A MARKETING PLAN

1
A MARKETING PLAN FOR JAPAN
Prepared by The Philippine Japan Team
2
JAPAN OUTBOUND TRAVEL
Prepared by The Philippine Japan Team
3
WHY TARGET JAPAN?
ECONOMIC POWER

• It is the worlds second largest economy
• (US5.465 Trillion). It is a rich country
  with
• enormous personal savings.
• It has one of the highest per capita GDP in the
  
• world US28,000 in 2003 (estimated)
• Real GDP growth of 2.5 in 2003

4
WHY TARGET JAPAN?

• Japan is one of the biggest sources of the
  worlds outbound travellers and
• the biggest tourism spenders.

WORLDS TOP TOURISM SPENDERS 2002
Source WTO Tourism Highlights 2003
DOT Foreign Offices
USA figures exclude outbound to Canada and
Mexico
5
WHY TARGET JAPAN?

• STRONG RP-JAPAN RELATIONS

• The Philippines has close historical ties and a
  strong,
• vibrant relationship with Japan in trade,
  business,
• investments and tourism.
• The 2nd largest investor in the Philippines,
  representing
• 37 of total foreign Direct Investment for the
  Philippines.
• The top Official Development Assistance (ODA)
  donor
• country No. 1 source of external development
  funds.
• 2nd largest export market of Philippine
  products.
• Consistently the 2nd largest source market for
  tourism
• for the past 10 years averaging 19-21 share
  of total
• visitor arrivals.

6
JAPAN OUTBOUND TRAVEL
SUMMARY OF FINDINGS (2003 JTB SURVEY)

• Japanese outbound travel dropped 19.5 to 13.3 M
  in 2003 in the aftermath of SARS (far larger
  decrease than that following the 1991 Gulf War
  and the 9/11 in 2001).
• Proportionate decline in average expenditure
  per traveller from 309,100 in 2000 to 271,000
  in 2003.

7
JAPAN OUTBOUND TRAVEL
Total Japan Outbound Travel Market Expenditure
Total Expenditure per Trip Per Pax

• US
• 1994 Not available
• 404,000 4,299
• 361,000 3,318
• 331,000 2,737
• 327,000 2,496
• 326,000 2,861
• 309,000 2,867
• 296,000 2,435
• 293,000 2,339
• 271,000 2,338

• 2000 was the peak year for Japan outbound
  travel, due to 2 consecutive years
• of strong yen and income growth.
• SARS had the greatest impact on Japan outbound
  travel, bringing it down to
• lower than 1994 levels.

Source JTB Report 2004
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PROFILE OF THE JAPANESE OUTBOUND TRAVELLER By
Point of Origin
SUMMARY OF FINDINGS (2003 JTB SURVEY)
Hokkaido
Majority of Japanese travellers are from Greater
Tokyo, Kinki/Kansai, and the Tokei Regions. In
terms of prefectures Tokyo/Kanagawa, Osaka and
Aichi (in that order).
Tohoku
Koshin-etsuHokuriku
Chugoku
Kanto
(Greater Tokyo)
Tokai
(Aichi)
Kinki
(Osaka)
Shikoku
Kyushu
Okinawa
9
PROFILE OF THE JAPANESE OUTBOUND TRAVELLER By
Overseas Destination
SUMMARY OF FINDINGS (2003 JTB SURVEY)

• Inspite of SARS in 2003, China remains Japans
  top
• overseas destination with 16.95 market
  share of total
• outbound travel.
• Top 3 destinations in 2003 (2000)
• China 2.250 M (2.202 M)
• Korea 1.802 M (2.472 M)
• Hawaii 1.324 M (1.856 M)
• None of the markets in 2003 recaptured 2000
  levels. All
• regions infected with SARS suffered major
  declines.

10
PROFILE OF THE JAPANESE OUTBOUND TRAVELLER By
Gender
SUMMARY OF FINDINGS (2003 JTB SURVEY)
Majority of Japanese travellers in 2003 is male.
Both male (7.61M) and female (5.69M) markets
decreased in 2003. The female market continues
to drop (for 3rd consecutive year) due to
safety/security concerns. Men in their 30s
have overtaken women in their 20s (segment with
the most rapid growth in 2000) as the largest
market segment in 2003. Departure ratio
(including repeat travellers) for men in their
40s is the highest. Remarkable decline in the
elderly market (men over 60 and women over 50).
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PROFILE OF THE JAPANESE OUTBOUND TRAVELLER By
Spend

• SUMMARY OF FINDINGS
• (2003 JTB SURVEY)

• Total overseas travel expenditure per trip per
  person is 271,000, little change over the
  years.
• Middle aged women spent the most on shopping
• (98,000).
• Elderly women are the biggest spenders with
  347,000, followed by middle-aged women
  (324,000), and elderly men (317,000). Least
  spenders are single men and women.
• The highest travel expenditure is for overseas
• study/school trips at 483,000.

