Marketing strategy for Toyota Motor Corporation
1.0 Executive Summary
The paper examines the marketing strategy of Toyota Motor Corporation which is the leading car manufacturer, assembly and distributor of motor vehicle and its products. The present of the company, marketing strategy and competitive environment will be discussed and this will be followed by its competitive advantage, recommendation and conclusion in the marketing strategy of the company.
2.0 Introduction
2.1 Company background
The Toyota motor corporation is a head in the car manufacture, assembly and distribution globally. The company has employed a very efficient management style and this has been one of the reasons for the firm’s good performance. However, there are numerous other prominent factors that have made the company attain the niche of market leader. The market strategy that Toyota operates in can not be definitely stated. Since Toyota Motor Corporation is a dominant market player in car exportation, it is mainly viewed as a monopoly. In reality, its differentiation strategy has enabled it profit from an almost monopolistic existence especially in the third world countries of the world. However, its market strategy can be viewed as an oligopoly. This is basically due to that there are other key players like General Motors who are providing a stiff competition. Never the less, Toyota Company is devoted to keep track on how these competitors are operating and make sure it responds to their proceedings in a way that will assure its market leadership.
3.0 Current Situation
Toyota’s ability to take control of productivity efficiency and quality levels can be attributed to its internal environment. This involves the mode production process is managed by the top management who are eminent for their proficiency. The production team has an voracious fascination to progress the competence and effectiveness of its manufacturing operations. Therefore, to completely comprehend the situation analysis of Toyota Company, a SWOT analysis is determined and it mainly consists of the Company’s strength, weaknesses, available opportunities, and finally the threats that the Company is experiencing or projected to go through. There are various aspects of the existing corporate strategy that are developed in relation to their overall impacts caused to the marketing plan of Toyota Company. These are;
3.1 Mission Statement of Toyota Motor Corporation
Toyota seeks to create a more prosperous society through automotive manufacturing (Hiroshu, 2003). Therefore, the Company is aimed at achieving a stable and long-term growth in future, and this is supposed to be in synchronization with a number of factors: the significant environment, global economy, local communities served, and the Internal Environment of stakeholders.
3.2Goals Of Toyota Motor Corporation
The company has committed itself to offering of hybrid alternatives for every model that is sold in the market. This is aimed at enabling the Company to make a total sale of 1 million hybrid vehicles within a year, and this goal has been set to have been achieved by the year 2012.
Toyota Company has improved its 2011 Environmental Action Plan and it is committed in six different key areas, which are: the Environmental Management; changes in Energy and Climate; the Quality of Air; concerned Substances; the aspects of Recycling and Improved Resource utilization; and Societal Cooperation. The Company is committed to reduce carbon dioxide emission and it is believed to take combined actions of ensuring that the environment is kept clean all the time by observing the stated fuel economy values.
3.3 Sole Ability and Sustainable Competitive Advantage
Toyota Motor Corporation is focused towards the attainment of a enhanced and more sustainable financial system by establishing a secure world wide market. With the current state of improved technology and other related matters, Toyota is endowing in various strategies that will allow it to comprehend its set goals and objectives over a period of time. Toyota Corporation has a well urbanized and equipped network of know-how that are dedicated to research and development over parameters that enable Company maintain its top product and service delivery the market around the world. Also it has a variety of distribution network around the world and this has facilitated it to get to a portion of the market that is seeing it through to greater altitudes.
3.4 Consumption of Toyota products
Persons can purchase Toyota’s products anytime that they like, at any period of the year. This is due to the fact that Toyota sells its cars all year round, except for the limited editions which are purchased directly from the factories. New users often purchase cars after acquiring a driver’s licence in the case of some countries when going to high school or to college in others. Other users usually purchase a new car when the old one breaks or gets too old or when they want to trade in for a newer car or a different model.
Customers select Toyota products over other manufacturers mainly because of their comprehensive, yet specialized, nature. Toyota provides a diverse range of cars that cater for all needs of the customers. They are directed on establishing and maintaining high values when it comes to the products. They provide cheaper options to the customers for the same products from other manufacturers that are quite expensive. Toyota has also invested profoundly on safety in their cars. As the world goes green and customers call for a proper response from their car manufacturers, the company has reacted by devoting in hybrid cars. This may be the future of the motor industry. The elevated value products make it all that easy for clients to go back to the shop and purchase another Toyota product (Flanagan, 2007).
