• Global Recall of Vehicles – To recover from such a downturn stage, Toyota Company decided to implement the survival strategy. Since millions of vehicles were recalled, Toyota’s new motto is “Moving Forward.” After this huge failure, Toyota Company desire to start over again and look toward a better future. After few years later, the company of Toyota was able to came back on track in it top position as there are the absence of design defects and problems (Kelly, “Has Toyota’s Image Recovered From The Brand’s Recall Crisis?”, 2012).
• Competitive Rivalry – This is also another environmental driver that proposed negative effect over the Toyota Company. So, the company decided to work harder on research and development of green vehicles such as eco-cars and hybrid cars at quite competitive cost in order to maintain the customers’ base for a long term. Also, to retain the power and control in the market among other players thereby lowering the distress of new entrants.
4Ps’ Marketing Mix
Toyota Company is considered as the huge leading firms in the world automotive industry. As Toyota is a multinational company with operation spread across many countries and regions around the world, thereby target market of Toyota is varied in terms of regional market conditions and buyer preferences.
Marketing Mix (4P’s) is one of the most significant tools used to analyze and reflects the company’s strategies and interacting with overall market. Thus, by implementing marketing mix can help Toyota to develop the company’s effectiveness and remain successful.
The 4P’s of marketing are standing for product, price, place and promotion.
Toyota Company provides a wide range of businesses to fulfill customer needs including automotive and non-automotive business.
Toyota’s product categories breakdown as following:
1. Automobile – Vehicles
2. Materials Handling Equipment
3. Textile Machinery
5. Financial Services
8. Biotechnology and Agriculture
Furthermore, Toyota’s vehicles are further breakdown into different types and models as following:
1. Cars and Minivan – Yaris, Corolla and Avalon
2. Trucks – Tacoma and Tundra
3. Crossovers and SUVs – CHR and Highlander
4. Hybrids and FCV – Prius, Camry Hybrid, Avalon Hybrid, Highlander Hybrid and Mirai
With crude oil prices rising rapidly in the Middle East countries leads to the decline of demand for vehicles by gasoline. Toyota Company decided to develop on alternative energy sources such as eco cars and hybrid cars in order to response with the increasing prices of gasoline. Thus, in 1997, Toyota Company came up with the first hybrid car – Toyota Prius to resolve the problem of crude oil prices.
To satisfy customer needs and wants, Toyota has always retained high quality vehicles and offered affordable prices. The differences between prices of vehicles are widely varied depending on the option, model and value of products. As Toyota Company is the worldwide organization; price of products are flexible due to the different income level, market conditions, demography and geography of each countries and regions. For example, Toyota has launched many vehicles for the low-income people with low prices due to the high rate of middle class income level in country such as Thailand. On the other hands, the purchasing capacity of the population in the UK is relatively high; therefore, vehicles for the people tend to be distinguished from the usual. In doing so, Toyota Company has used market-oriented pricing scheme and value-based pricing scheme to retain competitive among other players in the automotive industry.
1. The Market-Oriented Pricing Strategy – Toyota uses this strategy to evaluate prices of comparable products from other automotive brands and make sure that Toyota product prices are competitive as compared to other players among the automotive industry. This strategy can be applied to vehicles that considered have affordable price for group of people who has middle income level.
2. The Value-Based Pricing Strategy – For this strategy, price of products is set primarily according to the actual and perceived value rather than according to product costs. Toyota Company applying this strategy to high-end products such as Lexus.
The company of Toyota is an international company and its headquarter is in Japan. However, Toyota has a numerous number of worldwide sales channels such as distributors, retailers and maintenance services to make sure that all products and services can easily access and are available to reach maximum target customers. Toyota sales channel network is separated into 9 regions including Japan, Latin America, North America, Asia, Europe, Africa, Oceania, Middle East and China (Toyota Motor Corporation, “Dealerships in Japan, Overseas Distributors”, 2012). Especially in Japan, Toyota provides door-to-door sales representative. Toyota has always maintained highly skilled employees and efficient supply chain in order to develop and improve a strong dealership network.
