Introduction
Building on previous research into the strategic expansion of Swedish fashion label ARKET into promising markets such as Vietnam and Japan, this e-portfolio outlines global marketing mix strategies specifically tailored to market entry in Japan.
Vietnam was not selected for this report as previous research shows that it is a communist country that harbours significant risks due to the high level of control and dependence on a still-growing middle class (Marketline, 2023b).
Japan was selected mainly based on previous research showing that Japan is the second largest fashion market (Statista, undated a), with high competition due to many international and local retailers. But also because consumers increasingly favour and demand environmentally friendly brands such as ARKET, rooted in the Shinto religion (Marketline, 2023c).
Prior research has shown that a joint venture strategy is the best way to enter the Japanese market. In this approach, ARKET enters into a partnership with a Japanese company to establish "ARKET in Japan". Working with a Japanese partner helps to overcome the strong competition in the Japanese market, as shown by the clustering of fashion shops in districts such as Ginza (left). Additionally, although it is not a fashion brand, the Swedish IKEA story, has shown that certain marketing aspects need to be considered by a brand in order to be successful in Japan (Spiegel, 2006).
Therefore, the objectives for the marketing strategies are the following:
Create a 30% brand awareness among the target audience in the Japanese market within the first year of market entry through a strategic marketing. Measured by monitoring social media engagement metrics, including likes, shares, comments, and follower growth and and analyze demographics using advanced social media analytics tools.
Achieve a 5% market share in the Japanese fashion market within two years of market entry through a glocal marketing strategy. This will be measured by evaluating market share data against competitors such as UNIQLO, tracking quarterly sales growth and conducting online market surveys to gather honest consumer preferences and behavior data.
International Approach
The international approach used for ARKET's marketing strategy is the glocal approach, which encourages "thinking globally and acting locally" (Dumitrescu et al., 2010, 147). Originating from Japan, the approach means standardising certain core elements while adapting others, both shown in the Figure below (Dumitrescu et al., 2010, 150). It is therefore a combination of the global approach, which focuses on standardised marketing activities in markets with similar consumer needs and can overlook cultural differences, and the local approach, which attempts to meet local needs by tailoring all products to a specific country or culture, despite potential costs and risks to standards (Kotler, 2009).
In its marketing strategy for Japan, ARKET has to operate in a complex environment characterised by different economic, political, social and cultural factors and requirements, as shown in previous research. Neither the global nor the local approach alone is sufficient. Rather a mix of both is required to understand and fulfil the unique requirements of the Japanese market.
Target Market
As already mentioned, the Japanese fashion market is the third largest in the world and is fragmented, with strong competition from many international and local brands and dominated by the Japanese brand UNIQLO (Marketline, 2023c).However, the market for sustainable and Scandi fashion is yet to be conquered as it is a newer trend and a preference of the younger Japanese generation (Haghirian, 2021).
Therefore, ARKET's target market therefore consists of the "new Japanese consumer group" (Haghirian, 2021), the young men and women of the Satori generation (GenZ) born between 1997 and 2012 and millennials born after 1994 (Francis, 2019). This population group is only a small part of the population and made up only 14.7% of the Japanese population in 2020 (Figure below). They live mainly in major Japanese cities such as Tokyo and Osaka and their suburbs and have a strong preference for fashion (Haghirian, 2021).
Satori primarily use Instagram and TikTok to discover fashion trends and brands, which fosters a sense of community and connection with certain styles (Smart Answer, 2022; Francis, 2019). In addition, they use various sources such as fashion shop displays, magazines, peer recommendations, websites and TV programmes to inform their clothing purchases (Figure below).
The average monthly income is USD 2,079.57 (MHLW, 2024). Women typically spend around USD 33.49 on clothing, while men spend around USD 22 (Model Hyakka, 2023). However, this generation tends to invest more in things they like fashion (MHLW, 2024).
Common purchasing characteristics of the Satori are that they attach great importance to appearance and quality, durability, and material in their purchasing decisions (Statista, 2023a; Neo Marketing, 2022). They also pay attention to and value the purchase of sustainable fashion (CAA, 2023). These preferences are deeply rooted in the nature-loving Shinto culture, which means that Japanese consumers are willing to invest in high-quality products (Marketline, 2023c). When a new shop opens, they are curious and quick to check it out (Neo Marketing, 2022).
When it comes to shopping, Satori favour fashion complexes, individual high street shops and sometimes online shopping. They favour physical shops and local visits above all, as they want to shop in simple, harmonious, and natural shops that are in line with Shinto beliefs (Salsberg, 2010).
Many different fashion trends currently coexist in Japan, but the biggest current fashion trend demanded by the generation is Scandi style and "Korean monotone", rooting in the Scandi minimalism (Roll, 2021).
