Toyota Motor Corporation is well-known Japanese Multinational Corporation. It is the world’s second largest manufacturer of automobiles, trucks, robots, buses. In addition to manufacturing automobiles, the company also provide financial services to its customers (About Toyota 2010). The company was established by Kiichiro Toyoda in the year 1937 as an offshoot from his father’s company Toyota Industries to produce automobiles. The company headquarter is in Japan and it operates all over the world.
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The company designs and constructs a varied product line-up that admits subcompacts to luxury and sports vehicles along with SUVs. The company produces its entire vehicle either with combustion or hybrid engines, as with the Prius. As well, the company also produces several automotive parts for its own use and sale (Toyota Motor Corporation Company Profile 2010). The company well known models are the Camry, Land Cruiser, Corolla, luxury Lexus line, and the Tundra truck. As of 2009, the company employs 71,116 people all over the world.
The company operates with an all inclusive concord among people, society, and the worldwide environment. As well, it also believes in the sustainable development of society, through inventing. The company’s marketing strategy assist it significantly in attaining harmony between people, society and global environment (Toyota Vision and Philosophy 2010). Here, in this paper the evaluation of company’s marketing strategy will be done so that it can be recommended with a new marketing strategy. This paper will be completed in two parts in which first one will deal with the evaluation of Toyota’s marketing strategy on the basis of different marketing theories. Other will deal with the development of new marketing strategy for company’s existing car Corolla.
Part – 1
Critical Evaluation of the Toyota’s Marketing Strategy
Toyota Motor Corporation is a leading automobile manufacturer that operates all over the world. The company’s success in different nations is all because of its marketing strategy that is devised with all essential planning and market analysis (Kotler, Keller, Brady, Goodman & Hansen, 2009). From the time of its inception that company has altered its marketing strategies number of times according to the need of market and specific location. The company is aware with the fact that all customers cannot be handled with an identical approach and needs different attention and handling (Gilligan, Sano & Wilson 2003).
The company’s corporate goal is to maintain its position in the automotive industry as a market leader and continue its growth along with the improvement in profitability and shareholders returns. All goals of company are realized with the help of its different and unique marketing strategies (Shimokawa 1994). Its marketing strategies are designed by considering all its goals, policies and guidelines so that an exclusive business model can be created in spite of weak business model.
The company’s marketing strategies are to innovate, penetrate market, differentiate and product development. All these marketing strategies assist company significantly in expanding its operations all over the world (Kotler, Keller, Brady, Goodman & Hansen, 2009). All these marketing strategies of company are aligned with its corporate goals as it makes use of technology, production and marketing, affirmed by quality control improvements, toning cost-competitiveness and employees’ development (Pride, Hughes & Kapoor 2008).
For realizing its all marketing strategies the most important element is the use of technology. The company believes in innovation and differentiation and the adoption of these marketing strategies by company are related with the present needs of customers. Nowadays, consumers are highly aware about the environmental issues and a company involved in these issues cannot attract consumers. Market is full of competitors that serve consumers with several different types of automobile on the basis of different needs of consumers (Shimokawa 1994).
Recognition of all these aspects going on in the market is essential for a firm and Toyota does it very well. The company’s marketing strategies are highly based on vital marketing theories related with the needs, desire and buying pattern of consumers. The different marketing strategies of the company facilitate it in managing its position in different international locations (Kotler & Armstrong 2010). In Asia, the company works with marketing strategies like innovate and differentiate for product development.
For targeting Asian consumers, the company adopt different means and measures in comparison to some other nation like U.S or Europe (Walker 2006). Different and well-planned marketing strategies of Toyota help it in reaching to its different consumers all over the world by adopting an appropriate marketing mix and STP (Segmentation, Targeting and Positioning) approach (Shimokawa 1994). With the help of its effective marketing strategies, the company has become able in dealing with its core competitors and developing an effective marketing plan to reach its all goals.