Promotion strategy of the marketing mix refers to any form of marketing communications between suppliers and their target customers, including brochures, billboards, television, Internet or rebate. Toyota focuses and spends a lot on different types of marketing and promotion activities to raise the volume of sales.
Promotion strategies that Toyota Company uses are as follow:
1. Personal Selling – Toyota distributes its products and services where dealerships’ sales staffs promote and advertise products to target customers through social media, magazines, newspaper and billboards.
2. Advertising – Toyota Company spends a lot on various types of advertising channel such as TV advertising, outdoors advertising and digital advertising. As the graph below shows that in 2017, Toyota Motor Corporation had spent 1.78 billion U.S. dollars on advertising, which was the third largest advertising spend among the automotive industry (Statista, “Toyota’s advertising spending in the U.S. 2007-2017”, 2018).
Figure2: Toyota’s advertising spending in the U.S. 2007-2017. Retrieved October 28, 2018, from https://www.statista.com/statistics/261539/toyotas-advertising-spending-in-the-us/
3. Public Relations – In addition, the company of Toyota promotes its products and services through public relations activities in order to help the company create a positive brand image. The program activities are “Together Green” and “Meals Per Hour”. “Together Green” has publicly launched in 2008 with the concept of lead green, grow green and go green (Toyota Motor Corporation,”TogetherGreen”, 2018). In 2012, Superstorm Sandy ravaged the East Coast caused limited access to food for New Yorkers. Thus, Toyota Company came up with another program called “Meals Per Hour”. This program was aimed to get meals to those victims of Super storm Sandy (Toyota Motor Sales, “Meals Per Hour – Get Food to Those In Need Faster”, 2013).
4. Sales Promotion – Special offers such as debate deal as a down payment.
5.Direct Selling – Direct selling often use for corporate clients.
Thus, by using the tool of marketing mix 4P’s help Toyota Company to enhances its business and retain at the top position in the automotive industry.
Segmentation, Targeting and Positioning
Market segmentation –
An important tool that companies use to determine how firms divides their customers into groups based on factors such as demographic, geographic, psychographic and behavioural. By paying attention to geographical needs will be able to help companies to serve their customers more efficiently. As Toyota is an international company, it has segmented all the countries around the world as its market. Toyota’s vehicles are designed varied depends on segmentation of customers includes gender, age, education, income and behaviour of people each regions. For example: The models of Camry, Land cruiser and Parado are focused on middle high income. And the models of Lexus, Altis Sport and the Toyota Fortuner are focused on higher class income people.
Afterwards, Toyota decides which segments to focus by searching the most attractive ones to serve. For example,
• Toyota Prius – was launched to targets on customers who are aware on the air pollution problem. Also, target on conscious customers who are suffering from an increase of crude on prices.
• Lexus – is categorized as a high-end vehicle. This model is aimed to target on luxury buyers and higher class income level.
Lastly, Toyota has to identify how to position its product to target customer segments, based on customers’ behaviour and personality. Toyota is positioning itself as the world top automotive manufacturer with their motto of “Moving Forward”. In additional, The Company’s strongest point is that Toyota provides quality product with affordable price as comparing to other automotive brands. Thereby, Toyota has to implement different positioning and modifies different strategy in different market according to customers’ perception and preferences. Hence, these strategies retained Toyota as a world top automotive brand among other players in same industry in term of brand value and power, innovation, consistency and efficiency as the picture illustrated below.
Figure3: Brand Positioning – Toyota. Retrieved November 1, 2018, from http://mahmudulislam040.blogspot.com
Conclusions and Recommendations
Conclusively it might be shown from the analyses discussed above that the most significant efforts that Toyota Company always put on are product quality and services. However, these strategies need to taken by the management of the company in order to present successful and effective outcomes.
In addition, more motivation and concentration need to be invested in research and development, and also human resources of the company in order to develop and enhance the growth, profitability and the productivity of the firm.