12
PROFILE OF THE JAPANESE OUTBOUND TRAVELLER By
Purpose of Travel
SUMMARY OF FINDINGS (2003 JTB SURVEY)

• Japanese travel primarily for tourism, 80 to
  Guam/Saipan and Hawaii for sightseeing,
  natural/scenic attractions, shopping, RR.
  Business Travel is increasing, especially to
  China. VFRs remain strong (U.S. Mainland and
  Canada).

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PROFILE OF THE JAPANESE OUTBOUND
TRAVELLER Breakdown of Japan Tourism Market into
Activities in Destinations
Natural attractions
Tourism
Sightseeing
Shopping
Honeymoon
Historical attractions
Gourmet sampling
VFR
Art galleries museums
Cultural attractions
Rest Relaxation
Business
Swimming
Trainings/ inspection trips
Theme Park
Total Japan Outbound
Golf
Scuba Diving
2000 17.8 M 2003 13.3 M
Overseas study / school trips
Other Sports
Wedding ceremony
Attendance in meetings
Theatrical performances / concerts / movies
Night Tour
Others
VFR
No answer
Gambling
Others
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PROFILE OF THE JAPANESE OUTBOUND TRAVELLER By
Type of Travel Arrangement
SUMMARY OF FINDINGS (2003 JTB SURVEY)

• Package Tours is the most common type of
  overseas travel (46 from 50.8 in 2000) BUT
  individually arranged (FIT) type of travel (42.1
  from 34 in 2000) will increase, especially via
  the Internet which had a phenomenal growth.
  Predominantly mono destination in travel format.

15
THE JAPANESE OUTBOUND TRAVEL MARKET
SUMMARY OF FINDINGS (2003 JTB SURVEY)

• Security concerns, while declined slightly still
  continue to be the biggest factor hindering
  travel. Costs too much rises. Language has
  become less of a concern.

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THE JAPANESE OUTBOUND TRAVEL MARKET
CONCLUSION
Inspite of its economic downturn, decreasing
volume of outbound travel, and decreasing travel
expenditures, Japan remains a huge market for
tourism and travel. JTBs 2004 forecast remains
high at 16.5 M outbound Japanese!
17
THE JAPANESE TRAVELLER TO THE WORLD 2003
Predominantly Male (30-39s)

• Travels by Package Tours
• ? mono destination
• packages

• Favorite Destinations
• China
• Korea
• Hawaii

• Books thru a travel firm

• Travels primarily for
• Tourism

• Travels 5-7 days usually in
• April / May (Golden Week)
• or November / December

• Favorite Activity in
• Destination is
• viewing natural /
• scenic attractions
• followed by shopping

