A good research

MUJI

Introduction

A good research is one which has a clear problem that the researchers investigate and then come up with an adequate solution. The focus of this report is to come up with a great research problem and an effective research solution. The researcher is interested in a retail company that is called MUJI. While MUJI has in the past been a successful retail company in China, in the past four years, it has performed dismally (De Toni, Milan, Saciloto, & Larentis, 2017). The researcher is interested in determining the actual problem that has contributed to MUJI performing poorly in the Chinese market, and proposing solutions that MUJI can undertake to become one of the leading industry players in this market.

The report is divided into the following sections:

Introduction: It provides an overview of the report.

Industry and company: In this section, the researcher provides a description of the industry of the company that will be investigated. The company section provides a brief details of MUJI, and the problem that the company is currently facing.

Research problem, identification and definition: As the name suggests, in this section, the researcher identified the current research problem of the study.

Research aims and objectives section consists of the objectives that the researcher will use as guidelines for this paper.

Research plan: It comprises an overview of the literature review and methodology that the researcher will use.

Conclusion: It is a summary of the key arguments that have been raised in this report.

Industry and Company

The retail industry is one of the highest performing industrial sectors in China. According to Statista, in 2019, this industry’s revenue was approximately 13 trillion yuan. In addition to that, it contributed to approximately 32 percent of the country’s GDP. The country’s largest retailer presently is Suning Commerce Group, which has an annual revenue of approximately 270 billion yuan. The retail industry in China has been so lucrative that it has attracted companies from other countries such as MUJI from Japan.

Muji is a Japanese retail company, which is involved in the selling of a variety of household and consumer products in the market. The company was started in 1979, and during its initial stages it had a low product diversity, i.e. it only dealt with nine household and 31 food products (De Toni, Milan, Saciloto, & Larentis, 2017). An important point to note is that, initially it began by retailing its products within the Seiyu supermarket chain in Japan. However, by the 2000s, the company had managed to increase the range of products that it retails to 7,000. Some of the products that the company is engaged in include: pens, pencils, kitchen appliances, household care products, food items and notebooks. The primary business areas for Muji are home furnishing, Cafe Muji, Meal Muji, Muji campsite and it has recently began operating in the automobile and the architectural sectors.

Currently, in Japan alone, the business has 328 stores, which are under its direct control. The company also supplies its products to 124 other outlets. An important point to note is that, Muji is a multi-national company, which has 505 international outlets in different countries as indicated by table one below:

Country of Operation Number of Stores

Mainland China 264

Taiwan 51

South Korea 30

Hong Kong 19

United States 17

Thailand 17

UK 12

Singapore 11

Italy 8

Canada 8

France 7

Germany 7

Malaysia 7

Spain 6

Indonesia 6

Australia 5

Phillipines5

UAE 5

Saudi Arabia 4

India 4

Bahrain 3

Turkey 2

Kuwait 2

Qatar 2

Finland 1

Ireland 1

Sweden 1

Poland 1

Portugal 1

Oman 1

Switzerland 1

Over the years, Muji has been able to achieve and maintain a high level of success as can be witnessed by its rapid expansion both in Japan and globally because of its minimalist approach. Muji is seen as a representation of the anti-thesis towards consumerism. In this case, Muji has adopted a philosophy whereby its products are designed and produced to promote a sense of functionality, and quality design (De Toni, Milan, Saciloto, & Larentis, 2017). This can best be described as utilizing the minimalist approach, whereby the business does not rely on utilizing a brand name to sell its merchandise. In line with the minimalist approach, Muji’s products do not have any form of decorations, or ornamentations that will not assist the consumer in terms of using, or aiding the functionality of the product.

To put it into perspective, the ‘less is more,’ approach promotes the aspect of ensuring that the functionality aspect of a product is highly emphasized. Other than the provision of decorations, or ornaments, the company uses standardized packaging to reduce the overall amount of waste that is produced. To put it into perspective, the packaging process is done in such a way that the strongest emphasis in this process is highlighting the natural colors and overall shapes of the products (Feurer, Schuhmacher, & Kuester, 2018). This approach will contribute to the company conserving their resources, and also reducing the amount of waste that they will produce. It has facilitated the company’s successful market penetration in different geographic locations as has been indicated in table one above.

While the ‘no-brand’ policy has been effective in Japan, and its initial market penetration in different parts of the world, as the company is involved in the retail of high quality products at a relatively fair price, the approach is proving ineffective in China. It has provided cheap imitators with the opportunity to copy and sell their merchandise to unsuspecting consumers. An important point to note is that, while this approach may have been successful in other markets, in China this approach is contributing negatively to business and high profit margins for Muji.

