PGBM15 Marketing Management Theory and Practice: Toyota Company Assessment Answer
Title: Critical Evaluation of the Contribution of Current Marketing Management Theory and Practice
Toyota Company in USA plays a significant role in the automobile industry. It is a German company, however, the name Toyota is a well-known name of the automobile industry of different countries. There are various companies in the automobile industry in USA. Some of them are famous names like General Motors. In this situation, it is a challenge for the Toyota USA to make the smarta move so that it can hold its position in the competitive market.
Part 1: Critical evaluation of the strengths of Toyota Company’s marketing strategy for the SUV category in delivering value to customers.
In order to understand the status of Toyota USA, the application of the game theory of marketing can be done. The game theory in marketing management is used for better conceptual decision making in the competitive market (Amasaka 2016). It is represented through the matrix where the possible outcomes of the marketing strategy can be mentioned.
In the case of Toyota USA, the different marketing assumptions can be made for the innovation of the sustainable SUV that will be launched in 2020. Apart from that, the behavioural assumptions of the stakeholders are needed to be included in this as the game theory is based on the assumptions.
In this context, 7p's of marketing can be mentioned. The 7p's of marketing in case of Toyota USA is as follows-
|Product||The product made by the Toyota USA is of standard quality. There are different other car manufacturing companies in the USA. However, among them, Toyota is doing better business and getting better consumer feedback. Toyota Sequoia, Toyota Land Cruiser, Toyota RAV4 and many other SUV has been producing by the Toyota.|
|Place||The availability of the Toyota car in the USA is easy. Almost all the car dealers in the USA keep the model of Toyota Cars in their showrooms.|
|Price||The price of the Toyota car is different for the different model starting from $15,240. The consumer can choose the model along with maintaining the budget (Toyota, 2019). This indicates that Toyota has a range of cars which are affordable to the ordinary people.|
|Promotion||The marketing of Toyota is done in a proper way throughout USA. Apart from that this company has dedicated consumer base which is an advantage for this car manufacturing organization.|
|People||The people indicates the employees of the Toyota USA. The employees and the people involved with the manufacturing of the parts for Toyota are working efficiently so that the end product can be of a high standard. Apart from that, the sales team of Toyota USA is doing their job effortlessly so that the brand value of this car manufacturing can get into a better position.|
|Processes||The consumer can choose the car from the showroom. Toyota USA does not sell the cars directly to the consumers (Toyota, 2019). Instead the organization deal with the consumers through the third-party dealer.|
|Physical evidence||As the evidence of the buying car, the dealer may provide dome memo with an official stamp. Apart from that, the dealers are needed to be registered from the Toyota USA. In that case, the dealers will hold the authorisation from the Toyota USA. Apart from that, the customer will get car insurance and the proof of purchase.|
Table 1: Marketing mix of Toyota
Source: created by the author
It has been seen that the strength of Toyota is the delivering of the quality products along with maintaining the transparency (Liu and Meng, 2017). It has been observed that almost all consumers are satisfied with the Toyota cars. Most of them are happy with the after sale service the company is giving. Apart from that Toyota has a significant brand value that helps the organisation to make a different place in the competitive automobile market in the USA.
The customer value is delivered through the delivery of the quality product. The value of the consumers can be defined by the situation where the consumers can get all the desired requirements from the product (Kehr and Proctor, 2017). From the discussion, it can be assumed that Toyota has made it possible to fulfil the expected requirements of the people. From this point of view, it can be said that the consumer value is delivered in a proper way.
Part 2:Research and evaluation of the key dynamics and trends in the competitive and external environments with regard to the SUV category.
In order to know the current happenings of the market and the situation of the market, external analysis is needed to be done in a proper way. In this case, the PESTLE analysis of the Toyota USA is done. This will indicate the possible effectiveness of the new sustainable SUV that is going to be launched in 2020.
