Toyota Motor Corporation2014 Highlander Marketing Plan

Group DSean PackardBobby PavligaAlexis PennicostBrandon PetersonHelene SankovitchKatie Sayad

Executive SummaryToyota Motor Corporation is preparing to launch the 2014 Toyota Highlander; the newest version of a mid-size SUV line that has established itself as a dependable, safe, affordable, and sustainable vehicle. This commitment will be stressed in our marketing strategy for the 2014 model. When the Toyota Highlander first appeared in 2000, it has since made a name for itself in the Mid-Sized SUV market. The SUV market has become highly competitive, but the newly added features, such as the choice between a fuel-efficient four-cylinder engine or a V6-powered Hybrid Synergy Drive for enhanced mileage and fewer emissions, included in the 2014 Highlander model creates superior consumer value and will take market share from our greatest competitors; Jeep Grand Cherokee, Dodge Durango, Ford Explorer, and Honda CR-V. The Toyota Highlander 2014 will stand out through various dimensions of its interior versatility, design, technology, efficiency, and safety marking it as the lead competitor in the SUV automotive industry. The price is predicted to begin around $29,000. Toyota will exhibit the 2014 Highlander by continuously attending auto shows and marketing it through its website and various advertisements. The 2014 Toyota Highlander will be targeting customers looking for the safety of an SUV and the ease of driving a car, specifically, families with children. The primary marketing objective is to continuously increase its growth rate in sales. Last year, 121,000 Highlanders were sold, which is up 20% from the year prior. In 2014, the goal is to sell over 135,000 Highlanders.

Current Marketing SituationMarket DescriptionThe automotive market is made up of many types of vehicles. Some of these vehicle types are cars, SUVs, crossovers, trucks and mini vans. The 2014 Toyota Highlander fits into the SUV and crossover segment of the automotive market, specifically under crossovers.The 2014 Toyota Highlander is a full size crossover. A crossover is a vehicle built on a car platform combining SUV design features such as high seating, high center of gravity, high ground clearance and all wheel drive capability. Crossovers are well renowned for their superior fuel economy and car-like handling. The crossover attracts customers who are interested in the safety of an SUV such as in bad weather conditions and the ease of driving a car. Specific segments that the 2014 Toyota Highlander will target include adults with children and specific regions where inclement weather is most likely going to affect traveling. The Toyota brand has established a strong base of loyal customers with families who want a vehicle with space, safety, and ease of driving. This segment is becoming a prime target as their families grow and safety and space become a top priority. Product ReviewToyota Motor Corporation has released their 2014 line of vehicles. Specifically, the Highlander offers the following features and models: Its available in a wide variety of models: Highlander, Highlander Plus, SE, Limited, Hybrid, Hybrid Limited Two engine sizes: 2.7L 4-Cyl. and 3.5L V6, a five-speed automatic transmission Two available drivetrains available: FWD and 4WD A refreshing fuel economy of 20MPG city and 25MPG highway. 2013 IIHS top safety pick award winner for front, side, rear, and roll over collisions Star Safety System: Enhanced Vehicle Stability Control (VSC), Traction Control (TRAC), Anti-lock Brake System (ABS), Electronic Brake-force Distribution (EBD), Brake Assist (BA), and Smart Stop Technology Advanced airbag system consisting of driver and front passenger dual stage airbags, driver and front passenger seat-mounted side airbags, a driver knee airbag, and Roll-sensing Side Curtain Airbags for all rows A wide array of nine exterior colors: Blizzard Pearl, Classic Silver Metallic, Magnetic Grey Metallic, Black, Sizzling Crimson Mica, Sandy Beach Metallic, Cypress Pearl, Nautical Blue Metallic, and Shoreline Blue Pearl Five fabric colors in two fabric materials: Cloth Ash Fabric Trim and Sand Beige Fabric Trim - or Leather Ash Leather Trim, Black Leather Trim, and Sand Beige Leather Trim Five different packages: 50 state emission, Cold weather package, Highlander plus package, Display audio with navigation and Entune, and Rear seat DVD entertainment package Spacious three row, 7 seat interior, with 50/50 third row seating, one touch fold flat second row seats, and second row stow seating 6.1 inch display screen with backup camera and Bluetooth technology 5,000lb Towing Capacity Affordably priced at a starting value of $29,020 MSRP

