Toyota Fun-Vii Entering China and Saudi Arabia Market - Case Study Example

Report of Toyota Fun-Vii Entering China and Saudi Arabia Market Name: Institution: Course: Date of Submission: Report of Toyota Fun-Vii Entering China and Saudi Arabia Market Introduction This report is about advising Toyota on branding for their forthcoming motor vehicle: Fun-Vii as they are evaluating requirements for China and Saudi Arabia’s auto market. Fun-Vii has been defined as the model of the future motor vehicle which has come with touch screen doors, digitally customizable exterior and interior, collision-avoidable tech, car-to-car networking, and many more other hi-tech equipment.(Thornhill, 2011) By using brand management theories such as Brand Extension Theory, Brand Loyalty Theory, Global Branding Theory and Co-branding Theory and the use of academic analysis, this report helps Toyota in evaluating the brand position of Fun-Vii so as set up an effective brand strategy before it enters the Asian market. The Asian auto market: China & Saudi Arabia a) The auto market of China China has emerged from the global recession as the world’s largest auto market. Its new vehicle sales reached 13.6 million units and total output hit 13.8 million units, up 46.2 percent and 48 percent from 2008. China’s auto market is poised for more impressive growth, according to recent China association of Automobile manufacturers; China produced 7.5 million cars and sold 7.6 million cars within the first five months of 2010. China’s accession to the WTO has promoted its auto industry and the economy. Chinese and foreign auto Industry are facing the development of Chinese automobile where China will have over 200 million households with car capacity. b) The auto market of Saudi Arabia Saudi car market is very young and they are interested in developing environmentally friendly cars. In Saudi Arabia, Toyota brand has good reputation so any new car produced will easily sell. The kingdom of Saudi Arabia is one of the most important amongst the developing ones; in 2001 it represented $40 billion-worth of yearly export to international markets. Saudi Arabians are looking forward to embrace any new technology (Bhuian, 1997) Target Market Saudi Arabia and China are very different in terms of geographical location, culture, economy and other fields. However, the two countries have strong purchasing power in terms of potential markets and young potential consumers. There is a sufficient number of youths in both countries who would be attracted to the Fun –Vii owing to its stylish function and would afford to buy it. The Fun-Vii could successfully borrow the Toyota brand influence which would result in a good sales performance in the two countries. The huge market must also attract many competitors. In the automotive industry, if a company at the onset does not achieve successful branding, it faces an extremely tough competition test. The Toyota brand faced decreased popularity among consumers following its recalls but it is slowly improving owing to the company’s commitment to better performance in the future. Toyota Toyota Motor Company Limited is Japanese Company established in 1937 and later merged with Toyota Sale Company Limited to create today’s Toyota Motor Corporation in I982. Its main business activity is the production and sale of motor vehicles though but has investments in other business activities including real estate, marine biotechnology and environmental conservation through afforestation. It provides employment for more than 350, 000 people around the world. The company started its international marketing efforts in the mid 1950’s and sought to adapt its design and production to meet the needs of customers in whichever region they found themselves. The company has manufacturing plants in over 170 countries and is the second largest automotive company after General Motors (Toyota, 2002). Toyota’s success may be attributed to its development of technologically advanced products and an efficient production system (Toyota, 2006). Its model of excellence places particular importance on philosophy, people, problem solving and process. The brand Toyota was renowned for its good quality, dependability and customers always reported satisfaction upon using the products until its recall of 3.8 million vehicles in November 2009. Prior to the recall, a study in the United States reported that 83% of adults expressed confidence in the brand displaying that many people believed in the brand. After the recalls in 2009 and 2010, customer confidence fell to 59%. However, Toyota changed its motto to Moving Forward which implies their commitment to better products. Customer confidence has continued to recover and had reached 70% by December 2011 (Kelly, 2012). Rational Factors Toyota is aiming at establishing the fun