International marketing- Toyota w/c – 2194
Table of contents
1. Introduction
2. Toyota’s business environment
3. Segmentation
4. Target market
5. Micro environment
6. Macro environment
7. Pestle
8. Swot
9. Findings and recommendations
10. Conclusion
11. References
Introduction
Toyota celebrate its 75th anniversary, the company has compiled 75 Years of performance in the automobile industry. Have a look at the company’s progress over the last three-quarter century is very remarkable. The world largest automobile giant Industries Corporation was founded in 1926 by Saki chi Toyoda.The Company is the world’s largest vehicle manufacturer by volume and market shares. Its worldwide business, vehicles are sold in more than 170 countries and regions around the globe. The company has employed more than 350000 employees directly around the world. Toyota as a leader in the industry, leads the automobile industry in environmental friendly innovation and technologies with the success of the hybrid technology in the latest vehicles (TMC, 2011). Toyota’s successful business strategy has delivered the best working relationship in every department when it comes to specially its suppliers, something that can pay off handsomely in terms of quality, reliability and cost and also result in getting new environmentally friendly technologies ahead of the competition. In the early part of the company’s history the management philosophy has been reflected in the terms “Lean Manufacturing” and “Just in Time” changed towards 2001 under the Moto of “respect the people” and “continues improvement”. Company support people live in various segmentation and field such as life styles, automobile industry, insurance and estate development (Ivan, 2011).
Toyota’s business environment
Toyota’s business environment is mainly defined as PEST factors such as political, economic, social and technological forces which impact on company’s business processes of an organisation in a positive or a negative way and these forces are largely out of control of the business organisations in a global environment. Those forces involve both the internal and external environment of firm and refer to those aspects of the surroundings of business firms which have influence on the functioning of business in the global level (Jain et al. 2006).
Segmentation
Wendell Smith was introduced the segmentation concept in the 1956 in the marketing world. Marketing segmentation mean as a tool used to divide a collectively into homogeneous groups or fragments based on one or more criteria (Claudia et al 2008). In another term, marketing segmentation has described various groups or potential customers very closer or similar in some of their chrerecteristc. Further to that, the marketing segmentation has divided into gender, age, education, income and ethnicity. As a the leader in the world‘s automobile industrstry Toyota focused on different segmentation of low, middle and high class people in a society. Their target market is based between different group of consumer and different model of their product. They are mainly manufacturing models such as Aygo, Yaris and Auris for the low class earning people of the society in a particular country. Different models call Parodo and C-HR for are targeting middle class earners of a country. Toyota’s sport models such as GT86 and Altus are targeting high earners of the society. Toyota’s main segmentation methods are mainly based on different income group of the society. But the same time Toyota as a pioneer in the automobile industry has remarkable potential to move from one sector to another according to the market condition Claudio C S (2008).
Geographic segmentation means the market which has divided according to the consumer’s location. This type of segmentation is whole divided market according to different geographical boundary like continents, countries, regions, counties or neighbourhoods.
Demographic segmentation refers people who have divided according to age, life cycle stage, income and social class. This is one of key segmentation class or division for the Toyota. Toyota’s segmentation is mainly based on the income of the particular society or group. Psychographic segmentation means particular society has divided according to lifestyles, value and personality.
Behavioural segmentation means, a particular group’s behaviour play major role to decide a particular market. To target this type of market consumer behaviour is a key concept in depth over time in marketing management.
Target market
As a pioneer and leader in the automobile industry Toyota has some responsibility to serve all sector of the society. But in common target make mainly focussing on very profitable and effective sector of the market and minimises or eliminate others sectors. Two main important factors in the target market are when and whom. These are the two important factors to put into consideration when targeting is attractiveness and compatibility with company (Claudie et al 2008).
Micro environment
Philip Kotler says micro environment mean the very closer operating environment factors of a firm and consists of the factors within the immediate environment which affect the whole business operation of the firm. Internal environmental factors, which are close to the internal operation of a company, under the immediate area of operation of an organisation which has a direct impact on the performance and organisational strategies call micro environment.
Macro environment
This is completely differing from micro environment. Macro environments factors are mostly analysing the external and uncontrobable forces which impact directly on firm’s decision and strategy making process. Theses is includes external forces like political, economy, social, technology and environment Lucas J R (1998).
Pestle
In the modern day the automobile industries involving with so many obstruction and pressures while trying to operate profitably as a multinational around the world. The modern technology and innovation helps to fulfil one the company’s Moto known as continues improvement in the products, by investing heavily on the latest innovation to protect our environment as well. Global economy, politics and several other factors affect the business of the automobile industry heavily than other business around the globe. Apart from above mention factors, competition in the market substitute product also significant factors are also affecting Toyota’s automobile industry. Here is a PESTEL analysis that evaluates the effect of various forces on the business and profits of Toyota Gillespie, A (2007).
One of the important factors of pestle is political, kept growing importance in the multinational company’s decision making. This is very vital for the company like Toyota whether the environment of a country is good for business and long term investment like factories and plant. A better and stable government and its policies much important for the international brands will be able to do business activities in a particular country.
The economic factors of a country and market condition have closer relationship between them. In the globalization the better economic condition leads the better opportunity for better market condition. Company like Toyota are focusing on the region for faster economy growth rate to maximise its profitability.
Social and cultural forces impact on the sales of international brands brand such as Toyota is little smaller compare to food service business like KFC or Mcdonolds. Due to awareness of local society regarding environment issue like global warming, Toyota much focuses on its environment friendly vehicles such as hybrid and electric vehicles.
