* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, June 17, 2012, Issue No. 665b<br>
<br>+++ INDEX<br><br>- What's New -- How to Compete with Online Retailers<br>- News -- Ozawa's wife spills dirt on hubby<br>- Upcoming Events<br>- Corrections/Feedback<br>- Travel Destinations Picks -- Tochigi and Chiba<br>
- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br>
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e-mail us at <a href="mailto:info@pbxl.jp">info@pbxl.jp</a> or call us at 03-4550-2557<br><br>------------ PBXL is BUSINESS COMMUNICATIONS --------------<br><br>+++ WHAT'S NEW<br><br>The Nikkei ran quite a good commentary this last week on a <br>
phenomenon in the USA called "showrooming" which is also <br>becoming a trend here as well. The term refers to the habit<br>of web-savvy consumers checking out products in physical <br>show rooms, only to turn to their favorite shopping and <br>
price comparison websites to see if they can buy the same <br>product cheaper elsewhere. Globally, this is not a new <br>trend, as evidenced by the demise of Borders and other <br>bookstore chains in the States after the arrival of <br>
Amazon.com, but it is now starting to have a significant <br>disruptive effect on Japanese retailers and is being blamed<br>for sucking the profit out of their operations.<br><br>The Nikkei quotes, as an example, home electronics chain <br>
Yodobashi Camera, which has been forced to advertise that <br>it will not only match prices of other stores but that now <br>it will match online sites as well. This is a risky <br>guarantee for them to offer because as the Nikkei points <br>
out, with Amazon's JPY500bn of sales in Japan, it has the <br>buying power to sell TVs and other items for below <br>Yodobashi Camera's own cost price. Without the costs of <br>sales staff and stores, Amazon and other online operators <br>
will eventually win this game.<br><br>Currently online retailing in Japan is worth about <br>JPY10trn, still a modest percentage of overall retail<br> sales, which run around JPY135trn, but it's growing <br>rapidly. The reason is because consumers are learning how <br>
easy it is to compare prices online and because <br>gratification is quick (pull out a credit card and buy). <br>Kakaku.com, the nation's leading price comparison website, <br>covers a multitude of products and draws about 35m users a <br>
month. Nikkei also mentions a new smartphone application <br>called Shoppi, which has even more comparison categories <br>than Kakaku.com, and which as of the end of May had 650,000<br>registered users.<br><br>This got us to thinking about how traditional companies can<br>
fight back against the online-only retailers and the price <br>comparison websites. It seems to us that the bottom line is<br>to either escape the trap of being compared on pricing <br>alone or alternatively to use the price wars as a means of <br>
meeting customers before upselling them on something else. <br>This means companies have to create products or service <br>line-ups that are unique and therefore can't be compared, <br>bring in some loss leader products for an upselling <br>
strategy, or to make their offerings solutions-oriented so <br>as to deter the competition. Lastly, they can be old <br>fashioned and simply deliver consumers enough value that <br>consumers forget about the price.<br><br>
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<br>---------- YOUR BOTTOM LINE IS OUR TOP PRIORITY------------<br><br>[...Article continues]<br><br>In terms of unique products, you have both manufacturers <br>and retailers in the mix, generally with the makers deciding <br>
whether a product is allowed to be supplied competitively. <br>From what we can see, the most successful companies have <br>developed a strategy where they control the overall <br>distribution chain and therefore don't have to compete at <br>
the retail level. Apple is a good example of this, and has <br>its own stores and locked in distributors to deal with <br>customers. If you want an iPhone you're not going to be <br>able to buy it at an unofficial discount (although there <br>
may be supplementary discounted services). <br><br>On the retailer side of things, shoe store chain ABC Mart <br>is a good example where a retailer has gone back upstream <br>and taken over the manufacturing, so as to create their own<br>
brands and thus control over how they are sold. ABC Mart's <br>shoe brands are HAWKINS, VANS, and NUOVO and offer <br>compelling price-value -- of course they are only available<br>from ABC Mart. Uniqlo is another outstanding example of <br>
end-to-end control by a retailer. <br><br>One foreign apparel maker we spoke to told us that they <br>went a step further (which we suspect Uniqlo will also do) <br>of creating a fun, low-cost sub-brand for online sales <br>
