The Toyota Marketing Strategy

Introduction

Navana Limited stands as the authorized distributor of Toyota cars in Bangladesh, so we have chosen them to make a successful marketing plan on Toyota cars. Our area of concentration was centered on the new model of Toyota Corolla-GLi. This is the latest car of Toyota Corolla that has been recently launched in Bangladesh by Navana Limited in November 2007 at Japan trade fair in Bangladesh. The brand name Corolla of Toyota is well known for producing cars for the common people but this car is an upgraded model of Corolla.

Company Overview

Toyota Motor Corporation is a multinational corporation headquartered in Japan. Today, Toyota is the world’s third largest manufacturer of automobiles. Providing the most reliable automobile for its customer is the Toyota’s specialty. Toyota Motor Corporation recently celebrated its 70 years both as a carmaker and half a century of selling cars in America. In 2007 Toyota sold 8. 52m vehicles and its net income rose by 20% and become $14 billion. Moreover Toyota is aiming to sell 10. 4m vehicles in 2009. In Bangladesh it is the most popular automobile company to the car user and it has almost 70% market share in our country.

It is always interested to get the attention of the young generation, family people, working executives, service holders, business people, in one word all kind of people. “Its mission” is to predict consumer trends and create a lineup of cars and trucks to capitalize on them. Each professional is expected to spend time out in the field talking to car buyers. The Japanese have a name for it: genchi genbutsu – go to the scene and confirm the actual happenings. With Toyota, one thing has never changed that their commitment to the communities where they do business.

Toyota spends over billions of billion on R, design, manufacturing, sales and marketing operations. Over the world they have sales /service offices, financial service offices, R centers, holding company, manufacturing facilities, design centers, Hino operation facilities, Supplier state etc.

History

Kiichiro Toyoda, founder of the toyota Motor Corporation, was born in 1894. His father Sakichi Toyoda became famous as he inventor of the automatic loom. Inheriting the spirit of research and creation from his father, Kiichiro devoted his entire life to the manufacturing of cars, which was an unknown frontier at that time.

In 1933, Toyoda Automatic Loom Works created a new division devoted to the production of automobiles under the direction of the founder’s son, Kiichiro Toyoda. Kiichiro Toyoda had traveled to Europe and the United States in 1929 to investigate automobile production. After years of hard work, he finally succeeded in completing the A1 prototype vehicle in 1935. That was the beginning of the history of the Toyota Motor Corporation. Toyoda Automatic Loom Works was encouraged to develop automobile production by the Japanese government and Model AA passenger car was the first production model of Toyota in 1936.

Replica of the Toyota Model AA, the first production model of Toyota in 1936 Toyota Motor Co. was established as an independent and separate company in 1937. The company was founded by Kiichiro Toyoda as a spinoff from his father’s company Toyota Industries to create automobiles. Toyota also owns and operates Lexus and Scion brands. Toyota is headquartered in Aichi, Nagoya and in Tokyo. In addition to manufacturing automobiles, Toyota provides financial services through its division Toyota Financial Services and also creates robots.

Current marketing situation

There is a huge market for automobile industry worldwide. In this global earth people need to communicate with others each and every minute. Transportation is one way that facilitates communication.

The market demand for cars rise and fall time to time, but the demand never fell to the ground. The current market situation of cars is a little unstable for the fact that oil price has risen significantly worldwide that has resulted in a decrease of car sale worldwide. The same has also affected the Bangladeshi market. Different car dealers have reported that car sale has dropped significantly from last year, 2006-2007. There is also a rise in the car due to increase in cost of production. The steel price has risen significantly worldwide. Japan, Taiwan, importers of steel, are giving 27 to 30% more for buying steels.

In Bangladesh, the government’s rules and regulation imposed on import, duty and tax has also caused the market of cars to decrease.

Mission, Vision, Objectives & Goal

• Mission: The mission is to create a luxury vehicle that could go head to head with the world’s best automobiles.
• Vision: Setting new industry standards in operational excellence, market penetration, customer satisfaction and community commitment.
• Objective: Corolla GLi is clear in its objective to produce the segments most engaging driving dynamics while maintaining the brands traditional ride quality.
• Goal: From the outset, it is their goal to develop a luxury flagship vehicle that would be recognized as one of the finest cars in the world.

