Realtime Strategies for Customer Satisfaction

In last month's column, we discussed some of the opportunities still available for manufacturers and Internet service providers to capitalize on the growing interest in the Internet. This month, we outline five major trends from JD Power Japan's ongoing omnibus survey on Personal Information Equipment (PIE) for 1996, and examine their implications for businesses in Japan.

Trend 1: Tokyo has been leading Osaka in percentage of personal ownership of PCs by a consistent margin of around 5%. This has translated into a time lag of about nine months. Personal computer ownership reached 25% for Osaka in December 1996. At the same time in Tokyo, it had jumped to over 30%, after having reached 26% in March 1996.

Our studies have shown a "spill-over" effect - that is, consumers who use PCs at work are more likely to buy computers for personal use. This spill-over effect is nearly the same for both Tokyo and Osaka, which suggests that one or more additional factors are contributing to the more rapid diffusion of PCs within the Tokyo area. Some possibilities to consider are the higher number of educational institutions, a larger group of SOHO (small office/home office) workers, and the pace of internationalization. A combination of these may explain most of the disparity between the two areas, and marketing people need to consider these differences for product planning and promotion.

Trend 2: Nearly 36% of respondents indicated a strong interest in purchasing laptops, versus 62% for desktops. Yet 79% of those who had recently purchased a computer said they had bought a desktop. What accounts for this discrepancy?

When we look at only those "seriously considering" purchasing a new computer, 78% responded they were interested in desktops (and only 22% were interested in laptops). This is much closer to the percentage who actually purchased desktops. Laptop manufacturers need to clarify the factors that lead to a decrease in interest when shoppers seriously consider purchasing a computer. We can speculate that some of the reasons are consumers' consideration of price, expandability, and performance.

Trend 3: Many consumers (44%) obtain their information about computers and the Internet from TV. Those who own and use computers are more proactive in obtaining information, however, relying primarily on computer magazines (60%) and books (47%). As the Japanese market matures and the number of computer owners increases, we will see more proactive consumers who seek information rather than passively viewing TV commercials.

These findings suggest that while TV commercials should be used to attract new users, makers of such computer accessories as printers, scanners, and DVD should focus on advertising in computer magazines. On the other hand, advertising Internet-related products, such as Internet-TVs and Pippin, in computer magazines is probably a lost cause. Knowing who your customers are and where they obtain their information is a fundamental requisite of market research.

Trend 4: During the past year, we have seen an interesting phenomenon of "PC equals Internet" among Japanese consumers. In December, over 70% of respondents selected "the Internet" as the number one purpose for using a computer, whereas this number had only been 40% nine months earlier.

However, the reverse equation of "Internet equals PC" will not necessarily hold true if other Internet devices become popular. Next-generation computer companies looking for ways to succeed in this congested market need to establish a clear association between their products and the Internet.

There is more to the equation, however, than merely establishing an Internet connection; marketing and promotion need to be focused accurately. For example, we believe that the current crop of large-screen Internet TVs will give way to smaller, portable, and upgradable Internet-compatible products. Our surveys show that people are primarily interested in using the Internet for personal uses, such as information gathering, Web surfing, online shopping, and communication. Contrary to the "good intentions" of manufacturers, the Internet is not a group or family activity that requires a large visual display; rather, the Internet and its derivatives will need smaller, less expensive devices aimed at individual users.

Trend 5: Among apartment (bunjo mansion) owners, 44% own personal computers. This is much higher than the overall average of 28%. And among that 44% of respondents, 22% have used the Internet - nearly double the percentage of the overall population (12%). The table also shows a clear difference between those who own apartments and those who own houses. This is important information for contractors, phone companies, and electricians planning apartment housing. Many Japanese houses are ill-equipped to deal with the dramatic increase of computers and related accessories, and most apartments have just a single phone line and low-capacity circuit breakers. Companies involved in housing construction need to consider the needs and consumer demographics of future tenants. For example, as interest in the Internet continues to grow, ISDN or cable lines that can support more than one connection will be needed.

From this short list of facts drawn from our studies, the reader can probably begin to sense the impact that the Internet and PIEs will have on our lives. Our 1996 Personal Information Equipment Survey touched on some major shifts in this dynamic consumer market. Based on the results of these surveys, we try to locate the areas in which those shifts are occurring, and use this information to understand the direction of the market.

One of the main vehicles behind the current shifts has unequivocally been the introduction of Japanese Windows 95. For the first time, the majority of PC users have an easy interface with which to connect to the Internet. (Macintosh owners have been enjoying this advantage for years.)

Another major factor behind the success of the Internet has been the mass media. Our surveys show that more people have learned about the Internet and computers from television than any other source. Mass media has played an impressive role in educating consumers and creating excitement about PIE goods. The Internet phenomenon also reflects how Japanese consumers are attuned to new technology and information goods.

JD Power Japan's PIE surveys will continue, allowing us to follow trends and forecast changes in the market. In the columns that will follow, we will examine new trends for 1997 that will create opportunities for manufacturers as well as for perceptive eyes in marketing and advertising.

Comparison of apartment and home owners
	Apartment owner	Home owner
Own a computer	44%	27%
Own two computers	22%	13%
Use a computer daily	21%	6%
Brand of most recently	Fujitsu, 36%	NEC, 52%
purchased computer	NEC, 29%	Fujitsu, 15%
Interested in buying Internet-TV	16%	7%