Comparing Toyota Company and Pepsi Company - Research Paper Example

Executive summary Toyota Company has been in business for several years. Currently, the company is among the leading car manufacturers in the world. Today, the company is manufacturing automobiles that are friendly to the environment and are affordable to most people. This report will analysis Toyota Company and compares with Pepsi Company. The two companies utilize advertisement so that they can retain their market share and the leadership position in the market. The report will also analyze how the company uses demographic segmentation in delivering its product to the existing and the potential customers in the market. It is essential for marketers to know how to market the products so that the company can retain it position and at the same time extending the customer loyalty. Tables of Contents Executive summary 1 Introduction 2 Demographic market segment 3 Benefits of demographic segmentation 4 Consumer loyalty 6 Literature review on consumer loyalty 6 Relationship between loyalty and customer satisfaction 7 Methodology and survey instruments 9 Research Project Findings 10 Discussion of 4 P’s for Toyota and Pepsi Company 10 Conclusion 11 References 13 Introduction Organizations are facing stiff competition in the market, and the effective way of retaining the market share and attracting potential customers is through the use of advertisements. In many years now, companies have utilized advertisement to introduce new products in the market. The Pepsi and the Toyota Company use the advertisements as a tool of achieving brand loyalty and gaining competitive advantage over the rivals. This report will analyze the effectiveness of the advertisement in the company and how the Pepsi and Toyota Companies have utilized it in achieving its objectives. Furthermore, the report will examine the opinion of the interviewers concerning the adverts used by these companies. Demographic market segment Demographic segmentation is dividing the market into various groups basing on variables such as age, income, gender family size and education. This method of segmentation is mostly used when identifying niches that are targeted. According to Gilbert (2013), demographic segmentation is the most appropriate method of segmenting the market. This is because it will make the design of adverts to be simple and can help the marketers avoid wasting resources. Pepsi Company produces a wide variety of beverages such as energy drinks, sports drinks, and mineral water among others. In brief, Pepsi produces so many products and they are able to sell them because they use effective market segmentations. They segment their market using demographic segmentation method. The company produces different products so that they can attract different categories of customers (Wilson et al, 2012).  Toyota Company, on the other hand, designs advertisements that are appealing to different categories customers in the market. The top management has developed a strong marketing team that can convince customers despite the high competition in the market. Though the Target market for the Toyota Company is the entire people in the world, they design cars that can suit the need of people depending on their age and status. For example, the company manufactures sports cars that can be used only for sports. Furthermore, the company considers the need for the entire market keeping in mind that the developing countries are still using poor roads. For this reason, the company manufactures cars such as Land Cruiser. They manufacture cars that are extremely economical in fuel consumers, decent and that can be used by a large family. The Toyota Company is changing its mode of advertisement. According to the Bill Fay who is the Toyota division general manager, the company targets young people who enjoy travelling and exploring places and to attract their attention, the company had to adopt new advertising tagline “Let’s Go Places”. The new advertisement tagline reflects the commitment of the company in producing attractive and exciting product that can satisfy the need of the customers. The Toyota Company focused so much on satisfying the needs of customers in the market. They divide the market basing on variables such as age, life cycle, gender and the family. They manufacture cars that can satisfy customers regardless of their age or gender. These demographic factors are essential when supplying products in a competitive environment. Benefits of demographic segmentation Pepsi and Toyota Company choose to segment their market demographically so that they can be sure that their advertisements are directed to the right consumers. This segmentation method has helped the two companies to avoid wasting resources since the adverts are directed to the right market. In addition, the companies are able to identify the expectation of customers in the market when using demographic factors. Researchers show that the company can be able to gather the necessary and essential information from the market through demographic segmentation as compared to other methods of segmentation. This is correct since the Toyota Company has been able to identify the needs of customers despite high competition in the car industry. Apart from this, the Pepsi Company has also been able to pinpoint the beverages that can satisfy different classes of customers in the market. Demographic segmentation has made it easy for the international companies to market their products effectively. This mode of segmentation makes it easy to serve international market because the variables are easy to be obtained and measured. Pepsi and Toyota have penetrated the global market by accepting the simple fact that no one who can satisfy the entire market. They, therefore, adopt strategies that they use to select the market they serve to avoid targeting unwilling market (Majaro, 2012).  