Strategy Evaluation 1

Strategy Evaluation, Toyota Motor Corporation Gayathri Kumar Davenport University MKTG 610 Mr. Tom Collins July 14, 2012

Strategy Evaluation 2

Company Overview The Conglomerate Company Toyota meaning fertile based in Japan was found by Kiichiro (Present CEO) in 1936, is one of the leading automobile manufacturers of Passenger vehicles, commercial cars, auto parts, SUVs, mini-vans, buses, pick-up trucks and wagons. Their Lexus and Scion brand is known for luxury, quality and innovativeness. They have won various awards consistently forefront for their environmental, safety technologies, new transportation and robotics. The vehicles are sold and serviced approximately in 170 countries including Japan, North America, Europe and Asia through Toyota dealers. Kiichiro Toyoda dedicated his life to research about automobile and he invented small gasoline powered engine in 1930. Then he opened an automobile department at his fathers factory where he invented the Toyotas first prototype passenger car. This companys development through 1937 from when Toyota Motor Corporation was first established to till selling more than 2 millions hybrid Prius car and becoming one of the leaders in automobile industry is humongous and breathe taking. Market overview Toyotas major competitors are Honda, Volkswagen, Nissan & GM. Toyota have always had good market share in automobile industry, always being one among the top three in past decades. In 2008, before the great recession and Toyotas quality crisis, they sold 9.2 million vehicles which made them the worlds biggest car maker in sales volume. Even after 2010 recall, the net sales have been estimated to 8.42 million which still makes them top the no 1 position in top global sales After two tumultuous years between late 2009 to 2011, during when Toyota had recall issues followed by Congressional hearings, millions of dollars in fine, Global economy downturn, not to mention earthquake, Tsunami and appreciation of Yen in Japan, Toyota has

Strategy Evaluation 3

found a silver lining and turned disaster into prospect. The net sales have been estimated to 8.42 million making them the no 1 position in top global sales position. Toyotas aim is to increase their domestic market share from 44.4% to 55.6% in Japan, double its profit and sell 5 more hybrid cars by 2015 through 50% future sales from emerging markets in Europe, 15% from China and the rest from North American Market. Marketing Strategy Toyota is a great product and its marketing strategies like Branding, Market segmentation, Targeting, Opportunity Analysis is what keeps them at the top. Brand Management Branding is the process of creating a unique name and image for a product in the customers mind mainly through advertising and other promotional campaigns with a consistent theme. A significant and distinct positioned can be attained in the market through branding thereby gaining a huge market share of loyal customers. Also branding cannot be built in a day, it takes consistency in promoting and keeping up the promises made by the company to the consumers. Toyota has built their brand around 5 main factors like Durability, Reliability, Affordability, Style and Fuel efficiency. They always focus on being eco-friendly and community, employees and stakeholders friendly and exceed expectations in each region. Toyotas advanced technology, kaizen power, constant innovation, quality consciousness, customer oriented vision .company we should be, made Toyotas brand so strong that it was able to bounce back even after huge recalls, stiff competition in automobile industry and credit rating cut by Moody due to Mar 2011 earthquake and Tsunami. Through these efforts Toyota is not only able to win

Strategy Evaluation 4

the smiles of millions of customers, harmony with nature but also increase sales with profitability.

Market Opportunity Analysis

Market opportunity Analysis is an important key that helps company to be ahead of time in creating a product or service exactly what a consumer wants and gain a competitive edge. It also helps companies to identify themselves they stand in the market in order to evaluate the opportunities of success of their products in the market. Toyota analyzed the importance of market opportunities with respect to customers, company, technology and competition. Toyotas new marketing strategy was to create a new Vision by emphasizing on bringing a smile to every customer who chooses their product. Toyota was proactive in identifying the increased demand, rising price and decreasing supply of fuel would definitely drive customers to look for fuel efficient cars. Toyotas traits of R&D, technology update and sufficient resources helped it to create Prius, the worlds first hybrid car. Their market opportunity assessment helped them to sell more than 2 million cars all around the world and are in the process of inventing 5 more hybrid cars and creating robots with human touch by 2015 which will help them to be ahead of competition. Toyota want to gain their market by making the customers aware about their primary focus on future mobility is providing safety, quality and constant innovation.