• Mostly come from Tokyo
• using Narita Airport

• Motivated to travel
• primarily by desire
• to visit a destination

• Travels with friends
• and relatives

• Usually gets his
• travel information from
• reading pamphlets

• Spends an average
• of 271,000, mostly
• on shopping

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JAPAN OUTBOUND TRAVEL
Total Japan Outbound Travel vs. Japan Arrivals To
The Philippines
Legend Japan Outbound
(in millions) Japan
Inbound to the Phils
Source JTB Report 2004
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PHILIPPINE MARKET SHARE OF JAPAN OUTBOUND TRAVEL
2000/2003
Total Japan Outbound Travel vs. Japan Arrivals To
The Philippines
Legend Japan outbound
travel Japan arrivals to the
Philippines
Total Philippine Arrivals vs. Japan Arrivals To
The Philippines
Legend Total Philippine
Arrivals
Japan arrivals to the Philippines
but Japan remains largely underpenetrated
Sources DOT Statistics and JTB Report
20
PHILIPPINE MARKET SHARE OF JAPANESE OUTBOUND
TRAVELLING FOR TOURISM 2000/2003
Total Japanese Travelling for Tourism vs. Japan
Arrivals To The Philippines for Leisure
Legend Total Japanese
Travelling for Tourism 2000
Nearly 80 visit Guam, Saipan
and Hawaii Japan arrivals to
the Philippines for leisure
Source DOT Statistics and JTB Report
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PHILIPPINE MARKET SHARE OF JAPAN ARRIVALS TO
ASEAN 1998-2004
Total Japan Arrivals to ASEAN vs. Arrivals to the
Philippines
1998 1999 2000 2001 2002 2003 2004 Jan-Apr
Thailand 986,264 1,071,482 1,206,549 1,177,599 1,239,421 1,042,349 -
Singapore 843,683 860,661 929,887 755,766 723,431 434,036 174,598
Indonesia 469,409 606,102 662,045 611,314 620,722 548,630 -
Malaysia 252,178 286,940 455,981 397,639 354,563 213,527 100,473
Philippines 361,631 387,513 390,517 343,840 341,867 322,896 128,528
Vietnam 95,258 113,514 152,755 204,860 279,769 209,730 94,102
Laos 12,936 14,860 20,687 15,547 19,801 17,766 -
Cambodia 13,386 17,885 19,906 17,952 96,796 88,401 40,298
Myanmar 20,525 17,014 16,096 20,118 20,744 18,799 7,680
Brunei Darussalam 6,639 3,172 3,968 2,033 2,251 - -
TOTAL 3,061,909 3,379,143 3,858,391 3,546,668 3,699,365 2,896,134 545,679
Legend Total Japan Arrivals to
ASEAN
Japan arrivals to the Philippines
Sources DOT Statistics and ASEAN Secretariat
Ranking based on 2000 figures
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THE JAPANESE TRAVELLER TO THE PHILIPPINES 2000 /
2003

• Predominantly MALE (45-54s)

• TRAVELS primarily for HOLIDAY

• Mostly MARRIED

• INDEPENDENT traveller

• Travels ALONE

• Usually a PROFESSIONAL /
• BUSINESSMAN
• Usually a BUSINESSMAN

• Spends an average of
• US 133.89 DAILY
• Spends an average of
• US 79.80 DAILY

• Majority traveled in AUGUST and MARCH
• Majority traveled in DECEMBER and
• AUGUST

• Earns an average of US 62,949.43
• annually
• Earns an average of US 63,698.99
• annually

• Most are REPEAT VISITORS

• HAS a university / college
• DEGREE

• Stays an average of 6.37 NIGHTS
• Stays an average of 6.48 NIGHTS

• Prefers a HOTEL as type of
• ACCOMMODATION

• Is predominantly MOTIVATED BY
• WARM, FRIENDLY PEOPLE

• Legend
• 2000 2003 data

Sources Phil. Annual Visitor Sample Survey 2000
2003 DOT Statistics 2000 2003

• 2000 data

• 2003 data

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CONCLUSIONS

• Japan has consistently been our 2nd
• largest source market for tourism yet it
• remains largely underpenetrated.

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CONCLUSIONS

• We have been tapping market segments like golf
  and diving which make up small segments of the
  tourist traffic from Japan.
• Huge untapped tourism (leisure) market for
• Shopping
• Viewing Natural / Scenic Attractions

MARKET
We have always been a MARKET FOLLOWER, never a
MARKET LEADER OR TREND SETTER.

• We have the product attractions but few are ready
  for the market in terms of infrastructure and
  services
• Low awareness about product offerings
• No / Few new product offerings since 5/10 years
  ago.

PRODUCT
PRICE

• Still competitive but becomes expensive when
  viewed in terms of value or content

• Weak indistinct image, low awareness, largely
  overlooked product resulting in low trial
• Lack of / absence of special / sale promotional
  offers
• No advertising
• Inconsistent, unsustained PR activities lack of
  good news on the Philippines.
• Lack of appropriate collaterals in Japanese.
  Inefficient distribution.

PROMOTIONS
DISTRIBUTION

• Travel wholesalers lack incentives to mobilize

BUDGETS

• Widely dispersed use of available tourism budgets

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CONCLUSIONS

• Japan needs a ONE-COUNTRY APPROACH considering
  
• its importance to the Philippines not only for
  tourism but
• for trade, business, investments,
  socio-cultural exchange.
• While the DOT concentrates on the tourism
  segment,
• other government agencies can help increase
• Japanese arrivals to the Philippines for the
  following
• strong market segments
• Business Travel - DTI/BOI et al
• VFRs - DFA/DOLE/OWWA
• Elderly Market - PRA

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CONCLUSIONS

• DOT MUST FOCUS,
• We need to identify the market segment of
• Japans outbound travel that remains
• largely untapped, has the highest potential,
• and whose needs we can meet and focus
• on it our marketing/promotions efforts and
• resources.

