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Toyota and the Australian market
Like other major Players in the Australian automotive industry, Toyota Motor Corporation Australia Limited is foreign-owned. It is a subsidiary wholly owned by the Japanese Toyota Motor Corporation.
The firm is headquartered in Alton, Victoria, while the sales and marketing operations are based in Sydney (Toyota Motor Corporation Australia Limited, 2008). In general, the company is a global leader in the automotive manufacture, assembly as well as distribution.
The backbone of the company’s good performance is a very effective management style that it uses. There are numerous other outstanding factors that have contributed to the achievement of the leading position including research and development activities.
Differentiation strategy supported by innovation has enabled the company to produce different varieties of vehicles ranging from trucks to cars exhibiting technological savvy of a high degree.
The market structure Toyota operates in cannot be definitely described. For some, it might appear as a monopoly. The reason is that the firm is a dominant player in both the local market and international market.
Indeed, the differentiation strategy embraced has made it enjoy nearly a monopolistic presence in some developed nations as well as developing nations.
Then again, the market structure might appear as an oligopoly to some people. The reason is that there are other major players like Ford Motors, General Motors and Volkswagen who are peer competitors.
Specifically, the Australia market has three major competitors which include GM Holden Limited, Ford Motor Company of Australia Limited and Toyota Motor Corporation Australia Limited (Federal Chamber of Automotive Industry, 2008).
There are also other foreign-owned and local companies, although their significance is low when compared to the three. The fact is that each of these competitors is in the race to increase the market share at both local and international levels. One of the marketing areas they are focusing on is the digital marketing or e-marketing which has proved to be most effective as noted by Kasavana (2001).
Toyota is therefore keen to observe what its competitors are doing and ensuring that it reacts to their activities in a manner that promise its market leadership.
Toyota’s current marketing strategies
Madhani (2012) is of the opinion that an effective marketing strategy originates from three elements: segmentation, targeting and positioning. In fact, these three elements define the marketing strategy as either direct or indirect in nature.
Indirect marketing is an effort by all departments starting from R&D, manufacturing, sales and marketing among other departments to drive sales. Direct marketing is an effort of the sales and marketing department whereby the major focus is on increasing customer awareness.
It can be argued that Toyota uses both direct and indirect market approaches when marketing their products. For indirect marketing, the company’s segmentation and target market is steered by its belief of ‘right vehicle in the right place.
It has used both psychographic and demographic forms of various segmentations and has based its target market on that. For instance, Toyota Australia has segmented several countries across Asia as its market. Its cars range with different prices. The economy class vehicles are targeted to lower income earners and the luxury vehicles are targeted to the higher class of people.
With various product designs, it targets different age groups and professional groups. For instance, for sportsmen and sportswomen, it produces sports cars.
For people sensitive to the environment, it has produced environment-friendly cars. Similarly, for truck lovers, it produces various types of trucks. Indeed, its marketing strategies are natured by its variety of product designs.
Further, Toyota has designed its marketing strategies at various levels, national level and regional level, with basis on the assessment of customer choices and needs. The company focuses its offerings in the market with comfort, excitement and kindness.
It claims that its cars harmonize emotions and ecology. Among the key factors for designing marketing strategies, Toyota’s assessment is in most cases based on the market condition, purchasing capacity, economy and consumers’ choices.
Perhaps the most dominant strategy in Toyota’s direct marketing is market campaigns. Almost every new product is launched through extensive market campaigns.
For instance, the campaign launched for hybrid Camry led to the Federal Government granting the company $35 million to produce the car domestically in addition to $15 million contributed by Victorian Government (IBISWorld, 2012, p.27). About 10,000 cars were manufactured and sold within the Australian and New Zealand markets.
Digital print has also been a core marketing strategy for Toyota especially in Australia and the United Kingdom. As technology moved towards digital age (Osaki, 2008), Toyota decided to enrich its convention communication strategy through print with digital technology.
By exploiting the benefits of print-on-demand, the company now has an outstanding workflow system that delivers millions of pieces of print material. For instance, the company use systems developed by marketing solution providers which allow its centers to order, edit and proof-read numerous printed items remotely.
In that way, its customers benefit as they only receive material from their local dealers that is relevant to them.
Likewise, Toyota uses integrated market communication tool, hence upholding a very strong promotional strategy. In addition, its blog is another very effective mechanism of promotion and advertising.
