Marketing Management: Toyota - Essay Example

THE MARKETING PLAN – A TEMPLATE 2005-12-24 CONTENTS Terms of Reference 2. Executive Summary 3. Business Mission 4. External Marketing Audit Macro environment The Market Competition 5. Internal Marketing Audit Operating Results Strategic Issues Analysis Marketing Mix Effectiveness Marketing Structures and Systems 6. SWOT Analysis 7. Marketing Objectives Strategic Thrust Strategic Objectives 8. Core Strategy Target Market(s) Competitor Targets Competitive Advantage 9. Marketing Mix Decisions Product Promotion Price Place 11. Organisation and Implementation 11. Control 1. Terms of Reference Camry was developed and launched in 1980 by Toyota group. This product saw enormous growth in the USA market but it was a steep failure in the UK market and therefore was withdrawn in 2004. The product has gone through various redesign and re-engineering process. Each time it came up with better product than ever. Now Toyota needs to develop a marketing plan to launch its one of the best brand Camry again in the UK market. This report emphasize upon the area of concern for Toyota for its launch and the strategies it can adopt. 2. Executive Summary Toyota has already proved itself in the UK market with brands like Lexus with its many variants, Land Cruiser, Corolla, Celica, Corolla Verso to name a few. It has its own reputation in the market for its fresh designs, quality and dealer satisfactions. Though Japanese cars are one of the top choices of customers in UK today still there are some products which have been extremely successful in one market but have been not done well in the other market. One of such example is Toyota Camry. Performance of Camry was not encouraging in the European market but it was highly successful in USA market. In the report we are analysing the factors which are responsible for it and trying to find out the possible area’s where improvements can lead to the success of the variant in the same market. 3. Business Mission Business mission of Toyota is to satisfy the consumer of United Kingdom with their mid size car Camry profitably. 4. Marketing Audit UK market is well known for its maturity. It is highly regulated and offers tough competition to all the industry and all the industry products and services. Demographic Population of UK is more than 60 million. The percentage of male is approximately 50.7% and female is 49.3 %. The trends indicate that in future number of retired people will be more. The growth in the 60 years and more age group has grown up from 16% to 20% from year 2000 to 2005. 90 % and more people live in urban areas. Economic The current GDP in is £ 282 million (3rd quarter, 2005), which shows an average growth of 1.7% as compared to the same period previous year. The consumer price index has gone up to 114.3 which show annual change of 2.1 % (base 1996 = 100). The overall economy is growing. The purchasing capacity of people is increasing. Technological Its one of the most technologically advanced countries in the world. The communication tools, science, research and development etc sector attract researchers from all over the word. Various companies have set up their research and development units here including Toyota. Governments supportive polices for the technology have been one of the encouraging factors. Political Legal From the political point of view UK is very stable. The recent regulatory reforms on exports and auto industry have been supportive for the overall growth of the industry. Socio Cultural UK is known for its multicultural setup. It has liberal policies for all the segment of the society. It has network of effective social work organisation supporting all the segment of the society. Women take part in decision making process along with man in most of the families. Ecological UK comprise of England, Scotland, Wales and Northern Ireland. It covers area of 242,514 km 2. . The Microenvironment includes the following Market Potential Though the marketing have grown up but it still has demand for niche segments. Gone the days when cars were considered just a mode of personal transportation. Today it is not just a mode of transportation but also it is a symbol of personality, status and high level of comfort. Customer is looking at various attributes in it from the looks to the power of engine. Customer Different segments of consumer with different needs have developed. Consumer today are more informed and a deal can be gone within few second with just one click. Involvement in the car purchasing is high and consumer does lot of research before buying. Competitors: Competition for cars in the market like UK is extremely challenging. There are players like General Motors, Ford, Mercedes, BMW, where the name itself are enough to generate an image in the consumers mind. Each has their unique position in market. Some are most admired for their quality consistency, than other for engineering, some for power and speed along with other features. Distributors and Suppliers Distributors enjoy various rights here. They have choices of Selective and Exclusive dealership options and can do multi brand dealership. About Toyota Camry: The Toyota Camry is a popular midsize car manufactured by Toyota in Georgetown, Kentucky, USA; Australia; and Japan. The United States is the Camrys biggest market, where it competes with the Honda Accord, the Nissan Altima, and the Ford Fusion. The Camry sells very well in USA, Australia and a number of Asian markets. It hasnt sold as well in Europe and Japan - many