Consideration (Brief Summary) of Differentiating Strategy of General Products Stores (A company) in Japanese Cosmetics Industry

~From Perspective of Working Women~No.3/3

3. About Shift of the market and macro environment
3-1 Annual shipment value in cosmetics industry (The graph is omitted)
3-2 Current State of politics and economics (Description is omitted.)
Economic change such as the introduction of consumption tax
3-3 The analysis of the environment in cosmetic market.
About needs of consumers
3-4 Current status and summary
As you can see, this industry hasn’t been affected much even though consumers are tend to be negative because of the economic circumstances and anxiety of higher tax.
Women tend to increasingly participate in society. Seeking “beauty” for career-oriented women will be improved.
In the future, it will stably increase not affected by the economy.

4. Future differentiating strategy on general products stores ~ Case study.
4-1 What is Tate Style Business Model?
Normally, Business model equals structure of business.
However, Structure of profit making capability is the Tate Style Business Model.
Competence is development capacity, internal know-how (learning experience), brand, business right, patent right, property in a prime location and investment in product capacity as a pioneer.

Strategy
□ Cost leadership - purpose to achieve cost lower than competitors.
□ Differentiation - Purpose to create something that is very unique among the companies in the same industry.
□ Concentration - purpose to combine with cost leadership or differentiation by limiting area or categories of products.
□ Homogenization - purpose to imitate competitors.

4-2 Business model of A company
Let me introduce a discount cosmetic store, A company as a case study.
The head office of A company is located in Tokyo, and they expand their shops in Sapporo, Kyoto, Osaka, Kobe Fukuoka and Sakae in Nagoya.
I shop at this store from a few years ago, and consumer can purchase cheaply.

4-3 Differentiated and progressed business model
I will explain a progressed future model. (Business model is omitted.)
I will also introduce A company that is differentiated with high valued business system of cosmetic products from customers point of view. (The business system omitted)

5. Problems and future
Although we hear news of recession everyday, cosmetics industry keeps its scale of market.

As I told you, the scale of market hasn’t been changed. However, on the site of distribution has been changed, and major stores of cosmetic products are moved to drugstores or retail stores from cosmetic stores directly managed by manufacturer or department stores.
Growth of market started slowing down, and competition among the manufacturer are increased. In such consequences, various manufacturers started paying attention to improvement of efficiency in distribution process by IT.
Each manufacture focuses on an Internet business because mail-order businesses via the Internet are expected to increase.
Marketing strategy considered entering foreign market
In China, the main channels of Japanese and foreign enterprises are department stores. However, Japanese companies diversify abroad and open supermarkets and convenience stores.
The key is a unique products development of cosmetic manufacturers “who know the skin and needs of Asian well”
There are also many issues, such as the government regulation and copy products. Training of sellers is one of the big problems.
Anti-Japanese feeling is also a problem which cannot be ignored.

Our society has the low birth rate and the tendency to marry late. Working women tend to have needs to buy selected and stabilized cosmetic products from their experiences in cheaper and efficient way.
Demands of the business style as A company which have made it possible to get items cheap and quick in a limited times like the way going home will be increased.


6. Conclusion
For all readers, thank you very much for reading. I omitted graphs, numbers, and a progressed business model on purpose. Therefore, there might be some points that you did not understand. However, we already have completed the document includes the graphical content.
Also, I put “Case Study-1” on our website as complementary of this blog.
The business of website has been matured in Japan. Regarding businesses in Taiwan, we would like to increase sales and customers by differentiating information of websites.
That’s the business plan which we aim to.


October, 15th 2009
Tate Business Consulting
Takashi Tate

Consideration (Brief Summary) of Differentiating Strategy of General Products Stores (A company) in Japanese Cosmetics Industry

~From Perspective of Working Women~No.2/3


1.5 The Times and the Trend
It is not too much to say that makeup equals fashion.
Makeup has trend such as popular color of the year every year. The economic circumstances affect the trend.
● In 1960’s: Tokyo Olympics was held in 1964, in the years of high economic growth.
Miniskirt became extremely popular and psychedelic fashion and pantaloons were big boom.
There was the fixed image such as a beauty = fair skinned person at that times. Tanned skin became the newest fashion at the times.
Wearing light color makeup was popular.
● 1970’s: There were Osaka Expo, oil shock, and Lockheed scandal etc.
First food stores and convenience stores showed up.
The commercial with the catch phrase “Skin of Beautiful Cocoa Brown in Summer” was broadcasted. The commercial was representing the times. Healthy tanned skin took root as a fashion. Makeup that emphasizes eyes had become popular.