Research Problem, Identification and Definition

The research process can be defined as the systematic manner of finding, or coming up with solutions that the researchers had not previously identified, or was not aware of. In any study, the first and most important step in facilitating the process is the formulation, or identification of the research problem(Cooper & Schindler, 2016). The research problem is the foundation of the research process, from which the researcher will build his, or her study. An important point to note is that, before a researcher can be able to come up with a solution, there is the need to identify the research problem. To put it into perspective, the research process can be divided into the following steps: identification and definition of the research problem, formulation and testing the hypothesis through different processes such as data collection, conducting analysis, coming up with the relevant deductions to the problem, and making relevant conclusions from the results and evaluation process of the research.

The research process is problem driven, and as such, the first step of the study is to identify the problem. In this study, the researcher will be conducting an assessment of Muji’s declining sales in China (Pardede, 2018). Muji is a company that had developed one of the most effective business models in relation to its products. Adopting the minimalist approach, meant that in designing and developing different home appliances and products, the company mainly focused on the functionality of the product, over ensuring that the products had the right aesthetic values. The company does not add any form of decorations and the packaging process is simple and meant to emphasize the overall shape of the product. While in the past, and in a majority of countries such as Japan, this process has been successful, in China, the company is recording low sales(Isomura & Huang, 2016). The main reason for this is that, the minimalist, or no-brand policy has led to the company to be a prime-target for the low-cost Chinese copy cats, and this has resulted in a reduction of the company’s overall sales. In addition to that, in comparison to the products that are locally produced in China, Muji’s products are considered to be relatively expensive. The reason for this is that, they are subjected to taxes, and tariffs, which add to the overall cost of the product. Furthermore, the company is facing stiff competition from companies such as Miniso, Nome and OCE, which provide similar products but at a fraction of Muji’s products in the Chinese market.

Cheap imitations, added taxes and tariffs, and low prices of products from rival companies has contributed to the company reporting lower sales on an annual basis. All these factors are considered to be a problem that warrants for a research to assist Muji to find a solution (Kienzler & Kowalkowski, 2017). The reason for this is that Muji is a retail company, and its sales are dependent on the consumers, or the target market purchasing products from their retail stores. In addition to that, outside Japan, China is the biggest market for Muji. This means that, the company cannot just make the decision to leave the Chinese market based on the existing challenges that it is facing in this market (Masuda, 2019). There is the need to find a reliable solution (s) to the problem, which will facilitate, and increase the number of Chinese citizens who purchase their household products from this company.

Given the problem that has been identified, the researcher feels that this work is researchable. The reasons for this is that, first there is a high availability of data. The researcher can conduct a quantitative approach in which the data will be collected from the customers of Muji and one or more of its competitors such as Miniso, or even customers who purchase the imitation products. In addition to that, it is easy to recruit research participants via the different online platforms such as Facebook, Twitter, or even Weibo. The data collected will help the researcher to identify all of the reasons, or a majority of the reasons that have facilitated the consumers to purchase products that are sold at Muji from other companies(Cooper & Schindler, 2016). In addition to that, the researcher may be able to identify the approach that Muji may undertake to ensure that they can become competitive, and attract a huge market in this industry.

A second approach that the researcher can use is to conduct a mixed methods approach whereby a quantitative and qualitative data collection process is used. In this case, the researcher will collect data both from the target market (potential customers) and employees at Muji who can be determined as market experts(Cooper & Schindler, 2016). This will assist the researcher to have a better perspective of the industry and the measures that can be undertaken to not only ensure that the customers increase their likelihood to shop at Muji, but also the steps that can be undertaken to reduce the imitation of Muji’s products and also contribute to a reduction of the prices of their products.

A third approach in the data collection process is using the secondary study approach. In this case, the researcher may rely on the information from other studies to determine if one can find viable solutions to the problem(Creswell, 1998). However, the researcher is not sure if there is enough information online to solve the research problem that has been identified. To facilitate this problem, use of the secondary study can be used with another approach such as a quantitative approach.

