Promotional and Advertising Strategies of Toyota and General Motors - Case Study Example

Running head: promotional and advertising strategies 30th November Introduction Based on the high profits that are generated in the automobile industry, many companies have entered the market with an aim of generating more sales and capturing the attention of the loyal customers who aim at getting the best brand. Globally, the automobile industry has been dominated by companies such as Toyota, General Motors, and Ford among others. The stiff competition in the industry has led to innovation and brand improvement that has resulted to expansive brand portfolio in the international market. This paper seeks to discuss the promotional and advertising strategies that Toyota and General Motors have adopted in their local as well as global operations. Promotional strategies As a way of creating strong customer awareness and loyalty, Toyota, which is the largest listed Japanese company by market capitalization, has adopted strong promotion strategies of its brands an aspect that has made it to generate high revenue in the international market. The company, which was founded by Kiichiro Toyoda in 1937, has a production output of more than 10 million units that are highly demanded locally and in the international markets. One of the notable brands that Toyota has introduced in the market is Toyota Tundra, a full size pick-up that was manufactured in US and is being sold in US, Honduras, Chile, Canada, Panama, and Bolivia among other countries. One of the methods that Toyota adopts to promote the Tundra brand is through production of short branded videos. A 15 second instagram videos, that was initiated in 2014 has effectively informed the customers regarding the benefits of Tundra. The promotion strategy that has also been applied for other brands such as 4Runner and Rav 4 has generated thousands of likes from potential customers. The first advantage of the video is that they are economical. While the company uses minimal resources to come up with the video, the consumers just need to take out their Smartphone and produce the 15-second instagram video. Another way that Toyota promotes its Tundra brand among others is by use of pinterest to improve brand appeal. This involves use of photos of their shiny vehicles in addition to Toyota race drivers at race tracks. In this way, the company is able to attract attention of young tech savvy clients as well as the executives. On its part, General Motors (GM), a US based firm which is headquartered in Detroit, provides a wide range of brands. Major brands by GM include Chevrolet, Cadillac, HSV, Alpheon, Opel, and 2015 GMC Sierra, which is a modern pick up that is comfortable and of high quality. In order to ensure that potential as well as existing customers are aware of the benefits and features of 2015 GMC Sierra, the company has initiated a promotion strategy through the use of social sites including You Tube, LinkedIn, facebook, and twitter (Farber, 2002). By visiting these sites, consumers are able to identify unique features of 2015 GMC Sierra, which is one of the modern GM brands. In addition, just like Toyota, GM has adopted pinterst to improve the appeal. The shiny photos of 2015 GMC Sierra in the company website strong brand awareness in the minds of the consumers (Cray, 1980). Based on the increased demand for the company brands in the global market, I recommend that Toyota should undertake a market research in the emerging market where the competitors have established their outlets. In this way, they will gather adequate market information that will make the company to produce quality brand that meets the needs of the local customers. One of the major reason for seeking information from emerging markets such as Brazil and India is that due to the fact that the residents income are deemed to improve, their purchasing power will raise thus making them to change their lifestyles and seek more valuable brands like those of Toyota. As a result, Toyota will gain advantage over its competitors in the emerging market. Additionally, I recommend that Toyota emulates realignment of its markets to establish a vertical team that is organized by products instead of discipline. This will entail establishing of a new marketing team that will ensure each of the company brands such as Tundra, Highlander, and Camry have a representative whose responsibility will be branding, market communication, product training, and digital marketing. In this way, the company will offer customized services to the customers thus differentiating itself in the market place. Consumer-oriented promotions With the growing competition in the motor vehicle industry, Toyota should adopt various consumer oriented promotions, which entails discounts and incentives that aim at inducing the customers to buy. The first promotion that I propose for Toyota is value-added. This entails provision of free instructional course, bonus points, free trial, and complementary training as once the customers purchase the company brands. In this way, the customers will not only be induced to buy Toyota brands currently, but also they will