Marketing of the One of the Major Automobile Manufacturers in the World - Coursework Example

Toyota Motor Corporation Name of Student: Name of Professor: Name of Course: Code of the Course: Date of Submission: Toyota Motor Company (TCM) Executive Summary Marketing is one of the important processes in an organization. Its aim is to make the brands of an organization known in the market with an aim of enhancing sales. The following report will focus various aspects in marketing with special reference to Toyota Motor Manufacturing which is one of the major automobile manufacturers in the world. The report will be structured in different headings namely Hierarchy of strategies, five competitive forces, analyser/prospector/defender/reactor strategies, micro and macro level analyses, market research, differentiation and positioning, segmentation and targeting and product/price/place/promotion policies. The conclusion will give an overview of the points discussed in the main paper. Table of Contents Executive Summary 2 Table of Contents 2 1.0 Introduction 3 2.0 SMART Objectives 4 3.0 Hierarchy of Strategies 4 4.0 Porter’s 5 Competitive Forces 5 4.1 Competition 5 4.2 The Power of the Buyers 6 4.3 The Power of the Suppliers 6 4.4 Threat of New Entrants 6 4.5 Threat of Substitute Products 6 5.0 Aggressiveness Strategies 7 Analyser /Prospector/Defender/Reactor Strategies 7 5.1 Prospector Strategy 7 5.2 Defender Strategy 7 5.3 Analyzer Strategy 8 5.4 Reactor Strategy 8 6.0Macro and Micro Level analysis 8 6.1 Macro Level Factors 8 6.2 Micro Level Factors 9 7.0 Market Research 9 8.0 Product/ Price/ Place & Promotion Policies 9 9.0 segmentation and Targeting 10 10.0 Differentiation and Positioning 10 11.0 Conclusion 11 References 12 1.0 Introduction Marketing is one of the vital business operations in any organization. Marketing ensures that an organization is able to make its products known in the market and in the process possibly attract customers. Marketing is a dynamic process and is subject to change depending on the changing patterns in the market. Ideally, marketing cuts across all the operations in an organization; from the product design process to its actual sale, specific marketing concepts must be taken into account. The following report will give a deep insight into marketing in the automobile manufacturing industry, with a special focus on Toyota Motor Corporation. 2.0 SMART Objectives Toyota Motor Corporation Limited was established in 1939. The company focuses on the manufacturing of high tech automobiles at the minimum costs. The company’s global vision is to be a leader in mobility by developing the most responsible and safest means of transporting people from one location to another. The vision commits the company to the upholding of quality, continuous innovation and the embracement of eco friendly solutions. Toyota Motor Company is part of the larger Toyota Industries Corporation which is a range of industries which are geared towards ensuring that the motor manufacturing unit is well supplied with all the raw materials among other requirements. The total Capital of the company is 397.05 billion Yen (Toyota Motor Corporation 2013, p.1). In the 2012 – 2013 financial year, the company had sales equivalent to 22, 064. 1 billion Yen and produced 8,698,000 vehicles (Toyota Motor Corporation 2013, p.1). The company employs 331, 876 employees directly. The company uses strategic operation polices such as Jidoka and Just in Time so as to ensure that it minimizes its operating costs and in the same process ensure that it produces products which are able to satisfy the needs of customers sufficiently. The following sections will analyze key marketing aspects with respect to Toyota Car Manufacturing Company. 3.0 Hierarchy of Strategies Normally, organizations have different levels of strategies, each of which is meant to enable it meet a specific set of objectives within the given level (Kathuria & Porth, 2003). The hierarchy of strategies has three main levels namely corporate, business-level and functional strategies. Corporate strategies dictate which kind of business an organization is involved in and the development strategy of the organization. Business strategies focus on the domain of the business and its development strategy. The functional/ marketing strategies focus on specific operations in the organization which are needed for it to succeed in the market. TCM implements its strategy by the use of the three different levels of corporate strategy. 4.0 Porter’s 5 Competitive Forces Michael Porter, a reputable marketing expert proposed that there are five main forces which influence the type of competitive strategies which an organization develops María O., & (Luisa ,2010). Precisely put, they are the five forces which shape strategy. The five forces are the competition in the market, the power of the buyers, the power of the suppliers, the threat of new entrants and the threat of substitute products (Porter, 2008). The following is an analysis of the five forces with respect to the automobile industry and Toyota. 4.1 Competition The automobile industry is highly competitive. The main competitors in the industry are Toyota Motor Corporation, General Motors, Volkswagen Group, Hyundai, FIAT, PSA Peugeot Nissan, BMW, Daimler Ford, the Rover Company, Suzuki and Honda among others. The high competition necessitates that a company establishes appropriate competitive strategies (Porter, 2008). Owing to the high competition, companies must come up with proliferated products which have the ability to satisfy specific needs of their target markets. Toyota Motor Manufacturing Company has been able to emerge top in the industry by its value on excellent designs and cost effectiveness which are key to the modern market. 