Toyota Aygo Marketing - Essay Example

ToyotaAygo Marketing Part A Toyota Company employs different strategies to segment its market in accordance with its philosophy of “having the right car, in the right place and for the right person.” The company commonly uses demographic segmentation and psychographic segmentation to target its markets. Demographic segmentation involves sub-dividing a market into groups on the basis of demographic variables such as age, sex, family size, education, income, religion, race and nationality. Toyota Aygo model is centered on demographic segmentation. (Young and Aitken, 32). The car model was first launched in 2005 and targeted the urban youth as the major customers. Then, there were only five car competitors for the urban youth market segment. However, competitors have grown to twenty today. Thus, in an effort to improve its position in the highly competitive segment, where customers are hard to win, in the year 2014, the company unveiled a new version of the Aygo model with modifications that make it more suitable for the young target customers. The model constitutes the largest individual market share of any Toyota model and has a remarkable track record of attracting new customers to the Toyota brand and winning their loyalty (Lap Lab). Young people have different tastes for cars from the older people. Firstly, they prefer small cars. Tus, in this respect, the Aygo model is small enough to suit the target customer needs. The car’s capacity is four people; the boot is also pretty small, though enough for a carry-on case/a few bags of shopping (Lap Lab). In addition, young people also want economical cars; they are young and not yet at financial peak. In this regard, Aygo is economical in two aspects. Its price is the cheapest of all Toyota models, the average list price in UK being £8, 59. Further, insurance costs are also relatively lower, and the company offers attractive finance deals to make the car more affordable to the youth. Secondly, the model scores relatively high in fuel economy. The new recently launched model has a fuel efficiency of 68.8mpg, which is a big improvement from its predecessor (Lap Lab). In addition, the youth also want a stylish car with playful features. Styling is one area in which Toyota has majored in to achieve the upper hand in a competitive urban youth market segment. The new version has been designed with style and fun in mind which, the company says to have been inspired by the Japanese youth culture. While the previous Aygo looked tasteless, the new version has a fancy X arrangement that gives it a splendid look. Further, its side window graphic is sharply drawn. It also has hi-tech features such as a rearview camera and a seven-inch touch screen that provides navigation information (BBC). Further, young people are selective. Therefore, they would want a variety of cars to choose from. In this regard, the Aygo model is offered in both three and five door looks and with a discretionary roll-back canvass roof. The model also stands out from the typical cars by giving a flexible customization enabling customers to specify colours of the wing flashes, nose cone, rear bump insert and substantial trim on the middle console and doors (Lap Lab). Therefore, having identified the target market for the Aygo model, Toyota can use various market concepts to ensure that the target customers buy the product and most importantly, that they are satisfied. Since there are other major motor companies offering similar cars, Toyota’s main focus should be on the marketing mix. Continuous improvement of the marketing mix will enable the company to position itself even better in the market as the leading motor dealer with respect to mini-cars in this case. The product is the first element in the marketing mix. Product attractiveness and quality are the stimulants for the customer to buy (Constantinides, 243). Toyota should aim at continuous improvement of innovation and technology to improve its Aygo model in order to make it more fulfilling to the young urban customers. The appearance can possibly be made fancier with time. The quality of the model can be improved in several ways such as by increasing fuel efficiency to fit that of its new competitors and equivalents Hyundai and VW UP. High-quality products which are reliable and dependable are key to success and growth of any company. Although Toyota has emerged the number one carmaker in the world for several years, there have been substantial cases of recall of some of its sport cars due to quality related problems for instance, defective front suspension systems. It is crucial for the company to maintain focus on the quality of Aygo model (Young and Aitken, 35). The price is another important element for any company’s marketing strategy (Constantinides, 243). Currently, Aygo model is the cheapest of all Toyota models, and the company provides credit assistance according to the young consumers’ requirements. In future and with consideration of competitors pricing strategies, better pricing will be the greatest opportunity for survival, maximization of profit and revenue for the Aygo model. In regard to promotion, modern marketing requires more than just creating a good product, pricing it and making it available to the target consumer. Toyota must engage in rigorous communication with the urban youth about its Aygo model through the various promotional tools that include, advertising, sales promotion, public relations and direct marketing through the internet (Young and Aitken, 33). The place is the last element in the marketing mix. Well timely delivery of the Aygo model through spread out stores in all approachable areas of the young urban customers should be a major focus of Toyota. The Supply chain should also be very efficient. Therefore, place as a component of the marketing mix is essential for enlargement strategy of Toyota with respect to the Aygo model. (Constantinides, 245). Therefore, by identifying the target customers and their specific needs, Toyota Motor Company has been able to develop and reinvent the Toyota Aygo model to suit better these needs and be competitive in the young urban market segment. Further, the marketing mix has been a central part of strategies of Toyota Company and their continuous improvement would be important for better strategic positioning and customer satisfaction in regard to the Aygo model. Part B A good product designing involves transformation of an idea, consumer or the market needs or wants into a product that satisfies these needs. Designing a product is a problem-solving exercise (Seider et al., 351). It has the following stages, which Toyota must have inevitably used in designing the Aygo model: Design Brief Design brief is ordinarily an intent statement. Toyota