1: TOTO is the world’s largest manufacturer of toilets, producing more than 7 million units each year. The Japanese company was founded in 1917, with “TOTO” being an abbreviation of the two Japanese words forming its full name: Toyo Toki. Although the company manufactures a complete line of plumbing supplies, it is best known for its high-end, innovative toilets.
TOTO enjoys a consistent position across markets, and differentiates from competitors by being the leader in innovation. With 5% of revenues going to research and development (R&D) and an army of 1,500 engineers, the company remains at the cutting edge of toilet technology.
TOTO holds its position based on beliefs about company innovations combined with an emphasis on sustainability. The company began designing water-conserving toilets before many governments began to focus on this improvement. The Aquia model has a 1.6-gallon flush for bulk waste and a 0.9 gallon flush for light or liquid waste. It saves about 20% more water than an ultra-low flow toilet. TOTO also invented and introduced the tankless toilet, which leads to less material waste in manufacturing and a more efficient flush.
TOTO’s success has been largely based on its patented invention of the Washlet, an automated, remote-controlled cleaning nozzle. A consumer pushes a button and a nozzle extends to warm-water rinse and then warmair dry. The nozzle moves back-and-forth resulting in a clean so thorough that the company claims that no toilet paper is needed. This makes the nozzle not only innovative but also green—it eliminates paper waste. The nozzle then retracts and self-cleans before the next usage. The products were first introduced in 1980 and have sold 18 million units worldwide.
Washlets are highly popular in Japan and hold 60% of the market share for toilets.
TOTO also features “smart toilets” that offer various luxury features such as a heated-seat, hands-free automatic flushing, tank-less toilets, built-in airpurifying systems, remote control adjustable heated seat temperatures, an energy-saver timer that turns off the toilet during low usage time periods, and even medical sensors to measure blood sugar, pulse, and blood pressure. In Japan, a popular feature in women’s restrooms is a set of small speakers that play music to mask any sounds made while the consumer uses the toilet. Two other recent innovations are the automatic closing and opening lid, which the company markets as a “marriage saver,” and a rimless design for the bowl, which keeps the bowl cleaner longer.
As TOTO has become increasingly dominant in the Japanese market, with over 70% of households using the company’s products, global expansion has become necessary to continue growth. The company currently operates in the following countries:
China Taiwan Thailand United States Indonesia Vietnam India

Questions

1. Discuss the challenges TOTO might encounter when seeking to maintain a consistent position globally.
2. How might regulatory activities affect TOTO as it enters markets?
3. Create a positioning map for TOTO using the attributes green and price.
4. TOTO targets high-end consumers in their markets. What are some other potential segmenting factors for the company’s target market?
5. It is possible that competitors may follow TOTO’s lead by focusing on innovation and green products. What will need to happen before TOTO should consider repositioning? What is a potential attribute that the company could emphasize if repositioning? Would share of mind and share of heart become part of this analysis in some way? Why or why not?

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