However, Pepsi and Toyota companies have been facing small problems in handling multiple segments. In some cases, this multiple segments can sometime force the company to comprise the quality of the products they deliver. This is due to the high cost and much time that is required to access different segments of customers with unique expectations. Each segment calls for a unique advertisement and this can be time consuming in design them and also cost the company. Consumer loyalty According to Dávila (2012), consumer loyalty is the attitudinal or behavioral tendency of customers to favor one product over others with the same purpose. It is believed that the loyalty of the customer is created when the customer feel satisfy with the product they use. Other simple definition of consumer loyalty is the attraction of the customers to use the company’s products is persuading them to purchase them in the future. The sales persons need to learn effective skills for convincing the customer that the product provided by the company is superior so that the same customers can offer referral to other customers. Literature review on consumer loyalty Consumer loyalty has been a wide topic in marketing practice and has made management scientist differ in the definition and its concept. Academic researchers have given varieties of definition for customer loyalty. According to Dawar and Marketing (2012), believes that customer loyalty is basically satisfaction. He argues that the most recommendable action for marketers is to earn loyalty of their customers. On the other hand, it differs with the definition given. He said that, customer loyalty is basically the post consumption behavior. Does the customer ready to use the product again? This will call for the customers’ feedback concerning the product consumed. Customer loyalty is the experience the customer goes through after consuming the product. It is the result of the evaluative process that compares what the customer experience with the expected satisfaction (Bloom et al, 2012). Majaro (2012), reveals that the satisfaction levels is the difference of the satisfaction a customer experience after using the product from what he or she had expected from such products. Relationship between loyalty and customer satisfaction Dávila (2012) argues that the success of an organization depends on the satisfaction of the customers. When customers are satisfied, they will offer referral to other potential customers. It is, therefore, essential for the company to work on the quality of the product they produce so that customers would remain satisfied. Satisfaction of the customers leads loyalty and repeat purchase which is profitable to the company. The Toyota and Pepsi Company need to employ this strategy of satisfy customers and used it as their fundamental principles so as to retain their share in the global market Wilson et al, (2012), has indicated that Pepsi Company is seeking to lay down a strong foundation so that they can gain the confidence and the loyalty of customers in the market. They target developed countries because of high population. On the other hand, Toyota Company is struggling to penetrate African markets because customers have started buying vehicles in high volume. Toyota and Pepsi Company are working on creating value for their customers in the market so that they can create interrelationship between the customer satisfaction and the customer loyalty. There are also focused in creating a long lasting relationship between the company and the customers. The main tool of monitoring the customers is the collection of the feedback Dávila (2012), a management scientist, believes that customers are the main determinant of the success of the company. He further argues that customers’ complaints must be handled in a professional manner so that the customer feel valued. Researchers indicate the mission statement of the Toyota Company focused on value delivered to the customers. They focus on satisfying the customers by creating value to them so that they earn their lifetime loyalty. The researchers show that Toyota and Pepsi Company are in a position to achieve advantage over competitors if they successfully apply loyalty scheme. The two companies will be able to excel in the following areas: Achieve efficient production They will gain some barriers for new entrances They would be able to explore consumer trends In control of negotiations between suppliers and the consumers They would implement cross-selling Kotler and Keller (2012) concluded that all of these strategies are essential in satisfying the varying needs of the customers and creating customers’ loyalty. He said that, the best way to win a customer and influence customers purchasing decision is through the production of quality products. According to Dawar (2012), the effect of satisfying customers need in Toyota and Pepsi Company is the reduction of the customers’ complaint and the creation of customers’ loyalty. These are the most essential elements in any business. It has now become a reality that when the customers are satisfied by the product of a company they will be loyal to the company. It is also evidence that Toyota and Pepsi Company can increase their market share by producing