Home Appliances pay per use

Toshiba Home Appliances - Pay Per Use

PSS strategy:

Use-oriented service

Details of Product Service: The only details found on this product service, are those on the link at the bottom of the page. There is no mention of it in the Toshiba annual report under Home Appliances. The product service system looks interesting as it has a rental package for a group of home appliances, but the lack of data makes it difficult to analyse the financial, social and environmental impacts.

Toshiba Techno Network Co., offers 'home appliance rental packages' to those who live alone, such as students and workers away from home.
The package is four appliances: a 4.2 kg automatic washing machine, a 120-liter two-door fridge-freezer, a 15-inch flat television, and a cooking oven-range.
The monthly rental fee of the whole package for a three-year contract is 3,800 yen (about U.S.$31). Users have a choice of a two, three, or four-year rental period
Toshiba covers within the rental any repairs, delivery, installation and removal
Toshiba pays the recycling fees at end-of-life. These fees result from legislation called the Home Appliances Recycling Law (HARL). This requires manufacturers to take back for recycling TVs, Refrigerators, Air-Conditioners, and Washing Machines. The recycling fees are normally paid for by user (see 'Japan' in the seeba technical directory at www.cfsd.org.co.uk )

Stakeholders and Relationships: No details are given on other stakeholders, but it is likely that the following does exist

Toshiba Techno Network designs and produces the products.
A third party is used to deliver and install the appliances in the users home. The same company probably handles the removal at the end of the contract. All charges for this are paid by Toshiba Techno Network.
The indications are that the user pays Toshiba Techno Network directly the rental fees, but it could be done through a finance company.
Maintenance/repair is probably done by a specialist companies in the users area. Again invoices are paid by Toshiba Techno Network.
Since Toshiba gets all the appliances back at end of life, and lays the recycling fee, they have probably established close relationships with recyclers to minimise the cost of treatment.

Financial:

The user only pays $1120 dollars for the 4 appliances over a 3 year contract. Although prices of electrical goods are lower in Japan, this is still pretty cheap for what is offered, and the limited market it is addressing.

Environmental: Since no indication is given on what happens to the appliances after a contract is completed it is difficult to tell whether this product service is good or bad environmentally. The contract of 2 to 4 years is considerably less than the average life of such appliances in Europe. Even in Japan the life span is still higher than 2-4 years for those type of products. If those products are updated/reworked and reused for rental there could be large environmental benefits. However if they are disposed of, then the shorter life cycle is likely to be detrimental environmentally. Other influences are:

Since Toshiba are paying for the recycling they have an incentive to design for recyclability at end of life.
Unlike purchased products almost 100% of the appliances will be returned for end-of-life treatment. In addition a few specialist recyclers can be used for the treatment, as it is not mixed with products from other companies.

Social:

Meets a need for students and single people assigned for limited periods away from their normal home.

Potential Market:

Very much aimed at a niche market.
Consumers usually not only purchase appliances because they like their own, but on features and style of the appliance. Having a package of appliances reduces that freedom and likely to further restrict the market.

Literature:

Toshiba Appliance Rental Service Targets People Living Alone