must have said” we will design and make a car suitable for young urban customers." Although the problem is identified, there is no adequate information with which to begin designing (Seider et al., 351). Product Design Specification This is the most critical stage of the designing process, which is necessary for the company to have a true understanding of the real problem before producing a solution. A PDS is a document that lists the problem in detail. It is essential to work with the customers and assess the market in order to come up with a list of requirements vital to producing a successful product. For best practice, the designer should refer to this document from time to time to ascertain that the designs are appropriate. In coming up with a PDS, the company has to carry out research on the problem and an analysis on competitor’s products and all relevant points and discoveries should be incorporated in the PDS. Toyota must have analyzed the products of rival companies such as Peugeot 107 and Citroen which are basically similar with its Aygo model (Seider et al., 354). Concept Design Concept design has two stages, concept generation and concept evaluation. First, using the product design specification as the basis, the designer captures their ideas typically on paper. For instance, the concept design of the Toyota Aygo might have consisted of a sketch showing a four-wheel vehicle and the engine mounted on the front of the vehicle. The designer may use brainstorming to help in the development of new concepts. After generating a number of suitable concepts, the company evaluates these concepts and selects the most suitable according to the requirements determined in the product design specification (PDS). The chosen concept is the one to be developed in detail. Several methods such as “matrix evaluation” can be used to evaluate the concepts to decide on the best to use (Seider et al., 355). Detail Design In this stage, the concept chosen is designed in detail, with all the necessary dimensions and specifications necessary to create the design specified on an in-depth drawing of the design. At this stage, the company designer might find it important to produce prototypes for testing ideas. The designer should also liaise with the manufacturer to ensure that the product is made (Seider et al., 356). Thus, once the company has the product it exactly wants to offer, in this case Toyota Aygo, the next step is to introduce the product to the market. New product introduction process involves seven essential steps: Study of Competition The Company takes a serious look at the competitors. It considers other businesses that offer product similar to the one it plans to launch. In this case, Toyota must have considered the Peugeot 107 and Citroen as the main competitors. After determining who the competitors are, the company reviews the marketing strategies of the competitors. It then evaluates how the new product (Aygo) will stand up against other similar products already being offered in the market, in what ways it will excel, and which companies or their products pose the greatest threat to success (Viale, 237) Targeting the ideal Customer To successfully launch the new product at the most efficient cost, it is important to concentrate exclusively on the prospects that are most likely to buy the new product. The new prospects have a perceived need for what the company is offering, can afford to purchase it and have shown the willingness to do so, probably by buying from the competitors (Viale, 238). The Toyota Aygo model was targeted for young people since the design stage. Creating a unique Value Proposition At this stage, the company has a clear understanding of what it must offer in order to stand out from the competitors who will want to take advantage of the new product offer. It is, therefore, essential for the company to know why customers will choose to buy from it and not from the competitors. The bottom line is that the new product should be unique from competitors’ products (Viale, 239).Toyota Aygo is unique in several aspects such as the X-shaped front., fuel economy and relatively low price. Defining marketing strategy and tactics Next, the company chooses its sales and marketing channels. The channel could be online, through catalogue or dealers. In Europe, Toyota chose to major on online marketing such as through websites, blogs, homepage sponsorships and instant messenger, and market campaigns targeting the young people to market the Aygo model (Viale 240). Testing the Concept and Marketing Approach Due to the high costs inherent to introducing a new product to the market, the company should examine the product and the marketing approach it intends to adopt. This can be done in different ways including online research and formal focus groups, or simply round table meetings with members of the target market. Only after testing should the company move on to create marketing tools and materials (Viale, 241). Rolling out the Campaign Public relations play a vital role in launching of a product or service. The company can use media relations strategies to have articles about the new product published or get coverage by inviting key press to review the product. Alternatively, it can hold a launch event or employ grass root marketing. Results from all media should be monitored and the campaign adjusted to take advantage of what works best (Viale, 342). Toyota Aygo was designed with young customers in mind as explained by its funky and playful design. The unique design and successful product launching processes have enabled the model to acquire a large mini-cars market share since its first establishment in 2005. The recent launching of the uniquely modified Aygo model sets the company apart in the competitive urban youth market segment. Therefore, it is evident that Toyota Company employs different strategies to segment its market in accordance with its philosophy of “having the right car, in the right place and for the right person” through the use of demographic segmentation and psychographic segmentation, which has enabled the company maintain a strong position in the market. Work Cited BBC, BBC NEWS | Business | Toyota Targets Europes Urban Youth. News.bbc.co.uk. N.p., 2014. Web. 3 Nov. 2014. Constantinides, E. The Marketing Mix Revisited: Towards the 21St Century Marketing. Journal of Marketing Management 22.3-4 (2006): 407-438. Pdf. Lap Lab, Toyota Aygo Targets Young Customers. Lap Lab. N.p., 2014. Web. 3 Nov. 2014. Seider, Warren D et al. Product and Process Design Principles. New York: Wiley, 2004. Print. Viale, J. David. New Product Introduction. Menlo Park, Calif.: Crisp Publ., 1998. Print. Young, Antony, and Lucy Aitken. Profitable Marketing Communications. London: Kogan Page Ltd., 2007. Print. Read More