Implementing Brand Management in the Japanese Companies: Related with Target Cost Management

Although a lot of Japanese companies has started to introduce brand management system, the regulation and rules for the disclosure of brands acquired as a part of business combination is not prepared in Japan. In June 1997, the Japanese regulation for the consolidated financial statements was amended so that purchased goodwill can be presented fairly in a balance sheet. This paper examines financial accounting aspect of brand, some criteria to identify intangibles from goodwill, and describe the present state of brand management processes at major Japanese enterprises. One of the key issues is combining target cost management(TCM) and brand management. TCM or target costing is a Japanese management accounting system for managing planned profit and life cycle costs for every product brand. The paper seeks to examine the importance of the relationship between strategy, organization, and TCM, and three directions of TCM as well as the intertwines between Product Manager Allowance. Activity based approach has some possibility to build new brand management system. 2 I. Introduction Recently, many Japanese enterprises have started to introduce brand management system. For example, Kao (the cosmetic industry) introduced a position of brand manager who has a responsibility of increasing the brand value of the segment. It is reported that Kao maintains a higher level of the stock price in the market compared to its rival, Shiseido, that does not employ the brand manager system (Saito, K, 1999). Furthermore, the cooperation between R&D section and marketing section can be often observed in Japanese enterprises. Sony also introduced brand management system in which brand managers are expected to increase brand value of a brand or a certain group of brands in cooperation with marketing people and R&D people. There are three classes of brands: that is, 1) corporate brand, 2) umbrella brand, and 3) product brand. Corporate brands include a company's name and reputation. Product brand means brand that is attached to a certain product. Umbrella brand means a brand name that includes a group of brands. Traditionally Japanese enterprises unconsciously made efforts to maintain and increase the value of enterprises' names, though they are not interested in measuring the brand value. It is just recently that Japanese enterprises come to be conscious to the brand management including the umbrella brand. On the other hand, Japanese companies aggressively invested in R&D since the rapid economic growth era. Electronic product and automobile obtained a certain position in …