● 1980’s: The Equal Employment Opportunity Law was enacted, and women started taking more important roles in the society. For example, Ms. Takako Doi became a female leader of a political party. Thick eyebrows represented “an independent lady.” Cosmetic industry started paying attention to importance of cleansing and face-wash, and beauty essence of high quality showed up.
The makeup in this times gave others flashy impression.

● 1990’s: The bubble economy had burst in 1992. The Great Hanshin-Awaji Earthquake had hit Japan.
Young girls imitated a singer “Namie Amuro,” and they were called “Amurar”. Brown hair and dark tanned face became popular.
On the other hand, tanning was recognized as cause of aging among female office workers and housewives
Thin eyebrows are back in fashion. Makeup features are “thin eyebrows” and “strong eye makeup.”
● 2000’s: The deflation rate increased. The Internet and mobiles had become daily necessities. Gloss that emphasizes burnish, not color was brought in, and mascara and nail fashion had spread out. Regarding skin care, people got interested in “anti-aging” that tries to stay young, and numbers of products that contains coenzyme Q-10 had increased.

Shiny skin makeup that emphasized eye rush were featured.
Most of cosmetic products contain pearl.

Spots, flecks and skin dullness caused by ultraviolet light used to be considered as problems of aged women. However after 90’s, people became aware of harm caused by ultraviolet light, and it created the boom of beautiful skin care. They became basic items of skincare.
The needs of the women in 20’s who had had their face tanned increased.
Also, one of the reasons is growing tendency to marry late and more working women wish to stay being young. Products or foods that contain coenzyme Q-10 become very popular. The theme of this time was to be beautiful both inside and outside.
Fashion and trend influenced the styles of makeup.

Popular products and tendency by facial parts
Women in Taiwan tend to buy all the products from one brand. However, thanks to various domestic brands, there are many people who use different kinds of products from different brands and use the different products pats by parts in Japan.
I investigated popular products and tendency based on a hot-selling raking.

2. Current distribution, products, and sales policy
Framework and structure of cosmetics industry
2-1 Distribution system
It is divided into 5 groups in a major way. 5 major groups are following.
1. “System products” by counseling sales. 2. “General products” which can be selected and bought by customers themselves at drugstore. 3. “Door-to-door sales” by a sales person. 4. “Mail-order sales” which consumers and manufacturer directly deal each other. 5. “Professional use products” for beauty shops.
Foreign manufacturer are recognized more in each channels. Recently one manufacturer has different brands that target customers of different age group.

Ratio of shipment shift by distribution is below. System products are 32.3 %. General products are 33.7%
In 2007, general products exceeded system products.

2-2 System products cosmetics / mechanism of general products
System products
A brand bear all the cost of producer, brand controller, wholesales, sales people.
In this system, brands can develop their products to raise their brands image, advertise, and conduct their PR activities, and promotions.
As their brands image go up, they can make more profit because they have power to control their products prices.
General Products
General products need reasonable price. However, they cannot be sold, if the sales prices which meet the quality of their products are maintained and the brands images are good.
In other words, the quality and the price of the products need to be well balanced, and the price should be reasonable. To lower the price of the products, brands have to make effort to save the costs in every process. The brands need delegate the production to OEM (Original Equipment Manufacturing) cosmetic manufacturers.

General products manufacturers usually bear both of producer costs and brand controller costs, and sell their products to retail stores. Therefore, about xx % is the rough indication. However, negotiation on volume of transaction or various conditions make this percentage go up and down. The cost will be cheaper if wholesales sides bear the cost of clearance goods.
Bearing wholesale cost, wholesale store distribute products to retail stores. Because wholesale stores do not have sales people such as beauty experts, they do not need to bear the cost of retail sales, and they can distribute products to retail stores with xx % of multiplication. The percentage can be lower depends on volume of transaction in this case. General products of self-selective sales normally have xx % of gross profit. However, drugstores use xx % of budget for salaries of sales people for discount resource. Moreover, competitive retail stores allow xx %, xx % reduction in prices by reducing retail sales profit which normally can be made approximately 15 %.
Regarding general products, manufacturers bear the producer costs and brand controller costs, and wholesale stores and retail stores are responsible for the each costs.