vii car as a fun car that can perform other functions of a normal car. The car has also incorporated environment friendly features in the car that help reduce pollution and hence raising the popularity and awareness of the green car (Thornhill, 2011). Sensible factors Customers may receive the Fun Vii as an entertainment product rather than a normal car. This is due to its features that allow the whole body of the vehicle to be used as display space. Customers can be able to change the colour of both the interior and exterior of the Fun Vii as they desire. Games have also been incorporated into its entertainment features and one can play with their friends. Most importantly, the device allows one to connect to social media networks which have become a major part of life for people around the world (Patton, 2011). Market Sector for Fun Vii A brand marketing plan must be developed for the Fun Vii which must be in line with the development plan of Toyota’s global strategy. The Fun Vii is different from other products and demands a unique marketing plan. The brand strategy must also give full consideration to the specific characteristics and the target market of the Fun Vii. Identifying and Establishing Brand Positioning Brand positioning is the main purpose of brand management. It forms the basis of brand building and successful brand management. It plays an immeasurable role in brand management and marketing. A brand’s position consists of the brand name and the corresponding target market so as to establish an inner link (Kotler, 1996). The Customer-Based Brand Equity (CBBE) model has been employed by managers in brand building. According to the model, there are four main stages involved in building successful brands. Firstly, the target consumer must be identified (Keller, 2001). Toyota Fun Vii targets consumers aged between 19-25 years old. These are young and dynamic individuals with a high acceptance of new things. Furthermore, they are willing to try the latest Hi Tech products and pay for it. The Fun Vii’s dazzling appearance and high-tech components are expected to impress the target consumer group. It is also in line with the trend of contemporary young people’s lifestyle. The second step involves identifying the main competitors (Keller, 2001). Toyota FunVii main competitors are GM, Ford and Hyundai Motor Group. The third step involves identifying how similar the brand is to its competitors (Keller, 2001). Group of Toyota and competitors have had traditional indicators of quality which include performance, appearance, safety and comfort. The cars have added value in terms of entertainment and being environmentally friendly. Their marketing strategies will focus on the aspects of environmental protection and the new driving experience. The final step involves identifying how different the brand is different from similar brands (Keller, 2001). The Fun-Vii focuses on entertainment and improved social functions. It offers a special driving experience, a voice navigation system and a ready to transform pattern of the vehicle’s interior. Its windshield is also a smart screen which man can ask questions, watch video programs, surf the internet and play the game. In fact, the Fun-Vii has a very high degree of artificial intelligence enabling it to meet the driver’s entertainment (Thornhill, 2011). Leveraging Secondary Brand Association to Build Brand Equity a) Creation of New Brand Associations By making a connection between the brand and another entity, consumers may form a mental association from the brand to this entity and consequently to any or all associations, judgments and feelings linked to that entity (Kapferer, 1997). People refer to the Fun-vii as the “smartphone on wheels” because the whole vehicle is covered with display screens and its impressive entertainment function, it can be linked to the social networking services and allows gaming with friends since the windscreen is a screen too (Thornhill, 2011). The mobile phone is the most common everyday items and almost every adult owns a cellphone in the modern society. Associating the Fun-Vii to the smartphone will foster the strengthening of the brand image for the Fun-Vii among the people. It would also help Toyota increase image equity (Kapferer, 1997). Three factors are important in predicting the extent of leverage resulting from linking the brand to another entity. b) Awareness and knowledge of the entity The phone is the most common portable devices and the time spent on the phone in a day by the modern population has increased (Kapferer, 1997). c) Meaningfulness of the knowledge of the entity In addition to the basic function of communication, entertainment features on the phone are increasingly being welcomed. Entertainment features have become the main product demand in the Fun-Vii since they can