On this blog, the company closely pays attention to the comments of its customers and in turn provides responses to an enormous amount of enquiry. In fact, IBISWorld (2012) suggests a connection between the increasing profitability for the automotive industry and the increasing use of blog posts.
Therefore, as a major player in this industry, Toyota’s use of blogs as a marketing strategy is quite significant to its performance.
Another digital strategy employed by Toyota is social media which helps it to communicate complex aspects of its products. Cope and Mason (2001) observed that “as the internet turns the world into a global village, it will not only enhance the global social identity, but will find its use more and more in areas that seem irrelevant such as business and healthcare”.
As Toyota faced the challenge of communicating complex, advanced attributes of new vehicles, it supplemented more conventional offline and online marketing with social media.
By coalescing channels, Facebook, Twitter and blog posts, the company successfully increased interchange to its blog and achieved the objective of enhancing the online exchange around its brand. Henceforth, the company embraced social media as its core e-marketing strategy.
Current digital trends and activities
Online advertising
Over the recent past, technology innovations have brought about online user experience that is more bespoke than ever. Therefore, online advertising needs to keep the pace in order to stay relevant. These are not the days of blanket adverts and pop-ups as new internet technologies enhance interactions which drive engagement.
In this environment, the constancy of machine learning technology is essential to enabling companies to improve customer acquisition as well as simplify the activities involved.
O’Guinn and Semenik (2008) predicted that the need to manage enormous amount of information efficiently would certainly see the companies’ move towards integrated campaigns.
Search marketing
The current search marketing trend involves the integration of search and social. This integration has become a crucial activity since social data is increasingly becoming used in natural search algorithms. Companies are ensuring that their search and social strategies complement, thus generating inbound links, mentions and followers (Mamaghani, 2009).
Nearly all search engines are moving their content strategy to the center stage. For instance, Google adjusted its algorithm recently to face this direction. As long as social, search and display remain the backbone of a successful digital presence, so will content remain the adhesive joining them.
Mobile marketing
Mobile marketing is yet another paradigm that has engulfed online environment as mobile networks throttle consumer mobile data. Seeing that apps and m-sites go to war, users are looking to the former for smooth navigation, user experience and interaction, whilst the latter is being used for its immediacy.
Strong competitors are considering the best strategy to be a focus on both routes in order to capture a wider customer base. As Smutkupt, Krairit and Esichaikul (2010) note that the fact is that no strategy developed is better, it is all about timing.
Businesses are realizing that a mobile marketing strategy requires one to be smarter, not just taking an order via a Smartphone. Mobile users are increasingly relying on their gadgets to assist them shop, compare prices, read reviews and watch demonstration videos.
Online video
For online video, the only trends which seem to be absolutely certain are that masses will keep on watching it and that the limits between the television and the internet will continue to become blurred. Currently, television viewers are going online in an effort to watch, find or preview the preferred programs.
Brands and broadcasters are increasingly searching for new ways to engage this audience effectively. This echoes Sengupta (2005) words that “competitive advantage is dependent on the ability to study the customer markets closely”.
Indeed, consumer behaviors especially those related to internet use are the key signs that companies are using to develop their marketing strategies. For that reason, companies like Google have established video platforms like the YouTube, hence attracting a large audience.
Ecommerce
In the recent few years, ecommerce has had one of the notable shifts with the integration of social components such as recommendations and reviews, and the present business environment has built on that.
Considerably, nearly every consumer, purchasing nearly any good or service can expect to locate some kind of review or rating system prior to the purchase. Such systems are built in the main online retailing systems, but increasingly we are seeing them in even the smallest online retailing systems.
Burke (2012) even predicts that “while on the face of ecommerce reviews and ratings may mean similar goods and services are ridiculed, smart players will employ remarkable data for bulk purchasing and inventory decisions as well as convention recommendations in manners that only the biggest online retailers had realized before now”.
Scaling higher, the socialization of search will define ecommerce such that consumers will find results preceded by the products and brands their friends endorse elsewhere.
Social media
As the internet become more and more accessible, so do social media become an irreplaceable strategy for firms large and small to enlarge their customer base, reach out the fan-base, engage and convert users to customers. The forecasted statistics regarding to online marketing indicate that the trend cannot be ignored.
