Marketing Audit - Toyota Motor Corporation - Research Paper Example

?Marketing Audit Table of Contents Table of Contents 2 Introduction 3 About Toyota 3 Marketing Audit 4 Target Market 8 Reference List 10 IntroductionChanges in the market, society and economies have led to the shortening of the product life cycle due to which the organizations are now seen to intensify their innovation related to the creation of new product that can offer the customer with more attracting features. These new products provide mechanism of further growth to the organization. Increasing competition raises the possibility of organization to go for new and modified products; this makes innovation not an option but a necessity for the modern organizations (Stonehouse and Houston, 2013; Hisrich, Peters and Shepherd, 2011; Saxena, 2010). Newness in the product signifies minor modification of the existing product that is new to the world and can also create new market for the organization. Higher the degree of newness, higher is the chances of failure or success. On one hand the newness can bring success for the organization by increasing the sales and profit, whereas on the other hand, it may lead to high cost and failure that can create problems for the business (Cravens and Piercy, 2010). This study focuses on conducting a marketing audit for a customised car that can serve many purposes at the same time. This car serves the purpose of multifunction and customization that offers the owner with the opportunity of using and transforming the car in a variety of new designs. It can serve the function of both city car and pick up. Toyota has shown interest in launching this car and in this regards the marketing audit has been conducted. About Toyota Toyota Motor Corporation is one of the world’s most favourable and leading manufacturers of automobile. It is the market leader in developing technologically advanced and environmental friendly cars. Toyota Motor Company was officially launched and started up by Kiichiro Toyoda in the year 1937 (Borowski, 2010). In the year 1952 the company experienced exponential growth and become successful. After this success the company began to export cars to South America and five years after this achievement, the company gained firm ground in the automobile market of North America. Entering the market of US proved to be a breakthrough for Toyota in terms of automobile export. In the year 1982, Toyota Motor Corporation (TMC) was formed by collaborating Toyota Motor Sales Company with Toyota Motor Company. Currently the company has nearly 522 subsidiaries all over the worlds with about 320,808 staff and having their manufacturing unit not only in Japan but also in 51 other locations spread over 26 countries (Borowski, 2010). In the year 2007 Toyota Motor Corporation has the highest share price value among all the car manufacturers. In the year 2008 the company recorded total sales of 8.972 million cars generating an annual turnover of $239.4 billion. In the same year the organization was recognised as the biggest manufacturer in the automobile industry (Borowski, 2010). Marketing Audit Marketing audit is described as the process of “comprehensive, systematic, independent and periodic examination of a company’s or business unit’s marketing environment, objectives, strategies and activities with a view of determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance” (Avasarikar and Chordiya, 2007, p. 4.15). The profitability of the organization can be increased by conducting marketing audit before launching a new product in the existing or new market (Kotler and Keller, 2012). In this regards the strength, weakness, opportunities and threat of the product and the organization has been identified. Strength The major strength of the product is customisation. The owner of the car can use this in a variety of ways serving numerous purposes. The owner can use it as a pick up van and as a common city car at the same time. The car has got innovative features that can attract the customers. It is extremely light in weight and the aluminium structure attached to it acts as the shock absorber at the time of collision. The car is designed that to carry passengers or cargo and at the same time the seats can be adjusted in such way that it can be used for used for outdoor seating. This is a car that not only provides attractive features but also uses modern technology which provides information related to speed via smart phone navigation. This signifies that the car not only serves the purpose of transportation for which it has been created but also provides easy access to information through modern technology. Thus, this car will be loved by the tech-savvy people, who look for using upgraded technology. The new type of car is backed by the brand name of Toyota, which has been the leading player in the automobile sector. The brand value of Toyota is quite high and apart from this, the company has a strong innovative culture with diverse portfolio of innovative modern cars. This brand name will help in positioning the car and penetrating the market easily. While manufacturing the cars Toyota gives special attention towards quality. Thus the customers buying this product will be affirmed about the quality and could expect a low price as the company has lower cost for production and manufacturing as compared to other players in the industry. Apart from all these strengths the major strength that gives the product a competitive advantage is that this product has brought a totally new concept in the automobile industry. Such a concept is absolutely new and is expected to arouse interest among the customers. The customers who are looking for a car that serves two purposes at the same time will find this as a highly interesting one. Weakness One of the major weaknesses of the car is that the surface of the car is made up of bamboo. Though bamboo is a natural thing but use of bamboo can arouse environmental issues and government regulations. The name of Toyota has been linked with large number of recall. In the summers of 2010, the number of recalls was at its peak. About 70 percent of the vehicles was reported to be defective and was repaired by the company (Wimmer, 2011). This type of recall not only caused adverse impact on the financial condition of the company but also the brand image of the organization. In the year 2010 the market share of Toyota was seen to decline by 1.8 percent after the already poor condition in 2009. The company booked financial loss of JP? 180 billion due to the failure owning to the recall (Wimmer, 2011). The presence of Toyota is quite weak in the emerging markets. The primary markets in which Toyota operates are Japan, Europe and United States, while has limited presence in emerging economies like India and China. Very few percentages of sales are generated from the automobile sector of India and China. Moreover, in China General Motor is holding a major portion