citizens its design as ill-suited for European and Japanese tastes. In Japan and Asia, its main rivals are the Nissan Teana and the Honda Accord. Source: http://www.answers.com/topic/toyota-camry Toyota Camry has been proved failure to the UK market. Now to succeed in the same market it requires changes based on the customer requirements. Product launch is a simple process but product re-launch is very challenging for any marketer. The Market Potential The market consists of: Analyses of Market Size Garel Rhys, Professor of Motor Industry believes 3 million sales a year are sustainable in the future car industry of UK. In a growing market all the players enjoy profits with the growth of the market. Whereas in the case of mature market the growth is very less, increases the competition in the same market and with the same consumers. For consumer it’s almost the same kind of offerings all the companies have. The market leader becomes benchmark for every other company. Everyone tries to improve itself to that level. At the same time if the leader does not come up with anything extraordinary for the consumer, it will be the same offering for him every where. As per the reports of Institute of motoring following table presents the growth rates of various companies: Company Market Share (%) 1. Ford 14.8 2. Vauxhall 13.7 3. Renault Volkswagen Peugeot More than 5% higher than Toyota 4. Toyota 5.2 5. Honda 4.1 6. Nissan 3.6 7. BMW 3.8 8. Audi 3.6 9. Mercedes 2.9 10. Jaguar 1.0 11. Kia 1.4 12. Saab 1.1 (Source: www.motor.org.uk) Growth Rates: Growth rate of different brands have been different. When brands like, Mercedes, Ford, Honda and Jaguar shows fall in the market share, brands like Toyota, Audi, Saab, Kia and Nissan have shown considerable growth in market share. Customer Consumers today are very demanding. Information is very easily available to them. They can compare products and services easily spending less time, energy and resources than they used to do in the past. The consumer behaviour patterns have changed a lot. Their attitude towards their own needs have changed. Their perception to different brands varies. As per a recent online survey done by Interactive reveals the values that adult consumers from Great Britain, France, Germany, Italy and Spain associate with 21 major automobile brands. We will take the outcome of Britain consumers. Mercedes Benz, BMW and Audi are not only perceived by consumer for best qualities but also value for money where as Toyota signifies sense of freedom to the consumers. Japanese cars hold high brand quality value among the surveyed consumers. Distribution Channel Distributors, resellers and showroom owners etc all the member of distribution channel play a vital role in bringing the product to the consumer. UK market is characterised by Selective and Exclusive distribution. This is the end where customer finally gets the product which can fulfil his demand. The layout of the premise or showroom, the quality of interaction with staff, accurate information and the assurance in the operational issues like delivery and after sales services etc becomes deciding factor for the consumer. These things are available to him through these distributors. So they play a very efficient role. Dealers’ margin and his ownership to the product are the factors which motivates the dealer. Now when multi brand dealership is coming into the picture and voices are up to providing more freedom to the dealers it became very important for the companies to strengthen their relationship with them. Competition Various brands have already been mentioned who are direct into competition with Toyota. Specifically if we talk about Camry than apart from its sister brand Vista are the Ford Taurus and Honda Accord. The competition for the wallet space is among all the players and potential players in the market. With New Year new brands and variants are being developed by various makers. Suppliers Car companies depend on various suppliers to provide raw material other car accessory products e.g. Steel, lights, mattes etc. 5. Internal Marketing Audit Though Toyota have withdrawn Camry from the UK market long back but still it is manufacturing other products in its manufacturing unit Toyota Motor Manufacturing (UK) Ltd. On the basis of the optimum utilisation of the resources and manufacturing unit Toyota can utilise the same manufacturing unit for the production of Camry Variants or it can get exported and assembled. The strategy will depend upon the following issues: Market demand for the product Market size Capacity of manufacturing unit Possibility to extend the manufacturing capacity Manpower requirement Technological, raw material and other manufacturing inputs Government Regulations for export-import and manufacturing. The strategic Issues involved are: Sustainable demand of the product. Sustainable market. Required Management effort Investment requirements Human Recourses requirement Socio-cultural Issues Political legal issue Need for any strategic alliance. Strategic Issues Analysis The current marketing objectives are positioning Camry variants as a mid size family car. Camry have gone through various developments and have changed according to the European taste. The core competency of Toyota is quality which is ultimately a distinguishing feature of all the products. The fifth generation Camry offers many features and is much better than ever before in engineering, looks, power, speed etc. From the year of its launch 1980 Camry has been gone through many redesign and