Category: Toyota

Toyota Motor Corporation is the world’s largest motor manufacturer and seller; it has its headquarters in Toyota, Aichi, Japan. According to the company’s accounts 2010, the company had a total of 317,734 people worldwide. With contemporary globalized world, the company’s operations are affected by internal and external factors. This report offers a recommendation on how the company can launch “Toyota Prius” in domestic and international market.

The world is recovering from global financial crisis of 2008; this has limited the growth in demand of motor vehicles by industries, governments, and private owners. Other than the crisis, Japan 2011earthquake has hindered transportation from the country thus the company is facing a challenge selling to the global world. There are numerous players in the motor vehicle industry; they include Mitsubishi, Ford, and British Motor Works.

The companies are offering substitutes to customers who get a wide selection of products. Other than using road transport, consumers are having the option of using rail and air transport. Consumers are offering pressure to the company; there are moves to environmentally friendly motor vehicles as people move to sustainable development. The pressures from the customers are keeping the company on its toes to develop customer focused products.

Toyota has been in operation since 1936, during this time, the company has created a strong brand name for its products. The strong brand name for the company is a strength that the management dells on; when launching new products, the company is favoured by its brand strength. With a strong brand, the companies sales are high with comfortable profit margin; the margins give the company good financial strength that it can develop new product with ease.

High sales have led to enjoyment of economies of scale making the products affordable. Toyota automobiles are known to be fuel-economical; getting original spare-parts for the products is easy thus people prefer the products. Opportunities for Toyota are many; the company has implemented the “blue-ocean” management whereby it’s focusing on areas other than japan where competition is lower.

Economic development in different countries is offering potential market for the company. The main threat and risk that Toyota faces is competition and world economics operations; there are many players in the motor vehicle industry thus increasing the competition the company has to fight with.

Internal structures of Toyota has been challenged of their inability to maintain human resources; with the structures, there are an increasing number of people who quit jobs and with them goes much wisdom to the disadvantage of the company. Some of the strategies that the company should implement during implementation include integrated marketing management system and customer relation management schemes.

When launching a product, Toyota needs to research on the target market and adopt such policies that will see the products sell more easily. “Toyota Pius” is a hybrid motor vehicle which can use both fossil fuels and bio-fuels; the product is an eco-friendly product by the company. When developing the product, the company aims at fulfilling the demand of customers and environment conservers on sustainable development.

The strength of the product will be the selling point or the strength of the product. When marketing and selling the product, the company should emphasis on the benefits that the product will have on the customers and the world in general.

For instance the marketing team should inform target customers that the product is fuel economical as well as it will protect the environment. Some of the strategies that the company should implement during implementation include integrated marketing management system and customer relation management schemes.

One the most important concept in the world of business is globalisation. In a nutshell it means that the whole human race is interconnected to a great degree. It also means the successful breakdown of barriers such as language, culture, and traditions. This is because of the rapid development of technology that has made it possible for different ethnic groups to come together and interact in a level that was impossible to accomplish in the past.

There is therefore a greater interconnectedness not only in human interactions but also when it comes to doing business in the international level. The success of the Toyota brand is the most powerful argument when it comes to the impact of globalisation. However, there is more than interconnectedness there is also an emerging phenomenon in the modern age – the rise of a business organization that can dominate the whole world in the same way that empires used to conquer and subdue nations.

Before the emergence of sea vessels that can travel halfway around the world the idea that the West can control the East was absurd. There were Europe-based empires that were able to control the Middle-East and to some extent Africa but a European superpower that can boast of dominating China was just impossible. But after the West established colonies in the Far East and South-east Asia it was no longer a matter of debate.

Nevertheless, the concept of globalisation was not yet in the minds of intellectuals, politicians, and business leaders. The West belongs to the Europeans and the East belongs to the Asians. It was not until Japanese carmakers began to demonstrate that they can compete with the big firms in America and Europe that the world took notice. People began to understand that there will come a time when Europe will no longer be considered the centre of the world.

Background

Sea vessels that came from Spain, Portugal, France, Holland, and the United Kingdom laid down the foundation of the present structure of international trade. This was enhanced even further when man invented aeroplanes. The rapid acceleration in technology when it comes to the field of transportation knew no bounds even after railway cars became the main reason why Europe and the United States achieved the status of a highly industrialised society.

As a result it became relatively easy to travel around the world to move from one continent to the next. This capability was none existent even as early as 300 years ago. Four hundred years ago it is already an extraordinary human feat to circumnavigate the globe, but today the same achievement can be done in a matter of hours.

Although the transportation sector played a major part with regards to globalisation, the degree of interconnectedness would not have been possible without an equally rapid pace of innovation in telecommunications technology. The telegraph, telephone, and then radio made it possible to communicate effectively and efficiently over long distances.

A mere one hundred years ago it took weeks or even months depending on the location to deliver a message. Half a century later this gap was narrowed when the telegraph was invented and the use of the telegram was popularized but still it requires elaborate set-up and complicated processes in order to communicate through long distances.

When the TV was invented it changed the game entirely and the whole world reached a level of understanding that never existed since the history of mankind. Asians are now able to see what was happening in the West and vice versa. Musicians and other artists became popular all over the world. Their songs translated into different languages and it was as if a global community was born. There is now common ground between two different cultures.

Globalisation is not an entirely new concept. When Europeans learned to circumnavigate the globe and created colonies halfway around the world, it can be argued as the beginning of globalisation. But it is only in the 20^th century when the whole world felt the impact and full meaning of the concept. It simply means that people with influence, such as businessmen, political leaders, and ambitious individuals can no longer limit the effect of their activities within their country of origin.

In the the age of globalisation, business, political and social decisions and actions created ripples across the globe. It is through the radical change in the field of technology, transportation and communication that made it all possible. This study will focus on the Japanese company known all over the world as Toyota.

The rise of this Asian business giant and its daring move to snatch the crown of achievement from an American conglomerate is a major testament that a local operation can be made into a global enterprise that in turn can affect every man, woman and child on earth.

Globalisation is not a mystery but it is like a diamond with multiple facets. Others see the interconnectedness of people with different cultural backgrounds and religious orientations and yet able to transcend these differences through the use of modern technology such as the Internet. There are those who see globalisation in the context of mobility, that a person can be a citizen of the UK, yet lives in New York and travels frequently to China.

Globalisation is also seen as the destruction of diversity and the emergence of one dominant culture. In this case one company can now dictate the prices of a commodity and how products are made. There are also others who argue that globalization is nothing more than a planet being partitioned into manageable pieces by multinational corporations that are now as powerful as nation states.

Toyota Motors

The success of Toyota Motors in the world stage is nothing less than spectacular. The automotive industry is more often than not associated with the United States and Europe. In America there are the iconic brands such as Ford and Chrysler.

In Europe there is no need to elaborate even further the impact of Mercedes Benz, Jaguar, and of course Ferrari. But how come Toyota, a firm that originally came from Japan began to take over a territory once controlled by Americans and Europeans. The answer can be understood if one will apply the principles of globalisation.

Notice for example that Toyota did not become number one by simply outproducing Ford and Chrysler. This company became the biggest carmaker only after it decided to branch out and establish factories in the United States and other parts of the world. It only began to dominate when it learned how to sell cars outside Japan. This means that the company had to emphasise the need to break down barriers and create a system of effective communication and coordination to manage a business that has a global presence.

It was also pointed out in the article in the BBC website that the Japanese car manufacturer was able to sell 8.42 million vehicles because of the spectacular economic growth in China and other Asian countries (BBC 2011). It has now become a global business. It is no longer possible to simply focus on the country of origin or even to focus on one market such as the United States.

The positive aspect of globalisation can be seen in the way that a businessman or an organisation can succeed past the hurdles that is usually encountered in a traditional business model. For example Toyota can build factories in China but sell the products not to the Chinese but to the Americans.

In the past the factory workers in the United States are also the consumers of the products that they produced and therefore as the company succeeds so does the economic status of the workers. This means that their standard of living also improved tremendously. This is a good thing for employees but the firm suddenly finds a market where the profit of margins is not as great because they have to deal with increasing payroll.

This problem is solved by moving factories from a region where the firm is forced to pay higher wages to a location where Toyota does not have to spend so much on payroll. This is why the growth of the company can be achieved at such a rapid pace. The limitations imposed by geography and old business models no longer apply.

Aside from improving cost-efficiency the most important consequence of globalisation is the fact that the market is no longer limited to the local economy. It used to be a simple process. A businessman sets up shop in the city. The businessman either buys or sells goods or manufacture them.

But the customers are the residents of the city or the people that live in nearby cities or provinces. Today, this is no longer the traditional target market for businesses such as Toyota. Their products can be sold to India, Singapore, Norway, and even as far as New Zealand.

As Powerful as Nation States

Globalisation is a double-edged sword. On one hand it makes possible an efficient and highly lucrative way of doing business. On the other hand it created an environment that will give rise to multinational corporations that are as powerful as nation states. In the not so distant past nations were governed by royalty.

These rulers either took the crown by force or by diplomacy but they rule a particular region. They may build an empire so expansive and yet it is still easy to see the boundaries of their power. The same thing cannot be said of multinational corporations.

The claim that multinational corporations are the true rulers of the world deserves a more in-depth examination simply because there is very little that an ordinary citizen can do to influence their decision-making process. There is no electoral process that can be used to correct the abuses of multinational corporations. If it can be proven that multinational corporations are the ones that are controlling this planet then perhaps governments and their respective citizens can do something to lessen their influence.

It is not the scope of this paper to dwell deeper on the strategies that can be adopted to lessen the negative impact of corporate leadership. It must also be pointed out that if there is indeed too much power in the hands of a few CEOs then it is imperative to create some form of a check and balance that will mitigate the effects of greed and absolute power that may emanate from the boardroom of some of the world’s most powerful companies.

Management Issues

Globalisation is a contemporary management issue because it is no longer possible to start a business, manage an existing one, and try to improve the performance of a firm without thinking about internal and external factors. Globalisation is a force that can radically alter not only the economic landscape but also the social landscape as well.

This is an important consideration when it comes to the problem of competition. It is not only a very complex world but also a highly competitive environment. It is more and more difficult to establish a business without first considering the fact that other firms had already penetrated the market and has found a way to sell their wares at a cheaper price.

The implication of this problem is not only limited to contending with higher barriers of entry but also the fact that multinational companies has the power to dominate an economy in such a way that it is no longer easy to offer an alternative because these organisations had already set up a system in place where consumers can have access to quality but low priced items.

This is a good thing if the general public is assured of perpetual access to cheap but quality goods. However, this is not the case when a company succeeded in defeating the competition.

Once a company has successfully prevented a rival from flourishing then it means that there is now a higher demand for their products. If there is a high demand then there is always a price hike that follows.

However, rising prices are not the only problems that comes with a dominant force without a rival. There is also the problem of not having a competitor that acts as a check and balance. In other words the company may not be driven to improve their products knowing that customers had no other choice but to go to them for their need of their product or service.

It is therefore important to allow for the benefits of globalisation but also be cautious of the negative impact of such a development. The world is in need of innovators more than ever. The problems with the environment and the need for better products can only be solved if more people are involved and if more organisations are given the chance to participate.

It is therefore crucial to develop a system or a set of international laws that will lessen the probability of a totally dominant business organisation to have a level of power that will force every single competitor out of business.

Conclusion

Globalisation is the result of radical technological advancements. It has given rise to a new business environment wherein a corporation can become as powerful as a national government. There are benefits as well as risks in this kind of environment. A company like Toyota can create a business model where they can supply quality but affordable cars.

This is because the company has found a way to make money by simply utilising what the whole planet can offer instead of being limited by local conditions. On the other hand the tremendous success of a global brand discourages the entry of innovators because of the high barrier of entry. It is possible that a fledgling company has the answer to the problem of petroleum dependent cars but because of the dominant position of one multinational corporation in the market, it becomes impossible to compete any longer.

References

BBC 2010. Toyota beats GM to end 2010 as world’s biggest carmaker. Available from <https://www.bbc.com/news/business-12264396>. [24 January 2011].

