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Understanding the social value of natural gas vehicles from a marketing perspective
Research Institute of Marketing Communication
Waseda University’s Research Institute of Marketing Communication was established in April 2004 as part of a comprehensive research organization known as Project Research Institutes. The institute’s research is grounded in marketing strategy and consumer behavior and has collaborated in marketing research projects with companies from various industries.
For the past several years, the institute has focused on natural gas vehicles, an industry that has yet to establish a significant market presence in Japan. The institute conducts its activities through a consortium of industrial, academic, and government organizations and has garnered considerable attention. Japan is a country with scarce natural resources and has sought to minimize risk through the diversification of energy resources. The shortage of petroleum caused by the Great East Japan Earthquake made the diversification of fuel resources a particular pressing issue. Therefore, the promotion of natural gas vehicles is not only important environmentally, but also in regards to economic growth.
Professor Onzo (second from left) surrounded by (from right) Research Associate Susumu Ohira (Faculty of Commerce), Research Associate Ryunosuke Nagai (Faculty of Commerce), and Full-Time Instructor Hitoshi Iwashita (Faculty of Economics, Kyushu University).
Forming a collaborating study group with gas companies
As implied by their name, natural gas vehicles are powered by the same natural gas used in household kitchens and bathtubs. Natural gas is one of clean energy resources and environmentally efficient. Although the development and implementation of electric vehicles is present in Japan, natural gas vehicles have yet to establish a significant presence.
Professor Onzo comments, “I was actually not familiar with natural gas vehicles before working on this project. I wonder why Japan is lagging behind the promotion of natural gas vehicles even though other parts of Asia and the West view it as essential to their environmental initiatives. This project began when an acquaintance from Osaka gas contacted me and explained that they would like to address this situation.”
There are currently 20 million natural gas vehicles being used throughout the world and only 40 thousand of these are in Japan (as of December 31, 2014). Sagawa Express was the first company to implement natural gas vehicles as part of their corporate principles in 1997. Although these initiatives have garnered attention from overseas, there are still few other examples of full-scale implementation in Japan.
Figure 1: Diffusion of natural gas vehicles worldwide (as of March 31, 2013)
First appearance: The Gas Vehicles Report, March 2014 Issue
In 2012, the Natural Gas Vehicle Diffusion Strategy Study Group was formed through an industry-academia partnership with five gas companies (Tokyo Gas, Osaka Gas, Toho Gas, Seibu Gas and Hokkaido Gas) and marked the start of collaborative research activities. The study group works with logistics/transportation businesses, shipping corporations from various industries, government agencies, and municipalities and conducts surveys to assess conditions in Japan as well as overseas.
“Although there is a high level of awareness among government agencies and gas companies, this has yet to be reflected in the market, infrastructure, and cost systems” explains Professor Onzo. “The question of how to create this new market requires a different approach from marketing research for consumer goods conducted in the past. Social marketing, or developing and integrating marketing concepts to influence behaviors for greater social good, becomes necessary.”
In 2014, the project team visited France, Italy and other foreign regions to tour corporations and municipalities that are at the forefront of implementing natural gas vehicles. The team exchanged information with local officials and investigated the possibilities of implementing similar initiatives in Japan.
“Overseas, government plays a leading role in promulgation [of natural gas vehicles],” notes Research Association Ohira. “France has created a policy which aims to replace all trucks driven in Paris with natural gas vehicles or other environmentally-friendly vehicles by 2020. Major supermarkets chains such as Carrefour and Monoprix now use natural gas vehicles in Paris. Furthermore, approximately 80% of garbage trucks in Paris are fueled by natural gas. Since natural gas trucks are much quieter than conventional diesel trucks, it is suitable for garbage collection early in the morning and late at night.”
Other examples of full-scale promulgation include Los Angeles (US) using natural gas to fuel all of its 2,200 large buses and Seoul (Korea) replacing almost all of its buses with natural gas vehicles.
CNH Industrial Village (Torino, Italy)
Natural gas station operated by GNVERT (Paris, France)
Three environmental conditions for ideal clean energy
One reason that natural gas vehicles are gaining ground throughout the world is because natural gas is a clean form of energy. In regards to CO2 emissions, natural gas vehicles are only slightly better than diesel vehicles. However, when conducting a comprehensive evaluation that measures PM (particulate matter) and Nox/Sox emissions, natural gas is clearly the cleanest energy source.