only, while at the same time supplying the physical <br>distribution channels with their normal product. The <br>company said that after creating the new range, its online <br>sales and margins have soared and the results are <br>
influencing what they do with their regular line as well.<br><br>On the loss-leader/solutions side of things, we are <br>thinking of companies that take a simple product or <br>service, then bundle it into something much deeper. The <br>
more complex the solution the less likely an Amazon.com <br>will come along and take away the business. These companies<br>typically are not just selling to newcomers but have been <br>around long enough to have developed a strong customer base<br>
and are repeat marketing. And of course the customers have<br>been around long enough to understand what the solution <br>means to them.<br><br>As a case in point, we're following with interest the <br>Low-cost Carrier (LCC) airlines coming into Japan. Right <br>
now these airlines are selling ultra-cheap airfares in <br>massive quantities to Japanese consumers who are enjoying <br>the novelty of cheap travel. Going on to Kakaku.com, the <br>LCCs (and some national airlines that position themselves <br>
in the same space) are winning the price comparison wars <br>hands down and in the process are scoring lots of new <br>customers. <br><br>But one-time ticket sales are not their objective. Instead,<br>once they have the customer they start cross-selling them <br>
on hotel rooms, travel packages, upgrades to basic <br>airfares, and of course repeat holidays every season. The <br>formula works and a company like JetStar, for example, is <br>now the biggest carrier of air passengers between Australia<br>
and Japan, with 23 flights per week.<br><br>Then there are the old fashioned services where customer<br>perception and quality counts and online competition still <br>can't compete -- although recommendation sites do influence<br>
them by bringing new customers. We're talking about a broad<br>range of professional and personal services that are <br>provided by so many smaller companies, such as accounting, <br>legal, language training, restaurants, counseling, massage<br>
and acupuncture services, babysitters, after-school <br>tutors, you name it. What these companies offer is physical<br>customer satisfaction that creates word-of-mouth sales and <br>loyalty. For these companies to allow price cutting through<br>
online resellers or promotions (such as doing Groupon) may<br>actually mean a loss of business, because loyal customers<br>see what the newcomers are getting as discounts and feel <br>bad about it. <br><br>The trick with this last category of companies is how they<br>
can stay personal when they're growing larger and through <br>necessity have had to commoditize their offerings. Some of <br>the larger English language schools are having this <br>problem, and for some time have been competing on price, as<br>
can be witnessed on subway ad boards. Actually, it's all <br>been quite gentlemanly: a few discount campaigns here, a<br>few marketing twists there...<br><br>Then suddenly out of left field came an Internet company<br>
which completely disrupted the industry and destroyed the<br>encumbents' margins by offering webchat language learning <br>to the Philippines for JPY500 per session. The answer for<br>the encumbent English schools appears to be that they<br>
can either watch helplessly as budget-minded customers <br>defect, or they can move to a loss leader/complexity model.<br>In this case they would presumably offer the same low-price<br>webchat, but with better quality instructors, and upon<br>
recapturing their customers proceed to upsell them on <br>services the Internet-only companies cannot, such as <br>high-end learning (MBAs), specific language consulting, or <br>even job placements. <br><br>**********<br>
<br>Lastly, our piece last week on Mainali release from prison,<br>and his deportation to Nepal yesterday, drew a lot of <br>comments. In our FEEDBACK section below this week, you'll <br>want to read the response of one reader who had personal <br>
contact with the woman illegally detained in Chiba some <br>years ago and who successfully sued over it. As our reader <br>comments: NEVER NEVER confess to something you didn't do, <br>no matter how much pressure the police put you under.<br>
<br>Oh, and in case you are wondering about the numbering of <br>the newsletter, we can be a little superstitious at times, <br>and figured readers would understand. :-)<br><br><br><br>...The information janitors/<br><br>
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-----------------------------------------------------------<br><br>+++ NEWS<br><br>- Ozawa's wife spills dirt on hubby<br>- LDP/New Komeito, DPJ reach consumption tax agreement<br>- Whale meat glut on falling demand<br>
