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How successful is Toyota's International Marketing Strategy in China

Introduction
Toyota is worlds leading automobile company which has distribution network in majority of the
countries around the world. The vehicles designed by Toyota are considered to be one of the best
in their class. The product portfolio of Toyota extends for target segment in every age group as
well as income group. The major success factor of Toyota is considered to be the excellent
product quality as well as marketing efforts. The quality and innovation of Toyota is the unique
selling proposition in the cars segment and this is the reason why this Japanese company has
taken over automobile market around the world. Many innovations around the world are credited
to Toyota like just in time approach was introduced by Toyota only. This approach is highly
successful approach which is being utilized by the almost all the companies around the world.
This phenomenon has changed the world of operation function in the companies where
manufacturing and processes are of critical importance.
International marketing strategies have also played critical role in making the brand of Toyota as
invincible in every country they forayed. These international marketing campaigns were
successful in every nation and tailored according to the customer behavior and psychographic as
well as demographic conditions of the country. Same strategy was being utilized in the china by
Toyota and devised many effective as well as impactful international marketing campaigns.

Research Question
The research is being carried to analyze the success as well as effectiveness of Toyotas
international marketing in China. The research is done through secondary researches and
complete literature review of related articles as well as journals describing international
marketing strategies of Toyota.

Annotated Bibliography
In this section various resources have been chosen which provides information about the
resources being utilized for the analyzing the marketing effectiveness and success of Toyota in
China. The lists of the resources are as follows:

1. Fengru Li and Shooshtari, Nuder H (2006), On Toyota's Misstep in Advertising Its


Land Cruiser SUV in Beijing: A Distortion of Consumers' Sociolinguistic System,
Journal of International Consumer Marketing; 2006, Vol. 18 Issue 4, p61-78, 18p
The article talks about the mistake which was committed by Toyota while launching its
SUV Land Cruiser in the market of China. Marketing communications are always
tailored according to the customer buying behavior and there demographics. But in the
case of this launch, international marketing strategy of Toyota was proved to be fatal. The
article is very much in line with the research question as it talks about the international
marketing strategy of Toyota in SUV market of China. It also talks about the criticism
and failure of the campaign because of inappropriate analysis of socio-linguistic system
of Chinese. Because of this marketing campaign, there were huge protests as well as
boycott of Toyota vehicles in China. Marketers administer that the campaigns should not
be decided only on the basis of creativity but social as well as linguistic considerations
should also be given importance.
2. Peter J. Buckley and Sierk A. Horn (2009), Japanese Multinational Enterprises in
China: Successful Adaptation of Marketing Strategies, Japanese Management, Long
Range Planning 42(4):495-517
The article very precisely takes three case studies from different industries such as
retailing (It-Ykad), consumer goods (Shiseid) and automobiles (Toyota). Through
these case studies, Author defines the importance of flexibility in the marketing
campaigns by these three companies and thus success of the marketing campaigns. All
the three companies and especially Toyota were effective in adapting to the local culture
which is prevalent in China. This type of flexibility as well as practical approach of
Toyota is known as Think Global, Act Local which means that the marketing
campaigns were designed to showcase the unique selling propositions of Toyota cars and
also effective communication of brand message by molding the communication carrier
according to the taste of local China citizens. Author thus states that the Japanese
marketing communications are neither Japanese nor western but are flexible and realistic
in order to showcase the benefits to the local people effectively.
3. Yang, John Z (1998), Key Success Factors of Multinational Firms in China,
Thunderbird International Business Review; Vol. 40 Issue 6, p633-668, 36p

