The Macro, Micro, and Eternal Environment Influences at International Marketing Strategy - Essay Example

Introduction Numerous foreign businesses have made inroads in the Russian market in the last two decades. Even with the economic decline that characterized the Russian economy in 1990s, interest in the Russian market never ceased as the collapsed businesses recovered with time. With Russia having approximately 100% literacy rate, over 140 million people, a growing economy and enormous reservoirs of natural resources in its expansive land mass, it provides an appeasing market for many businesses. However, even after appreciating these aspects, it is crucial for businesses seeking to expand in this market to understand the various macro and micro influences of doing business in Russia. According to IMF, the Russian economy is about 2 trillion doallrs in GDP. The country is one of the highly growing countries in the world. The country has a favourable political and socio-economic environment that is crucial for business. Toyota Motor Company is a multinational vehicle producer and a public company listed in the New York Stock Exchange and London Stock Exchange. The company has a global presence with operations in countries such as Japan, USA, Canada, Russia and European nations among many other regions. In the Russian market, the company commands a leading market share with about 150,000 units sold in 2012. For the company to survive in any political regime there must be satisfactory authenticity as perceived by the citizens through continuous economic and effective development. Adherence to the established code of conduct leads to increased sales and market growth in foreign operations. The Macro, Micro and Eternal Environment Influences Over the years, Toyota Company has faced a number of challenges in their established markets in business operations, particularly in the production segment. Specifically, the automobile products are seen to have defective parts and other engineering challenges. This led to a number of recalls that dented the reputation of the firm. Nonetheless, the executives insisted that they marked vehicles for defaults that were regarded non-problematic in order to establish the real challenges and please the clients. Moreover, the company is faced with market challenges in their Russian and Japanese market due to the growing tensions between the two nations. This has given the German and Korean firms a chance to grow their market share in the country. The company is faced with high competition from other automobile firms such as General Motors, Honda, and Ford. The Toyota Company, being a multinational presence in the industry, has to deal with the recognized legal and regulatory requirements in their international markets. Every nation has their own regulations on business operations that affects corporate outcomes. Appreciating that Russia underwent through 70 years under communist rule that ended in 1990, it is outright that this played a role in shaping the Russian way of life. Even before the communist rule, it is crucial to bear in mind that Russia had been under authoritarian rule for more than a thousand years. Even though it may be risky to generalize the cultural perspective on doing business in Russia based on these, this information ought to be appreciated as a point of departure in attempts to understand the unique micro and macro perspectives in doing business there. Considering its unique history, there are distinct cultural perspectives of doing business that anyone ought to consider before venturing into the Russian market. SWOT Analysis Strengths Production presence in Russia High brand reputation Supportive government policies in Russia Global presence and brand assortment Weaknesses High number of complaints and vehicle recalls Frail presence in the emerging markets Opportunities Intensification through acquisitions High uptake of ‘green automobiles’ Changing client wants Threats High costs for raw materials High competition from rival companies Varying fuel prices Product, Price, Promotion and Distribution Strategies Market Positioning Toyota Motor Corporation has effectively positioned itself in Russia as well as the larger European market. The company has identied various fast-moving cars such as Rav-4, which has conquered the Russian market. The company has identified an elaborate pricing model by making cost-effective vehicles. Further, the company has a production plant in the country that has eased the distribution and supply logistics. As a consumer, we are all unique and this uniqueness is reflected in the consumption pattern and process of purchase. The consumer behaviour gives the company and specifically the marketers an insight on why there exist differences in the purchase of products and services by the consumers (Sarkar & Singh, 2005, p. 84). On quality, Toyota produces quality and cost-effective cars that have managed to meet the demands of the clients. The company’s marketing strategies enables the company use a tactical process of crafting, distributing, endorsing and valuing products and services for the clients. Market positioning should enable the company to maintain high standards of quality services at all times. The approach demands attributes such as passion, dreams, hopes, imagination, lifestyle, emotions, innovation, among other aspirations. This is achievable through providing the necessary information, knowledge, and methods to realize that vision, coordinating and balancing the marketing strategies with the demands of the clients and global business practices. Good and elaborate marketing arrangement results in better engagement with consumers, building relationships, fostering loyalty, and increasing brand and product awareness. A good marketing plan takes into consideration the business objectives, market