Running Head: MARKETING PLAN FOR TOYOTA MOTOR COMPANY
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1.0 Company Description
The Toyota Company is a leader in the car manufacture, assembly and
distribution the world over. A very efficient management style that the
company uses has been one of the reasons for the firm's good performance.
There are many other salient factors that have made the company achieve the
niche of market leader. The market structure the company operates in can
not be definitely stated. Some may consider it to be a monopoly. This is
due to the fact that the company is a dominant market player in car
exportation. In fact, its differentiation strategy has made it enjoy an
almost monopolistic presence especially in the developing nations of the
world. On the other hand, the market structure can be seen as an oligopoly.
This is due to the fact that there are other key players like GM who are
peer competitors. Toyota is keen to see what these competitors are doing
and make sure it reacts to their actions in a way that will guarantee its
market leadership.
2.0 Strategic Focus and Plan
There are three 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;
1 2.1 Mission Statement of the Company.
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
2.2 The Company's Goals
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.
2 2.3 Core Competency and Sustainable Competitive Advantage
Toyota Company is working towards the achievement of a better and
more sustainable economy by having a stable global market. With advancement
in new technology and other related matters, the Company is investing in
various strategies that will enable it to realize its set goals and
objectives over a period of time. The Company has a well developed and
equipped network of expertise that are into research and development over
aspects that are to keep the Company on top in product and service delivery
to its global market. Also it has a wide range of distribution network
allover the world and this has enabled it to reach a portion of the market
that is seeing it through to greater levels.
3.0 Situation Analysis
Toyota's capacity to stay on top of productivity efficiency and
quality rankings can be credited to its internal environment. This entails
the way production process is managed by the top management who are famous
for their competency. The production team has an insatiable obsession to
improve the efficiency and effectiveness of its manufacturing operations.
Therefore, to fully understand 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.
3.1 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.
Figure 1: SWOT Analysis of Toyota Company (Internal Factors)
"Internal Factors "Strengths "Weaknesses "
"Management "Having competent and "Large size of management"
" "experienced management "team reduces chances of "
" "team and board members "moving fast into the "
" " "targeted market, because"
" " "of slow rate in decision"
" " "making "
"Offering "Hybrid products that are"Expensive in proofing "
" "customer friendly "the market that are "
" " "right products for them "
"Marketing "Distribution of products"Expensive in "
" "into the market through "establishing this "
" "wide range of identified"distribution network "
" "branches " "
"Personnel "Have good skilled "The gap will be big if "
" "workforce who are relied"the employees left the "
" "upon "Company "
"Finance "Improved revenues from "Limited workforce and "
" "sales made in the global"material may slow down "
" "market "the growth of the "
" " "Company in relation to "
" " "competitors "
"Manufacturing "Main supplier of "Different supply "
" "material ensure fast and"interests among the "
" "quality material "Company suppliers and "
" " "other competitors. "
"R&D "Quality of products " "
" "delivered is enhanced " "
" "through out the period " "
" "of doing business " "
Figure 2: SWOT Analysis of Toyota Company (External Factors)
"External Factors "Opportunities "Threats "
"Consumer/social "Stability of the "Low priced products may "
" "upcoming market is "proof that the quality "
" "highly projected "of the products is quite"
" " "low "
"Competitive "Differentiated products "Products of high "
" "and prices make the "technology are being "
" "Company to be quite "introduced into the "
" "distinctive in the "market by other "
" "market "competitive companies "
"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"Individuals opting for "
" "has made it convenient "other products since "
" "for the Company to get "they have enough "
" "deep into the market "disposable income "
"Legal/Regulatory "Regulatory measures " "
" "ensuring fairness in the" "
" "market and avoid " "
" "over-exploitation by " "
" "other competitors " "
Figure 3: The SWOT Analysis Matrix
"Strengths: "Opportunities: "
" " "
" investment in new factories " hybrid cars "
" diverse range of products " selling technology "
" improved marketing techniques " rising urban youth population "
" " "
"Weaknesses: "Threats: "
" " "
" Maintaining client base " Faulty products "
" Maintaining production " Upcoming manufacturers "
" " "
3.2 Industry Analysis
Toyota Company is able to apply its strengths and opportunities it
has to create a competitive edge in the industry. For instance, the widely
differentiated product line is helping the company to have more global
presence. This can also be achieved through entering new markets like China
and Europe. Toyota has previously concentrated on the Japan and American
markets and it needs to setup strategies to penetrate the other markets as
well.
Toyota has taken a good position as far as sustainable development is
concerned. With the fear of depletion 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
3.3 Company analysis
Toyota Company is one of the world's leaders in car export and it
appears to literally be living its mission, which is to be the world leader
in the creation of automotives that are best in terms of value. The company
is working towards the end of creating a society that is prosperous by
providing their clientele with the best value for their money. They believe
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
could be the reason why their products are having a very good market in the
developing nations. The Company is also conscious about sustainable
development, and this can be clearly seen in its different corporate social
responsibilities as well its sustainable development initiatives aimed at
reducing the pollution of the environment.
