Toyota's market segmentation, targeting, and positioning strategies

Toyota Marketing Strategy

What marketing exactly is?

Marketing is a very unique set of activities which show a great and valuable impact on the entire organization. A company cannot sell its all products to a single customer or at a same market. There are numerous markets and they all are diverse according to their demand and buying requirements. That's why each company needs to identify its market segmentation, market segmentation procedure, pattern of segmentation, basis of segmenting consumers and business market. Many companies use to be target oriented and they develop a target-marketing. They first identify their segments, and then set targets for each segment. After this, they manufacture their products according to their targeted market (Armstrong & Kotler, 2003).

Three Important Steps of Target Marketing

Identify and profile distinct groups of buyers who might require separate products or market mixes is known as "market segmentation" (Sun, 2009).

Select one or more market segments to enter which is known as "market targeting."

3. Establish and communicate the product's key distinctive benefits in the market which is known as "market positioning."

In this research "Toyota Motors" has been selected in order to understand the segmentation concepts and to know about the target market and market positioning followed by this company. In this paper, I will discuss how important is marketing strategy and segmentation for a successful company, like Toyota, to achieve what it wants.

Company Profile

Toyota Motor Corporation started its business in Japan in 1937 and it had introduced its first U.S. based product in 1965 and the product was Toyota Carona (Toyota Motors, 2012). Soon the company succeeded to promote its brand in different countries particularly in USA. After getting fame in U.S. In 70s, it started manufacturing its vehicles in the U.S. At the start of 80s. After 59 years of its corporation, it was a globally recognized brand till 2006, and was the second most selling vehicle brand of the world. But every one guessed it at that time that Toyota is soon going to capture the number one position. And in 2008, Toyota came up as the "Number One" car manufacturer and seller not only in the U.S.A., but in the entire world. This was just a start of Toyota's journey to success and there is much more to happen in the future (Toyota Motors, 2012).

Mission statement of company:

Toyota's mission statement is as follows:

As published on the official website of Toyota, (2007) "To sustain sustainable growth by providing the best customer experience and dealer support."

It is clear from the statement from Toyota that its main focus is "Customer's satisfaction" and this inspires Toyota to provide high quality products along with the leisure and peaceful drive. Toyota is working on a single word which is "Kaizen," the word Kaizen means "Continuous Improvement" not only in its products, but also in its technology, value added services and other services (Peter, 1996).

Elements of Marketing Strategy for Toyota:

Toyota's segmentation and target market are based upon the philosophy it believes and that is, "Right Car in the Right Place" and also for the right person. Toyota is using different segmentation classifications i.e. Demographic, Psychographic, Geographic. For instance, Toyota has segmented almost all the countries of the globe to make its market over there. While doing this, Toyota has also identified its mainly focused markets, for example U.S., Canada, EU, Australia, China, Indonesia, etc. However, USA is one of the major markets of Toyota where it has up to 30% of its total consumers. In the U.S., it has targeted its markets. Toyota has targeted from Economy class to lower class. Toyota has also developed specific car for middle class people and for those who love luxury cars like the Lexus. Similarly one of its brands the Prius is produced for the environmentally sensitive people. In fact, the marketing strategy, market segmentation, market targeting, and market positioning of Toyota cars is based on the "care" of its users and it can be clearly seen in its variety of offers and product attributes (Dobni, 2002).

Market Segmentation:

The marketing strategy, market segmentation, target market, and market positioning of Toyota cars is based on the "care" of its users and it can be clearly seen in its variety of offers and product attributes.

Currently Toyota is focusing on two segmentations:

Demographic Segmentation

Targeting Strategy used by Toyota

For the selected products, Toyota is using considerations "Differentiation Strategy." Toyota offers different products of different prices and for different market segments. In the sport utility vehicle class alone, Toyota developed the Land Cruiser, 4 Runner, Rav4 and Sequoia; each tailored to different price ranges (Drummond & Ensor, 2005).

Environmental Factors affecting Toyota's Strategy

The governing body of Toyota motors consists of 26 members who are responsible for the decision making at the company. In external context Toyota is also influenced by factors such as political scenario and security situation, technological factors, economic conditions, surrounding environment and social and legal setup (Dobni, 2002). In the internal setup, the company will be affected by employees, labor unions, resources available, to name a few.

Conclusion:

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.