Situation Analysis and Marketing Objectives for Toyota Aurion - Case Study Example

Situation Analysis for Toyota Aurion EXECUTIVE SUMMARY Toyota Aurion is the first car to be designed and manufactured in Australia by Toyota Motor Corporation (TMC). Other brands manufactured by TMC in Australia were designed in either Japan or the US, and customized for the Australian consumers. The Ford Falcon and Holden Commodore have been identified as the main competitors to the Toyota Aurion sedan. The key strengths of the Toyota Aurion include its lower retail price, economic fuel consumption, enhanced safety and comfort features, and its good environment rating. The car’s weaknesses are mainly associated to it being a forward wheel drive vehicle. Opportunities for the Toyota Aurion include the expanded sales in export markets especially due to its economical consumption of fuel. Likely threats to the car however include the development of more sophisticated vehicles by competitors, which would reduce its market share. The marketing objective for Toyota Australia in regard to the Aurion model will be planned in a manner that will enable the company meet its objective of selling 75,000 Toyota models in and outside Australia. To attain this target, marketing will target one-time buyers who are not loyal to any of the traditional big-six family cars sold in the Australian market. Marketing will also target solution seekers who search for cars that will give them the best deal in terms of price, affordable maintenance costs, and style. INTRODUCTION Toyota Aurion was initially released in the Australian market in 2006. The car model went down in history as Toyota Australia’s first car to be designed and assembled in the country. Since the car designers understood the Australian market well, they believed that they were better placed to give Australians a car that matched their needs and preferences better than foreign car designers would. Before its launch, Toyota Australia publicized the car by releasing data, photos and tidbit information about the locally built sedan (Motoring Channel, 2006). With the term ‘Aurion’ loosely translated as ‘the dawn’ in Latin and ‘tomorrow’ in Greek, a popular pre-launch advertising campaign used the catchy phrase “Can’t wait for tomorrow” to imply that the car would mark a fresh start for Australian motorists (Moldova Foundation, 2006). By such marketing tactics, the company was able to create anticipation and appeal about the car among the motoring public in Australia. INTERNAL ENVIRONMENT In order to establish if indeed the marketing of Toyota Aurion has enabled Toyota Australia meet its mission, objectives and/or growth strategies, one needs to identify the exact strategic aspirations that the company has for its short- and long-term operations. According to Griffin and Egan (2002), the company had set a target of increasing its production capacity by more than 50 percent within a five-year period. Further, the company intended to increase vehicle sales in the Australian market to 75,000, and export an equal number of vehicles. In addition to this, the company targeted expanding its car components production, and develop design/engineering capabilities, which would enable it become the Asia-Pacific technical centre for Toyota. The report further identified becoming “free of significant exposure movements in the Yen and US dollar exchange rates” as another key objective for Toyota Australia (Griffin & Egan, 2002, p. 31). Justifying its reason for pursuing the latter objective, Toyota Australia argued that by so doing, it would protect its bottom-line from currency movements. By marketing the Toyota Aurion as an Australian-made car specifically made for people within the country, the company was able to accomplish a reduction in the level of exposure to external exchange rates in just four years. This is not to mean that the company is completely shielded from exchange rate fluctuations; rather, it is proof that marketing the Toyota Aurion has enabled the company accomplish (albeit partially) its objective to localize its production processes. Gauging Toyota Australia’s performance based on how it has handled its product, pricing, promotion, and supply chain in the past, it is worth noting that the company has always handled its marketing efforts with levelheadedness uncommon in other companies operating in a competitive environment such as Australia. To start with, it is worth noting that Toyota Aurion was the first car to have been designed and manufactured in Australia. In the past, the company got fully or partially manufactured cars from Toyota Japan or Toyota US. As such, the design responsibility was fully on designers in either Japan or the US. Despite this, it is worth noting that the company, as a subsidiary of Toyota International has always accepted responsibility for marketing Toyota vehicles in the Australian market. According to Moldova Foundation (2006), the company commenced the manufacture of Toyota Avalon in 2000. Unfortunately, the design was based on an 8-year old similar model from the US. Due to the outdated design, the Avalon failed to challenge other vehicles within its category such as the Ford Falcon and Holden Commodore, and subsequently, Toyota Australia did not realize the original sales predictions it had on the car. As the Moldova Foundation (2006) observes, Toyota Australia created Aurion to clear its reputation as the maker of an uninspiring car - a tag it attained after launching the Avlon. Toyota Australia prices its cars at par with other competing brands. Depending on the Aurion model that one chooses to purchase, he or she can pay between $34, 990 and $49,990. Compared its competitors, Pettendy (2006) observes that the initial offer for the Aurion range of cars was $500 to $1500 less than the purchase prices of its identified rivals. About promotion, Toyota Australia had started its communication to the target market well before the Aurion was launched. Among the promotion techniques used by the company include massive outdoor, online, press and print campaigns, television and cinema advertising, digital invitations to dealers, and promotions for the Aurion in international motor shows held in Melbourne and Sydney. This created awareness about features of the new car, and created anticipation among industry players. As Palekar (n.d.) notes, the carmaker sought to capitalize on Australians who were interested in the premium, and European styled family sedans that had a roomy interior and a powerful engine. In the past, Toyota Australia’s relations with players in the supply chain have always been mutually beneficial. To enhance such relations, the company has a program that