BCS-Autobox, based in Leighton Buzzard, Bedfordshire, provides machines for making cardboard boxes and cartons; customers include box manufacturers, packaging manufacturers and end-users who use BCS-Autobox machines to make their own boxes in house. Since it was established in 1979, over 3,000 BCS-Autobox machines have been built and sold throughout the world with Export sales now accounting for 80% of turnover.
Despite their enviable export successes, BCS-Autobox had been unable to secure business in Japan. As Barry Tabor, Managing Director, explained, "Japan had always eluded us as a business; we’d tried to look for agents on a number of occasions, but got nowhere." It was when Barry was contacted by Anton Rudgalvis, an International Trade Advisor (ITA) working for UKTI, their strategy for entering the Japanese market began to take shape. "I’d always been cynical about any form of government support", admitted Barry, "but when we met Anton his wealth of front-line experience was so refreshing, we soon realised that UKTI support could be just what we needed. Anton also assured us that we there would not be a paperwork mountain to climb to get support!"
Understanding the dynamics
It was Anton who suggested Barry use the Export Marketing Research Scheme (EMRS). The EMRS is a UKTI Scheme providing professional advice and funding to help businesses understand the dynamics of a potential overseas market before creating an appropriate market entry strategy.
Anton arranged for Barry to meet with his local Research Adviser, Alice Mamier, who helped Barry to identify the key decisions he would need to make to develop his launch strategy, and the people he’d need to meet to find the relevant information. "It was straight forward" explained Barry, "we very quickly realised that we’d need to gain a good understanding of the structure of the market, both within big cities and more rural areas, to work out our best route-to-market and the sort of partner we’d need.It was also apparent that we’d need to make sure our offering was relevant to the Japanese and work out whether we’d need to change the machines in any way." Alice helped Barry to put together a list of the type of people he’d need to meet with in Japan.
In December 2010, Barry travelled to Japan with an itinerary of meetings, both within the Tokyo area and outside, including: four different box manufacturers, three potential agents and Industry Experts at the British Embassy in Tokyo. Over the course of the week spent in Japan, Barry was able to interview these key people and to immerse himself in their culture to gain a good understanding of the market he wanted to enter.
"The whole research trip was so useful. Japan is such a unique culture that you really have to go there to understand why the people act the way they do," said Barry. "For example, the man serving drinks in the train gave a bow each time he entered or left the carriage; the level of service and respect for others was a real eye-opener!"
Understanding the high levels of after-sales service expected in Japan helped Barry to choose an appropriate representative in the market, "We realised that we needed someone locally, who understood the attention to detail required, and could give the appropriate level of service, so we took the decision to appoint a Japanese distributor, rather than just an agent. Barry subsequently appointed a distributor with a young, dynamic team, "They have amazing energy and a real ‘go-go’ attitude!" The new distributor is also helping BCS-Autobox to create a Japanese website and communications plan.
Barry also discovered that, because of the Japanese labour laws,it was difficult to reduce the size of the workforce; in addition, he realised that the Japanese employers place high value on labour stability and commitment to the workers, so it was not desirable to make people redundant. It was obvious that whilst the BCS-Autobox machines can save labour, it would have less appeal so promoting the flexibility of their machines enabling the manufacturers to react quickly to their customers’ needs would be the main marketing message in the Japanese market.
Getting the best
Furthermore, the research enabled BCS-Autobox to choose an appropriate price point which was quite different to their initial assumptions.
As a consequence of the market research visit, BCS-Autobox are now confident they have the best distributor in their industry, and signs of strong business growth are appearing, As Barry enthused, "Within two years, we predict that our business in Japan will account for 15% – 20% of our turnover"
Barry was really positive about all the support he’d received from UKTI, "The Export Marketing Research Scheme was a very positive experience. It turns out my earlier preconception was a total misconception – the support was brilliant, the people were really helpful and we now have the basis for a very strong business in Japan, a market we’d been struggling to enter for years"