Political: It has been seen that political factors play an essential role in managing and the expansion of the business in the organisation. Similarly, Toyota has to play a crucial role in order to mitigate the issues raised form the political factors. At present, working permission at the USA for the people from the other country has been revised (Betancourtet al.,2018). There is a different restriction imposed on the people coming from different countries to the USA for the work. In this situation, Toyota is having problems with the employee in the organisation. Toyota is a Germany based multinational company which has expanded its business successfully to different countries. In that case, it has become famous for the organisation to exchange employees between different branches. However, the service law of the USA is sustaining this possibility that is affecting the innovation of Toyota.
Apart from that one of the significant issue in the USA is the emission of the carbon. It has been seen that the USA is among the countries that are responsible for generating a higher amount of carbon footprint. Regarding this, the government of the organisation has imposed strict environment rule which has to be maintained by Toyota. It has been seen that support all the rules imposed on the organisation is increasing the manufacturing cost of the products.
Economic factors:the GDP of the USA is much higher and is the largest economy generating $20,494,100 million last year (Lydia DePillis, 2019). One of the interesting economic factors that have been an advantage of Toyota is that the Yen is weaker than the US Dollar. This makes the business of Toyota profitable as Toyota is a Japanese company. This can be considered as the opportunity for Toyota. Though the recession affected the USA negatively and unemployment became a headache for the government but slowly the country is recovering and employment rate increasing 0.10% in January 2019 than December 2018. So the opportunity is there for Toyota to get the potential employees in the USA. Better business growth will be better revenues in terms of dollars. It has been seen that in the current fiscal year, the operating profit has grown to 5.09 billion dollars for Toyota. Apart from that, the revenue has grown up to 2.3 per cent in the current fiscal year (Alexandra-Maria 2018). All these indicate that the organisation is operating the fair business and there is lots of growth and opportunities for this business organisation in the USA.
Social: The social factor is essential for the determination of the demands of the products for the organisation. It has been seen that most of the Americans prefer to have private cars. In this case, most of the ordinary people like to choose cars at a reasonable price along with better functionality (Tron et al.,2018). Toyota has the ranges of cars that are reasonable in price and provides better features than cars in the same range from different brands. This quality has the business and the brand value of Toyota in the USA. Apart from that, the smart pricing strategy has made this car manufacturing company desirable to the people.
Technological:In terms of technology Toyota is in good position. The company uses the emerging and the latest technology for the development and manufacturing of the cars. Apart from that the use of the advanced technology for finding the car and the self-maintenance of the car is also carried out by the implementation of this organization (Kozielski, 2017). Car industry is the most important in USA and government also investing lot in it for the technological development. It has been seen that the organization has also implemented the use of the technology in managing g the human resources in the company. The organization has implemented the Worldwide Automotive Real-Time Purchasing system in order to determine wastage of the time and the personal hassle, so that the employees in the organization can indulge themselves for the innovation regarding the products.
Each of the automotive products has to pass the emission test before releasing in the market. It has been seen that Toyota has improved the mechanism of the engine so that the mitigation of the carbon emission can be achieved in a proper way. Apart from that this also makes the products manufactured by the organization sustainable.
Environmental: It has been seen that the use of technological advancements in manufacturing also has a particular impact on maintaining the environmental factor for Toyota. The use of carbon emission mitigation technology the Toyota maintains environmental sustainability. Apart from that the parts and the materials the organisation is using can be defined as sustainable. Apart from that, the organisation is planning to launch a new product which can be described as the sustainable SUV in 2020 (Environmental Protection. 2019). It can be said that the initiatives taken by Toyota to maintain the environmental factors has a specific positive impact on the business of the organisation and the people are becoming interested in this brand.
Legal:Toyota has faced some of the legal issues that indicate the management has to be careful about maintaining the laws of the business. Recently a bunch of the products from Toyota have failed in the emission test. This incident can question the high standard Toyota is maintaining. Constant legal issues can affect the business of the organisation in a negative way. Beside this increase in minimum wage rate from $8.25 to $9.20 also impacted the company and the cost of their service growth due to that (Paywizard, 2019).
Porter’s five forces:
Competitive Rivalry: Competitive Rivalry of Toyota is high. It has been seen that the automobile market of USA is highly competitive. There are other well-known car manufacturing companies like General Motors, Ford, Honda, Fiat and many more. In this situation performing better is a challenge for Toyota. However, it has been seen that the acceptance of the Toyota among the common people is beating the cars with high prices (Toyota, 2019). However, it can be said that in order to compete in the market Toyota has to become more innovative in sense of car manufacturing and servicing.