intelligence on the business environment, the implementation plan and the evaluation framework. Market and Brand Segmentation Brand management solutions tend to offer point solutions for precise customer functions such as customer analytics, sales strength automation and awareness. Customers analyses the values of the brand as communicated to them and expect them to be replicated in the interaction they have experienced with that brand. It is important to note that women are easily influenced by the elegant commercials and images appearing advertisements, thus makes them easily persuaded into buying the product and services (Larson, 2011, p. 6). People are able to perceive the company’s goods and services as depicted on the television advertisements among other platforms. Different advertising and brand management strategies have different social powers in terms of expertise, reward and coercion that make them appeal to the various customer groups. In view of this, Toyota Company has segmented the Russian market by producing vehicles for various cluster groups according to the financial capacity of the clients. The focus for competitive differentiation between organisations has evolved over time. Brand management should ensure that a company sets new future expectations, which set a new scale for the company. It relies on the understanding and commitment of the entire organisation towards realizing a common goal. Marketing competitive advantage has evolved where many companies in dominated economies are using tangible product qualities to gain competitive advantage over their competitors. Further, the company prides itself in having strong brands, which enable it to withstand a strong competition among other changes in the business environment. Customers’ brand perceptions and expectations may influence their customer experience (Davis, 2010, p. 177). Company’s brand and its eventual recognition reflect a certain expectation to the customers. Proper segmentation of the target market helps the company to stay focused and designed in a way that will ensure maximum efficiency, convenience and satisfaction of clients. Brand management provides strategies, process models, interactions and technology to maximize the clients’ experiences throughout the business network (Logman, 2004, p. 98). There has been great diversity among producers, consumers, marketers and cultures of the potential consumers that shape the marketing, buying and pricing trend of a product (Kapferer, 2008, p. 337). The consumer behaviour provides the marketer with the necessary strategies that can be applied in marketing practice. Consumer behaviour is a key determinant of the type and timing of a product launch by a company. International Marketing Strategy Toyota Company begun several initiatives to address complaints and other challenges related to their products (Toyota Motor Corporation, 2013). The thinking behind their quality initiatives was to address low-profile flaws. One of the initiatives included a global database to aid in trailing vehicle repairs and reduce customer-reporting time. Moreover, the company positioned rapid-response teams in their international markets to help in identifying the real causes of accidents arising from their products. Businesses that come up with a strategic plan are more innovative and have very high chances of experiencing a worldwide growth. They end up realizing sales growth, higher profit margins, higher returns on their assets, and finally, a significant growth in the number of employees. The differentiating aspect between successful businesses and those ones that are unsuccessful is strategy. Strategic approaches can be regarded as the process of critically identifying the place where you are and the place you wish to be, and creating some specific actions that would fill the gap (Ireland, Hoskisson, & Hitt, 2012). The state-of-the-art computer structure was designed with a multilingual system to collect and assess the repair details from their dealers across the globe. Moreover, the team was supposed to compile complaints on the Internet and safety concern data. The Toyota Advanced Quality Information Center, commonly referred as TAQIC, was established for easy access by all the company’s staffs (Jacobs & Chase, 2013). Additionally, the managing director was given the responsibility of supervising all safety-linked matters. The executive is supposed to manage the research and engineering segment as well as other quality initiatives. The company started the ‘Swift Market Analysis Response Teams’ technique that was rolled out in Russia and other regions. Under this initiative, the company’s teams were dispatched to track down on the safety reports (Jacobs & Chase, 2013). This troubleshooting approach was initially started in the Japanese market as part of compliance by the regulators. The approach was meant to help in handling potential challenges emanating from the automobile products. Besides, the company a product development technique, ‘Toyota New Global Architecture’. Under TNGA, it is easier come up with new designs using the common automobile parts. The Ansoff matrix helps in strategic positioning by assessing components such as business growth, stability, profitability, efficiency and expansion into the global marketplace (Bowhill, 2008). Positioning involves selecting the marketing mix that is the most appropriate for the target segment. The evaluation and selection of a business strategy involve a number of features such as market entry strategies, growth strategies, market development and sustainability. Toyota Company has the responsibility to ensure that their product reaches the Russian market. By creating such a form of awareness, they are able to know the best group to sell to, because not all people have the ability to use the product