One of the most common requests our team receives is for advice on selecting a distributor in Japan or to set up business meetings with potential distributors.
In many cases, the Japanese medical device and pharmaceutical industries already have established business channels and players. Therefore, in some cases, which distributors you can make connections with can have a significant impact on your success or failure in entering the Japanese market. This article summarizes a model case of our support for selecting distributors in Japan, setting up a business meeting with them, and following up with sales activities afterward.
We provide marketing support services for overseas B2B companies seeking to enter the Japanese market. If you don’t know where to start in finding a distributor in Japan, or if you need consistent support from selecting distributors and setting up business meetings with them, to following up sales activities afterwards, please feel free to contact us.
Issues
Our client, a manufacturer of medical devices, faced the following issues in entering the Japanese market.
- They didn’t know where to start to enter the Japanese market.
- (Through the research described in the next section) They have learned that the first step to entering the Japanese market is to gain the recognition of the distributors which have connections with each medical institution but they were still not sure ;
(1) which distributor they should choose
(2) what criteria they should choose distributors with
(3) how to approach the distributors - No one in the company had experience in dealing with Japanese companies, so they did not know how to proceed with sales activities.
Strategy
Our preliminary interviews with several physicians and healthcare professionals revealed that in most cases, when Japanese medical institutions consider the introduction of new medical equipment, the procurement process is as follows.
- A medical institution clarifies requirements such as budget and necessary specifications.
- Based on the specified requirements, a medical devices distributor who has had business with that medical institution will list candidate medical device companies & products.
- The medical institution compares and examines the above-mentioned candidate products listed by the distributor and decides on the product to procure among them.
The above fact means that no matter how much your company is known in the Japanese market through various promotional activities, it is almost impossible to actually get a contract unless you are recognized by the local distributors who frequently visit medical institutions and your products are on the lists that the distributors prepare for their clients, the medical institutions.
Thus, the most important thing for this project was to contract with quality Japanese distributors, and we focused our marketing efforts on such distributors.
What we have actually done in finding distributors in Japan
#1 List potential Japanese distributors
The following points were taken into consideration when selecting distributors in Japan.
Whether they have experience in dealing with medical devices similar to our client’s products.
If they already had experience in selling similar products, it meant that they had already received procurement requests from medical institutions for similar products, so we selected companies with the greatest emphasis on this point in order to reach results in the shortest possible distance.
Whether they have strengths in specific regions of Japan, or strengths for specific groups of medical institutions.
Since the medical device distributors with high market shares varied by region in Japan, and some distributors had strong ties to certain groups of medical institutions, the selection was also based on what the distributors were good at and what they were not.
Whether they have the business scale appropriate for our client.
If a distributor is too small, sales activities will not be successful, and if the distributor is too large compared to our client, they may not focus on selling our client’s products. The selection criteria were whether the company was large enough to handle our client’s products and whether there was an incentive for them to focus on selling those products.
Whether partnering with that company would help our client achieve the goals they ultimately wanted to achieve in the Japanese market.
We also made our selection from the viewpoint of whether the distributor was capable of achieving what our client wanted to achieve in the Japanese market in the mid- to long-term.
It was also very important to consider if the use of the distributor would be the best first step in working backwards from the goals that our client ultimately wanted to achieve in the Japanese market.
#2 Set up business meetings
Our team contacted the selected candidate distributors on behalf of our client, provided a brief company and product description, and proceeded to set up business meetings.
In the meetings, in addition to promoting our clients and their products, we also sought to obtain more specific information such as whether they had a sales organization capable of handling new products from our clients, whether they had sold products from overseas companies in Japan in the past, and any reflections on their past sales activities.
Our team members were present at the actual business meetings and shared with our client the reactions of the company and the issues that needed to be resolved as an important reference element for the next step, the sales activities afterward.
#3 Support for sales activities after the meetings
In this project, due to the specialized nature of the product and its high unit price, continuous follow-up was necessary after the meetings. However, our client lacked sales experience with Japanese companies and did not have the human resources dedicated to that effort. Therefore, our team also provided support for the subsequent sales activities.
Since we were present at the business meeting, we were aware of the issues that needed to be resolved and the details that needed to be clarified before the contract could be signed, therefore we could respond to them as if we were the Japanese contact for our client.
In this project, we contacted each company directly because the number of candidate companies was not so large due to the nature of our client’s products, but in cases where there are many candidate companies in Japan, it also can be a choice to hold several seminars and study sessions in Japanese to cultivate leads in the Japanese market.
Conclusion
- In industries with unique business channels, such as medical devices and pharmaceuticals, the shortest distance to success is not to market directly to end-users (i.e. medical institutions), but to the distributors that have strong connections with the end users.
- Since the medical device distributors with high market shares varied by region in Japan, and some distributors had strong ties to certain groups of medical institutions, it is necessary to select distributors with a clear understanding of the target Japanese region and the target groups of medical institutions.
- Since marketing in industries with high product unit prices, such as medical devices and pharmaceuticals, should be conducted with a long-term perspective, it may be necessary to obtain support for subsequent sales activities.
We provide one-stop services from strategy development to execution of each measure and support for subsequent sales activities when you consider entering the Japanese market. Marketing of B2B products with high product unit prices is an area in which we specialize the most, so please feel free to contact us for more information.