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Bodies and Structures 2.0: Deep-Mapping Modern East Asian History

Incentives and Rewards

Although the structures of its franchise system enabled it to be successful, the company had to adapt its structures to fit the realities on the ground. One issue was that despite the company's measures to ensure franchise loyalty, the company often encountered disloyal merchants -- who openly dabbled in other manufacturers' distribution networks -- particularly as it grew larger and expanded its reach further into a national market. The financial health of the franchises on the ground was paramount. The success of the system was built upon maintaining franchise loyalty to the parent company; if individual franchises did not make profits, they were often tempted to skirt company orders or to leave the company's network.

Hoshi Pharmaceuticals employed a number of incentives and rewards to promote the fast turnover of its products and maintain strong ties with its franchises. For example, in January 1919, the company introduced a program called the "Friends of Hoshi (Hoshi kōkai)," which established a club for high-performing stores. Anybody could be a member as long as certain sales figures were reached, and ideally wanted every franchise would want to join. The requirement was an average of above one yen of sales per day or 365 yen per calendar year. If a store reached this goal, it was awarded between 3 and 200 yen, with the amount determined by a lottery. The winners were celebrated and ranked in Hoshi Pharmaceuticals' company newspaper.

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Placing People
Controlling space involves controlling the practices of people who inhabit a particular place. In this case, the management of the store clerks was vitally important. Once a prospective merchant became a Hoshi franchise, the company did everything in its power to ensure that it would promote Hoshi's products and maintain the company's reputation. The success of its franchises depended on managing personnel in the network to ensure that they did everything possible to sell the company's products. This was particularly important for a newly established pharmaceutical company like Hoshi, which did not yet have the same brand recognition as other manufacturers. Medicines relied upon trust and reputation; because customers did not know the active ingredients in a particular medicine, or what kinds of medicines could treat which ailments, they relied on the advice of pharmacists and vendors to determine which medicines to buy.
Hoshi Pharmaceuticals claimed that its franchises were integral parts of the company's efforts to "democraticize" (minshūka) medicines. The company encouraged its franchise workers to be on-the-ground proselytizers of its promise to better human lives through better medicines. It wanted them to be active members of local communities who could easily provide medical advice in lieu of doctors. Hoshi claimed that its franchise workers were "pioneers" (kaitakusha) in spreading the benefits of its modern medicines across Japan, to far-flung rural and land-locked regions as well as across the oceans ("Baiyaku no minshūka" 1924). Echoing the very same discourse concerning the distribution of medicine in overseas colonies and beyond, a November 1, 1915 article in the company newspaper, for example, lamented how Hoshi franchises were not as numerous in places in Kansai, let alone Tōhoku where modern medical care was scarce ("Tōhoku chihō to Kansai chihō" 1915).
To create merchants loyal to the cause and train them in ways to better attract consumers, the company purported to make use of advances in psychology (shinrigaku). The goal was to make rational the seeming irrationality of the human mind and its desires. The company looked again to the United States for inspiration, where it appeared that "psychology had become practically inseparable from sales strategy (hanbai shōryaku)." The company wanted its franchises to learn from scientific expertise because it would help them become more efficient at attracting customers by better understanding and catering their tastes (shikō). For example, one article asked "what shapes and structures generally have the most impact, from all angles, in public view? What kinds of colors resonate (kyōmei) with female consciousness depending on age? The results to these types of problems are applied to merchandise as well as to other objects aimed at enticing customers" ("Shōnin to shinrigaku" 1918).
The company used a number of technologies and structures to manage its franchise workers. These included incentive and rewards programs and stock and bond offerings as well as efforts to educate franchise workers including franchise conventions and an affiliated business school. It also included the company newspaper.