October, 15th 2009
Tate Business Consulting
Takashi Tate

Consideration (Brief Summary) of Differentiating Strategy of General Products Stores (A company) in Japanese Cosmetics Industry

~From Perspective of Working Women~No.1/3

■ Introduction
Hello, everyone.
I have been to Taiwan for four times on business in this year.
I was very surprised that various kinds of foreign products were sold in Taiwan. Surprisingly, Japanese products were very popular especially in Taiwan.
What I had heard in Taiwan is that “MatsumotoKiyoshi” is very famous for the ladies’ main tour attraction in Japan. They are recognized as providing “high quality” and “competitive price.”　Japanese bags and outfits are evaluated for “its cuteness of design” compared to other countries.
It is the same as Japanese women buying the products from American, British or French luxury brands.
Taiwanese ladies have a fixed image; Japan equals Luxury Brand. We had started the business plan of mail-order sales in Taiwan.
However,
① There are various Japanese products lined up in the Taiwanese market.
② Taiwanese women are buying products without knowing products themselves and Japanese trend.
③ Discount is the only policy that mail-order sales and stores in Taiwan
provide to their costumers.



From these three points, we are going to change the business plan in a direction of information service.
The reasons are because that it is common that a Taiwanese family have double incomes, and total fertility rate in is 1.0; it is the lowest in East Asia.
We would like to operate the business to fulfill the needs of working women from double-income-family, such as “we want to shop accurately in a short time.”
Based of these points of view and the title, I am going to place a “brief summary”. This brief summary was written based on a wide variety of documents and A company which actually exists in Nagoya, with the corporation of a outside staff, a working woman.
I would like to divide it in three parts and post them because it is going to be long.

Currently, not only Japanese products but also imported products come on the market.
The ways of purchasing are different such as over-the-counter sales in department stores or drugstores. There are also mail-order sales and sales over the Internet.
We have investigated the services of department stores or retail stores that provide products in low prices.
We weigh the historical background of cosmetics industry, and introduce a new “progressing business model”, including how we can survive in this competitive society. (The case studies are posted on “case studies-1” on our website.)
Historical consideration in Japanese cosmetics industry

1.1 transition of scale of cosmetic market
The scale of Japanese cosmetics market is 232,090,000,000 JPY. (The graphs are omitted.)
Japanese government introduced 3 percent of consumption tax in 1989, and it raised the tax to 5 percent in 1995.
This graph shows the shipment value includes export and import prices. (The graph is omitted.) In these ten years, the domestic shipment value of cosmetic products has not changed much. However, the values of export and import tend to increase. The market has grown without being affected by the Heisei Recession.
For your information, the top three sources nations of import are France, the United .States. and China in order.
The top three exporting countries are in East Asia such as Taiwan, Korea and Hong Kong.
(The scale of the market in 2008 was cited from YANO Research)

1.2 Expansion of the System of the System Products
Organizing the retail stores (chain stores) which signed contract with manufacturers
Shideido established the system of chain stores.
Shiseido started beauty counseling by beauty experts in 1937.
Pola Cosmetics started door-to-door sales in 1929.
Current Kose began operation in 1946.
Being influenced by wars and economic condition, cosmetics industry has grown to daily needs of Japanese women. Even though the industry shrank during the World War II, it successfully expanded with the post years of recovery.
In 1965, the market scale reached to 100,000,000 JPY.
These are the examples of main Japanese manufacturer.
Expensive brands in Shiseido, Kanebo, and RMK are popular recently in domestic manufacturer. Lancôme which is famous for mascara and Helena Rubinstein are popular among foreign manufacturer.

