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Cleaning up the Market
Dyson Japan

September 2005

On September 06, the Chairman of Dyson Japan, Gordon Thom, gave a presentation to EA-Tokyo members at the City Club of Tokyo entitled "Playing Away: competing with Japan's giants on their home ground"

Russian author and historian Aleksandr Solzhenitsyn once penned Stalin as saying that the dictator had decided to live to be 100 or die in the attempt. The mental fortitude behind that bold ambition very accurately sums up how Gordon Thom, Chairman of vacuum cleaner manufacturer Dyson Japan feels about hitting his ambitious sales target of 6 million units in the Japanese market. “It’s where we want to go and if we don’t get their entirely, we won’t be too disappointed, but there’s nothing like being ambitious, Ehe said at EA-Tokyo’s September 6, 2005 seminar where he spoke about establishing a brand and competing in the fiercely competitive Japanese floor care market.

Dyson set up its Japanese operation in 1998, began selling and distributing vacuum cleaners in 1999 and launched DC12, its cleaner designed specifically for Japan, in 2004. Sales in 2005 are expected to be around 200,000 units ∁Ecompared to some 20,000 per year before DC12's launch.

Functionality over form
Emphasizing functionality over form, company founder James Dyson, an industrial designer who with his research team has developed products that have achieved sales of over $10 billion worldwide, once outlined a key concept for producing great products: “Design is not about the way a product looks, but the way it works. E

The end result of this simple but effective approach has blazed the way for Dyson vacuum cleaners to become the best selling machines in Europe, the U.S. and Australia. In Japan, the company’s machines are sold in some 1,800 stores, and while being a relatively new entrant in the local vacuum cleaner market, the Japan subsidiary of British vacuum cleaner manufacturer Dyson Limited now controls just over 10% of the market ∁Eup from less than 0.5% in the 12 months since the launch of DC12.

Japanese company paved path for development
How did Dyson get off the ground?
Thom explained that it was never Dyson’s intention to be a vacuum cleaner designer. “He was vacuuming one day and found the vacuum cleaner didn’t work. Opening it up, he saw the bag was full, replaced it and it started working OK, but after doing a couple of rooms, he noticed suction had dropped off again. He took the bag out and saw the inside was coated with dust. His simple thought but massive conceptual leap was, ‘If I can make a vacuum cleaner without a bag, I can make a vacuum cleaner that won’t lose suction.’ E

Inspired by the sawdust separation cycle on top of a sawmill where sawdust goes up, spins around, drops down and is exhausted out, Dyson used this concept and applied it to a vacuum cleaner.
After building more than five thousand prototypes of the Dual Cyclone(TM), he eventually developed a design that met specifications, and most importantly, worked.

Having surmounted the design challenge, Dyson then faced another ∁Eselling his idea. After having his revolutionary design repeatedly turned down, Dyson eventually found a Japanese company that expressed interest in his product. He designed and built his first cyclonic vacuum cleaner ∁Ecalled the G-Force ∁Efor a Japanese company which sold it door-to-door for 200,000 yen. Using income from the Japanese license, Dyson decided to manufacture a new model under his own name in Britain. The result was launched in 1993 ∁EDC01, the first of a range of cleaners to provide constant suction. And the rest, as they say, is history.

Only 30 months out from launch, Dyson became the best seller in the market, and now, the company has more than 50% of the UK vacuum cleaner market and has been taking a steadily increasing share of the higher end segment.
UK vacuum cleaner market - Key facts:
Unit sales have increased 28% from 2,662,000 in 1992 to 3,398,000 in 1998.
Sales value has increased 63% from 282 million GBP in 1992 to 461 million GBP in 1998.