3.4 Customer Analysis
Toyota's customers are very diverse and they range from the low
income earners to the very rich. They are widespread around the world.
Toyota has catered for all car needs that may arise for any individual with
their wide range of motor vehicles. They range from small sports cars to
big family vehicles and trucks as well as vans. The customers comprise a
varied group of people, with differing ages, incomes, geographical
locations, and social and cultural statuses. Customers go for Toyota
products to satisfy different wants and needs. Low income earners are
provided with a basic mode of transportation that is both within their
price range and efficient. Clients going for class and elegance are also
catered for.
Customers purchase Toyota products on individual basis according to
their specific needs. In some cases we have organizations purchasing cars
for their firm's usage or for their employees. In such a case, the product
buyer and purchaser is not actually the product user. Once individuals
purchase the company's product, there is an increased exposure to its other
products. Product awareness is enhanced through 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 big.
Where do they Purchase?
Most of Toyota's products are sold through retail distributors
located all over the world. Purchase can also be made directly from the
factories, as is the case with limited edition models. The increase in the
use of electronic commerce, Toyota as well, that is, purchasing products on-
line. 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.
Customers are able to order a product in stores and with a toll-free number
directly from the company as well (Booz, 2007). This grants customers
around the world access to the company's products.
When do they Purchase?
Individuals can purchase the company's products anytime that they
like, at any time of the year. This is because 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.
Why do they Purchase?
Customers select Toyota products over other manufacturers primarily
because of their comprehensive, yet specialized, nature. Toyota offers a
diverse range of cars that encompass all needs of the clients. They are
focussed on building and maintaining high standards when it comes to the
products. They offer cheaper alternatives to the clients for the same
products from other manufacturers that are quite expensive. Toyota has also
invested heavily on safety in their cars. As the globe goes green and
clients call for an appropriate response from their car manufacturers,
Toyota have responded by investing in hybrid cars, the Prius. This may be
the future of the motor industry. The high quality products make it all
that easy for a customer to go back to the shop and purchase another Toyota
product (Flanagan, 2007).
Why Potential Customers Don't Purchase
As is the case for many large organizations, Toyota's target market
defines a much wider population than their customer base actually reflects.
There are many car manufacturers who have come up and the motor industry is
currently flooded with many products. Many of these products are similar,
often differing due to one or two features that may or may not be
significant. In this case, 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 implication of a high social standing. 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.
4.0 Product-Market Focus
In this section, the Company three year development projections is
clearly explained in various categories, which are developing of a
strategic focus; marketing goals and objectives; target market; and the
Company position in the market.
4.1 Developing a Strategic Focus
Toyota has already embraced product differentiation as a major
strategy in market penetration and the strategy is working well. It is
determined to use a pricing mechanism that will give it a competitive edge
over its main competitors. The cost of production of a unit for Toyota is
projected to be large but due to possible mass production plants, the
overall cost will not be a huge issue in this case. This means the company
will be able to sell its products at an even lower price yet still remain
profitable. The company is taking an advantage of this and using it to
penetrate the markets of emerging economies with affordable products.
4.2 Marketing Goals and Objectives
Toyota's enormous size and capacity is a great advantage in meeting
industry growth. The number of clients in need of cars is constantly
increasing, thus creating a bigger market for Toyota and requiring more of
their products. The perceived importance of owning a car due to increased
travelling needs in today's largely corporate world is constantly
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).
The company keeps 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). Then, everyone has a chance to know the real values behind
Toyota's past, current, and hopefully future existence (Armstrong & Kotler,
2003).
Toyota is in the process of engineering lesser platforms to be used in
the assembly of its different models. This is as a cost cutting measure;
they intended to compress their platforms from 20 to ten in the ambitious
exercise. This is especially important since their chief rivals; GM and
Ford have made notable improvements in their production process. Toyota is
also thinking twice about its bloated assembly points. It is thinking of
best ways to reduce them without hindering its efficiency (Mullins, Walker
& Boyd, 2010).
4.3 Target Market
Each of Toyota's products is designed to target a specific market. The
design criteria range 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).
Toyota has been previously blamed by the American Markets that their
products are lacking in flair and design unlike those of GM and Ford. This
has led the company to be more attentive to its American designers to make
sure this needs are met. The V8 pickup which was launched recently was as a
result of this ambitious. 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.
Overly, the Toyota Company 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 current impressive results
and global positioning of the company is anything to go by, then this is a
position Toyota is not likely to lose any time soon.
4.4 Company Position in the Market
Toyota Company has been producing vehicles and significant products
that are not expensive and readily available. This has been a significant
factor that has enabled the Company to have a major cut in the market , and
it is projecting to have most of the market by the end of 2013, as it has
put a cross a number of strategies to enable it reach the set target.
5.0 Market Program
This consists of the four marketing mix elements that are designed to
fit the market in terms of their needs and ability to access such products
and services.
