Promotional and Advertising Strategies - Toyota and Ford - Case Study Example

PROMOTIONAL AND ADVERTISING STRATEGIES Introduction Rapid growth of the economy and high purchasing power of the population in different countries all around the world have greatly influenced the way automotive industry do their businesses. Toyota, Ford, Honda, KIA are some of the global automotive companies which set up operations worldwide and took advantage of that rapidly increasing consumer demand. The automotive companies have spent lots of money for promotional strategies to keep their sales at the high level; they have implemented numerous promotional strategies such as advertising, personal selling, internet marketing and public relation to keep abreast with the changes in social, economic, technological and competition areas. Nevertheless, the success of these strategies is unclear. Marketing, pricing and consumer-oriented strategies of Toyota and Ford The leading companies in the automobile industry are Toyota, a multinational corporation headquartered in Japan, and Ford, an American multinational automaker. Operating more than fifty years, Toyota Company gave job to more than three hundred thousand people across the U.S. within the ten plants located all over the States. It invested more than twenty billion dollars in the U.S. economy and produced more than one million vehicles (Fast facts, n.d.). A world-class design, research and development facilities along with the newest technology, Toyota work relentlessly in order to prove its grounds in U.S. and to develop the most advanced vehicles. In search for the new ways to do things better, the company tends to improve its cars on the constant basis in order to provide its customers with the best products. Moreover, it is aware of driver and dealer needs that are accommodated by the sales process. The regional offices enable Toyota to make critical decisions regarding the needs of its customers and respond faster on the occurred issues. With its Financial Services, Toyota helps millions of people to obtain the driver’s seat, offering a wide range of lease, purchase and protection plans in addition to friendly and attentive service that its each customer deserves. Ford Motor Company is the classic example of how business is oriented on production. According to its year review of 2013, Ford continues creating excellent products to ensure its customers to drive its success around the world and thus to deliver high profitability. The company moves forward to meet the needs of its customers, the challenges of automobile industry and the issues confronting the world. With more than one hundred and sixty thousand employees in different plants and offices around the world, it introduces approaches of large-scale manufacturing of vehicles and large-scale management of the industrial workforce that is with the use of well thought engineered manufacturing solutions (Our company, n.d.). In addition, Ford’s pricing initiatives enabled it to sustain over time and increase net income and cash flow. Thus, these initiatives were concentrated on encouraging and offering the incentives to sale force in order to sell the most profitable cars, use of discount packages to the up-sell customers, the cross selling if financing from Ford Credit and restructuring of vehicle sales. Such money-maker strategy of pricing enabled Ford to win in the late 90s and in the present time (Mohammed, 2010). Promotional strategies used by Toyota and Ford The promotional marketing factor for Toyota is one of the essential for its success. It will let the company not only to move forward but be able to compete with such rival as Ford. To achieve this, the primary target of the company is to commit its promotional marketing by advertising, personal selling, offering sales promotions and involvement in publicity. While it spends a significant amount of money on advertising, it plans to surpass other automakers by producing vehicles that are fuel efficient, reliable, affordable, and practical. For automobile industry an advertisement is a special tool that helps in attracting the potential customers. It facilitates in stimulating demand for the product and develops brand preference, it also helps to cut costs and acts as a certain competitive mean (Hitt, Ireland & Hoskisson, 2012). Thus, Tte main marketing strategy for Toyota Prius was to adopt new technology. The company launched the promotional activity, which highlighted the commitment to manufacture environmental friendly vehicles. Moreover, as a part of the promotional strategy, the company provided interested customers with the opportunity to visit a special website that could tell them all about the development of Toyota Prius (Hoque1, Faruque, Shahid, Pasha & Rahman, 2013). One important goal of Ford marketing strategy is to enhance the consumers’ awareness about the products and company’s corporate performance. Ford is primarily focused on improving consumers’ knowledge on Ford excellent quality and safety of its vehicles, environmental and social performance. In addition, the company represented in 2012 a new global brand promise that illustrated corporate culture and gave its consumers vision of what makes Ford different from other companies in the industry. With such vision, the company stated its performance to go further in order to deliver a strong business of great products for a better world. The initiative was used for marketing and advertising and the main aim of it was to show how Ford employees delivered ingenious products and made them available to people. Besides, keeping abreast with the modern trends, Ford used social media platforms such as Facebook, Twitter, Google+, Instagram and YouTube for establishing connection with the customers. In addition, it revealed vehicles via social media and social gaming. Thus, in 2010, instead of representing the new Ford Explorer at the auto show, the company introduced the vehicle first to its fans on Facebook (Building Customer Awareness, n.d.). Consumer-oriented promotions that assist Toyota’s objectives In the existing competitive market, the consumer oriented promotions are explained by the retailers’ power, which is shifting in the current time very fast. Moreover, over the last years, brand loyalty is not an advantage, because customers make their purchases on the basis of the price value and the convenience. Beside, when they see the equality between the brands, they change their decisions quickly. Since the market has become overloaded with the new brands in all categories, the competition among manufacturers, the increased accountability and the focus on short