Products quality and features, design, packaging, brand name, extra services

• Brand name: Corolla GLi Features And Quality:
• Powerful performance: Responsive and quick to please, the Corolla effortlessly generates the power for driving pleasure, delivering subtly smooth and stable performance.
• Advanced technology: The Corolla generates outstanding power, minimizes its environmental impact, and provides warm reassurance.
• Wti technology: Based on driving conditions, it optimally changes the open/close timing of the intake valve, contributing to increased torque and output, better fuel economy and reduced Nitrogen oxides and hydrocarbon emissions.
• Crash safety body: It is comprised of a high integrity cabin with front and rear crumple zones that help absorb impact energy in a collision.
• Suspension: The Macpherson strut suspension on the front and torsion beam suspension on the rear were fine-tuned to provide excellent stability and control, and ride comfort.
• Keyless entry system: It lets to lock and unlock the doors from a distance.
• Moon roof: It incorporates one touch mode and a jam-protected system.
• Rear spoiler: The rear spoiler integrated into the trunk lid adds a sporty touch.
• Anti corrosion steel sheeting: The extensive use of anti corrosion steel sheeting protects the Corolla from rust, helping it to keep its goods looks for years to come.
• Immobiliser system: It provides security against theft. The car can only be started when the ID in the electronic matches the ID code in the engine immobiliser system.
• Dynamic and advanced: With its dynamic and advanced design creating a high quality feeling, the Corolla continues winning hearts and minds right around the world.
• Sophisticated presence: First impressions are compelling. The short-nose, long-deck proportions highlight the advanced sedan styling. Together with its expensive cabin space, it exudes a distinctive presence.
• Generous appearance: The captivating design creates a feeling of great possibility. The wide tread and generous appearance set the stage for the spacious cabin.
• Refined interior details: The Corolla’s attention to details includes the distinctive curved design of the center console, the use of colors and textures, and the quality finish.
• Brakes: Disc brakes on all four wheels, ventilated on the front, are standard for all grades, giving sure stopping performance.

According to our observation, Crown falls into Dogs position in the matrix table. This is the model, which has less demand in Bangladesh that is why their market share is also low.

Market segmentation process

Market segments are large identifiable groups within a market. There are four basic bases for segmenting consumer market. These variables can be used singly or in combination. These are

1. Geographic segmentation
2. Demographic segmentation
3. Behavioral segmentation
4. Psychographic segmentation

Now, considering Corolla GLi, we find that they also segment their market into groups based on the above segmentations. For this segmentation process, firstly they study the market and customers demand.

They complete this process by analyzing the competitors’ products, segmentation as well as customers demand. The process is described below- Geographic segmentation: It is the process of dividing the market into different geographical units, such as country, city, nation, state, region etc. The company can operate in one or few geographic areas, or operate in all but pay attention to local variations. From Corolla GLi’s point of view that they segment their market based on

• Country: In order to cover the whole world’s market they launch their product in different countries. To do so, in 2007 they first launch this model in Bangladesh. City: After selecting the country, they target those cities where they find more customer demands and wants. They actually select the cities after analyzing the purchasing power, living standard and so on.
• Demographic Segmentation: In this segmentation the market is divided in to groups on the basis of variables such as age, family size, life cycle, gender, income, occupation, education etc. These variables are the most popular bases for distinguishing customer groups. From corolla GLi point of view, they segment their market depending on income and occupation mostly and others have less affect in this segmentation part. As we know that they firstly go for market study to know customers demand as well as their purchasing power. For this purpose, they target those customers who have high income as well as in top position in their occupation to match whether they can afford this car or not.

• Behavioral segmentation: In this segmentation buyers are divided in to groups on the basis of their knowledge, attitude toward the product, use of, or response to a product. The behavioral variables are occasions, benefit, user status etc. If we look at the Corolla GLi’s segmentation process, we can see that they mainly focus on benefit variables and customers attitude toward the products. In benefit variables consumers actually look for products quality, services, economy, and speed. Therefore, corolla GLi is providing high quality, extra ordinary services along with high economic value to meet the customer demands. Moreover some customer’s attitude is to prefer branded products. They are basically quality concern people not price sensitive.
• Psychographics segmentation: In this segmentation the market is divided in to groups on the basis of life style, personality and social class. As we have mentioned earlier that GLi is a branded product targeting the upper class people so social class, life style, and personality play an important role in this segmentation. The people who are in the upper class and lead a luxurious life style they want such type of car that represent their status, image and pride in the society. Here corolla GLi holds all the characteristics that make satisfy these groups of customers.

In addition, the customers who are ambitious, outgoing, demanding, compulsive and want to show a unique image may also buy this car as a symbol of attractiveness. Thus these four basic parts of segmentation process helps them to identify the proper customer demands and market.

Target market selection process

After the segmentation process marketers identify one or more selected areas to enter into the market, this is known as target market selection process. There are different patterns of target market selecting. These are

1. Single segment concentration: Producing one product for one selected market.
2. Selective specialization: Offering different product for different market. Here, one sector can be covered by other.
3. Product/service specialization: Offering one product for all groups of people in order to minimize cost.
4. Market specialization: Offering different product for one selected market.
5. Full market coverage: Marketers try to cover full market by offering different products for different market. After analyzing the five patterns of target market selection, we can say that Corolla GLi follows the Single segment concentration.