Market Target Market target means identifying a specific group of people to be a part of companys consumers and compete in the market to sell products to them after analyzing competitors strengths and competitiveness and reviewing various segments. Target market is developed based on

Strategy Evaluation 5

geography where the market is located, age and sex of the consumers or combination of all the factors. This breakdown will definitely help the companies to do business successfully. Toyota, who is one of the giant in automobile industry identified their market targets and involved itself in the production of various kinds of vehicles like mini passenger cars for one person or couple, small cars for family of four, mini-van for a family more than four, mini bus and large bus for carrying more people, SUVs and fast sports cars for adventurous people, green cars which are hybrid and energy efficient for environment friendly people, Expensive cars like Lexus and Scion cars for people who love luxury and style. Their vehicles are sold approximately in 170 countries including Japan, North America, Europe and Asia through Toyota dealers. Also Toyota always knew customers are sensitive to quality, service, price and mileage. Toyota produced Camry and corolla targeting these customers which have time value for money and corolla has been in the market for more than two decades and still have a strong customer base all over the world. Toyotas are available at all price ranges and can be customized according to customers need, style and affordability. Toyota didnt stop there. They are in the process of developing future mobility which is a vehicle that is very compact, foldable, less energy consuming for driving and can be carried by hand when not in use. They are also pioneers in inventing and developing robots which are able to attend and communicate with humans with human sense and touch. Toyota is not only able to predict the current customer taste and preference but also able to recognize the future generations need and already on the road to capture the future market.

Market Segmentation

Market segmentation is the process dividing a whole homogenous market into individual smaller segments which have same needs / wants / characteristics. This helps companies especially giant

Strategy Evaluation 6

companies who supply for an entire market to identify the needs of every market segment based on their behavioral, demographic, psychographic and geographical differences and it is affected by size, need, policies & resources of company. Toyota company was started in Japan plans to concentrate region wise marketing strategy like Toyota launching a new plant in Japan which shall focus on advanced technology and kaizen power and be a benchmark for Toyotas operations in Japan and continue to produce minivans and passenger cars. As of North America, more autonomy and self-sufficiency shall be given which lead them in being forefront in IT and be a partner with Tesla. Europe shall be the global center of expertise for planning A, B, C segment cars and China taking the lead on future growth models which shall help to reach 15% sales in china. . Also as a part of environmental credit, Toyota shall release 10 new hybrid and fuel cell offering models by 2015 and not to mention retaking the production of Lexus in Japan as part of making Lexus a unique global brand. Toyota plans to bring 50% of growth from emerging markets in Europe by 2015 with the sale of hybrid vehicles. By doing these Toyota is pretty confident on gaining their customers smiles. Specifically Toyota shall make their product more appeal in both style and quality and reveal in auto shows globally.

Conclusion

Toyota actually realizes the difference between marketing a product and building a brand name. Toyota didnt build this brand name in a day. They have been consistently focusing on this in their every advertisement and promotional activities. Their brands are known for best quality, good price, eco- friendly, innovative, ultimately satisfying customers in every aspect they desire. That is the reason even though they had a huge recall issues, they didnt lose much of the customer base because of their branding and pro-activeness. Toyota has retained its top position

Strategy Evaluation 7

and placed 11th as the gas efficient green brand. Toyota recovered because of decades of delivering on its brand promise of durable and affordable high quality cars and that is the reason why recalls didnt create that much negative impact. Toyota rebranded itself with a new vision and did acts like clearing up its name before U.S. Congress and NASA that majority of the accidents happened because of customers negligence and replaced customers cars that had problem through their dealers. Toyotas rebound was fast because of their targeted and effective communications with consumers through advertising, public relations social media, digital communications which is direct, honest and voluminous. Toyota didnt stop just selling their city. The company grew bigger and bigger in Japan and expanded its wings all over the world through exports and establishing joint venture and independent manufacturing plants in USA, UK, China and France. They segmented and targeted their market to sell right products in the right place which has resulted in increase of sales. Toyotas winning shows success is not a one day event but it is constant perseverance and endurance.