Toyota Term Project

Running Head: MARKETING PLAN FOR TOYOTA MOTOR COMPANY

Name:

Professor:

Institution:

Course:

Date:

Marketing Plan For Toyota Motor Company 2

1.0 Company Description

The Toyota Company is a leader in the car manufacture, assembly and distribution the

world over. A very efficient management style that the company uses has been one of the reasons

for the firm’s good performance. There are many other salient factors that have made the company

achieve the niche of market leader. The market structure the company operates in can not be

definitely stated. Some may consider it to be a monopoly. This is due to the fact that the company is

a dominant market player in car exportation. In fact, its differentiation strategy has made it enjoy an

almost monopolistic presence especially in the developing nations of the world. On the other hand,

the market structure can be seen as an oligopoly. This is due to the fact that there are other key

players like GM who are peer competitors. Toyota is keen to see what these competitors are doing

and make sure it reacts to their actions in a way that will guarantee its market leadership.

2.0 Strategic Focus and Plan

There are three aspects of the existing corporate strategy that are developed in relation to

their overall impacts caused to the marketing plan of Toyota Company. These are;

2.1 Mission Statement of the Company.

Toyota seeks to create a more prosperous society through automotive manufacturing

(Hiroshu, 2003). Therefore, the Company is aimed at achieving a stable and long-term growth in

future, and this is supposed to be in synchronization with a number of factors: the significant

environment, global economy, local communities served, and the Internal Environment of

stakeholders

2.2 The Company’s Goals

The company has committed itself to offering of hybrid alternatives for every model that

is sold in the market. This is aimed at enabling the Company to make a total sale of 1 million


hybrid vehicles within a year, and this goal has been set to have been achieved by the year 2012.

Toyota Company has improved its 2011 Environmental Action Plan and it is committed

in six different key areas, which are: the Environmental Management; changes in Energy and

Climate; the Quality of Air; concerned Substances; the aspects of Recycling and Improved

Resource utilization; and Societal Cooperation. The Company is committed to reduce carbon

dioxide emission and it is believed to take combined actions of ensuring that the environment is

kept clean all the time by observing the stated fuel economy values.

2.3 Core Competency and Sustainable Competitive Advantage

Toyota Company is working towards the achievement of a better and more sustainable

economy by having a stable global market. With advancement in new technology and other

related matters, the Company is investing in various strategies that will enable it to realize its set

goals and objectives over a period of time. The Company has a well developed and equipped

network of expertise that are into research and development over aspects that are to keep the

Company on top in product and service delivery to its global market. Also it has a wide range of

distribution network allover the world and this has enabled it to reach a portion of the market that

is seeing it through to greater levels.

3.0 Situation Analysis

Toyota’s capacity to stay on top of productivity efficiency and quality rankings can be

credited to its internal environment. This entails the way production process is managed by the top

management who are famous for their competency. The production team has an insatiable obsession

to improve the efficiency and effectiveness of its manufacturing operations. Therefore, to fully

understand the situation analysis of Toyota Company, a SWOT analysis is determined and it mainly

consists of the Company’s strength, weaknesses, available opportunities, and finally the threats that


the Company is experiencing or projected to go through.

3.1 SWOT Analysis

Strength and weaknesses are referred to as internal factors of the Company as their

impact starts from within the Company, while opportunities and threats normally originates from

outside of the Company, hence referred to as external factors.

Figure 1: SWOT Analysis of Toyota Company (Internal Factors)

Internal Factors Strengths Weaknesses

Management Having competent and

experienced management team

and board members

Large size of management

team reduces chances of

moving fast into the targeted

market, because of slow rate

in decision making

Offering Hybrid products that are

customer friendly

Expensive in proofing the

market that are right products

for them

Marketing Distribution of products into

the market through wide range

of identified branches

Expensive in establishing this

distribution network

Personnel Have good skilled workforce

who are relied upon

The gap will be big if the

employees left the Company

Finance Improved revenues from sales

made in the global market

Limited workforce and

material may slow down the

growth of the Company in


relation to competitors

Manufacturing Main supplier of material

ensure fast and quality

material

Different supply interests

among the Company suppliers

and other competitors.