of the market share due to which Toyota is experiencing difficulty in entering the market (Segal-Horn and Faulkner, 2010). Opportunity The opportunity for the product is high because this product is new to the market. Hence, the product can be targeted to the totally virgin market. The features that the product possesses are also new and can attract huge volume of consumers. The rising fuel price is another opportunity for this car, since it is light in weight so the car will consume lower amount of fuel. Thus, this car will suit the pockets of the customers. Moreover, the consumers will be more interested in shifting towards efficient cars. The needs and demands of the consumers have undergone rapid and dramatic changes with the change in the economic condition. This will not only caters to the diverse need of the customers but also is highly affordable. The research and development of Toyota is highly reputed. They are engaged into continuous improvement of their cars and bringing most innovative design. In developing such innovative car the organization is expected to put a great deal of effort and expertise in order to make it a grand success. Threat The decrease in the price of fuel can make the fuel efficient cars less attractive. In this regards this car can also suffer if the price of the fuel is seen to decrease. People then may look for some other innovative cars and those with attractive models. Introduction of any new government rules, regulations and standards related to the car can affect the business of the car. The raw materials required by the automobile manufacturing companies are seen to increase. This increase in the cost of the raw material will increase the cost of production of the company, which in turn will raise the price of the new car (Mitsuishi, Ueda and Kimura, 2008). Toyota is facing intense competition while entering in the emerging market. Tata, General Motors, Hyundai, Audi, BMW are some of its potential competitors, who are restricting its way from entering the emerging countries. Natural disaster is another threat to the production of this car. Since Toyota will be manufacturing this car and it is based in Japan, which is subjected to natural disaster. These natural disasters disrupts the production facilities; thus, reducing the volume. The appreciating value of Japanese currency Yen causes another limitation for the production of this car. America provides huge market to Toyota. If the company manufactures this car in Japan and sell in other countries then the profit of the organization will be affected (Carbaugh, 2008; Thorbecke, 2012). Target Market In order to succeed in the business, the organization should decide on the market segment before launching the product and deciding the target customers. By defining the target market the organization can successfully direct the marketing strategy towards that particular segment. The target market is a part of the whole market to which the company plans to sell the products and direct the marketing efforts designed by them. The marketing plan can be developed efficiently once the target market has been identified. The target market is identified by studying the buying power, demographic and geographic position of the buyers (Barringer, 2011). The first step of selecting the target market is market segmentation. This involves the process of analysing the industry in which the company operates and determine the potential of this market. Market segmentation is important in the initial stage since when the organization is launching a new product. The company do not have enough resources to target the whole market, so it is beneficial to target a particular segment. The segmentation can be done in a number of ways like by analysing the type of product, type of customer and price point. The companies go for selecting the market that appears to be the best prospect. The process of choosing the market segment is to identify the homogeneous group within the industry whose needs and wants are similar. At the same time the segment should have enough number of customers so that the profitability can be reached. After the market has been segmented then the target market is decided. In this context the firm should see that the product is attractive to the target market chosen by them and the firm is capable enough to serve these customers (Lantos, 2010; Pride and Ferrell, 2011). In case of this product which acts as a city car and a pick up van at the same time; it is clear that this car has the capacity to accommodate large number of people all together. Thus, the product can target the segment of both large family and the corporate clients that may require this for picking up their employees, etc. The product is targeted to the large family since this car acts as the city car too. Apart from this, the fuel efficiency related with the car will attract the customers who are looking for pocket friendly customers both family and corporate clients. Moreover, if someone is planning for a picnic or some outside event, then this car is the most appropriate one. Toyota will be targeting the market of United Sates with this product. This is because the company has huge presence in USA and brand is easily recognisable by the people over there and the company does not require making additional efforts to penetrate the market. Reference List Avasarikar, D.P. and Chordiya, S.B., 2007. Marketing research. Pune: Nirali Prakashan. Barringer, B. R., 2011. Entrepreneurship: Successfully launching new ventures. New Delhi: Pearson Education. Borowski, A., 2010. Report on the Toyota Company. Munich: GRIN Verlag. Carbaugh, R.J., 2008. International economics. Connecticut: Cengage Learning. Cravens, D.W. and Piercy, N.E., 2010. Strategic marketing. 8th Ed.. New Delhi: Tata McGraw-Hill Education. Hisrich, R.D., Peters, M.P. and Shepherd, D.A., 2011. Entrepreneurship. 6th Ed.. New Delhi: Tata McGraw-Hill Education. Kotler, P. and Keller, K.L., 2012. Marketing management. New Jersey: Pearson Education. Lantos, G.P., 2010. Consumer behaviour in action: Real-life applications for marketing managers. New York: M.E. Sharpe. Mitsuishi, M., Ueda, K. and Kimura, F., 2008. Manufacturing systems and technologies for the new frontier: The 41st CIRP conference on manufacturing systems. Berlin: Springer. Pride, W.M. and Ferrell, O.C., 2011. Foundations of marketing. 5th Ed.. Connecticut: Cengage Learning. Saxena, R., 2010. Marketing management. 4th Ed.. New Delhi: Tata McGraw-Hill Education. Segal-Horn, S. and Faulkner, D., 2010. Understanding global strategy. Connecticut: Cengage Learning EMEA. Stonehouse, G. and Houston, B., 2013. Business strategy. London: Routledge. Thorbecke, W., 2012. The contribution of the yen appreciation since 2007 to the Japanese economic debacle. CPII [pdf] Available at [Accessed 20 August 2013]. Wimmer, E., 2011. Motoring the future: VW and Toyota vying for pole position. Hampshire: Palgrave Macmillan. Read More