developments processes. Camry is a product which has been appreciated for its utility values. The sales records say that Camry buyers are not car enthusiasts. Camry is one of the most important products for Toyota. The seventh generation of Camry is coming up in more variables with 6-speed sequential transmission. Camry has been designed in a customised manner to suit Australian market. The same can be done for European market. Already Toyota’s products are doing well in quality, style, comfort, more mileage less gas, engine, handling and ride, practicality, interior and ride. Toyota has its own financial services also available to provide service to the customer. Marketing Structures and Systems The marketing structures and systems of the company will be evaluated to identify what exists and its effectiveness. Marketing structures include marketing organisation, marketing training, and intra and interdepartmental communication. Marketing systems include marketing information systems, the marketing planning system and the marketing control systems. When we talk about Toyota as a group lot many operations management concepts we recall, like quality control process. The cornerstone of Toyotas quality control system is the role of the team members in the production process. The principles on which Toyota was founded are employed at the Georgetown plant. Toyota involves its team members by: encouraging an active role in quality control, utilizing employee ideas and opinions in production processes, And practicing "kaizen" — striving for constant improvement. (Toyota Motor Manufacturing, Kentucky Inc.) (Source: Toyota Motor Manufacturing, Kentucky Inc.) 6. SWOT Analysis A SWOT Analysis is a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats. Strength Manufacturing Capability Brand Name Consistent performance Consistence Growth Quality Products New Product Development Processes Opportunity Sustainable Demand for cars exist in UK market The Population figure says that growing number of Old people in future, these people require comfortable cars and are less car enthusiast Requirement of comfortable family car 7. Marketing Objectives Strategic Thrust The strategy based upon different markets and available products are different. If a company has to serve the existing market with existing product the strategy it will follow will be penetration, the firm will try to gain more market share. Similarly the marketing strategy will differ with the market type and products. In the case of Camry the market is old for the company, even the product which was launched earlier is also known but we would consider the new Camry as a new product for the market and establish the brand in the same way. Existing Market New Market Existing Product New Product The strategic thrust in this case should be given to product development according to the consumer behaviour and preferences. Marketer knows the market very well and the product have faced failure in the past. This demand for, inculcating all the require changes and re-launching the better product. Strategic Objectives Strategic objectives should be build sales and market share rather than harvesting and divesting. 8. Core Strategy Once the company understands its market challenges for Camry it can easily formulate core strategies for it. Toyota can adopt Relationship and value based marketing strategies for Camry. The relationship marketing management calls for customer survey, their feedbacks and based on that strategy is developed. It can be identified which marketing activities have attracted them in past and the core features of Camry like its comfort, powerful engine and 6-speed limit and performance report based on its success in other markets. It can be as follows: 1. Re-positioning and re-launching in the target segment. 2. Brand Establishments. 3. Target on the basis of sales volume Target Markets The target consumer group for Camry is the niche segment which looks for a mid size family car, comfort and efficiency and who can afford a mid size car. Competitor Targets Below is the market share enjoyed by various companies, their brands and segments in Western Europe. The Japanese share is 14% next to the Volkswagen and very close to PSA group. In the Japanese share the share of Toyota is 5.2% which is leading the in the group. Toyota knows by its quality, reengineering and user friendly product. It has shown very positive growth rates in the previous years and has given a good competition to its competitors on various segments. The competitors like are Fiat, PSA group, Ford, GM Renault, Nissan have shown negative growth rate. This group have given tough competition to Toyota on some or other way in the past. Since it’s a mature market, Toyota has to keep an eye on the slow growth which is available or potential sales at the same time focus should be to get more of the competitors share to increase overall market share. Competitor Advantage All new Toyota products are known for their eco-friendliness including Camry. It offers more mileage, less overall maintenance and fuel efficiency. According to recent surveys people in US and UK are willing to pay more for eco-friendly products. This brings an opportunity to position the product as a Car of their need. The overall strategy for Camry should be focussed on consumer behaviour studies. This product should be matched with European taste and preferences unlike past when it was not according to it. 9. Marketing Mix Decisions The first need is to understand who is the customer and what kind