R&D Quality of products delivered

is enhanced through out the

period of doing business

Figure 2: SWOT Analysis of Toyota Company (External Factors)

External Factors Opportunities Threats

Consumer/social Stability of the upcoming

market is highly projected

Low priced products may

proof that the quality of the

products is quite low

Competitive Differentiated products and

prices make the Company to

be quite distinctive in the

market

Products of high technology

are being introduced into the

market by other competitive

companies

Technological Break-through in

technological standings is a

better course for the Company

to improve on the quality of its

products

Economic Improved consumer income Individuals opting for other


has made it convenient for the

Company to get deep into the

market

products since they have

enough disposable income

Legal/Regulatory Regulatory measures ensuring

fairness in the market and

avoid over-exploitation by

other competitors

Figure 3: The SWOT Analysis Matrix

Strengths:

•investment in new factories•diverse range of products•improved marketing techniques

Opportunities:

•hybrid cars•selling technology•rising urban youth population

Weaknesses:

•Maintaining client base•Maintaining production

Threats:

•Faulty products•Upcoming manufacturers

3.2 Industry Analysis

Toyota Company is able to apply its strengths and opportunities it has to create a

competitive edge in the industry. For instance, the widely differentiated product line is helping

the company to have more global presence. This can also be achieved through entering new

markets like China and Europe. Toyota has previously concentrated on the Japan and American

markets and it needs to setup strategies to penetrate the other markets as well.


Toyota has taken a good position as far as sustainable development is concerned. With

the fear of depletion of the fossil fears coupled with the global warming effects, there is a ready

market for the Toyota’s hybrid car. The company can also use this opportunity t sell its

technology to other firms

3.3 Company analysis

Toyota Company is one of the world’s leaders in car export and it appears to literally be

living its mission, which is to be the world leader in the creation of automotives that are best in

terms of value. The company is working towards the end of creating a society that is prosperous by

providing their clientele with the best value for their money. They believe in giving the best prices

for the client yet still deliver a vehicle that is at per with those being offered by their other major

competitors. This could be the reason why their products are having a very good market in the

developing nations. The Company is also conscious about sustainable development, and this can be

clearly seen in its different corporate social responsibilities as well its sustainable development

initiatives aimed at reducing the pollution of the environment.

3.4 Customer Analysis

Toyota’s customers are very diverse and they range from the low income earners to the very

rich. They are widespread around the world. Toyota has catered for all car needs that may arise for

any individual with their wide range of motor vehicles. They range from small sports cars to big

family vehicles and trucks as well as vans. The customers comprise a varied group of people, with

differing ages, incomes, geographical locations, and social and cultural statuses. Customers go for

Toyota products to satisfy different wants and needs. Low income earners are provided with a basic

mode of transportation that is both within their price range and efficient. Clients going for class and

elegance are also catered for.


Customers purchase Toyota products on individual basis according to their specific needs.

In some cases we have organizations purchasing cars for their firm’s usage or for their employees.

In such a case, the product buyer and purchaser is not actually the product user. Once individuals

purchase the company’s product, there is an increased exposure to its other products. Product

awareness is enhanced through advertisements, newsletters, website information, and other

informational sources. The opportunity for Toyota to generate income from complimentary

products such as books and seminars by members is very big.

Where do they Purchase?

Most of Toyota’s products are sold through retail distributors located all over the world.

Purchase can also be made directly from the factories, as is the case with limited edition models.

The increase in the use of electronic commerce, Toyota as well, that is, purchasing products on-line.

Majority of the advertising materials can be obtained in full, on-line view over the Internet. On-line

publications diminish paper waste while giving existing and direct availability of the product to

clients. Customers are able to order a product in stores and with a toll-free number directly from the

company as well (Booz, 2007). This grants customers around the world access to the company’s

products.

When do they Purchase?

Individuals can purchase the company’s products anytime that they like, at any time of the

year. This is because Toyota sells its cars all year round, except for the limited editions which are

purchased directly from the factories. New users often purchase cars after acquiring a driver’s

licence in the case of some countries when going to high school or to college in others. Other users

usually purchase a new car when the old one breaks or gets too old or when they want to trade in for

a newer car or a different model.


Why do they Purchase?