Introduction

All organizations face crisis of different natures and scales at one time or another and the auto manufacturing industry is no exception to this. Devlin (2006, p.48) asserts that it is the premise of an organization’s management and the Public Relation (PR) offices to ensure that in the event of a crisis, the organization recovers gracefully and in a timely manner.

The objective of crisis management is to protect the stability of the organization by ensuring that stakeholder interests are protected and the organization’s losses are mitigated. Public relations forms an integral part of any crisis management efforts especially when the news media is involved.

In the course of the previous year, a crisis has hit the car manufacturing giant, Toyota forcing it to recall hundred of thousands of some of its bestselling models all over the globe. The negative publicity that this matter has received from main stream media has been immense. This has resulted in damage to the company being significant as can be illustrated by the company’s stock prices taking a plunge as vehicle sales plummet.

In light of these daunting realities for Toyota, this paper shall argue that effective PR and timely crisis management can be used to achieve a company’s marketing objectives even in the face of a global crisis.

The paper shall perform a brief analysis of Toyota’s handling of the crisis so as to highlight if proper crisis management policies were employed. The role of the media in this situation will also be reviewed and advice offered as to how Toyota can best harness the media to sanitize its tarnished image.

An Analysis of Toyota’s Handling of the Crisis

In the course of the past few months, Toyota has had to recall vehicles from all over the world over issues to do with sudden acceleration which is allegedly as a result of sticky accelerator pedals. In addition to these problems, there have been speculations that there could be braking problems as well as electronic system problems in the new model Toyota Cars.

Toyota’s crisis reached new levels following revelations that the death of an American highway patrolman, Mr. Saylor and his family in August last year were as a result of faults in the Toyota manufactured vehicle. Mr. Saylor’s finally words through an emergency call confirmed that his vehicle, a Lexus, had stuck its accelerator and had no braking which subsequently led to the fatal accident (Frean & Lea 2010).

The initial reaction by Toyota to this incident was the issuing of advisories instructing owners of specific model vehicles (including Lexus IS350) to get rid of driver side floor mats in their vehicles as this were suspected to cause the accelerator to stick. In addition to this, the company declared that it would continue working towards developing a long term solution to this problem.

However, it emerged at the beginning of this year that Toyota was issuing a recall of Lexus models to make some adjustments due to breaking problems that had been experienced by customers world wide (Lewis 2010).

This recalls have allegedly been necessitated by an increase in the number of reported cases of injuries and deaths attributed to Toyota vehicles. Even in light of this, company officials have maintained that recalls are not technically required since the brakes problem is of a temporary nature and indeed very rare.

Following the accident involving Mr. Saylor and his family, company representatives of Lexus issued a statement of condolences through which they expressed their deep regret at the family’s loss. The company went on to proclaim that they would investigate the issue do as to ensure the safety of Toyota’s customer’s.

This was a sound crisis management maneuver for as Blythe and Zimmerman (2005, p.304) assert, in the event of a crisis that leads to some form of lose to a customer, a public apology demonstrates the organizations empathy which may lead to some amount of goodwill from the general population.

From the onset, Toyota was assertive that the acceleration problem was isolated to only a number of models which it subsequently outlined and proceeded to give advisories on. This was an attempt at localized damage limitation and as Shirley (2000, p.32) confirms, this is a prudent move since all brands of an organization do not have to suffer for a crisis in one of the branches.

A report by The Times confirms that Toyota has been keen to isolate its luxury brands from the quality crisis that has hit most of the company’s new motor brands (Lewis 2010). Despite this crisis management strategy having hit some glitches as the luxurious Lexus IS350 model is in the shortlist of problematic vehicles, the isolation policy has helped the company to save face and retain some semblance of quality and reliability.

One of the errors that Toyota made while handling the situation was in its original insistence that the problem had to do with the few individual customers who experienced the problem. In addition to this, Toyota attempted to downplay the issue and did not publicize its advisories as much as it should have.

This might have been as a result of the fear by the management of the huge cost and reputation dent that the problem would cause for the company. In light of the recent recall in which the company has been forced to acknowledge that there had been problems inherent in the Toyota cars, the company’s initial claims on the vehicle’s safety have been seen to have been wrong.

This has greatly damaged the company’s credibility and reputation as being committed to customer safety. Fear among customers has escalated as Toyota drivers lack the assurance that their cars are safe.

This status quo has been worsened further by government warnings issued to Toyota drivers in America advising them to quit driving their vehicles for fear of accidents (Demetriou & Ruddick 2010). This has at the least damaged the company’s customer base to a large extent in the USA. Competitors have taken this opportunity to capitalize on Toyota’s losses and offset its market dominance.

Due to the speculation that Toyota knew about the problems with its vehicles but knowingly withheld the information from the public, there is mounting pressure on Toyota and lawsuits are being filled especially in the USA by car owners. Toyota dealership shops are also seeking compensation for the recalls and the damage that is resulting from the company’s damaged reputation.

The insinuation that Toyota knew about the problem but decided to downplay it could cost the company millions, or even billions of dollars in court settlements as was demonstrated in the late 1990s case in which Firestone/Bridgestone was forced to pay $7.5 million in settlement due to claims that is failed to deal with quality problems in its tires (Hearit 2006, p.154).

Had Toyota addressed the issue from the onset and adopted a policy of full disclosure, none of these daunting predicaments would be facing the giant manufacturer.

The Toyota Crisis and the Internet

We live in an increasingly globalized world which is characterized by instant access to information mostly as a result of the internet. As such, mainstream media outlets such as Television, Radio and Newspaper have at times been forced to play second fiddle as informal news outlets in the form of blogs and social websites take the lead.

The major problem with most internet media (especially social networking sites and blogs) is there is lack of verifiability and or accountability for claims made. As such, if there is no authoritative source of information, speculation and rumours may be interpreted as the absolute truth.

As such, a cardinal mistake by Toyota was that the company did not make any official statement on the matter. This informational black hole resulted in the media, and in particular bloggers and twitters being the authority on the matter.

While some of the information provided was of credible and truthful, sensational gossip also made the rounds in various sites as individuals told and retold their tales. The first public comment from an executive at Toyota’s head office in Nagoya was only made in February; almost 6 months after the crisis began (Frean & Lea, 2010).

Had Toyota acted in time and issued a solid statement, it would have been the authority on the matter and all the speculation would have been nipped at the bud. This would have given Toyota an opportunity to avoid the situation being blown out of proportion.

Despite these failures, Toyota has over the last weeks realized the power that the internet wields and has therefore sought to utilize this media to tell its side of the story and curb speculations and slander. The company posted a document on the internet which was addressed to Toyota owners. In the document, the company proposed to shed light to the recall; an issue which had until then been marred with speculations.

The letter informed the customers of the recall schedule and reassured all that dealerships would indeed extend their work hours so as to fix all problems in good time (Toyota 2010). Toyota has also elicited the use of social networking websites such as Twitter where it has encouraged customers to air their views. The company has adopted an honest stance by allowing negative comments to be aired without censorship.

My Advice to Toyota

Since the crisis has already begun, the best that Toyota can do is undertake “firefighting” and hope to emerge from the crisis with limited loses both in reputation and finances. Devlin (2006, p.45) declares that effective crisis management strategy is that which handles a perceived threat in a sequential manner.

He goes on to articulate that the primary concern in any crisis should be the safety of the consumers and the public at large. A failure to address this fundamental concern will invariably lead to intense damages from the crisis in the form of scarred reputation and financial loses.

While Toyota has already undertaken part of this step by recalling some of its brand, it is in my opinion that emphasis has not been placed on customer safety. while Toyota has formed safety advisory group and allegedly tightened its reins on its safety control, this is seen by many customers as mere damage control since consumer safety is not emphasized.

The company should endeavour to constantly remind customers that their safety is the company’s primary concern.

An experimental study by Dean (2004) whereby a comparison of how people reacted to expressions of concern verses no expression of concern found that post-crisis reputations were stronger when an organization provided a strong expression of concern for faults or any other misgiving.

With this in mind, I would advice Toyota to constantly remind the public that it is working overtime to resolve the issue as it overly concerned about consumer safety and convenience. Attempts at this can already be seen in the company president’s Toyoda’s heartfelt apology and expression of grief over the inconvenience that the troubles have caused to the company’s customers.

In managing a crisis, any show of weakness or indecision may spell doom for an organization. A company should therefore appear confident and optimistic that it has the situation under control.

Toyota should therefore maintain a calm attitude as it deals with the problem and avoid making panicked decisions as this will only lead to an escalation of the problem. The organization should also take responsibility for the crisis since this will result in the public being more accommodative of the company (Dean 2004). This will result in less damage to the Toyota’s reputation.

How Toyota can Use the Media to Restore its Image

Toyota has always been renowned for reliability and its quality control has been the company’s insignia. The current crisis threatens to undermine these virtues that the company has held on to unwaveringly throughout the years. This grim possibility can be averted by use of the media to restore Toyotas glory.

Over the years, the role of corporate advertising has changed from goodwill to advocacy advertising (Harrison 2000, p.90). Toyota can therefore utilize these outlets to fulfill its strategic aims and objectives. Advertisements have been known to change people’s attitudes towards a particular company for the better.

By extensively engaging in media campaigns that highlight the company’s strengths, Toyota can give its image a new lease of life even in the face of the crisis that threaten to run it under.

Shirley (2000) proposes that when a crisis hits a company, it either leads to the damaging of the brand or presents an opportunity for the organization to bolster the product by using the publicity that is gained as a result of the crisis. Toyota can therefore use the publicity that the crisis is affording it to reaffirm its commitment to consumer safety.

However, this move will only function if the rectifications that the recalled vehicles are fitted with prove to be as good as the company says they are. The reputation of the company will therefore be salvaged and its credibility as a reliable and safety conscious manufacturer maintained.

Toyota has already begun making use of the media to this ends as can be illustrated by extensive advertisements in American newspapers. The advertisements stated that Toyota was in the process of fixing the current problem (Demetriou & Ruddick 2010)

Bearing in mind that continues communication is the cornerstone of all business relationships, Toyota should especially be keen to maintain constant communication with the customers who are in one way or the other affected by the crisis.

A research by Taylor and Kent (2007) indicates that establishing a crisis web site is one of the best ways in which an organization can utilize the internet during a crisis. Toyota should therefore create a crisis web site in which it will give detailed information as to the models that have problems.

Information on the particular dealerships which are accepting the recalls should also be provided and a schedule made for the convenience of the customers. These constant communication efforts will demonstrate to the public that Toyota is indeed concerned about its customer’s problems and is doing all that it can to resolve the issue.

Conclusion

The Toyota crisis has been classified as the worse of its kind in vehicle manufacturing history. The cost in terms of financial losses run in the billions of dollars and the reputational consequences are equally dire. This paper set out to argue that effective PR policy compounded with a well calculated use of the media and a timely crisis management can enable the company achieve its marketing objectives in the face of global crisis.

By performing an analysis of the way in which Toyota first handled the situation, it is clear that some wrong choices were made and their effects are still causing major problems to the company. From the discussions presented in this paper, it is clear that all is not lost and Toyota can still manage to gracefully come out of the crisis as the leading car manufacturer in the world.

The company is still in a position to turn the tables and use the increased publicity for its own good. However, all this depends on the company’s commitment to their customers and the ability of the PR and crisis management team to harness the power of the media for the company’s advantage.

References

Blythe J. & Zimmerman S. A., 2005, Business-to-Business Marketing Management: a Global Perspective, Cengage Learning EMEA.

Dean D. H., 2004, Consumer Reaction to Negative Publicity: Effects of Corporate Reputation, Response, and Responsibility for a Crisis Event. Journal of Business Communication, 41, 192-211.

Demetriou D. & Ruddick G., 2010, Toyota Woes: Staring into the Abyss, Telegraph. Web.

Devlin S. E., 2006, Crisis Management Planning and Execution, CRC Press.

Frean A. & Lea R., 2010, Toyota Recall: Last Words From a Family Killed as Lexus Crashed , The Times. Web.