From Corolla GLi point of view, they select their target market by considering the customer’s demand like- what feature, design, and benefit they want. Last of all, they try to match these with the customer ability and purchasing power. As it is mentioned earlier that they are following single segment concentration so the benefits for selecting this pattern are mentioned below- ? Through the Single segment concentration, marketers gain a strong knowledge of the segments need and achieve a strong market presence. ? With the help of Single segment concentration they can increase their sale, which can earn a high return on its investment.

Types of Consumer behavior

Buying Behavior is the decision processes and acts of people involved in buying and using products.

There are four typical types of buying behavior based on the type of products that intends to be purchased.

These are

• Complex buying behavior: It is a buying behavior where the individual purchases a high value brand and seeks a lot of information before the purchase is made. In this process, buyer first develops belief about the product then develops attitude about the product and lastly makes a thoughtful choice.
• Variety-seeking buying behavior: It is a buying behavior where the individual likes to shop around and experiment with different products. Here brand switching occurs for the sake of variety rather than dissatisfaction and look for cheaper price.
• Dissonance-reducing buying behavior: It is a buying behavior when buyer is highly involved with the purchase of the product. There exists little difference between existing brands, so customers become confused.
• Habitual buying behavior: It is a buying behavior where the individual buys a product out of habit e. g. a daily newspaper, sugar or salt etc. After analyzing the above point it is quite clear that Corolla GLi car buyers are following complex buying behavior, because they are highly involved in purchase and aware of significant difference among brands. We know that this car is expensive, risky and self- expressive so buyer buy infrequently.

Furthermore, this type of customers buy car by differentiating the products with other significant brands like- Mercedes, BMW. Here, Corolla marketers also compare their product with BMW, Mercedes. Mainly, customers are concern about brand not price so they look for brand’s benefits and quality, which will show the symbol of pride, status in the society.

Post-purchase Behavior

After purchasing the product, consumers will experience some level of satisfaction or dissatisfaction. In the case of Corolla Gli, consumer may try to figure out their satisfaction level. Whether the car’s perceived performance is satisfactory or not. 4 h. Product Life cycle stage determination [pic] Corolla GLi was launched in November 2007 in Bangladesh it went through the introduction stage with great success and now it is in the growth stage the features, quality and brand name of the car are attracting more and more potential buyers day by day.

Each pricing strategy is different from the. Cost based pricing strategy is where the organization set prices based on cost of production with that amount a certain markup is added for the profit and the product is sold. Competitors based pricing strategy depends on the price of the competitors what they would charge for the product for this pricing strategy the organization either charges same or low price than the competitors. 5b. Pricing Corolla Gli Toyota mainly follows cost based pricing strategy for the entire car it manufactures for the luxurious car it follows both cost based pricing strategy and value based pricing strategy.

They deliver the value promised by their value proposition and the customer perceives the value. To communicate and enhance perceived value in buyers mind Toyota uses other marketing mix elements such as advertising and sales force. Value based pricing depends on the product performance, quality, features, customer service, etc. For Corolla GLi Toyota uses both cost based and value based pricing strategy as this is one of the most luxurious cars of Toyota. Navana is the only importer in Bangladesh who buys Corolla GLi from Toyota. Initially when the car was launched it was sold at a price of 1950000 taka but now as duty fee has increased and international currency fluctuated the price of Corolla GLi is now 2250000 taka.

For the pricing of this car Toyota is also following other pricing strategies they are price skimming strategy which is they are charging maximum price as it is a new product, the demand of this car is already present in other countries and the buyers are also willing to pay any price to buy this car. It is following premium pricing which is charging high price for the high quality car . It is also following the optional product pricing e. g. for with the car Toyota is providing a luxorious comfortable interior with leather seats, cd player, etc. Therefore Final price is determined with all these strategies plus the cost of import, duty fee, the cost of shipment and the markup of Navana. pic] Distribution for Corolla Gliю

As Toyota uses Just-in-time approach to some extent they depend on their distributors as the distributors provide them information about customers demand or about the cars of the competitors and Toyota produce their cars accordingly. Toyota and Navana together follows the Vertical marketing system where they work as a unified team. If Toyota wants to launch a new car in Bangladesh they provide Navana with all the information about the car Navana then analyzes the current marketing situation about the competitors and orders as per demand which is then delivered after 5months through shipment. Navana is an exclusive distributor of Toyota they are given full authority to sell the cars of Toyota.

References

1. www. amartoyota. com
2. www. toyota. com
3. www. toyotahistory. com
4. www. toyotacarzone. com
5. Marketing Management-Philip Kotler 11th edition, Prentice Hall Advertising Principle & Practice – William Wells and Sandra Moriarty, 7th edition, Prentice Hall.
6. www. bdnewspaper. com