Toyota and Ford Marketing Strategies - Essay Example

?Running head: ford motor and the toyota motor corporations 15th November Introduction Based onthe stiff competition that is currently been experienced by local and international companies, majority of firms have turned into use of extensive marketing strategies as well as unique strategic plans with an objective of keeping at bay their competitors. One of the industries that have attracted quite a number of firms is the motor vehicle industry. This is based by the increased demand for motor vehicles not only in the emerging market but also by the consumers in the developed countries. Similarly, the demand for eco friendly automobiles has gone up in the international market thus calling for the manufacturers to emulate modern technology to produce brands that have lees impact on the environment. Two major competitors in the automobile industry are Toyota Motor Corporation and Ford Motor Company. This paper seeks to develop the fundamentals of strategic plans for the two competing companies including their SWOT analyses. Toyota Motor Corporation Toyota Motor Corporation is a Japanese based automobile company that sells its brands locally and in the international market. Having been established in 1937 by Kiichiro Toyoda, the company was the largest producer of motor vehicles in 2012. Based on its expansive market, and the high demand of its brands in the international market, the company whose headquarters are based in Toyota, Japan has employed large number of employees in all its departments. One of the major aspects that have made the company to attain a competitive edge in the market is the extensive marketing strategies that the company has adopted in all its market segments. For example, in the US market, the company has embarked on extensive promotion of its brands especially in the North American region. Apart from sponsoring of sporting events, the company has maximized on the concept of ownership experience (Thomas, 1969). This has made it to come up with marketing slogans such as: You asked for it You got it. Oh what a feeling, Get the feeling and Lets go places among others. In the Japanese market, the company has established a dealerships which includes Toyota Store and Toyota diesel store that helps the company in its distribution strategies. Being a market leader in the automobile industry, Toyota has effectively enjoyed strong customer loyalty based on its luxurious as well as executives brands. Some of the notable brands the company manufacturers include Toyota Yaris, corolla, camry, Estima Sienna, Prado, FGortuner, RAV4, Venza, FJ Cruiser and full size Avalon among others. Based on the wide product portfolio, the company has effectively met the needs of its customers. Another aspect that has made the company achieve a competitive position in the market is the use of Toyota Way strategy (Liker, 2004). This entails all the business methods and the managerial values as well as philosophies such as Just In Time (JIT) that greatly assist the company in its global operations. The five major principles that guides Toyota Corporation in its activities includes challenge, improvement, go and see, team work and respects within and outside the company premises. Ford Motor Corporation Ford Motor Corporation is an American based corporation whose headquarter is located in Michigan, US. Having been established by Henry Ford in 1903, Ford has a long history in the production of automobiles. Based on its production outputs, Ford is the fifth largest producers of automobiles. One of the key aspects that make Ford distribution system significant are the production facilities and plants located in 90 regions (Wilkins and Frank, 1964). Additionally, the large number of employees is key in ensuring that the company brands are effectively marketed and distributed in the various markets. The company organizational structure involves the executive management that includes board members who includes Stephen Butler, William Clay, Ellen Marram, Irvine Hockaday and Homer Neal among others (Den and Koopman, 2002). Top level management team is made up of Lewis Booth who is the executive vice president and Mark A. Schulz, the president of international organizations among others. William Ford and Alan Mulally are the executive chairman and the chief executive officer respectively. One of the major marketing strategies that Ford has continued to emulate for a long time is sponsoring of sports and other social events especially in the US market. Some of the notable sponsorship programs include Ford Filed located in Detroit and Ford Center in Indiana (Maynard, 2003). Apart from creating strong customer awareness in the US market, Ford has also been involved in sponsoring of UEFA Championship league as well as Premier League football. According to Mark Jones, one of the company’s top marketers, Ford objectives is to create a situation where people come together and share their experiences. In terms of operations, Ford has manufacturing facilities globally. Notable operations are located in US, UK, Germany, Turkey, Brazil, China, Australia, South Africa and Germany among other places (Williams et al, 1992). As a result of the improved distribution system, the company has been able to reach its customers located in various parts of the world. In its marketing strategies, Ford Company emulates various Marques the major ones being Lincoln Marque and Ford Marque. Others include Mercury, Merkur and Edsel whose target market is North America while Land Rover, Volvo, Jaguar and Aston Martin Marques target the international market. Despite the extensive marketing campaign that Ford has initiated in its market segments, its production capacity is less as compared to that of Toyota. For example, in 2012 the company produced 2,250,165 units as compared to 9,909,440 units that Toyota Company sold in the same year. Notable brands that are produced by Ford include Ford Ka, Ford Fiesta, FordEcoSport, Falcon, Sierra Cosworth Lincoln MKX, Ford Kuga, Escape and Ford Mustang (Mello et al, 2006). One of the notable differences between Toyota and Ford Company is that while the former specializes in the production of luxurious brands, the latter has embarked on investing in sports cars racing. This is the major reason as why Ford has been involved in sponsoring world rally championships. Comparative table between Ford Motor Company and Toyota Motor Corporation Issues Ford Toyota Legal, Social and Economic environments Registered in 1903 as a limited company. Sponsoring of sporting events. Participates in New York Stock Exchange                                  Supports Toyota Family Literacy, United Negro college fund, and training to charitable organizations such as Food Bank For New York City Participates in New York Stock Exchange, London Stock Exchange, went public in Japan market in 1949 and globally in 1999.                                   