The Role of Toyota in the Automobile Industry - Essay Example

? Analysing Marketing Strategies, Toyota (Yaris) Introduction The automobile industry is determined to be the largest manufacturing business in termsof the capital, capacities, employees and annual turnover. Several companies are striving hard to expand their market and be at the top in terms of sales and revenue. Toyota, a Japanese based company, which is one of the biggest manufacturers of automobiles, had launched a new vehicle range of Yaris. It has its dominance in nearly five continents as it has sold nearly 9 million cars. It is rated as one of the top ten automobile companies in the Fortune 500 list (Toyota, 2013). The company is proud of its progress and achievements which is dedicated towards the satisfaction of the customers. Toyota believes in innovation, is customer oriented and is a well organised company. The vision of the company is to provide commitment on the basis quality and mobility. The mission of the company is to provide safe and sound journey to the customers, use new technologies for innovation along with creating a prosperous society following the standard norms of the industry. The Toyota cars have over the years delivered assured superior quality with various cars category. Toyota offers cars for varied segments wherein a few are multi premium vehicles, luxurious cars and hybrid/green cars. The vehicle of Toyota, Yaris which is a sub-compact passenger car, is one of the most affordable cars and the smallest one which is sold by Toyota especially in the market of the US (Toyota, 2012). The Yaris is offered as a ‘four door sedan or five back hatchback’. Toyota Yaris has added various innovations in the car which makes it compatible to compete with true Honda Fit along with making it one of the most versatile offerings. Toyota Yaris launched its second generation model in 2012. The car as compared to the first generation is about 3 inches long and more specifications are added. The looks, features and the price of the Yaris are better as compared to the first generation products. It is one of the smallest cars with technological innovation and is cheap, reliable with enhanced quality (Toyota Motor Sales, 2013). The brand Toyota Yaris is introducing relative marketing processes to create brand loyalty. The objective of the study is to evaluate Toyota Yaris’ marketing strategies which are implemented for the success of this unique brand. The competitive behaviour and the environment based on the PESTEL analysis are evaluated. External Environment Analysis PESTEL Analysis PESTEL is an analytical tool which is considered to evaluate the external factors impact on Toyota Yaris. PESTEL is used to summarise environmental factors which influence the organisation and its future strategies. PESTEL assists the company to think proactively in the ever-changing environment to resolve the issues which can be faced by it in the operational activities. The use of PESTEL analysis would facilitate to evaluate the environment of the United Kingdom and the United States both of which seem to be quite lucrative for Toyota (Hoque, Faruque, Shahid, Pasha & Rahman, 2013). Political The government policies, rules and regulations affect the infrastructure of a country and hence influence the environment of the industry. The political factors refer to the political pressure, current environment of the country and the effective cost of operations to be faced by the industry. The government policies are an important influential factor for the sustainability of any industry in a particular country. The political factors impose costs on the industry such as taxes, and at times provide relief as well. Toyota Yaris which is a sub-compact car got the support from the US government to improve its production. This has helped Yaris to increase its sales in the USA. The government has taken initiatives to improve the production by executing policies such as the Energy Policy Act among others. The fuel efficiency of the car has made it one of the most popular new generation cars the UK as well (Hoque, Faruque, Shahid, Pasha & Rahman, 2013). Economic The economy of a country has a great impact on the sales of the automobiles. The Gross Domestic Product (GDP) of the country, the income level and the purchasing power affect the sales of the automobiles. The economy of the US being one of the most prospective ones has brought about a huge demand for Toyota Yaris vehicles. The features of Yaris have helped it in its survival and have facilitated to increase its sales number in both the US and the UK. The rise in the price of the oil affects the sale of Yaris as it is one of the best sub-compact cars with various features. The growing and the slow economy of the countries affect the sales volume of the vehicles. The economic condition of the US is helping Yaris in increasing its sales (Hoque, Faruque, Shahid, Pasha & Rahman, 2013). Social Factors The sale of Toyota Yaris is effective in areas where people are attracted towards buying small fuel efficient cars. The social factors which affect the sale of a product depend on the ethnicity, gender and age of the people. The sale of Yaris vehicle has witnessed a positive trend in the US as it had less effect on the health of the people and their skin because of the less pollution from the car. These factors have influenced the sale of Yaris in the US more than in UK (Hoque, Faruque, Shahid, Pasha & Rahman, 2013). Technological Factors Yaris being a small sub-compact car has a great influence on the perception of the people. Toyota Yaris is a technologically advanced vehicle with a modernised engine. The vehicle is featured with four cylindrical engines which makes the car competent in the town. The car uses nine air bags including knee bags for the drivers which is an advanced technology used. Thus, the strategy of using