The Scandi style is becoming increasingly popular in Japan, among men and women and can be seen in a style called "Japandi" = Hygge + Wabi-Sabi, which combines Japanese elegance with Nordic cosiness, creating a beautiful balance of simplicity, texture, and comfort. This trend emphasises natural materials, soft colours and handcrafted pieces and reflects the desire for sustainability and a simpler life (Business Finland, 2020), examples can be seen on the right (from Roll, 2021).
Product Decisions
Regarding the global marketing mix, certain strategic decisions need to be made. Starting with the product, which Keegan and Green (2013, 309) define as "a good, service, or idea with both tangible and intangible attributes that together create value for a buyer or user".
In terms of ARKET's glocal approach, certain product attributes need to be standardised, while others need to be adjusted depending on factors such as the Japanese environment, market dynamics and competitors, etc., which have been clarified for ARKET through prior research. These factors have a direct impact on product features, pricing strategies, promotional activities, and distribution channels. At the same time, they influence the performance and perception of a brand, as shown in the figure below. These decisions are implemented with the help of the joint venture's local partner.
Following the product levels (above), starting with customer services, Japanese customers highly value politeness, and genuine commitment, rooted in their Shintoism and culture (Oryoki, 2020). Therefore, ARKET must adapt and customise customer service to meet these expectations. By offering an after-sales service that includes warranty, repair and product maintenance, Japanese consumers get reassures of ARKETs commitment to product quality and customer satisfaction (Al-alsheikh, 2014).
Efficiency and convenience are also important, so offering fast, reliable shipping, easy returns and various payment options such as credit card, QR code on Japanese social media and transport cards makes the purchasing process more convenient and fulfils the expectations of Japanese customers (Ameliavitory, 2024).
In terms of product features, customers are treated like royalty in Japan, sales staff are always by the customer's side and even carry the bag to the door. Upon entering, customers are greeted very quickly and loudly, and staff constantly promote the brand, as this is part of Japanese culture (Rogers, 2014). Therefore, the behaviour of the staff must be adapted accordingly.
In addition, adaptation to Japanese is crucial for online platforms, product descriptions, packaging, and clothing labels (JCO, undated), while keeping the design consistent.
Adaptation and standardisation is required with regard to the shops. The café's menus should include authentic Japanese matcha in both drinks and food (left). In addition, the ambience of the ARKET café should reflect traditional Japanese tea ceremonies (left). This is achieved through floor seating, wooden elements and culturally appropriate music, creating a space that pays homage to Japanese culture (left).
However, the overall design layout, interior, exterior facade and shop windows, for the stores and cafes can be standardised as the minimalist, earthy and sustainable design align with the Shinto beliefs and Japandi preferences (see below). Using the known colour palette for ARKET stores (below) and including design elements such as plants and wooden parts, clear forms etc. from the existing stores maintains consistency (below).
Furthermore, the general store music shared by ARKET on Spotify, encompassing genres like house, R&B from e.g. Japanese artists (button below), complements the minimalist interior design and can be retained for a consistent brand experience.
Unifying the ARKET name is critical to maintaining brand recognition, especially given its established presence in Europe and Korea, a popular destination for Japanese travellers where they may have already seen ARKET (JTB, 2023).
Similarly, the quality and manufacturing processes of ARKET products in Europe will remain unchanged, reflecting the brand's commitment to sustainability and ethical sourcing (ARKET, undated).
The design of the clothes and the diverse product range also remain unchanged, as ARKET wants to convey a certain mentality with its clothing and remain true to its values (ARKET, undated). Also, as previous studies have shown, the Scandi style is trending in Japan, so there is no need to adapt.
ARKET's prices remain the same as they are based on sustainable material, ethnic material and the production of high-quality items. Although previous research has shown that the Japanese are spending less money on clothing, Satoris are investing in durable, high-quality and sustainable clothes, aligning with ARKET.
As for the international pricing strategy, skimming allows ARKET to position themself in the market by emphasising exclusivity and quality through initially higher prices. This strategy initially prioritises profit margin over market share, with adjustments made over time that influence subsequent marketing decisions (Ehidiamen, 2024b).
Regarding core product benefits, clothing size adjusting is crucial. Compared to Europeans, Japanese have smaller body sizes (MGOO, 2022). Their S is XS internationally, S is an M (see below) The introduction of a special "Asian fit" line, similar to H&M's approach (see below), therefore ensures that clothing is tailored precisely to the measurements of the Japanese.
Promotion Decisions
Sales promotion, another pillar of the global marketing mix, requires decisions that strike a balance between standardisation and individualisation in line with ARKET's glocal approach. It involves communicating product information to the target market and building brand awareness (Ehidiamen, 2024d; UOL, 2022).