be motivated to purchase the future brands. For example, if a customer is given bonus point that he or she can redeem in future by acquiring a Toyota brand, customers will emulate repeated purchases thus enhancing Toyota sales in future (Neil and Demand, 2014). The second promotion strategy that Toyota can use is price off. With the increased number of firms in the automobile industry, the number of substitutes is also high. Toyota should therefore adopt price off, which entails marking down specific types of products especially in the emerging economies. As a result, the company will create strong positive customer-brand relationship that will be of benefit in the short and long term. Toyota pricing decisions and ways other companies can gain a competitive advantage Being one of the vital components of the marketing mix, price generates a return since it supports the other marketing mix elements. In addition to the supply and demand in terms of driving price decisions, there are other objectives that determine the prices to most firms. These include survival, profit, sales and status quo. One of the key issue objectives that guide Toyota in its pricing decision is survival. Though this objective, the company prices are flexible. One of the impacts of the survival-based price objective on the operations of Toyota is that it is in a position to accept short-term losses for the sake of long-term profitability (Kvint, 2009). For example, in 2008, Toyota raised the price of new models due to the increase in the sheet price by Nippon Steel Corporation. In this way, the company was able to pass the costs to the retailers while at the same time ensuring continuous production of its brands. The second pricing objective that guides Toyota is sales-oriented pricing objectives. Toyota is focused at expanding its market share as compared to other companies. With a global market share of more than 12%, Toyota has effectively faced off its competitors in the market. The company also adopts extensive promotion online and sponsorship of rallies such as Paris-Dakar Rally and Bela Motor Rally to create strong brand image and boost its volume. In order for other companies in the automobile industry such as General Motors, Ceekay Daikin Ltd ,Clutch Auto Ltd , Commercial Motors Ltd, Eicher Motors Limited ,Escorts Limited and Competent Automobiles Company Ltd among others to differentiate themselves and gain a competitive advantage, they should adopt extensive advertisement and promotion (Gustin, 2008). For example, by sponsoring motor rallies in the developing Africa and Asian countries, the companies will enjoy strong brand awareness and increased sales. Based on the desire by the locals in the developing to watch the motor rallies especially during the starting point, the potential customers will become aware of the brands produced by the companies. Secondly, I suggest that other companies emulate the culture on innovation in the production facilities. It is worth to note that none of the factor that has contributed to the success of Toyota is extensive innovation. Thus, by expanding their research and development strategies, the companies will introduce new and unique brands that will make them attain a competitive advantage. The most effective advertising medium The most effective advertising medium that Toyota can use is putting adverts in the national television. By advertising the company brands especially just before prime time news, large number of customers will notice new Toyota brands in the market (Goldstein and Lee, 2005). One of the major reason as to why television advertisement is effective is that since the company targets regardless of their ages and income like watching news, they will identify Toyota brands just before the news. Additionally, televisions as compared to internet are easily accessible by the consumers. This implies that Toyota will reach large number of potential customers locally and globally. Conclusion Based on the above discussion, it is clear that Toyota has effectively addressed the need of its customers as well as competition in the market. Through extensive promotion for example by use of videos and in magazines as well as quality brands, Toyota has continued to enjoy wide market segment. Apart from sponsoring motor rallies and innovation, other companies in the automobile industry can also enhance their brand image by advertising through national television. References Cray, E. (1980). Chrome Colossus: General Motors and Its Times. New York: McGraw-Hill Farber, R. (2002). Sloan Rules: Alfred P. Sloan and the Triumph of General Motors. Chicago: University of Chicago Press. Goldstein, D and Lee, Y. (2005). The rise of right-time marketing. The Journal of Database Marketing & Customer Strategy Management 12 (3): 22–25. Gustin, R. (2008). Billy Durant: Creator of General Motors. Ann Arbor: University of Michigan Press Kvint, V. (2009). The Global Emerging Market: Strategic Management and Economics. New York, London: Routledge. Neil, K and Demand, M (2014). Consumer Sales Promotion Methods. Available from http://yourbusiness.azcentral.com/consumer-sales-promotion-methods-11963.html Read More