The author of his article has described many strategies which are being utilized by the
multinational companies to become successful in China. China is considered to be an
emerging market and hence the growth rate of china is very high. Considering such a
high potential many firms have entered this market with their products. To become
successful marketing strategy is also a chief parameter which is being considered
crucially by many companies including Toyota. The car models of Toyota are modified
on the basis of requirements of China citizens but only R&D is not a success criteria.
Marketing campaigns specifically designed to entice Chinese are also decisive parameter
in increasing the sales of car in China. Being an emerging market, the demographics are
changing at fast pace hence Toyota is also bound to be flexible in its marketing approach.
Bringing new models, communicating and catering the value to target segments are
defined in this article. Thus this article is worth utilizing in this report for analysis of
international marketing strategy of Toyota in china.
4. Murphy, James (2005), Saatchis scoops Prius launch task, Asia's Media &
Marketing Newspaper; 10/21/2005, p8-8, 1/4p.
The article is very important for the research being conducted on the international
marketing strategy of Toyota in China. The article talks about the handling of marketing
campaign of Prius launch in China. This marketing campaign was given to Saatchis and
Saatchis, one of the worlds leading advertising agency. Prius is a hybrid model of
Toyota which runs of petrol as well as electricity. This is a highly successful model in US
market and now Toyota wanted to launch this in China. Chinese automobile market is
considered to be one of the most lucrative markets and thus Toyota does not want to
leave any stone unturned. It rope Saatchis and Saatchis for designing and implementing a
Creative as well as impactful marketing campaign for Chinese Audience. Saatchis and
Saatchis have core competency to develop marketing strategies according to the desired
target audience and thus these campaigns are successful. This is one of the major step in
international marketing being carried by Toyota in China.
5. Schultz,

Don

E.,

(2008),

Branding

from

Emerging

Markets,

Marketing Management, Vol. 17 Issue 5, p10-11, 2p


This article showcases the branding as well as marketing activities in the emerging
nations like Brail, Russia, India and China. These 4 nations together are known as BRIC

nations and the market in this nation is growing at rapid pace thus companies want to tap
this growing market. Toyota is also one of the automobile giant which is determined to
make its brand as global brand in these nations and especially China. Author has
described several strategies which should be utilized by the marketers while foraying in
the emerging market like of China. The advertising campaigns should be designed
according to the local need after carefully analyzing the buying pattern of citizens. The
companies should decide of the short term and long term goals and thus depending upon
these goals the strategies should be formulated. The author has also described several
instances where the companies in order to achieve instant success have ignored long term
plans. This has severely hampered the image of many global brands and these practices
should be abolished by these multinational companies while entering emerging market.
6. Wang, Yue & Tanaka, Akira (2011), From hierarchy to hybrid: The evolving nature
of inter-firm governance in China's automobile groups, Journal of Business
Research; Jan2011, Vol. 64 Issue 1, p74-80, 7p
The automobile industry in China has evolved over time and this has lead to several
changes in the automobile industry. This article has very clearly showcased the difference
in the organizational culture as well as strategies of Chinese automobile firm i.e. Tianjin
Automotive group (TAG) and Japanese automotive firm i.e. Toyota. The Chinese firm
TAG was a top to down Administration Company with authoritative rule. Earlier the
inter-firm relationships were sort of like institutional agreements hence this Chinese firm
was very slow in adapting to the needs of the customers. Compared with global giant
Toyota which is very effective in maintaining the supply and buyer relationship, TAG
was lethargy in following these steps. Toyota is very fast in adapting to the local needs
and thus they bring out new model of cars for every segment of population. They also
invest highly in the marketing campaigns to make people aware of the models and their
specialty.
7. Amasaka, Kakuro (2011), Changes in Marketing Process Management Employing
TMS: Establishment of Toyota Sales Marketing System, China-USA Business
Review, Vol. 10 Issue 7, p539-550, 12p
This is one of the most apt articles for the research being conducted on international
marketing strategy of Toyota in China. Total marketing systems also known as TMS is

