Toyota: Domination on Global Car Market for 75 Years

Nike Individual Strategic Marketing Paper John Houghton California State Monterey Bay Executive Summary Toyota Motor Corporation began as an umbrella division of the Toyoda Automatic Loom Works. In 1929, Kilchiro Toyoda ventured across Europe and the United States to investigate automobile production. Due to the First World War, the Japanese government required domestic vehicle production. Toyota helped produced its first gas powered Type A engine that enable the production of these cars Today, Toyota is still the second largest car manufacturer on Earth.

And they are the seventh highest revenue grossing company in the world. One of the largest reasons they hold a large portion of the global vehicle market is because of their dedication to quality and marketing.

They have experienced a few Public Relations hurdles a long the way with product mishaps like the acceleration pedal debacle. Because of the strength of their marketing, paired with quality products and customer loyalty they are still a successful brand. Their marketing plan is a global masterpiece that is evident when observing their distribution channels, production, supply chains, continuous improvements, and their focus on global marketing.

We focus on observing their current target positions. As we will also discuss a broader market that Toyota will target in the future. Lastly, we determine that Toyota will remain one of the global companies that consumers trust and will continue to prosper in the future. Toyota is a Japanese multinational car manufacturer headquartered in Toyota City, Aichi, Japan. Globally, Toyota employs 364,445 employees and is the sixth largest company in the world by revenue earnings.

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And is the largest revenue producer in all of Japan. It currently produces 80 different models around the world. The Rav4 model was the 11th best selling car in the world, and Toyotas 3rd highest selling model. (2018.)

Toyotas current logo was revealed in 1989, in part to honor the 50th anniversary of the company. It was also introduced to differentiate the Toyota line of cars from their Lexus luxury brand of cars. This symbol was first seen on the 1989 Toyota Celsior, and is one of the most recognized symbols in the world. The symbol is a combination of three ovals that combine to represent a T for Toyota. Each oval carries its own representation. The overlapping of the ovals stands for the level of trust and mutual beneficial relationship between the customer and company. The largest oval represents the “global expansion of Toyota’s technology and unlimited potential of the future”. (2019, Toyota) Toyota logo is a direct representation of the type of relationship and reputation the car manufacturer has held for generations in the car industry.

Segmentation The Rav4 model was originally introduced in the American market in 1998.When released, it created a new industry segment of its own, the crossover SUV. It is still a growing market segment to this day. And the Rav4 is still the highest selling model in the segment. The 2019 model is set to make waves in the market as well; it continues to provide improved performance and fuel efficiency. It is marketed to an upper middle class male above the age of 35 who is looking for a reliable product with off-roading capabilities. This customer has an active lifestyle that focuses on activities and hobbies that are found in an urban setting. Toyota customers are also responsible and have a need for sustainable products. They also want their products to reflect these values, and give off a professional and elegant edge. And the bottom line is, Toyota customers want to feel secure and have a sense of reliability in their expensive purchases. Toyotas current market is based on cost efficiency and a broad demographic segment. The Rav4 is produced for the customer seeking an off-road capable SUV with more storage space and with the drive and efficiency of a compact car. A portion of this market segment also figures to value sustainability as well. Customers in this demographic as make purchases placed on value.

Improvements with the 2019 model look to grab even more of this market. Toyota is focusing on providing a quality car that is geared for young professionals and young parents. Targeting Toyota target market for the Rav 4 is an active male between the ages of 25 and 65. They vary between single, married, new parents, and retirees. Most of this target market is a successful professional. While some consumers use the Rav4 to navigate their work commute and city lifestyle, most of these consumers use the Rav4 for recreational activities. Changing Targets One market that is similar that is not currently being marketed to by Toyota is successful females. Many more young professional or career women are seeking hefty cars that can are built for the outdoors. 4 P’s Products Toyota offers the automobile consumer a vehicle for nearly any place or person. Lexus is their luxury line of product. While the Welcab series focuses on those with disabilities or an older demographic.

Most consumers don’t know that the company also manufacturers yachts as well. The Japanese company also produced their own engines, accessories, and spare parts for automobiles and marine products. Besides these products, they also provide e-Toyota, biotechnology, financial services, warranties, road assistance, and car maintenance services. This mix of products appeals to a broad set of consumers, in turn this reduces Toyotas market based risks. And many of these products and services are the essence of customer reliability and loyalty from Toyota consumers. Place Toyota dealerships are the location where most of their products are distributed. They rely heavily on these dealerships to push their vehicles. It is where most of Toyotas revenue stream can be found from vehicles and small parts. In the United States alone, Toyota has over 1,500 dealerships. There are even a sub section of their revenues that is generated from retailers who sell Toyota accessories. Toyota also takes advantage of showrooms, exhibition centers, and special events. Promotion Toyota uses personal salesmen at dealerships that promote various vehicles and products to potential buyers. Corporately they also use a direct selling tactic to promote their business and products. They also heavily use various advertisements across multiple platforms. These various media outlets include television advertisements, radio advertisements, and websites advertisements.

Toyota also utilizes their Public Relations department to posture themselves with a positive public image. Currently, Toyota utilizes multiple programs like TogetherGreen and Meal per House to boost their public image. These programs focus on sustainability and giving back to the communities they thrive in. Much like other manufacturers in the market, Toyota frequently provides sales promotions that are always changing. Price Toyota has built a reputation for maintaining the highest level of quality with affordable prices. Prices vary depending on the model vehicle and levels of the product as well. They base these price rates according to competition, segment, geography, and demand levels. These are flexible prices that fluctuate according to market conditions and competitor’s prices. Their business model is positioned to allow customers to make credit payments at the lower possible interest rate. Affordable prices have been the backbone of their customer loyalty and brand marketing.

