Taiwanese Firms Promote Own Brands in Japanese Market

A number of Taiwanese companies are successfully developing the Japanese market with their own-brand products, paving the way for the marketing of such products in other overseas areas as well.

A notable example of this success is provided by the Teco Electric & Machinery Co., which after a year of promotion has built up sales of its own-brand LCD (liquid crystal display) TVs in Japan to 1,000 units a month. A daily sales record of 10,000 units was achieved at ION chain stores there in July, strengthening Teco's confidence that it will reach sales of 20,000 LCD TVs in Japan this year to capture a 1% share of the market there.

Huang attributes Teco's success to its low-price strategy. Its 30-inch LCD TV is priced at only 100,000 yen, at least 30% less than similar Japanese-made products. The company also offers a complete program of after-sales services, including home calls to solve problems with Teco products.

The Taiwanese manufacturer's marketing offensive has attracted the concerned attention of Japanese manufacturers. One result: Sharp sued Teco for patent infringement in a bid to stall its attack; the two sides reached a settlement in July, however, leaving Teco free to develop its Japanese business.

The key ingredients in the company's overseas market strategy, Huang says, are innovation and brand promotion. After securing a foothold for its LCD TVs in Japan, Teco now plans to introduce some of its own-brand home appliances there and expand into other foreign markets later on. Its marketing strategy will be altered slightly to cater to different markets.

The main targets in Europe will be the United Kingdom, Holland, and Spain, where the people are ready to accept foreign products; Teco, therefore, plans to pursue a more traditional marketing strategy there in contrast to its low-price strategy in Japan. In the U.S. market, though, price-cutting could become a vital marketing weapon.

In view of the strict quality demands of the Japanese people and the intensity of the competition there, Huang remarks, the triumph of Teco products in Japan is testimony to their high quality and strong image. These characteristics put the brand in a good position to succeed in other foreign markets as well.

Teco's success followed that of the Pihsiang Manufacturing Co., which penetrated the Japanese with its "Shoprider" own-brand electric scooters. It now sells 5,000 scooters a year there, rivaling Suzuki for the championship for such vehicles in Japan.

Pihsing exports 97% of its electric scooters form Taiwan, 90% under its own brand. In the United Kingdom, "Shoprider" vehicles command a 70% share of the electric scooter market. Pihsing is, in fact, the third-largest maker of electric scooters in the world, and is now building a factory in mainland China with the aim of becoming No. 1 globally within five years.

Encouraged by the outstanding performance of Teco and Pihsing, Alona Inc., which already has a strong presence in the Japanese automatic vending machine market, is now planning to sell its "Alon" LCD TVs there. Two major Taiwanese makers of blood-pressure monitors, Microlife and Hoshih, plan to follow suit.