A Marketing Plan for Toyota Cars in Australia - Coursework Example

Table of Contents A Marketing Plan for Toyota Cars in Australia 1 1 Introduction 1 2 Mission statement relevance 2 3 SMART objectives 2 4 Hierarchy of strategies 3 5 Five competitive forces 4 5.1 Rivalry in the industry 4 5.2 Threat of new entrants 5 5.3 Power of suppliers 5 5.4 Power of buyers 5 5.5 Threat of substitutes in the industry 6 6 Choice of strategy 6 7 Macro level analysis 6 8 Micro level analysis 7 9 Marketing research 7 10 Influence of the 4Ps of marketing on decision making 7 11 Segmentation and targeting 8 12 Differentiation and positioning 8 13 Conclusion 9 References 10 A Marketing Plan for Toyota Cars in Australia 1 Introduction This marketing plan is intended for Toyota cars in Australia being manufactured and distributed in the Australian market by Toyota Motor Corporation Australia Limited a subsidiary of Toyota Motor Corporation. This marketing plan will seek to identify the relevance of the mission, SMART objectives and hierarchy of strategies for Toyota Australia in relation to its cars. The plan will also analyze the industry in which the products are being offered, to identify the market attractiveness through macro and micro level analysis. Finally the paper will discuss the relevance of market research in the case of Toyota cars and describe the importance of segmentation, targeting, differentiation and positioning of the products in the Australian market. This will be done under the respective headlines. 2 Mission statement relevance The mission of Toyota Australia is to deliver outstanding products and services to its customers and enrich the community, partners and the environment (Toyota Motor Corporation Australia, 2013). Through the statement Toyota promises its clients and customers of quality products and at the same time provide jobs, investment opportunities and care for the environment. 3 SMART objectives A company’s objectives must be well articulated so that the intended outcome can be achieved. They need to be specific, measurable, attainable, realistic and timely (Walker, Gountas, Mavondo, & Mullins, 2011). Toyota Australia communicates its main objective through its mission statement; to become the most respected and admired company (Toyota Motor Corporation Australia, 2013). The company held a market share of 18% towards the end of the year 2011. Toyota recorded domestic sales of 181, 624 cars in 2011 raking in a revenue of $7.079 billion for 2013 (Toyota Motor Corporation Australia, 2013). The corolla brand has recorded sales of 25,000 in Australia alone which is a 13% improvement from the same period last year according to the company’s data ( Toyota Motor Corporation Australia , 2013). From the statistics it is acceptable to conclude that Toyota has laid down SMART objectives that have enabled the company to achieve the impressive performance in as far as market share, profitability and sales volumes are concerned. 4 Hierarchy of strategies A well formulated strategy should have: a scope, goals and objectives, resource deployments, identification of sustainable competitive advantage, and synergy. A strategy is formulated at three different levels in organizations. However in all the levels it must have the above mentioned attributes for it to serve the intended purpose (Walker et al, 2011). The three levels are: Corporate strategy This is at the level of senior management of an organization. It is at this level that the management decides the overall direction of the business in relation to its capacity and prevailing conditions. Toyota Australia is a subsidiary of the parent company Toyota Motors Corporation. The parent company is at this top level of management where corporate strategy can be formulated and reviewed according to the wishes of the top management. For a long time Toyota has adopted the strategy of continuous improvement which has enabled the company improve on the quality of its products and processes to make it the number one car seller in the world (Hino, 2006). Business level strategy- this is the strategy at the business unit level. It is important that a business knows how to address the five mentioned strategy factors at the business unit level. Toyota Australia offers passenger models, SUV models and commercial models (Toyota Motor Corporation Australia, 2013). These vehicles are specifically targeted for different segment in the Australian market. Marketing strategy- this is the strategy formulated by the market at the market level. The company seeks to understand the influencing factors at the individual segment level and package its product to suit the needs of the market in terms of the product, price, place and promotion. Toyota Australia has successfully met the expectations of specific markets by designing vehicles of top performance for the segment of the market with a higher income such as the Prado, RAV4 and Kluger. The vehicles consume more fuel but give a superior performance. The passenger vehicles are modest in terms of cost and also offer a modest performance. 5 Five competitive forces Five forces model developed by Michael porters is used to determine an industry’s long term attractiveness, rivalry, and threat of new entrants, bargaining power of suppliers and buyers and the threat of substitutes in the market (Walker et al, 2011). 5.1 Rivalry in the industry In the case of Toyota Australia there exists huge rivalry in the car industry. Toyota only controls 18 percent of the market, it’s a relatively big percentage but from another perspective it tells the level of rivalry since the rest 82% is controlled by rival companies. Ford and general motors are the biggest competitors for Toyota in vehicle manufacturing business in Australia. Other rivals in the market include Nissan, ford, Volkswagen, Mercedes, Mazda and Mitsubishi (Deloite Motor Industry Services, 2011). 5.2 Threat of new entrants The threat of new entrants into the market is not so high since the capital required to carry out a coup in the market to take up the position of the major market players is high. There are long-term dealerships agreements that prohibit sales of other brands and as such limit entry into the market (Deloite Motor Industry Services, 2011). 5.3 Power of suppliers In Australia prices of raw materials such as steel are very volatile and so are the fuel prices. This situation leaves the manufacturers at a disadvantaged position since it impacts on their production plans and also on the projected profitability of their activities (Deloite Motor Industry Services, 2011). When the supplier is left to dictate prices of raw materials and supply volume production can become very costly and negatively impact on competitiveness (Ferell & Hartline, 2010). 5.4 Power of buyers When buyers have the ability to dictate prices of the product being sold by a company, it may result in reduced profit margin and high cost of operation (Fifield, 2012). The Australian motor industry is very competitive meaning the buyers have a wider variety to choose from. This gives them the power they need to negotiate for prices in the market thus reducing the profitability of sellers. 