term have appeared. Finally, most of the marketers use sales promotion techniques, which result the less effectiveness of such fragmentation. Thus, to improve the relations with the stakeholders, Toyota addressed diversifying customer needs based on the policy where customers come first and they need products of good quality. Despite the tradition of customer first policy, Toyota did not fully live that notion. The company recommitted itself in order change that position. Thus, its activities sector along with the development design to procurement, the production and servicing were reviewed in order to be compliant with its drive to orient its business to the customers’ needs. One of such thinking about the customers was the customer assistance center, formed in 1982 and aimed to respond customers’ requests that were integrated into the company’s product and service planning. The center made its all efforts to provide sure and friendly responses to the consumers’ needs and complaints (Relations with Stakeholders, n.d.). Ford has found its success by enlarging the product and thus targeting the more number of consumers. Such strategy helped the company to obtain admirers in different ranges, lifestyles and geographical locations. Traditionally, Ford meet the needs of the middle class consumer, however, it also offers different models for every potential customer. One of the advantages of consumer orientation of Ford is that its customers are mostly Americans, who wish to choose not only vehicle of good quality, but who also think about the fact that they support their home country. A strategic manner and pricing objectives for Toyota Price is the most important component of every company’s marketing mix. Price forms a return and is driven by the supply and demand. Since there are no concrete rules in such area, so any number of pricing objectives can appear, however, the main four are applied to most businesses. A survival factor is when the prices are flexible. Then an organization can lower them to enhance sales and keep the business run. Such survival-based price objective is useful for the company if it wants to accept short-term losses but wishes to win in the long-term perspective. Besides, price has different effects on company’s profit. The direct effect refers to the price to cover the cost of manufacturing the certain product. The indirect effect is made by influence on the quantity of units sold by the organization. They make a considerable impact on the profit through economies of scale. The other pricing objective is based on the profit-based objective of pricing, as it maximizes price for long-term organizational profitability. Pricing objectives that are oriented on sales seek to raise volume of the certain product. It is measured against the companys own sales and certain time periods and the companys market share is measured by its sales against the sales of competitors. Volume and market share act independent because the change in one does not need the change of the other. There is also a so called status quo price objective, which is aimed to be the tactical goal in order to encourage competition on different factors but not on price. It mainly focuses on keeping the market share and beating of it. Such pricing objective has a stabilizing effect on the products demand. Speaking about Toyota Company, it uses differentiation and low cost strategies in its attempt to gain a competitive advantage over its competitors in the automotive industry. The market scope is a wide for Toyota. It encompasses almost every type of customer that is in the market and is ready to buy Toyota’s vehicle. The company is able to set goals is such a big market as it has wide range of product portfolio that fits everyone’s needs and preferences. Besides, the company successfully differentiates itself on several levels. The design and quality of Toyota cars is well known and it has been very successful for the company to be differentiated this way. Besides, the brand image that Toyota carries is very strong and brings to people’s mind thought about quality, long lasting performance of Toyota’s vehicles. Moreover, the company represented itself as a strong in facing with difficulties and successful solution of different issues. The proven track record of excellent quality helped the company to earn respect and trust from its loyal customers and attract new consumers as well. Another field of Toyota’s strategic manner that helps to differentiate it among others is the technology. The first successful mass manufacturer of hybrid cars on the market brought Toyota a considerable advantage over its main competitors. Thus, release of Prius in 2003, the first hybrid car on the market allowed Toyota to obtain a large portion of the market share in the area of hybrid cars. Conclusion One can say that Toyota’s organization orientation and marketing mix is developed from the philosophy of its organizational culture mainly. It is because the company always puts customers and quality on the first place. When dealing with the product development, marketing strategy, other activities and services, the company pays attention to the customers, the quality of products it establishes which differentiate it among others. However, Toyota has a weakness. The main competitor for Toyota is itself, because so far a distinctive brand image is going to be eliminated by the Lexus success. Besides, the company cannot manage all the macro factors that may affect it. Despite all these threats, Toyota expected to have many reserves to handle any situation. References Building Customer Awareness, (n.d.). Ford official website, Retrieved from http://corporate.ford.com/microsites/sustainability-report-2012-13/people-customers-awareness Fast facts, (n.d.). Toyota official website, Retrieved from http://www.toyota.com/usa/operations/fast-facts Hitt, M., Ireland, R. & Hoskisson, R., (2012). Strategic Management: Concepts and Cases: Competitiveness and Globalization, Cengage Learning Hoque1, I., Faruque, O., Shahid, E., Pasha, S. & Rahman, S., (2013). Analysis of Toyota’s Marketing Strategy in the UK Market, European Journal of Business and Management, Vol.5, No.20 Mohammed, R., (2010). Fords Secret Profit Weapon -- Better Pricing, The Street, Retrieved from http://www.thestreet.com/story/10821974/2/fords-secret-profit-weapon--better-pricing.html Our company, (n.d.). Ford official website, Retrieved from http://corporate.ford.com/our-company Relations with Stakeholders, (n.d.). Toyota official website, Retrieved from http://www.toyota.com.hk/inside_toyota/environment/report/10/relations_with_stakeholders.aspx#customer Read More