Lectures on “plant factory” at Liberty Academy

Lately people are concerned about the safety and sustainability of supplies of food. On the other hand it is very difficult to initiate business in agriculture for individuals as well as corporations. To rectify the situation METI (Ministry of Economy, Trade and Industry) and MAFF (Ministry of Agriculture, Forestry and Fishery) are strengthening support for “plant factory”. An increasing number of companies are getting interested in it as “the business of vegetable production in industrial fashion”.

At Liberty Academy, a center for lifelong education, we offer a lecture on “plant factory” under the title of “A New Approach of Business Development of Agriculture”. Business people are zealously attending the class indicating that many companies see “plant factory” as a realistic business opportunity. At the same time, it is also a meaningful research subject for students. A joint team of students in School of Commerce and School of Agriculture presented a proposal of the products of “plan factory” as a new business to JTB last year.

Technology of production, facilities and equipment and know-how of cultivation are the indispensable knowledge to popularize “plan factory”. The lectures at Liberty Academy center on needed technologies and current issues of “plant factory”. We also recognize that we need the intelligence of commerce and management such as organization and sales strategy for the business development of “plant factory”. Marketing perspective is the most important element for the products of “plant factory” to be accepted by the market. The value of the technology is determined by the market (customers = consumers).

Determinant is “product concept”

In order to make use of its new technologies and science for vitalization of agriculture, “plant factory has to steadily produce the agricultural products that meet end-users’ needs. It also has to present how its products solve consumers’ problems. While trying to reduce production costs we need to prove new added value that vegetables, in the current market, do not have. Its determinant is “product concept”. “Product concept” describes the product benefits, that is, it is a usefulness for consumer. In other words, we should let buyers know that the products from “plant factory” solve the problems they face in their life. It is a creation of information.

Changing consumers’ perception

We need to change consumers’ perception so that consumers understand the property of vegetables from “plant factory” as they may be concerned about the quality of products because they are produced without sun and soil. Therefore it is essential to design an effective way to distribute products, resources and information between “plant factory” and consumers. “Plant factory” can be profitable if we do the business from consumers’ daily life perspective (such as shopping vegetables at supermarkets).

We have an interesting example: In a store of fast food chain at the basement of an office building, they serve sandwiches with vegetables from “plant factory” that is installed in the store.

We are also told that an increasing number of hotels and restaurants are using the products from “plant factory” because of their stable quality, high nutritional value and cleanliness (you can eat them without washing before hand). These benefits attract overseas tourists. If they are worried about radioactive contamination, including in the hotels menu vegetables from “plan factory” will offer added value, safety. Through these efforts vegetables from “plant factory” become attractive products.

Marketing is activities that make customers “smile”

I have been researching marketing for long. Lately I came to redefine marketing.

Why did I redefine marketing? Since several years ago I met many executives from longstanding companies“「老舗shinise」” in the course of “Research on Longstanding Companies and Brands”, one of the business programs at Liberty Academy. These companies are 100 or 200 years+ old. These executives unanimously said “the objective of our business is to continuously satisfy customers. It is not the business expansion.” I was very surprised. We are accustomed to the belief that the survival of companies depends on the expansion of market share while generating profit in the severe competition. However here are companies and shops that are not based on the profit principle. It was very daring.

Their stories taught us that the small companies that are loved by people and survive very long are superior and socially far much more valuable than big corporations that lived just 30 years or so and disappeared.

I would call it “deep growth” (translator’s note: professor Ohtomo’s coined word that implies profound and long term growth,“「深長」 shincho”) not ordinary growth, “seicho”. Marketing was developed in the United States and built its theoretical structure there based on US corporations’ activities. I started to sincerely question if such marketing can be helpful to solve current problems of Japanese companies. As a result I came to use the following definition of marketing: marketing is all the activities that companies have to conduct to make customers “smile”.

The goal of marketing is to create the business that does not rely on short term pricing tactics through acquiring consumers’ understanding of the pricing validity. We have to continuously improve quality, service and administration and develop new technologies in order to maintain pricing policy.

It is very important to look at things from a consumers’ perspective. We must try hard to please customers. For “plant factory”, we investigate what our technology can do to make consumers assured of eating Japanese vegetables. There are no good or bad technologies. You lose the battle not by technology. You lose the battle in the market.

It is very possible to sustain the business in the belief that it should earnestly pursue customer satisfaction disregarding purposeless expansion. We, as consumers, have been letting such businesses survive.

Profile

Professor, Department of Commerce, School of Commerce

Jun Ohtomo became a professor at Meiji University in 2000 and the director of Liberty Academy in December 2010. He is a member of the Japan Academy of Advertising, Japan Management Diagnosis Association, Japan Society of Marketing and Distribution and other organizations, and he has a Ph.D. in commerce from Meiji University.

Marketing theory, marketing, advertising, commercial science