1.3 Abolishment of resale system
Deflation expanded after the collapse of the asset-inflated economy. Drug stores started discount sales.
●Originally cosmetic products are approved to be sold at fixed prices. (Resale price maintenance system)
↑Because the discount competition became too intense.
In 1997, discount sales rapidly expanded, drug stores like “MatumotoKiyoshi” has come to know more. Consumers recognize drugstores as “stores where we can get cosmetic products at cheap prices.”

For your information, “Sugi Yakkyoku” and “Amano Drug” are the major drug stores in Tokai area in Japan.

1.4 Current situation of counseling sales
Counseling sales are the ways to buy the products from beauty experts who have knowledge and technique. It is different from the discount stores, and the department stores and the specialty stores claim that it is important for cosmetics sales to provide counseling by beauty experts who have special knowledge.
Department stores
They have brought the latest original theory of counseling and equipment. Their levels of counseling are very high because manufacturers mark department stores as “show window of the companies.”
The following services are available for free.
● Isetan provides “Beauté Concierge” who can give clients right advice and introduce recommended products.
●“Cosmetic Advisers” who can check the skin types and conditions of the customers are available at Takashimaya. Based on the scientific data, they advise how to choose cosmetics, the way to wear makeup, the personal colors that match the clients.
● “Beauty Adviser” at Matsuzakaya can assist clients in skin care, makeup, and give solutions to all customers’ skin trouble.
I tried these services, and I was satisfied with the services!
I felt that this is the service of the department store and eventually bought the products from them. At department stores, customers can get new products earlier than the other stores and that is one of the merits of using department stores.
I also felt that personality and experiences of beauty experts are very important.

October, 15th 2009
Tate Business Consulting
Takashi Tate

「営業パ－ソン、がんばれ！」 ～ロジカル思考！20話～

読者のみなさん、こんにちは！

小学校時代から、
私は大の国語嫌いでした。
特に感想文や作文なんかは、嫌いでした。

ちなみにこの歳になるまで、マンガを読んだことがないんです！

よく仕事で東京へ出張した時、
新幹線の中で、マンガを読みながら笑いを堪えている人を見ると
「なんで文字と絵で、笑える！」とかと、今でも不思議に思えます。

ですから、今こうしてブログの連載をしているのは、
私にとっては奇跡に近いことになります。

さて今回は、ロジカル思考！とタイトル付けました。

私が、ロジカル思考について書く器ではないですが・・・。

商社に入社してから、
上司や先輩への「報告」や「意見」の仕方について
まったく要領の悪い話し方で、頻繁に指導されていました。

「あっ、もっと学生時代に国語の勉強しておけば・・」と、
当時よく後悔した記憶があります。

担当先へ訪問し、商談を済ませて帰社。

A先輩へ「今日の商談の報告をしたいのですが・・・？」

私は「今日は、3つの件を報告します」と。

私は「1つめの件は、○○○・・・○○○・・・でした。従って、○○○・・・
を○○○としたいと考えております。」と。

A先輩は「あのな、楯よ！俺も忙しいんだ、結局なにがいいたいんだ！30秒で
報告するようにしろ！」と。

つまり、頭の中で整理されているようで、されていないこと。
「状況説明」→「結論」であったので、聞き手はイライラするはず。

何気ない、「報告の仕方」「要領の悪い話し方」で、私と同じ経験や今悩んでいる
方もいるのではないでしょうか？

　もしそのような事で悩んでいる方には、「ロジカル・シンキング」と言う書籍関係
を、一度読んで頂くことをお勧めします！
意外と、新しい発見が見つかるかと思いますよ！

しかし、私も社会人になってから、必要に迫られて本をよく読むようになりました。

やはり学校で学問を学ぶことと、社会人に必要な能力は少し違いがあると思います。

「先生から教えてもらうのか、自分からか・・・」です。
では、次回お楽しみに！

PS:11/18、HPを大幅にリニュ－アルしました。
　　
今回「事例」及び「事例研究」について概要を記載しましたが、これだけでは説明は物足りません。
来年１月から「事例」及び「事例研究」について、ブログにて詳しく解説する予定です。
　このHPとブログが、少しでもご参考になれば光栄と思っております。
　　

At My Stay in Taiwan – Welcome Back! –

Greetings from Tate to everyone!
　
I traveled to Taipei, Taiwan this April on business.
　After that, for a total of three times in May, July and September, I visited the Kaohsiung City, the second largest city of Taiwan located in south, and stayed there for about 10 days on every visit.