Toyota defines these two strategies as market-oriented pricing and value-based pricing. Market-oriented are often used for Toyotas sedans and trucks. These have higher variances because of a fluctuating market with more competitors. Value-based pricing is often utilized for helping determine the market price of the luxury line Lexus’s and hybrid Prius. These prices are based on what they believe consumers perceive the value of these vehicles to be. Positioning Product Every Toyota vehicle is known for a reliable and efficient product, at a reasonable price. Nearly ever other competitive card in this market is within $1,000 dollars of one another. This includes the Honda Cr-V, Subaru Forester, and Chevy Equinox. There are fees that vary between each manufacturer, like delivery fees that draw these bottom line numbers even closer.

Performance wise, the Rav4 has the best engine and horsepower available. It carries a lot of storage space and is extremely comfortable. These are both huge pluses when marketing towards the outdoorsman. And the interior features of Bluetooth, Wi-Fi, and improved navigation also turn this vehicle into the essential camping companion. Fuel efficiency wise, most of the competitors have better fuel efficiency, except on the highway. This is not to say that the Toyota Rav4 is not also great on mileage. It will certainly get you to that remote area in under a tank of gas. Toyota also does offer a hybrid alternative version of the Rav4 as well. Car reviewers have also spoke to length about the style of competitive producing a sporty in look. This is also a result of Toyota valuing quality over esthetics. The gap between the competition and Toyota’s Rav4 is the improved style, after sales service, and reliability. Most consumers in the market forget to include the Total Cost of Ownership of a vehicle when looking at the sticker price. The average lifespan of competitors in the market is 8 years.

Toyota boasts an impressive average lifespan of over 10 years. One of the largest problems about this market is that there are so many competitors. There are over 51 different vehicles listed on U.S. News Best Crossovers for 2018. This makes competition fierce, but most car executives agree this doesn’t mean the market is saturated just yet. Sam Fiorani, the Vice President of Global Vehicle forecasting with AutoForecast Solutions believes we are a decade away from meeting market saturation. Although most of the producers in the cross over SUV market offer products for similar prices across the board, Toyota is still slightly higher than average. Because of higher rates of competition, Toyota may have to steadily bring the starting price of the Rav4 down each year. This is something Toyota is reluctant to do because it cuts into overall profit margins.

Ethical Issues Marketing cigarettes to a youth market has always been a hotly debated marketing ploy. Recently, the emergence of vaping and e-cigarettes has brought this discussion back to the forefront. This is a highly controversial ethical debate that is currently going on in our society today. There is an ethical issue because they are marketed to underage teenagers who don’t always have the capacity to make the best long-term decisions for themselves. And the entire vaping industry prides itself on selling products that are much healthier than cigarettes. Companies like Juul appeal to teenagers for their technology based products and ability to be hidden. Most of the vaping products on the market can easily be mistaken for USB drives. And the majority of these companies produce flavors like cotton candy, fruit and other sweet flavors that appeal to a younger market. One of the other multitudes of issues is that these vaping devices deliver higher volumes of Nicotine than a cigarette. Research has found that one Juul pod has Nicotine equivalency of a pack of cigarettes.

Differing Ethical Issues Toyotas Issues are not similar for many reasons. Toyotas ethical issues stream from product malfunction accidents. These aren’t similar because of the difference in the targeted market segment. Consumers of Toyota are at least 18 years of age and are legally adults who can make rational decisions for themselves. Under-aged minors that are consuming toxic chemicals that can potentially give them unhealthy life-long habits don’t have the same decision making ability or legal rights to make these decisions. I also believe that these issues will change because of legislation changes. It is only a matter of time before sanctions are brought down on large vaping companies that force them to change their marketing schemes. In the near future, we will see the entire smoking industry change. Flavors will be changed that aren’t targeted to entice teenagers. And the restrictions on buying these products will also become more stringent. Legislation was already in place and was suppose to impede car manufacturers from making potentially harmful products.

Altering Ethical Stance Most famously, Toyota experienced issues with over 2,000 reported accidents of the accelerator pedal being stuck down. Reports found that issues streamed from using improper equipment and poor safety testing requirements. This issue was further exacerbated after the company claimed there would be no reason for customers to be alarmed after the first recall. Toyota eventually paid out $1.2 billion to avoid prosecution for covering up severe safety issues with unintended acceleration caused by continuing to manufacture parts they knew were faulty. (ABC News, 2014) This is one of the largest vehicle manufacture related Public Relations scandals. And it is the largest monetary penalty that a vehicle manufacturer has paid out. Lately their focus on shareholders instead of stakeholders has also taken flack. This is not an uncommon qualm with companies the size of Toyota. It is recall and equipment malfunctioning that is driving the narrative for these discussions even further. Toyota has claimed they focused on gaining a bigger share of the market and higher revenues. An adverse of Toyota performing such acts has left stakeholders feeling as though they don’t have as many resources to commit to safety as decades past.

This research has changed my personal stance on Toyota whatsoever. I realize that most companies will not have the same time or resources to allocate to safety when expanding its consumer base. I also owned a Toyota Camry that was recalled during the gas pedal malfunctions. I felt secure as a customer with the way that Toyota handled the situation. As a consumer, you have to be realistic and realize the user is more likely to cause an accident than a faulty gas pedal. Every company of Toyotas size will always have some sort of negative feedback; this research changes none of my beliefs as a consumer. Conclusion Toyota has dominated the global car market for 75 years now. According to my research, Toyota will continue projects to trend in a positive direction. By re-establishing themselves as an ethical and reliable producer in the car market they will continue this progression. Focusing on this improved image and adding an emphasis on security will provide the company with certain marketing success.