analyses and manages the value chain, specifically focusing on cost areas ranging from the acquisition of raw materials to retailer who handle the final consumer (Griffin & Egan, 2002) Although Toyota had marketed its products in a relatively successful manner in the Australia market, Paleker (n.d.) notes that the company had not fully dealt with the customer needs presented in the same market. The failure by Toyota to give the Australian market a vehicle in the V6 category was a major gap since it is identified as the “largest segment in the Australian car industry” (Paleker , n.d., p. 2). Two years after launching the Toyota Aurion, the effects of marketing activities undertaken by the car maker were evident because in addition to being declared the best large car in ‘Australia’s Best Car Awards’ and ‘The Drive Car of the Year Awards’, the car maker’s sales skyrocketed to an all time high. EXTERNAL ENVIRONMENT The market for Toyota Aurion is not only Australian, but global. Before manufacturing the Aurion, Toyota undertook research that identified the New Zealand and the Middle East as other viable market for the new brand. Gauging Aurion’s market by past sales, Australia has the largest market averaging 18,503 unit sales between 2007 and 2009. Toyota also signed a contract to deliver 10,000 Aurion cars to the Middle East in 2007. Toyota Aurion’s competitors include the Ford Falcon and Holden Commodore. The Mitsubishi 380 was also a competing brand before it was discontinued. The TRD variants compete against the Mazda 6MPS, and the Subaru Liberty GT. Of the four identified competitors, its Ford and Holden that pose the biggest challenge to Toyota since their marketing practices target enhancing brand loyalty among Australians. In fact, Paleker (n.d.) observes that marketing practices used by the two companies perpetuate the “real Aussies are born into either a Holden or a Ford Family” tagline (p. 3). Toyota identified its target consumers as technological-savvy, and though their social cultural orientation may incline them to find appeal in a locally designed and manufactured car, they are not necessarily bound by it. The regulatory environment on the hand requires Toyota Australia to abide by the Australian Design Rules, which set out requirements for vehicle safety, emissions, anti-theft, and noise. SWOT ANALYSIS Strengths The Toyota Aurion is rated as a low-fuel consumption car compared to its competitors, and has received awards as a good performance car. Additionally, the comfort and safety features included in both its exterior and interior serve to enhance its appeal to consumers. Compared to its competitors, the Toyota Aurion is more affordable. Additionally, its exterior design appeals to car owners who have a taste for European designs. It is also the best-rated environment friendly car compared to its competitors (Toyota Motor Corporation, n.d.) Weaknesses Being a Front Wheel Drive (FWD), the Aurion has the weight of its transaxle and engine over its front wheels. As such, its handling capabilities are much lower especially at high speeds or when the car has a heavy load. Additionally, the Aurion is more susceptible to damage on its half-shaft when driving on rough terrain when compared to the solid axle of a Rear Wheel Drive (RWD) car (Peters, 2005) Opportunities In addition to the Australian market, the Aurion can be marketed in other countries as a viable family sedan. With its impressive low fuel consumption, the car will no doubt appeal to a world market since fuel costs are dreaded the world over. Additionally, the price appeal will work to Aurion’s advantage since it sells at a comparably lower price than its competitors do. It is also worth noting that the Aurion can ride on Toyota’s global reputation as a carmaker. The car can also demystify the notion that real Aussies use either the Holden or Ford cars. As the first Toyota model designed and manufactured in Australia, the car can also have its own share of loyal customers. Threats Since Toyota Aurion has already taken a sizeable market share from its competitors, it should be expected that they would hit back in the near future through more sophisticated and competitive cars of their own. The continued marketing of the Holden and Ford cars as befitting the Australian population is also a threat that could jeopardize the marketing activities of the Toyota Aurion. The shortage of skilled workforce in Australia’s Motor industry also means that Toyota could lose some of its employees to rival firms. MARKETING OBJECTIVE Since Toyota’s objectives seek to increase sales of the Toyota Aurion in both the domestic and external export markets, marketing activities will seek to increase sales to reach the 75,000 target by 2014. Marketing intends to accomplish the identified objective by concentrating on one-time buyers who are not loyal to any of the traditional big-six family cars sold in the Australian market, in addition to targeting solution seekers. The latter category of consumers is technology-savvy, is not bound to any brand, and search for an affordable vehicle which handles well in different terrains. They also look for a car that consumes fuel efficiently. References Griffin, P. &Egan, J. (2002). “Toyota Corporation Australia.” Submission to productivity commission inquiry into post 2005 assistance arrangement for the automotive manufacturing sector. Retrieved June 13, 2011, from www.pc.gov.au/__data/assets/pdf_file/0009/25749/sub039.pdf  Moldova Foundation. (2006). “Toyota Aurion.” Retrieved June 13, 2011, from http://auto.moldova.org/brands/auto-toyota-aurion-76-172-eng.html Motoring Channel. (2006). “Toyota launches Aurion V6 Large Car.” WebWombat Pty Ltd. Retrieved June 13, 2011, from http://www.webwombat.com.au/motoring/news_reports/toyota-aurion-1.htm Paleker, L. (n.d.). “How to launch a new product in a well established market- a case study of Toyota’s Aurion V6, Hyundai’s Nemesis, and Tata Motor’s Nano.” Retrieved June 14, 2011, from http://qaci.eq.edu.au/images/uploads/creative_article_leena.pdf Peters, E. (2009). “Pros & Cons: Rear drive, front drive or all-wheel drive?” National Motorists Association Blog. Retrieved June 14, 2011, from http://blog.motorists.org/pros-cons-rear-wheel-drive-front-wheel-drive-or-all-wheel-drive/ Pettendy, M. (2006). “Toyota’s new Aurion is priced- and specified- to please big Aussie six buyers.” Retrieved June 13, 2011, from http://www.goauto.com.au/mellor/mellor.nsf/story2/769143A742FC7C42CA25720B0025D1DD Toyota Motor Corporation. (n.d.). “New Toyota Aurion: in depth (AU).” Toyota Motor Corporation-Press Release. Retrieved June 13, 2011, from http://www.worldcarfans.com/10610175952/new-toyota-aurion-in-depth-au Read More