Toshishige Hamano, head of international business at Sharp Corp., realized his company had a problem. Despite being the world's top seller of liquid crystal display televisions, surveys showed that the only TV brand many Americans could come up with was Sony.
It was easy to see why: Sharp didn't do much in the way of advertising in the United States besides occasional TV spots. The company was late in catching on to U.S. consumer trends, like the move toward bigger TVs. Sharp didn't even roll out its new TV models overseas until half a year to a year after they had gone on sale in Japan.
Now, Hamano is changing that. This week, Sharp has launched its second full-fledged ad campaign for its Aquos line of flat-panel TVs, put together by Wieden & Kennedy, an edgy ad agency based in Portland, Ore. Sharp declines to say how much it is spending on the U.S. campaign, but it says it has budgeted about 20 percent more than it spent on the Aquos promotion last year. Ad tracker TNS Media Intelligence estimates Sharp's U.S. ad spending for Aquos last year at $30 million, the first year of its campaign push. Spending in 2003 was at $17 million.
This year, Sharp plans to start selling in the United States a 65-inch LCD TV -- the biggest such model in the world. Sharp executives say the TV will go on sale within months of its Japanese sale date, part of a push to have Aquos TVs eventually launched at the same time worldwide. The price in the United States hasn't been set.
Hamano has two goals. First, he wants to make sure Sharp's Aquos TVs evoke strong brand loyalty from buyers outside its home market. Despite Sharp's strong lineup and sales, past surveys showed that many people didn't even know the Aquos name.
Stronger brand loyalty, he says, can help Sharp stay a profitable top seller of electronics in an industry where "unless you're leading, you don't make money."
The stronger branding overseas, in turn, should help Sharp become less dependent on the Japanese market, where it earned 52 percent of its revenue for the year ended March 31. That is important because the industry's most rapid expansion is expected to be from markets such as the United States and Europe. Unless Sharp hurries, a raft of Asian rivals is going to grab those markets first.
"Unless we recognize [that we need to become more international], we won't be able to win against the challenge from Samsung, LG or the new Chinese companies that are going overseas," Hamano says.
Sharp's savvier wooing of the U.S. market comes as many of Japan's electronics makers are taking stock and deciding they still are too domestic. Sony Corp. has long been a brand and advertising powerhouse outside of Japan as well as inside, but now companies such as Toshiba Corp. and Matsushita Electric Industrial Co., maker of Panasonic products, are busy cooking up strategies that will help them become less reliant on the home market.
Matsushita last year also began a concentrated ad push for plasma TVs in the United States, under a new American operations head who is determined to increase the company's revenue from countries outside Japan. In the year ended March 31, Matsushita booked 12 percent of its $81 billion in sales from the U.S. market; the company hopes to bring that up to around 30 percent, close to the U.S. share of world economic output. In 2002, Matsushita also started rolling out some key products at the same time as worldwide, and it has since seen global launches of plasma TVs, DVD recorders and digital cameras.
Toshiba, which still earns 64 percent of its revenue in Japan, in May rolled out its newest portable audio player in Japan and the United States -- one of the first times the company has made an electronics gadget available overseas and at home at the same time.
At Sharp, Hamano's first move in 2003 was to hire a U.S. company for its Aquos campaign rather than the big Japanese ad agencies it had previously used. In contrast to the spots Sharp runs at home -- featuring a kimono-clad actress -- Wieden & Kennedy came up with Web and TV spots that tell the back story of a red car that plunges into a pool. In May, that campaign won a prestigious Clio advertising award; Hamano credits it for helping raise the portion of Americans who recognize the Aquos brand to 57 percent last year from 30 percent the year before.