“In Japan, some people argue that there is no need to incur the cost of switching to natural gas vehicles,” explains Professor Onzo. “These people argue that it is fine to use diesel vehicles which are gradually becoming cleaner. Nevertheless, switching to natural gas will significantly affect air quality. An example is The Sapporo City Central Wholesale Market which has implemented natural gas for all of its forklifts and turret trucks. When I visited to conduct a survey, I was surprised by the sweet scent of fruit which filled the air that would normally be filled by the smell of exhaust from 500 to 600 turret trucks. I experienced just how clean the air had become after switching to natural gas.”
The sweet-smelling fruit market (left) and natural gas turret trucks (right) used in the market (Sapporo City Central Wholesale Market)
In order to spread awareness regarding the social benefits of natural gas vehicles, the institute published the results of survey research and held the Natural Gas Vehicle Diffusion Strategy Symposium in 2013 and 2014. The symposium featured keynote speeches and detailed panel discussions with participants from gas businesses, transportation businesses such as Sagawa Express, retail distributors such as AEON, and automobile manufacturers. Other distinguished guests included overseas managers from Shell Oil Company and government officials from the Ministry of Land, Infrastructure, Transport and Tourism (MLIT).
“A number of other guests were strategically selected for the 2014 symposium,” says Professor Onzo. “For example, a special lecture was given by the Minister for Building National Resilience (former Minister of Disaster Management), and we invited directors from the MLIT, the Ministry of Economy, Trade and Industry (METI), and the Ministry of the Environment. The participation from so many officials gave great meaning to the symposium. If the government lifts the ban on imports of shale gas in the near future, cost issues are expected to significantly resolve themselves.
Left: Marketing Solutions for Energy Issues (written by Naoto Onzo et al, Asahi Shimbun Publications, 2013)
Right: Protecting Logistics from Major Disasters—Response through Diversified Fuel Sources (edited by the Waseda University Research Institute of Marketing Communication, Waseda University Press, 2014)
Natural Gas Vehicle Diffusion Strategy Symposium
(Held on October 23, 2014 at Waseda University)
Educating young researchers
This industry-academia research collaboration is a great opportunity to educate young researchers, postdoctoral researchers, and graduate students. Young members including research associates Nagai and Ohira, and full-time instructor Iwashita (Kyushu University; graduate of the Professor Onzo’s seminar) have been involved in research activities since they were in graduate school and have learned much from the industry-academia collaboration.
“Young researchers tend to focus on a narrow theme when conducting research,” explains Nagai. “However, at this institute, I can explore a broad range of themes which are related to my own research and be involved in the business world. Being forced to broaden my perspective has been a blessing.”
“I conduct research on how the relationship between sellers and buyers impact purchasing behaviors and product value,” says Research Association Ohira. “For me, there are many benefits in being involved in the promulgation of natural gas vehicles. For example, I am involved in more practical research and have the opportunity to interact with officials from top corporations in the industry.”
Full-time Instructor Iwashita of Kyushu University comments, “I teach working professionals at a business school in our graduate school. The knowledge I gained through collaborative research with a variety of corporations at the laboratory is extremely useful in my lectures.”
In 2015, a major Japanese automaker is scheduled to release the first natural-gas-powered heavy-duty truck in Japan. This will surely be a new point of research for the laboratory. In terms of conventional research on consumer behavior, the laboratory plans to collaborate with CO-OP Sapporo and Yakuju Corporation to conduct research on the relationship between music at retail vendors and consumer behavior. The laboratory will continue to engage in marketing research with a broad perspective and serve as a bridge between social value and economic value, as well as consumer goods and public goods.
Research Institute of Marketing Communication has been involved in a wide variety of industry-academia research collaborations. For example, the laboratory conducted survey research with Mizkan Holdings regarding effective product displays. The institute also cooperated with Toyota Motor Corporation to perform survey research on differentiation and competition with rival German automobiles in regards to the release of the high-class Lexus in the European market. The institute has also conducted research collaborations with Lotte, Coca-Cola Japan, and the Asahi Shimbun Company. Result and case examples for collaborative research are summarized in the publications shown above.
Far left: Marketing Theory for Commoditization Market (written by Naoto Onzo et al., Yuhikaku Publishing, 2007)
Second from left: Mobile Marketing (written by Naoto Onzo et al., Nikkei Publishing, 2008)
Second from right: Marketing at Point of Customer Contact (written by Naoto Onzo et al., Chikura Publishing, 2009)
Far right: Marketing Through Sensitivity (overseen by Naoto Onzo, Maruzen Planet, 2010)