          
          
                          Direct Marketing
          
          A relatively recent development has been the significant 
          growth of direct marketing in Japan. According to Japan 
          Direct Marketing Association (JADMA) estimates, total sales 
          revenue of its members in JFY 1988 (Japan Fiscal Year -- 
          April 1, 1988 - March 31, 1989) was $8.8 billion, an 
          increase of nearly 31 percent over the previous year.
          
          U.S. direct marketers enjoy the benefit of a well-educated 
          Japanese populace with a high level of discretionary income 
          and a great curiosity about the United States.  
          Interesting, unique, well-made, brand-name items, adapted 
          to Japanese tastes or sizes, sell well in Japan.  The 
          following are two marketing methods which illustrate how 
          U.S. products are being successfully sold through direct 
          marketing in Japan:
          
          One marketing approach is to use a non-duty-free-catalog 
          aimed at travelers.  Japanese going overseas on holiday 
          desire to minimize the time spent shopping for "obligatory" 
          gifts and souvenirs for friends, relatives, and co-workers.  
          Japanese consumers will often know before going overseas 
          the gifts that they want to buy.  Many travel magazines 
          describe in detail the "best shops" in the major U.S. 
          cities that Japanese should visit.  Airline companies and 
          travel agents have been aggressively promoting catalog 
          sales of non-duty-free imported goods, especially 
          cosmetics, accessories, gifts, and food (excluding most 
          brand-name luxury goods, which have an exclusive agent in 
          Japan).  Travelers place the orders before departing and 
          the goods are delivered to their home after they return. 
          These goods are imported just like other imports 
          (customs-cleared, customs duty paid, and consumption tax 
          paid), so the price is higher than if purchased by the 
          traveler overseas, although usually lower than the retail 
          price at department stores in Japan.  The primary value of 
          this service is convenience.  There is great opportunity 
          for firms with an innovative approach for reaching and 
          servicing this market.
          
          Another marketing method is to utilize the foreign catalog 
          sales corner at 50 major Japanese post offices.  This 
          approach, employing the so-called International Mail Order 
          Support Service (IMOSS), allows customers to select 
          merchandise from a foreign company's catalog, pay for the 
          merchandise by international mail order or credit card, and 
          receive shipment directly from the seller located overseas. 
          There is no need for the direct marketer in this case to 
          stock inventory in Japan.
          
          One negative market condition affecting direct marketing is 
          that the Japanese consumers desire to inspect a product 
          prior to purchase.  Successful Japanese catalog companies 
          maintain a showroom where the customer can examine the 
          product before ordering.  Also, some of the largest catalog 
          sales operations are managed by well-established department 
          stores and other reliable retail chains.
          
          Japanese consumers are demanding about the condition and 
          packaging of goods.  Everything must arrive in perfect 
          order, just as if they had purchased the item in a store.  
          It is very common that goods are returned for claims of 
          damage.  Direct marketing should not be seen as a way to 
          get around the Japanese customer's expectation of strong 
          after-sales product support.
          
          Without a well-established position, it is unrealistic for 
          a U.S. company to expect to rent a mailing list, send an 
          English-language catalog directly from the United States to 
          Japanese individual customers, and be inundated with orders 
          placed by these customers.  U.S. companies aiming to enter 
          this market should at least be prepared to make an 
          investment in service functions such as market research and 
          product support.  In addition, a representative in Japan 
          can act as a liaison with the U.S. supplier to handle 
          receipt of claims, customs clearance, public relations, and 
          the preparation of a Japanese-language catalog.  
          Warehousing and delivery can be managed by the 
          representative as well.
          
          The Japan Direct Marketing Association:  In response to the 
          recognized need for assistance in the direct marketing 
          field and with the guidance of the Japanese Ministry of 
          International Trade and Industry (MITI), the Japan Direct 
          Marketing Association (JADMA) was founded as Japan's first 
          and only officially recognized direct marketing association 
          on October 11, 1983.  The aims of JADMA are:  advancement 
          of a standard of commercial ethics in the direct marketing 
          industry; promotion of fair business practices; consumer 
          protection and education; a systemized structure for 
          settling consumer complaints; modernization of the direct 
          marketing industry; representation of the trade's interests 
          with appropriate government agencies; conducting seminars 
          and developing educational programs; collection and 
          distribution of information from both domestic and 
          international sources; and greater contact and cooperation 
          with related trade associations overseas.  In addition, 
          JADMA conducts research aimed at exploring the future 
          potential for utilizing new media forms by the direct 
          marketing trade.  JADMA's address is:
          
          The Japan Direct Marketing Association No. 32 Mori 
          Building, 3-4-30 Shibakoen Minato-ku, Tokyo 105 JAPAN
          Phone: 011-81-3-3434-4700 Fax:   011-81-3-3434-4518
          
          