Its marketing strategy help company management in undertaking decisions related with product, price, place and promotion along with an evaluation of competitors’ product, price, and place and promotion decisions. Till now, company has expanded its operations in 200 countries all over the globe and it has become possible for company due to its effective marketing strategies (Hill & Jones 2008). The company’s ambitious market penetration strategy is linked up with its skilled demographic and psychographic segmentation and targeting. It has successfully got high level.
The effectiveness of company’s marketing strategy can also be understood with the help of its well-developed integrated marketing communication plan. Its integrated marketing communication plan is the result of its marketing strategy that is related with all company goals, principles and philosophies, customer needs, competitor analysis and market trends (Jeannet & Hennessey 2005).
The Toyota Motor Corporation has become able in diversifying its automobiles with a marketing strategy of branding right car in the right location. For example the company has launched a flex fuel vehicle in the Brazilian market. This vehicle will run on 100% bio-ethanol fuel. As well, Toyota has launched hybrid electric car Prius for most of the markets of the US, Japan, and EU (Pride, Hughes & Kapoor 2008). Brazilian customers want a fuel efficient car whereas in US, Japan and EU nowadays customers like hybrid cars.
The consideration of consumers needs by company demonstrate that Toyota’s all marketing strategies are the result of effective planning and customer needs analysis. In addition to market penetration, the company believes in serving its customers with continuous product development. This strategy of the company serves its management in the management of their product life cycles (Pride, Hughes & Kapoor 2008). Marketing products with continuous development helps the company n growing their product without allowing them to be matured and reach at decline stage.
The company’s marketing strategies is developed in a way that facilitates it in concentrating on its distinctive skills and resources in the direction of sales enhancement and increase in market image (Viardot 2004). The Toyota’s marketing strategy integrates different aspects like product development, promotion, pricing, distribution and relationship management along with several other elements that are essential for a firm’s marketing strategy (Zahay & Griffin 2010).
Company’s different marketing strategies that integrate all above discussed aspects guide its management in the identified of specific marketing goals. As well, it also helps in the identification of ways through which all marketing goals will be realized (Kotler & Armstrong 2010). The effectiveness of Toyota’s marketing strategy can also be evaluated by analyzing following aspects related to its marketing strategies:
Importance and Use of Information in Toyota’s marketing Strategies:
The company’s all marketing strategies are based on the significant use of diverse information related to its own resources, customer needs, market analysis and trends and competitor analysis. Before entering a market, company develops a marketing strategy that is developed along with following analysis so that significant information can be collected:
Analysis of its own organizational resources that is essential to manufacture automobiles in a specific location.
Customers need analysis in terms of automobiles, their features and prices.
Macro and micro environmental analysis along with SWOT analysis, PESTAL analysis and value chain analysis (Pride, Hughes & Kapoor 2008).
Competitors’ analysis and identification of their core competencies and competitive advantages.
Business pattern followed in a target market according to the consumers’ perceptions and trends (Lancaster & Reynolds 2005).
By analysing all above discussed aspects, the company become able in collecting significant information about a specific target group or market that in turn assist Toyota in undertaking specific marketing decisions. Without all these information, it is not possible for the company to develop effective marketing strategy that may help it in realizing all its pre-determined marketing goals and objectives (Kotler & Armstrong 2010). All its product, price, place and promotion related decisions are based on information that evidences that information is very important for Toyota Motor Corporation and in the development of its marketing strategy.
Relation of Marketing Strategy to Overall Organizational Strategy:
The overall organizational strategy of Toyota Motor Corporation is to assert its position as a market leader in the automotive industry and to extend its growth by improving profitability and shareholder returns. On the other hand, the company marketing strategies are to innovate, market penetration and differentiation (Wood, 2007). All these marketing strategies’ assist company in maintaining its continuous position and in working in the direction of continuous improvement and growth by offering customers with different and unique automobiles (Kotler & Armstrong 2010).