Customers select Toyota products over other manufacturers primarily because of their

comprehensive, yet specialized, nature. Toyota offers a diverse range of cars that encompass all

needs of the clients. They are focussed on building and maintaining high standards when it comes to

the products. They offer cheaper alternatives to the clients for the same products from other

manufacturers that are quite expensive. Toyota has also invested heavily on safety in their cars. As

the globe goes green and clients call for an appropriate response from their car manufacturers,

Toyota have responded by investing in hybrid cars, the Prius. This may be the future of the motor

industry. The high quality products make it all that easy for a customer to go back to the shop and

purchase another Toyota product (Flanagan, 2007).

Why Potential Customers Don’t Purchase

As is the case for many large organizations, Toyota’s target market defines a much wider

population than their customer base actually reflects. There are many car manufacturers who have

come up and the motor industry is currently flooded with many products. Many of these products

are similar, often differing due to one or two features that may or may not be significant. In this

case, it comes down to personal like and dislike. The other reason is the issue of class and social

status. Toyota products do not always give the implication of a high social standing. A customer

may choose to buy a car from a competitor and not from Toyota simply because of that, and yet the

car is the same.

4.0 Product-Market Focus

In this section, the Company three year development projections is clearly explained in

various categories, which are developing of a strategic focus; marketing goals and objectives; target

market; and the Company position in the market.


4.1 Developing a Strategic Focus

Toyota has already embraced product differentiation as a major strategy in market

penetration and the strategy is working well. It is determined to use a pricing mechanism that

will give it a competitive edge over its main competitors. The cost of production of a unit for

Toyota is projected to be large but due to possible mass production plants, the overall cost will

not be a huge issue in this case. This means the company will be able to sell its products at an

even lower price yet still remain profitable. The company is taking an advantage of this and

using it to penetrate the markets of emerging economies with affordable products.

4.2 Marketing Goals and Objectives

Toyota’s enormous size and capacity is a great advantage in meeting industry growth.

The number of clients in need of cars is constantly increasing, thus creating a bigger market for

Toyota and requiring more of their products. The perceived importance of owning a car due to

increased travelling needs in today’s largely corporate world is constantly increasing as well.

Toyota’s great size will enable them to successfully meet the needs of this growing population of

customers in need of cars (Dobni, 2002, p.41).

The company keeps making quality product and make it a rule not compromise on this,

and not to give in to the competitors’ pressure and rise their prices then clients will remain loyal

to the company (Armstrong & Kotler, 2002). Then, everyone has a chance to know the real

values behind Toyota’s past, current, and hopefully future existence (Armstrong & Kotler, 2003).

Toyota is in the process of engineering lesser platforms to be used in the assembly of its

different models. This is as a cost cutting measure; they intended to compress their platforms

from 20 to ten in the ambitious exercise. This is especially important since their chief rivals; GM

and Ford have made notable improvements in their production process. Toyota is also thinking


twice about its bloated assembly points. It is thinking of best ways to reduce them without

hindering its efficiency (Mullins, Walker & Boyd, 2010).

4.3 Target Market

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).

Toyota has been previously blamed by the American Markets that their products are

lacking in flair and design unlike those of GM and Ford. This has led the company to be more

attentive to its American designers to make sure this needs are met. The V8 pickup which was

launched recently was as a result of this ambitious. The hybrid model, Primus, has also been

transformed since at its inception, it didn’t hit the American market. When they made it look

more futuristic, it resulted in big volumes of sales.

Overly, the Toyota Company is giving its competitors a hard time. Even though it has

experienced challenges like the recent recalls, it is still notable in market leadership position. If

the current impressive results and global positioning of the company is anything to go by, then

this is a position Toyota is not likely to lose any time soon.

4.4 Company Position in the Market

Toyota Company has been producing vehicles and significant products that are not

expensive and readily available. This has been a significant factor that has enabled the Company to

have a major cut in the market , and it is projecting to have most of the market by the end of 2013,


as it has put a cross a number of strategies to enable it reach the set target.

5.0 Market Program

This consists of the four marketing mix elements that are designed to fit the market in terms

of their needs and ability to access such products and services.

5.1 Product Strategy

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.

5.2 Price Strategy

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.

5.3 Location Strategy

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.

5.4 Promotion Strategy

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.

