Strategic Marketing Management: Toyota Corolla Australia - Book Report/Review Example

?STRATEGIC MARKETING MANAGEMENT: TOYOTA COROLLA, AUSTRALIA and Section # of The report provides a comprehensive analysis on the internal and external environment on the Toyota Corolla Australia. The management is expected to make sound, comprehensive decisions that are to be complemented by the internal and external environment that the organization is working on. A tactical strategy can be developed on the basis of a comprehensive situational analysis. It is tremendously important that the strategy that is developed is harmonizes with the external environment and complements the external environment. Toyota Corolla in Australia has been the top preferred brand for consumers since 2003-2004. They have regained market share and become the first in the automobile market. The situational analysis reveals that car has been the preferred brand among consumers in the age of 18 to 30. However, some of the newer models of the brand have had some negative reviews relating to the quality of the product. This can work in a bad way for the organization in the long run; Toyota Corolla is based on its branding and banks on its positive reviews and any negative publicity can harm the brand in the long run. The company should focus on hybrid models of Corolla so that they increase their share in their environmental friendly products. They should make sure that they focus on delivering their brand promise in all aspects, otherwise they will lose market share. Introduction: Organizations competing on the global front are faced with multitude of challenges in every aspect of their business. The management is expected to take sound tactical decisions that help them flourish on the regional front, complementing the global strategy as well. This defines an intricate web of decision making, flowing through layers of organizational authority. However, multinationals have now made their regional divisions more autonomous towards tactical decision making to eliminate the factor of time as competition is now based on timely provision of quality rather than just quality itself. On a regional front, tactical strategy can be best gauged by performing a comprehensive situational analysis of the organization. This includes a complete SWOT analysis, so that the strengths, weaknesses, opportunities and threats are all marked and understood. Strategic options can then be developed using these internal and external factors to fight in the market for the bigger share. The organization that has been chosen for the comprehensive SWOT analysis is Toyota, Australia. It is part of the bigger corporation and enjoys a big market share in the Australian market. The product that will be focused on, within their portfolio, is the Corolla. The report starts with the introduction of the organization and a brief history, outlining the major strengths and weaknesses after that. Continuing with the opportunities and threats, a comprehensive situational analysis is performed, marking strategic options for the company to follow through in the future. The conclusion provides the best strategy in the opinion of the writer out of all the possible options. Company Overview & History: The company under scrutiny is Toyota Australia, which is a subsidiary of Toyota Corporation, Japan. Toyota Motor Corporation Australia is a marketing organization for Toyota products; it also the responsible organization to provide Lexus in the Australian markets. The company today is being led by the visionary Max Yasuda; under his leadership, the organization has flourished through the tough times as the automobile industry fell prey to the recessionary economic cycle. The company was established in 1958; the establishment was as an importer when Toyota Land Cruisers were imported into Australia. There was no turning back after that, assembly of motor vehicles in the country started in about 1963. After that, a production plant was set up in Victoria and since then the organization has been an important part of the vehicle industry and market share in the country. They have been enjoying prime market share since 2003-2004, where they took over the market share from their prime competitor Holden. (Company Website, 2011) Today, the company offers many models in different classes to cater to most of the population in Australia. These include passenger models, SUV models and commercial models. The product under consideration for this report is the Toyota Corolla which comes under the umbrella of passenger models. Current Scenario: The current scenario in the automobile industry and the market dynamics provide important insights to the external environment that Toyota Corolla is present in. The Toyota Corolla has been the dream car for most of the world for a while. Since it came into being in 1966, it has been satisfying customers all around the world. There have been record sales for this product in many countries across the world. Therefore, it won’t be wrong to state that it is the most popular car in of the 20th Century. With the sales figures rising every year, it has been calculated that there has been a Toyota car sold every 40 seconds since its inception almost 40 years ago; this is an achievement in itself that the company should be proud of! Generations after generations of this car have been the released, increasing