- Watami proves restauranting can still make money<br>- Peach planning China flights<br><br><br><br>=> Ozawa's wife spills dirt on hubby<br><br>As if DPJ politician Ichiro Ozawa didn't have enough going <br>on, it appears that his divorced wife has decided to weigh <br>
in with the revelation in a popular weekly magazine that <br>Ozawa fled Tokyo after the nuclear plant explosions in <br>March last year. Interestingly, the wife decided to stay <br>put. She also revealed that Ozawa originally wanted to <br>
marry a bar hostess but was talked out of it and instead <br>was introduced to her through Kakuei Tanaka. ***Ed: Ozawa <br>is certainly not the first public figure to have been <br>pressured into marrying respectably. The fleeing Tokyo <br>
allegation, however, is politically loaded. How does that <br>saying go? "Heaven has no rage like love to hatred <br>turned/Nor hell a fury like....?"** (Source: TT commentary <br>from <a href="http://japantimes.co.jp">japantimes.co.jp</a>, Jun 16, 2012)<br>
<br><a href="http://bit.ly/K9twcj">http://bit.ly/K9twcj</a><br><br>=> LDP/New Komeito, DPJ reach consumption tax agreement<br><br>Well, given that the ruling DPJ and opposition LDP/New <br>Komeito parties have the numbers to carry a consumption tax<br>
hike through parliament, the news that both parties have <br>now agreed to a deal to support the increase pretty much <br>makes it a done deal. However, the compromise does seem to <br>ensure a short "lifespan" for the Noda premiership, given <br>
how much opposition to the tax increase still remains both <br>amongst politicians in both parties and the public at <br>large. Further, Noda has had to trade away a DPJ election <br>pledge of a guaranteed minimum pension and changes to <br>
health care for the aged. ***Ed: In addition, PM Noda <br>appears to have sacrificed Japan's participation in TPP <br>with the appointment of anti-TPP proponent Akira Gunji as <br>the new agriculture minister. In so doing he is dooming <br>
Japan to continued protection of its special interest <br>groups at the expense of the general population.** (Source:<br>TT commentary from <a href="http://nytimes.com">nytimes.com</a>, Jun 16, 2012)<br><br><a href="http://nyti.ms/KsCaYd">http://nyti.ms/KsCaYd</a><br>
<br>=> Whale meat glut on falling demand<br><br>Good news for whale lovers. While harassment in the <br>Southern Ocean doesn't seem to have deterred Japanese <br>whalers, the market may well be their undoing instead. <br>
Apparently the semi-governmental Institute of Cetacean <br>Research has only been able to sell 303 tons of whale meat <br>from last summer's catch from the Northwest Pacific. That <br>means that the remaining 908 tons are still in freezers. <br>
The Institute has had 13 public auctions since last <br>October, and observers say the reality is that public <br>demand for whale meat is down sharply. ***Ed: The Japanese <br>public is well informed, and many people are starting to <br>
feel that whales should not be eaten. In fact, according <br>to the Guardian article, a 2006 survey found that 95% of <br>Japanese have either never or seldom eat whale.** (Source: <br>TT commentary from <a href="http://guardian.co.uk">guardian.co.uk</a>, Jun 14, 2012)<br>
<br><a href="http://bit.ly/LutmyF">http://bit.ly/LutmyF</a><br><br>=> Watami proves restauranting can still make money<br><br>The consumer economy is still under huge pressure due to a <br>rising number of under-employed (and thus underpaid) <br>
people, and so common wisdom would have it that <br>restauranting should be a difficult business. However, the <br>Japanese do love to eat out and companies that have created<br>proven dining experiences, especially of traditional foods,<br>
are still making money. Such is the case with restaurant <br>group Watami, which has announced that it enjoyed <br>consolidated net profit of JPY3.418bn on sales of JPY140bn.<br>As a result, the company reckons it will be debt-free by <br>
March 2013. ***Ed: This is significant because the company <br>had interest-bearing debt of JPY21.7bn in 2008.** (Source: <br>TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Jun 16, 2012)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20120615D1506A06.htm?GID=57">http://e.nikkei.com/e/ac/tnks/Nni20120615D1506A06.htm?GID=57</a><br>
<br>=> Peach planning China flights<br><br>One of the 3 newest Low-cost Carriers (LCCs), Peach, has <br>said that pending approvals the airline will start flying <br>to mainland China later this year. The company says that <br>
its preferred destinations will be Shanghai, Beijing and <br>Hangzhou. Peach will start flying from KIX airport in Osaka<br>to Hong Kong in July, for just JPY9,100. ***Ed: People <br>underestimate the impact that the LCCs will have on local <br>
