The Smartest (and Most Profitable) Business in Japan?

Today, you won't read about the company I am going to tell you about in magazines about business or the economy... You won't see news reports about them on TV shows about profitable businesses...Why? Well, as I've written many times before, the mass media is not interested in the truth. The mass media are only interested in filling the spaces between advertisements. That's all. 


Besides that, as a more than 30 year veteran of the mass media, I will tell you that the business of most in the mass media is: kissing businessmen's a*ses in the hopes of getting paid advertising for their media...


While the Internet and Social Media are all the rage today (Hint: when things are "popular", they are already out of fashion) there's still a few "traditional" business models that blow the rest away.


You won't read too much about this company in the mass media... Yet... But you will someday soon (the mass media are always a day late and a dollar short.) But this company blows the socks off of Groupon, Twitter and these other flash in the pan "Social Media" darlings of today. 


I'm talking about a publishing company. That's right, a publishing company. You know, printing press and all. Ink and paper....


Gutenberg would be blown away that a company, so many centuries later after his invention, could use his idea and still make a massively successful and profitable business in the age of the "Internet", in the age of "digital media."


Remember that it wasn't that long ago when people were saying that the Internet was going to destroy books and magazines? Ha! Laughable. Remember that it wasn't that long ago when they said that children today needed to know about the digital age in order to survive? Ha! Laughable. 


As it was 2,000 years ago and as it will be 2,000 years from now, the wealthy, the intelligentsia, the church and the movers, shakers and leaders of society will be people who read books. It has always been that way, it always will be. 


To think otherwise is just plain stupid.   


You know, I'm talking about one of the most profitable companies in Japan today...a publishing company that puts out old fashioned things like books and magazines... And, no, you can't get their products on Kindle.


I'm talking about Deagostini. Specifically Deagostini Japan...(If that link doesn't work, see here: http://deagostini.jp/)


Look out Internet businesses! Your business models are far too often a scam (or full of scams or SPAMS!) I think so because if your online business doesn't translate into something tangible or real-world, then you are headed for a fall.

Move over Groupon. I've railed on you over and over. But your business model is a joke. Who could possibly think that there would be a potential for a business that survives on SPAM? And you want a 60% sales commission!? Any good business model has to be good for all parties concerned... I don't see where you are getting any repeat customers in Japan... Maybe that's why your advertising here has disappeared. Gee! Does Groupon save me time from having to clip coupons? I never really had a problem with that before. Did you?


Twitter? You kidding me? I get more messages from Twitter that are SPAM than anything that I would ever want to read... And who needs to read idiotic nonsense on Twitter like, "How to get more followers on Twitter for only $5?"


Jeez! Who wants a bunch of "followers" who are people who know absolutely nothing about you nor do they care about you excepting that you are another digit in their masturbatory dreams of having a large "Twitter following"?

What a joke!


But old fashioned publisher Deagostini is no joke.


Deagostini sells a product that you can hold in your hand. Deagostini sells a product that kids can look forward to like Christmas or a birthday. Deagostini sells an "event" and a "limited edition" item... Once they are sold out, they are gone forever...


People in a consumer society have a history of going crazy over stuff like that.

X-RAY SPECS - ART-I-FICIAL

I know I'm artificial

But don't put the blame on me

I was reared with appliances 

In a consumer society 

When I put on my make-up 

The pretty little mask not me

That's the way a girl should be 

In a consumer society 

Deagostini Japan was founded in 1997. Because of the Internet, 1997, was called the beginning of the end for the traditional publishers and old school mass media. 


Deagostini's late entry into Japan was considered by many a joke. All the traditional big Japanese publishers laughed at this upstart foreign company and their ridiculous ideas for penetrating the already overly-saturated Japanese market... A market that was the most profitable with the highest literacy rate in the entire world...


They all said that Deagostini's products were cheap and poor quality. Then, Deagostini were the laughing stock of the Japanese publishing world. It was thought that there was no way a foreign company could come here and survive... 


That was then.


They aren't laughing anymore...Last year, of the top 15 publishing products sold in Japan, 13 of them were Deagostini products. I got the sales figures for Deagostini Japan yesterday. These figures are not public yet, but I have quite dependable inside information. 