popularity with each model. (Frank, 2006) Currently, the company is in the forefront when it comes to market share. Corolla helped the company set up records for sales in 2008. Corolla became Australia’s bestselling car in 2008 (Toyota Owner’s Club, 2008). The most recent press releases and new clippings state that Toyota has emerged as clear winner in the Australian Passenger car industry. According to Steve Lague from The West, the Australian population has spoken about its buying preferences when it comes to a car; the locally manufactured Holden Commodore and Ford Falcon have emerged as losers in front of the Toyota Corolla which enjoyed record sales in the starting month of 2011. The Toyota Corolla has also been the most popular car in the current financial years’ first seven months. The statistics mentioned above are a true representative of the fact that the car is enjoying prime position and branding in the minds of its target market and the company has been able to deliver on their promise for a long time to see such a growth in demand. Situational Analysis: A situational analysis provides a clear picture about the market dynamics and position. Through a situational analysis, a company’s current position and market share can be evaluated. It focuses on three important stakeholders of an organization; customers, competitors and company. It is highly significant to perform a situational analysis of an organization before developing a sound marketing strategy for the products. A number of elements are the part of the situation of an organization or a product that demands a marketing strategy. Some of the elements include product situation, the competitive situation, the distribution situation, environmental factors such as economy and societal norms and a SWOT analysis. Therefore, organizations need to take into account all these factors before developing a marketing strategy as the key factor in determining the success of the marketing strategy will be the fact that the marketing strategy should be in sync with all the situations present around the product (Alex, 2003). Product, competitive and distribution situation: The product under consideration is Toyota Corolla. The research will be conducted in Sydney. This car belongs to the passenger car umbrella in the wide range of products Toyota has to offer. They specifically target people from the age of 18 towards 30 to 35. For the purpose of analysis the core product will be broken down. The product is a passenger car that provides seating arrangements for 2 to 5 passengers at a time. The brand Toyota promises its customers classic style to complement its quality engineering, outstanding comfort and sporty performance. The brand promises reliability and have been delivering on this promise for decades. This has translated into a gigantic growth in the market share of the product. The service advantage that Toyota provides its customers is the peripheral product along with the core product. The servicing advantages are now provided by most of the car dealers, however, the company is known for its service provision. The product is also priced in the middle range, not too expensive and not too cheap. Therefore, it is affordable for most middle class families and therefore targets the masses of the total population. (Cravens, 2000) The product has been able to wipe out competition, becoming the top in 2003-2004. With the latest news serving as the nail in the coffin for the future of the companies Holden and Ford in Australia; the selling ratio of Corolla to Holden was three to one. The company has its own production plant in the country and the distribution system is immaculate. Environmental situation: The environment can be best judged performing a PEST analysis. Politically, Australia is a stable country that is en route towards economical and financial stability. The recovery from the recession has been slow and steady but it is there. Socially, it is a country that has been inviting the youth from all over the world with open arms through its academic programs. There is a complete mix of races present in the country, bringing the country forward with an open mind. Demographically, the youth makes the biggest proportion in the market and that is what the company is targeting. Internal Situation – Strengths and Weaknesses: The target market for the Toyota in Australia is the youth. They want to connect with the youth on every level in every social walk of life. It can be the young female without the college degree, the single parent with two school going kids, or a family of four who enjoy a reliable and classy ride. The target market is definitely between 18 and 30. The company employs designers to provide the car with an exclusive style packaging that attracts its target market towards the brand. Another aspect of this branding is the five-meter impression. Toyota engineers want to make sure that the aesthetic appeal of the car is the maximum as the customer approaches the car, sits in the car and drives it for five meters. The 2009 model is quieter than its preceding models which is a big advantage for its target market. The technological advancements that have been added have added positivity for the part of the target market that enjoys speed. (Mike, 2008) The company has been promising reliability for its customers and it is a very important part of their