MARKETING MANAGEMENT

Kelompok VII

DIAN ATIKA – RAFIKA - RERY INDRA KUSUMA

Content

Case Summary

Main Issue

Problem Statement

Analysis

Recommendation

Case Summary

Year

1917 Toto was established with a “vision to disseminate new hygienic living customs throughout the country” by introducing flush toilets during an era when most of Japan still lacked a sewage system. The company quickly gained a dominant position and grew aling with the industry as the government invested in developing a sewage infrastructure.

Visi TOTO

1964 TOTO began selling a bidet toilet made by American Bidet Inc.

Selling the Washlet in Japan: a bidet toilet

1968 Only 18% of homes in Japan had flushing toilets connected to a sewage sytem.

Flushing Toilet

Year

1979 Sales had reached only 500 units per month. The product had technical problem, and management felt that American Bidet was not responsive enough, so TOTO decided to develop its own bidet toilet.

A bidet toilet sales growth slowly

1980 When people connected to the system, most purchased a Western-style toilet.

TOTO’S opportunity

1989 TOTO focused on the mid to high-end segments, which accounted for 77% of the market.

TOTO entered the U.S.

1992 Leveraging water efficient technology already developed for the Japanese market, TOTO gained a foothold.

TOTO Is the only player initially able to meet the constraints of the regulations

Case Summary

Year

1980-2006 Bidet-toilets accounted for the vast majority of the growth in the overall Japanese toilet industry. Sales increased almost tenfold.

The Washlet as a major component of TOTO’s growth in Japan

2000-2007 Washlet sales had grown at a double digit rate. Washlet sales grown in U.S.

2001 TOTO had a 15% share in its target market TOTO

2003 Both sales and profits TOTO USA had been growing at about 20% a year since then. TOTO had offered Washlet seats and provided maintenance and service for Washlets.

TOTO’s USA first profitable

2005 TOTO had announced its own “Eco-product certification system”.

TOTO’s products inovation in the U.S.

Case Summary

Year

2006 TOTO had a tradition of design excellence. TOTO opened a Washlet kiosk at The Galleria Mall in Fort Lauderdale, where people could see a product demonstration.

TOTO developed a product line.

2007 TOTO launched “Clean Is Happy” marketing campaign, which incorporated multiple media including websites, billboards, and print ads. TOTO was the No. 2 player with 28% share in its target market after Kohler, which had 34%.

TOTO launched unique holistic

2008 25% of toilets were sold bundled with a sink and bathub. Consistent with its high end positioning and commitment to design , TOTO had opened Galleries in New York, Los Angeles, Fort Lauderdale, Chicago and Boston.

TOTO developed into the leading Japanese manufacture of bathroom and kitchen products

Case Summary

Main issue: Competition

• TOTO had experienced tremendous success since entering the U.S. market in 1989, but the vast majority of these sales were traditional toilets. Bidet toilets made up less than 5% of TOTO’s U.S. toilet sales. In contrast, bidet toilets were instaleed in 63% of houses in Japan, and 41% of TOTO’s toilet business in Japan from Washlet.

• In Japan, Competition had helped create consumer awareness of the bidet toilet category, but in the U.S., competition was just beginning to emerge.

Inax,

Toto’s primary Japanese competitor, had entered the U.S. market in 2010

Kohler, had kaunched an attachable bidet toilet

seat in 2007.

Brondell, based in San Francisco, was start-ups

in the space. Prices ranging much lower than

Toto’s

Flushable moist wipes , the bidet toilet concept which faced competition in

the U.S. in 1990-2000, as an alternative traditional toilet paper. NuWay Corp

introduced Moist Mate, Kimberly Clark with Cottonelle Fresh Rollwipes and

Playtex’s Wet ones Fresh n’ Flush and Georgia-Pacific’s Quilted Northern

Moist Ones.

Main issue: Competition

Problem Statement • Why was the Washlet so successful in Japan, yet struggling to

achieve any significant penetration in the U.S.?

• What should Sako be doing promote the washlet more effectively?

• Should Sako just be happy with TOTO’s overall success and not continue promoting Washlet sales aggresively in the U.S.?

• How’s the plumbers network played such a role at the Washlet in the U.S.?

• How could TOTO better reach possible target for American tourist and business travelers who visited Japan ?

• How’s to positioning TOTO’s brand ?

• Why Sako was just focus on traditional toilets for the foreseeable future?

Analysis: Washlet so successful in Japan

• TOTO took advantage of its dominant position in the toilet industry to push the product.

• TOTO had tremendous influence with the country’s network of 50,000 plumbers, who played a major role in influencing consumers purchase decision for home renovations.

Analysis: Promote the washlet effectively

• “Clean is Happy” campaign included print ads, brochures, promotional events, a website (cleanishappy.com), and billboards throughout New York, including one mounted in Times Square. The campaign, which featured “the bottom line” of men and women.

• TOTO Washlet launch began airing TV commercials.

• Unusual nature of TV commercials generated strong word of mouth communication and high levels of awareness.

• TOTO sent demonstration van, equipped with a Washlet and invite people in the community to see and experience the product.

• TOTO aldo conducted a “trial period” promotion, enabling consumers to return the Washlet if they were unhappy with the experience.

• TOTO had achieved some penetration in the residential sector, asking public venues such as hotels, department stores, restaurants, stores, and golf clubs to install Washlets.

Analysis: Challenges in the U.S.

There are four factors to exposure the bidet toilet in the U.S.:

• Lack of infrastructure.

Consumer who wanted to install an integrated bidet toilet had to pay an eletrician

• Influence on the distribution system.

If TOTO could influence the plumbers, they don’t have any influence on the purchase decision.

• Consumer culture / behavior

Bidets had almost no adoption in the U.S. so the concept of cleansing with a stream of water was unfamiliar.

• Perception of the toilet category

In the U.S., people didn’t associate toilets with high technology or electronics.

Analysis: Plumbers network played such a role at the Washlet in the U.S

• Sako was concerned that if he continued to use the same approach to marketing the Washlet in the U.S. as in Japan, it might never be successful.

• One option was significantly shift the marketing strategy from consumer demand creation to aggressive selling by somehow developing network of “change agents”. In Japan, the plumbers network played such a role at the Washlet launch.

Analysis: Possible target for American tourist and business travelers in Japan

• Begin distribution through the Do IT Yourself (DIY) channel.

• OR

TOTO Cut prices TOTO Create a low-end

product

Analysis: Positioning TOTO’s brand

• Consistent with its high-end positioning and commitment to design, network of TOTO Galleries are in New York, Los Angeles, Fort Luderdale, Chicago, and Boston.

• Katz Nojima, VP Sales for TOTO USA explained TOTO was a prestigious high-end brand image given the superior quality of our products.

• Employees focused their efforts on establishing a good reputation with architects, interior designers, and contractors.

• Positioning TOTO was “clean” product changed to a “green” product.

Analysis: Focus on traditional toilets

• TOTO had a tradition of design excellence which established a Universal Design Research

Center as pasrt of its R&D center in Chigasakai.

Recommendation

If we could compare Washlet in Japan and the U.S., there were treats the toilet differently.

• TOTO should use different approach to marketing the Washlet in the U.S. as in Japan to reach successful sales.

• TOTO should more aggressive selling Washlet in the U.S. by somehow developing the network of “change agents”.

• Change the positioning of the Washlet from a “clean” product to a “green” product so that TOTO could leverage the fast rising “green” movement in the U.S.

• Make some new innovations

• Expand sales in other countries.