The above discussion evidences that there is a significant relation between Toyota’s marketing strategy and overall organizational strategy and due to this the company had become able in attaining all its business goals (Hill & Jones 2008). The company’s marketing strategies’ are significantly associated with its overall organizational strategy. The company strives for continuous organizational growth and for this it had adopted marketing strategy of penetration and innovation so that from time-to-time customers can be served with new automobiles (Wilson & Gilligan 2005).
For continuous growth and profitability enhancements the company have adopted strategy of product development that assists it in continuously doing significant research and development and improving its automobiles at global level (Wood 2007). The selection of different marketing strategies’ to realize its diverse organizational goals also evidences that how Toyota’s all marketing strategies’ are related to its overall organizational strategy. Due to this association between marketing strategies and overall organizational strategy, Toyota Motor Corporation has become able in reaching different parts of the world (Pride, Hughes & Kapoor 2008).
Incorporation of Global Context into Toyota’s Marketing Planning:
Toyota Motor Corporation is a multinational firm that operates in more than 200 countries. The company’s marketing strategies like innovation and differentiation are selected to reach over global customers. Its management is trained to think at global level rather than only thinking about domestic level operations (Hill & Jones 2008). The company try to innovate and differentiate by learning from global automakers and industry players. Its marketing strategies differentiation and innovation demonstrate that company marketing planning is done in concern to global level operations’.
From the time of its inception, all its marketing planning is done in regard to its global expansion and thinking beyond boundaries. The company believes in serving the needs of different country’s customers and due to this it develops all its employees in a way so that they can think globally and take company in the direction of continuous organizational growth and extension (Wood 2007). Toyota Motor Corporation and its employees operate with the principle of innovation and continuous differentiation so that world’s different customers need related to automobiles can be fulfilled effectively.
The company’s different marketing plans are built with the consideration of global level operations and attainments and this helps Toyota in positioning itself as a global level brand in spite of national brand (Hill & Jones 2008). The present global level position of the company is the result of its effective and well-thought marketing planning.
Integration of E-business strategies in Marketing:
Toyota Motor Corporation is a well known global automobile brand that operates with advanced technologies and e-business strategies. The company’s all marketing strategies also include diverse e-business strategies for their effective management and implementation (Pride, Hughes & Kapoor 2008). The continuous product development and innovation at its different locations is done with the help of different e-business strategies like internet and advanced information technology and communication systems. Now for managing all its marketing strategies and facilities the company also make use of different advanced systems that can be accessed by all locations of firm (Kotler & Armstrong 2010).
Internet assists company and its customers in getting associated and resolving their queries instantly. With their own websites and blogs the company is also become able in delivering all its marketing goals to its employees. As well, all information about its differentiation in comparison to competitors and innovative automobiles is also delivered through its blogs and websites (Hill & Jones 2008). With the advanced e-business means it can easily deliver information and awareness about all its efforts to its customers that in turn will attract more and more customers from global locations.
The use of internet and websites demonstrate that the company significantly integrates diverse e-business strategies with its all marketing strategies’ and due to this it has become able in implementing them effectively.
Part – 2
Development of Marketing Strategy for Toyota’s Corolla in American Market
For understanding the development and application of marketing strategy in concern to marketing plan, here in this paper a marketing strategy will be developed for Toyota’s existing car Corolla. The marketing strategy will be developed for targeting American consumers as in U.S. this model of Toyota is working from last 37 years. The Corolla model of Toyota is a product line of subcompact and compact cars. From the time of its launch in the year 1966, it has been liked a lot all over the world (Toyota Corolla Review 2010).
This car model of company is still doing well but due to its long history now it has started losing its position that can be regained if presented with new and enhanced marketing strategy. By adopting a new marketing strategy, the Toyota Motor Corporation can again reposition its old car model Corolla with new image and advanced features. Its long history will work as a competitive advantage for company and new marketing strategy will assist in presenting it in a new way. A marketing strategy if developed effectively can assist a firm in repositioning its old products and services in a new way and attracting its old customers as well as potential customers.