Competitive ReviewThe SUV market was changed forever when Ford launched the 1991 Explorer. According to the article "Small SUVs, Big Market,"this car was the first car of its type and ever since its release; SUVs like this have been sales juggernauts. During this craze, nearly 1 in 5 cars sold in America were SUVs according to according to "Surprise! SUVs are more popular than ever. The 1991 Explorer was a very unique blend between a car and a truck and it quickly became the benchmark for other sport-utility vehicles. In the beginning, these cars were very truck-like, with body-frame construction and heavy-duty underpinnings. This was very different and effective at the time for the car market, but then gas prices began to rise. Consumers began to shade away from the SUVs since there gas-mileage wasnt cutting it, and starting to shift to purchasing more car-like SUVs.The thing that got consumers very interested in cars like this is that it was very family-friendly without being to giant of a vehicle. Also, since companies started to make manufacturing them to have more car features rather than truck, the size has gotten a lot smaller too. So the car wasnt too bulky, but you still were able to take a crowded road trip with comfort. This made the car like no-other on the market, and it became very common for companies to put their version of an SUV out for sale.Americans began to grow to the flexibility of these types of vehicles, and so they began to purchase compact SUVs that achieve better miles per gallon than the larger ones. These hurt the truck-based SUVs, and so manufactures began to mainly focus on producing SUVs that were more car-based than truck-based. The market for these smaller SUVs began to get very competitive.In 2011, all small SUV sales increased by 20.3% over the previous year and the field has continued to grow ever since. It has got very competitive over the past few years. As of 2008, the article, "Number of SUVs, Pickup Trucks on the Road Holds Strong," it states that SUVs account for 11.42% of all cars out on the road. Today, due to the extreme increase in gas prices and society becoming more environmentally aware, only about 1 in 3 cars sold are SUVs. These compact vehicles have adapted for the market demands over the years and continue to. Key competitors to the 2014 Toyota Highlander include the following:Honda CR-V:This compact SUV that was launched in 1995 by Honda is one of the smallest SUVs released by Honda. According to the CR-V review, the original CR-V's mission was to, "offer a distinct alternative to more mainstream mid- and full-size large SUVs." The CR-V is manufacturing in many international locations, such as: Mexico, Canada, Japan, the United Kingdom and the United States. It wasn't released in North America until 1997. They now have CR-Vs released in Indonesia, India, Thailand, Japan as well as North America. Each year, the model continues to adjust to its market demands, whether its redesigning the interior or adding more power to its already efficient engine. The CR-V is considered very affordable in the category for compact SUVs, having an average price of $23,272 for the 2014 edition of the CR-V.Chevrolet Tahoe:The Tahoe is a full-size SUV made by General Motors. A very similar and almost identical vehicle is called the GMC Yukon, which was first introduced in 1992 and calling in their version of the Blazer. They changed the name to the Tahoe and for the first time had a 4-door model instead of the 2-door in 1995. In 2005, General Motors redesigned the Tahoe majorly in almost every aspect, and this lead to a great increase in sales. Even when the large SUV marketing was weakening, the Tahoe continued to exceed expected sales. The Tahoe is used for many cop cars across the United States. The four-wheel drive version is considered a Special Service Vehicle and frequently used by police.Jeep Grand Cherokee:The Cherokee is a mid-size SUV produced by the jeep division of Chrysler. The main difference with the Cherokee from other SUVs is that they have always used a unibody chassis opposed to a body-on-frame construction. This car was first talked about in 1983 when American Motors was designing the smaller version of the future Cherokee. The Cherokee would be the first Chrysler vehicle that was a jeep. Not until 1992 was the Grand Cherokee truly released though. Shortly after this release, according to Automobile Mag, "it became the first serious competitor to the blockbuster Ford Explorer." Although recently, sales have slowed down a bit but it continues to be one of the more popular SUVs in the market. The Grand Cherokee played a big part in the reviving of Chrysler. It moved the company into the very competitive SUV market and did very well in that market.Dodge Durango:The Durango is another SUV produced this time by the Dodge section of Chrysler. The first two editions of the car were both based off of the Dodge Dakota. The third addition, although, was built very similar to Chryslers another very successful SUV, the Jeep Grand Cherokee, which features a unibody as discussed above. Each one of these generations featured many new aspects that were adapted to the ever-changing SUV market. There were 42,589 Durango sales in 2012, a decrease from 2011 by 17.6%, as stated in the article, "Dodge Durango Gets Tweaks, more MPGS to Boost sales," and there sales peaked back in 1999.

