TOSHIBA MAKES LEAP IN IMAGE, TECHNOLOGY;TOP PC MARKETER FINDS SUCCESS IN OTHER ARENAS

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A global computer marketer vaulted to first place last year in U.S. and world sales of portable PCs. Compaq? No, Toshiba.

On another front, a consumer electronics company has developed what may be the VCR replacement of the '90s. Sony? No, Toshiba.

And at least one Japanese company has managed to buy into Hollywood without losing billions. That rules out Matsushita and MCA, as well as Sony and Columbia Pictures. Yes, it's again Toshiba, which has forged a successful alliance with Time Warner.

Toshiba Corp., a $45 billion global industrial technology giant, has quietly chalked up a series of successes, moving beyond less glamorous fields like electronic parts and generators to become a hot consumer technology brand in the making.

"They are the fastest-rising player, both in image and technology," said Richard Sherwin, editor in chief of Dealerscope Merchandising, a consumer-electronics trade magazine.

Toshiba America, the $5.4 billion U.S. arm, is starting to tell the brand story. It just began a $4 million corporate print campaign from Bozell Worldwide, New York, that promotes the multimedia strengths of Toshiba's PCs and consumer products. With a foot in computers, consumer electronics and phones, Toshiba is in a good position to capitalize on convergence.

"If you are seen as a leader, you will be able to sell more products as they come off the line," said Jay Schulberg, vice chairman-chief creative officer, Bozell.

Toshiba is at heart a technology company that focuses first on product and then on matters like brand. It also defines niches where it can make money. In computers, it sells notebook PCs but avoids the commodity desktop PC arena.

In consumer electronics, Toshiba is one of the top three marketers of widescreen TVs, but it dropped out of audio products four years ago.

Audio is "a very competitive field and not very profitable," said Kenjiro Ishihara, VP-general manager of public communications and advertising at Toshiba America.

Next month, the company will get back into audio in a limited way with a line of Looney Tunes portable products. The Walkman knockoffs with cartoon characters may not be such a looney idea to counter Sony's "My First Sony" line.

The cartoon products are one result of a broad alliance Toshiba struck with Time Warner when it made an investment in the entertainment and media giant early this decade.

Toshiba's niche approach means the brand doesn't have the same share of voice as full-line brands like Sony in consumer electronics or IBM in computers. But Toshiba has aspirations to be the No. 1 brand in what many believe will be the next hit in consumer electronics, Digital Video Disc (DVD) players.

Toshiba and Time Warner jointly created Super Density DVD, a compact disc-like format that offers superior video quality to VCRs and a new data storage alternative for PCs.

The Toshiba-Time Warner format has gained the backing of some big names, including consumer electronics giants Matsushita (Panasonic) and Thomson (RCA) and such Hollywood studios as MCA and Metro-Goldwyn-Mayer.

Sony Corp. and Philips Electronics, inventors of the compact disc, are pushing a rival DVD format. But Toshiba so far is winning the standards battle by signing hardware and software allies.

"I think DVD will put them over the top," Dealerscope's Mr. Sherwin said.

Toshiba's Mr. Ishihara isn't pronouncing victory. "The real decision will be made by consumers in the market," he said.

Toshiba will introduce its first Super Density DVD player next year, and Mr. Ishihara said the company will fight hard to be the dominant supplier.

That won't be easy: Toshiba will be competing against format partners that have far more power in consumer electronics and could end up like JVC, which invented the VHS videotape format.

To become the No. 1 DVD hardware brand, Toshiba will need to step up advertising, handled by FerrellCalvillo Communications, New York. Toshiba's current consumer electronics advertising "is middle of the road and not in the line of the Big 3"-Matsushita, Thomson and Sony-Mr. Sherwin said.

Toshiba is probably better known in computers than in consumer electronics, since it pioneered portable PCs in the '80s.

Toshiba's models don't have the cache of IBM Corp.'s ThinkPad or Apple Computer's PowerBook. But Toshiba consistently delivers good portable PC values. More important, Toshiba executes the basics, working not to miss shifts in consumer demand, and simply getting product into stores.

After losing leadership in '93, Toshiba swept past Compaq Computer Corp. and Apple last year to reclaim the No. 1 spot for mobile computers in the U.S., with 18.4% of unit sales, and world, with a 12.4% market share, according to Dataquest, San Jose, Calif.

Toshiba two years ago dropped Chiat/Day, Venice, Calif., and its brand-oriented effort, hiring Bozell-owned Poppe Tyson, Los Angeles, to do more traditional computer product ads. And beginning next week, product ads for the first time will play up Toshiba's No. 1 sales position.

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CORPORATE CLOSE-UP

Headquarters: New York

Revenues: $5.4 billion for fiscal year 1994, out of parent Toshiba Corp.'s $45 billion global sales.

1994 ad spending: estimated $20 million.

Agencies: Bozell Worldwide, New York (corporate); Poppe Tyson, Los Angeles (computers); FerrellCalvillo Communications, New York (consumer electronics).

Recent successes: Took back No. 1 spot in portable computers in 1994. Attracted growing attention at retail in widescreen TVs. Won key allies in consumer electronics (Matsushita, Thomson) and movie studios (MCA, Paramount, Metro-Goldwyn-Mayer) for the Super Density Digital Video Disc player, to be introduced in '96.

Challenges: Get the Super Density DVD format established as the successor to the VCR. Become the top brand of SD DVD player amid competition from formidable format partners Matsushita (Panasonic) and Thomson (RCA). Build overall awareness for Toshiba brand. Re-enter consumer audio products in '95 with a line using licensed Looney Tunes characters from Time Warner.

Source: Advertising Age and company reports

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