Brand Japan—Time To Get Business Back to Normal

It’s just over a month since the tragic events of March 11 and the subsequent disaster at Daiichi Nuclear Power Plant. There are daily smaller earthquakes but for those of us in Tokyo, life has returned to “nearly-normal.”

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While the future is uncertain and the true human cost of the disaster is still unknown, many of us feel that the best way we can support those in the worst hit areas of Tohoku is to get back to business as quickly as possible.

The crisis is clearly having an immediate impact on the overall economy. The IMF downgraded growth forecasts slightly and private observers are more pessimistic.

The upgrading of Fukushima to 7 on the INES scale will no doubt only add to the negative mood. However, the longer-term impact on “Brand Japan” remains to be seen; much depends on how long the crisis continues and how well the Japanese government manages the situation.

For private companies, the strength of association with Japan will vary a great deal by brand, by industry, and by market. The impact of radiation fears on any value-added association with “Made in Japan” will also vary greatly by category and by segment.

While there may well be some longer-term damage to the brand value of “Japanese food” or to destination branding for tourism and events, global durable goods brands such as Sony or Toyota may not have suffered much direct value erosion yet and are more likely to rebound quickly.

Of course, the immediate financial impact will not help Toyota, despite its strong brand history. Indeed, Toyota was already struggling with quality issues and has just announced plans to scale back production by half for at least two months.

Provided Japan can keep the radiation issue under control quickly, there may actually be positives to take out for global “Brand Japan”:

1. The Japanese people’s response to events has been inspirational; from the small energy-saving steps everyone is taking in Tokyo to the heroism of the “Fukushima fifty.”

2. Although there was horrendous loss of life due to the tsunami, Japanese engineering has so far stood up to a massive earthquake and continuous aftershocks.

3. Increased international engagement; Japan is not facing the crisis alone, help is coming from the region and from around the world. Japan is communicating better with neighbors and the world understands just how critical Japan still is to the global supply chain.

As with any crisis, it is critical that the brand managers (i.e. the government) communicate clearly, remember that it’s a conversation not a monologue, focus on people above all else, keep sight of the big picture (people want interpretation not data points), show a vision for the future and, check, double-check, and independently verify the risk.

The government needs to understand better the importance of perception and work with established global brands such as the UN, Greenpeace, or leading academic institutions to add credibility to the message that Japan is open for business.

Alexander Murrary is a Senior Consultant in Interbrand Tokyo.