“As Dyson’s share grew, we dragged the average price up from 105 to 135 British pounds ∁Ea 29% increase, and added $200 million to the value of the market, EThom said. “Not only did Dyson increase the average price, but the company changed how often people were replacing the product, how much they were prepared to pay, and changed the structure of the market. E

The newest product in the range is the DC15, however it is not actually Dyson’s 15th vacuum cleaner due to naming issues. “The Douglas Corporation wouldn’t let us use ‘DC 9 Eand ‘DC 10 Ebecause they are airliners, EThom said, drawing laughter from the audience.

Revolutionizing the market
While almost all other vacuum cleaners use bags to capture dust, one of the key points of difference ∁Ebesides the patented cyclone technology ∁Eis that Dyson machines do not. And because there is no bag, there is nothing to block airflow, allowing Dyson cleaners to maintain 100% suction, 100% of the time.

So, what’s happening in the Japanese vacuum cleaner market?
“Dyson started selling in Japan in 1999, and in a good year, we were selling about 20,000 units, EThom explained. “The problem is there are about 5.5 million vacuum cleaners sold in Japan every year, so we weren’t really making much of an impact on the market. It didn’t take long for the Japanese competition to design cyclonic cleaners, and they grew the cyclonic market very quickly until it was about half the market in 2003. However, since 2003 the cyclonic category in Japan has begun to shrink because they don’t perform. E
Market volume in 2003 was 5,580,000 units, a decrease of 0.3% over 2002, and,
Market value in 2003 was 1.14 trillion JPY, a drop of 1.2% over 2002.

However, while these statistics may have cast a chill over the cleaner company end of year parties, Dyson has, and still is, revolutionizing the market. The only price segment that has grown in value and volume is Dyson’s territory ∁Ethe premium price end of the market.

So what has Dyson tried to make? Well, basically something that would be welcomed by consumers and retailers. After surveying consumers, Dyson found the key problems experienced by consumers were dirty and smelly exhaust air, weak suction power, the cleaner losing suction, and the need to buy and replace bags.

To meet these design challenges, Dyson have come up with the DC12. According to Thom, besides being the only vacuum cleaner in the market that doesn’t lose suction, the DC12 also results in cleaner air in the home and comes with a unique method of storage and a more efficient motor.

An unusual product requires unusual methods
So how is Dyson marketing its machines? The company follows simple principles:
If the product is right, everything else is (relatively!) easy ∁Eif the product isn’t right, people are not going to buy it.
Keep it simple ∁Emake it simple and easy for Dyson people to execute and for consumers to understand.
Focus on technology and benefits ∁EDyson do not talk about the design and the colors. Instead, they focus on the technology and the benefits the technology provides to the consumer.
Then let the consumer decide ∁Eif Dyson get the top three points reasonably right, they believe consumers will choose their products.

And in-store? Venture into any large Japanese electrical appliance store and your senses are likely to be assaulted by a maelstrom of sound and color. How does Dyson make its vacuum cleaners stand out in these noisy, bustling environments?

The company’s marketing strategy is simply ∁Ekeep it simple.
Along with training and educating store staff, Dyson ensures product displays are relatively clear of clutter and signs. “We go for a nice simple black background against which our products stand out ∁Ewe try to keep it looking as simple as possible. By doing so, we ensure that our products are visible. We have a very simple product brochure and don’t fill it with masses of text and pictures of singing housewives. We have clear magazine and newspaper adverts highlighting technology, the design process, benefits, etc. This is very different from a Japanese product brochure, which is full of information consumers do not need, and are crowded and cramped. E

Thom said Dyson expects to sell close to 200,000 units this year out of 6 million. “The market is going to grow from 5.8 million in 2004 to 6 million in 2005. We are making higher price points attractive to the consumer and we are growing the market in volume and value. E



Text: Jonathon Walsh.
Jonathon Walsh is a professional Editor and Writer, and Director of Business Grow, an innovative company specializing in providing a wide range of top quality Editorial and Advertising services to Japanese and foreign organizations. For information about Corporate & Publicity Writing, Corporate Newsletters, Seminar Summaries, Translation and other valuable services, please contact: info@businessgrow.net

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