products that are beyond customers’ expectations. It is only possible to increase market share after creating customers loyalty on the products offered. Brand loyalty Previous studies indicate that consumer buying behavior can be significantly influenced by the effective advertisement. It is possible to influence a purchasing decision through the use of advertisement, and this will lead to brand loyalty. The Toyota and Pepsi Company need to design quality advertisement, so that they can influence the customers to buy their products. It is possible to create brand loyalty that will increase consumer consumption. The consumers will want to buy a lot from the company because they trust their products (Berthon et al, 2012). Methodology and survey instruments The interpersonal survey I conducted indicates that people especially young people like soft drinks from the company. I was amazed by a kid who knew about the products of the company. Some of the drinks he mentions were the Tropicana, Pepsi and the Frito Lay. This shows that the company’s product was doing well in the market. Most people prefer Pepsi than other drinks from other companies because Pepsi contain caffeen. I also realized after interviewing few people that what matters is the taste. Young people prefer sugary things while middle age people go for salty products. Pepsi is well known in the market because of the massive advertisement they make. Everyone wants to be associated with the brand name of the company. An interviewee shows interest with company’s product. I interviewed a person with a car, model: Toyota Wish, what he thinks about the company. The response was notable because the interviewee claims that the product of the company was giving him the best services. He said that the car was economical in terms of fuel consumptions. The car also was comfortable when driving and it design is stable. Research Project Findings Research findings indicate that the products for the two companies are doing well in the company. There are factors that people see in a product. They are interest in knowing whether the product will deliver the best as compare with other products. It is, therefore, vital for the company to ensure that the product contains the entire element which the customers is looking for in that product. For example, the Pepsi Company should ensure that the soft drinks contain nutrients that are balanced. The research finding also shows that the two companies had employed effective marketing mix. The use of 4 Ps yielded high results. This marketing had helped in directing promotion to the right market segment and thus minimizing wastage of the resources. The four P’s or the elements of the marketing mix comprise of the place, product, promotion and price. Discussion of 4 P’s for Toyota and Pepsi Company These elements comprise of the following: I. Products: The products of these companies are unique as compared to that of competitors. For example, the cars from Toyota are unique in terms of quality; they are durable and affordable. Many people would go for Toyota because they are economical and at the same time presentable. Then again, the products of the Pepsi Company are attractive to many people because the company considers all categories of people. They also provide water that is useful to people with healthy problems. II. Price: The prices of these products are extremely competitive in the market. III. Place: these companies target entire global market. They have branches all over the world. IV. Promotions: they mostly use advertisements so that everybody would be aware of the existence of the products. Through the marketing mix, the company has been able to achieve their goals and objectives. This is exceedingly vital in the sense that the company will be able to creating strong positioning in their segmented market. Conclusion In conclusion, Pepsi and Toyota Company are doing well in terms of the market share. The companies are now operating globally because they produce products that satisfy customers’ needs effectively. Customer satisfaction is their main goal because when customers are satisfied with the product of the company, it will lead to customer loyalty. These two elements are the main pillars for the companies which are operating in a competitive environment. Furthermore, the two companies are well managed that has led to the spirit of team work. Both the senior and junior employees are working in a friendly manner making the subordinate staff feel part of the company. References Gilbert, R. J. (2013). The Protected Profits Benchmark: A Refusal To Deal Metric?. Antitrust Law Journal, 78(3), 689-702. Majaro, S. (2012). International Marketing: A strategic approach to world markets. Routledge. Czinkota, M. R. (2012). International marketing. Cengage Learning. Wilson, A., Zeithaml, V. A., Bitner, M. J., & Gremler, D. D. (2012). Services marketing: Integrating customer focus across the firm (No. 2nd Eu). McGraw Hill. Dávila, A. (2012). Latinos, Inc.-the Marketing and Making of a People. University of California Pr. Dawar, N.(2012). What are brands good for?. Image. Berthon, P., Holbrook, M. B., Hulbert, J. M., & Marketing, M. S. (2012). Understanding and managing the brand space. Image. Bloom, P. N., Hoeffler, S., Keller, K. L., & Meza, C. E. B. (2012). How social-cause marketing affects consumer perceptions. Image. Dávila, A. (2012). Latinos, Inc.-the Marketing and Making of a People. University of California Pr. Kotler, P., & Keller, K. L. (2012). Framework for marketing management. Pearson Education India. Read More