tourism. These airlines don't just sell airfares. Look at <br>JetStar's model, which is quite mature, and you will see <br>that they see themselves as a complete holiday company -- <br>hotels and activities feature in their income-earning <br>
activities.** (Source: TT commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Jun<br>15, 2012)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20120614D1406A09.htm">http://e.nikkei.com/e/ac/tnks/Nni20120614D1406A09.htm</a><br>
<br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>few days of posting them, thus breaking our links -- we<br>apologize for the inconvenience.<br><br>***------------------------****-------------------------***<br>
<br>+++ CANDIDATE ROUND UP/VACANCIES<br><br>=> BiOS, a Division of the LINC Media group, is actively<br>marketing the following positions for customers setting up<br>or expanding in Japan, as well as other employers of<br>
bilinguals.<br><br>** HIGHLIGHTED POSITION<br><br>BiOS is looking for a Field Engineer (Data Center Support) <br>for our client, a global data center services provider in <br>Tokyo. The candidate will be responsible for providing <br>
hardware and application support for clients within several<br>data centers in the Tokyo area, by both on-site and remote <br>support. This includes but is not limited to installing, <br>configuring, troubleshooting, and remote support of <br>
hardware; providing infrastructure cabling support; <br>server/network monitoring and appropriate incident <br>escalation; and assisting managers with projects (e.g., <br>server migrations).<br><br>Due to the technical nature and demanding work environment,<br>
this position is suitable for someone with more than 2 <br>years of experience as an engineer within a data center or <br>similar sensitive IT environment (e.g., iDC, server <br>monitoring room, etc.), as well as with business knowledge <br>
or hands-on support skills in networking (routers, <br>switches, etc.). Hands-on cabling experience and knowledge <br>of protocols (DWDM, SDH, TCP/IP Ethernet, etc.) is also <br>required. In addition, since this role requires direct <br>
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<br>** BiOS Job Mail<br><br>Every 2 weeks BiOS sends out a regular communication to its<br>job seeking candidates, called BiOS Job Mail. Every edition<br>carries a list of BiOS's current and most up-to-date<br>vacancies, with each entry featuring a short job<br>
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<br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br><br>---------------- Start a Company in Japan -----------------<br><br>Entrepreneur's Handbook Seminar 29th of September, 2012<br><br>If you have been considering setting up your own company,<br>
find out what it takes to make it successful. Terrie Lloyd,<br>founder of over 17 start-up companies in Japan, will be <br>giving an English-language seminar and Q&A on starting up <br>a company in Japan.<br><br>This is an ideal opportunity to find out what is involved,<br>
and to ask specific questions that are not normally <br>answered in business books. All materials are in English <br>and are Japan-focused.<br><br>For more details:<br><a href="http://www.japaninc.com/entrepreneur_handbook_seminar">http://www.japaninc.com/entrepreneur_handbook_seminar</a><br>
------------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ CORRECTIONS/FEEDBACK<br><br>In this section we run comments and corrections submitted<br>
by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br><br>=> Last week in TT665, we covered the case of Govind <br>Mainali, who was released from prison after years behind<br>
bars for what appears to be wrongful conviction. We<br>mentioned in passing about Mainali's ability to claim<br>compensation and how a South American woman had <br>successfully done just this, even though she was still <br>
convicted. As it turns out, she wasn't from South America<br>(we made a wrong assumption after reading her name) and a<br>reader that probably many people know, kindly wrote in to<br>give us more information about her case. Thanks Charles.<br>
<br>=> Our reader comments:<br><br>Great piece. I have been following this case for many <br>years. However, one correction: the woman you are <br>referring to is Rosal Manalili Villanueva (Filipina) who <br>was detained on November 8, 1997 after discovering her <br>
boyfriend's body in their apartment. She was illegally <br>detained for 10 days. She was convicted in September 1999 <br>and given 8 years. She finally was released and deported <br>January 8, 2007. He daughter, who was three at the time <br>