5.5 Threat of substitutes in the industry This threat is very real considering there is huge competition in the industry and every player is seeking to outdo the others with a product that serves the needs that the competitor is trying to meet. 6 Choice of strategy The market in which Toyota is operating in is quite competitive. In such markets, players try to outdo each other by coming up with revolutionary technology or additional features in what they offer their clients (Walker et al, 2011). Toyota fits well with the analyzer strategy proposed by Walker et al (2011) for such a market. It is a hybrid strategy; split between Toyota protecting its position through continuous improvement on quality and on the other hand analyzing the environment to identify aspects it needs to improve on to stay competitive. 7 Macro level analysis At the macro level the scope under consideration is wide and can be viewed in terms of factors posing a challenge or offering an opportunity for the players in the industry. The motor industry in Australia is expected to grow since after the 2008 global financial crisis, the sales volumes have been increasing steadily across al segments of motor industry in Australia. Toyota recorded a 7% increase in sales in 2011. The corolla sales by July 2013 had improved by 13% as compared to the same period in 2012 (Deloite Motor Industry Services, 2011). This shows that the industry prospects of growth and profitability are relatively high as compared to the sluggish growth experienced in the period preceding 2011. 8 Micro level analysis While the motor market in Australia is expected to grow and perform exceptionally, the situation at the micro level is as challenging to the players due to stiff competition and close substitution of products on offer. Companies can however take advantage of consumer needs in the market to differentiate the products on offer. Toyota has taken on an approach of continuous improvement to redefine their products in terms of appearance and performance as well as revolutionary features such as hybrid engines to serve the needs of the market and remain relevant. 9 Marketing research Toyota Australia will have to conduct a market research at the maturity stage of the business. At this stage a company has already made a name for its self in the market. There are however many competitors and the greatest challenge is to remain relevant to consumers (Fifield, 2012). The company needs to innovate to offer better cars and consumer oriented features to boost sales. Some of the questions to ask during the research will be; What is your car choice and why? What do you like and don’t like about Toyota cars? What would you like improved on Toyota cars 10 Influence of the 4Ps of marketing on decision making Toyota cars are averagely priced to target the mass market (Hino, 2006); it is a popular brand with many Australians with average incomes who comprise the largest percentage of its market. The pricing model influences the product features as well since the production cost has to be low as well as the distribution channels which are least expensive models such as dealerships to lower final cost of the product. Promotional messages adopted also focus on the affordability and efficiency of the cars. 11 Segmentation and targeting Through segmentation, a company is able to focus its resources and efforts where it is likely to achieve the best results in the market (Walker et al, 2011). For Toyota Australia, the target market is wide, from low income to middle income and high income earners through its car brands. The extra brand features such as hybrid cars make it even complicated for the company and as such cannot adopt a general segmenting strategy but rather a differentiated market segmentation strategy which involves having different marketing mix for different but complementing products. 12 Differentiation and positioning Differentiation helps a company set apart its products from the products available in the market (Walker et al, 2011). This helps to have the product identified in positive way for its attributes by consumers. Positioning also places the product on a unique platform that enables it announces its presence and authority in the market. Toyota cars if analyzed on a grid with value and prestige on one axis and value for money on the other axis will fall at the quadrant where it gives value for money but not much on prestige. This segment is very competitive as it involves less production cost and differentiation. Toyota has excellently defended its position here but needs to move to high value for money and high prestige where the competition is lower and the car brand will not be very much threatened by competition. 13 Conclusion The marketing plan above has highlighted the position of Toyota Australia in the Australian market in terms of its mission relevance, current market strategies and what they have achieved so far. The plan also analyzed the motor market in Australia through five forces analysis and suggested the most appropriate strategy for Toyota Australia in relation to macro and micro level factors in the industry. Finally the plan looked into the importance of segmentation, targeting, differentiation and positioning of products in the market. Toyota needs to adopt an analyser strategy to be able to handle its different market segment appropriately. The competition is very rife in the mass market segment and Toyota needs to find a way of gradually positioning its products as prestigious as well as quality to beat the competition. References Deloite Motor Industry Services. (2011). Australian Industry Overview 2011. Sydney: Deloite Motor Industry Services Pty Limited. Ferell, O., & Hartline, D. (2010). Marketing Strategy. Cengage Learning. Fifield, P. (2012). Marketing Strategy (3 ed.). Routledge. Hino, S. (2006). Inside the Mind of Toyota: Management Principles for Enduring Growth. Productivity Press. Toyota Motor Corporation Australia. (2013). About the company: Toyota. Retrieved August 23, 2013, from Toyota Motor corporation Australia Limited Website: http://www.toyota.com.au/toyota/company?WT.ac=ToyotaOverview_Home_Company_FindOutMore Toyota Motor Corporation Australia. (2013). Toyota Key Facts. Retrieved August 23, 2013, from Toyota Motor Corporation Australia Website: http://www.toyota.com.au/toyota/company/key-facts Toyota Motor Corporation Australia. (2013). Vision and Philosophy: Toyota. Retrieved August 23, 2013, from Toyota Motor Corporation Australia Website: http://www.toyota.com.au/toyota/company/vision-and-philosophy Toyota Motor Corporation Australia . (2013). Corolla Extends Sales Lead: Toyota. Retrieved August 23, 2013, from Toyota Motor Corporation Australia Website: http://www.toyota.com.au/news/corolla-extends-sales-lead Walker, O. C., Gountas, I. J., Mavondo, T. F., & Mullins, W. J. (2011). Marketing Strategy: A decision-focused approach (2 ed.). North Ryde: McGraw-Hill. Read More