Toyota Motor Corporation (TMC) is a Japan-based multinational automaker. Kiichiro Toyoda founded Toyota Motor Corporation in 1937 and now the company is headquartered in Toyota, Aichi, Japan. It is the world’s largest automobile manufacturer by sales and production and it employees more than 320,808 people throughout the world. The company is mainly engaged in the automobile business and financial business. The popular brands of the company are Toyota and Lexus.
Toyota also owns and operates Lexus and Scion brands and has a majority shareholding stake in Daihatsu and Hino Motors, and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, and Yamaha Motors. The company includes 522 subsidiaries. It is a leader in the car manufacture, assembly and distribution the world over. Its differentiation strategy has made it enjoy an almost monopolistic presence especially in the developing nations of the world. SWOT ANALYSIS OF THE COMPANY STRENGTHS •Having competent and experienced management team and board members.
• Distribution of products into the market through wide range of identified branches. •The company has a strong industry position which is based upon a number of factors including a diversified product range, highly targeted marketing a commitment to incline manufacturing and quality. •Differentiated products and prices make the Company to be quite distinctive in the market. •The company maximizes its profits through efficient manufacturing approaches for example Total Quality Management. •It has very strong presence in Europe due to the accomplishment of Toyota Team Europe.
• It has a strong distribution and marketing efforts focused on the meeting diverse needs, high quality sales and services, and close involvement with customers. •It presently maintains more than 16 percent of the US market share and is only behind its rivals the General Motors in terms of volume. •It has initiated new technologies including first bulk-produced hybrid gasoline-electric automobile which had two million sales worldwide in 2010.
WEAKNESSES •Large size of management team reduces chances of moving fast into the targeted market, because of slow rate in decision making. • Different supply interests among the Company suppliers and other competitors. •The company needs to keep producing cars in order to retain its operational efficiency. Car plants represent a huge investment in expensive fixed costs, as well as the high costs of training and retaining labour. •From last quarter of the 2009 through the 1st quarter of 2010, it recalled more than 8 million trucks and cars globally in numerous recall campaigns, and temporarily stopped production and sales.
•Toyota relies on giving the customer the product that they want, but does not market to the intrinsic value of its vehicles. •The company was badly hit by the 2008 financial crisis and declared its 1st annual loss. •In May, 2009, Toyota Motor Corporation reported yearly net loss of $4. 2 billion. •In 2005, it faced criticism because of large scale re-call and quality issues. •Toyota offers most of its brands in the Japan and United States, where as competitors’ get global efficiency. OPPORTUNITIES •Break-through in technological standings is a better course for the Company to improve on the quality of its products.
•Regulatory measures ensuring fairness in the market and avoid over-exploitation by other competitors. •Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are based upon advance technologies developed by the organization. •Rocketing oil prices have seen sales of the new hybrid vehicles increase. •It has also sold on its technology to other motor manufacturers, for example Ford has bought into the technology for its new Explorer SUV Hybrid. •It aims to target the 'urban youth' market.
The company has launched its new Aygo, which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment. •Joint ventures with French motoring companies Peugeot and Citroen has provided various opportunities for the company to produce cars in France. •North American consumers shifted to more fuel-efficient and higher-quality product of European and Japanese automakers. •Produce fuel-efficient, higher-quality and smaller automobiles that can attract the consumers. THREATS
•Increase in the prices of the raw materials such as rubber, steel and fuel. •Product recall is always a problem to vehicle manufactures. For Example in 2005 whereby 880,000 sports utility vehicles and pick –up trucks were recalled of which majority of them were sold in the U. S. while the rest were sold in Europe and Japan. •It faces tremendous competitive rivalry in the car market for example General Motors. Competition is increasing almost daily, with new entrants coming into the market from China, South Korea and new plants in Eastern Europe.
•Environmental regulations and associated apprehension concerning carbon emissions have sharp sensitivity to environmental protection globally and gas mileage standards. •Frequent fluctuation of foreign currency exchange rate and increasing maintenance costs of vehicles, rising fuel price and changing customer preference are challenging threats. •Toyota must anticipate the risks involved with operating in certain countries like Middle East. For example, the organization does not have any facilities set up in the Middle East because it involves too much political risk.
HOW THE COMPANY USES SWOT INFORMATION TO PLAN ITS MARKETING OPERATIONS. As a result of high fuel prices in the market the company new technologies initiated in the company such as first bulk-produced hybrid gasoline-electric automobile which increased the company’s sales by two million worldwide. Toyota Markets most of its products in US and Japan, therefore it is exposed to fluctuating economic and political conditions in the two markets. To address this challenge Toyota has expanded to European market whereby it the most successful Japanese car manufacturer in Europe.
As a result of large scale re-call the company has established six new Product Quality Field Offices (PQFO) around North America. The new offices are to be co-located with Toyota Motor Sales regional offices and focus on investigating and addressing customer issues like reports of unintended acceleration. As a result of the use of advanced technologies adopted by the company, Toyota manufactures environmentally friendly vehicle called Toyota Prius. The company has redesigned, the Prius making it more stylish than its predecessors.