4.2 The Power of the Buyers The power of the buyers in the market is relatively high. This is because of the many options available in the market. For this reason, companies have to come up with products which have the ability to satisfy the specific needs of the customers in the market in order to tame that power (Porter, 2008). This explains the wide product range of Toyota Motor Corporation whose aim is to reach out to specific customers in the market. 4.3 The Power of the Suppliers The power of suppliers in the automobile manufacturing industry is also high. This power has the ability to influence the operating costs of manufacturers (Porter, 2008). For this reason, companies operating in this industry must find ways of lowering this power. Toyota Motor Corporation has been able to do this by establishing various companies which are part of the larger Toyota Group which supply TMC with vital supplies. 4.4 Threat of New Entrants The threat of new entrants into the market is low. This is due to the high capital costs associated with automobile manufacturing. In addition to this, the entry of new brands in the market is challenged by the existing brand loyalties in the market. 4.5 Threat of Substitute Products The threat of substitute products in the market is high. There are many automobile manufacturers in the world who produce products which have the same abilities as Toyota vehicles. For this reason, Toyota Motor Corporation has made it its key vision to stay ahead in the motor manufacturing industry in the world. This has enabled the company to emerge a leader in the global industry. 5.0 Aggressiveness Strategies Analyser /Prospector/Defender/Reactor Strategies The aggressiveness strategies dictate the vigor with which a company operates in the market. Aggressiveness is measured with respect to its assertiveness in marketing, innovation, financial leverage, the risk propensity among others (Slater & Narver, 1993). The following section will analyze the four main aggressiveness strategies with respect to Toyota and the automobile industry. 5.1 Prospector Strategy The prospector strategy is a collection of various strategies which are used by an organization to increase their market share of venture into new opportunities (Slater & Narver, 1993). The strategy involves such practices as product development and leveraging. Toyota Motor Company uses this strategy to expand its market share by having a wide range of products, each of which is meant to satisfy specific customer needs. 5.2 Defender Strategy A defender strategy is one which aims at ensuring that an organization is able to secure its already acquired market (Slater & Narver, 1993). It is e complete opposite of the prospectus strategy. Some of the practices which enable an organization to do this include developing brand loyalty, hence ensuring that it retains its market. Toyota Motor Company does not uphold this strategy but integrates some of its concepts in order to retain its customers. 5.3 Analyzer Strategy This strategy operates in the midpoint between prospectus and defender strategies (Slater & Narver, 1993). It is a moderation of each of the strategies. Toyota has been implementing this strategy; gradually increasing its market share with time to emerge a global leader in automobile manufacturing. 5.4 Reactor Strategy This strategy involves making reactions to occurrences in the market(Slater & Narver, 1993). The occurrences are often triggered by Macro economic factors. This strategy is used by organizations which have low bargaining power in the market. Toyota Motor Corporation does not use this strategy. 6.0Macro and Micro Level analysis The micro and macroeconomic forces influence the attractiveness’ of an industry. The automobile industry is affected by various forces which influence an organization’s success. 6.1 Macro Level Factors Macro level factors are forces which an organization has minimal influence on. They include such things as legal issues and global economic patterns. For this reason, marketing methods must take into consideration these forces in order to ensure that they are able to reach out to them. Some of the macro economic forces in the automobile manufacturing industry include the global economic patterns, changing social values, rapid changes in technology and legal disparities in world countries. 6.2 Micro Level Factors Micro economic factors are factors which influence an organization’s operations from within. Normally, an organization has the ability to influence them. The automobile manufacturing industry requires that an organization take full control of the micro economic factors; hence being able to increase its competitiveness and performance in the market. Some of the micro economic factors in the global motor manufacturing industry include operation policies, supplies, management and marketing. Toyota has been able to achieve its success in the market by taking care of the macro economic factors by establishing and implementing policies such as Just In Time, Lean Manufacturing, Kaizen and Jidoka. This has enabled the company to produce products which have a high ability of satisfying the market needs. 