technology and the environmental advantage would lead to the increase in the sales of the product. The innovation and technological advancement would help in improving and evolving requirements for the safety and confortable lifestyle of the people. The hatchback feature along with sedan makes it effective for the customers (Tan, Chua, Chow, Chong & Chew, 2012). The market segment for Toyota Yaris is judged by the philosophy of delivery of the right car in the right place. The market segment implemented by Toyota for its Yaris range of vehicles is based on several factors such as income of the persons, gender, lifestyle and attitude of the customers. The focus of Yaris is towards the people with moderate income, youths and the section of customers who are technological lovers. The key target market for the car is youth section who is essentially learners, prefer quality and display attitude. They are also targeting women as the car is technologically sound, has a various features, is cost effective and fuel efficient. The idea of Yaris is to bring more technological advancement such as the second and third generation cars which would attract young customers. The consumer response towards Yaris car is positive because of its technological advancement. The behaviour of the customer depends on various factors such as the low price of the product with high technology. Fuel mileage which would meet the requirements of the prospect customers and the promotional factors affect the behavioural pattern of the customers. The concepts of marketing which include the pricing strategy, promotional strategy, the product features and the place affect the consumer behaviour at large. The competition faced by the Toyota Yaris is quite stiff but the favourable environmental factors and high technological advancements facilitate Yaris to sustain in the global competitive marketplace. However, Nissan Versa in recent years has emerged as one of the key competitors by introducing subcompact car with high class engine and unique design (Cupler, 2013; Tan, Chua, Chow, Chong & Chew, 2012). Marketing Strategies Toyota is one of the leading global brands and hence uses a strong marketing strategy to increase its sale and revenue. The production of Toyota Yaris is a part of the strategy of developing advanced technologies, along with low priced vehicles for the young generation as well as to maintain its market. Advertisement and promotion are the key factors of the marketing strategies. In order to precisely comprehend the marketing strategies of Toyota Yaris that have been the key differentiator for the company, the dimension of marketing mix has been evaluated. Marketing mix is a tactical tool which controls the perspective of the target market, for the sale to increase. Marketing mix facilitates to influence the demand of the product by the use of the promotional strategies. The concept of seven P’s is used by the Toyota to increase its sales in the countries such as the US and the UK among others (Perreault & McCarthy, 2006). Product Toyota has a wide range of products which are marketed in various areas, such as the Yaris, Auris and Corolla among others. The Unique Selling Proposition (USP) of Yaris is its design and small size. Toyota Yaris is driven by technological advancements to make it lucrative for the customers. Yaris has sensor, auto start, air bags and knee bags for the drivers which make it an effective and attractive option for the customers. The car is fuel efficient with various gadgets in it which makes it desirable for the consumers. The key feature of Yaris is its engine and power. The engine of the L3- Door MT is 1.5L106 hp 14, with the horse power of 106 @ 6000 RPM. The vehicle is fuel efficient which gives nearly 30mpg in the city and 37 in the highway. These features make Toyota Yaris car an efficient, comfortable and convenient option for consumers. The safety provision is provided utmost importance by Yaris as it has used airbags, ABS brakes, traction and stability control (Carsales.com Limited, 2013). Price The economies of the USA and the UK are strong and the people in these nations have relatively high purchasing power. Toyota sets the price of the different products based on the income level and the market demand. Yaris targets the moderate income group people along with youth and hence have priced the product relatively low. The car is priced for the people who intend to buy cars different from others with high technology. The pricing strategy of the product changes with the life cycle, Yaris uses this strategy and hence has kept the prices of the product low to attract the customers. Toyota has kept the price of the Yaris in the reach of people to generate the demand for the product. The pricing strategy has helped in increasing the sale of the vehicle in the US and has also facilitated in maximising the profit (The Car Connection, 2013). Place The place is an important factor for the success of the product. Before considering the target market, it is important to observe the key factors of the location, such as the political, economic and social. The analysis of the place is an important factor as the success of the product depends a lot on the place and its people. To emphasize, Yaris exhibited great success in the US as compared to other regions as it is learnt that Toyota has failed to estimate the requirements of the people in the UK. The reason for the failure of Toyota had been a lack of analysis of the tastes of the people of the UK. Therefore, the geographical location of an area is of great relevance when considering the marketing of the products. Moreover, in terms of distribution strategy, it is recognised that Toyota Yaris is distributed on a nationwide basis at the varied Toyota dealerships. This approach facilitates the company to reach its desired target customers (Hooker, 2012). Promotion