Toyota’s Corolla model will run successfully if presented by company with new marketing strategy. The model is very famous in America due to its diverse features like fuel efficiency, eminent design and three different trim levels that are four-doors, front-wheel-drive sedans and 26-horse engine (Toyota Corolla Review 2010). In comparison to competitors this model of Toyota did well and this evidences its potential in coming future. The new marketing strategy will work as a support for company employees to reposition this car model with their all inclusive potential and skills (Kotler & Armstrong 2010).
The company should develop new marketing strategy for Corolla by altering all aspects of its old strategy like segmentation, target marketing, differentiation, positioning, marketing objectives etc (Lancaster & Reynolds 2005). By making change in all these aspects will drive company towards new marketing dimensions. With new marketing strategy the Corolla model of company can be repositioned in the minds of American consumers. For Corolla’s new marketing strategy the company should work out on following aspects:
Market Segmentation:
The company can perform target market segmentation on the basis of demographic segmentation. The old profile of Corolla’s buyer involves grown-up and more feminine consumers. From old sales data, it is identified that total 51% Corolla buyers are females. As well, most of its consumers are above the age of 35 and only 28.8% Corolla buyers are below the age of 35 (Toyota Corolla Review 2010). In addition to age, and preferences other basis that can be used to target market is American income groups. Till now the company had introduced 3 different versions with different price variations and features. This can also be used to segment target market.
By developing an appropriate segmentation approach the company can easily segment its market in a new manner. For segmenting the market in a new way, the company should initially start with need based segmentation. With this it can identify the needs of different customers. If it is considered on the basis of gender, the company should identify what females look in compact cars and what grown-ups look in a car (Peter & Donnelly 2002). In this way it can also be done on the basis of needs of different income groups. This will assist the company in understanding the market and customers needs and presenting their old model in a new way with new features.
After identification of needs, the target market needs to be segmented on the basis of customers’ demographics, lifestyles, personalities and usage behaviours. With this each segments, distinct needs can be identified easily. Afterwards, company should identify the overall attractiveness of each identified segment along with the estimation of its profitability (Kotler 2002). Subsequently a value proposition needs to be determined along with product-price positioning. In the end, the company should devise a marketing mix strategy so that product, price, place and promotion related aspects of Corolla can be determined. By adopting this approach Toyota can segment its target market in an improved manner (Lancaster & Reynolds 2005).
Target Market Selection:
After identifying market segments and the existing opportunities, the company and its management need to classify the segments that it can target effectively. By considering these aspects, Toyota Motor Corporation can easily select target market for its existing car Corolla:
Overall attractiveness of the segment
Company objectives and resources (Kotler 2002).
In addition to the consideration of these aspects, the company can also make use of different patterns of target market selection that are as follows:
Single-Segment Specialization
Selective Specialization
Product Specialization
Market Specialization
Full Market Coverage (Kurtz, MacKenzie & Snow 2009).
With the past trends of Corolla and need-based segmentation, it can be said that the company can position Corolla in its target market with selective specialization, product specialization or market specialization (Dibb, Stern & Wensley 2002). The Corolla model of Toyota is significantly liked by females and grown-ups and due to this the company can target it a new way with selective specialization. With the selection of target market, the company can newly position its Corolla with the altering needs of its past customers (Kotler 2002). As well, now company can also select some other group of customers that prefer to drive compact cars. By following the above discussed procedure, the company can easily and effectively select its target market.
Differentiation and Positioning of Corolla:
For attracting customers towards Corolla it is essential that the company adopts an effective differentiation and positioning strategy. The company should try to introduce its old model in a new way with new and advanced features in comparison to existing competitors’ compact cars. Females always like different colours and easy features so company can differentiate its model with new colours and eminent design that will attract more and more female customers (Baker & Hart 2007). In addition to differentiation, the company also need to work out in concern to positioning of Corolla in a different and new way.
