MARKETING RESEARCH LANDSCAPE IN JAPAN

1. MARKETING RESEARCHLANDSCAPE IN JAPAN Prepared by Japan Marketing Research Association

2. MARKET RESEARCH INDUSTRY IN JAPAN

3. Market Research Turnover by Region & Country Source: ESOMAR

4. Market Research Turnover in Asia Pacific Region Source: ESOMAR

5. Market Research Turnover Against GDP

6. Sources of Market Research Revenue in Japan Source: JMRA

7. Data Collection Methods for Ad-hoc Research in Japan (Total Ad-hoc Expenditures = 100% ) Source: JMRA

8. Source: Top 10 Sales – The Senden Kaigi Total MR Sales in Japan – JMRA Top 10 MR Companies in Japan in 2001(MR Sales: Million)

9. Top Global MR Organizations in Japan Source: Larry Gold, Inside research and Research World September 2002 Global rank is based on research revenues in 2001 * = Japanese companies located in Tokyo. Their subsidiaries / affiliates in Japan are not listed.

10. International Research Revenues Source: JMRA 5.5%* and 2.2%** of JMRA members’ revenue, respectively

11. JAPAN MARKET RESEARCH ASSOCIATION

12. Japan Marketing Research Association (JMRA) • Established in 1975 • Number of member companies : 98 (as of January, 2004) • Having ISO accreditation: 12 • Having Privacy Mark: 44 Chairman: Yasuo Miki Secretary general: Tadaaki Takayanagi No.1 Magami Building, 1-1-5, Koraku, Bunkyo-ku, Tokyo, 112-0004, Japan Phone:+81-3-3813-3577 Fax:+81-3-3813-3596 URL: http://www.jmra-net.or.jp/ E-mail: info@jmra-net.or.jp

13. JMRA: Quality and Ethical Standard • JMRQS • The JMRA Marketing Research Quality Standard sets out quality standards for clients and safeguards respondents’ anonymity and privacy and member companies are required to comply from April 2002 • JMRA Guidelines • Protection of privacy, project arrangement, central location testing, street intercepts, telephone interviewing, mail survey and group discussions. • Internet survey guideline is in preparation • Privacy Mark • JMRA is one of the examination organization issuing permission to use the Privacy Mark • 31 of JMRA 89 member companies were permitted to use this mark by end of 2002

14. Personal Information Protection Bills • The first comprehensive legislation by the Government to prevent leaks and the unlawful use of personal information (May, 2003) • Covers private firms, government organizations and independent administrative agencies, who handle a large volume of personal information, including client lists • The law obliges: • To prohibit obtaining personal information through unlawful measures or providing them to third parties without consent of those on the lists • To take safety measures to prevent such information from being leaked and to quickly process complaints about misuse of information • Up to six months in prison or a fine of not more than \300,000

15. Some Points to Note (1) • Japan accounts for 7% of global research turnover and is by far the largest market for market research in Asia Pacific. However, research spends as a proportion of GDP is low (0.03% of GDP). • Japan is still a product and technology rather than consumer oriented country. Business place more confidence in information collected by their own staff than in marketing research. • Ad-hoc projects accounted for 67% of all 2001 sales of which 87% were quantitative and 13% were qualitative. Continuous projects, such as consumer panel and retail store panel, accounted for 33%. • Qualitative has grown in the past two decades and is now the primary information source for product / advertising concept development and consumer understanding.

16. Some Points to Note (2) • Face-to-face including both in-home and hall and street, accounted for 42% of ad-hoc quantitative research projects in 2001. In-home interviews continued to fall to 24%. CAPI accounted for 3%. • Phone surveys are not prevalent and few agencies have CATI facilities. In 2001, telephone interviewing was used in 11% of ad-hoc surveys, 3% by CATI and 8% by Non-CATI. • 6% of ad-hoc sales are from online research in 2001 compared to 3% in 2000. • Incentives are absolutely necessary for respondent participation. Doctors and professionals command particularly high incentives. • For survey research proposes, respondents are generally categorized by annual household income levels. Social Grade common in European countries i.e. A, B, C1, C2, D is not applicable in Japan.

17. JAPAN COUNTRY NOTE

18. Source: GDP and Deflator – Cabinet office, Japanese Government AD Expenditure - Dentsu MR Sales – JMRA (The Japan Marketing Research Association) Change in GDP, Ad Expenditure, MR sales and Deflator in JapanYear-on-Year Change %

19. Source: Ministry of Health, Labor and Welfare Source: United Nations Japan In the World (1) Countries with Large Population (Unit: 1,000 persons) [2001] Total Fertility per Woman

20. Source: Cabinet Office Source: Cabinet Office Japan In the World (2) Per Capita GDP in 2001 (Nominal) (Unit: US$) Real Economic Growth Rate

21. M F 1st Baby Boomer Born: 1946-1951 Age: 51-56 2nd Baby Boomer Born: 1971-1976 Age: 26-31 Population Pyramid

22. ●5 13● ●11 ●1 ●14 9● 2● ●4 ●7 6● ●3 ●10 12● ●8 ＊indicates prefectural capital Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications Population Ranking of Cities (2003) The population of Tokyo / Osaka / Nagoya urban areas constitutes about 44% of the total national population

23. Household diffusion ratio Internet users (Government statistics) Internet users (Private statistics) Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications Internet Internet users and Household Diffusion Ratio (Unit: 10,000 persons, %) Internet Users by Medium (At the end of 2002) (Unit: 10,000 persons) By mobile phone, PHS and portable information terminals 2,794, 402% By PC 5,722, 82.4% By mobile phone, PHS and portable information terminals only 1,061, 15.3% 1,633 23.5% By PC only 3,884, 58.0% Total 6,942 By video game terminals and TVs 864, 5.2% 24 0.3% 76 1.1% 129, 1.9% Note: The ratio is of Internet users of the age of 6 and older. By video game terminals and TVs only 135, 1.9%

24. Note: The 1970 data is as at February. From 1980 on, the data is at March. Source: Cabinet Office Ownership of Durable Consumer Goods