respond to your communication is the answer to the question often asked in research, “Is your product and company “Shitashi mi yasui” or easy to feel familiar with?”
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What charities or non profit organizations do you support?

Unesco Africa Mission 2008. I will be on the 2008 Unesco Committee for this project will raise money by producing music from African and famous recording artists and then selling the songs online. The proceeds will go to the RED PRODUCT Project supported by Armani, Apple and Amex. Please look for the songs online this summer.

A good example of how this could work was Paul Simon’s African album.

   

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Rail Privatization, a Lesson from Japan

Even though passenger rail is supported by national governments in the rest of the world, the Bush administration proposed shutting down U.S. intercity passenger rail service by zeroing out funding for Amtrak in fiscal year 2006. The Bush budget proposal came during a fierce debate over how to reform the U.S. passenger-rail system.

Some proponents of privatizing Amtrak have pointed to privatization efforts in other countries, including Japan, as proof that Amtrak could also be privatized. Are there lessons U.S. policymakers can learn from the Japanese experience with privatization?
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In the mid 1980s, Japan National Railways (JNR) was a monolithic national monopoly with an operating deficit, huge debt, declining ridership, high fares, poor service and political interference. In other words, JNR had many of the same problems that plague Amtrak today. In its place, the Japanese government created six separate private passenger-rail companies to serve different regions of the country.

Three of the six companies that served rural areas would be eligible for a yearly operating-deficit subsidy from a revolving government fund. The other three companies, which largely served urban areas, were expected to cover their operating costs. Each private company would be responsible for both rail operations and infrastructure management.

By most measures, privatization in Japan has been a success. Since privatization, yearly profits for the three main companies have increased to between $600 million and $2 billion, accidents have decreased by close to 50 percent, fares are stable, the number of rail employees has been reduced by 50,000 and ridership as measured by passenger-kilometers has risen by nearly 20 percent. However, any discussion of Japan’s privatization efforts must also note the Japanese government’s role in financing rail infrastructure projects and the operating deficits of rural railroads.

While the Bush administration’s proposal would effectively destroy passenger rail in the United States, the Japanese government has launched an ambitious effort to expand high-speed rail service over the next 10 years. The cost, close to $30 billion, will be funded by the national government, local governments and revenues generated from existing high-speed lines. When construction is complete, the new lines will be owned by the government and leased to the rail companies.

The same private rail company that manages operations will also manage maintenance for the new high-speed lines. Obviously, there are limitations in comparing the U.S. and Japan rail systems. Japan is especially well-suited for rail because of its high population density and short distances between major cities. Furthermore, in the current budgetary climate it is impractical to believe that the United States could build the type of dedicated high-speed rail network in its high-density corridors that Japan possesses. Yet the main difference between the Japan and U.S. rail systems is political.

The United States has never had the political will to make the necessary infrastructure investments to create a competitive rail system. Instead, from the time Amtrak was created in 1971, Congress has given the struggling railroad barely enough to survive from year to year. As a result, Amtrak does not have enough money to fix its growing backlog of capital maintenance or promote a true high-speed rail system.

In the Northeast Corridor alone, it is estimated that $28 billion is needed for rail infrastructure over the next 20 years, and billions more would be needed to implement higher speed rail. As U.S. highways and airspace become more and more congested, the lack of investment in rail infrastructure has made it difficult for passenger rail to compete successfully with these other transportation modes (all of which receive much more federal subsidy).

By contrast, Japan has consistently poured billions of dollars into its rail infrastructure (even after privatization) and has created a competitive transportation alternative to plane and automobile travel. The lesson from Japan is obvious: Intercity rail systems, whether private or public, need stable sources of public investment to be successful.

Unfortunately, this simple fact is often ignored by advocates of privatization in the United States. The administration’s legislation to privatize Amtrak does not guarantee any specific amount of federal funding for rail infrastructure. Without a specific dollar amount of stable, guaranteed funding, promises from the administration to rebuild the nation’s rail infrastructure ring hollow. This could change after Obama’s State of the Union address…perhaps we will have a “Shinkansen Moment”?
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An empty federal financial commitment in the name of “flexibility” for the states is a recipe for disaster. As Japan has shown, successful passenger rail systems need more government investment, not less.

Gentemann on Change Management at Nissan Japan

Nissan is a company worth exploring with regard to Informal Structure. Although Nissan as a Japanese company has an extremely formal and hierarchal organizational structure Carlos Ghosn created a temporary informal structure to initiate change and reach his aggressive goals for the troubled automaker.
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“Ghosn’s challenge was to act quickly, yet minimize the inevitable resistance that arises when an outsider tries to change traditional Japanese business practices. To resolve this dilemma, Ghosn formed nine cross-functional teams of 10 middle managers each and gave them the mandate to identify innovative proposals for a specific area (marketing, manufacturing, etc.) within three months. Each team could form sub-teams with additional people to analyze specific issues in more detail.