Hearit M. K., 2006, Crisis Management by Apology: Corporate Responses to Allegations of Wrongdoing, Routledge.

Lewis L., 2010, Toyota Prius Global Recall Fears Spread to Luxury Lexus brand, Times Online. Web

Said C., 2010, Toyota Should Have Accelerated Response, San Francisco Chronicle. Web.

Shirley H., 2000, Public relations: an introduction, Cengage Learning EMEA.

Taylor M., & Kent M. L., 2007. Taxonomy of mediated crisis responses. Public Relations Review, 33, 140-146.

Toyota, 2010, Toyota Customer Letter. Web.

Organizational behavior is based on the principle of developing the necessary competencies and skills needed for effective growth contribution to an organization or company. Within an organization, there are several policies that are essential to success in an organization.

The context below shall elaborate more on these competencies in relation to the Toyota Brand. The competencies include the diverse management observing ethics and different cultures, team management, as well as the groups managing the communication and sales department.

Nature of groups and group behavior at Toyota

In relation to the nature of groups and the organizational the behavior within the Toyota brand, the management of Toyota is divides its staff to several categories. One group deals with consumer behavior also known as the psychology of marketing.

This group was formed with the aim of giving the company a better understanding of their customers. This group enables Toyota improve its marketing strategies by understanding such issues such as the psychology and how the consumers think, feel, reason and the factors that guide them when selecting between brands and products.

Other customer psychological factors that they study include how the environment, culture and media affects a customer’s decision when buying a car, for example customers usually choose a car shop which is regularly advertised in the media and one that is usually popular with the surrounding people. The several groups usually survey the consumer motivation and decision strategies.

Basically, the effectiveness of the organization structure of the groups within Toyota depends on how the company’s marketers are able to improve their marketing campaigns and marketing strategies so as to expand its consumer base and make the company’s products more attractive compared to competition. The other group formed in Toyota is the focus group. The focus group serves several purposes one being to find out the main issues that customers consider as most important.

The members of the above groups are encouraged to be open-minded so they can effectively deal with the myriads of customer opinions and preferences. Based on their findings from surveys and questionnaires carried out on customers, the above mentioned groups act as moderators between the company and its customers by collection and conveying customer preferences to the company’s management.

Factors that lead to effective teamwork

In order to get a better understanding of the factors that lead to effective teamwork at Toyota as well as their influence to the company’s success, one has to first dig into the company’s history. As noted by Potterton (1970), the Toyota brand was founded in 1937 and has since grown and diversified its operations. Today, Toyota owns and operates the Lexus and Scion brands and also owns numerous shares in other companies such as Fiji Heavy Industries, Isuzu motors Yamaha motors, and Mitsubishi Aircraft Corporation.

The diversification factor in Toyota has resulted in the Toyota team brand whose aim is to encourage the company’s management and workers to improve their efforts in serving customers. The success of Toyota brand is the company’s large market share especially in the US market and in Europe where it controls a smaller market share (Mckern 2003).

One factor that has hindered Toyota’s growth in the recent times is the recent financial crisis. Being a global company, the financial crisis that struck the whole globe had a big impact on vehicle sales and therefore the company’s profits. The crisis was so devastating that in May 2009, the company reported a net loss amounting to 4 billion USD (NA, 2000).

Impact of technology on team functioning

One of the main benefits of technology in the team functioning within Toyota is that it has enabled the company to successfully implement lean manufacturing. Lean manufacturing is basically the variation of efficiency based on optimized flow.

Technology has enabled the company induce manufacturing changes that are in line with what their customers value with little effort. Lean manufacturing began as a philosophy derived form the Toyota Production System and its main goal is to encourage team work within the employees as they work towards the improvement of customer satisfaction.

References

No author, (2000). Ward’s automotive yearbook (Volume 62). Ward’s Reports, Inc. Detriot.

Potterton, W.J. (1970) International businessmen’s who’s who. (Volume 2). Burke’s Peerage Ltd press: Michigan.

McKern, B. (2003). Managing the global network corporation. Routledge. London.

Realco

Johnny Chang has a typical supply chain management problem in his hands. The only silver lining in his dilemma is that he has a steady stream of orders coming in. But apart from that he has no clear grasp of the other aspects of the supply chain management component of his business.

This was brought about by sudden and unexpected success of his company when it began to manufacture and sell Realco’s Breadmaster. The orders kept pouring in for the past two years. Apparently Johnny was busy focusing on marketing and perhaps the technology within them that he did not have time to look into the manufacturing and supply issue of the business.

Two years later the company seemed to be operating on the basis of the demand made during the boom years – it was the time when was a novelty item and the market was not yet saturated with them.

However, in the present time when Johnny Chang studied the inventory levels for this particular item, he was correct to be alarmed when he discovered that there are 7,000 units left in their warehouses. In his opinion this number is too high and the company has to find a much reliable method when it comes to manufacturing only the required units and create an oversupply of the said equipment (Proud, 2007, p.49).

Facts of the Case

The current production cycle is based on the idea that orders are estimated to be around 20,000 units of Breadmaster per week. This is the reason why the manufacturing facility has been churning roughly 40,000 Breadmaster every other week. This is equivalent to 80,000 units per month.

But upon closer examination of the orders that were already listed for the upcoming month Johnny discovered that for the first week the order was 23,500 units. For the second week, the order was 23,000 units. For the third week the order was 21,500 units.

For the fourth week the order was 15,050 units. For the fifth week the order was 13,600 units. For the sixth week the order was 11,500 units. For the seventh week the order was 5,400 units. For the eight week the order was 1800 units.

There are two implications here. First of all, if the estimated order was 20,000 units per week and by deciding to manufacture 40,000 units every other week, the eight week cycle is projected to yield 160,000 units of Breadmasters.

Assuming that on the first week of the eight-week cycle the company was able to produce 40,000 units and still have 7,000 units inventory then at the end of that particular cycle the company has 167,000 units ready for delivery. But the actual demand is less than that. It is clear that there is an oversupply of Breadmasters.

However, there is another problem, on the fourth week the orders began to decline in a significant manner. Thus, using the current production cycle, the company cannot created a significant oversupply in the next five weeks of the production cycle.

Master Scheduling

There are two ways to look at the changes in the demand for Breadmasters. It can be a mere fluctuation and that in the next few months it goes back to the previous levels. In this case the company has no need to modify the master schedule and Johnny can rest easy because it is business as usual.

However, this can be a new trend altogether. It can also be a sign that the company has already saturated the market. Regardless of what happens in the next few months it is important to use master scheduling tools to determine how the company can correctly respond to current supply and demand trends.

The following table would help Realco eliminate guesswork and determine once and for all how to manage their supply chain. In this manner, the company can eliminate waste because it is obvious that if there is excess production, Realco pays for the cost of storage and obsolescence if the same items are not delivered on time.

As predicted the projected available balance is way beyond what the management expected when it comes to surplus. There is an excess of 51,650 units at the end of the eight-week production cycle and that is not a good thing. This is not the proper way to manage the company.

This means added cost when there is no need to spend for additional Breadmasters. In addition, the company spends more money in terms of storages costs. And if the Breadmasters will not be sold in the next few months then the company is also expected to spend an extra amount to cover obsolescence or potential damage to the equipment.

The critical factor here is the tremendous number of units made every two weeks. It was made clear that 40,000 units should not be the base number of units that has to be produced in one production cycle. Based on the actual demand even changing the master schedule to 20,000 units per week would still result in the significant oversupply of Breadmasters in eight weeks.

However, the high demand for Breadmasters in the first three weeks justifies the change to 20,000 units per week. However, management must reduce the number of units that must be manufactured after the fourth week. After the fourth week the number of units must be reduced to 15,000 units per week and then the reduction continues until it matches the actual demand.

Supply Chain Management Techniques at Realco

The strategy to make a promise to deliver a particular number of goods at a particular time frame is a good way to increase customer satisfaction, improve brand image, and most probably enhance customer loyalty. This is good on one condition alone and that is, Realco would be able to deliver on the promises made.

However, an error in estimating actual demand and forecasted demand can create in shortages. The inability to deliver as promised can easily hurt the company’s image. This can even lead to the cancellation of orders.

In the case of Realco the company cannot afford to make this mistake. Based on data given it is best to assume that the company has already saturated the market. It is not the time to damage the business relationship established in the past and endanger the orders placed in the present.

With regards to the question concerning which one is worse: to refuse an order or to make a promise and not deliver, both are pitfalls that must not be avoided. However, if forced to make a choice it would be best to make a promise and not deliver on time.

This is assuming of course that the delay is a matter of days or a few weeks. In this regard the company can offer a discount and other freebies that can repair the damaged reputation of the organization and can lessen the frustration of the customer. But both scenarios are bad for business. A business leader must do his best not to make a pledge to deliver an item and then turned around and fail to do so.

This is disastrous for a company if it keeps failing to deliver. On the other hand an oversupply of Breadmasters can force the company to bankruptcy because it is being made to produce a product in excess numbers and yet the demand is no longer the same as previous levels. This not the prudent thing to do and thus, aside from master scheduling Johnny Chang must hire experts to anticipate future demand for Breadmasters.

Toyota

Toyota is a globally known brand. It is a company with production facilities scattered all over the globe. It has announced its presence to the global market when it debut in the United States in 1957. After that time there was no turning back for Toyota as its core leaders vowed to become the best automotive company in the world.

A few decades later they were able to deliver their promise. From a fledgling manufacturing organization in Japan it has grown to be a dominant force, producing cars, trucks, SUVs, vans and hybrids. At its highest level of success, Toyota has invested billions of dollars into the U.S. economy and there seems to be no sign of stopping although a slowdown has been noticeable as of late.

In difficult times, such as those that is being experienced by Toyota Motors – only those who are ready to adapt to a changing world can expect to compete and win. The challenges and opportunities brought about by globalization is easy to understand and made obvious in news headlines and changes that can be seen happening all around us.

In the business world, especially in the automotive sector, the use of technology to lower production costs has increased the level of competition. This is exacerbated by the needs to lower energy consumption and the sophisticated tastes of consumers.

The giant auto-manufacturing companies in the United States and Europe knew this very well when they discovered that ability of a Japanese upstart company to take away the global dominance that they had been enjoying since cars became an indispensable commodity in the 20^th century.

However, the rapid ascension of Toyota to the top has been threatened as of late. The company that revolutionized production systems and has grown itself to take down the global leader in auto sales has realized the difficulty of sustaining tremendous growth.

Recommendations

It has become apparent that Toyota’s success is in the use of lean-management principles as well as just-in-time management strategies (Bell, 2006, p.38). This has been enhanced by their knowledge of Manufacturing Resource Planning or MRP2 and Enterprise Resource Planning or ERP.

The goal of these different systems is to increase efficiency while at the same time reducing waste. There must be an economy of effort as well as the economical use of resources to produce a high-quality product that can be delivered on time.

These are tough standards to follow but Toyota was able to deliver on it promises beginning in the 1980s up to the early part of the 21^st century. But a survey of recent headlines gives the idea that the company is struggling to regain its dominance that it experienced two decades ago.

The use of computer-based technologies and even proven management strategies has been the hallmark of Toyota and this has resulted in their unprecedented success according to automotive industry standards. A fledgling Asian company became so successful it was able to influence the whole world when it comes to its revolutionary manufacturing techniques.

A closer look at Toyota’s production strategies would reveal that the company is well-aware of Enterprise Resource Planning and in their case it can be argued that it is simply an improvement of MRP2 (Rowbotham, Galloway, & Azhashemi, 2007, p.89).

This can be interpreted to mean that ERP takes the integration of different system even further, whereas MRP2 deals with the integration of system related to manufacturing and human resources, ERP aims to provide “…one integrated information system for the whole organization using one set of common data” (Rowbotham, Galloway, & Azhashemi, 2007, p.83).

Therefore, in the case of Toyota the following components were included into their ERP: a) customer relationship management; b) human resources; c) operations; d) supply chain management; and e) finance and accounting. However, in order for ERP to work it is imperative that the company has to initiate a company-wide system of training and education in order to prepare their management team to apply the principles of ERP.

