Takashi Kiga: Digital Communication in B2B Will Change Japanese Manufacturing

Last September, I published "The B2B Manufacturing Communication Revolution: The Future Brought by the Digitalization of Customer Touchpoints" through Toyo Keizai Inc. The main point of this book is that if Japanese manufacturing industries, which tend to focus heavily on technological development, utilize digital communication to actively promote themselves and their products, their hidden value will be better appreciated worldwide.

Even if they are not usually in the spotlight, B2B manufacturing industries that support high-quality social infrastructure are the unsung heroes of the Japanese industrial world. I believe many Keio University alumni are also active in various fields.

In this article, I will explain how strengthening communication—an area that has been left untouched due to a sense of inadequacy—is a measure with significant room for growth that can enable the further leap of Japan's proud B2B manufacturing industry.

The home appliances and semiconductors in which Japanese companies once boasted glory lost their luster during the "lost 30 years." However, even if the makers have shifted to overseas companies, it is still Japanese B2B manufacturing companies that supply the manufacturing equipment, parts, and materials to make them.

There are pure B2B companies like Tokyo Electron and Shin-Etsu Chemical, which boast high market shares in semiconductor manufacturing-related fields, and companies like Sony, which holds the world's No. 1 share in smartphone image sensors, achieving high performance as a B2B player while also handling B2C.

In fact, as international relations become increasingly unstable, these Japanese B2B manufacturing companies are attracting even more attention. Despite being modest entities known only to those in the know, their high technological capabilities, quality, stable supply capacity, and service strength are being valued under unstable global conditions. Even in digitalization, where we have been consistently outperformed by Google and Amazon, the theme will shift in the future toward connecting with "things" such as factories and automobiles to enable autonomy and automation, so the quality of those "things" will be scrutinized.

We are now at a stage where manufacturing is being reevaluated globally. It can be said that this is a tailwind for Japanese B2B manufacturing. However, it does not mean products will sell even if we remain silent.

During the high-growth period, when the competitors of Japanese manufacturing were only the US and Europe and there was a clear advantage in quality and price, it was an era where products sold if you made them. However, today, we are forced into fierce competition with powerful rivals such as China, Taiwan, and South Korea in addition to the US and Europe. Without ingenuity to stand out from the crowd, one will easily be buried.

Of course, every company continues to hone its technological capabilities, but there is a measure that is essential for winning this battle yet one that Japanese B2B manufacturing has not put much effort into. That is communication with potential customers to make them understand the value of the company and its products.

"It's obvious that companies should promote their products." Most of you probably feel that way.

However, my frank impression after helping B2B companies with their communication for a quarter of a century is that "it is not being done."

Until now, there were reasons why they didn't have to do it. During the high-growth period, products sold like hotcakes, so stable supply was the top priority. Furthermore, because there was close communication within long-term transactions with specific customers, there was no need to widely promote the company or its products to the world.

In addition, the culture of "silence is golden," which considers not speaking to be good, and the virtue of humility, such as saying "this is a trivial thing," encouraged a tendency not to verbalize the value of the company's technology and products. Still, there was no problem in an era when there were few competitors and the superiority of products was clear.

However, today, the number of competitors has increased and technical differences have narrowed. In particular, aggressive overseas competitors use eloquent language to promote their own products. The advantages of Japanese companies also have a high weight of value that is difficult to understand at the time of purchase, such as durability and service quality, so it will not be conveyed unless it is verbalized.

Furthermore, with the progress of major transformations such as the shift to EVs in automobiles, energy shifts, and the smartification of society, players are being replaced, and the importance of developing new customers is rapidly increasing. In that case, no matter how well-known a company is in Japan, it must start by making itself known.

No matter how good a product is, if it is not known, it is the same as if it does not exist. In a highly competitive global market, Japanese B2B manufacturing can no longer afford to be complacent about being inarticulate.

The most important thing in strengthening communication is to correctly recognize the value of your company that should be transmitted. You might think, "Again with the obvious," but this is also something that Japanese B2B manufacturing is not good at.

For example, if shortening the inspection process is the customer's need when introducing a new device, the amount of time saved is the information the customer wants. However, if this is not understood, the promotion stops at technical specifications that are only partial stories, such as "resolution increased by 15%" or "battery life improved by 10%."