They have even added optional accessories that are revolutionary in the auto industry such as a solar powered moon roof that can cool the car on hot days, and also added the intelligent parking assistant, similar to the one we see on Lexus commercials. With a major presence with Europe, due to the success of Toyota Team Europe, the corporation decided to set up Toyota Motor Europe Marketing & Engineering (TMME), to help market vehicles in the continent. Toyota has increased the production of hybrid vehicles which are environmental friendly so as to cater for the increase in oil prices in the company.
Natural disasters also inevitably effect Toyota’s global operations. But instead of viewing these circumstances as obstacles, Toyota uses them as opportunities to help the community get back on its feet. In the past year, Toyota has led four different relief efforts internationally. From providing relief efforts in Myanmar after the cyclone to supporting relief efforts in Sichuan province in China after the earthquake, Toyota does its best to alleviate the negative effects of some local conditions. Due to political risks in some, Toyota announced at the end of October that it would be exporting U.
S. made vehicles to the Middle East in order avoid the instability of setting up operations there, but still capturing that emerging market. Toyota has recognized the China’s large population and purchasing power as an asset and as a result has set up multiple bases and regional headquarters within the country or nearby. Also, South America’s economy has strengthened recently and demand has increased in this region for Toyota’s full-size trucks. APPLICATION OF THE MARKETING MIX TO BUILD AND SUSTAIN ITS COMPETITIVE ADVANTAGE IN THE MARKET Product
Toyota Motor Corporation (Toyota) engages in manufacture, design and distribution of a wide range of automobiles. The company’s product line includes passenger cars, recreational and sport-utility vehicles, minivans, and trucks. Each of Toyota’s products is designed to target a specific market. The design criteria range from top speed, capacity and exterior appearance like color and shape. There is a high speed, small, two-seat model cars for the relatively younger and single people who are adventurous to the big five-seat models for the family set up.
Demographically, they also target situations on the smooth tarmac road as well as the rough and rugged off road terrain (Thomas, 2001). The Company is believed to be moving with a strategy of mass production of which it has enabled it to sell widely in the global market. It has also included the strategy of hybrid product, where it can double the amount of production for the arising needs in the market. Price The traditional pricing strategy is formulated into the cost + profit=selling price. When auto companies make changes and improvements, cost of production increases causing the selling price to go high.
Companies normally do not want to cut their targeted return and therefore the costs are passed on to the consumer to maintain their profit margin. Toyota takes on slightly different approach with sales-oriented objective. Selling price-cost=Profit. Toyota firmly believes that its markets and consumers is what determine the selling price. Waste elimination is given top priority which reduces cost and by continuously reducing these types of costs, it will result in preserving the company’s profit growth. The reputation of the Company has been developed by producing high quality vehicles that can be bought at a reasonable price.
The Company has also been using tactful pricing strategies through price differentiation so that they are different from other automobile producers. Place Being a global producer and supplier of Toyota automobiles and their components, Toyota Company has positioned itself all over the world giving it a clear cut within the market. Within three years to come, it is working towards the achievement of about 35 percent of the market share, and this will make it to be best and top supplier of automobile products. Promotion
The Company is determined to use a pricing mechanism that will give it a competitive edge over its main competitors. This is a mechanism that it is using to market itself so that it can get hold of market share that will see it better in achieving the highest level in the market. It uses the following communication mix elements. a)Advertisement Toyota uses many different techniques of advertising as most of printing advertisement of Toyota Corolla is individually targeted at factors like comfort, performance, styling, power, and driving pleasure.
b)Brochures The Brochures, Posters, Leaflets showcase that Toyota Corolla, Innova, land Cruiser, Prado are all for the people who demand performance, style, power and sheer driving. c)Sales promotion Toyota Company uses major sources of sales promotion such as Trade fairs, like auto expo, motor shows. In these fairs, the company showcases its various varieties of car. These fairs help customers to draw comparison between different cars on the basis of color, features etc. d)Public Relations
Toyota Company contributed to public relations in the following manner; It contributed to Tsunami, Toyota Kirloskar signs MOU with Bangalore University for promotion of Japanese language. Toyota observes earth day by supporting local schools. e)Direct Marketing. The company officials directly contact the prospective buyers with the information available through the Toyota website. REFERENCES •Armstrong, G. , & Kotler, P. (2003). Marketing: an introduction. New Jersey: Prentice Hall. http://html-pdf-converter. com/en/convert? u=search-pdf-books. com/philip-kotler,-and-gary-armstrong.
-marketing-management. -prentice-hall,-2003-download-pdf-free-pdf/ accessed on 23rd February. •Porter, M. (1985). Competitive advantage. New York: The Free Press. Retrieved February 25th, 2011 fromhttp://www. 12manage. com/methods_porter_competitive_advantage. html •Hiroshu O. (2003). Chairman’s message. Retrieved February 23rd 2011, from the Toyota company website. http://www. toyota. co. jp/en/ir/library/annual/pdf/2003/chairmans_message_e. pdf •http://www. articlesbase. com/education-articles/competitive-advantage-between-ford-and-toyoyta-2040128. html#ixzz1F32cgcEF accessed on 24th February.