The use of ERP techniques would enable Toyota to prepare for sudden increase in demand and yet provide the same level of flexibility when the demand for a particular product slides down. This means a more prudent approach when it comes to the constraints in the production cycle.

This gives the management team the ability to understand the requirements of a particular demand cycle and also prepare them for the unavailability of personnel and materials during the course of the production of a particular product.

If these principles are not taken to heart then Toyota becomes the organization that it has worked hard not to become. The organization can experience a negative transformation and instead of others companies copying their strategies, Toyota would end up copying their style (Shinkle & Smith, 2004, p.81).

It has been proven disastrous in the past and thus this organization has to find ways to rekindle the passion to demonstrate lean management principles, just-in-time management and the much vaunted Toyota way of doing things. It is commonly known as the Toyota Production System or TPS.

The linchpin and the one that keeps the system running is the midlevel Japanese manager commonly known as the coordinator. This was the time when computers are not as sophisticated as they are today. This is also the time when there was no over reliance on automated assembly lines.

Today robots do most of the work. Although Toyota made use of technology, without a doubt it was the masters of TPS that made everything work perfectly. The difficulty of replicating this atmosphere and the creation of a special team to emulate what has been done 20 years ago is the skill-level of the coordinator. A coordinator has 20 or more years of experience.

This is a tremendous challenge because in today’s marketplace it is difficult to have a loyal worker who stays with the company for more than 15 years, much more 20 or more years of dedicated service is rare.

Obviously the first step in the process is to develop an efficient human resource department that can take care of good workers. The HRM must make it their goal to retain the best worker and do what has to be done to make them a part of the Toyota team for many years to come.

The second strategy that can be implemented is to put together a system that can speed up the learning process. Using technology and other management principles it is possible to transfer knowledge and experience that can be had in twenty years of work and yet perform the same process in five years. The company cannot afford to wait another twenty years to mentor and develop top quality leaders or coordinators.

The next thing that Toyota has to do is to study the communication techniques used by coordinators. It has been said that these coordinators are the by-products of a particular culture and that this culture created a certain language that enable them to communicate beyond words.

This is the reason why machines and top executives was not the secret of Toyota but midlevel managers who are called coordinators. This means that these leaders were able to coordinate complicated tasks and inspire people to work closely and efficiently. These are the things that the company has to focus on.

References

Bell, S. (2006). Lean Enterprise Systems. New Jersey: John Wiley & Sons, Inc.

Proud, John. (2007). Master Scheduling: A Practical Guide to Competitive Manufacturing. New Jersey: John Wiley & Sons, Inc.

Rowbotham, Galloway, & M. Azhashemi. (2007). Operations Management Context. UK: Butterworth-Heinemann.

Shinkle, G., L. Gooding, M. Smith. (2004). Transforming Strategy into Success. New York: Productivity Press.

Executive summary

It is apparent that there are numerous features that are used to compare Service Utility Vehicles (SUVs) such as Audi Q7 and Toyota Cruiser. From a careful analysis, these types of SUVs are made by different companies. Nevertheless, they have numerous features that are similar and those that differentiate them.

The distinct features that one should consider include their category drive types, base transmission, seating capacity, engine performance and fuel consumption. When making a concise comparison, it is imperative to compare both the interior and exterior features.

Moreover, one can equally explore the major safety features such as headlights, stability control, hill-start assistance and engine immobility.

It is against these standards that this paper intends to make a comparison between two companies namely Audi SUV q7 and Toyota SUV cruiser while demonstrating their marketing concepts. Companies in the motor vehicle industry have to bear in mind that there is stiff competition in the automobile industry and hence the need to exercise the best marketing strategies.

Introduction

According to Pride, Hughes and Kapoor (2011), there are three major aspects which must be well organized. The first step towards achieving success is attaining optimum supply of variety services or goods. A company must give the market a wide range of products. Secondly, it should be noted that consumers in this industry expect the respective companies to supply them with quality products.

Rajagopal (2000) argues that a motor company that does not produce high quality products which transcend the expectations of its clientele is highly likely to fail as an enterprise. Third, in order to succeed in a very competitive business environment, companies should prioritize the productivity of their individual employees (Pride, Hughes & Kapoor, 2011).

The latter is likely to replicate towards improving customer satisfaction. Therefore, this explains the reason why companies in the automobile industry should be quite strategic when marketing their finished products to the wider global market.

Industry background

The motor vehicle industry has been a dominant sector of the economy since time immemorial when the earliest engines were invented. Companies operating in this industry have been able beat the test of time by becoming very competitive in the auto mobile industry. Statistics show that through production of quality products, the industry has been able to become competitive in the global market (Rajagopal, 2000).

It is worth noting that various brands of motor vehicle machines have indeed managed to dominate the global market by far and wide. There are lots of car models and designs through which clients can choose from and meet their personal tastes and preferences.

The manufacturing segment of the industry yields reliable compact cars, passenger cars, minivans and many other sorts of machines. For a long time now, the industry has recorded remarkable performance.

A case example is the Toyota Company. If financial figures are anything to go by, a turnover of US$ 216,255.13 for the year ending March 2011 was a mark of achievement by the Toyota Company (Rajagopal, 2000).

Company background

From a careful analysis of literature, it is definite that these two types of vehicles are largely Service Utility Vehicles (SUVs). Moreover, studies have shown that both are categorized as SUV/Crossovers. Further studies have illustrated that these companies manufacture the vehicles with similar drive types. For instance, FindTheBest.Com (2012) elucidates that their drive type entails AWD/4X4.

In addition, these vehicles have a seating capacity of seven passengers each. Furthermore, both have got 4 doors with an automatic base transmission of 6-speed.Besides, Girnar Soft Automobiles.Com (2012) note that these vehicles consume both gas and diesel for fuel.

To emphasize on this, their fuel capacity is approximately 26.4 gal. In terms of the interior features, FindTheBest.Com (2012) highlights that there are numerous aspects of Audi q7 that resembles those of Toyota SUV cruiser.

For example, both have got a hand free calling, power seats and leather upholstery. Moreover, they have an auxiliary input jack even though this is not well developed in the Audi SUV q7 (FindTheBest.Com, 2012). Needless to say, both vehicles are well installed with A/C in addition to climate control features.

Additionally, Audi manufactures a wide variety of automobiles apart from the famous Audi SUV q7. Since its establishment as an assembly company, it has been able to feed its vast market relatively well. They have more than 100 plants located in various strategic locations across the world. These plants are situated in different continents although they operate with a very close linkage.

The subsidiary companies adhere to strict designs which have been formulated at the central plant (Tram, 2010). Customers of this company have access to competitive after sale products which include trucks, vans, sport utilities and passenger cabs.

Through strategic marketing, this firm records a relatively stable financial turnover which ranges around US$128,954.00 per annum (Rajagopal, 2000). As a matter of fact, the company has been able to navigate through the competitive automobile industry with much ease due to its versatile marketing concepts.

Macro-environmental forces

The macro-environmental forces in both companies are determined by the consumers’ tastes and preferences. For instance, there are standard features that can be used to evaluate the similarities between these two vehicles. Some of the features that are common in both cases include air conditioners, CD player, power steering and power windows.

Further studies have revealed that these vehicles have got similar antilock braking system and central locking (Girnar Soft Automobiles.Com, 2012). There are other standard features that are meant for safety and can be identified in these vehicles. These features include stability control, side curtain airbags, engine immobilizers and front for lights (Girnar Soft Automobiles.Com, 2012).

This comparison can only be relevant to the study if it shows how these two companies apply marketing concepts to appeal to their customers. The strategies laid down are of great importance. To start with, the competition element between the two automobile companies is quite clear.

Although many firms in this industry make disguised following of rival models (Pride, Hughes & Kapoor, 2011), these have not employed such principle. Their operations are distinguished by worldwide objectives. Their style is also dominated by bidding in order to reach out the widest market possible.

It is worth noting that Toyota operates with relatively open market objectives. This global firm has been known to allow customers and all other stakeholders to follow day-to-day achievements of the company. They keep information on the attributes of the products at the disposal of the market. This has been achieved through diversification of online business (Tram, 2010). The company has a special focus on customers.

They do not merely give close attention to current clients. All the potential buyers are also given due attention as part and parcel of building a strong marketing portfolio. They provide a motivating experience to anyone who shows interest in their products.

For this reason, an emphasis is given to construction of strong relationships between the company and consumers of its products. This explains why the Toyota SUV cruiser makers avail large amounts of product and company information to those who are interested in them.

Micro-environmental forces

On the same note, Audi has a professionally similar operation. Their approach slightly varies in the sense that their products have incorporated an element of customer specification (Tram, 2010). There are four major marketing aspects associated with this company. To begin with, constant promotion of its model products is a very key element. Customers are provided with directives about the design makeup of each product.

The biggest brands have been left under the care of loyal customers. According to Rajagopal (2000), companies which have established customer loyalty have little to do when it comes to realizing optimal competitive advantage in the market.

In simple business terms, uniqueness has helped the Audi automobile brand to propel its sales in the automobile market. The firm is geared towards preserving its customers.

Ideas on marketing campaigns are inbuilt to every single interaction with customers. They have market based approach to product designs. This is shown by their reinforcement on customers’ input in terms of designing their products.

SWOT analysis

This analysis attempts to discuss the strengths, weaknesses, opportunities and threats that may be facing each company.

Strengths

It is worth mentioning that Audi SUV Q7 vehicle is made by Audi Company while Toyota SUV Cruiser is made by Toyota Company. In terms of their model and trim, the former is a Q7 replica while the latter is a land cruiser. According to Girnar Soft Automobiles.Com (2012), examining the average gas mileage is indeed essential when purchasing a vehicle.

It is evident that both vehicles have a relatively low mileage which is an opportunity for growth. Audi SUV Q7 has an average gas mileage of 19 MPG while the latter consumes about 15.5 MPG. However, there are other factors to consider while analysing their gas mileage.

For example, research has shown that these vehicles have diverse level of gas mileage both in the city and while cruising on a highway. To elaborate on this, it is imperative to note that the Audi SUV Q7 has a gas mileage of 12 mpg while on highway and 16 mpg in the city (Girnar Soft Automobiles.Com, 2012).

Weaknesses

Contrastingly, the Toyota SUV cruiser has got a highway gas mileage of 18 mpg and 13 mpg in city. The two vehicles from these companies also differ in terms of their Horse Power (HP). FindTheBest.Com (2012) notes that the Audi SUV Q7 has a horsepower of 272 HP.

On the other hand, the Toyota SUV cruiser has a horsepower 381 HP. On the same note, the two vehicles have dissimilar prices when being marketed. For instance, a recent case study conducted in the companies revealed that the Toyota SUV cruiser fetches up to 68, 020 US dollars while the Audi Q7 sells at 46, 250 US dollars.

The latter also lacks the hill-start assistance which is usually one of the major safety features which can be found in the Toyota SUV cruiser Hence, price factor may be a weakness when marketing these vehicles since some segment of the market may not afford their costs.

Opportunities

Despite the fact that the vehicles consume similar type of fuel, their engine types are completely different from each other. For instance, the Audi SUV Q7 has an engine type of 3.0l Turbocharged V6 while the Toyota SUV cruiser has 5.7L V8 (Girnar Soft Automobiles.Com, 2012).

Additionally, the Audi Q7 has additional options for the engine. The Audi SUV Q7 also lacks the active head restraints which are considered as some of the crucial safety features (FindTheBest.Com, 2012).

On the other hand, the Toyota SUV cruiser does not have all-season tyres, a factor that is an added advantage for the Audi SUV Q7. However, it has got alloy wheels and moon roof features which make it more preferable by buyers than the Audi SUV Q7.

Threats

The main threat facing both companies is the stiff competition among individual companies in this industry. In addition, constant change in tastes and preferences of customers has also been a threat since newer designs have to be unveiled on a regular basis.