　I stayed at what is called in Japan, a “business hotel.”

　My stay was arranged by a female, local interpreter who helped me with oral and written translation until this August.

　The hotel I stayed at was a nice one with the services and facilities similar to Japan.
The voltage of electricity supply in Taiwan is the same as Japan.
　But, there was one thing that surprised me.
　Almost all bathrooms have only a shower.
　The translator later told me that the houses or apartments in Taiwan rarely have a bathtub.
　It was late May this year that I first visited Kaohsiung.
　Kaohsiung has an international airport, and there are two direct flights weekly from the Chubu International Airport in Nagoya to Kaohsiung.
　Immediately after getting out of the Kaohsiung Airport, I felt extreme humidity outside.
　They told me the humidity there was 80% to my surprise.
　The peak temperature was 39 ℃, and I got drenched with sweat just from walking.
　Inside the hotel room, however, the air-conditioner was working very good.

　I thought to myself, while smoking.
　“When getting up tomorrow morning, my throat will have pain!”
　But, when I woke up the next morning, my throat didn’t have any pain at all.
　I learned later that due to the outside humidity of 80%, even an air-conditioned room maintains humidity of around 50%, and therefore, my throat didn’t get sore at all.

Two of the hotel staff spoke English, and one elderly lady worker spoke a little Japanese.
　She was an interesting lady who spoke to me in her broken Japanese during my stay there.
　I stayed at the same hotel in Kaohsiung when I went there late July.
　After arriving at the hotel, when I was about to enter the same room, I unexpectedly came across with this elderly worker.
And the lady spoke to me saying,
“Welcome back, Mr. Tate!” in Japanese.
I naturally replied, “I am home,” in Japanese.

　I felt a very exhilarating feeling.
　Unlike the courteous welcome greetings at a first class hotel, the sound of “welcome back” spoken in Japanese made me feel that “there is someone who is waiting to welcome me in this foreign place of Taiwan.”
I also thought these words cannot be said by someone who doesn’t understand the linguistic sense of Japanese people.
　
Good Luck to everyone! （*^_^*）

◇Mystery of Psychology◇ ～Smile～ No.4

Good afternoon everyone!

This time is about smile!
Have you ever fall about laughing with your clients?

People feel a real affinity with someone who laughs at the same timing.
It is said that people who can laugh at the same timing, they have common identity　which means they are get along with well.
The most well known smile in negative way is diplomatic smile.
Then how do you differentiate real laugh and fake smile? It is said if eyes are not smiling that is fake smile.
The point is movement of eyes.
When you faked a laugh, your eyes and mouth move at the same time. On other hand, when you are smiling naturally, your mouth smile first and then eyes.
Incidentally, when you are crying with laughter, it expresses not only your mouth and eyes but also with your body.

※ When I traveled from Osaka to Akita with a executive managing director of client on business. My tin and ears were getting very sore on airplane, and then the director laughed hard at my reaction. Since then, he brought back this story and started to laugh at me before business talk.

Once again, when your relationship with clients became that freely discuss each others true feelings; you can feel real joy of sale!

Good　Luck！（*^_^*）


Don't miss the next story.

◇Mystery of Psychology◇ ～Unhappy face～ No.3

Good afternoon, everyone.

This time is about displeased look.

It is a sign when people change the specific facial expression; it means you score a big point on the credibility scale from them.
What kind of a facial expression do you think?
The answer is displeased look.

You might think that is unexpectedly, but think about when you are talking with your family. You sometimes have serious talks, get harsh advices or maybe urge with your family or friends. I could say that from my experience, if you can speak to other people real motives and tackle the problem at a brass-tacks level, it makes relationship transcendental trust in business. That is because that the person is opening their heart to you.

Incidentally, the gesture quick flick of the tongue when you made a mistake, it is only showed to a person who is approved. On other hand, if someone keeps their mouths firmly shut, it expresses dislike feeling.
They might be hiding something on you.

Don't miss the next story.

Good　Luck！（*^_^*）

-Importance of sounds-

Good afternoon, everyone.
I am Tate from Nagoya.