More than 500 middle managers and other employees formed a new informal structure to implement the so-called Nissan Revival Plan. After a slow start—Nissan managers weren’t accustomed to such authority or working with colleagues across functions or cultures—ideas began to flow as Ghosn stuck to his deadline, reminded team members of the automaker’s desperate situation, and encouraged teams to break traditions.

Three months later, the nine teams submitted a bold plan to close three assembly plants, eliminate thousands of jobs, cut the number of suppliers by half, reduce purchasing costs by 20 percent, return to profitability, cut the company’s debt by half, and introduce 22 new models within the next two years. Although risky, Ghosn accepted all of the proposals.

Moreover, when revealing the plan publicly on the eve of the annual Tokyo Motor Show, Ghosn added his own commitment to the plan: “If you ask people to go through a difficult period of time, they have to trust that you’re sharing it with them,” Ghosn explains. “So I said that if we did not fulfill our commitments, I would resign.” Within 12 months, the automaker had increased sales and market share and posted its first profit in seven years. The company introduced innovative models and expanded operations.

Ghosn, who received high praise throughout Japan and abroad, will likely become head of Renault. The change process that Carlos Ghosn launched at Nissan seems to be smoothly executed, but it was buffeted by uncertain consequences, organizational politics, and various forms of resistance from employees and suppliers.” (Kreitner, Kinicki, 2004)

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The Japanese Denim Market from a Diesel POV

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This came from an interview with the chairman of Diesel and how he sees the brand as global…not Italian.

When anyone calls the head office of Italian fashion giant Diesel in Molvena, northern Italy, staff always answer the phone with “Welcome to the Diesel planet.” That’s because chairman Renzo Rosso jokingly describes himself and his empire as being from another universe. The 45 year old Rosso is a walking advertisement for his company. Everything he wears — from head to toe and including his underwear — is Diesel.
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Established in 1978, Diesel is an innovative design company whose main product lines are denim and underwear for men and women, clothing for kids aged between two and six, a line of sportswear, luggage and fragrances. The company has grown so rapidly that the Italian home market now represents only 15% of the company’s annual sales. A bundle of energy, Rosso took over the reins in 1985 from Adriano Goldschmied with whom he co-founded Diesel in 1978.

He views the world as a single, borderless macroculture. From day one, he and his staff have dared to be different, whether it is making jeans layered with a metallic mesh to give them a permanent rumpled appearance, waistcoats designed to resemble life jackets, T-shirts with shark warnings or jackets featuring US tank manuals.

At one fashion show in Europe, Rosso turned the tables on the audience and made them walk the catwalk with models inspecting them as they passed by. Diesel “aliens” have set up 120 stores in 80 countries. The showpiece is their Japan flagship store, a three story, 640 square metre house of fun in Tokyo’s fashionable Harajuku.

Diesel already has several stores in Japan but a walk through the Harajuku premises is like visiting another world. The store manager, a young man sporting a pink topknot and little else in the hair department, greets you before bounding off to check a display, his cell phone permanently stuck to his ear. Soon you are wandering around in an environment in which fashion, architecture and design blend together. Customers are served free drinks at the third floor cafe; PCs and CD players are set up for your enjoyment, whether you buy anything or not.

Rosso comes to Japan two or three times a year, seldom staying longer than 48 hours. When he is not working, he is out snowboarding, playing soccer or drinking with his staff and family. During a recent whirlwind trip to Tokyo, Rosso sat down with Japan Today editor Chris Betros to discuss the Diesel universe.

What do you think of Japanese fashions? I think they’re great. I like how Japanese pick up fashion trends and then take them to the extreme. You don’t see that anywhere else in the world. Where do your clothing engineers get their ideas? We’re a global product, so we draw on every culture. Each one of our designers is provided with funding for at least two research expeditions to go anywhere in the world. When they come back, we all get together and take some things from Japan, France, America or wherever.

I like to think of Diesel as a giant tree whose roots are Italian with different branches representing various countries. We started off selling jeans. Now we are selling a way of life. And what’s that? You should turn your back on the style dictators and forecasters and let your own tastes lead you. Sampling, mixing and style surfing are the best ways to go.

Do young Japanese like the same outfits as their counterparts overseas? Kids are the same all over the world. Up until about ten or even five years ago, that wasn’t always the case. But today, Japanese kids like the same fashions, supermodels, film stars and sports superstars as anywhere else. Diesel’s target is as he calls them, kids…18 to 24

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Gentemann on Starbucks in Japan

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Sazaby in Japan and Starbucks, which began as a specialty coffee-bean purveyor in Seattle more than thirty years ago, gave Japan’s specialty coffee industry a real jolt when it established its first shop in Tokyo in late 1996.