Market segmentation

From an economical perspective, it is recommended to consider other dimensions and capacities for the two vehicles. For instance, the curb weight, width, length and height are very important features that give each vehicle a competitive advantage against each other.

Hence, the market is segmented along these specifications. The Toyota SUV cruiser has a length of 294.9 inches, 74 in, high and a width of 77.6 in. (FindTheBest.Com, 2012). For the Audi SUV Q7, their dimensions entail a length of 200.3 inches, a height of 68.4 inches and a width of 85.7 inches respectively.

Since they have varying dimensions, this affects their curb weight where the Audi SUV Q7 has 5.192 ibs and Toyota SUV cruiser has a weight of 5,766 ibs (Girnar Soft Automobiles.Com, 2012).

Target markets

A quad headed strategy is shown by the analysis of these two companies. Their concepts are spear headed by product designing in relation to customer satisfaction, management of demand, market planning and consumer information especially to the various markets that are targeted. The desirable outcomes have been achieved by giving the models a taste which is extremely unique.

Simplification of buying is also observed. The process has been made easy and can be done at any time. Online purchases have been prioritized bearing in mind that e-commerce has been a viable target market.

Differences in Toyota SUV cruiser, Audi SUV q7 are clearly spelt out in this regard. As a matter of fact, it is possible for a customer to pursue personal tastes and preferences bearing in mind that the two classes of vehicles have an appeal of market in spite of price difference.

Targeting strategy

Demand management is done accordingly in the two companies. The only disparity is in the part of steps taken in doing it. Increasing demand usually occurs as a result of strategic choices made in the company. Toyota has always been undertaking design changes in order to bring strength in their products. On the other hand, Audi models are flexible enough to make significant appeal to customers.

Generally, creation of more demand is a major factor towards competition. It is through strategic market competition whereby every company has put compounded efforts in order to be able to win a larger share of the market.

For example, Toyota body customization has been a strong pillar to hold on as a competitive factor. Their machines are believed to be heavy enough to resist tear and wear (Pride, Hughes & Kapoor, 2011). The Audi Company is quite phenomenal towards incorporating style with strength. This has been triggered by the need for customer satisfaction.

From the above comparative analysis, it is evident that both companies exhibit a remarkable market expertise. Credit is due to strategic choices made by their leading teams. Notably, quality cars blended with excellent market games have given Toyota SUV cruiser and Audi SUV q7 the high competitive niche which they hold in different markets.

Clever application of marketing strategies is therefore as important as production of high quality products. Apparently, Toyota SUV cruiser and Audi SUV q7 have managed a good performance in the global market.

Positioning strategy

These brands have been positioned in a way that they occupy the systems of customers compared to any competing brand.Having discussed the distinct features that can be used to identify the vehicles in the two companies, it is imperative to note that there are numerous marketing concepts which both companies use in order to make attractive returns in the market.

For instance, studies have shown that manufacturers in Audi and Toyota companies always aim at making the vehicles luxurious in order to appeal to the customers (HowStuffWorks.Com, 2012). Factually, the contemporary markets need a well-to-do folk and hence the companies have to demonstrate that they are capable of producing quality products.

Consequently, these companies are compelled to manufacture vehicles that will satisfy the customers’ demand and meet the market criteria, a factor that makes them to earn attractive profits (HowStuffWorks.Com, 2012).

In the event of emerging competition, these companies ensure that their products have distinct features that make their products remain outstanding. This implies that despite the similarities, there are diverse features that give their vehicles a comparative advantage against others in the market.

In this case, they endow the vehicles with powerful engines, refined interiors and sophisticated driving dynamics which shoppers are quick to desire (HowStuffWorks.Com, 2012). Empirical research has revealed that redesigning is also a major marketing concept used by these companies in order to make a good kill.

For instance, manufactures rely on major updates concerning upcoming brands of vehicles from other companies (HowStuffWorks.Com, 2012). Through these updates, they are able to improve the standards of certain features while employing minor trim changes that are appealing to customers.

Balanced marketing concept is based on companies’ intentional analysis of customers’ needs to be able to make plans of satisfying them amicably (Pride, Hughes & Kapoor, 2011). This is not always the case. It is usually in cases of optimally performing companies where a clear picture of marketing strategies is profound. Toyota SUV cruiser and the Audi q7 present a reliable performance for study.

These firms use strategic actions with marketing concepts to make the best out of the global market. One of the concepts relied on is gathering of data related to market environments. This has been a tool which the companies apply in finding the most resourceful groups of consumers for specific products. Groups of consumers are divided according to interests and localities.

The companies also conduct comprehensive studies and analyses of the markets at different locations. This is treated as one of the inevitable practices which ensure good performance in the motor industry. They have links for disseminating technical improvements which are put in place. In normal interaction with customers, they get a chance to conduct surveys on what is appealing to them.

Recommendations

It is highly recommended for the two companies to enhance their integrated customer relations management. According to Tram (2010), customer relations management refers to the overall maintenance of good relations with the aim of optimizing customer satisfaction.

Hence, companies should embrace high quality services. Besides, growing customer base for both companies should be a priority in order to improve sales. Finally, high standards of market relations should be used to enhance consistent performance of Toyota SUV cruiser and Audi SUV q7 (Rajagopal, 2000).

References

FindTheBest.Com. (2012). Unbiased data driven comparison. Web.

Girnar Soft Automobiles. Com. (2012).Compare Audi Q7 and Toyota Land Cruiser Prado. Web.

HowStuffWorks. Com. (2012). The Consumer Guide to 2012 Premium-Large SUVs. Web.

Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2011). Foundations of business. Mason, OH: South-Western Cengage Learning.

Rajagopal, J. (2000). Marketing: Concepts and cases. New Delhi: New Age International Publishers.

Tram, M. (2010). Innovate your company: Trends to follow for a competitive advantage. Weinheim: Wiley-VCH-Verl.

Toyota Motor Corporation in Australia orients in its activities to the sustainable practices in order to overcome sustainability issues associated with the environmental protection and usage of resources.

To protect the environment and community’s interests, Toyota should focus on implementing strategies developed to improve the technologies of the car production in relation to vehicle design, reduction of greenhouse emissions, orientation to recycling processes, use of innovative materials, and reduction of the energy usage (Dunphy, Griffiths, & Benn, 2003).

To protect the environment and develop the company’s capacities within the sphere of sustainable production, Toyota should implement a range of effective strategies in order to respond to the needs of the community. The implementation of the innovative technologies, which can reduce the negative effects on the ecological system of the region, is the first step.

The main strategies, which should be implemented within the company, are the development of the sustainable car design with references to using materials that are more efficient; the improvement of a supply chain; the focus on research and development in the company; and the introduction of technologies orienting to reduce waste and the usage of resources.

The development of the sustainable car design with using of materials that are more efficient is necessary to contribute to the effective usage of resources. According to the principles of Biomimicry research, it is necessary to focus on the development of the more sustainable car design, paying more attention to aerodynamic possibilities of forms and materials.

Furthermore, the usage of innovative technologies should be based on the simple design and environmentally friendly strategies. Toyota is able to shift to the usage of light metals and cast materials in the production of the developed hybrid and fuel-efficient vehicles to make the process more sustainable (Innovation for the Automotive Industry, 2012).

The improvement of a supply chain is the next effective strategy, which should be implemented in Toyota Company in order to reduce the greenhouse gas emissions and optimize the usage of resources. From this point, the optimization is necessary for improvement the work of the supply chain and company’s logistics.

Toyota should continue the participation in the Ecostation program in order to reduce possible gas emissions. To achieve the high results, it is important to reduce the transport operations within the supply chain and to use software calculating gas emissions effectively (Toyota: Respect for the planet, 2013).

Furthermore, Toyota should review the strategies in choosing suppliers and focus on those ones who share the company’s sustainability principles. As a result, the main purpose of Toyota in relation to sustainability and environmental protection can be achieved while focusing on effective emission reduction technologies.

Toyota is one of the leading companies within the industry. To preserve the leading positions, the company’s production should be oriented to the constant research and development basing on the implementation of the innovative technologies necessary for reducing environmental pollution and implementing recycling technologies.

The research and development sector of the company should be discussed as the priority for investment because of the necessity to find the new approaches to creating high-quality vehicles responding to the principles of sustainability.

If the long-term goal is the orientation to production of vehicles less reliant on fuel, the short-term goal is the focus on innovations to continue production of hybrid environmentally friendly vehicles (Toyota Sustainability Report 2012, 2013).

At the Toyota plant in Altona, it is necessary to implement technologies to reduce waste and usage of resources. Toyota should implement technologies to guarantee the efficient usage of energy and water, to provide recycling systems for water and waste, and to reduce soil and water contamination (Toyota Australia Sustainability Report 2012, 2013).

The implementation of the innovative technologies is the prolonged and expensive process. That is why, it is necessary to focus on the costs and benefits of the process. The benefits of implementing the innovative technologies are based on the significant reduction of resources use and decrease in waste and emissions.

The Cost/Benefit Analysis for Implementation of Innovative Technologies

Strategic Response

It is important that Toyota Motor Corporation develop innovative strategic sustainability response. There is also the need to address the significance of sustainability changes. This section also addresses the strategies for implementing the proposed sustainability changes.

To this end, Toyota Motor Corporation should implement a Green Supply Chain Management (GSCM) strategy, which presents diverse advantages (Lin, Chen and Nguyen, 2011). The approach is crucial to reducing environmental impacts and generating additional economic benefits to the company. GSCM is a strategy that takes into consideration environmental concerns in different company processes.

The strategy ensures that considerations for the environment supersede other concerns in the Supply Chain Management (SCM) (Lin, Chen and Nguyen, 2011). The consideration for environmental issues starts at the point of raw materials extraction, product development, production procedures, distribution of manufactured products to the end users, and end of life management.

Specifically, GSCM incorporate green purchasing, green production, management of manufacturing materials, green distribution systems (Lin, Chen and Nguyen, 2011).

The implementation of GSCM provides opportunities to manage the company performance under crucial sectors including environment, operations, and economy. In addition, GSCM is crucial in enhancing market competition as well as assuring compliance to different regulations.

The proposed GSCM strategy can be implemented in different aspects. It can start with strategies that promote environmental performance in all company processes. The company should adopt International Standards Organization (ISO) 14001. This provides benchmarks for managing environmental issues associated with all processes in the company (Lin, Chen and Nguyen, 2011).

In addition, the company should also adopt ISO 14031. This standard code also provides benchmarks for assessing environmental performance. The adoption of these standards enables the company to set internal mechanisms for managing environmental concerns.

They also provide ways of measuring and evaluating performance at international standards (Lin, Chen and Nguyen, 2011). The Company should also implement pollution control measures and using both environmentally friendly technology and resources in order in order to escalate environmental performance.

The second aspect of GSCM entails the rationalization of the economic performance in all processes in the company. This aspect exemplifies the economic value of the proceeds and represents whether diverse inputs are used effectively in the production processes. The company should focus on ensuring positive economic performance (Lin, Chen and Nguyen, 2011).

This is achieved through putting in place strategies to minimize costs associated with energy use, procurement of materials, waste management and disposal. However, implementing the strategy presents negative economic performance associated with escalating costs for procuring environmentally friendly resources.

The third aspect of GSCM strategy entails considerations for operational performance. It is important to note that operations are at the core of company activities such as production and distribution, which have a direct relationship with the returns on investment. The company can measure operational performance in the way it manages customer satisfaction, in-house practices, and undertakings (Lin, Chen and Nguyen, 2011).

The Company can escalate operational performance through improving product superiority and improving the speed of their delivery to clients. In addition, operational excellence can be achieved through ensuring that the manufacturing plant is working to its full capacity and eliminating or drastically minimizing waste generation.

GSCM Strategy for Toyota Motor Corporation

The Company can also implement other innovative social sustainable programs. The Company can implement a new strategy, which ensures that the product becomes a service to clients (Williams, 2007). This is important to creating lasting relationships with clients. The Company can implement this strategy through developing product-oriented services.