Bargaining power of the consumers: The bargaining power of the consumer is high as the consumers have other options in the market apart from Toyota. There are other car manufacturing brands available in the USA that will provide the same service as Toyota at a reasonable price. In this case, it can be said that the bargaining power of the consumer is high for Toyota that will lead this organization to bring more innovation in manufacturing.
Bargaining power of supplier: The bargaining power of the supplier is another thing in Porter's five forces that determines the market condition of the respective organisation. It has been seen that the bargaining power of the supplier is low as Toyota is a well-known brand name in the USA (Harmon 2019). Apart from that, it provides the cars at a reasonable price that makes it one of the trusted and preferable brand for most of the people. In this case, the suppliers are interested in the distribution of Toyota.
Threat from new entry: The risk from new entry attribute in Porter's five forces is low for the Toyota. It has been seen that entering into the car manufacturing market is not easy. Moreover, Toyota is already in an established position in the market. It can be said that people will not choose a new brand over Toyota.
Threats from substitute: The threats from substitute can be considered as a medium. As there is notmuch substitute company, who produce the SUV at an affordable price like Toyota. Apart from that gaining the trusted position in the automobile industry is a long term process. Some of the substitutes of the automobile company can be considered as a threat, but the amount is very low.
Identification of the key factors underpinning the opportunities
It has been seen that Toyota is thinking to launch a new sustainable SUV within 2020. The new innovation has some significance as it will help the organisation to gain the goodwill of the people. It has been seen that environmental issues are becoming some of the major issues nowadays. In this situation, common people are getting aware of the pollution in the environment due to the excessive use of the automobile. In this case, the innovation of the sustainable SUV by Toyota can have a positive impact on the mass.
There are certain things that are needed to be considered by the organisation before the launching of the new SUV. Before launching of the new SUV, the possible acceptability of the product is needed to be judged (Toyota, 2019). In that case, the surveys can be conducted among potential consumers. It can be said from the situation that the product will be initially acceptable as Toyota is claiming this product as a sustainable product.
Apart from that, the pricing of the SUV is not going to be high. Toyota has analysed the market before setting the price of the product. It can be said that the reasonable price of the product will be helpful for the people to buy the new model of SUV from Toyota. Apart from that, the brand name will do the marketing for the product. It can be said that the emission of the carbon can be mitigated through the use of the advanced engine developed through emerging technology (Toyota, 2019). It can be assumed that as the SUV is sustainable in nature, the technology and the material used for this product will also support the conservation of the environment. The mitigation of the all kind of pollution that can be seen from the automotive products is mitigated in this model.
Recommendations for building a sustainable brand
Key opportunities identified to launch and market a new sustainable brand for Toyota
There are specific opportunities for Toyota to launch a sustainable brand. It has been seen that the people of the USA and around the world are getting aware of the impact of pollution in the environment. Apart from that most of the people are adopting a healthier lifestyle that will maintain their balance in life. All these things indicate that the demand of the people is inclined towards sustainable development and maintain sustainability. In this situation, it is an excellent opportunity for Toyota to promote a brand that will be sustainable in nature.
Product rationale and overview
The product launched by Toyota in 2020 will have different sustainable features. The engines used in the car is said to control the emission of the carbon in an effective manner. Apart from that, the designing of the car can be done in such a way that it will take less water while washing the car. Apart from that, the use of smart technology and GPS will be used so that the car can help the driver to reach the destination through the shortest distance (Toyota, 2019). This will help to reduce the fuel consumption of the car. All these features indicate a sustainable feature of the car.
Marketing objectives for the new brand
The marketing objective of Toyota regarding the launch of the new SUV can be on the win-win condition. The company is assured that the selling of the new car will give the company some amount of profit. However, the marketing strategy will enhance the selling of the products in an effective way. The marketing of the Toyota Company, in this case, will focus on the existing consumer base. Apart from that, the organisation will try to make the new consumer based on the idea of sustainability (Toyota, 2019). Apart from that Toyota has decided that the agenda regarding saving the environment will be included in their marketing strategy. Regarding this, the company can take some sort of activities related to corporate social responsibility. Through this, the organisation can reach to potential consumers. As well as the organisation can also get feedback regarding the new product. On the basis of further feedback, modification can be done for the next version of the sustainable SUV.