The results from this study will be instrumental in helping the researcher to come up with a solution to the problem that has been identified. In this study, the researcher has hypothesized that, one of the reasons that a majority of Chinese consumers have decreased their frequency to purchase products from MUJI has been because of high prices of their products. By conducting this study, the researcher can be in a better position to verify if this is true, if there are any other underlying aspects, and what can be done by MUJI to address this problem. Coming up with a viable solution will be instrumental for the business executives and the MUJI’s Board. The reason for this is that, China is one of the primary, or major markets of the company (Lee & Hong, 2016). Coming up with a solution, which facilitates the company to perform better in terms of an improvement to its sales, and also improving its competitive advantage over its rival businesses in China will be supported. An assertion that the researcher has made is that, MUJI is not willing to change its business philosophy of a minimalist approach, and its ‘no brand,’ strategy. This means that, if this study comes up with a solution that shows that the company will not have to change its approach, or strategy then they will support it.

Research Problem/Objectives

The Research Problem is to identify how Muji will be able to retain its minimalist approach in China, even as it is currently experiencing a reduction in its sales volume. As has been identified, the overall reduction of sales has been facilitated by an increase of the imitation of its products by copy cat establishments in China. Secondly, MUJI needs to develop a strategy whereby the retail price of the products will be lowered to ensure that they can compete against the company’s current competitors. While MUJI’s products are of a fair price, factors such as taxes and tariffs increase the overall price of the company’s products, which provides an edge to the rival companies. There is the need to ensure that the company’s products have a fair price to ensure that they compete with the rival products in the market.

The following are the research objectives that will guide the researcher in this study:

To ensure that there is a critical assessment of MUJI’s competition in the market. The justification of this objective is that, MUJI’s sales over the last four years has been significantly decreasing. This means that MUJI will need to be able to provide a description of its competitors, and how they are currently affecting the overall sales and profit margins of the company.

There is the need to design and develop a new pricing strategy for MUJI in China. The reason for this is that, currently, MUJI’s products in China are considered to be expensive in relation to the imitation products and the price by the rival companies. The researcher needs to come up with an effective pricing strategy that MUJI can apply to ensure that their products have a competitive price in the market, and at a price that will contribute to the Chinese consumers shopping from the company’s retail stores that are located in different parts of China (Lee & Hong, 2016).

To provide an affective advertising strategy for MUJI. The justification of this approach is that if the company has experienced a reduction in sales of its products over the past four years, it could be an indication that a majority of its customers are losing interest of the company’s products. They may feel that the price is too high, and they stop looking at MUJI’s products. In this case, even if MUJI was to reduce the prices of its products and the targeted customers are not aware of it, then it will not have the desired impact that MUJI may expect.

To develop an effective strategy, which will contribute to an overall reduction of the cost of the MUJI’s products. The justification of this is to determine if there is any unique approach that MUJI can undertake to reduce the overall price of its products. One of the approaches that will be taken into consideration is whether MUJI can produce its products locally in China to reduce the amount of taxes and tariffs that it will be charged.

Research Plan

In this study, the literature review that will be used will focus on the retail of household goods in China. The researcher will also be interested in assessing customers’ characteristics in terms of their reactions to price changes and the most appropriate advertising strategies that an be used to ensure that the targeted customers are aware of the price changes, if any of the company. In addition to that, the researcher will also use literature studies that have focused on taxation and tariffs in China to determine if there are any strategies that can be used by MUJI to ensure that it reduces the amount of taxes and tariffs that it can be charged in this market. Furthermore, the researcher will also assess literature on local production of products in China to assess the benefits and cons of MUJI taking its manufacturing processes in China.

In this study, the researcher has determined that the best approaches to collect data are quantitative approach from the consumers and secondary study on the retail market in China. The researcher assumes that these sources of data will provide the researcher with the right data and information that will be instrumental in developing an effective solution for the research problem that was identified.

Conclusion

The most likely findings for this study is that, for MUJI to be competitive in China, there is the need to reduce the overall prices of its products. Secondly to increase the awareness that it has reduced its prices, the company will need to increase its social media presence. Other than advertising, it will provide indications of what the customers can look at, to ensure that the products that they purchase are authentic. The company will also inform the potential customers of the places where they can purchase genuine products, and if the company engages in after sale services. This will be instrumental in improving the likelihood of customers shopping from the company’s retail stores in its target market in China. An important point to note is that the business significance of this study is to assist MUJI to be able to increase its sales volumes in China. An effective solution will address the current imitation and high prices of MUJI’s products in the Chinese market.

References

Masuda, A. (2019). MUJI: Brand concept creates process innovation. Palgrave Studies in Practice: Global Fashion Brand Management, 45-72. doi:10.1057/978-1-137-52352-5_3

Song, P., & Guangan, L. (2019). Brand Analysis from the Perspective of Semiotics – Take MUJI as an Example[J]. Drama House, (33):214-216.