7.0 Market Research Marketing research is a process in which an organization collects crucial information from the market such as demographics, purchasing power of the target market, and the specific needs in the market among others. On this point, it is important at to note that market research is very important in ensuring that marketing is successful. Toyota Motor Corporation has invested heavily in market research; which explains the big product range which it has. 8.0 Product/ Price/ Place & Promotion Policies Effective marketing strategies call for a mix of various elements so as to ensure that the needs of a customer are met and at the same time ensure that an organization is able to achieve its economic objectives. The four main elements ate product, price, place and promotion. The product produced must meet the needs of the customers; it must be sold at customer friendly price and must be available at the most appropriate point of sale. Lastly, it must be promoted using various marketing tools so as to gain popularity in the market. TMC boasts of great automobiles which are sold at customer friendly prices. It also has various assembly centers around the world which ensure that customers are able to get various products at the most convenient places. Lastly, it promotes its products through the internet, media among other avenues. 9.0 segmentation and Targeting Segmentation is the breakdown of a market into small groups with a view of providing products which meet the specific needs of the market segment (Goyat, 2011). On the other hand, targeting is focusing on a specific market segment with an aim of selling products to it.TCM has various market segments, all of which are satisfied by specific products. Giving an example of the Toyota probox which target market is business people who need small commercial vehicles and Toyota Land Cruisers which targets people who love big cars which have excellent navigating abilities both on and off road, it can be acknowledged that TCM has specific products for specific market segments. 10.0 Differentiation and Positioning Differentiation is defined as the proliferation of a product or a service so as to make it stand out from the rest in the market. Differentiation is a strategy which aims at increasing the competitiveness of an organization. On the other hand, positioning is the development of a good image in the market (Manhas,2010). Positioning aims are strengthening a specific brand in the market. The two processes are important marketing practices which put an organization at an elevated position above its competitors. Looking at TCM, it can be appreciated that it has a high regard for differentiation and positioning. This can be supported by its wide range of automobiles. In addition to this, Toyota is a strong brand in the market, its resell value is high and its liquidity is equally good. In fact, Toyota has a common postponing slogan saying ‘The Car In front is Always Toyota’. From this, it can be acknowledged that branding and positioning are important elements in marketing. 11.0 Conclusion In conclusion, this report has been able to give an in depth insight into marketing in the corporate world. The report has used Toyota Motor Corporation as the reference company in the automobile manufacturing industry. The paper started by introducing the company and the automobile industry in general. It then discussed about Hierarchy of strategies, five competitive forces, analyser/prospector/defender/reactor strategies, micro and macro level analyses, market research, differentiation and positioning, segmentation and targeting and product/price/place/promotion policies. From the report, it is clear that Toyota Motor Corporation’s success is based on the effective implementation of the strategies associated with the elements outlined above. Concluding, it can be appreciated from the report that marketing is a broad process which starts in the product design to its release in the market. References Kathuria, R., & Porth, S., (2003). Strategy-managerial characteristics alignment and performance: A manufacturing perspective, International Journal of Operations & Production Management, 23 (3), 23- 41 Goyat, S., (2011). The basis of market segmentation: a critical review of literature. European Journal of Business and Management, 3(9), 45-54. Manhas, P.S., (2010). Strategic brand Positioning Analysis through comparison of cognitive and Conative Perceptions. Journal of Economics, Finance and Administrative Science, 15(29), 15-33. Marketing Blog, (2013).Three Levels of Strtegy Similar To Components But Different Issues, Marketing Blog, Retrieved on 10th August 2013 from María O., & Luisa F.,, (2010).The moderating effect of business strategy on the relationship between operations strategy and firms' results, International Journal of Operations & Production Management, 30 (6),612 - 638 Porter, M., (2008). The five competitive forces that shape strategy. Harvard Business Review, 78-93. Toyota Motor Corporation, 2013. Toyota Group, Toyota Motor Corporation Retrieved on 9th August 2013 from http://www.toyota-global.com/company/profile/overview/ Kathuria, R., & Porth, S., (2003). Strategy-managerial characteristics alignment and performance: A manufacturing perspective, International Journal of Operations & Production Management, 23 (3), 23- 41 Parnell, J., (2010). Strategic clarity, business strategy and performance, Journal of Strategy and Management, 3, (4),304 - 324 Slater, S., & Narver, J., (1993). Product-market Strategy and Performance: An Analysis of the Miles and Snow Strategy Types, European Journal of Marketing, 27 (10), 33 - 51 Read More