Deciphering the Fate of the Market Using Big Data to Lead the New Marketing Strategies

Public Relations Office        May 30, 2017

Akihiro Nishimoto Associate Professor, School of Business Administration

Akihiro Nishimoto Associate Professor, School of Business Administration

Early Graduated from Undergraduate School of Business Administration, Kwansei Gakuin University, and received M.A. from Graduate School of Business Administration, Kwansei Gakuin University. After working Department of Marketing Communication in, Nissan Motor’s Marketing Head Office, he received Ph.D. from Graduate School of Business Administration, Keio University. Worked as an associate professor in Otaru University of Commerce, Department of Commerce from 2011 and has been staying in his current post since 2013. His current publications are “Consumer Behavior as an External Marketing Resource: Getting Competitive Advantage from Market’s Heterogeneity” (Yuhikaku Publisher, 2015), “Competitive Context as Marketing Resources: New Ideas for Avoiding Commoditization” (Co-written, Yuhikaku Publisher, 2016).

“When are markets created?” “How do new products diffuse in the market ? ” In the study of marketing, these are the kinds of simple questions we find ourselves asking. With a focus on Blue Ocean Strategy (strategy to create new markets), Associate Professor Akihiro Nishimoto is attempting to answer these questions using Big Data.

Take the smartphone(Sumātofon), for example. The market penetration rate of the iPhone (Apple Inc.) is higher in Japan than in any other country, accounting for about 60% of all smartphones in use in Japan. Why did the iPhone diffuse so well in Japan? While there are a range of factors, including the unique nature of Japan’s cellphone market and the “Galápagos syndrome” that affected development of cellphone devices, one reason is that non-iPhone smartphone products were slow to enter the Japanese market.

The market picked up pace (consumers started to purchase smartphones in earnest) in 2010, but new releases were unable to keep pace with that (Fig. ①). On the other hand, after that market momentum settled down somewhat in 2011, the number of new releases jumped drastically, so it is obvious that the other manufacturers missed the opportunity.

The point at which the market was in full swing can also be seen in the way the language that permeated society changed (Fig. ②). The upsurge in the market is evident from the frequency of Internet searches for the hybrid word, “smartphone” (smart + telephone). Why did this upsurge in the market coincide with the penetration of this hybrid word? Associate Professor Nishimoto points out, “As consumers, when we come across something new, we can only recognize it based on our past learning and experience. When the past learning and experience of consumers are compounded and new things are recognized in society, that results in the penetration of hybrid words.”

(Fig. ①),(Fig. ②)

(Fig. ③)

However, once large numbers of consumers have purchased a smartphone and the market’s momentum has subsided, there are fewer searches for “smartphone”.

Instead, searches for “suma-ho,” a contraction of the Japanese pronunciation for “smato-fon,” increase, and we start to see searches for the coined word, “gara-kē” (a contraction meaning “Galápagos cellphone”), as a word to distinguish smartphones from cellphone devices already in the market prior to the advent of the smartphone. With only the information in the short word, “suma-ho,” consumers are able to recognize that this indicates the same cellphone device as “sumato-fon,” and they are giving previous types of device a different name, “gara-kē.” It is evident that less information is needed to share information about a topic in society. A similar analysis of newspaper article data from the past ten years also produced exactly the same results.

This change in language (less linguistic information needed) is linked to the momentum of the market (rate of acceleration of penetration), and provides important information to marketers that can assist them in making decisions about when to enter the market. Associate Professor Nishimoto is currently focusing on virtual reality (VR). “This is still just my intuition, but when we look at the way companies and consumers act, we can expect to see a future acceleration of diffusion. While keeping an eye on the changes in the language of VR, I am going to enjoy analyzing these trends.”

In research of Red Ocean Strategy, which aims to capture a competitive advantage in intensely competitive markets, he is focusing on the “Effect of Competitive Context” through the analysis of big data on consumers’ purchasing history.

One example of this is the chocolate market, which is in the throes of fierce competition. At a glance, it appears that the various brands are trying to compete with their rival brands (Fig. ③). Analysis found that there are some brands that, despite competing with another brand, actually help consumers choose their rival brands.

(Fig. ④)

For example, although Crunky is supposed to be a rival to KitKat, in fact, when a consumer is having trouble deciding whether to buy a KitKat or a Crunky, Crunky actually prompts the consumer to buy the KitKat, more than if the consumer were just trying to decide whether or not to buy a KitKat (Fig. ④). Associate Professor Nishimoto is excited about these results, saying, “Until now, marketers have only thought about avoiding competition, but there is the school of thought that ‘competition’ can also actually be a strategic resource that they can take advantage of. This is the Effect of Competitive Context. I want to elucidate the various phenomena that are taking place in the market and use them to help marketers.”