Positioning pertains to the design of a marketer’s offering and his product image to attain a unique place in the minds of its target market. Effective product positions assist marketers with a customer-focused value proposition that in turn provides a basis to its target market to buy a specific product. For positioning Corolla, the company need to determine the number of ideas that it want to communicate to its target market (Pride & Ferrell 2004). Now, company can position Corolla as a high quality and fuel efficient cars with different colours and variations. As well, it can position it with a unique selling proposition for its different versions. This kind of positioning strategy will assist the company in positioning Corolla in a new and distinctive manner.
Marketing Objectives:
In concern to positioning Corolla in present market, it is also essential that the company also make use of specific marketing objectives. With the help of pre-determined marketing objectives it will become easy for Toyota to encourage all its employees in repositioning its old model Corolla in a new way. Marketing objectives will direct company and its management in all their efforts to reposition Corolla. Subsequent are the marketing objective through which, the company can become able in developing a successful marketing strategy and implementing it:
Successfully reposition its old model Corolla with new and advanced features.
Attain effective position in the target market by developing a unique selling proposition.
Attain a significant position in the minds of existing and potential customers by conveying unique ideas about new Corolla (Kotler & Armstrong 2010).
Attract more and more customers towards Corolla by offering different versions.
Build a new image in the minds of customers about Corolla on the basis of old established competitive advantage.
Identify customer needs and present them with their specific needs and desires in the form of new Corolla.
With the help of these new marketing objectives it will become easy for Toyota to establish its old model in a new and more effective manner.
Marketing Mix for Corolla:
Marketing mix pertains to an integration of diverse tools in regard to a product or service. In a marketing mix four important aspect of a product is included that is product, price, place and promotion. For developing an effective marketing strategy for Corolla, it is essential that the company also develops an effective marketing mix (Peter & Donnelly 2002).
With the consideration of these aspects it will become easy for the company to establish Corolla in an improved manner. The marketing mix of Corolla should include subsequent aspects:
Product: The product is a significant part of entire marketing mix as all aspects of marketing revolve around it. In concern to product, the company can adopts different unique strategies that will depict what Corolla is and its long history and competitive advantage. It is working in market from last 37 years and this is the most prominent thing about its uniqueness. In product mix, the company need to make decisions about product brand name, quality, design and several other aspects through which it will be presented to its customers.
Price: This aspect of marketing mix pertains to decisions related to pricing of Corolla. The company can successfully reposition Corolla on the basis of competitive pricing. After establishing its old image, it can also be offered on high price. The management of price is quite essential as this is the factor that significantly affects buyers purchasing patterns (Kotler 2002).
Place: Place mix is also an imperative factor of the marketing mix. In the place mix, company can make use of diverse channels of the distribution to sell its car model Corolla. Determination regarding place is crucial in case of automobiles as it is not possible to sell it through every channel of distribution.
Promotion: This aspect of marketing mix includes decisions that the company will adopt to promote Corolla in its target market. For promoting Corolla in a new way, the company can make use of advertising through different media channels. In addition to advertising, the company can also make use of sales promotional tools and campaigning as these are the most advanced tools of promotion (Pride & Ferrell 2004).
By making changes and alteration on all aspects of marketing mix, Toyota can successfully reposition its Corolla in new and more effective manner.
Indication of the Costs of the Marketing Strategy:
With the discussion of company’s segmentation, targeting and positioning along with marketing mix it can be said that that redesigning of company’s marketing strategy will involve several costs. For new strategy, the company has to hire some experienced marketing professionals along with the involvement of several new aspects like advertising and channels of communications. Involvement of several aspects will definitely increase company’s cost but it will start rendering efficient returns if implemented successfully (Kotler 2002). Return on marketing strategy can be expected after some time of its implementation as it takes time to implement all aspects of marketing strategy.
The consideration of all these aspects will assist Toyota in establishing a new and effective marketing strategy for its existing model Corolla.
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