brand promise. Fortunately, they have been able to keep that promise for the past two decades, making them the prime choice of consumers and consumer agencies worldwide. Their positive recognition by the consumer reports, agencies etc, is their biggest strength and asset. Consumer reports reliability statistics provide a happy picture for Corolla that serves as a pre-positive cursor for buyer behavior and thinking (Paul, 2008). At least in Australia, it enjoys prime position in the market. Their branding promises have been met and it makes them the top choice for most consumers, as marked by their sales figures in the past two to three years. The Corolla has made its mark in the Australian market and this mark will not fade anytime soon if they keep on delivering on their promise. The company has also been able to make profits through increased efficiency in manufacturing processes. They use total quality management techniques throughout their manufacturing plants in order to make sure that their products reach the market in time. The company also provides choice to its consumers regarding the engine that they want in their Corolla, great features and style. Coming towards the weakness, it has been observed that in order to create cost cutting measures, some reviews in the newer version of Corolla have suggested that customers are unhappy with the compromises that are being made on the quality of the fittings in the product. The interior looks of the 2009 Corolla model were considered to be below expectations and the plastics that were used seemed cheap. These independent reviews posted on blogs and car review websites serve as the prime source of quality insight towards a car for a wide audience. Therefore, a negative review is bound to serve a dent in the sales of the car. Although consumer reports work in their favor, Toyota Corolla needs to re-visit their strategy in terms of providing quality for the cheaper price. External Situation – opportunities and Threats: The external situation also involves the opportunities and threats that are present in the market. One of the biggest opportunities that Corolla has over other vehicles is the reputation it has for producing environment friendly vehicles. As oil price hikes have increased the popularity of hybrid vehicles, Corolla can take complete advantage of this changing consumer taste trend and start producing completely hybrid models. They might be a big costlier but with car financing options; they will sell in the market like hot cakes. The biggest threat that the car has is itself. Thanks to the branding and the reliability of the car for the past two to three decades that Corolla has won the hearts of all, however, if they compromise much on the quality of their products in order to satisfy investors and make profits, they are bound to lose this race in the long run. With the recent negative reviews in the look and feel of the product, the company should take note of these reviews and make sure they correct these faults in time. (Jay, 2006) The competitors are termed as the biggest threat to an organization. In this case, Corolla has been able to take its competitors down the drain and emerged as a true winner. It was the largest selling car in the first seven months of this financial year. Competition wise, it has nothing to worry about. They are doing most of the things right to make the consumer choose them over the other locally manufactured brands. (Arkadi, 2010) Strategic Action: The strategic options of the organization are many. They should continue increasing their market share, with increase manufacturing of providing hybrid vehicles under their name. A hybrid Corolla is sure to be a tad bit more expensive but will serve its purpose well. The brand should make sure that they continue to deliver on their brand promise as most of their sales and fortune is based on this. Compromising on aesthetics and quality of the product is bound to take any product down in the market. References Arkadi. Borowski. (2010) Report on the Toyota Company. GRIN Verlag. Cravens. (2000) Strategic Marketing. Tata Mc Graw Hill. Jay. Storer. (2006) Toyota Corolla: 2003 through 2005. Haynes North America Inc. Mike. W. Peng. (2008) Global Business. Illustrated. Cengage Learning. Company Website. Corolla-the world’s most popular small car. Retrieved March, 7, 2011, from http://www.toyota.com.au/corolla?WT.ac=Toyota_GlobalNav_Cars_Corolla Worldcarfans.com/Frank. (2006, November 13). First Ever Exported Toyota Corolla Anniversary. Retrieved March 7, 2011, from http://www.worldcarfans.com/10611145734/first-ever-exported-toyota-corolla-anniversary Toyota Owners Club. (2008, July 3rd). Corolla leads Toyota to sales records. Retrieved March 7, 2011, from http://au.toyotaownersclub.com/news/au_indexPage.php?COROLLA-LEADS-TOYOTA-TO-SALES-RECORDS-53 The West/Steve Lague. (2011, February 9). Commodores and Falcons lose their shine. Retrieved March, 7, 2011, from http://au.news.yahoo.com/thewest/motors/a/-/motors/8802910/commodores-and-falcons-lose-their-shine/ Margarit, Alex. (2003). Elements on Situational Analysis. Retrieved March, 7, 2011, from http://marketing.about.com/od/marketingplanandstrategy/a/situationanalys.htm The Truth About Cars.com/Paul Niedermeyer. 2009 Toyota Corolla Review. Retrieved March, 7, 2011, from http://www.thetruthaboutcars.com/2008/03/2009-toyota-corolla-review/ Read More