Deagostini sales in Japan for 2010 (still not public information) were....are you sitting down? ¥28,400,000,000! That's ¥284 BILLION YEN! (about $370 Million USD!) Not only is that just incredible, but of those sales about 30% is pure profit of ¥842,000,000 (about $110 million dollars!)

Deagostini Japan's newest model... Think kids go crazy

for this stuff? Yes. They do! I know even adults who buy

these items... Heck! I've even bought them before!

How does Deagostini do it? It's so simple that when I first heard this idea, I slapped my head and thought, "Of course! Everyone knows this idea!"


How do they do it? Deagostini releases their products in a limited edition series. Like the Gundam advertisement above, they will release a quality model of a toy product (anime, war plane, car, ship, etc.) in a series of editions to be released once a month or so. There could be anywhere from 12 to 50 or 60 items in a series.


The first editions are really cheap. They get more expensive as the series progresses.


I bought a Zero Fighter for my son last Christmas at the book store because I couldn't believe how cheap it was and the quality was awesome for the price.

This model was high quality metal cast. It had moving parts.

It came with a huge book, and other great things that boys love... 

I think it was about $4.00.... 

Then, regularly, Deagostini releases the rest of the series in succession. As the issue go along, after a certain point, the items grow slightly in price.


If you are a real collector, you will buy each item until the series is over. Trust that there are tons of collectors with the disposable income to buy this stuff in Japan... Not just Japan! All over the western world. 


In, say, a twenty series set, by the sixth issue, Deagostini has broken even on the cost of production and logistics of the entire series and each item sale after the sixth issue is pure profit.


Get that? In the series, after the sixth issue or so, every item they sell is 100% pure profit.


It's an incredible success story and an incredible business model.


So much so that Deagostini is a model for future businesses in Japan and the world over... How many other businesses can claim that 30+ some percent of their sales is pure profit?


Certainly not Facebook or Twitter, which have no sales; nor Groupon who keeps doing the switcheroo on accounting methods.


Kids want something to hold in their hand and play with. The child's imagination is a powerful thing. Social Media offers no real tangible items....


Deagostini not only offers a product to hold and play with, they sell a dream and something to look forward to every month.


With Deagostini products, kids get Christmas not once a year, but 12 times a year... Adults too.


What's having something to look forward to everyday worth to the average person? Well, judging from Deagostini's Japan sales, it's worth well over $370 million US dollars and growing. 


Nah. No big deal, right? Let's talk about Social Media.... Yawn!


UPDATE: My friend Brenda chimes in:


Mike,

Not only that, they re-issue same series years down the line - all profit! I did some marketing for them in UK years ago.

How to Capitalize on Events and Happenings

Staying in the public mind is a mightily difficult thing to do. You need to constantly be thinking and upgrading your efforts. You always need to keep one step ahead of the others. Today I will show you an example of how a tiny country like Croatia does a job a hundred times better than many of her European competitors.


In this day and age, the Internet is the key to doing so. But many companies confuse the issues. As Brian Tracy writes in Focal Point:


Many Internet companies define themselves as providers for free information geared towards attracting as many eyeballs as possible. In reality, the Internet is a communication and distribution channel that must be focused on selling products or services and making a profit, like any other business.

Anyone who reads this blog with any regularity knows that I often harp upon the need to giveaway great free content to get readers... But how to reconcile that with the need to make money? That's what I'd like to blog about today; giving away great content online and offline and using that offline content to increase your online appeal by use of press releases and more.

Let me introduce you to a guy named Edouard Tripkovic Katayama. Edouard is in charge of the Croatian National Tourist Board in Japan and, since he set up the office here, three years ago, they've been a party to a 300% increase in sales and Japanese visitors to Croatia. That's incredible! (Disclaimer here: Before I go on too much, I must state that I know these things to be facts as I am proud to be a part of Edouard's promotional/marketing team and an advisor to such a cool service and wonderful country).


A 300% increase in Japanese visitors to Croatia? And in a down market? Are there any others who could make the same claim? I doubt it. Those are amazing results in any market, not to mention in a down one. I can't think of another organization that has shown such excellent results in Japan.


Of course there are many things that have all played a part in this success story, but let me give you a good example of one that we have coming up that is a marketing dream. The event will fulfill all the requirements that I always mention that are necessary: online and offline elements; news releases; promotion before, during and after; and mutually beneficial tie-ups to help defray costs amongst the partners.


