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 Visi TOTO 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. 1964 TOTO began selling a bidet toilet made by Selling the Washlet in American Bidet Inc. Japan: a bidet toilet 1968 Only 18% of homes in Japan had flushing toilets Flushing Toilet connected to a sewage sytem. Case Summary

Year 1979 Sales had reached only 500 units per month. A bidet toilet sales The product had technical problem, and growth slowly management felt that American Bidet was not responsive enough, so TOTO decided to develop its own bidet toilet. 1980 When people connected to the system, most TOTO’S opportunity purchased a Western-style toilet. 1989 TOTO focused on the mid to high-end TOTO entered the U.S. segments, which accounted for 77% of the market. 1992 Leveraging water efficient technology already TOTO Is the only developed for the Japanese market, TOTO player initially able to gained a foothold. meet the constraints of the regulations Case Summary

Year 1980-2006 Bidet-toilets accounted for the vast majority of The Washlet as a major the growth in the overall Japanese toilet component of TOTO’s industry. Sales increased almost tenfold. 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 TOTO’s USA first growing at about 20% a year since then. TOTO profitable had offered Washlet seats and provided maintenance and service for Washlets. 2005 TOTO had announced its own “Eco-product TOTO’s products certification system”. inovation in the U.S. Case Summary

Year 2006 TOTO had a tradition of design excellence. TOTO developed a TOTO opened a Washlet kiosk at The Galleria product line. Mall in Fort Lauderdale, where people could see a product demonstration. 2007 TOTO launched “Clean Is Happy” marketing TOTO launched unique campaign, which incorporated multiple media holistic including websites, billboards, and print ads. TOTO was the No. 2 player with 28% share in its target market after Kohler, which had 34%. 2008 25% of toilets were sold bundled with a sink TOTO developed into and bathub. Consistent with its high end the leading Japanese positioning and commitment to design , TOTO manufacture of had opened Galleries in New York, Los Angeles, bathroom and kitchen Fort Lauderdale, Chicago and Boston. products 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.

Main issue: Competition

Inax, Kohler, had kaunched an Toto’s primary Japanese attachable bidet toilet competitor, had entered seat in 2007. the U.S. market in 2010

Flushable moist wipes , the bidet toilet Brondell, based in San concept which faced competition in the U.S. in 1990-2000, as an alternative Francisco, was start-ups traditional toilet paper. NuWay Corp in the space. Prices introduced Moist Mate, Kimberly Clark with Cottonelle Fresh Rollwipes and ranging much lower than Playtex’s Wet ones Fresh n’ Flush and Toto’s Georgia-Pacific’s Quilted Northern Moist Ones. 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 Create a low-end TOTO Cut prices 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.