of need this product fulfil for them. This product is usually second car for them. It is mostly bought as a family car. The user friendliness, mileage, maintenance requirements are some of the features attracting to this group apart from style, engine performance, capacity interiors and cost. Since it’s a family car than we can understand the influence of both male and female partners in the decision making process. The marketing mix decisions should focus on both the things. Product UK market is full of other brands and variants competing in the same group. The product features and practicality will be the driving force here. Other benefits can be clubbed with the product like availability of financial services, insurance, free services etc. which will add value to the product. Promotion For Camry apart from anything else a great extent of Publicity is required. The product should occupy the top of the mind of the consumer before it hits the market. All the previous features due to which it did not match with European taste should be highlighted in the publicity material with the explanations of new Camry being better than ever before for UK market. It should emphasize in a very alert manner about the best features of the Camry to win the hearts and head. One of the strong points of Toyota had been its Internet marketing strategies. The display and the presentation of product on the internet are very appealing. Toyota is already doing the same for the US and Australia markets. Specific direct mailers to consumer and dealers can be sent. The overall advertising strategy should be very coordinated with other marketing mix components. The frontline staff should be adequately trained to deal with any questions related to past performance and new features of the Camry in a perfect manner so that they leave a positive impression on the consumer. Price Toyota is known for its pricing strategy. It can raise or lower the price very logically to the consumer and communicate in a positive manner. The new product Toyota Yaris which is priced higher than its competitors Renault Cilo, Mitsubishi Colt and Ford Fiesta. This is priced at £ 10195 while the others do not even touch the mark of £10,000. Place To ensure the success of Camry Toyota will need a strong support from the distribution network. To ensure any sales query to be taken in a very expert way, Toyota need to provide all the informational material, promotional brochures to the frontline staff. In the multi-brand outlets the effective frontline staff and product information materials can change the decision of consumer from the competitor brand to the Camry. On the basis of initial customer feedback Toyota can decide upon the factors like number of outlets and the location. Product availability and minimum delivery time should be ensured. Physical Evidence The exclusive outlets and Toyota owned outlets the physical evidence should be supportive in the decision making process. The outlets should be neat and clean, with proper services available. The consumer should have the option to look at the products and its interiors etc both physically and on the computer screens. The staff should be expert in their subject knowledge about Toyota and Camry along with competitor knowledge. Process The product like Cars which involves the customer highly the process of buying, delivery and services should not be very complicated for the customer. Customer should be informed adequately about various services available for the Camry. After sales and insurance services should be properly delivered as a when required. The experience each customer will have will support in creating a positive impact on the consumer which indeed will help in positive word of mouth about product and services. People The market today has become very much service oriented. The efficient delivery of these services can be ensured with the competent staff and personnel. All the frontline staff after the recruitment should be trained properly to handle the customer and product. These people should be motivated and supervised well. They should be given proper training and managerial attention. These people are eye and ear of the company; if they are well informed and trained they can prove to be great resource to the organisation. 11. Organisation and Implementation All the factors discussed above require various inputs and several brainstorming sessions to identify and rectify possible outcomes. Each decision of Camry re-launch in the UK market is vital for its success and requires expert knowledge and efforts. The process of implementation of the marketing plan should be as follows: Each factor in marketing strategy is equally affected by various other departments like Finance department for the budget, Operations department to fulfil the commitment made by the marketing department, Human resource department to recruit, train and provide efficient workforce and management support for the success of the marketing plan. The best time to launch Camry would be with its 6th generation launch. The 6th generation Camry is coming up with various features liked by the European customers. It can be further modified to match their preferences. The 6th generation Camry will be available in 2007. 12. Control Every plan need to have effective control system to utilise its resources effectively. The control system also helps in monitoring overall progress and helps to identify and rectify any system error as and when it takes place. 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