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Accidents do happen, despite the best precautions. A fire broke out while tape research was being conducted. Flammable chemicals, used in tape production would occasionally spill onto the floor. The floor would be cleaned with water, which would then flow down the drain. One day, the company janitor who was burning garbage in the yard incinerator, dipped a heated poker into a nearby drain. Nothing would have happened if the drain had contained only water. But this time, the chemicals in the drain ignited and started a small fire. Although the fire was quickly put out, a manhole cover across the street at Nippon Carburetor Co. Ltd blew off with a bang and created quite an commotion.
Shozaburo Tachikawa rushed to the fire station at once, carrying two bottles of sake. From the General Affairs Department, Yamanouchi also went apologizing to the Gotenyama community, offering a confectionery box to each house in the neighborhood. In this well-to-do community, Yamanouchi received many complaints like, "We are really disturbed by the presence of a company like yours. This used to be a fine residential area. Your factory will bring down land prices here." They picked on this and other rather touchy issues.
Besides such accidents, Totsuko had a serious problem with excess inventory. When the P-type tape recorder started selling well, ruse during the March-May period, when the school year began and at the end of the year, but orders slacked off in the summer. Accounting manager Tachikawa proposed, out of sheer business greed, that constant production be maintained over the normally slow summer months to stock up for later shipments. Production efficiency would thus surely increase. But an unforeseen problem arose with the products in stock. Boxes for the P-type tape recorder were produced by another company called the Minowa Woodworking Shop. Each box exterior was given a veneer and then pasted-on a overlay of artificial leather. Since natural paste was used, as opposed to chemical paste that is used today, mold grew on the stocked boxes. As a result, the boxes had to be entirely remade.
At the time, Totsuko had only two small companies in its sales network, in addition to the Tokyo Recording Company. One was called Marubun, run by a big landowner in Nihonbashi who was making a large profit producing steel frames for coal mining. This man had taken a keen interest in the tape recorder and started marketing Totsuko tape recorders. The other company, Yamaizumi, was run by Morita's family in Aichi Prefecture.
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As the tape recorder steadily gained popularity in schools, marketing by those two companies alone became inadequate, making it necessary to have an agent who could help with school sales. So Totsuko approached Nippon Gakki, or Japan Instruments.
Nippon Gakki had an excellent sales channel into schools through their sales of pianos and other musical instruments. However, they had a policy of only selling their own products. Kurahashi and Kasahara went together to see the president of Nippon Gakki, who happened to be home with an illness. "This will be essential to music education," appealed Kurahashi and Kasahara again and again. It was then agreed that Nippon Gakki dealers throughout Japan would handle Totsuko tape recorders.
At this time, Marubun and Yamaizumi merged as Maruizumi. Together, Nippon Gakki and Maruizumi formed the base for the nationwide marketing network Morita and his colleagues had so earnestly desired.
One day, Morita noticed that tape recorders were selling particularly well in the Kyushu area. Upon investigation, Morita found that the entire Kyushu area was very well-off due to a boom led by coal mining. This was gratifying for Totsuko, but sales in Kyushu in turn suffered as the coal mining boom suddenly cooled off and the regional economy started waning fast.
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