In just several years, the company has achieved a cult-like status, revitalized an entire industry, generated local competition, and inspired a new coffee culture that has extended the coffee drinking demographic significantly.

Starbucks uses an energetic, hands-on style and straightforward corporate governance to manage its fast-paced growth, and has made employee satisfaction a key ingredient in its hugely successful blend. Other primary drivers of the “Starbucks experience” include offering customers high quality coffee, excellent customer service, a stream of innovative and appealing products, a savvy local partner with a similar business culture and values, and an inviting, nonsmoking environment.

By combining the parent company’s sophisticated supply chain for coffee bean sourcing with its local partner’s understanding of the Japanese market, Starbucks Coffee Japan has become the clear market leader, poised to open its 700th store this year.

Howard Schultz, the parent company’s chairman and chief global strategist, had long been interested in the Japanese market, but a meeting with a blue-chip Japanese consulting firm in the early 1990s proved very discouraging. Japanese consumers would not accept a nonsmoking environment or drink from paper cups in the street, said the consultants, adding that Starbucks would have to keep stores no larger than 500 square feet to save on rent.
Furthermore, the consultants believed that no Japanese person would walk down the street carrying a Starbucks beverage because it was considered impolite in Japanese culture.

Schultz and Starbucks did not adopt any of the recommendations the consultants made, choosing instead to offer a Starbucks experience similar to what had worked in the United States. They met with several potential Japanese partners, but it was at a meeting with Yuji Tsunoda, a senior board member of Sazaby, that Starbucks Coffee Japan was born.
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Tsunoda had visited a Starbucks in 1992 and been impressed by the quality of the coffee and the excellent customer service. He identified immediately with the vision and values of Starbucks, and subsequently proposed forming a partnership, sensing that Starbucks could greatly increase Sazaby’s customer base. Meeting with Tsunoda convinced Schultz that Sazaby was the partner he had been searching for. The two companies had similar business cultures and a similar view of how to serve Japanese customers better.

The board of Starbucks Japan has four members: two directors from Starbucks Coffee Japan, one from Starbucks Coffee International, and one from Sazaby. A managing directors committee consisting of the CEO, COO, and CFO who operates in concert with the board, making swift decision-making and rapid implementation possible.

Tsunoda, who is CEO of Starbucks Coffee Japan, said: “In a typical board meeting at Sazaby, even people who had questions didn’t bother to ask. Our Starbucks Coffee Japan meetings are much more dynamic, the U.S–based members tend to focus on what the company has done and make concrete suggestions for improvement. The Japanese members talk knowledgeably about the realities we are facing in the market and the long term.” (Tsunoda, 2005)

Tsunoda also notes that Sazaby learned a lot about disclosure practices from Starbucks because of U.S. (SEC) requirements and because Starbucks Coffee Japan had to make sure foreign board members received all materials beforehand so they could fully participate in discussions and decisions. “We shared a lot of information and ideas as questions would come from non-Starbucks Coffee Japan members,” he says. “This has made our meetings longer but significantly increased our effectiveness.”

Starbucks overall theme is to provide a third place outside of work and home where people can relax and enjoy top-quality coffee and coffee-related products. Starbucks Coffee Japan trains employees to thoroughly understand what Starbucks represents, and believes its employees represent the firm’s most valuable asset.

David Chichester, Starbucks Coffee Japan’s chief financial officer, says: “The culture is so important at Starbucks that all executives also go through an orientation during which they spend several days or more actually working at the store level to get the feel of the Starbucks experience and culture.”

Starbucks culture is actually very similar to the old Japanese traditional business mentality where members of the company are part of a family. Since Sazaby operates in the same fashion, the creation of the 50/50 joint venture went very smoothly. Starbucks provided the complete supply chain of top-quality coffee, from purchasing to roasting to packaging, a feat that would be very costly for any other company to reproduce or copy.

Sazaby, on the other hand, had insights into the Japanese consumer and the right connections and ability to pinpoint new store locations. Starbucks Coffee Japan successfully went public in October 2001 and now operates as a separate entity from Starbucks Coffee International.

Starbucks Coffee International has sent over staff to help explain operating techniques, policies, and procedures. The basic services and goods have not been altered, although counter heights and merchandise packaging were changed a little to suit Japanese consumers. Early on Starbucks Japan fell into the red in fiscal 2002, posting a net loss of ¥454 million primarily because of too rapid growth opening new shops faster than its cash flow could handle.

In less than a decade, Starbucks Coffee Japan has been able to basically reinvent the retail coffee market in Japan. The company did this by combining its own dynamic corporate style, brand name, global supply chain, and extensive expertise in producing quality coffee with partner Sazaby’s understanding of the Japanese consumer and insights into how to establish unique products and services. Despite a host of aggressive imitators and very tough economic environment, the company continues to grow the contemporary coffee house category.

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