Marketing strategy for Toyota Motor Corporation

Marketing Plan for Toyota

Toyota Motor Corporation is a public Japanese automotive manufacturer located in Toyota, Aichi, Japan. The company was founded in 1937 by Kiichiro Toyoda as a division of his father's Toyota Industries company (Chart, Ends, & Shares, 2000). While still a department of Toyota Industries, the company created its first product, which was a type A engine and passenger car dubbed Toyota AA. Toyota Motor Corporation produces automobiles under five brands namely Toyota brand, Lexus, Ranz, Daihatsu, and Hino. In 2016, the company had 348,877 employees worldwide, and it is ranked as the fourteenth largest company by revenue in the world. The company has managed to produce over 10 million vehicles in a year, making it the world's first automotive manufacturer to attain this in 2012 and 2013. The company has managed to beat rivals General Motors and Ford although it is ranked as the world's third largest automotive manufacturer. According to industry data published in 2017, Toyota lost the number one position to Volkswagen Group who managed to produce more vehicles than Toyota. However, there are unofficial reports suggesting otherwise. Toyota is the largest listed company in Japan by market capitalization, and by revenue. There is a prediction that the global vehicle industry has been on the rise and will continue to increase in the coming years (see appendix 2).

Product Line

Toyota has managed to maintain its market leadership in the sales of hybrid electric vehicles in the world, and it has been encouraging mass adoption of hybrid vehicles in the world. Toyota is also the first company that commercially mass-produced and sold such a vehicle in 1997 by introducing the Toyota Prius (Schmidt, 1997). Later on, the company began offering this option to its passenger cars like Lexus, and Camry. Cumulatively, the company passed the 10 million mark in January 2017 for the sales of hybrid passenger car models. As of January 2017, the Prius family accounted for 6 million units sold making it the top selling hybrid brand within Toyota.

Toyota offers a broad range of vehicles, and it currently has around 70 different models that are sold under its brand. The brands include coupes, sedans, trucks, vans, crossovers, and hybrids. A majority of the models are produced as passenger sedans that range from the compact Corolla and subcompact Toyota Yaris, to mid-size Camry, and full-size Avalon. Toyota also does manufacture SUVs like Prado, Fortuner, Cruiser, and Sequoia. The company's most famous pick-up truck is the Hilux. The Hilux pickup is extremely durable and reliable (Ward, Liker, Cristiano, & Sobek, 1995). The luxury type cars under the Toyota brand are Century, Crown Majesta, and Crown. The company did produce a limited version for the Emperor of Japan dubbed the Century Royal. Toyota Coaster and Hino Liesse are the company's buses.

Mission and Vision

Toyota aims to achieve a stable and long-term growth the future through synchronization of local communities, global economy, the environment, and internal environment of shareholders. The company's mission is to cultivate a customer relationship by producing products and offering services of superior quality at affordable prices. Toyota strives to create an eco-friendly company that is in harmony with nature and society.

Toyota is committed to offering hybrid alternatives for each of its models sold in the global market. This would enable the company to have sales of over 1 million hybrid vehicles annually. The company has implemented various strategies aimed at improving its environmental management. The strategies include producing more energy efficient vehicles that have fewer carbon emissions. and recycling of materials. In order to reduce its carbon emission impact, the company has taken actions that ensure the environment is kept clean by observing and adhering to the recommended fuel economy values.

The Market

Currently, the company operates globally in 28 countries with 53 overseas manufacturing plants. The company's vehicles are sold in over170 countries worldwide. Toyota was ranked eleventh in the Forbes list of world's largest companies in 2015. Toyota is living its mission of becoming the world leader in the production and sale of vehicles that are best in terms of value. The company provides its clients with the best value for their money, which ensures that the company is able to penetrate many markets. Giving the best price and delivering quality has truly endeared them to the customers. This is the main reason the company has managed to penetrate the developing nation's market (Amasaka, 2009). Toyota's customers range from low income to the high-income earners, which demonstrates the company's commitment to offering value to its consumers. Having a wide range of vehicles allows the company to cater to the individual needs of its consumers and attracts customers to its different range of vehicles. Customers purchase Toyota vehicles based on the needs, wants, and financial capabilities. Product awareness is enhanced once a customer purchase one its products. Product awareness is also achieved by advertisements, website, newsletters, and other informational sources. A majority of Toyota products are purchased through retail distributors who are located all over the world. Customers can also make purchases from the company's factories.

Company Summary

Nature of Business

The nature of Toyota's business is based on the fact that customers make purchases based on their current needs and desires. Therefore, Toyota has to ensure that it has a wide range of products that would be able to meet customer needs all year round. There is no timeframe for making purchases for vehicles, not unless they are the limited editions. The reasons for purchasing a new car vary from region to region and are based on individual decisions. This makes it hard to predict the requirements for a particular period. However, Toyota has managed to ensure that it has new models of vehicles being launched each year replacing old models. The new models usually have advanced features that would meet market requirements for the coming year. Increasing fuel efficiency has been a key driving force in the development and production of new vehicles. Therefore, Toyota has invested heavily in R&D to ensure that vehicles produced are more fuel efficient and vehicles have minimal impact on the environment (Welch, 2007).