3.5 Analysis of Toyota marketing strategy
Toyota Motor Corporation is capable of applying its strengths and opportunities it has to establish a competitive advantage in the industry. For example, it has strategically differentiated product line is helping the organization to gain more global market existence. Toyota has attained a significant position as far as sustainable development is concerned. With the fear of exhaustion of the fossil fears coupled with the global warming effects, there is a ready market for the Toyota’s hybrid car. The company can also use this opportunity t sell its technology to other firms.
Toyota Company is among the world’s best in car export and it seems to directly be living its mission, which is to be the world leader in the creation of automotives that are best in terms of value. Toyota is working towards the end of creating a society that is prosperous by providing their clientele with the best value for their money. The companies believes in giving the best prices for the client yet still deliver a vehicle that is at per with those being offered by their other major competitors. This might be the reason why their products are having a very good market in the third world. The organization is also cognizant about sustainable development, and this can be evidently seen in its diverse corporate social responsibilities as well its sustainable development initiatives targeted at reducing the pollution of the environment.
Consumers of Toyota products are diverse and range from the low income earners to the very rich. They are widely distributed globally. Toyota has accommodated for all car needs that may come up for any person with their diverse variety of motor vehicles. They vary from small sports cars to large family vehicles and trucks as well as vans. The consumers comprise a varied group of individuals, with distinct ages, incomes, geographical locations, and social and cultural statuses. Consumer’s s go for Toyota products to suit various wants and needs. Low income earners are endowed with a basic form of transportation that is both within their price category and competent. The company also caters for customers going for class and elegance.
Clients purchase Toyota products on personal ground depending on their specific needs. In some cases we have other companies purchasing cars for their firm’s usage or for their employees. In such situations, the clients who buy and purchase are not the actual users of the product. Once individuals purchase the company’s product, there is an increased exposure to its other products
3.6 Financial data and Projections
The initial years have seen Toyota’s profit grows each year with an exception of 2009 due to the economic downturn as well as the recalls. The figures below illustrate this
Figure1: Toyotas impressive performance in the last four years (Johnson, 2009)
With the advent of more efficient production technologies coupled with the entrance into the new markets, it is expected that the increase in profits will continue for the next five years. Below are the projections for the next five year period
3.7 SWOT ANALYSIS
Strength and weaknesses are referred to as internal factors of the Company as their impact starts from within the Company, while opportunities and threats normally originates from outside of the Company, hence referred to as external factors
3.7.1SWOT ANALYSIs of internal factors
Internal Factors Strengths Weaknesses
Management Well established management team and board members Large size of management team minimizes probability of moving fast into the targeted market, due to slow rate in decision making
Offering Hybrid products that are appealing and customer friendly costly in proofing the market that are right products for them
Marketing Distribution of products into the market through wide variety of identified branches costly in establishing this distribution network
Personnel Existence of good skilled workforce who are relied upon The gap will be large incase employees left the Company
Finance enhanced revenues from sales made in the global market inadequate workforce and material may slow down the growth of the Company in relation to competitors
Manufacturing Major suppliers of material ensure fast and quality material Various supply interests within the Company suppliers and other competitors.
R&D Quality of products delivered is enhanced through out the period of doing business
3.7.2SWOT Analysis of External Factors
External Factors Opportunities Threats
Consumer/social permanence of the upcoming market is highly projected Low priced products may imply that the quality of the products is quite low
Competitive Differentiated products and prices make the Company to be quite unique in the market Products of high technology are being introduced into the market by other competitive organization.
Technological Break-through in technological standings is a better course for the Company to improve on the quality of its products
Economic Improved consumer income has made it appropriate for the organization to get deep into the market persons opting for other products since they have enough disposable income
Legal/Regulatory Regulatory measures ensuring fairness in the market and avoid over-exploitation by other competitors
4.0 RECOMMENDATION
4.1Developing a Strategic Focus
Since Toyota has already employed product differentiation as a major strategy in market dissemination and the strategy is functioning effectively. It should put more emphasis on using a pricing mechanism that will give it a competitive advantage over its main competitors. Consequently, the cost of production of a unit for Toyota is anticipated to be huge because of possible mass production plants, the overall cost will not be a huge issue in this case. This implies that the company will be able to sell its products at an even lower price yet still remain profitable. It’s also recommended that Toyota takes an advantage of this and using it to break through the markets of emerging economies with affordable products.
