Building Successful Brand of Toyota - Essay Example

Building Successful Brands (Toyota) Introduction The Toyota Motor Corporation is an automotive manufacturer with its headquarters in Aichi, Japan. With over 333,000 employees across the world, Toyota was ranked as the largest manufacturer of automobiles by production in 2012, while also ranking as the most valuable global automotive brand despite heavy competition from other companies like Nissan, Volkswagen, and Audi (Wimmer et al, 2011: p39). According to Cusumano (2013: p32), Toyota recognizes the difference between product marketing alone and actual investment in the creation of a company brand. Indeed, Toyota seems to understand and appreciate the value of forming a corporate framework that facilitates the consumer’s preference for its products. As noted, the company faces fierce competition from other brands for the global market, which has meant that Toyota needed to reposition itself using contemporary means to stay ahead of the competition, at which they succeeded (Wheeler, 2013: p20). This paper seeks to discuss how Toyota has managed to build a successful brand. Quality Toyota Motors is responsible for total quality management or TQM, receiving numerous awards for quality management, such as the Japan Quality Control Award and the Deming Application Prize. The TQM strategy at Toyota is based on the Kaizen or customer first concept that stands for continuous improvement, as well as total participation that refers to input and involvement of all its workers (Chernatony, 2010: p32). The Creative Idea Suggestion System, for example, seeks to encourage and support employees in contributing effectively to quality development at the company. The Toyota’s production System has also resulted in quality improvement for work and products. In addition, the Toyota Way, established in 2001, is composed of continuous improvement, also referred to as Kaizen, which strives eliminate overproduction and waste, as well as to allow employees to suggest appropriate changes. Other techniques under Kaizen include eliminating employee fears to report issues, eliminating mistakes through a root cause analysis, eliminating transport and mistakes, creating a satisfaction relationship with customers, and using mathematical and intellectual rationalization to create long term solutions (Yamaguchi, 2012: p328). Well Blended Communications Integrated marketing communications has been defined as a planning process that is designed to make sure that the customer receives brand contacts for a service, product, or organization that relevant and consistent over time to that customer (Beverland, 2011: p19). This has seen Toyota shift from traditional advertising and mass media to interactive media and specialized media respectively. Toyota has also shifted from low agency accountability and traditional compensation to high agency accountability and performance-based compensation. One good example is the Toyota Sienna campaign in 2010 that debuted during the 2010 Winter Olympics. The campaign saw Toyota integrate social media and its traditional marketing mix, inviting potential customers who viewed their ad to their YouTube page to learn more about the brand and the company. In addition, they also introduced the “Swagger Wagon” music video that became a viral marketing success, receiving over eight million hits on the site. As a result, Toyota, through integrated campaigns, has managed to capture the imagination of consumers a family-focused campaign that has succeeded across several platforms (Temporal, 2010: p41). Being First The Toyota Product Development System, also TPDS, is significantly different compared to the manufacturing process, especially since physical objects are not the core material but, rather, information and knowledge that are difficult to touch to see (Grant, 2010: p36). Toyota measures their product development times in months and weeks, while the flows are multi-directional and non-linear and a large, diverse group of technical specialists instead of manufacturing workers is utilized. Decision-making is driven by technical and knowledge expertise, rather than structure-based development where process controls, procedures, and structures drive decision-making (Irvine, 2012: p54). Some of the key features of Toyota’s product development system are functional engineering managers being used primarily as teachers to other employees, a clear emphasis on technical competence reward pull scheduling for distributive control and planning, standardization around design standards and checklists, and visually managing the development process (Roll, 2012: p50). All these enable Toyota to be a market leader in product development and, therefore, become a pioneer brand. Internal Marketing Internal marketing refers to marketing that is inward-oriented and is used by marketers to motivate a company’s internal functions so as to satisfy their customers, in which all those involved in delivering value to consumers are considered as internal customers (Haig, 2011: p25). However, this is a new concept for Toyota, which during their rapid phase of expansion was not able to develop appropriate human resources and engineering skills. This may have been the cause of employees losing sight of the company’s mission to produce quality and safe cars, resulting in the recent recalls due to faulty car parts. Indeed, the company’s obsession with becoming the biggest automotive manufacturer in the world strongly clashed with their normal procedures of operation, while the new strategy was not communicated effectively to its employees. However, in the recent past, Toyota has been seeking to market its mission to all its employees by integrating the mission and vision with their performance, strategy, and business objectives, as well as aligning their performance metrics with their mission statement (Rothacher, 2014: p41). Long-Term Perspective According to Hitchens and Hitchens (2014: p72), the manner in which a company is able to handle its failures evidences the strength of the company’s portfolio, noting that Toyota Motors has managed to survive through tough times because of their long term brand perspective and investment. From toppling GM as the top automotive seller, to 2009’s security scandal and 2011’s natural catastrophe in Japan, Toyota has managed to maintain its brand’s global supremacy by remaining attractive to long-term investors. For example, even with Japan’s monetary policy and its positive impact on Toyota’s profits, Toyota still continues to pursue cost-saving initiative relentlessly, while also focusing on luxury brands and exploring emerging markets (Magee, 2013: p44). The company has also focused on the US auto market, which continues to grow, by offering new vehicles in the US, such as full-size trucks that have been the major strength for Ford and GM. Making inroads into this market will bode well for Toyota’s long-term future in the US market. Moreover, their Toyota New Global Architecture system seeks ~30% cost reductions over the long term through standardization techniques (Hino, 2012: p81). Positioning A positioning strategy is critical as it influences how consumers perceive products in the market, as well as where they position these products. For instance, Lexus and Toyota, which are both brands under Toyota Motors, possess different positioning strategies and, whereas the Lexus IS and the Toyota Camry are comparable in terms of size of shape, they are designed and marketed to different groups of consumers (Dawson, 2014: p27). The Toyota Camry is mainly positioned as a car for consumers seeking reliability and affordability, while the Lexus IS is positioned as a car for high-end consumers seeking luxury and prestige (Krzykowski, 2011: p132). Toyota has two main positioning strategies for its brands, one of which is positioning by brand user. In this case, Toyota directs its products to specific market segments, such as business use, transportation, and multi-purpose vehicles. The second brand positioning strategy is through competition, in which they position their services as possessing different benefits or attributes in relation to competitors (Dawson, 2011: p46). Repositioning Partment (2014: p36) defines repositioning as a major change in a brand’s or product’s positioning, which requires a company to change the understanding of their target market about their product, especially where a product’s performance is declining or the competitive environment is shifting. Toyota has repositioned several times, including in 2010 when they sought to portray their brand as an American car company for US consumers. This was meant to help Toyota surpass GM as the largest global carmaker. In this case, they had to reposition Toyota as a company that sought to contribute to the US economy, rather than a company that surpassed an American company and a major competitor for America’s market that would lead to a loss of jobs (Hughes & Jeanes, 2011: p60). The company opened new plants in the US, as well as launching community events to gain support from local communities and show that they were helping Americans. References Chernatony, L. (2010). From brand vision to brand evaluation: The strategic process of growing and strengthening brands. Amsterdam: Butterworth-Heinemann. Cusumano, M. A. (2013). The Japanese automobile industry: Technology and management at Nissan and Toyota. Cambridge, Mass: Published by the Council on East Asian Studies, Harvard University and distributed by the Harvard University Press. Beverland, M. (2011). Building brand authenticity: 7 habits of iconic brands. Basingstoke: Palgrave Macmillan. Dawson, C. (2011). Lexus: The Relentless Pursuit. 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