The “Depth” of the Japanese Market Orientation: A Comparison Across Ranks and Functions With U.S. Firms
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This paper offers some evidence supporting the contention that the Japanese have a greater market orientation than their American counterparts. Market orientation emphasizes customer value as the driving principle for corporate success. In a post-bubble recessionary economy and also battered by the ravaging yen appreciation, Japanese firms will begin to stress benefits to the customer as a source of competitive advantage more than ever before since they have to live with a higher cost—benefits derived from superior products that delight customer needs and from superior pre-and post-sales services to the customer.
The decade of the 1980s saw a great surge in the global market success of Japanese firms. There was talk about the beginning of the Japanese century and the emergence of an overpowering Japanese economy. U.S. policymakers, in particular, responded to these visions by expressing concern about the trade competitiveness of the United States and taking actions designed to break down Japan’s trade “barriers” and reduce the United States’ massive trade deficits vis-à-vis Japan. U.S. policymakers allegedly have found the root of the Japanese competitiveness in its trade barriers.Thus, various solutions to the trade deficit problem have been proposed.
Depreciation of the U.S. dollar was one solution (Brownstein, 1990; Johnson, 1987). Indeed, the dollar depreciated against the Japanese yen from 239 yen/dollar in 1985 to as low as 80 yen/dollar in 1995, or by almost 70% over the past 10 or so years. The dollar depreciated similarly against other key currencies of the world.
That depreciation has allowed the U.S. trade deficits with many countries around the world to decline. While this has been true particularly with Western Europe, the trade deficit with Japan still remains a sticky problem that has not been sufficiently corrected despite the depreciation of the U.S. dollar against the Japanese yen in the last 15 years.
Another solution that is often proposed is the removal of Japanese import restrictions (Business America, 1990;Norton, 1989). While many formal trade restrictions existed in Japan into the 1970s, U.S. trade deficits with Japan over the past 10 years do not appear to be due strictly to various trade barriers in Japan (Czinkota and Kotabe, 1993; Kotabe, 1985). Data from GATT and other sources strongly suggest that the United States has as many tariff and non-tariff barriers as does Japan (see, for example, Bergsten and Cline, 1985; Onkvisit and Shaw, 1988).
A decade later, Japanese firms, once thought to be almost invincible, are reeling from Japan’s post-bubble economy as they face the imploded domestic market, the skyrocketed yen, and worsened trade relations with the United States. As a result, many U.S. business practitioners have begun to discount the future competitiveness of Japanese firms.
However, we feel it is their short-sightedness that fails to see the fundamental strengths of Japanese firms. We argue that because of the inherent similarities of the U.S. and Japanese macroeconomic structure, answers to Japan’s (and Japanese firms’) competitiveness in the past two decades cannot be found completely in macroeconomics alone. Rather, the real answers may be found in the superior global corporate strategies and technological prowess of Japanese firms, which are currently shadowed in Japan’s post-bubble economy.
One component of the Japanese model that has received considerable attention is the way the Japanese design and implement marketing strategies. The Japanese have demonstrated their superior ability to provide consumers with what they want, when they want it, and at a price they are willing to pay. In simpler terms, the Japanese have proven to be superior marketers (Kotler, Fahey, and Jatusripitak, 1982). To those who have kept up with the stream of articles that have attempted to explain the success of Japanese business, the fact that the Japanese have proven to be superior marketers is not a revelation (Czinkota and Kotabe, 1990; Kotabe and Duhan, 1991).
Research abounds concerning the superiority of Japanese over U.S. marketing practices. More specifically, researchers have discussed the superiority of Japanese marketing techniques in terms of soft-data gathering and distribution channels (Johansson and Nonaka, 1985); product development (Takeuchi and Porter, 1986; Czinkota and Kotabe, 1990); communication and problem solving processes (Lazer, Murata, and Kosaka, 1985); decision-making process (Pascale and Athos, 1981; Ouchi, 1981); price setting (Ohsone, 1988); and organizational learning (Nonaka and Johansson, 1985), among others. These and other studies have suggested that Japanese businesses approach the marketing function from a different perspective than that taken by U.S. businesses.
The common U.S. approach has been to decrease the emphasis on manufacturing and to increase the emphasis on marketing (Buffa, 1984) This change in emphasis may have been in response to the perceived superiority of the Japanese marketers. Ironically, the Japanese marketing departments have never had the power that their U.S. rivals currently possess. In fact, our visits to various Japanese companies have made us aware that many Japanese firms do not even have a marketing department. Then how can Japanese firms, which are reportedly more market-oriented than U.S. firms, not have a marketing department? It has been suggested that the reason this can occur is because the entire Japanese corporation is market-oriented (Morishima, 1982; Nakane, 1970). Thus, the need for a specific department to champion the marketing concept cause within the corporation is eliminated. Research further suggests that differences in the roles and power of the marketing department have resulted from a difference in the implementation of the marketing concept (Lazer, Murata, and Kosaka, 1985; Kohli and Jaworski, 1990).
In this study, we explore how Japanese firms accomplish the implementation of the marketing concept as a corporate-wide driving force. The study promises to offer some insight into why the Japanese have been more successful in the implementation of the marketing concept than their U.S. competitors. In the next section, the concept of market orientation is reviewed in the context of U.S. and Japanese firms. Four hypotheses are developed.
KeywordsMarket Orientation Trade Deficit Japanese Firm American Market Association Japanese Market
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