6.0 Marketing Implementation Analysis

Toyotas main focus will be in reaching the new markets of China and Europe. It will also


be concerned about the competition from other firms like Ford and GM. An advantage the

company has is the widely differentiated product range. Establishing new factories in these new

markets as well as opening up new franchises will help the company in getting an ease of

penetrating the new markets

Human resource is one of the most important aspects in this plan. The company should

always make sure they have highly motivated staff as this is directly proportional to good

production both in the qualitative and quantitative aspects. Toyota can do this by coming up with

schemes of rewarding their employees like helping them own cars subsidized rates. The

company should also make sure the personnel are the best in terms of technical know-how. The

company needs to carry out frequent training towards this end.

7.0 Financial data and Projections

The previous years have seen Toyota’s profit grows each year with an exception of 2009

due to the economic downturn as well as the recalls. The figures below illustrate this

Figure1: Toyotas impressive performance in the last four years (Johnson, 2009)

With the advent of more efficient production technologies coupled with the entrance into the new


markets, it is expected that the increase in profits will continue for the next five years. Below are

the projections for the next five year period

Figure2: Projected Financial returns for the next five years (Johnson, 2009)

Sales Forecast Millions of Yen

year 2009 2010 2011 2012 2013

Net SalesOperating incomeOrdinary IncomeNet IncomeResearchDivindends/yen

1,243,445

54,120 70,912 46,12330,051

32

1,455,650

65,023 80.636 47,99932,051

44

1,900,340

89,954 108,484 60,231 30,051

50

1,957,879

98,0530 125,44481,23420,051

60

2,000,534

99,760 14,343 57,57630,051

78

7.1 Tactical Marketing Activities

Toyota has taken a bold step in being a leader in sustainable development. This position

will need some innovations which translate to expenditure. They are however necessary as a way

of staying ahead of competition. The activities the company will embark on are given in figure 3

Figure 3: Tactical Marketing activities

Specific Tactical Activities

Person/Department

Responsible

Required

Budget millions

of yen

Completion

Date

Product Activities

1.Car air conditioning compressor

2.DC-DC converters for fuel efficiency

3.Low Exhaust Emission Engine

Production

engineers and

Product

management

30.45 2011

Pricing Activities Operations 15.25 2012


1.New Technologies

2.Compression of Production platforms

3.Merger of Assembly points

management

Distribution Activities

1. Opening up of new factory in America and

china

2. Machine handling

3.Logistical operations

Logistics

management

21.40 2010

IMC (Promotion) Activities

1.Concerts

2.Volunteer

3Youth Invention club

Marketing manager 9.20 2012

8.0 Implementation Plan

There are a number of activities that have been projected

within a life span of three years and the following

representation shows the aspects that have been targeted and

within what strategic period of time.

Year To be Achieved New Targeted

Markets (millions)

Cumulative Targeted

Markets (millions)

Today (2010) Working towards

hybrid products

250 250

1st Year (2011) Introduction of pricing 320 600


mechanism and price

differentiation

strategies.

2nd Year (2012) Enhancing hybrid

products by use of new

technologies

370 970

3rd Year (2013) Product differentiation

to meet the needs of

the market

420 1320

9.0 Evaluation and Control

There is a monitoring and evaluation team that will be set to watch over the progress of the

company in realizing the strategic goals. The short term goals will be clearly watched and

corrections put in place where targets are missed for they are the keys to fulfilling the long term

goals. Currently, the Company has made a clear step forward in ensuring that hybrid vehicles are

being produced, and so far the market has started improving in terms of overall reception of these

brands of vehicles. Another aspect that is supposed to be considered here is the speed of the roll-out

program of pricing mechanism introduced. Currently, it has taken the market by surprise as most of

Toyota products are found to be customer friendly. The Company has been able to come up with a

differentiation program for its products and this has helped it to have a huge market share. It is

projects to improve and reach the target within three years and this will be determined by the rate of

growth and the total number of market reached.


References

Armstrong, G., & Kotler, P. (2002). Marketing: an introduction (International edition). New

Jersey: Prentice Hall. Retrieved October 7, 2010 from

http://www.pearsonhighered.com/educator/product/Marketing-An-Introduction-7E/

9780131424104.page

Armstrong, G., & Kotler, P. (2003). Marketing: an introduction. New Jersey: Prentice Hall.