This incorporates selling products to clients together with the services required. This can include the provision of product finance schemes, extending product maintenance contracts, supplying spare parts, and offering information on energy consumption and efficiency (Cusumano, Kahl and Suarez, 2008).

The Company should also implement a more integrated and robust social sustainability programs undertaken in collaboration with local communities. This approach is important because it enables the company to have impacts that are more lasting on the local communities (Toyota Motor Corporation, 2013).

The Company can implement this strategy through empowering the local communities to take the lead in deciding the programs that can improve their livelihoods. The social contribution programs should focus on community empowerment while also escalating the recognition and respect for fundamental human rights.

The Company should also develop a strategy for establishing partnership with different governments in the regions it operates. This is important in ensuring that the Company can establish meaningful partnerships with both state and federal governments (APG, n.d).

The partnerships are important in a business sense. Governments can provide the Company with business opportunities for the supply of their vehicles. Therefore, the partnerships with governments can present opportunities for the Company to escalate its competitive edge in all markets.

References

APG n.d, Corporate Sustainability Management: The Sustainability Change Process, Incremental and Transformational Change, Change Agents and Stakeholders. PDF File. Web.

Cusumano, M., Kahl, S., & Suarez, F. A 2008, Theory of Services in Products Industries. Web.

Dunphy, D., Griffiths, A., & Benn, S 2003, Organizational change for corporate sustainability: A guide for leaders and change agents of the future, USA: Routledge.

Innovation for the Automotive Industry 2012. Web.

Lin, R., Chen, R., & Nguyen, T 2011, “Green supply chain management performance in automobile manufacturing industry under uncertainty,” Procedia Social and Behavioral Sciences, Vol. 25, pp. 233 – 245.

Toyota Australia Sustainability Report 2012 2013. Web.

Toyota Motor Corporation 2013, Toyota Australia Sustainability Report 2012. Web.

Toyota Sustainability Report 2012 2013, Web.

Toyota: Respect for the planet 2013. Web.

Williams, A. 2007, “Product Service Systems in the Automobile Industry: Contribution to System Innovation”, Journal of Cleaner Production, Vol. 15, pp. 1093 – 1103.

Toyota Motor Corporation is the company which has a positive image among the customers in the USA and in Europe. But, having some technical problems with the defective accelerator pedals, the company had to recall more than 8 million cars and tracks. The first signs of the problem took place at the end of 2009 when customers turned to the service centres for helps.

The company did not pay much attention to the problem thinking that it was an isolated case. But when the customers became to tell about the problem from different parts of the world, the company began to worry about it.

The main purpose was to protect people from incidents which could occur and to save the company positive image. Here is the critical analysis of the quality management issues Toyota faced in the USA and Europe in 2009-2010.

It is obvious that each company tries to satisfy the client as he/she is the core idea of the company’s profit. Evaluating quality management issues discussed company had to face, it is crucial to take the whole period from the problem identification up to now and rely on the quality management principles.

Using those principles the company managed to recover from the crisis and to be able to renew customers’ trust.

The main principles of the total quality management Toyota had to face were “customer focus”, “process approach”, “system approach to management”, “continual improvement”, “factual approach to decision making”, and “mutually beneficial supplier relationship” (Boyer and Verma 44). The principles are discussed in detail in ISO 9000:2008.

Getting down to the discussion of the principles in closer relation to the company, it may be noticed that one of the main problems which appeared was the disbalance in quality cycle.

The company failed to provide its customers with the quality product may be considered as the violation of the process approach principle in the total quality management (Imai150). The lean production the company uses might be the central reason for the problem appearance as the company is unable to follow the process of lean production completely (Womack, Jones and Roos 11).

Considering the problem deeper, it is possible to state that the main idea of lean production is to reduce wastes. The company reduced waste by means of cost reduction. Toyota failed to execute lean practices in a proper way and to embody effective lean principles.

These actions led to the situation which could be observed in 2009-2010. Furthermore, the company also failed to follow the factual approach to decision making in the total quality management and failed to provide quality support at one. If the company paid attention to the problem at the end on 2009, it would not have to recall the models of 2010 (Kim n.p.). In this case, the company would suffer fewer costs.

Considering the situation with recalls, it is obvious that the company did not manage to meet the requirements of the system approach to management principle of total quality management. The quality objectives of the company products were neither efficient nor effective as the customers were provided with the spoiled vehicles.

Critically evaluating the customer focus of the company, it is possible to mention that this was the main failure the company made. When the problem was identified, the company made the main mistake, it remained silent for a week. Neither the company nor its representatives provided comments and only after this period the company began to discuss the problem in public (Wakabayashi, Sanchanta and Takahashi n.p.).

When the company understood that their image is under stress, they began to act. Public speeches and the ability to turn o company representatives were the first steps. Furthermore, the company recall of the cars was the central event. The company understood that it is impossible to solve the problem regionally and the global decision had to take place.

The company expenses comprised around $1 billion, resulted from recall and sales stoppage (Wakabayashi, Sanchanta and Takahashi n.p.). Still, it is possible to conclude that those actions renewed the company in customers’ eyes and now people still trust Toyota.

Considering other total quality management principles the company faced during 2009-2010, it is possible to mention continual improvement which was at the high level as having understood the problem the company did much to solve it as well as implementing effective mutually beneficial supplier relationship as the whole Europe and USA were touched by the problem.

It is important to understand that when the company faced the problem it hoped that only several items were affected. But everything turned another way round and the company had to make a decision. The inability to do it fast created a number of problems. The company tried to solve the problem without recalling so many cars, but when the situation was out of control there was no other way but do it.

In conclusion, it should be mentioned that one of the main reasons for occurrence of the problems connected with Toyota in 2009-2010 was the failure to follow the total quality management principles. In case if the company managed to control the situation from the point of view of the standard, the problem would not take place and the company would not have to suffer so huge expenses.

Works Cited

Boyer, Kenneth Karel and Rohit Verma. Operations and Supply Chain Management for the 21st Century. Stamford: Cengage Learning, 2009. Print.

Imai, Masaaki. Kaizen (Ky’zen): The Key to Japan’s Competitive Success. New York: McGraw-Hill, 1986. Print.

Kim, Soyoung, “Toyota Sets US Recall of 8,000 Tacoma Pickups.” Financial Times 13 February 2010. Web.

Wakabayashi, Daisuk, Sanchanta, Mariko and Yoshio Takahashi. “Toyota Faces Fallout over Recall.” The Wall Street Journal 1 February 2010. Web.

Womack, James P., Jones, Daniel T. and Daniel Roos. The machine that changed the world: the story of lean production — Toyota’s secret weapon in the global car wars that is revolutionizing world industry. New York: Simon and Schuster, 2007. Print.

Introduction

Toyota is one of the leading automobile manufacturers in the world. The multinational employed over 315,000 workers in 2012 to make it the largest automobile manufacturer. Having being founded in August 28 1937, Toyota Motor Corporation has grown to include a group of companies including Daihatsu, Lexus, Hino Motors, Scion brand and Toyota (Toyota 2012).

The founder of the company was Kiichiro Toyoda who ventured out from Toyoda Industries which was owned by his father. The company is based in Toyota which is in Aichi, Japan.

Toyota operates worldwide and its success in the automobile industry is as a result of sound management practices and implementation of strategic marketing policies. This paper seeks to analyze how Toyota has created a global brand and the features of a global brand it has successfully implemented.

Strength of Toyota in home market

For a global brand to be successful, it has to be strong in its home market where it was first introduced. Toyota was founded in Japan and though it is now an international brand, it first had to perform well in Japan. Toyota is so strong in its home market that most people in Japan and Chinese speaking countries identify with this brand.

This has made it extremely difficult for other automobile countries to make an impact in this region of the world. Dominance of the home market prevents new entry of competitors. This has been beneficial to Toyota as it has been able to minimize competition in Japan.

Dominance of the home market is a characteristic of all major global brands. It enables other markets to also appreciate the value of a brand since they are aware of its existing popularity and customer preference in another place.

Other markets would not appreciate Toyota automobiles if the Japanese people were not driving them. It would be suspicious since foreign consumers would not understand the underlying reason why the brand is infamous in its home market.

Toyota’s strength in its home market was revealed by the 2010 Interbrand report. This report revealed that Toyota is ranked top of the list when it comes to the most valued brands in Japan. Toyota beat companies in other industries other than the automobile industry such as Sony, Nintendo and Toshiba.

This was as a result of the company’s potential to influence consumer selection and generate revenue from its branding activities (The Independent 2010).

The strength of Toyota in its home market is seen through comparison of sales volume in Japan and North America. In 2007, 2008 and 2009, Japan sales were: ¥ 8,152,884, ¥ 8,418,620 and ¥ 7,471,916 while in North America they were ¥ 8,771,495, ¥ 9,248,950 and ¥ 6,097,676 respectively (Geographic Breakdown 2009).

Geographical balance in sales

Toyota is well represented globally in terms of brand awareness. There is no place in the world where Toyota brand is not well known. It is an international brand that has presence and recognition in every region in the global automobile market. There are however regions that have adopted Toyota more than other brands. Other countries prefer other brands especially if it is an automobile manufacturing nation such as Germany.

Toyota has addressed its global branding strategy in three faces. It has considered the aspects of recognition, awareness and sales. Being a global manufacturer of automobiles, Toyota has developed its marketing strategies which are aimed at creating sales from all regions of the world.

It considers aspects such as cultural differences so as to make the marketing communication universal. The sales volume between 2007 and 2009 reveal the geographical imbalance of Toyota’s operations. This is reflected in the table below:

Table extracted from Geographic Breakdown (2009). Web.

Toyota’s marketing activities do not only target its home market in Japan. Rather, it develops marketing programs that are applicable in different regions of the world. For instance, the Chinese speaking countries use different writing styles as opposed to English speaking countries. Toyota does not develop its adverts in Chinese language only just because it is based in Japan.

There are adverts meant for the Chinese and others meant for other markets. This approach ensures that awareness is created evenly in the world so that the brand grows everywhere. This reflects in the Toyota’s sales since there are substantial volumes sold in both English and Chinese speaking regions of the world.

However, Toyota is excessively popular in the eastern part of the world as opposed to other regions. Due to this, the sales volume of the company in countries such as China, Hong Kong and Korea are very high as opposed to European sales. This is partly because European countries such as Germany and the UK also produce automobiles of their own.

They therefore dominate the European markets since it is their home market. Toyota needs to overcome this obstacle if it is to rank among the top international brands such as Microsoft. It is important that international brands balance their sales volumes across geographical regions as this acts as a foundation for their stability in the global market.

Addresses similar consumer needs worldwide

One of the ways through which Toyota meets the needs of consumers globally is by creating service centers in almost every country. Service centers are necessary in the automobile industry because vehicles constantly require servicing. Independent mechanics cannot be entrusted to satisfy the needs of all consumers, especially corporate customers.

Toyota is able to get feedback and respond to customer queries through the service centers where people bring their troublesome vehicles. This strategy has so far been successful for instance during the recent recalling of various models by Toyota. The service centers of Toyota reveal its corporate framework in dealing with product issues (Siddiqui 2011).

This was a direct investment by Toyota in its brand and it has enabled the company to gain mileage from its competitors such as Honda and Nissan which are also based in Japan. Toyota would not be successful if it was not effective in addressing consumer needs. Toyota’s effectiveness in meeting consumer needs is what makes an estimated 80% of Toyota vehicles to still be in the road 20 years after they were sold (Siddiqui 2011).

Consistent Positioning

Toyota is very consistent in its positioning strategy. Over the years, the company has adopted different themes to direct its marketing activities. For instance between 1975 and 1979, Toyota’s theme in North America implied that the company was in the business of providing consumers with what they ask for.

In another theme, Toyota implied that that they satisfy customers such that none of them can ask for something in addition to what they offer. In another slogan, Toyota stated that most cars on the roads were Toyotas so that consumers could be motivated to choose this brand over others.

The positioning of Toyota therefore is aimed at creating a picture of automobile dominance in the consumers’ minds. This is seen from the various themes and slogans that Toyota has adopted over the years.