4.2Marketing Goals and Objectives
Toyota’s massive size and competence is a immense advantage in meeting organization growth. The number of customers in need of cars is continuously rising, thus creating a bigger market for Toyota and requiring more of their products. The perceived significance of possessing a car due to increased travelling needs in today’s largely corporate world is persistently increasing as well. Toyota’s great size will enable them to successfully meet the needs of this growing population of customers in need of cars (Dobni, 2002, p.41).Therefore, Toyota needs to maintain making quality product and make it a rule not compromise on this, and not to give in to the competitors’ pressure and rise their prices then clients will remain loyal to the company (Armstrong & Kotler, 2002 pg 92). Then, everyone has a chance to know the real values behind Toyota’s past, current, and hopefully future existence (Armstrong & Kotler, 2003 p.103).
The company should always aim at keeping the progress of engineering lesser stage to be used in the assembly of its different models. This will enhance cost cutting; since it had also intended to compress its platforms from 20 to ten in the ambitious exercise. This approach is very vital since their chief rivals; GM and Ford have made prominent advancement in their production process. Toyota also needs to maintain focus on its bloated assembly points. It should target establishing the best ways to minimize them without thwarting its efficiency (Mullins, Walker & Boyd, 2010).
4.3 Capturing potential customers
Just like other great companies, Toyota’s targets market defines a much wider population than their client base actually reveals. There are numerous car manufacturers who have emerged and the motor industry is currently flooded with many products. Lots of these products are comparable, often contradictory due to one or two features that may or may not be considerable. In such situation, it comes down to personal like and dislike. The other reason is the issue of class and social status. Toyota products do not always give the insinuation of a high social reputation. A customer may choose to buy a car from a competitor and not from Toyota simply because of that, and yet the car is the same. Toyota may increase its customer base via advertisements, newsletters, website information, and other informational sources. The opportunity for Toyota to generate income from complimentary products such as books and seminars by members is very
4.4Target Market
Every product from Toyota Corporation is designed to target a definite market. The design criterions vary from top speed, capacity and exterior appearance like color and shape. There is a high speed, small, two-seat model cars for the relatively younger and single people who are adventurous to the big five-seat models for the family set up. Demographically, they also target situations on the smooth tarmac road as well as the rough and rugged off road terrain (Thomas, 2001. P 113).
Initially, Toyota has been blamed by the American Markets that their products are deficient of flair and design compared to those of GM and Ford. Therefore, the company needs to be more attentive to its American designers to make sure this needs are catered for. It should expound of more products such as the V8 pickup that was launched lately which was as a result of this ambitious. For instance, the hybrid model, Primus, has also been transformed since at its inception, it didn’t hit the American market. When they made it look more futuristic, it resulted in big volumes of sales.
4.5 Company Position in the Market
Toyota Motor Corporation needs to put more emphasis on producing vehicles and significant products that are not expensive and readily available. This will be a significant factor that will enable Toyota to have a major cut in the market, since it’s projecting to have most of the market by the end of 2013, it needs to put a cross a number of strategies to enable it reach the set target.
4.6Increasing market share
Since most of Toyota’s products are sold through retail shops, the company should aim increasing the number of retail distributors globally. Purchase can also be made directly from the factories, as is the case with limited edition models. Therefore, the company needs to increase the use of electronic commerce and online marketing. Majority of the advertising materials can be obtained in full, on-line view over the Internet. On-line publications diminish paper waste while giving existing and direct availability of the product to clients. This will enable customers to order a product in stores and with a toll-free number directly from the company as well (Booz, 2007 p.43). This grants customers around the world access to the company’s products.
4.7 Market Program
This entails of the four marketing mix fundamentals that are designed to fit the market in terms of their requirements and ability to access such products and services.
4.7.1 Product Strategy
The Company should be focused on moving with a strategy of mass production since this will facilitate it to distribute its products widely in the global market. Toyota also needs to expound on other strategies of hybrid product, where it can double the amount of production for the arising needs in the market.