in question. Adopting the Ansoff Growth strategy matrix has helped and will continue their business growth in the Russian market. Toyota’s marketers prefer to segment their customers in accordance to their level of thinking, because individuals who are inclined to think in a similar fashion tend to incline themselves towards products. Therefore, market segmentation helps corporations to be able to design products that are destined for particular customers. Moreover, the company has used horizontal, vertical integration, related and unrelated diversification strategies to grow their market share in the Russian market. Recommendations According to Porter’s generic strategies, it is crucial for Toyota Company to strategise on their core competencies. This will help in establishing the actual market demands and help in their strategic plans. Moreover, they have built great consumer experiences with the involvement of good strategies, integration of winning models and project portfolio management. Business support and operational support systems were aligned in a way that incorporates the interests of the clients and the organization. The company needs to structure their supply chain by adopting multiple strategies that will enable the dealers to report complaints among other flaws. This will help in improving the reporting time and faster resolution of the prevailing challenges. Being a multinational company, Toyota has many dealers and clients. It is prudent to adopt a central strategy in order to improve quality, efficiency, and reliability in the distribution of products and services. The Toyota Company should continue being abreast in technology and research. The production of ‘green automobiles’ in line with the global awareness on production of environmental-friendly cars will keep the company ahead of its rivals. Additionally, the company should embrace intensive-computer systems that will help in managing their affairs globally. This will go a long way in identifying complaints while offering solutions to clients promptly (Papakiriakopoulos & Pramatari, 2010). Nonetheless, implementation of the recommendations will not be easy considering the changing business environment and the minimal awareness about the environmental-friendly vehicles. The uptake of ‘green automobiles’ in the Russian market may be slow due to the sluggish research and technology. Competition from rivals in developed economies remains a challenge for Toyota Company. In the US, Ford had recently introduced new and low-priced vehicles into the market to rival the Toyota models (Jacobs & Chase, 2013). As a result, the company needs to establish markets in the growing economies while segmenting their products to remain relevant in their already established markets. Moreover, setting up more production plants in the African and Asian markets is timely to aid managing the supply process and lowering the production costs. The effectiveness and success of a company is highly dependent on the competency of decision makers and implementation mechanisms. Elaborate power arrangement results in better engagement with consumers, forming relationships, and nurturing loyalty while improving reputation and product awareness (Psomas, Fotopoulos, & Kafetzopoulos, 2011). The organizational structure of an organization helps add value to the concept of relationships amongst the stakeholders such as the government, clients, community, shareholders, and other collaborating companies. The changing business environment and trends is making companies to come up with products and services that are of high quality and affordable. Toyota Company stands at a better chance to improve on the weaknesses and utilize the opportunities created in the various markets. Every country has own regulations on business operations, which have impacts on the business operations. The market system in the Asian, European and American regions is oligopoly due to the existence of other automobile companies. In the African and developing countries, the market system is ‘perfect competition’ with the existence of several buyers and suppliers (Borowski, 2010). The legal system in majority of the countries is civil and common law, which makes it easier for the Toyota Company to establish a global presence. Conclusion Marketing is a very fundamental component in the success of any business and largely involve advertising, public and communication relations, sales and promotions. Due to high competition in the market, there is a need for development of innovative and tactical marketing strategies to reach the target clients. The changing trend in the global market has resulted in the emergence of a new marketing concept that put more emphasis on tangible resources and business relationships. Quality products and services are not sufficient to keep and sustain customers. Competition brings along improvement on goods and services provision; therefore, competitors can simply deliver product equivalence or improvement. Toyoto Company should continue embracing innovative strategies to help in their expansion plans and growth in the Russian market. Activities such as innovation and support services for customers drive both internal and external value of networks and relationships across traditional inter-organizational environments and boundaries. Increasing in process quality through brand management helps in positively satisfying the needs of the customer. Any feedbacks and complaints that may be a result of the order placed should be dealt with efficiently and professionally. Works Cited Borowski, A. (2010). Report on the Toyota Company. Mu?nchen : GRIN Verlag GmbH. Burmann, C., & Zeplin, S. (2005). 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Retrieved December 13, 2013, from Toyota: http://www.toyota-global.com/company/profile/overview/ Read More