Promotion is the key strategy used by Toyota to increase its sales and revenues. The promotional activities done by Toyota to promote Yaris has been through the television media by displaying various advertisements of the car demonstrating its features and small size with fuel efficiency. Toyota has promoted Yaris through the Saturday edition of Independent big SMALL guide issue through the polybag. The Saturday edition consisted of 52 pages which had the pictures of Yaris and full of advertisements of the cars with its specifications. It launched the advertisement campaign through the Saturday issues twice to attract the customer and gain their interest. Moreover, the online sites were used for the promotion of Yaris car and feedbacks were drawn from the customer regarding their opinion about the features of the vehicle. A poll generator which had questions related to Yaris was posted every week which was accessed by thousands of people (Independent Print Limited, 2010). Toyota also used billboards and brochures for the promotion of Yaris. The company reviewed the views of the readers regarding their opinion and choice of other vehicles as compared to Yaris. This helped in getting the idea of the people and attracting their attention towards the core features provided by Yaris. The promotion of Yaris was done through social media which enabled Toyota to attract and inform several people at a single time. It also used blogs to promote Yaris by displaying its price and features. Furthermore, Toyota promoted Yaris through the Frankfurt Motor Show wherein the car was demonstrated by displaying its environmental credentials. The unique promotional strategy helped Toyota Yaris to gain its market in the US. The promotion was mainly done using technologies such as social media and through the banners, e-brochures and hoardings (Independent Print Limited, 2010). Process Toyota Yaris uses lean production model. The use of just-in-time technique and total quality model has given the company a competitive edge over others. These techniques have assisted Toyota to come up with the low price vehicle with advanced features. This was possible by optimum use of the resources with minimal wastage after the implementation of the quality and just-in- time model. Supply chain management also contributes in minimizing the cost of production. These features and the business model helped the company in strategizing the price of Yaris and capturing the market by developing the car (Toyota, 2013). Physical Evidence The interaction between the customer and the manufacturer does not end with the sale of the vehicle, but it is the beginning of the relationship between them. This relationship would help the company to make the customer feel satisfied through the after sales service. The relation would facilitate the manufacturer to get the direct response which would encourage them in advancing the technology of Yaris. It was done by providing second generation and third generation cars of Yaris. The features of the car are better and more advanced as compared to the previous (Rao, 2011). People The internal customers i.e. the employees are the important aspect for the success of the product. The organisational culture Toyota emphasises creativity and innovation based on the perspective of the people. The activities of human resource have a major correlation with the facet of customer satisfaction. Toyota incorporates a democratic leadership approach which facilitates in motivating the employees. This has enabled to improve the quality of production and hence increased the sales. The research and development team has analysed the need for the subcompact vehicles with new technological advancements and low price. Having a better human resource is a key strategy to improve the marketing standards as it would lead to better customer satisfaction (Kotler, 2009). Conclusion and Recommendations Toyota has used various strategies to promote Yaris and make it a success especially in the US and the UK market. The organisational structure and the marketing mix strategy used by Toyota for the penetration of Yaris into the market have largely proven to be effective. From the conducted PESTEL analysis, it has been determined that the use of unique technological advancements along with focusing on addressing the consumers’ buying preferences have enabled Toyota Yaris to attain greater prominence amid the customers. Toyota has emphasised providing quality and satisfying the customers by fulfilling their requirements. However, in terms of future perspective, it can be recommended that Toyota needs to focus on designing its subcompact cars based on ensuring greater mileage along with upholding cost effectiveness. Toyota needs to keep aside more reserves to tackle the unwanted situations faced because of the macro environment. Toyota can aim to expand its presence with Yaris in other emerging markets as well, as the demand for fuel efficient subcompact cars is expected to raise more in these regions of the world. References Carsales.com Limited. (2013). Toyota Yaris: Launch Review. Retrieved from http://www.motoring.com.au/reviews/2011/small-passenger/toyota/yaris/toyota-yaris-launch-review-27480 Cupler, J. (2013). Toyota Yaris vs. Nissan Versa. Retrieved from http://www.carsdirect.com/compare/toyota-yaris-vs-nissan-versa Hoque, I., Faruque, O., Shahid, E.M., Pasha, S.H.A & Rahman, S.O. (2013). Analysis of Toyota’s Marketing Strategy in the UK Market. European Journal of Business and Management, Vol. 5 (20), 1-7. Hooker, R. (2008). Toyota Yaris. Make It New, 1-37. Independent Print Limited. (2010). Big Small. Retrieved from http://www.independentonlinesolutions.com/advertisingGuide/yaris.html Kotler, P. (2009). Marketing Management. India: Pearson Education India. Perreault, W.D. & McCarthy, E.J. (2006). 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