The Japanese WayMichelle Tan,

Associate Professor of Law,Tezukayama University,Nara

SOCAP AUSTRALIA 2004 INTERNATIONAL SYMPOSIUM

27-29 October 2004

What I will talk about

1. Extremely brief overview of consumer law in Japan

2. Complaints (including enquiries) management by:

• Consumer centers administered by local governments

• A consumer group on behalf of a local government

• Large manufacturing companies (some recent trends/ data, information obtained thru recent interviews)

Consumer Law in Japan

Public Law (based on Fundamental Act on Consumer Protection 1968) (sector specific）

Self-regulation

Private Law

・ Specific Trade Practices Act・ Anti-Monopoly Act

・ Civil Code

・ Consumer Contracts Act

・ PL Act

・ Unfair Competition Act

Factors Affecting Complaints Handling

1. Increasing number of complaints

2. Increase in scams

3. Increase in scandals involving well-known companies ( since 2000)

Complaints handling by consumer centres

1. Administration comes under local government ( over 400 nationwide)

2. Handled over 1300000 enquiries/complaints last year (contract 82% , services 74%)

3. Managed by local government officers, front-line inquiries/ complaints handling done by consumer advisers employed by the centres

4. Initial contact with the consumer is usually by telephone

5. Role of the consumer advisers: information, mediation, policy-making

Outsourcing of enquiry/ complaint handling by local government

1. New role for consumer groups

2. Kansai Consumers Association is first example (since 2002)

3. How does it work (handled almost 10,000 complaints in 2003)

“Complaints handling” in companies

1. CS、 CD、 CSR

2. Social/ Economic Factors Driving CS Promotion

Scandals　→　 greater awareness of need for CS (scandals→ distrustful customers→　 makes customer contact more difficult)

Long recession Aging population

Trends in enquiry/ complaints handling　 (Surveys by the Cabinet Office in 1999 and 2004)

1. large increase in companies with CS Division (up from 1.1% to 14.6%)

2. advances in ＩＴ /OA

3. interaction with top level management

1. Kao Corporation’s Echo System

2. Suntory’s profit center

3. National/Panasonic and Toshiba’s Customer Care Centres

Some examples

Top manufacturers improving CS through enquiry/ complaint handling

1. High status within the company

2. Consumer-oriented Communication with customers is key Use of knowledge　 management systems Effective use of information --feedback into all areas of the

organization e.g. development, planning, design, manufacturing, sales, marketing

3. Complaint Handling ” Complaints” are treated as valuable free information Speedy, sincere Several levels of complaint management

Product, Advert, Info

Response to enquiries

Consumer Information Centre

“Accurate, Quick、 Kind”

Information Exchange

Search

Enquiry Support Function

•Product information

•Lifestyle information

•Enquiry input

•Send replacement product

•Write letters

•Follow-up ongoing enquiries

•E-Mail enquiries

Kao Echo System

Enquiry Analysis Function

•Free search

•Typical enquiry analysis

•Enquiry trends

•Daily enquiry bulletin

Enquiry input

search

information

Research

Marketing

Sales

Production

Consumer Opinion

Reflected in “Good Product Production”

Consumer

Two Way

Communication

Source: Translated from Japanese original with permission of Kao Consumer Information Center,

see “Outline of the Kao Consumer Information Centre."

Some examples

1. Kao Corporation’s Echo System

2. Suntory’s profit center

3. National/Panasonic and Toshiba’s Customer Care Centres

Central centre General contact point for customers and overall management 1.General contact

point for customers, overall management

2.Planning and promotion of new management systems for enquiries

3.Enquiry information available in-house, monitor for trends

4.Support staff training

Cu

sto

mer

Business domain companies

　Incorp

ora

ting

con

su

mer o

pin

ion

　Resp

on

din

g to

com

pla

ints

「Con

su

mer O

pin

ion

」fo

rward

Cu

sto

mer V

alu

e E

nh

an

cem

en

t

Planning

Publicity

Design

Refl

ecte

d in

Qu

ality

con

trol

Technical

SalesAdvertising

Company centreBusiness unit

Free-dial

Ｃｅｎｔｒａｌ　ｃｕｓｔｏ m e r care centre/ Business domain company centers

Source: Translated from Japanese original by Michelle Tan, with permission of Panasonic's Customer Care Centre.

Customer Enquiry Information Retrieval System

ＰＡＣＳ System

Data for all companies

Available in-house next day

Company ＬＡＮ

Customer

advisor

Company centre

ＰＡＣＳ= Panasonic Customer Support & Satisfaction

ＣＴＩ system

ＰＡＣＳ server

Data sent that night

Central centre

Server

Customer Enquiry Information Retrieval System

Source: Translated from Japanese original by Michelle Tan, with permission of Panasonic's Customer Care Centre.

Stages in evolution of the internal function of Customer care

① Complaint/Inquiry Management② Information collection/analysis③ Information to consumers④ Internal distribution of

information from consumers⑤ Utilization of information for

marketing⑥ Participation in/ Support for

management

Customer perspective is basis

Source: Presentation by Sumio Shibata of Yoku Moku Corporation, ACAP Kansai Chapter meeting, July 27 2004.

Changes in Total Number of Inquiries/ Complaints

217816 234022 274076351139

400511 415347467110

547145

655899

873649

1371316

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Number of Inquiries/Complaints

Source: National Consumer Affairs Center of Japan, The Annual Report on Consumer Affairs 2004