replace the phone’s entertainment features (Kapferer, 1997). d) Transferability of the knowledge of the entity The Fun-Vii makes it more convenient to communicate with friends and offers a more exciting game experience. Consumers are not perceived to link up the phone with the Fun-Vii thereby narrowing the distance between products and consumers and thereby establishing a more intimate relationship (Kapferer, 1997) Channel Distribution Toyota management team usually puts their products close to the customers everywhere and gives them more choices and options. Therefore, they decide to sell the car in different ways including Main vehicle manufacturers; the manufacturers sell the products themselves Toyota franchise dealers; dealers in Toyota products around the world sell the car to customers. Local car dealers; People in the car selling business sell the car to customers (Toyota, 2002). Brand Value Chain Brand value chain is an analytical tool used to identify the various ways of creating customer value. It is a collection of logistics, design, production, sales, delivery and support of products taken as a series of events or a chain of activities. Its basic meaning is: each operating activities can create value and include basic and auxiliary activities (Keller, 2003). For Fun-vii, the market sector must be combined with the characteristics of the enterprise resource planning management mode and the industry value chain, market oriented suppliers and customers and integrate core business processes, restructuring and optimization, improve operational efficiency, reduce operating costs and enhance their core competition power and profitability (Kotler, 1996). Growing and Sustaining Brand Equity The core values of the brand is the main part of brand equity and must be clear so that customers can clearly identify and remember the points of interest and personality of the brand. They must also be able to locate every efforts to safeguard and promote the core values of the brand which is the main goal of many world-class brands (Keller, 2003). The Fun-Vii brand management should adhere to the, ‘Toyota always comes innovation’ stringent corporate philosophy. They should also provide customers with more comfortable experiences and after-sales services so as to enhance Toyota brand equity. Recommended Stages on the Branding of Fun-Vii in the Two Asian Regional Markets 1. Toyota Fun-Vii is commonly known as a technologically advanced and fun car with a modern smartphone system. It would therefore be good idea to promote the car and link the entertainments part of it with a big brand name in this field such as Apple Company or Samsung to give it a bright and good image. This would lead the customers to believe and trust the system and technology in the car. This is what happened with Chrysler and Mercedes Benz in terms of combining the Chrysler body with the Mercedes engines (Kotler, 1996). 2. Customers or people in general always want to identify with celebrities. Promoting the Fu-Vii through a famous personality would expand its publicity. 3. Linking the car with the government’s technology department and the environmental care department would cause them to support the car and therefore enhance its acceptance among consumers. Reference List Kapferer, J., 1997. Strategic Brand Management: Creating and Sustaining brand equity long term. 2nd ed, Kogan Page, London. Keller, K., 2003. Building, Measuring and Managing Brand Equity. 2nd ed, New Jersey: Prentice Hall Kotler, P., 1996. Principles of Marketing. 2nd ed. New York: Prentice Hall Inc. Keller, K., 2001. Building Customer-Based Brand Equity: A blueprint for creating strong brands. Massachusetts Avenue, USA Kelly, M., 2012. Has Toyota’s Image Recovered from the Brand’s Recall Crisis. [Online] Available at: http://www.forbes.com/sites/annemariekelly/2012/03/05/has-toyotas-image- recovered-from-the-brands-recall-crisis/ [Accessed 16 August 2012] Toyota, 2002. Vision & Philosophy. [Online] Available at: http://www.toyota- global.com/company/vision_philosophy [Accessed 16 August 2012] Toyota, 2006. History of Toyota. [Online] Available at: http://www.toyota- global.com/company/vision_philosophy [Accessed 16 August 2012] Patton, P., 2011. Toyota Fun-Vii: The Car as Mobile Mood Ring. The New York Times. [Online] Available at: http://wheels.blogs.nytimes.com [Accessed 16 August 2012] Thornhill, T., 2011. Toyota crosses a smartphone with a runaround and reveals a car that can change its look at the touch of a button. The Daily Mail. . [Online] Available at: http://www.dailymail.co.uk [Accessed 16 August 2012] Bhuian, N., 1997. Saudi consumers’ attitudes towards European, US, and Japanese product and marketing practices, [Online] Available at: http://www.emraldinsight.com/journals.htm?articleid=853504 [Accessed 16 August 2012] Read More