The global vision of Toyota is aimed at making the brand the most preferred in the automobile industry. The vision states that Toyota will revolutionize the motor industry in future because of its innovativeness and goals. The objective of producing safe vehicles is the tool that the company intends on using to make Toyota the best automobile brand in the coming days.

The company’s vision also specifies Toyota’s commitment to environmental concern since vehicles contribute greatly to global warming. Quality is also assured to customers in the global vision as well as a guarantee that the most talented people would be responsible for organizational operations (Toyota 2012).

Following the approach specified in Toyota’s global vision, the company positions itself as the brand that will define future automobile activities. Positioning is important as this affects consumers’ perspectives of brands. The core values of teamwork, innovation and quality assurance assist in the achievement of organizational objectives by directing efforts towards the vision.

Effective positioning also influences consumer behavior as it makes the purchasing decision making process easier. When automobile consumers go to a motor showroom with the intention of purchasing a vehicle, the perception that they have of the different brands affect the products that appeal to them. Some even go specifically to purchase that brand which they already perceive to be superior.

This is the strategy that Toyota uses so as to create the perception that its brands are more superior to other automobiles in the market. This has worked out successfully so far since Toyota’s mission statement, core values and global vision ensure consistent positioning in the global market.

Country of Origin effect

The COO effect refers to the impact that the country where products are manufactured assembled, designed or where the corporate ownership originates from has on a brand (Doole 2008). Some countries are notorious of producing substandard products and counterfeits. China apparently tops this list of exporting goods that are of inferior quality to unsuspecting consumers in other countries.

The COO effect favors Japan since the country has a good reputation of producing quality products since it depends on exports for GDP growth and development. Many global companies in the electronics and automobile industry are known for their production of quality products and brands. This has favored Toyota which is also based in Japan and so there is a positive COO effect in relation to their brands.

However, some of Toyota’s operations are based in China. The business environment in China favors manufacturing operations since the costs of production are lower because of availability of cheap labor. In the automobile industry, some cars are not sold directly from the company as independent importers buy from car dealers and agencies.

In this regard, some of the Toyota vehicles distributed in some areas of the world especially in developing countries originate from China. China is always the easiest source of products since there are lower costs and fewer bureaucracies that importers and exporters experience.

The COO effect comes to play in this case since some consumers have become cautious of vehicles they buy given that China products are known not to be genuine and long lasting. Toyota tries to overcome this hurdle by encouraging corporate clients to purchase only from authorized dealers who can guarantee after sale services in case vehicles develop complications.

The COO effect affected Toyota during the recent recall of faulty vehicles. Toyota decided to recall about 8.5 million vehicles which it had discovered to be faulty (Fangfang 2010). These vehicles had brakes and accelerators which were problematic and capable of causing accidents. After this action, automobile consumers became weary of vehicles that are manufactured in China.

Some even feared for their vehicles even though they were not in the list of the faulty models. This action also reduced the number of potential customers who visited Toyota showrooms. The faulty vehicles comprised of the RAV sport utility model. Chinese automakers are known for their ambitious expansion operations and this only adds fears to consumers of the possibility of future mistakes being made in the automobile industry.

Product category focus

Toyota produces a variety of products. Their product strategy is however different from that of other automobile companies such as General Motors and Ford. Toyota has focused on the automobiles which are its core business. For this reason, the brand Toyota is commonly associated with automobiles and not other product categories.

The company has therefore successfully achieved product category focus since its publics are never confused about what Toyota specifies in producing. Toyota however has a subsidiary, Toyota Financial Services which focuses on financial services, and is part of the Toyota Group of Companies. Unlike Chinese companies, Toyota’s product specialty is not too diversified to enable consumers identify the core business of the company.

Another aspect that distinguishes Toyota’s product strategy from its competitors is its single corporate brand (Ritson 2010). The sales of Toyota revolve around the sub brands related to Toyota. The company also markets brands such as Scion and Lexus but Toyota is the most dominant.

This business approach has led to the company’s prosperity since there has been a united effort from organizational operations, management and culture. The single brand focus has simplified manufacturing activities since the components needed for most products are the same.

Marketing of Toyota automobile models has also been easier and cheaper since the sub-brands are all related to the corporate brand. The single corporate brand strategy makes manufacturing easier as components needed in most models are the same.

Corporate name

Toyota’s marketing activities are simplified because the company’s sub-brands are all related to the corporate name. The company uses the same name for the brands and the corporation. This means that advertising the company directly markets its brands given that they share a name. The name Toyota was initially Toyoda which was the founder’s name.

This was changed in 1936 so that the corporate and brand name could be differentiated from the owners. This was important so that organizational matters could be separated from family issues and problems. Toyota as a brand has since been successful since it is independent from affairs of the owner’s family.

Changing the brand name to Toyota also sounded better than Toyoda in Japanese and its meaning was also appealing as it stands for wealth and fortune.

Toyota’s corporate name was abused before the 1990s. Before this time, the name Toyota was used worldwide for different purposes and this made marketing efforts such as positioning and strategic advertising the company difficult.

This changed in 1989 when Toyota introduced its logo which was meant to differentiate the brand from others. The fact that the company name and its products are all Toyota means that marketing the company as a brand is marketing the product and vice versa.

Status of Toyota as a global brand

Toyota has worked tirelessly so as to achieve the global brand status. These efforts have however not yet been ultimately successful going by the latest results from the Interbrand report. The problem with attaining the global brand status appears to be more than an organizational challenge because no Japanese company was able to appear in the top ten most recognizable brands.

This list was filled with companies from the US which strategize on global growth as opposed to regional growth. Toyota on the other hand has enormous sales volume in some regions while others have minimal.

The 2002 sales report indicated that Toyota was dominant in Japan and the North America but weak in Europe and Asia. This was before the entry of Toyota into the Chinese market but it nonetheless indicated that the company’s sales are concentrated on certain areas only.

Toyota has the potential of becoming one of the leading brands in the world. This is because the production volume of the company symbolizes that of a global leader. In 2009, Toyota surpassed General Motor’s production volume to become the leading manufacture of automobiles. The sale of Toyota vehicles is however concentrated on certain regions only.

This demonstrates that if the company was able to balance its sales geographically, it would create large volumes of sales and achieve high profitability. Geographical balancing of sales is what is standing in the way of Toyota in its quest of achieving its full potential and a global brand status.

It can be concluded that Toyota is more than halfway done with its global branding process. This is because it has successfully accomplished some of the features that characterize fully developed global brands. At the same time, some important features have not been amicably addressed by the company.

Aspects such as strength in home market, addressing similar consumer needs, consistent positioning, product category focus and corporate name have been addressed well by Toyota. Conversely, geographical balancing of sales and the country of origin effect still drag Toyota behind. The COO effect is somewhat related to external factors since other Chinese manufacturers who produce inferior goods tarnish the name of the entire country.

Internationalization Of Chinese Firms

The types of internationalization include born global and incremental internationalization. According to Child and Rodrigues (2005), the difference between the two is that incremental internationalization is the conventional approach whereby the process takes time and is only carried out when a firm is ready to venture abroad. Born global internationalization is whereby companies seek market share in the global market right from their inception (Moen 2002).

The approach sought by Chinese firms has for a long time been incremental internationalization because the Chinese market was large as a result of the high population density. It was only recently when new Chinese firms adopted the born global strategy because of the competitive disadvantages that local companies had.

Globalization is now the leading trend in business and any company that aims at success and profitability will have to embrace it. The Chinese thought that the local markets could sustain profitability for their businesses but entry of foreign investors increased competition to an unbearable level.

When it comes to the network theory of internationalization the current age of companies operate in the network model since joint ventures have become the order of the day (Park and Luo 2001). For instance, instead of Apple setting up a manufacturing company in China, it decided to use a subsidiary instead.

The partnership between Apple and Foxconn showed how Chinese firms were willing to form joint ventures with foreign companies so as to achieve growth and prosperity. Toyota and FAW also joined forces to become the largest joint venture in northeast China (Roberts 2006).

The network model of internationalization is perceived to be a modification of the stage models since it is simply a quickened process of attaining the same objective (Chi-Hsing and Hsin-Chih 2008; Tichy, Tushman and Fombrun 1979).

Under the stage model, internationalization is achieved gradually through a series of steps. This mostly applies to small and medium sized businesses which would lack capital and manpower to run foreign operations.

The need to expand outward from a local market arises when there is either stagnation of sales, opportunities in foreign markets or need for corporate growth (Cateora, Gilly and Graham 2009). Chinese firms experienced the decline of demand in the domestic economy once many people ventured into business activities and then multinationals also entered the market.

Chinese firms became motivated to venture abroad as a result of the entry of multinationals which sought to tap from the new and large Chinese market.

Multinationals such as Nike, Google, Coca Cola and Apple rushed to the Chinese market after the removal of trade barriers that had prevented foreign companies from operating and selling in the country. This move prompted Chinese companies to consider expanding externally so as to remain competitive in the industry.

The conventional international theory held that investing in a foreign country was supposed to come much later after a company begins operating (Oviatt and McDougall 1994). This was the case for companies such as Toyota which operated in its home country for many years before going global. This situation has since changed as the business environment has become more dynamic and competitive.

Currently, most companies go for the born global approach where they strategize on becoming international right from the time they are established. Chinese companies have not been left behind in this quest for global market dominance. Due to this change of business approach, there is hardly any large Chinese corporation that does not include internationalization plans in its corporate strategy; e.g. Lenovo.

Chinese companies have not always been ‘born global’. The products produced and sold in the country were for many years non-branded. Chinese businessmen simply went for sales and not creation of brand equity. In this regard, Chinese products lacked Intellectual Property Rights which are important for international marketing.

Currently, Chinese businessmen are being encouraged to patent their businesses and products so that it is possible for them to get into the export business when opportunities arise (Cateora and Graham 2005).

The easiest approach into internationalization in China currently would be the network approach which involves the formation of joint ventures and partnerships. In this approach, development of facilities in foreign countries is not required since it makes use of businesses that are already in existence.

The model that best describes the internationalization process in China is the network theory. This is because Chinese firms have not yet established a global presence like most foreign companies. This is the reason Chinese leaders are encouraging entrepreneurs to venture abroad so as to boost their sales.

There has also been slow adoption of branding strategies since most Chinese products and businesses do not have Intellectual Property Rights. This is also the reason why there are a lot of counterfeit products produced and distributed in China.

What is evident in China is more partnerships and joint ventures being formed between Chinese firms and foreign investors. Another reason for this is the cultural differences that make it difficult for Chinese companies to understand foreign markets fully.

This was witnessed in the case of Lenovo which acquired IBM in 2004 but has struggled to do away with IBM brand which was well recognized in North American more than Lenovo. Chinese companies will therefore have to invest in global branding if they are to attain successful internationalization status and creation of global brands.

Reference List

Cateora P, Gilly, MC & Graham, J. L. 2009, International Marketing, 14^th edition, McGraw-Hill, New York.

Cateora, P. & Graham, J. 2005, International Marketing, 12^th edition, McGraw-Hill, New York.

Chi-Hsing, T. & Hsin-Chih, K. 2008, ‘Internationalization and network strategies: Taiwanese firms’ foreign direct investment in China and the U.S.A.’, Journal of Asia Business Studies, Vol. 3, Iss. 1. Web.

Child, J. & Rodrigues, S. B. 2005, ‘The Internationalization of Chinese Firms: A Case for Theoretical Extension?’ Management and Organization Review, Vol. 1, Iss. 3, pp. 381-410.

Doole, I. 2008, International Marketing Strategy: analysis, development & implementation, 5^th edition, South Western – Cengage Learning, London.

Fangfang, L. 2010, ‘Recall may dent Toyota’s brand image, say analysts,’ China Daily. Web.

Geographic Breakdown, 2009. Web.

Moen, O 2002, ‘The Born Globals: A New Generation of Small European Exporters’, International Marketing Review, Vol. 19, No. 2, pp. 156-175.

Oviatt, BM & McDougall, PP 1994, ‘Toward a Theory of International New Ventures’, Journal of International Business Studies, Vol. 25, No. 1, pp. 45-64.