of the murder, last saw Rosal on November 7, 1997.<br><br>There are many sordid details about this case. I know this <br>because I met Rosal on November 18, 1999 while she being <br>detained in Chiba appealing her conviction. I became her <br>
advocate and traveled back to Manila with her on January <br>8, 2007. Her case appeared twice on nationally TV (Torigoe <br>covered her). While being detained she became fluent in <br>Japanese (writing as well as spoken) was by all standards <br>
an exemplary prisoner (no infractions, fluency in Japanese <br>that included use of keigo, and always cheerful), but was <br>not released early because she refused to accept<br>responsibility for the death of her boyfriend. Most <br>
prisoners are released after 60% of their sentence. She <br>held for nine years and two months on an 8-year sentence.<br><br>Our support group often met with Mainali's support group to<br>share information appeal strategies. You are right in <br>
saying his indefinite sentence was probably more cruel. <br>What you did not clearly mention was in 1999 he was only <br>one of 51 not-guilty verdicts out of +2000 trials. Even <br>though 90% of convictions involve a confession, he had <br>
refused to confess. Yet, within six months he was found <br>guilty at the District High Court because, as one judge <br>said, "I looked into his eyes and could see he was <br>guilty."<br><br>One thing to tell your readers, If you have not committed <br>
the crime, NEVER NEVER NEVER confess.<br><br>Probably more information than you wanted, but just wanted <br>to give her Rosal her due. She was an incredible woman with<br>an incredible story. And yet, during her time of detention <br>
you could not find someone more upbeat, positive and not <br>bitter given what she had been through.<br><br>Sincerely,<br><br>Charles E. McJilton<br>CEO / Executive Director<br>Second Harvest Japan<br>www.2hj.orgbac<br><br>
*** We respond: <br><br>Charles, thanks for this insight and the accompanying <br>documentation. From those notes we see that Rosal's illegal<br>hotel detention happened in evenings in between day-long <br>interrogations, and that she was guarded by female staff <br>
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<br>+++ TRAVEL DESTINATIONS PICKS<br><br>=> Nikko’s Chuzen-ji Lake, Tochigi<br><br>British diplomat, Ernest M. Satow adored this Nikko <br>lakeside district and, even more, built his own private <br>lodge here. He visited the lodge more than 30 times and <br>
spent a total of 218 days at Chuzen-ji Lake during his stay<br>in Japan. It's no wonder why. Chuzen-ji Lake is a beautiful<br>lake located at the southern base of Mt. Nantai. The lake <br>was created by explosions from Mt. Nanatai daming up the <br>
Daiya River 20,000 years ago. Senjo-ga-hara marshland is to<br>the northwest, Kegon-no-taki Falls are to the northeast, <br>and a slender peninsula, Haccho-dejima, is in the south <br>part of the lake. It’s really beautiful when the <br>
surrounding mountain ranges and their seasonal colors are <br>reflected on the calm surface of the lake.<br><br><a href="http://bit.ly/N0Yisg">http://bit.ly/N0Yisg</a><br><br>Touring Chiba’s Green Landscape, Chiba<br><br>
On a sunny morning we set out on our motorbike to drive to <br>Katsuura, a small fishing port on the Pacific Coast of <br>Chiba. It would be our first time to Chiba and the drive <br>would bring us through the Boso Peninsula which we were <br>
very much looking forward to exploring. Though we had heard<br>a few stories on golf outings, we had no idea what to <br>expect from the trip as there is not that much information <br>in English available on the area.<br>
<br>Passing by Haneda airport and the industrial facilities on <br>this side of Tokyo Bay, we took the Aqualine – the bridge <br>tunnel connecting Tokyo Bay with Chiba – and arrived in <br>Chiba shortly after. The landscape very rapidly changed and<br>
green mountain ranges started to sprout up everywhere. I <br>caught glimpses of small villages tucked away in valleys, <br>small rivers which disappeared into the green forests and <br>walls of trees that seemed to shoot straight up into the <br>
sky. We grew impatient with every minute longer on the <br>highway and wanted to exit as soon as we could. We were <br>finally able to take the smaller route 410, that led us <br>through long stretches of green rice fields with patches of<br>
traditional Japanese style houses scattered here and there <br>– the scenery was wonderful.<br><br><a href="http://bit.ly/NFmcLc">http://bit.ly/NFmcLc</a><br><br>***------------------------****-------------------------***<br>
<br>***********************************************************<br>END<br><br>SUBSCRIBERS: 7,991 members as of June 17, 2012<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br><br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
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