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WE FOCUS ON THE JAPANESE WOMEN 30s-50s MARKET
SEGMENT 4.354 M IN 2003 (3.05 for Tourism)

• PREFERRED STYLE
• OF TRAVEL
• Travels abroad as
• long as possible,
• even if infrequently.
• Less interest on
• historical sites, more
• on NATURE and scenery.
• Relaxes at just one
• or two destinations.
• Wants to visit a different
• place each trip.
• Stays at any hotel as long as
• has basic amenities.
• Eats at restaurants where
• locals eat.
• Visits famous destinations.

• GENERAL
• CHARACTERISTICS
• Makes the decision on
• where to travel
• Travels primarily for
• TOURISM (especially
• single females)
• SHOPPING is primary
• activity in destination
• (especially 15-29 singles
• and housewives)
• High interest in
• natural/scenic
• attractions and
• gourmet sampling
• Uses PACKAGE TOURS
• (especially married
• women)

• JAPANESE WOMEN
• AGE TOTAL
• OUTBOUND 2003
• 20-29 1.623 M
• 30-39 1.234 M
• 40-49 .630 M
• 50-59 .867 M
• ? Single
• Women - 15-29s
• - 30-44s
• ?Travel with friends
• and relatives
• ? Married

• COMPETITORS FOR
• THIS MARKET
• Single
• Women - Europe
• - East Asia
• (Korea/Taiwan,
• HK)
• - ASEAN
• (Thailand,
• Indonesia,
  Singapore,
• Malaysia)
• Married
• Women - East Asia
• (Korea/Taiwan,
• HK)
• - ASEAN (Thailand, Indonesia)
• - Hawaii (Saipan) (especially
  housewives)

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WE FOCUS ON THE JAPANESE MALE (MARRIED
MIDDLE-AGED) MARKET SEGMENT 4 M in 2003 (2 M for
Tourism)

• GENERAL
• CHARACTERISTICS
• 46 Travels for TOURISM
• 30 for BUSINESS
• Majority are Repeat
• Travellers
• Both segments are big
• spenders at 287,000 for
• Middle Aged Men and
• 283,000 for Married Men.
• Main motivation to travel
• is to take a holiday.
• Married Men, in particular
• want to visit a specific
• destination.
• Married Men travel with wife
• (34) or fellow employees
• (20.5)

• PREFERRED STYLE
• OF TRAVEL
• Travels abroad as long as
• possible, even if infrequently
• Enjoyment of nature and
• scenery ranks first
• Rest and Relaxation a
• strong preference with married
• men
• High interest in shopping
• (for married men) and
• gourmet sampling
• (for middle-aged men).
• Interest in Night Tours.
• Eats at restaurants where
• locals eat
• Visits a different place each
• trip

• COMPETITORS FOR
• THIS MARKET
• Married
• Men - US East Coast
• - Indonesia/
• Malaysia)
• - Guam / Saipan
• Middle
• Aged - China/Taiwan/
• Hong Kong
• - Thailand/
• Singapore
• - Germany

Married Men 2 M (Between
15-44) Middle Aged Men 2 M (Between 45-49)
_______ 4
M
Based on of Married Men (13.8) and Middle
Aged Men (13.3) among total respondents of JTB
Factual Survey of the Overseas Travel
Situation applied to Japans Total Outbound of
13.3M. Based on 46 of Total Male Market
segment travelling for Tourism in 2003.
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JAPANESE OUTBOUND TRAVEL MARKET

• Japanese outbound travel is almost 50/50
  male/female.
• 2000 2003
• Male 9,536,000 7,606,000
• Female 8,284,000 5,690,000
• The female 20-29s segment ruled overseas
  outbound travel for over 13
• years but was overtaken by the male 30-39s in
  2003 due to security/
• concerns.
• Over a 14-year period (1990-2003), the female
  30-39s segment is
• the only one steadily increasing its market
  share. All other segments
• have decreased/increased market share
  according to market
• forces. (economy, safety/security
  concerns).
• 4. Men in their 30s have overtaken women in
  their 20s (segment with the most rapid growth in
  2000) as the largest market segment in 2003.

