Research Proposal on "Marketing Toto Brand High Efficiency Toilets in Catalonia"

Research Proposal 13 pages (3469 words) Sources: 4 Style: APA

[EXCERPT] . . . .

Marketing Toto Brand High Efficiency Toilets in Catalonia

Marketing Plan for Toto Brand

Product Description

The product subjected to this marketing plan is represented by high efficiency toilets produced by TOTO USA. The company is the world's largest plumbing products manufacturer. TOTO's product range includes: commercial and decorative plumbing fixtures and fittings, faucets, accessories, shower and flush valves, lavatories, toilets, Air Baths, and urinals. The company's mission consists in the "integration of performance, conservation, technology, and innovation" (TOTO USA, 2009).

The product for which TOTO is developing the marketing plan is represented by a dual flush toilet equipped with Watersense system. The product is offered in the following models:

Aquia Dual Flush, 1.6 GPF / 0.9 GPF

Aquia II Dual Flush Toilet

Aquia III Dual Flush Toilet

The Aquia Dual Flush is a decorative, high profile two piece toilet. It has an elongated skirted design. The product is equipped with the Dual-Max Flushing System and with a push button style flush option. The toilet is upgraded with an Oval SoftClose seat. The trapway is large, fully glazed, and it measures 2-1/8."

The style is transitional. The toilet has a tank cover, fittings, chrome plated push button. The Dual-Max flushing system, which is a TOTO trademark, allows the customer to choose between 1.6 gallon flush or a 0.9 gallon flush in accordance with the customer's needs. This leads to exceptional water savings.

The pricing is different in accordance with the product's color, as it follows: Cotton - $457, Sedona Beige - $526, Bone - $526, Ebony - $686, Colonial White - $457.

The Aquia II Dual Flush Toilet is very similar with the previous model described above. Its price also starts from $457.

In addition to the features of the two models described above, the Aquia III Dual Flush Toilet is in compliance with ADA accessibility guidelines. The toilet features a seat at 16-1/8" or above from the floor. Pedestal lavatories is at a height of 34" or above from the floor.

In this case, the price starts at $588.

These toilets are equipped with the WaterSense system that was designed in order to help customers identify water-efficient products. This means that TOTO products meet the water efficiency and performance criteria.

The product's competitive advantage is represented by the Dual-Max Flushing System, one of TOTO's trademarks. The flushing system innovated by TOTO is "the leading choice for dual flush performance and conservation because it doesn't sacrifice performance for conservation like many other dual-flush solutions in the market" (TOTO, USA, 2009).

The objectives of this system consist in optimizing water conservation and setting high standards in flushing performance. Even more, the system allows the customer to select the appropriate amount of water usage from 0.9 GPF to 1.6 GPF through integrated control. TOTO's Aquia toilets successfully manage to combine style and efficiency.

Goals and Strategy

TOTO is recognized in the United States and across the world as the leader on the dual flushing toilets market. TOTO has chosen Catalonia as the new region where the company will export its products.

The company's marketing strategy will be centered around the advantages provided by TOTO's products. The main advantage consists in water saving, thus efficiency. TOTO believes that the company can gain significant market share by promoting products' efficiency, innovation, and quality, rather than small prices that would create a wrong impression in customers' minds.

Given the fact that TOTO is just establishing its presence on the Catalonian market, the company must first introduce itself to customers in this region, customers that may be unaware of the company's leading performance.

Given the market circumstances, TOTO has established a few realistic goals that can be achieved in the first period of activity:

Increasing brand awareness

Opening three individual shops

Reaching a 15% market share in the first period of activity

Creating a loyal customer data base

Reaching a volume of sales of 2,000,000 after the first 6 months

Projected growth is estimated at:

20% after the first six months

25% after the first year of activity

20% after the second year of activity

Target Market

The geographical market selected by TOTO is represented by Catalonia, Spain. Catalonia is situated in the northeast of Spain, it covers 32,114 square km, is an autonomous community. Barcelona is the capital city. In addition to Barcelona, Catalonia includes other prominent cities, like: Tarragona, Lleida, and Girona.

The climate is mixed between Mediterranean, continental, mountain and even Alpine. The official languages in Catalonia are: Catalan, Spanish, and Aranese.

Economy

In comparison with other regions in Spain, Catalonia is more industrialized. The primary sector accounts for 2.8%, the secondary sector accounts for 37.2%, and the tertiary sector accounts for 60%.

In 2007, Catalonia reached a GDP of €202,509 million. The GDP per capita reached €24,445. The region reported a 3.7% GDP growth. The financial and economic crisis has not left Catalonia unaffected. It is estimated that the region will report a 2% contraction of the GDP in 2009, when Catalonia will go through a recession period.

The region's economy is very much influenced by the tourism sector, Catalonia being the most important tourist destination in Spain. The banking sector is also very developed in this region. Almost a quarter of the Spanish savings banks are Catalan. Even more, the first savings bank of Europe is Catalan.

The real estate sector in Catalonia is characterized by very expensive houses. For example, for a square meter in this region, the customer must prepare himself for an average price of €3,397. Barcelona is the most expensive real estate market in the country, with an average of €3,700 for a square meter (Wikipedia, 2009).

At a certain point, this may prove to be an important aspect for TOTO. Given the fact that the company is not yet present on the Catalan market, TOTO will have to make an important initial investment. This means the company will have to purchase the spaces for its stores, for the storage warehouses, and for offices also.

The financial crisis had important effects on the real estate sector in all countries affected by the crisis. It is expected that Catalonia will not make an exception. Therefore, as a result of the financial crisis, real estate prices in this region should significantly decrease in the following period of time. From this point-of-view, TOTO's timing for entering the Catalan market is optimal.

Demographics

In 2008, Catalonia reported a population of 7,354,411. Of this total, immigrants account for 12.3%. Immigrants that come here usually come here to work. They work mainly in constructions. Given the financial crisis and the fact that Catalonia will go through a recession period, it is likely that many jobs owned by these immigrants will be cut, forcing them to return to their home countries. This will reduce Catalonia's population and obviously it will reduce the potential number of customers for TOTO.

Targeted customer segment

For the new Catalan market, TOTO has identified two main customer segments that the company intends to address through its products:

Customers aged 30 to 40 with medium incomes

Customers aged 41 to 55 with medium incomes

The first targeted segment of customers is represented by individuals aged 30 to 40 mainly, with medium incomes, individuals that are currently building their house, or that just bought an apartment that needs new furniture. This includes toilets.

These customers are educated, they tend to have a more eco-friendly lifestyle, and this attitude is reflected in the things that surround them, including their toilets. These customers are oriented towards reducing the water consumption. This is where TOTO holds the best advantage.

However, the company's products are not cheap. This is why the company is orienting towards customers with medium incomes. If these customers are willing to put an extra effort into saving water, they will be willing the pay the price that comes with these products.

The second customer segment that the company intends to address in the Catalan market is represented by individuals aged 41 to 55. This customer segmentation refers to customers that are replacing their old toilets with new, more efficient ones. Water waste is a concern for them also.

Their incomes are medium to high, in order to match the quality and prices of the products offered by TOTO. In this market, the company will address the issue of water consumption, water waste, and water saving.

The issue of water saving is the common feature that characterizes the prospective customers that TOTO intends to address on the Catalan market. The efficiency regarding water saving represents the competitive advantage that the company will exploit in order to gain a market share that will prove to be supportive for the company's activity in the future on this market.

The possible risks that come with this market are influenced by the financial and economic crisis that will affect Catalonia in the following period of time. As mentioned above, the region will experience a recession period, when the economy will contract.

The region's flourishing economic situation until… READ MORE

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