Management Structure  Executive management board of 12 members and main corporate officers composing of vice presidents  Chairman, CEO, Finance managers, Marketing managers among other internal board members. Analysis of Strategic Intent  Aims at expanding in the African market. Expand its brand portfolio and market segment.  To increase the sale of Lexus brands to exceed the 500,000 mark reached in 2012. Expand its brand portfolio Social and External Challenges Stiff competition, low purchasing power of customers in the emerging markets. High costs of production  Stiff competition, high costs of sponsorship, low purchasing power in emerging market, alternative fuel motor vehicles insecurity in African market Current Manufacturing  Production facilities in US, Germany, Britain, South Korea and South Africa  Luxury and executive automobiles, engines, motorcycles and commercial vehicles. Production facilities in Ohira, Japan, Malaysia, US, Philippines, Thailand, China, Vietnam and Russia. Facilities & Distribution System  Global offices in US, Germany, Britain, South Korea, South Africa, Minato in Japan, Kuwait, Saudi Arabia and Egypt.  Distribution centers in Japan- Toyota Store, Toyopet Store, Toyota Corolla Store, Netz Store. US - Fremont, New York, Torrance among others. Market Demand & Demographics  Highest demand in US market. With a sale of 2,250,165 units. Highly demanded in the emerging markets with a growing economy. Demanded by middle class income earners  Demanded internationally. Japan-2,411,890 units sold in 2012. US -2,082,504 units. Approximately 9,909,440 units produced in the world. Alternative Fuels & Propulsion Systems  Compressed natural gas, Hybrid-Electric Escape for example Ford Escape and Mazda Tribute. Use of ECOnetic programme technology.  Use of solar power, use of Eco Drive Indicator, electric vehicle for example The Scion iQ EV.   Ford motor Company SWOT analysis Strengths Long period of operating using moving assembly lines Presented globally Second largest in US market automobile industry and fourth in the world Extensive research and development Highly productive employees Weaknesses Significant drop in stock prices Decrease in market share Decrease sales and failure to take action Reduced advertising Slow application of modern technology Reduced CSR programs Opportunities Production of environment friendly brands Use of available advanced technology Production of small brands of cars Use production facilities in China to reduce cost of production Entering emerging markets Threats Toyota dominance in the world market by providing extra customer services Shifting to fuel efficient cars by North American customers Increased cost of raw material thus increasing the cost of production Increased fuel prices One of the notable Ford weaknesses is decreased sales and the failure of the company to take necessary steps. To address this weakness, the company should undertake an extensive promotional and advertising by the use of television and social sites including face book and twitter. As the road networks in the developing countries improve, Ford should place banners across highways with images of its new models. In this way, the company would effectively attract the attention of car owners who will be willing to try their brands. One way, to evaluate these modes of advertisement is use of a record that indicates the number of vehicles purchase in a region where adverts are placed. As the company continues with an extensive marketing campaign, its sales will significantly improve. Toyota Motor Corporation SWOT analysis Strengths Culture of innovation Toyota has strong brands Leader in the automobile industry Productive employees Strong customer loyalty Weakness Weak presence in the developing economies Large and regular recalls Targeting high income earners Loss of trust from customers whose brands are recalled Lesser grip of European market Opportunities Acquisition of other firms Use of green vehicles Changing needs of customers Production of small cars Expanding in the emerging economies Threats Stiff competition High costs of raw materials New standards of emission Fluctuating fuel prices Increased costs of production As indicated from the above table, Toyota has a weakness of large recalls that occurs due to numerous errors in its production facility. One of the strategies that the company should undertake is to come up with an extensive in-house training program that covers deeply on the production process of its brands. Additionally, the company should collaborate with local and foreign universities so that tailor made programs are provided depending with the technical requirements of the company. As a result, the defects that lead to increased recalls will be significantly reduced. To evaluate the effectiveness of this strategy, the company should put a record of the number of recalls and compare it against the number of engineers hired by the company and after undertaking the in-house training. Conclusion Based on the above analyses, it is clear that Toyota Company dominance of the automobile industry is largely based on its extensive marketing campaign as well as improvement of its brands. Even though Ford has equally, strong brands, its marketing campaign has not yet reached a level comparable to that of Toyota. This implies that Ford Company management team should come up with advanced marketing strategies that entail use of social sites such as face book and twitter. In this way, it will create a strong brand image to young consumers who are technology savvy. On its part, Toyota should undertake more research and hire more skilled to reduce the number of recalls that have become a key challenge for the company. References Den, N and Koopman, P. (2002). Leadership in organizations. London: Sage. Liker, J. 2004. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. New York: Macmillan Publishers. Maynard, M. (2003). The End of Detroit: How the Big Three Lost Their Grip on the American Car Market. New York: Macmillan Publishers. Mello, S., Wayne, M., Ronald, L and Richard, T. (2006). Value Innovation Portfolio Management. New York: J. Ross Publishing. Thomas, P. (1969). The Automobile Industry and its Tycoon. Explorations in Entrepreneurial History 6(2): 139–157. Wilkins, M and Frank, H. (1964). American Business Abroad: Ford on Six Continents Wayne: State University Press. Williams, K, Colin, H and John, W. (1992). Ford versus Fordism: The Beginning of Mass Production?" Work, Employment & Society, Vol. 6, No. 4, 517–555. Read More