MARKETING RESEARCH LANDSCAPE IN JAPAN Prepared by Japan Marketing Research Association

MARKET RESEARCH INDUSTRY IN JAPAN

Market Research Turnover by Region & Country Source: ESOMAR

Market Research Turnover in Asia Pacific Region Source: ESOMAR

Market Research Turnover Against GDP

Sources of Market Research Revenue in Japan Source: JMRA

Data Collection Methods for Ad-hoc Research in Japan (Total Ad-hoc Expenditures = 100% ) Source: JMRA

Top 10 MR Companies in Japan in 2001 (MR Sales: Million) Source: Top 10 Sales – The Senden Kaigi Total MR Sales in Japan – JMRA

Top Global MR Organizations in Japan Source: Larry Gold, Inside research and Research World September 2002 Global rank is based on research revenues in 2001 * = Japanese companies located in Tokyo. Their subsidiaries / affiliates in Japan are not listed.

International Research Revenues Source: JMRA 5.5%* and 2.2%** of JMRA members’ revenue, respectively

JAPAN MARKET RESEARCH ASSOCIATION

Japan Marketing Research Association (JMRA) Established in 1975 Number of member companies : 98 (as of January, 2004) Having ISO accreditation: 12 Having Privacy Mark: 44 Chairman: Yasuo Miki Secretary general: Tadaaki Takayanagi No.1 Magami Building, 1-1-5, Koraku, Bunkyo-ku, Tokyo, 112-0004, Japan Phone:+81-3-3813-3577 Fax:+81-3-3813-3596 URL: http://www.jmra-net.or.jp/ E-mail: info@jmra-net.or.jp

JMRA: Quality and Ethical Standard JMRQS The JMRA Marketing Research Quality Standard sets out quality standards for clients and safeguards respondents’ anonymity and privacy and member companies are required to comply from April 2002 JMRA Guidelines Protection of privacy, project arrangement, central location testing, street intercepts, telephone interviewing, mail survey and group discussions. Internet survey guideline is in preparation Privacy Mark JMRA is one of the examination organization issuing permission to use the Privacy Mark 31 of JMRA 89 member companies were permitted to use this mark by end of 2002

Personal Information Protection Bills The first comprehensive legislation by the Government to prevent leaks and the unlawful use of personal information (May, 2003) Covers private firms, government organizations and independent administrative agencies, who handle a large volume of personal information, including client lists The law obliges: To prohibit obtaining personal information through unlawful measures or providing them to third parties without consent of those on the lists To take safety measures to prevent such information from being leaked and to quickly process complaints about misuse of information Up to six months in prison or a fine of not more than \300,000

Some Points to Note (1) Japan accounts for 7% of global research turnover and is by far the largest market for market research in Asia Pacific. However, research spends as a proportion of GDP is low (0.03% of GDP). Japan is still a product and technology rather than consumer oriented country. Business place more confidence in information collected by their own staff than in marketing research. Ad-hoc projects accounted for 67% of all 2001 sales of which 87% were quantitative and 13% were qualitative. Continuous projects, such as consumer panel and retail store panel, accounted for 33%. Qualitative has grown in the past two decades and is now the primary information source for product / advertising concept development and consumer understanding.

Some Points to Note (2) Face-to-face including both in-home and hall and street, accounted for 42% of ad-hoc quantitative research projects in 2001. In-home interviews continued to fall to 24%. CAPI accounted for 3%. Phone surveys are not prevalent and few agencies have CATI facilities. In 2001, telephone interviewing was used in 11% of ad-hoc surveys, 3% by CATI and 8% by Non-CATI. 6% of ad-hoc sales are from online research in 2001 compared to 3% in 2000. Incentives are absolutely necessary for respondent participation. Doctors and professionals command particularly high incentives. For survey research proposes, respondents are generally categorized by annual household income levels. Social Grade common in European countries i.e. A, B, C1, C2, D is not applicable in Japan.

JAPAN COUNTRY NOTE

Change in GDP, Ad Expenditure, MR sales and Deflator in Japan Year-on-Year Change % Source: GDP and Deflator – Cabinet office, Japanese Government AD Expenditure - Dentsu MR Sales – JMRA (The Japan Marketing Research Association)

Countries with Large Population Total Fertility per Woman Japan In the World (1) Countries with Large Population (Unit: 1,000 persons) [2001] Total Fertility per Woman Source: Ministry of Health, Labor and Welfare Source: United Nations

Per Capita GDP in 2001 (Nominal) Real Economic Growth Rate Japan In the World (2) Per Capita GDP in 2001 (Nominal) (Unit: US$) Real Economic Growth Rate Source: Cabinet Office Source: Cabinet Office

Population Pyramid M F 1st Baby Boomer Born: 1946-1951 Age: 51-56 2nd Baby Boomer Born: 1971-1976 Age: 26-31

Population Ranking of Cities (2003) The population of Tokyo / Osaka / Nagoya urban areas constitutes about 44% of the total national population ●1 2 ● ●3 ●4 ●5 6● ●7 ●8 9● ●10 ●11 12● 13● ●14 ＊indicates prefectural capital Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications

Internet Internet users and Household Diffusion Ratio (Unit: 10,000 persons, %) Internet users (Private statistics) Internet users (Government statistics) Household diffusion ratio Internet Users by Medium (At the end of 2002) (Unit: 10,000 persons) By mobile phone, PHS and portable information terminals 2,794, 402% By PC 5,722, 82.4% By mobile phone, PHS and portable information terminals only 1,061, 15.3% 1,633 23.5% By PC only 3,884, 58.0% Total 6,942 By video game terminals and TVs 864, 5.2% 24 0.3% 76 1.1% 129, 1.9% By video game terminals and TVs only 135, 1.9% Note: The ratio is of Internet users of the age of 6 and older. Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications

Ownership of Durable Consumer Goods Note: The 1970 data is as at February. From 1980 on, the data is at March. Source: Cabinet Office