Ethan Allen Interiors Inc., one of the leading U.S. furniture manufacturers, is restructuring its Japanese marketing channels. Originally, Ethan Allen sold its products in department stores and they, in turn, bought the furniture from local Japanese distributors. The department stores allocated very little space for Ethan Allen furniture and charged high prices because of the extra margins going to the local distributors and the high operating overhead in department stores. With the new marketing channel, Ethan Allen will sell directly to a large Japanese specialty retailer—Otsuka Kagu Ltd.—that will devote as much as 12,000 square feet of space to Ethan Allen furniture. This is triple the space it had in a typical Japanese department store. Moreover, this space will be set up to create a clear identity for Ethan Allen furniture in a kind of “store within a store” concept. Ethan Allen has had to invest more capital and devote more effort to this new channel, but it hopes it will pay off in the long run. Discuss Ethan Allen’s new marketing channel for gaining more access to the Japanese market in light of frequent complaints by U.S. firms that Japanese markets are virtually closed and the Japanese response that U.S. firms too often take a short-term view and are not willing to invest the time and money needed to sell their products in Japan.
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