4.7.2 Price Strategy
The reputation of the Company has been developed by producing high quality vehicles that can be bought at a reasonable price. Toyota needs to place more emphasis on using tactful pricing strategies through price differentiation so that they are different from other automobile producers.
4.7.3 Location Strategy
Being an international producer and supplier of Toyota automobiles and their components, Toyota Motor Corporation has positioned itself globally giving it a clear cut within the market. Within three years to come, it is working towards the achievement of about 35 percent of the market share, and this will make it to be best and top supplier of automobile products.
4.7.4 Promotion Strategy
Toyota should always be determined to tactfully use a pricing mechanism that will give it a competitive advantage over its main rivals. This approach will enable it to market itself so that it can capture a market share that will see it better in achieving the highest level in the market.
4.8 Marketing Implementation Analysis
Toyota needs to focus on expounding its distribution and reach out new markets of China and Europe. The company may also be achieving this by engaging in new markets like China and Europe. Initially, Toyota concentrated on the Japan and American markets and it needs to setup strategies to penetrate the other markets as well it’s also very important for the company to keep in mind the competition from other firms like Ford and GM. Since it has an advantage the company has is the widely differentiated product range, it should aim at establishing new factories in these new markets as well as opening up new franchises. This will help the company in getting an ease of penetrating the new markets.
Human resource is one of the most significant parameters in this plan. Toyota needs to always ensure that they have a highly motivated staff as this is directly proportional to good production both in the qualitative and quantitative dimensions. This can be facilitated by coming up with schemes of rewarding their employees like helping them own cars subsidized rates. The company should also make ensure the personnel are the best in terms of technical know-how. The company needs to carry out recurrent training towards this end.
4.9 Evaluations and Control
The company should consider establishing a monitoring and evaluation team that will watch over the development of the company in attaining its strategic goals. The short term goals need to be clearly monitored and rectification put in place where targets are missed for they are the keys to fulfilling the long term goals. Currently, Toyota has made a clear step forward in making sure that hybrid vehicles are being produced, and so far the market has advanced in terms of overall reception of these brands of vehicles. Another dimension that is supposed to be considered here is the speed of the roll-out program of pricing mechanism introduced. Presently, it has taken the market by surprise as most of the company’s products are found to be customer friendly
5.0 Conclusion
Overly, the Toyota motor corporation is giving its competitors a hard time. Even though it has experienced challenges like the recent recalls, it is still notable in market leadership position. If the existing impressive results and worldwide positioning of the company is anything to go by, then this is a position Toyota is not likely to lose any time soon. . Toyota has been capable of coming up with a differentiation program for its products and this has assisted it to have a vast market share. It is projects to advance and accomplish the target within three years and this will be determined by the rate of growth and the total number of market attained.
6.0 Reference
Armstrong, G., & Kotler, P. (2002). Marketing: an introduction (International edition). New Jersey: Prentice Hall.
Booz, A. (2007). Striving for growth: Best practices in retail banking sales and service channels. New Jersey: Prentice Hall
Dobni, B. (2002). A model for implementing service excellence in the financial services. Journal of financial services marketing , 40-42. Retrieved October 7, 2010 from http://www.palgrave-journals.org/fsm/journal/v7/n1/abs/4770071a.html
Flanagan, N. (2007). How to provide exceptional customer service. New York. Retrieved October 7, 2010 from http://ezinearticles.org/?How-to-Provide-Exceptional-Customer-Service&id=2726818
Hiroshu O. (2003). Chairman’s message. Retrieved September 30th 2010, from the Toyota company website. http://www.toyota.co.jp/en/ir/library/annual/pdf/2003/chairmans_message_e.pdf
Johnson, J. M. (2009). Five pillars of sustaining exceptinal service. Chicago: 3 Palms Publishing Group, LLC. Retrieved October 7, 2010 from http://www.communicoltd.org/pages/166_five_pillars_of_sustaining_exceptional_service.cfm
Mullins, J., Walker, J. O., & Boyd, H. W. (2010). Marketing management: a strategic decision making approach. Boston: A McGraw-Hill Irwin.
Thomas, J. G. (2001). Business planning: long range and strategic management. Dublin: Black Hall Publishers