Park, SH & Luo, Y 2001, ‘Guanxi and Organizational Dynamics: Organizational Networking in Chinese Firms’, Strategic Management Journal, Vol. 22, pp. 455-477.

Ritson, M. 2010, Toyota’s Brand Problems Begin At Its Core. Web.

Roberts, D. 2006, Toyota Markets to China. Web.

Siddiqui, H. 2011, What is Toyota’s Branding Strategy that Keeps Toyota at the Top, 7 November. Web.

The Independent. 2010, Toyota tops ranking as world’s best-known Japanese brand. Web.

Tichy N. M., Tushman, M. L. & Fombrun, C. 1979, ‘Social Network Analysis for Organizations’, Academy of Management Review, Vol. 4, No. 4, pp. 507-519.

Toyota, 2012, Toyota Global Strategy. Web.

Executive Summary

Toyota manufactures vehicles for sale worldwide. In fact, the company operates in more than 30 countries. This study explores the German auto market in view of introducing the ME.WE Customizable Concept Car. In this paper, analysis of the product and the market is covered in order to give feasible recommendations to the company.

Introduction

Toyota Motor Corporation is among the renowned leaders in auto manufacturing globally. The company is highly innovative with the introduction of new products whenever a competitor brings another in the market. This is achieved by ensuring that there is a strategic plan that facilitates the achievement of the set goals. The company intends to introduce the ME.WE Customizable Concept Car in the market. According to the company reports, this necessitates the development of a marketing plan.

The Company Overview

History

The founder known as Toyoda Sakichi established this corporation. In fact, Toyoda entered the automotive industry in the financial year 1920s after touring US and Europe. He invested 100,000 pounds to start up the company. In Japan, the company has more than 40 percent market share. In the fiscal 2000, it delivered its 10-millionth vehicle to Germany hence becoming the company of choice for the European countries’ customers (Toyota, 2013).

Mission

The company’s mission is to direct the prospect of mobility as well as to enhance lives globally through the most secure and dependable ways.

Vision

The company will meet the demanding goals of the clients through the engagement of the abilities and enthusiasm of individuals who trust that there is always a superior approach (Toyota Global, 2013).

Main Body

According to Baldwin and Laban (1987), it is important for any business company to develop and implement a strategic plan before its launch. The plan regards how the company will market its product and services successfully for the profitability as well as to generate returns on investment. A marketing plan that is well created and outlined is similarly imperative. Before any business is launched, every organization or entrepreneur carries out these precautions.

In this respect, Toyota, which is a company with global reach, has not been left behind. The precautions have been taken since the launch of the company to-date through effective marketing of the model. By marketing the entire Toyota brand the company finds it relatively easy to market specific car models given that it has establish itself worldwide as a company of choice for most consumers not only in Japan, but also in the US and European countries specifically Germany.

In fact, Germans are among the highest purchasers of Toyota models despite the country having globally known auto companies such as Audi, Bavaria Motor Works, Ford, Opel, Porsche and Volkswagen.

Toyota is famous for introducing new models whenever they are ready. In most instances, it withholds new products until a rival company has introduced another product in the market to stay ahead of competition through disruptive innovation. Among the disruptive innovation introduced by Toyota in the recent times is the ME.WE Customizable Concept Car. The move did not come as a surprise. In January 2013, Ford sold the highest number of hybrid automobiles than the previous year.

Volkswagen, Renault, Honda and other manufacturers continue to introduce hybrid vehicles to water down the dominance of Toyota’s hybrid Prius. Other companies such as Chevrolet introduced Chevy Volt that is an auto with electric technology, astonishing fuel efficiency and performance. Nissan introduced the all-electric plug-in Leaf (Tuttle, 2013).

The entire platform changed with Renault introducing the first concept car and Duster from Romania brand (Ramsey, 2013). The new concept car provoked Toyota to announce the release of its ME.WE Customizable Concept Car. Toyota’s move again did not surprise the automobile industry.

By marketing the Toyota ME.WE, the company will lay the foundations for vigorous market activities and objectives that will not be difficult to accomplish (Londre, 2009). Typically, the company carries out the prevailing market position auditing. At the same time, the company develops and subsequently implements the contemporarily achievable goals. These are attainable through:

• The generation of product SWOT analysis
• Conducting customer analysis
• Conducting competitor and stakeholder analysis
• Gathering, analyzing and evaluation of data through market research
• Putting in place the company objectives including the market penetration model, growth and profitability
• Putting in place the goals of the market including the potential market share, and opportunities
• Timely and effective implementation of marketing plan
• Utilizing evaluations to improve marketing efforts (Turkus, 2013)

Product Analysis

SWOT Analysis

The Toyota ME.WE Concept is an innovative automobile manufactured by Toyota. It is among the latest in the vehicle design philosophy. The vehicle is designed to operate in cities, is convertible, a 4×4 and a pick-up. The car is defined by the innovator named Jean-Marie Massaud as ‘anti-excess’. It utilizes innovative materials including bamboo and lightweight Polypropylene (Ross, 2013).

Product Strengths

The car has a tubular aluminum formation. The lightweight polypropylene panels are fitted on the formation. The materials are durable and easy to maintain. The material will act as buffers in the incidence of a collision (McManus, 2013). The car utilizes the in-wheel electric wheels resulting into the capacity to change from a 2-wheel to a 4-wheel. The whole interior can be assigned to passengers or goods.

The rear seat is foldable to be stowed under the front seat. It can also be completely taken away for use as a picnic bench. When the owner requires additional room, the weatherproof foldout cover can be slid in and the rear deck extended. By using bamboo for the floor, the company increases the chances for survival in the currently environmentally sensitive consumer market.

Product Weaknesses

On the other hand, the use of bamboo to make the floor surface presents a weakness of the product. Consumers who are material oriented may consider the fate of the car upon catching fire. That is, the bamboo can easily burn.

Product Opportunities

The economic statuses of many people demand that they utilize as little money as possible to perform many activities. The car can be used for different purposes in different terrains. This increases the chances of people purchasing the car. Additionally, there is a growing automobile market in the new and existing markets.

Product Threats

One of the main threats facing Toyota ME.WE car is the existence of other concept cars developed by rivals. The consumers may prefer other models to the new and innovative ME.WE car. There is also the threat of new entrants with better concept cars at lower prices.

Toyota SWOT

In order to analyze whether the product will be successful in the market or not, it is important to conduct a SWOT analysis of Toyota to establish if the company has the capacity to effectively market the product in the competitive market and gain competitive edge over similar concept vehicles (USDA 2009).

Strengths

Strong market position and recognition

The company enjoys a strong market position in key markets globally. The market share for the company in the financial year 2012 in the Japanese market was over 45 percent with the exclusion of mini vehicles. In North America, the company has over 12 percent market share and over 13 percent in Asia. The strong market position presents the company with unchallenged competitive advantage. Thus, the consumers will easily associate with the WE.ME car.

Strong focus on research and development

The company invests heavily in its research and development. This has helped the company to expand its product portfolio. It has improved the functionality, features, security and environmental compliance of its products by creating a strong brand. The concept car has been studied well by the research team considering the many features integrated to meet the needs of the user.

Extensive production and supply chain

The company has over 50 manufacturing plants in twenty-seven countries with elaborate distribution channels. Once the concept car is launched, customers will easily access it for viewing and buying.

Weaknesses

Product recalls

The company in the recent years has recalled a variety of products. As a result, this has affected the brand image (Medeiros, 2007). In fact, the potential buyers may be guarded while buying the concept car for fear that it may be defective. Thus, it may take the company several years for customers to develop enough confidence to buy the car.

Declining sales

In the FY2012, Toyota experienced declining sales in the leading markets in N. America, Europe and Asia. This may be due to the loss in confidence in the company products and the availability of alternative products. The same fate may befall the concept car as prospected in the marketing plan.

Opportunities

Increasing global vehicle industry

The industry has been growing in the recent years. The industry performance is bound to hasten thus creating a market share for the concept car. Besides, new markets are opening up in Africa, Asia and other emerging economies.

Growing partnership with BMW

The company signed a memorandum of understanding with BMW in 2012 as a long-term strategic technological cooperation (Marketline, 2013). This increases the chances for further advancement of the concept car. Additionally, there will be synergy in marketing the car.

Threats

Intense competition

The industry is very competitive. This accrues from the fact that there are competitors in a variety of markets. The existence and entrance of other concept cars may threaten the sale of Toyota’s concept car. The car may be threatened by pricing that is yet to be analyzed, tagged as well as the reliability that will be determined by time.

Customer Analysis

Target Market

The concept car will be availed in the German market. This will occur after considerations that the Germany economy is performing considerably well and the company already has a wide customer base. It has a good percentage of loyal customers. Toyota enjoys a significant market share in the German market. The collaboration with BMW will ease access to many German locations in addition to the existing Toyota outlets. Germans are popular for buying Toyota products in volumes due to the loyalty established.

Competitor Analysis

Existing products

Currently, concept cars do not exist in the German market. In any case, few companies have managed to manufacture the cars.

Benefits or features

Concept cars manufactured by other companies do not have as comprehensive and advanced technology as found in the Toyota’s concept car (Desmond, 2013). They typically have partial electric supply of energy and are not extendable to pick-ups. However, ME.WE is fully electric and multipurpose (Adam, 2013).

Size of competitors

Competitors such as Audi and BMW are considerably big and financially endowed. However, the collaboration with BMW eliminates one aspect of the threat. Additionally, Audi has not indicated its intention to compete in Germany through concept cars.

Market share

Competitors have small market share in the German market with regard to concept cars. None of the competitors has managed to penetrate the market.

Reaction to entry

Companies such as Audi and Ford are likely to employ disruptive invention to regulate Toyota’s penetration with a new product.

Conclusion

Gaps identified

In the German auto industry, older models of vehicles seemingly dominate the market. The existence of leading competitors poses a challenge for Toyota to conduct comprehensive market research. The introduction of the concept car that has not been sold anywhere else will be challenging.

Overall strategic approach

Toyota should develop a marketing plan that is accurate and attainable. It should then implement the plan and make appropriate reviews when necessary. The company should develop marketing strategies that are different from those employed in other models.

Recommendations

Toyota should devise a promotion plan for successful entry into the German market by building brand awareness. The existing reputation should be maintained if not enhanced. The company should further increase investment in market research to develop the correct image in the market.

When pricing the concept car, competitive pricing should be given a priority to enable the company to enter successfully in the market. Since the company has a reputable brand name in the German market, it should ensure that it uses the name alongside ME.WE to ensure that customers can easily associate the concept car with the company.

References

Adam, B. 2013, Is Toyota’s endlessly customizable Me.We concept the car of the future?. Web.

Baldwin, N. & Laban, B. 1987, ‘The world guide to automobile manufacturers,’ Facts on File, vol.1 no.2, pp. 43-44.

Desmond, M. 2013, ‘High-concept cars,’ Journal of Technology, vol. 2, no.1, pp. 81-82.

Londre, L. S. 2009, Marketing, IMC, advertising, promotion, media and more, Wiley & Sons Perth, Australia.

Marketline 2013, ‘Toyota motor corporation’, Data monitor Business, vol. 2 no. 2, pp.1-11.

McManus, W. 2013, Toyota ME.WE concept unveiled. Web.

Medeiros, J. 2007, Toyota Motor Corporation: strategic analysis. Web.

Ramsey, J. 2013, Renault twin Z concept revealed, twingo replacement takes shape. Web.

Ross, J. 2013, Toyota Me.We concept is a multifunction Tupperware car. Web.

Toyota 2013, Concept cars. Web.

Toyota 2013, The history of Toyota – at a glance. Web.

Toyota Global 2013, Corporate governance. Web.

Turkus, B. 2013, Renault promises new concept car and Dacia Duster in Frankfurt. Web.

Tuttle, B. 2013, Hybrid-car competition heats up: does the Toyota Prius finally have a worthy challenger?. Web.

USDA 2009. SWOT Analysis: a tool for making better business decisions, Routledge, Perth, Australia.