SWOT Analysis Strengths Highest brand recognition rating among all car companies (Interbrand Best Global Brands 2013) 2013 Toyota Highlander ranked #2 on Affordable Midsize SUVs list behind the 2014 Buick Enclave on US News Best Cars 2014 Highlander is sportier and more stylish to target different segment of consumers (specifically Jeep and Ford) 2014 model offers optional bench to seat eight instead of seven Better visibility, rearview camera, and airbags for improved safety Sponge-bob Square-pants themed concept vehicle has drawn some press for the 2014 Highlander with the help of Nickelodeon Weaknesses No change in engine in the 2014 Highlander, therefore no improved gas efficiency Are there enough changes from the 2013 model to encourage new sales and attract new customers? Toyotas average fuel economy has plateaued in the last year and needs to continue improving Expects to sell 140,000 2014 Highlanders even though Toyotas Princeton, Indiana plant is capable of producing 200,000 Price of 2014 Highlander has not yet been releasedOpportunities Sales from 2013 Highlander up 20% from 2012 sales, potential to continue sales growth Toyota plans to begin exporting a significant number of Highlanders to other parts of the world Up to date 2014 Highlander model features a modern feel and softer interior to compete with Ford and Jeeps market share General Motors rapidly declining market share leaves opportunity for Toyota to take majority market share in the near future Toyota has increased their Princeton, Indiana plant size to meet growing demand for Highlanders Indiana plant will be able to produce 365,000 Toyota SUVs, and produce the cars where they are demandedThreats Strong market with many competing brands Difficult to increase market share in such a competitive market Other mid-size SUVs in $25,000-$40,000 market Kia Sorento Nissan Pathfinder & Murano Jeep Grand Cherokee Buick Enclave Ford Explorer & Edge Dodge Durango Mazda CX-9 Hyundai Santa Fe Honda Pilot GMC Acadia Subaru Tribeca Mitsubishi Outlander

ObjectivesToyotas conviction is rooted in the Toyota Way, the corporate philosophy that promotes continuous improvement. The company challenges itself to design and produce more efficient and cleaner-emitting cars; to structure its operations so as to tread more lightly on the earth; and to enrich the lives of people in its communities (Respect for the Planet). Toyota has become successful in its career by achieving its goals and building a reputation for durable and dependable products. According to Douglas A. McIntyre, Toyota has a competitive advantage of becoming the number one car company in the United States within the next year, which is its ultimate goal (McIntyre).One such example of the companys endeavors is the new 2014 Toyota Highlander. 121,000 Highlanders were sold last year, which is up 20% from the year prior. Toyota expects to continuously increase its growth rate in sales; therefore, the goal is to sell about 135,000 Highlanders this year (2014 Toyota Highlander Aims for Higher Ground). This goal can easily be achieved when the consumer has the choice between a fuel-efficient four-cylinder engine or a V6-powered Hybrid Synergy Drive powertrain for enhanced mileage and fewer emissions (News Releases). Such a feature is just one of the many that the Highlander has in store for its customers. The Toyota Highlander 2014 will stand out through various dimensions of its interior versatility, design, technology, efficiency, and safety marking it as the lead competitor in the SUV car industry.