Technology and its based products such as information technology is a very significant factor has kept growing important in every area of global business. The automobile company like Toyota is entirely based on technology and supportive activities. Toyota is one of the pioneers in the technology based products such as hybrid and electric vehicles. Companies like Toyota’s higher in the brand technology pack are doing better in the sales as well.
Toyota’s one of the successful brand strategy are improvement and innovation on environment friendly vehicles. The modern customers are looking for the brand like Toyota who makes more environmentally friendly vehicles. These types of vehicles are more poplar for the brand value and getting concession from governments.
Labour law to customer safety law are varying from country to country. Toyota should ensure these types of legal factors to do business in a successful formula (TMC2015).
Swot analysis
Swot is analysing and identifies the firm’s strength, weakness, opportunity and threats. It is a very useful strategic formula is used by firms to identify their strength and weakness and can find solution for opportunity and threats. It has divided into two category internal factors (strength, weakness) and external factors (opportunity, threats).Toyota as a global player have identified their strength,weakeness ,opportunity and threats to plan right strategy to handle those forces Miller D (1992).
Toyota as a pioneer in the automobile industry has lot of positive strength factors to support their business. Strong brand value, pioneer in the hybrid technology and environment friendly vehicles are the strength factors of the company. These are positives strength forces help the company to move forward as a global brand.
Recalls vehicle in numerous times due to several issues and weaker positioning in the emerging markets compare to competitors are some of the weakness of the company for last half a decade(TMC2012).
Opportunity is one of the external factor and very difficult to controllable by a firm. But Toyota as pioneer in the automobile industry factors such as innovation on fuel economy and green vehicles, bigger market share in the emerging country like China, India and Brazil creates new opportunity for the company.
Recent years due to high oil prices, substitute products and high production cost are some the threats to the smooth operation of the company. New market opportunities and green energy innovation are key concepts of the company to face these problems (TMC2015).
Findings and Recommendation
Toyota’s main successful strategy is market penetration. These types of formula or strategy helps company’s growth by reaching and discovering various segmentation of the customer‘s around the world. With the help of this growth Strategy Company can produce different types of vehicles to ensure to target various sectors to become a global brand Claudia C S (2008).
Companies another positive growth strategy is implementation of product development strategy as a part of growth formula. These types of product developments and innovation attract new customers.Toyata’s one of the main strategy product improvement help them to innovate and produce latest environment friendly cars such as hybrids and electric. As a global leader in the automobile industry Toyota should focus on new innovation which suit for green environment and fuel efficiency. These types of product innovation and technology are the main formula of success as global leader in the automobile industry.
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Toyota’s another positive strategy known as market strategy is very successful for the company to sell its products around the world. As a leader in the world automobile industry Toyota already has a worldwide presence. As a pioneer in the automobile industry over 75 years and its latest environment friendly innovation expand its market around the global. This strategy will help them to reaching every segment in the market. This successful growth strategy should supports Toyota’s cost leadership generic strategy by maximizing the company’s global market presence.
Conclusion
Different competitors and various substitute products are the main threat in automobile industry especially global brand like Toyota.Toyata adopting different marketing strategy as a vision to become global leader in the automobile industry. Toyota’s world best known strategy such as just in time and continues improvement help them to take the brand as a global leader. Toyota’s continues product improvement such as latest fuel efficiency and green environment friendly cars expand their market around the world. When the modern customers who they are focusing on the social issue, Toyota’s obligation to support those issues. Social issues such as global warming and sea level rising issue has regenerated their improvement and innovation strategy towards products call environmentally friendly. Toyota is the pioneer in the hybrid and electric car industry to support our environment. These kinds of environment kind products such as hybrid and electric version car attract more modern customers around the world. This type of environment friendly strategy in the car industry is one of the successful findings of the company as global leader in the hybrid car industry. So this is the key success of the Toyota’s strategy which improves their business as well as kind to our world for the next generation Merchant H (2014).
As a successful automobile suppliers must focus on issues likes market‘s needs and consumer expectations, costs issues within product design and development, and forces within global competition and political/legal environment.
References
Cloud Business Review, Ivan, 2011, Toyota partners with Microsoft, press release, 7April
Claudiu, CŞ, Ionel, D & Tudor, IF 2008, ‘SEGMENTATION, Annals of the University of Oradea, Economic Science Series, vol. 17, no. 4, pp. 790-5.
Gillespie, A. (2007). PESTEL analysis of the macro-environment. Foundations of Economics, Oxford University Press, USA.
http://www.toyota-global.com/sustainability/csr/compliance/sdb16_gv03_en.pdf
http://www.autoblog.com/2016/11/07/toyota-electric-vehicle-mass-production-2020/
Lucas, J. R. (1998). Anatomy of a vision statement. Management Review, 87(2), 22.
Merchant, H. (2014). Configurations of governance structure, generic strategy, and firm size. Global Strategy Journal, 4(4), 292-309.
Miller, D. (1992). The generic strategy trap. Journal of Business Strategy, 13(1), 37-41.
Stewart, T., & Raman, A. (2007). Lessons from Toyota’s Long Drive. Harvard Business Review.
TOYOTA MOTOR CORPORATION., 1995 – 2012, History of Toyota available at : http://www.toyota-global.com/company/history_of_toyota/[Accessed dat.e 11-10-2011]
Toyota Motor Corporation (2015). Toyota’s Strategy for Environmental Technologies.
UK Essays. November 2013. Factors influencing the business environment of Toyota. [Online].
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