Edouard had correctly decided that Croatian needs a URL that is Japan specific (I wrote the reasons for this here) so we are about to launch an Internet Funnel site for them. At about the same time that the Funnel site will be launched, a famous Croatian Classical Pianist named Kemal Gekic will be touring Japan...

Hear some of Kemal Gekic's fabulous music for free here!

Croatia is launching a new Japan specific Funnel site? A famous Croatian Classical Pianist is touring Japan?


I smell a great promotional opportunity!


Now, here we have an incredibly lucky convergence of events that we can use to promote Croatia Tourism, Kemal Gekic's tour, Croatian cuisine, and to increase awareness amongst the Japanese of just how cool and cultured Croatia is; and what a wonderful travel destination it is for the entire family. Not only that, since there are several parties with vested interests here, we can keep the costs way down. Anyone can spend massive amounts of money and run a good event. It takes imagination, planning and creativity to run a great event on a shoe-string budget!

Croatia: The Mediterranean as it once was

昔のままの地中海

What we are planning is to have a get-together with 30 - 40 of the most important writers for Tokyo's top Women's, Travel, Dining and Culture magazine's. The event will serve several purposes. It will be the announcement and unveiling of the new Internet Funnel site for Croatia as well as an opportunity to show off Croatian Culture with Mr. Gekic. We will also announce a secret (it's so secret that I can't announce it yet) promotional tie up with the most famous Pizza  delivery company in Japan...Also, we will use the event of create a buzz and to kick off our weekly newsletter that will come as part of joining our web community. (Concurrently running along at the same time as all these other goodies we have planned will be updates using our favorite Social Media like Twitter, Mixi, and photos (of course) with Pick).

The event will be held at the Croatian Embassy and we plan on featuring a short speech by the Croatian Ambassador as well as delicious food and refreshments from the top Croatian restaurant in all of Tokyo, Dobro. Throw this in with a few videos showing the striking beauty and history of the country and, there you have it, the seed of the buzz has been planted.  

Of course, as I said, this is a marketing dream. Everyone gets what they want; The magazines get exclusive information (as well as delicious free food and drink); Croatia Tourism (organizer) gets people to notice; the Embassy (provides the banquet hall) and makes themselves accessible; Kemal Gekic (performs) and his promoter gets people to see and hear his music and, perhaps, write about him; the restauranteur (provides food and drink) gets access to the magazine people who really matter and then he can invite them to write about his restaurant...

Dobro Croatian Cuisine in Kyobashi, Tokyo

〒104-0031 東京都中央区京橋2-6-14 日立第6ビル1F      03-5250-2055

This is a beautiful promotion that can cause nothing but smiles and handshakes (well, in Japan, lots of bowing)... And what does this cost Croatia Tourism? Almost nothing but the time it took to come up with this idea for a great opportunity and make the phone calls to bring in the partners.


So, perhaps, you might have guessed, even now, that this blog you are reading is, in fact, promotion for this event. It is the beginning of the creation of the buzz... I hope I have provided you with some ideas as to how you could steal my ideas and use it for yourselves.... If you can, by all means, please do!

Take a short video tour of Dubrovnik, Croatia here

But please don't forget to go back to the top of this blog and see what was written in the third paragraph;


"the Internet is a communication and distribution channel that must be focused on selling products or services and making a profit, like any other business."


So, I hope you get good ideas from this post that you can use to create your offline events and how to use them to benefit your online activities... I also hope that you've gotten some good ideas on how you can use your Social Media and blogs to sell your products/services without having to say, "BUY! BUY! BUY!"




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Post-note: Of course, as I mentioned in a previous blog, weekly press releases are a must. The above gives us several weeks of press release material before, during and after the event... It also allows us to create a buzz whereby it is easier to get good partners for future events... Heck, who knows? If they go so well, we might even be able to sell sponsorships to these events and have the sponsor pay for everything. So, just remember, the ceiling is your imagination!


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Keywords: business, press release, blog, smart marketing, catchy idea, weekly magazine, publisher, web page, promote,  U-Stream, Buzz, Tweet, Pick, George Williams,  advertising, Japan, marketing, Croatia, European, Internet, Social Media, blogs,