Getting to the Bottom of Japanese Selling Strategies

“Prestige is the shadow of money and power. Where these are, there it is.” – C. Wright Mills

America is usually given credit for being the ultimate consumer society, but compared to the Japanese we are miserable plodders.

If you don’t believe me, ride the escalator into the basement of any good-sized, top-quality Tokyo department store.

I remember the first time I was in Japan, when I accidentally did that. My astonishment at what I found was so great I couldn’t process it.

I am talking about the Japanese gourmet supermarket – a commercial phenomenon that no amount of food shopping (from Istanbul to France to New York) can properly prepare you for.

The first thing you notice is how perfect everything is: the polished floors, chrome-plated display cabinets, hand-painted signs, and hi-tech lighting are first rate. It’s the kind of atmosphere you would expect if you were shopping for $600 shoes at Gucci or a $6,000 watch at Cartier.

The employees are immaculately clean and beautifully dressed. And the food… the food. I promise you, you won’t believe your eyes.

I took Daniel, Allie, and K to one of these markets yesterday – and I was just as excited by the experience as I was the first time. We raved about how fresh all the produce was, how beautifully cut and arranged all the vegetables were, how pristinely packaged and well-presented the cakes and pastries were.

The sheer variety is awesome. I counted 32 bins of gourmet coffee, 98 varieties of tea, 22 types of Kobe beef, two dozen types of aged cheese, 16 types of French bread, and hundreds and hundreds of mouth-watering desserts.

But the most amazing thing is the pricing. Throughout this massive market, there are things selling for prices you just wouldn’t believe. For example:

beef at $120 a pound

French pastries at $180 a dozen

German sponge cake at $21 a slice

melons for $150

In Japan, these are routine, everyday prices for top-quality produce.

Japanese marketers have succeeded in doing what might seem impossible to a Westerner: selling ordinary food products as high-priced, prestige items.

Western consumers are used to the idea that wristwatches can vary in price from $10 to $100,000, but they would have a hard time applying the same understanding to bell peppers and turnips.

It’s hard to imagine, yet it’s being done. The upper-middle-class Japanese consumer is not only willing to pay $800 for a Louis Vuitton wallet and $150,000 for a BMW 760 and $600 for a pair of Gucci loafers, he’s also happy to dish out $36 for a piece of the world’s best apple pie. (Yes, they sell gourmet apple pie!)

As I said at the beginning of this article, when it comes to being consumers, we don’t hold a candle to the Japanese. Of course, the Japanese pay cash for their luxuries. We pay with credit.

But that’s another story.

My point today is that if you understand the psychology of marketing, you can sell anything at a much higher price than you might think. It’s all about what we refer to in the AWAI Copywriting Program as “deeper benefits.”

Affluent customers will spend more for a product or service – even if it’s only slightly better than a similar product or service – just to own the best. This is not because they need the quality. No one needs a Rolls Royce to get from Point A to Point B. You could drive a Toyota Camry and, rest assured, it will get you there safely, comfortably, and reliably. But people are willing to shell out exorbitant amounts of money because they want the prestige that comes with being the owner of that Rolls Royce.

When I came into the investment-newsletter business about 25 years ago, the most expensive stock market advisory cost $195. About five years after I started, I came up with an idea that notched the mark up to $695. Ten years after that, the first $995 service was launched. And today, there are dozens of services selling for between $1,000 and $5,000.

The same thing has happened in the self-improvement and home-study industry. The top prices for these programs used to range from $300 to $600. In the early 1990s, the $1,000 mark was broken – and thereafter, it seemed, the benchmark was raised about $1,000 a year. Today, I know of at least a half-dozen programs that sell for in excess of $10,000.

Bottom line: It doesn’t really matter what you are selling – watches, stock advice, or melons. If you understand that (a) people buy things for emotional reasons and (b) the more money someone has the more he needs to spend it, you’ll be able to create high-margin, high-profit products at all times in any business.

[Ed. Note: Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]