Various factors that affect international communication, such as linguistic, economic, sociological, cultural, legal and competitive differences (Ehidiamen, 2024d), have been analysed in previous research on ARKET, to take these into account, ARKET works closely with its joint venture partner in Japan and utilises their market knowledge.
In general, adaptation to the Japanese language is crucial, as Japanese people have limited English skills (JCO, undated) and advertising regulations require the use of Japanese in adverts (Wordbank, undated). Given the complexity of the language and its numerous alphabets, the joint venture partner is advised to ensure that the translated texts sound natural (JCO, undated).
Communication tools such as social media, especially Instagram and TikTok, are an important source of inspiration for the fashion choices of ARKET's target group (Francis, 2019). Effective digital marketing is therefore essential. While ARKET currently only maintains a single official social media account on Instagram with standardised posts for all countries in which it operates (right), diversifying its content with Asian models could increase its appeal to its target audience and foster a sense of identification (Francis, 2019).
Tailored collaboration with influencers, as shown on the right, has been shown to influence the purchasing behaviour of Satori’s, as previous research has shown. The influencers, chosen for their sleek, stylish looks that match ARKETs' aesthetic, can naturally include promotional content into their posts that resonate with the audience, while making ARKETs clothes seem ‘more Japanese’.
ARKET does not currently advertise outdoors, but could take inspiration from H&M, its parent company, and show its adverts on the digital screen of the world-famous Shibuya Square, where millions of people pass by every day (see video below)
In addition, ARKET should make billboard advertisements in underground stations where 6.84 million people pass by every day (underground advertisement, undated), a tactic already used by Japanese competitors (left) to increase brand awareness.
Fashion shop displays are another source of fashion inspiration for ARKETs target market. The displays in existing shops are very minimalistic, there is not much to see and you can draw inspiration from them. The rightshows the contrast with the vibrant, video displays that are common in Japan. To adapt without compromising the design, ARKET could integrate promotional videos into the screens that draw attention while maintaining the minimalist aesthetic.
Magazines are another source of fashion inspiration for ARKETs target market, as there are many different magazines in Japan (left). They mainly contain themed fashion shoots, short articles about brands and trends as well as brand advertising (Japan Buzz, 2021). For this, ARKET can utilise its existing photo campaigns, which can be seen on their Instagram, and expand them with images tailored to the Japanese audience and featuring Asian models.
ARKET's current content (add above) can be reused for Japanese campaigns with minor adjustments such as adding the Japanese language, like H&M's Shibuya advert, as it generally fits the scandi style of the Satori. The inspiration of ARKET's biggest competitor Uniqlo with its nature commercials and presentation of new fashion pieces with musical accompaniment can however guide new content ( below). Similar videos can be utilised across various platforms: social media, fashion shops, television, websites, and large screens in major cities. For exclusive Japanese content, urban environments that reflect Satori preferences and using the colour palette are recommended, reflecting previous research findings.
Advertising budget decisions are made using the goal and task approach, where the budget is set based on the objective of the communication strategy, as costs can be better allocated to different areas to maximise efficiency in times of building brand awareness (Ehidiamen, 2024d).
Distribution
Previous research has shown that the Satori generation prefers to shop in fashion centres, individual high street shops and online. ARKET uses direct distribution channels (figure below) and will operate its own shops in major cities such as Osaka and Tokyo and will start with a shop in Tokyo's Shibuya, a young fashion district (Business Finland, 2020). ARKET will also keep its online shop and only adapt the language. However, Japanese consumers prefer to shop in harmonious and natural shops (Salsberg, 2010).
Conclusion
ARKET enters the Japanese market with the aim of achieving brand awareness and market share in a highly competitive market. With a glocal approach, ARKET seeks a balance between standardisation and adaptation in the marketing mix decisions.
The target market consists of the Japanese GenZ, called Satori, and younger millennials who form the new Japanese consumer group with a preference for sustainable and Scandi fashion. In terms of products, language adjustments are required on the packaging and website, as well as customised Asian sizing options and the incorporation of traditional Japanese elements into the café offering. The shop interior design, product portfolio and brand name will be standardised and the skimming pricing strategy will be utilised. In terms of promotion, adaptation of the means of communication for the Japanese market, through working with local influencers and Asian models and using the Japanese language in advertising. Maintaining the brand ethos across all platforms, utilising adaptable existing content for Japanese campaigns for TV, Instagram or Shibuya Square and creating engaging store displays.
Distribution will focus on direct channels, including physical shops and online platforms strategically located in urban centres. Overall, the objectives are to be achieved through a global, tailored marketing mix that includes elements of standardisation and customisation to establish itself in the highly competitive Japanese market.
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