Retrieved October 7, 2010 from

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/

Booz, A. (2007). Striving for growth: Best practices in retail banking sales and service channels.

New Jersey: Prentice Hall. Retrieved October 7, 2010 from http://www.strategy-

business.com/media/file/leading_ideas-20071127.pdf

Chamberlin, P. (2009). Customer service complaint handling. New York: The Gurdian.

Retrieved October 7, 2010 from

http://www.impactfactory.com/p/customer_service_skills_training_development/

issues_936-2103-87287.html

Dobni, B. (2002). A model for implementing service excellence in the financial services. Journal

of financial services marketing , 40-42. Retrieved October 7, 2010 from

http://www.palgrave-journals.com/fsm/journal/v7/n1/abs/4770071a.html

Drummond, G., & Ensor, J. (2005). Introduction to marketing concepts. Oxford, UK: Elsevier.

Retrieved October 7, 2010 from http://books.google.co.ke/books?

id=Th54pUFEo6EC&dq=Introduction+to+marketing+concepts.+Oxford,+UK:

+Elsevier.&source=gbs_navlinks_s


Flanagan, N. (2007). How to provide exceptional customer service. New York. Retrieved

October 7, 2010 from http://ezinearticles.com/?How-to-Provide-Exceptional-Customer-

Service&id=2726818

Johannes, G., Bill, K., & Plenert. (2000). Finite capacity scheduling: management selection and

implementation. New York: John wiley & sons Inc. Retrieved October 7, 2010 from

http://search.barnesandnoble.com/Finite-Capacity-Scheduling/Gerhard-Plenert/e/

9780471352648

Johnson, J. M. (2009). Five pillars of sustaining exceptinal service. Chicago: 3 Palms Publishing

Group, LLC. Retrieved October 7, 2010 from

http://www.communicoltd.com/pages/166_five_pillars_of_sustaining_exceptional_servic

e.cfm

Hiroshu O. (2003). Chairman’s message. Retrieved September 30th 2010, from the Toyota

company website.

http://www.toyota.co.jp/en/ir/library/annual/pdf/2003/chairmans_message_e.pdf

Kirrane, D. E. (1990). Managing values: A systematic approach to business ethics. Training and

development journal , 53-60.

Lancaster, G., & Reynolds, P. (2005). Management of marketing. Oxford: Elsevier. Retrieved

October 7, 2010 from http://books.google.co.ke/books?

id=T6qHIr_hGYsC&dq=Management+of+marketing.&source=gbs_navlinks_s

Lascelles, D. (2006). Tell us the truth. Financial world , 37-39.

Levitt, T. (1975). Marketing myopia. Harvard business review , 26-40. Retrieved October 7,

2010 from http://www.casadogalo.com/marketingmyopia.pdf


Mullins, J., Walker, J. O., & Boyd, H. W. (2010). Marketing management: a strategic decision

making approach. Boston: A McGraw-Hill Irwin. http://books.google.co.ke/books?

id=u_UJAQAAMAAJ&q=Marketing+management:

+a+strategic+decision+making+approach.+Boston:+A+McGraw-

Hill+Irwin.&dq=Marketing+management:+a+strategic+decision+making+approach.

+Boston:+A+McGraw-

Hill+Irwin.&hl=en&ei=YZ2tTJD_JoOUOoLovc0F&sa=X&oi=book_result&ct=result&r

esnum=1&ved=0CDAQ6AEwAA

Porter, M. (1985). Competitive advantage. New York: The Free Press. Retrieved October 7,

2010 from http://www.12manage.com/methods_porter_competitive_advantage.html

Porter, M. (1996). What is strayegy? Harvad business review , 61-69. Retrieved October 7, 2010

from http://www.ipocongress.ru/download/guide/article/what_is_strategy.pdf

Shaffer, J. (2003). Communicating for business results: how to choose and execute

communication projects that dramatically help company. Journal of employee

communication management , 34-36.

Thomas, J. G. (2001). Business planning: long range and strategic management. Dublin: Black

Hall Publishers Ltd. Retrieved October 7, 2010 from http://books.google.co.ke/books?

id=MiR2ls7Uyo8C&dq=Business+planning:&source=gbs_navlinks_s

Documents

Toyota Term Project