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JAPANESE OUTBOUND TRAVEL MARKET
31
JAPANESE OUTBOUND TRAVEL MARKET
1. Higher percentage of women travelling for
tourism than male. 2. Over 70 of all groups
of women (except students) travel for
tourism. 3. About 46 of married men and middle
aged men travel for tourism about 30
travel for business.
32
JAPAN OUTBOUND TRAVEL 2003 By Purpose of Travel
By Market Segment
MALE MALE MALE MALE MALE FEMALE FEMALE FEMALE FEMALE FEMALE FEMALE FEMALE
Students Single Married Middle Aged Elderly Students Single 15-29 Single 30-44 Married (employed) Married (house-wives) Middle Aged Elderly
Tourism 57.1 71.2 47.0 45.2 59.2 63.3 72.6 72.9 69.1 68.3 74.9 80.4
Business - 12.3 27.5 31.4 10.8 - 1.7 4.8 2.4 0.5 2.6 0.3
Honeymoon 1.1 - 13.2 0.3 0.3 - - - 12.4 13.6 0.5 0.3
VFR 7.7 8.0 2.9 7.2 8.4 8.3 8.8 10.0 8.6 11.1 11.5 7.2
Training / Inspection Trips 6.6 4.1 2.3 3.6 3.5 5.3 2.7 1.3 0.7 - 0.9 -
Conference Attendance 6.6 0.8 1.2 1.8 1.9 1.2 1.0 - 0.3 - 0.5 0.3
Overseas Study / School Trips 14.3 0.3 0.2 0.2 0.3 16.6 3.4 0.4 0.7 1.0 0.2 -
Others 4.4 2.3 3.1 6.1 9.7 3.6 9.1 6.6 4.8 5.0 6.6 6.5
Source Japan Tourism Marketing Factual Survey
2004
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JAPANESE OUTBOUND TRAVEL MARKET
The Male 20s, 30s, 40s, 50s market segments,
though all decreased in 2003, total 6.04 M
outbound travellers in 2003 (7.46 M at its peak
in 2000). The Female 20s, 30s, 40s, 50s
segments, though all decreased in 2003, total 4.4
M outbound travellers in 2003 (6.4 M at its peak
in 2000).
34
JAPANESE OUTBOUND TRAVEL MARKET
35
JAPAN MARKET SEGMENTS TO SOUTHEAST ASIA ()
RP 2000 RP 2003
Male Students 15.6 0 15.4 3.4
Female Students 13.1 4.1 12.4 5.2
Single Women (15-29) 19.1 6.1 14.5 3.4
Single Women (30-44) 14.9 8.2 13.0 3.4
Married Women (employed) 20.5 2.0 14.1 1.7
Married Women (housewives) 9.8 2.0 15.1 3.4
Single Men 14.7 14.3 17.7 6.9
Married Men 14.9 10.2 15.9 20.7
Middle Aged Men 16.5 36.7 20.7 32.8
Middle Aged Women 14.6 12.2 13.1 1.7
Elderly Men 11.4 2.0 18.6 17.2
Elderly Women 9.8 2.0 12.1 0
Notes 1. Based on JTB Factual Survey of the
Overseas Travel Situation covering 2.5M
respondents who took 3.9M overseas trips in 2000
/ 2003 2. Respondents Male
48.2 Female 51.1 No Answer
0.7 100.0 3. Philippines total in 2000
49,000 in 2003 58,000 out of 3.9M
36
BREAKDOWN BY DESTINATION
MALE MALE MALE MALE MALE MALE MALE MALE MALE MALE FEMALE FEMALE FEMALE FEMALE FEMALE FEMALE FEMALE FEMALE FEMALE
MARKET SEGMENT H O N G K O N G S I N G A P O R E K O R E A T A I W A N C H I N A T H A I L A N D M A L A Y S I A I N D O N E S I A P H I L I P P I N E S H O N G K O N G S I N G A P O R E K O R E A T A I W A N C H I N A T H A I L A N D M A L A Y S I A I N D O N E S I A P H I L I P P I N E S
STUDENT 1.0 4.5 2.9 1.9 1.6 2.5 -- 1.3 3.4 2.9 3.4 4.2 1.9 2.3 2.5 2.0 3.8 5.2
SINGLE 8.8 11.4 17.8 17.9 9.6 13.2 18.4 3.8 6.9
15-29 8.8 9.1 8.2 6.8 5.8 7.8 2.0 10.1 3.4
30-44 7.8 1.1 5.0 4.3 6.4 4.9 10.2 5.1 3.4
MARRIED 13.7 14.8 12.5 13.0 11.3 8.8 22.4 22.8 20.7
Employed 14.7 5.7 6.1 4.3 4.2 5.4 10.2 10.1 1.7
Housewives 4.9 2.3 6.6 1.9 2.3 4.9 8.2 6.3 3.4
MIDDLE-AGED 18.6 18.2 14.6 22.8 28.0 23.0 16.3 10.1 32.8 16.7 15.9 0.1 7.4 7.1 9.8 4.1 13.9 1.7
ELDERLY 2.0 8.0 7.2 10.5 13.5 10.8 4.1 5.1 17.2 --- 5.7 4.2 6.8 8.0 5.9 2.0 6.3 ---