Communication with consumers can also give the company a chance to determine the right price for the SUV. If these initiatives bring success in the marketing campaign, the organisation can develop more products under this brand name.
Part 3: Recommendation segmentation targeting and positioning (STP) strategy
There are various segmentation types such as demographic, psychographic, behavioural, geographic have been sued to segment the market. The segmentation can be done on the basis of personal preferences of the people and the demographic division. It has been seen that the concern about the environment is restricted among a defined group of people. The identification of this group can be made through the use of the surveys. Apart from that it has been seen as the USA has a cosmopolitan culture, preference according to the demography can be seen in the different parts of the country. In this case, Toyota can segment the potential consumers on the basis of the demography and the personal preference of the cars.
The targeting will indicate potential consumers. This section will be followed by Toyota after the segmentation phase. After the identification of the groups of potential consumers, it is the responsibility of Toyota to target those groups of the potential consumers. In order to get their attention, the organisation send the individuals regarding the launch of the new sustainable SUV. Apart from that, the potential marketing is needed to be done through traditional advertisements so that these groups can come to know about the launching of these products.
The positioning of the product manufactured by Toyota is essential. The proper positioning of the product will help the organisation to choose the right group of the target consumers for selling of the products. The positioning of the products will be dependent on the various factors like the price and the purpose of the products. Apart from that new functionality of the product is also the considering thing regarding the positioning of the product.
Fig 1: positioning of Toyota
Source: (Toyota, 2019)
It can have been seen that the price of the SUV launched by Toyota is of reasonable price. Apart from that, the car will be useful for the daily purpose. This indicates that the sustainable car launched by Toyota is sustainable in nature and it is useful for the common people as it will fulfil all the essential daily functionalities. Apart from that the price of the car is reasonable. From all these factors it can be said that the positioning of the car can be included in the category "Family".
As per the statement of the Kottler(2012), in the competitive market brand has been considered as the face of the company through which customer can rely on the company. Brand may be image or something specific related to a particular company. Schultzet al. (2009) also highlighted that, in this oligopoly market brand is the only term that can be reminded by the customer while purchasing. Toyota maintains their brand since the beginning and captured market in a systematic way. In order to build a brand Toyota must have to segment their market and target the customers who could remember the brand of the Toyota while purchasing SUV. Not only that, Toyota also operates the digital branding management. As such Toyota introduced the Lexus, a premium brand deemed a classic. This Lexus brand dominates the luxury customer market. Through these strategies Toyota is able to maintain the brand in the market and climbing on the top of the automobile industry.
4ps of marketing strategy
|Product||The product made by the Toyota USA is of standard quality. There are different other car manufacturing companies in the USA. However, among them, Toyota is doing better business and getting better consumer feedback.|
|Place||The availability of the Toyota car in the USA is easy. Almost all the car dealers in the USA keep the model of Toyota Cars in their showrooms (Toyota, 2019).|
|Price||The price of the Toyota car is different for a different model. The consumer can choose the model along with maintaining the budget. This indicates that Toyota has a range of cars which are affordable to the common people.|
|Promotion||The marketing of Toyota is done in a proper way throughout the USA. Apart from that this company has a dedicated consumer base which is an advantage for this car manufacturing organisation.|
Table 2: Marketing mix of Toyota
Source: created by the author
The discussion is regarding the business aspects of Toyota and its opportunity regarding the launch of the new SUV in 2020. In order to understand the brand value and the market condition of the organisation, external analysis of this organisation has done. From this, it is seen that the organisation has absolute potential and opportunities for launching new products. Apart from that, it has been observed that there is a demand for sustainable products in the market. This can be regarded as a suitable situation for the launching of the new product of Toyota. As the new product is sustainable in nature, it can be said that the product will widely acceptable to the people and the consumers.