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Port of Los Angeles to Close Japan Office, Hire Marketing Firm Instead : Trade: High costs and protocol pitfalls of doing business in Tokyo prompt board to change strategy.

January 06, 1994|LISA RICHARDSON | TIMES STAFF WRITER

LONG BEACH AREA — With a cup of coffee costing $7 (no refills included), and a no-frills dinner running about $100, it is little wonder that the Port of Los Angeles was spending more than half a million dollars a year to staff a one-person office in Japan.

The high costs have prompted the Board of Harbor Commissioners to close the office at the end of this month and hire a marketing firm, Japan Marine Services of Tokyo, to represent port interests there. The change will save the port about $200,000 a year.

"We were looking at ways to enhance our marketing while cutting costs, and we decided it was in our best interest to go with an agency rather than a proprietary operation," port marketing director Al Fierstine said.

"It affords us the opportunity to use their resources rather than just one man," he said. "And it also affords us (the opportunity) to use their 25- to 30-member administrative staff rather than paying for a full-time office, which is where the real savings comes in."

The port's Japan office, one of 12 such offices worldwide, has operated for at least 20 years. It has been staffed by Shuji Nomura, whose contract expires Jan. 31.

Nomura has been responsible for gathering information about marketing and maritime trends and developments likely to affect Los Angeles port operations.

"They tell us what top customers are doing from a corporate level--being that corporations do not always pass on to local (Los Angeles) offices information about when they're considering rerouting their cargo or other moves they may make," Fierstine said.

In addition to guarding the port's maritime marketing interests, Japan Marine Services will continue working to expand the sea-to-air cargo market of shipments bound for New York, Europe or South America through Los Angeles International Airport. Cargo holds at the Los Angeles airport are almost full, but port officials believe the market could be expanded to airports in Ontario and Burbank.

Also, since Congress approved of the North American Free Trade Agreement, the port has begun to encourage customers to use it for sending products to Mexico.

Companies from Japan, Hong Kong and Taiwan make up a large bloc of the port's customers. Successful dealings with Japanese businesses are linked to a mastery of Japanese etiquette and protocol.

Although port officials say they have been careful to observe Japanese customs when dealing with Japanese business people (for example, presenting a business card pulled from a shirt pocket rather than from a card case can derail negotiations), employing a Japanese company for port marketing can only help.

"In Japan itself, when you're marketing, it's better to have the locals marketing to the locals," Fierstine said.

Fierstine has heard numerous tales of how cultural ignorance by American business people has led to marketing fiascoes.

"American companies don't always do the proper marketing, and it has caused real problems," he said. He tells a story about how a U.S. beer manufacturer began selling its product in Taiwan without doing research that would have shown that Taiwanese get their medicine in bottles the same size and color as beer bottles.

"It was a major faux pas ," Fierstine said.

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