marketing system which provide information about the market insights, customer needs
and sales information about the company. The author developed this type of marketing
system for Toyota which is known as Toyota sales marketing system or TSMS. The
system proved to be very beneficial for the company. The system gathers information
about the changes happening in the Chinese automobile market and thus makes Toyota
able to react upon the changes. This marketing system is very useful in the customers
retention and also increasing the number of repeat customers. Customer satisfaction and
brand awareness leads to customer retention and thus the number of repeat customer also
increases. It is believed that retained customer is 5 times more beneficial than a new
customer and hence every company tries to focus and increase the number of repeat
customers. This strategy is made feasible by the TSMS or Toyota sales marketing system.
8. Amasaka, Kakuro (2009), The effectiveness of flyer advertising employing TMS: Key
to scientific automobile sales innovation at Toyota, China-USA Business Review,
Vol. 8 Issue 3, p1-12, 12p
This article also talks about Toyota sales marketing system or TSMS which is derived
from the concept of total marketing system (TMS). This concept is being utilized by
Toyota and is like just in time (JIT) approach in operations. TMS is usually employed to
increase the sales of the product, to gather customer information and thus formulate
strategies to increase the customer traffic. The author of this article talks about the
effectiveness of the flyer advertising in TMS. The article provides insights about the
increase in the customer traffic at the dealers showroom and thus increase in the sales.
This article also showcases two other strategies day of the week effect and new car
effect which are also the part of TMS and thus they help in increasing the overall sales
effectiveness of Toyota in Japan, China as well as other countries around the world.
9. Hille, Alfred (2004), Toyota looks for road to recovery in China, Asia's Media &
Marketing Newspaper, p19-19, 3/4p
This article clearly states the aim of Toyota to become market leader in the automobile
segment in China. At the time of entering into Chinese market, the automobile market
was dominated by European and American car makers such as Volkswagen and General
Motors. These companies have dominated the entire market and catered to majority of the
segment of Chinese car market. Toyota wanted to make its brand as global brand in

China hence it started to find out gaps in the market and thus introduce its various models
to cater to the needs of target segment. In the entire process, the company also increased
the marketing budget which helped Toyota to increase its presence in the Chinese
automobile market. Marketing strategies were devised with clear aim of communicating
brand message effectively to the target segment. This strategy helped in increasing the
effectiveness of the marketing communication and thus made Toyota and well known
brand in China.
10. Fitzsimmons, Ella (2004), Chinese car buyers see no benefit in greener models,
Asia's Media & Marketing Newspaper, p16-16, 1/3p
This article talks about the customer buying pattern in china where people done much
prefer green cars. Around the world, green technology is found to be a lucrative option
and thus the sales of car with greener technology is very high whereas in china the sales
of green cars is very less and hence green technology is considered to be failure. The
author tells various reason of the failure of the green cars in china like government
policies, pricing of these cars as well as customer buying behavior. Customer buying
behavior is most important aspect as it describes the reasoning behind the low sales of
Toyota Prius in China. This model is very popular in developed nations but it is failure
model in emerging market like of China. This article describes the effort to be put in
changing the buying behavior of Chinese by Toyota to become successful.
11. Loida, Rosario (2008), Multicultural Marketing: A misunderstood concept and
untapped business strategy, Multicultural Marketing Program, 4. pp: 23-46
The article explains the issue of multi-cultural marketing which is very important aspect
for the multinational companies and thus applicable for Toyota and the marketing
strategy being utilized by Toyota in China. This article has described the foray of Toyota
in US market through its global marketing strategies. After making a foothold in those
nations, Toyota started to move towards Hispanics and Asian countries. For every car
model launch Toyota has devised approach which is highly customized depending upon
the need and requirements of the citizen. This is the basic reason of the success of the
marketing strategies implemented by Toyota in foreign countries. It made some mistakes
in few marketing campaigns like launch of SUV land cruiser in China bypassing socio-

linguistic system. These parameters have to be taken care while implementing


multicultural marketing strategies.
12. Laurette, Dube (1994), Foreign branding and its effects on product perceptions and
attitudes, journal of marketing research, 31, 263-70
Foreign branding as well as international marketing are sensitive areas which are very
carefully taken care by the marketers. The advertising as well as marketing strategies
have to be formulated according to the local target audience where the message is to be
communicated. Because of some tweaks in the marketing strategies in the foreign
markets, there is huge possibility of change in the perception of the product. The
marketers would like to project some different brand identity but the brand image formed
in the mind of target audience would be completely different. This will create major
problem in the success of the brand in that foreign market. Thus every brand has to
consider the local people and their behavior as well as liking pattern. After analyzing the
behavior, the strategy should be formulated and tested on a sample audience.

Conclusion
This report suggests various resources which can be utilized for gauging the effectiveness of
international marketing strategies. The marketing strategies are employed in China and thus the
brand awareness, brand recall as well as brand recognition of Toyota in China can be accurately
observed from the resources given in this report.