Marketing Strategy PositioningToyota has built a reputation for consistently providing dependable, fuel-efficient, safe, and affordable vehicles. The 2014 Toyota Highlander is no exception to this standard of excellence that Toyota upholds. As promised in the Toyota Motors mission statement (Farfan), Toyota has continued with its commitment to quality, innovation, and respect for the planet. The SUV market has been centered on soccer moms and a demand for safe family cars since its inception in the early 90s. In the vast affordable-SUV marketplace, there is no safer or more environmentally friendly option for families than the new 2014 Toyota Highlander. Our marketing strategy will focus on conveying the peace-of-mind provided while behind the wheel of a Highlander, Toyotas respect for the environment, and the safety innovations that Toyota always delivers for your family. Its more than just another affordable-SUV option; the 2014 Toyota Highlander is the safest and most environmentally responsible ways to move your family to and from school, soccer practice, work, and family get-togethers, day after day.Product StrategyToyotas 2014 Highlander is equipped with all the features listed in the Product Review section. The Highlander is growing each and every year with an estimated 140,000 units to be sold each year. As the Highlander reaches to our target audience of people in the mid-size SUV category, it becomes equipped with more features. Hybrid engines, 4 cylinder engines, and 6 cylinder engines pertain to the high interest in the Highlander. The vehicle has ignited further features that will also be made available to draw customers interested in other categories such as the 8 cylinder engine. Gaining an 8 cylinder engine will capture the interest of the mid-size SUV customers who want the power of a bigger engine. The value gained will be crucial to the customers in need of an affordable SUV with luxury features and a variety of engines to fit the need of each consumer. The new 2014 Highlander will be pushed to our Toyota dealerships in a variety of different options to provide the features needed with each customer to grab the interested of the most possible mid-size SUV customers. The Toyota promise will be instilled in each and every vehicle, dealership, and experience to provide what is expected plus more to each customer. Pricing The prices in the mid-size SUV market are all very similar for the most part, and this is why Toyota will follow a competition-based pricing strategy to compete against other SUV companies. Since most of these brands have a similar base price, the pricing of the other options of add-ons becomes very crucial. The projected average base price for the Toyota Highlander will be around $29,000. Other midsize SUVs prices vary from anywhere between $22,945 and $43,600 for competitors Honda (CR-V) and Chevy (Tahoe). This market always tends to be a very competitive one with many options to choose from. Therefore, don't expect the Highlander prices to get much more expensive then around their current price base since this could guide a lot of SUV consumers to look elsewhere. Even though the price does get up to around $45,000 for some SUVs in their market, the Highlander won't be targeted to those who want to spend more money on their vehicle. Lowering the price though could hint to interested purchasers that the quality might be lacking compared to others, so finding the right price is necessary to keep up in a very aggressive market.Distribution Review and StrategyToyota Motor Sales, U.S.A., Inc. (TMS) is the Toyota sales, marketing, and distribution subsidiary devoted to the U.S. market for fifty-six years now. There are ten Toyota plants in the U.S. purchasing $27.5 billion worth of parts and materials in producing 1,257,028 vehicles a year. 2,082,504 vehicles are sold in a year through its 1,500 Toyota, Scion, and Lexus Dealers in the U.S. Specifically, the company expects to begin production of the 2014 Highlander in December and it should begin showing up in U.S. showrooms in January or February. All Highlanders will be built at Toyota's Princeton, Ind., assembly plant. Toyota expects to sell about 140,000 units annually in the U.S. Though, as the plant has a 200,000-unit capacity, there is the possibility for both more U.S. volume as well as considerable exports to twenty-three other countries like Australia and Russia.However, Toyotas automotive sales distribution network is the largest in Japan. As of March 31, 2009, this network consisted of 290 dealers employing approximately 40,000 sales personnel and operating more than 4,800 sales and service outlets. Toyota owns 19 of these dealers and the remainder is independent. Toyota believes that this extensive sales network has been an important factor in its success in the Japanese market. Their traditional method of sales through home visits is being replaced by showroom sales, and the percentage of automobile purchases through showrooms has been gradually increasing. Toyota expects this trend to continue and plans to improve its sales activities to increase customer satisfaction not through only Japan, but throughout the rest of its distribution of the Toyota Highlander in other countries as well.Marketing Communications Review and StrategyFor the 2014 Toyota Highlander, the marketing team will show this new product at trade shows. On top of that, the hype on Toyotas website is also prominent.Trade-shows: The 2014 Toyota Highlander had its world debut at the New York Auto Show this year and will also be attending other auto shows.

Toyota opportunity exchange-in company show Toyota attends auto shows such as SEMA. Lexus made its first appearance at the Frankfurt Motor Show this year. Scion debuted the Scion tC and Scion 10 at the New York Auto show thisyear. 2014 Toyota Tundra was at the Chicago Auto show this year. At the Chicago Auto Show, Toyota featured an indoor riding course. Theyhad seven selected vehicles that highlighted the rugged durability of itstrucks. Toyota Furia made its global debut at the 2013 North AmericanInternational Show. Lexus was at the New Auto Show Display in Detroit this past year.

Brochures: On Toyotas website, all of Toyotas vehicles have an easily accessible brochure. (http://www.toyota.com/download-brochure.html)

Online Marketing: Toyota has an easy accessible website that allows their potential clients to access information on the product. They have brochures on their website of each specific type of vehicle. On the front page, Toyota has a flip through section of their new vehicles. This is where the marketing team will highlight the new 2014 Toyota Highlander. By making this easily accessible to the potential customer they will be more tempted to buy the Highlander. There also is another website that shares all of Toyotas press releases. There is where customers can keep up with any updates about the Toyota Highlander.

Websites:

On Toyotas main page, there aresections for the latest news, popularvideos, featured services, and community stories. At the top of the main page you can find a dealer close to you and selectvarious types of vehicles. There is a featured section for shopping tools where you can build andprice a particular Toyota vehicle. You can also compare vehicles, find yourspecific match, and get to the brochures. Toyota also put the local specials at the top, request a quote, and trade-ininformation. As well, there is a section of pictures of their new 2014 cars, including the2014 Toyota Highlander There is another website: pressroom.toyota.com, that is dedicated toToyota press releases in order for customers to keep up with its news.

References

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Exhibits#1. Toyota Sales and Production

"Toyota in the World 2013." Toyota Global. Toyota. Web. 29 Oct 2013..

#2. Toyota Fuel Efficiency

"Challenge, Commitment, Progress." 2011 North American Environmental Report.Toyota. Web. 29 Oct 2013..

#3. Toyota Sales vs. Market

"Auto Sales." . The Wall Street Journal, 1 10 2013. Web. 29 Oct 2013..

#4. Toyota Competitive Review

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