Takahiko Morinaga started the Japan LGBT Research Institute (part of Hakuhodo DY Holdings) last year while working as a planner. In this interview, he gives his view on the state of LGBT marketing in Japan, where brands are only just beginning to develop strategies specific to this consumer segment.

Diversity has become a key consideration in Japanese marketing communications, and corporate Japan has finally woken up to the opportunities in engaging with LGBT people more deliberately. Takahiko Morinaga established his think tank as an internal venture within Hakuhodo to help move things forward.

What led you to establish the Japan LGBT Research Institute?

I worked for an agency in the Hakuhodo DY Group. There, I took part in in-house contests over five years through June 2016, when I set up the institute. I submitted a range of business ideas targeting the LGBT community. These efforts were largely for naught. But management finally saw the light as diversity initiatives ahead of the 2020 Olympics picked up, realising the growing awareness and business potential of LGBT consumers.

When a business decides to engage with the LGBT market, it often finds that few people know what LGBT means in the first place. I think that's why my agency gave the green light to my plan to create an in-house think-tank to inform and offer consultations about LGBT issues.

How have LGBT initiatives fared in the Japanese market?

For a start, there is still little understanding about LGBT people. I used to volunteer related proposals when I was a planner. But the problem is that many Japanese businesses won't do anything just to make a social contribution, as the profit motive drives their thinking.

So, I think it's important to work together with companies by taking them through the marketing process. That includes helping them to understand LGBT people and their consumption preferences. After all, you need specifics to accelerate corporate action. One of the great strengths of the Japan LGBT Research Institute is that I am gay myself and understand exactly how LGBT consumers feel.

What's the potential of LGBT marketing?

A study showed that consumer spending among LGBT people is higher than in other segments for such categories as travel, pet care, and alcohol and other beverages. Individuals in this segment gravitate to the offerings of LGBT-friendly businesses, which can help them become more competitive.

At the same time, LGBT individuals spend comparatively less in such fields as finance, insurance and education. This does not mean low demand; it simply indicates that few products match the requirements of these people. So, a business can identify needs in undertaking LGBT marketing. Like everyone else LGBT people want new products and services. My dream is to encourage companies to respond to demand and create offerings that incorporate Japanese cultural elements and which people love the world over.

How did companies respond to your new business?

In the first three months, we received data and credential inquiries from more than 100 businesses. Companies are contacting us about everything from product development to testing for new advertisements. We initially expected that we would get a lot of requests for in-house training about LGBT issues. I was surprised that we so quickly engaged in discussions relating directly to marketing. The media response has been positive. We still provide free LGBT information to the media because we want more opportunities to spread the word.

We've had a lot of feedback from the LGBT community. Some said we should not profit from our work in this area. But LGBT people have needs, too, and they benefit from businesses accommodating them. I want to help optimize relationships between companies and the community.

Many praised us for creating our organization and want to participate in our projects. But it would be a bit hard to ask them to be volunteers as we are a business and not a nonprofit entity. So, we are trying to undertake activities that build on the support of the community. An example would be getting companies to sponsor nonprofit LGBT events.

How have things panned out so far?

We provided data to NTT DoCoMo for a corporate commercial. We thought this was a good opportunity to leverage media clout to share provocative ideas with as many people as possible.

It's also true to say that LGBT campaigns have not always worked out well overseas despite programs there being more advanced. In one case, a fast food brand launched a massive LGBT campaign during Lesbian, Gay, Bisexual and Transgender Pride Month. But store workers unfortunately did not understand LGBT issues and did not respond so well. Once a corporation decides to launch an LGBT campaign, it must continue to address LGBT issues in good faith.

Where should companies with no clue about LGBT marketing begin?

The first step is to understand the community. It's inconsiderate in any segment to start selling a product without understanding the target. Companies need to understand that LGBT encompasses several segments—for lesbian, gay, bisexual, and transgender people and individuals with other sexual identities. The Japan LGBT Research Institute therefore formulated a step-by-step process for marketing, which is to build knowledge through training, leverage the media to build connections, and generate strategies.

A side benefit of that approach for marketers internally is that studies have shown that companies that welcome LGBT people within their organisations and modify office environments accordingly can enhance overall work efficiency.

What goals have you set for the Japan LGBT Research Institute?

In making the Hakuhodo DY Group the first listed entity to profit from LGBT marketing, we would like to help innovate and empower LGBT people to shine. In so doing, we could transform society and deliver enjoyment to LGBT individuals through brand new products and services.

Over the next two years, we will work to enlighten people about the LGBT community in Japan and focus on marketing from the third year. Overseas, we plan to undertake some marketing initiatives to attract more LGBT visitors to Japan. We have recently engaged extensively with people around Asia with a view to making Japan an LGBT-friendly destination by 2020. Ultimately, we aim to help create a dynamic society that embraces diversity.