Actually, responding to specific requests such as "I want to increase resolution" or "I want to improve battery performance" is the forte of Japanese B2B manufacturing. However, because they focus so much on that story, even though they are fulfilling the true need of "process shortening," the promotion of this provided value tends to be weak.

Once a close relationship is established, it is fine to use the ability to respond to individual requests as a weapon. However, to get potential customers at the previous stage to look your way, the absolute basic is to first show what kind of value your company can provide.

If being able to communicate in this way is a prerequisite, then digital communication is a very powerful tool for B2B manufacturing.

B2B communication differs from B2C, which handles consumer goods like automobiles and cosmetics, in the following ways:

• Mass media is not suitable because the number of customers and customer touchpoints are few.

• Therefore, exhibitions where potential customers gather are the main meeting places.

• The purchase consideration period is long, and communication during that time is essential.

• Products are diverse, and there are many high-priced and multi-functional items, so there is a lot of information to provide.

• Due to this diversity of communication, sales by people become the primary method.

These are the characteristics.

In addition, the technologies, materials, and parts handled by B2B have a wide variety of applications and unexpected ways of being used, so it is often impossible to fully grasp the location of customers.

For example, the fluororesin in frying pans known for Teflon coating is valued for its resistance to chemicals and heat, and has become an essential material for cutting-edge semiconductor manufacturing. Finding new applications is also an important purpose of communication for B2B manufacturing. However, the duration of an exhibition is only two or three days, and the locations are major cities, so there are limits to meeting potential customers and new applications. Also, after the exhibition, there is a limit to handling a wide variety of potential customers who may start moving at any time using only human resources.

That said, product advertising in mass media does not suit B2B. Despite the constraints, B2B communication long had to depend on exhibitions and human sales.

Digital communication, such as websites and SNS, appeared there like a comet. Its convenience is obvious if we look at our daily lives, but the reason it has spread so rapidly is because:

1. Information can be provided without being restricted by time or place.

2. There are no restrictions on the amount of information.

3. You can meet people looking for information.

4. Information can be tailored according to user attributes.

5. It can respond to individual requests such as product comparisons, quotes, and purchases.

It has many features that previous media did not have.

And these features have liberated B2B communication from the constraints of time, place, and information volume.

There was an example like this with a manufacturer of color measuring devices. They were often used for automobile painting and inspections of food and cosmetics, but one day they received an inquiry from a fishery cooperative. They said they needed color identification for grading seaweed but wanted to leave it to a machine due to a labor shortage. The fishery cooperative reportedly found the information on the website by searching for "seaweed color inspection" and learned about the existence of color measuring devices. The manufacturer was very surprised by this unexpected encounter that led to a new application.

In this way, if you post information that is valuable to customers, digital communication allows potential customers who need it to come to you even if you don't know their location. There are no longer constraints of time, place, or information volume. To deliver the hidden value of Japanese B2B manufacturing to every corner of the world, we should make great use of these characteristics.

There is a success story where strengthening communication shed light on hidden value. The number of foreign tourists to Japan, which was 5 million in 2003 when the Visit Japan campaign started, grew to 32 million in 2019 before the pandemic.

Until now, the golden route for foreign tourists was Asakusa in Tokyo, Kiyomizu-dera in Kyoto, and meals like tempura and sushi. However, now foreigners can be seen in every prefecture, and the objects of enjoyment have expanded beyond temples and shrines to hot springs, skiing, and convenience stores—the daily lives of Japanese people.

All of these existed before the campaign. In other words, things that have existed for a long time just became known, and they received this much appreciation. This can be said to be a good example that clearly shows the power of conveying and making things known.

Therefore, if Japanese B2B manufacturing can also strengthen communication and convey the dormant value of their companies, they should be more appreciated. Since they haven't done everything they can, there is considerable room for growth in this initiative.

In particular, websites and SNS are highly flexible media where B2B manufacturing can control the content and timing themselves. Digital communication has a high affinity with B2B and can be started easily at a lower cost than technological development.

When Japanese B2B manufacturing graduates from being inarticulate and masters both technology and communication, another success story like Visit Japan will surely be born.