When I went to Taiwan, there was a thing surprised me very much.
There were a lot of people who could speak good English in Taiwan.
In other hand, Japanese people are not good at speaking English.
I was impressed that Taiwanese people could speak very beautiful English, and especially pronunciation was very good.


For example, when I asked a person
“Do you speak English?” the person seemed like she/he did not understand my English.
In stead of that, she asked me “Do you speak English?”
I keenly felt that it is hard to make myself understood with my English pronunciation.

The reasons why people could not understand my English is because English has more accents in words and sentences, compared to Japanese.
But Chinese pronunciation sounds similar to English to me.
Also both have similar grammatical rules.


I have heard that “Sound” is highly concerned in English education in Taiwan.
Therefore, most Taiwanese people are able to speak real English.


I thought that English education is still behind the times in Japan.
Sadly, my English as well.
I hope English education in Japan catches up with education in Taiwan soon.

Thank you.

Good luck. （*^_^*）


Don't miss the next story!

◇Mystery of Psychology◇ ～Eye～ No.2

Good afternoon.

This time is about“Eye”!

Before I wrote that if someone staring at you without looking away, it was a sign of alarm or it was a technique which such as used by a swindler.
However, there is a sign that doesn't correspond to it. That is a line sight of woman.
If you are male, you don’t feel bad when woman look at you, do you?
But, women stare at others more than men do. You should remind that there is no meaning or feeling.
In general, women often use eye contact with others more, and the time is also longer than men in an experiment.
The reason is because women are thought to be weaker than men.
In a long history of human, to survive women have to observe men who protect them to survive, and understand what men want without saying.

○pupil size
Girls drawn in comic books have big eyes and shining stars in their eyes.
If there is something in front of you which attract you, your pupils get bigger.

There is an interesting result of experimentations,
When men saw a picture of naked women, the result of the experiment was that their pupils got widen 18% than usual.
Incidentally, it was 20% widen when women saw naked man picture.

Be careful! The pupil expresses your feeling.

Good　Luck！（*^_^*）

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-The Consulting Business That TATE Initiates-

-The Consulting Business That TATE Initiates-

◇Mystery of Psychology◇ ～Line of Sight～ No.1

Good afternoon, everyone.

I have bitter memories when I got involved a new business development.
It was not easy for me to make a good relationship with a person I met at first.
A first business meeting always makes a sale person nervous.
I have seen a lot of people who failed in a business meeting with their clients because of the difficulty and anguish.
I would like to tell you what I learned and experienced from seeing through behaviors or from their signs.
I am very glad if it helps you.
In a phrase, It all comes down to the fact that “understand others feeling”

I believe that everybody is interested in these three topics below.
○ Clients’ psychology
○ Friend’s psychology
○ Boyfriend/girlfriend’s psychology
*How to win the hearts and minds of other people by reading signs and behaviors.
（Please use only as a guide.）

This time is about “line of sight”

The surprising reason why you want to refuse eye contact with someone interested in!
○A person who look into other’s’ eyes when you talk.
If you look in others’ eyes when talking to someone, this tells that you are an outgoing person. But at the same time, eyes could tell you, you have mental issue. A person who has strong desire to be with someone or to talk to someone (affiliative drive) also often look into others’ eyes.
Also a person who has anxiety tries to catch others’ eyes because he/she cares about how others think about him/her.

○A person who does not look other’s eyes when he/she talks
There are some people who never look into other people when they talk.
It is concerned as a sign of the strong complex. They can not see others’ eyes because they are afraid of being judged.
If someone looks down when he/she is talking to you, it is a sign that he/she is afraid of you.
But there is other meaning for looking away unnaturally.
For example, when you and your friend A & B are talking, A is looking at B, but not you. You might think A hates you. However, it might mean that A is interested in you and does not want you to know about it.

○A person who blinks a lot.
In general, it is a sign of that the person is weak or afraid of others.
The number of blinking is inversely related to degree of tightness.

Recently, products cannot be sold well because of economic depression, these situation effects of a sales person’s mental fatigue impenetrably

I hope that you will realize something through this “Mystery of Psychology”

Good Luck!(*^_^*)


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