The product line-up for Toyota includes top of the range vehicles, buses, sedans, coupes, pickups, and hybrids. With such a range of vehicles, the company is able to cater for the needs of its different markets and individual requirements. Having a wide product range especially for vehicles might be considered as a negative, but the product range is in place to ensure that the company does dominate the vehicle industry. The different products have been produced with different individual and needs in mind. For example, the Hilux pickup is designed for farmers or individuals who require a hardy vehicle that can handle tough terrains, and carry heavy loads while still being durable. For an individual looking to purchase a family car, the company has numerous options that would fit the requirement and financial needs of the individual.

Products

Toyota makes use of product differentiation as its major marketing penetration strategy, and it is working well for the company. The company also uses a pricing mechanism that gives it a competitive edge over its rivals. Having mass production facilities allows the company to lower its production costs and ensures that it can offer competitive prices to the consumer. With a growing need for vehicles globally, the company has strategically placed itself in the forefront of having quality products and not compromising on the safety of its vehicles. Each Toyota product is usually targeted to a specific market (Xu, Miwa, Morikawa, & Yamamoto, 2015). The company vehicles range from top speed, capacity, and exterior appearances. For the relatively young individuals, the company has high speed, two seat, small model cars, and for the family set up it has big five seat model vehicles. There are also vehicles designed to tackle the rough and rugged off-road terrain. In the past, Toyota was blamed by the American Market that its vehicles lacked the design and flair of Ford and General Motors. This resulted in the company paying close attention to its American designers in order to produce vehicles that met the American market needs and desires.

The Prius is a hybrid vehicle that is designed to use both fuel and electric energy. The car is termed the future of the motor vehicle industry. However, the initial Prius model was not attractive to the American market, and this resulted in a complete redesign to give it a futuristic look, and the sales increased.

Toyota caters to all customers with its range of vehicles. There might be some customer preferences that the company cannot satisfy, but it has vehicles that would suit different individual needs and desires. The working class has been well represented, and they have numerous options that a customer can select. For the farmers and another individual working in tough and rough conditions, the company has a variety of pickups that individuals can pick based on their needs. Catering for individual needs is vital to ensure that customers stick with the name brand.

The company does offer all its vehicles ready to go and its only in specific situations that a customer would have to wait to receive their vehicle. For all other situations, one can walk into a dealership and pick their car. The company ensures that all its dealers have enough stocks and they replenish stock as soon as they are running low.

Market Analysis Summary

Toyota focuses on meeting the global needs of vehicle users. Having a well-established customer base is vital to the success of any business. Venturing into new markets and the previously untapped location is the company's main focus. Toyota targets low to high-income earners with its range of products. However, the middle to high-income earners has been its major consumers.

Operating in a global market is challenging, but the company has managed to cater to the needs of different customers irrespective of their geographical location (see Appendix 1 & 5). Continuing to target new markets like Europe and China will allow the company to increase its customer base and spread its products across various market worldwide. Competition from Ford and General Motors is intensifying, and the company is working hard to maintain its differentiated product range, which has been a huge strength of the company. With a highly-differentiated product range, the company is able to attract new customers easily as compared to its competitors (Schlegelmilch, 2016). This will always be the driving factor for the company. In order to get an ease in market penetration, the company is looking to establish new factories and set up new franchises and dealerships. Using this strategy, the company would be able to attract customers to visit its shops and get to test drive one of the vehicles, which is one of the ways to demonstrate the capabilities of a vehicle.

Consumer buying patterns differ based on their requirements and geographical location. With the stiff competition facing the company, there is need to increase marketing efforts and demonstrate to the customer they have premium features at affordable prices. Looking into its competitors, the company can benefit in establishing the market needs of particular locations and markets. This would be beneficial to the company in that it would develop products solely focused on that market. Having product designed to suit a particular market will ensure that customers can relate to the product and they would be more willing to make a purchase. Customer targeting is the key to an effective marketing strategy, and Toyota has managed to target individual consumers with advertisements that cater for their vehicle needs.

Technology is the driving force in the market currently, and Toyota has not been left behind. In fact, the company has made numerous strides in ensuring that its vehicles come with the latest technological advancements in the motor vehicle industry. With such advanced technologies, the company vehicles are safer and efficient. Implementing numerous sensors on the car and continuously testing for safety is vital. Toyota conducts numerous tests of the safety of all its vehicles to ensure that the passengers are always safe. These tests have rivaled those of its competitors, and this has given it an edge over them in the market.

Appendices

Appendix 1

Appendix 2

Appendix 3

Appendix 4

Appendix 5