5.1 Product Strategy
The Company is believed to be moving with a strategy of mass
production of which it has enabled it to sell widely in the global market.
It has also included the strategy of hybrid product, where it can double
the amount of production for the arising needs in the market.
5.2 Price Strategy
The reputation of the Company has been developed by producing high
quality vehicles that can be bought at a reasonable price. The Company has
also been using tactful pricing strategies through price differentiation so
that they are different from other automobile producers.
5.3 Location Strategy
Being a global producer and supplier of Toyota automobiles and their
components, Toyota Company has positioned itself all over the world 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.
5.4 Promotion Strategy
The Company is determined to use a pricing mechanism that will give
it a competitive edge over its main competitors. This is a mechanism that
it is using to market itself so that it can get hold of market share that
will see it better in achieving the highest level in the market.
6.0 Marketing Implementation Analysis
Toyotas main focus will be in reaching the new markets of China and
Europe. It will also be concerned about the competition from other firms
like Ford and GM. An advantage the company has is the widely differentiated
product range. Establishing new factories in these new markets as well as
opening up new franchises will help the company in getting an ease of
penetrating the new markets
Human resource is one of the most important aspects in this plan. The
company should always make sure they have highly motivated staff as this is
directly proportional to good production both in the qualitative and
quantitative aspects. Toyota can do this by coming up with schemes of
rewarding their employees like helping them own cars subsidized rates. The
company should also make sure the personnel are the best in terms of
technical know-how. The company needs to carry out frequent training
towards this end.
7.0 Financial data and Projections
The previous 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
Figure2: Projected Financial returns for the next five years (Johnson,
2009)
"Sales Forecast "Millions of Yen "
"year "2009 "2010 "2011 "2012 "2013 "
"Net Sales "1,243,445 "1,455,650 "1,900,340 "1,957,879 "2,000,534 "
"Operating "54,120 "65,023 "89,954 "98,0530 "99,760 "
"income "70,912 "80.636 "108,484 "125,444 "14,343 "
"Ordinary Income"46,123 "47,999 "60,231 "81,234 "57,576 "
"Net Income "30,051 "32,051 "30,051 "20,051 "30,051 "
"Research "32 "44 "50 "60 "78 "
"Divindends/yen " " " " " "
7.1 Tactical Marketing Activities
Toyota has taken a bold step in being a leader in sustainable
development. This position will need some innovations which translate to
expenditure. They are however necessary as a way of staying ahead of
competition. The activities the company will embark on are given in figure
3
Figure 3: Tactical Marketing activities
"Specific Tactical Activities "Person/Departme"Required "Completion"
" "nt "Budget "Date "
" "Responsible "millions of " "
" " "yen " "
"Product Activities "Production "30.45 "2011 "
"1.Car air conditioning compressor "engineers and " " "
"2.DC-DC converters for fuel efficiency"Product " " "
" "management " " "
"3.Low Exhaust Emission Engine " " " "
"Pricing Activities "Operations "15.25 "2012 "
"1.New Technologies "management " " "
"2.Compression of Production platforms " " " "
"3.Merger of Assembly points " " " "
"Distribution Activities "Logistics "21.40 "2010 "
"1. Opening up of new factory in "management " " "
"America and china " " " "
"2. Machine handling " " " "
"3.Logistical operations " " " "
"IMC (Promotion) Activities "Marketing "9.20 "2012 "
"1.Concerts "manager " " "
"2.Volunteer " " " "
"3Youth Invention club " " " "
8.0 Implementation Plan
There are a number of activities that have been projected within a
life span of three years and the following representation shows the aspects
that have been targeted and within what strategic period of time.
"Year "To be Achieved "New Targeted "Cumulative "
" " "Markets (millions)"Targeted Markets "
" " " "(millions) "
"Today (2010) "Working towards "250 "250 "
" "hybrid products " " "
"1st Year (2011) "Introduction of "320 "600 "
" "pricing mechanism " " "
" "and price " " "
" "differentiation " " "
" "strategies. " " "
"2nd Year (2012) "Enhancing hybrid "370 "970 "
" "products by use of" " "
" "new technologies " " "
"3rd Year (2013) "Product "420 "1320 "
" "differentiation to" " "
" "meet the needs of " " "
" "the market " " "
9.0 Evaluation and Control
There is a monitoring and evaluation team that will be set to watch
over the progress of the company in realizing the strategic goals. The
short term goals will be clearly watched and corrections put in place where
targets are missed for they are the keys to fulfilling the long term goals.
Currently, the Company has made a clear step forward in ensuring that
hybrid vehicles are being produced, and so far the market has started
improving in terms of overall reception of these brands of vehicles.
Another aspect that is supposed to be considered here is the speed of the
roll-out program of pricing mechanism introduced. Currently, it has taken
the market by surprise as most of Toyota products are found to be customer
friendly. The Company has been able to come up with a differentiation
program for its products and this has helped it to have a huge market
share. It is projects to improve and reach the target within three years
and this will be determined by the rate of growth and the total number of
market reached.
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