The Locations and Market Areas of Establishments of Local Sales Companies Organized by National Manufacturers in Miyagi Prefecture, Japan

Abstract

In Japan, there are many big manufacturers which establish their own local sales companies by prefectures or provinces. The manufacturers have constructed mass production systems after the Second World War. At the same time, they have organized their exclusive marketing networks on the national scale as systems of mass sales corresponding with those of mass production. Local sales companies of manufacturers have been established for construction of such networks as well as manufacturers' branch offices.
Local sales companies of manufacturers (abbreviated as LSCMs) are obligated to increase their shares within their territories which are set by their parent companies. Many of LSCMs locate several establishments as selling bases in order to attain the above obligation.
The purpose of this paper is to ascertain both the locations and market areas of the above establishments in Miyagi prefecture. A survey was conducted to 52 LSCMs during from March to August in 1983. Through mail, those companies were requested to indicate the following items; the location and market area of each establishment, the year of locating each establishment, and the main factors relating to disposition of establishment. The data were presented by 33 LSCMs.
The findings are summarized as follows:
1) Most of LSCMs in Miyagi prefecture are established as sales companies only for the prefecture. This fact indicate that many big manufacturers tend to establish one LSCM for one prefecture. In addition, head offices of LSCMs are located in the Sendai city, the capital of both Miyagi prefecture and Tohoku province.
2) When LSCMs dicide to locate a branch establishment, they set a market area for the branch and, in turn, choose the site of location. On the other hand, both the volume of demand and spatially selling efficiency are crucial factors in setting of the area. Furthermore, real divisions of LSCMs' territories into market areas of establishments coincide with the traditional and nodal regionalization within the prefecture. According to those facts, it can be said that the above regionalization is proper areal divisions in terms of marketing activities; this is the reason for LSCMs to set market areas of establishments on such regionalization.