Clearly, companies are planning to connect their fan-base and it is becoming increasingly crucial that they have the capacity to scale these efforts. With social sites such as Facebook, Linkedln and Twitter, marketers are able to be more efficient and creative in launching campaigns across many social platforms.
Email marketing
Among the traditional digital marketing strategies that have not lost popularity in the business environment is email marketing. In fact, recent research reveals that the popularity of the strategy has never been greater (Westlund, 2010).
The strategy has become the norm of heavy industries such as the automobile industry where customer needs overtakes brand loyalty. The strategy is perfectly integrating with other digital strategies such as social media and search marketing.
To date, we have witnessed marketers experimenting in new ways to combine email marketing with other digital strategies.
In near future, they will graduate from the experimentation stage to an elevated level where they completely understand the strengths of the internet.
Impact of the digital marketing technology
According to Groves (2011), marketing plays a central role when it comes to the performance of an enterprise. It is the force behind a strong brand. The more a firm is able to market its products, the better it manages to acquire a wider customer base and eventually increase its profitability.
This paradigm is what forms the platform of exploiting a firm’s competitive advantage. For example, if a company pursues quality as its competitive advantage, consumers must be aware that the products they buy have attributes that reflect the quality claimed.
Likewise, low price as a competitive advantage must be communicated through marketing techniques that focus on the right customers.
Digital marketing technology has special emphasis on the creation of customer awareness. Right from online advertisement to social media, the objective is to ensure that the user of the media is aware of the products offered and the company as a whole.
One can argue that customer awareness is not significant to major players like Toyota. However, as noted before, other player like Ford Motors and General Motors have equal strengths if not better. A new model that has failed to perform simply because consumers know little about it can have a great impact on the profits.
For instance, poor marketing of the Skoda (a model from Volkswagen) was the reason behind the failure of the firm in meeting the projected sales within the Australian market. The product performed well in other countries like India where effective marketing strategies were adopted.
With that understanding, the area that digital marketing technology will impact most in Toyota is sales. Toyota offers a variety of vehicles that respond to the differing needs of its customers, hence what can drive sales most is customer awareness.
Furthermore, Moran (2011) notes that Australia is comprised of diverse communities and people of different classes who can drive sales if different product lines are offered in the market. Addressing the diversity problem can even be considered as a competitive advantage as many vehicle manufacturers are unable to produce many varieties.
Child (1994) explains a relationship between sales and production – the other key area that digital marketing technology will impact. With its large production capability, increased demand can trigger Toyota to increase its production.
Digital marketing technology, such as social media, can capture a wide consumer base, hence increased demand. Likewise, extra profits generated from higher sales can enable the firm to expand its production units.
Another area that digital marketing technology will have an impact on in the near future is the human resources. Research shows that customer satisfaction is directly related to employee motivation (Hays & Hill, 2000, p.3).
A motivated workforce can be considered as the backbone of overall performance (Mawoli & Babandako, 2011). Digital marketing will impact this area by ensuring that the consumers bring out their suggestions and preferences which can then be addressed by the employees.
Through this, employees can feel rewarded and increase their input to the overall success of the company. Again, higher profits mean higher income received by the employees. As Steenburgh and Ahearne (2012) link rewards to motivation, Toyota’s human resources will be motivated to work hard.
Throughout, Toyota has attempted to create a working culture where employees can always be motivated, hence digital marketing will greatly impact on this area.
Important changes to the current e-marketing approach
As noted before, Toyota has capitalized on two e-marketing strategies: digital print and social media. Although these strategies have had an impact on the company’s performance, they do not guarantee much success in the near future as the current digital marketing trends suggest.
They may be essential when we consider the nature of the industry, but it is equally important to respond to the technological changes and the changing consumer behaviors.
In the recent past, we have witnessed many economies melting down as well as financial crisis which signify the need to change from traditional approaches when developing strategies.
Certainly, Toyota must integrate e-mail marketing with the existing marketing strategies. This kind of marketing is going social such that this convergence is giving businesses the opportunity to grow in an affordable way. Unlike it was predicted earlier that social media would blur email marketing, it is giving the strategy a new life (Miller & Washington, 2012).
In fact, the two channels go together and can provide the company the best results when implemented together effectively. The reason is that e-mail is the best way the company can make its messages known, yet social media will give it the opportunity to spread the messages far and wide.
Notably, the line between social media marketing and e-mail, marketing will continue to blur in the near future as tools become easier to access. Moreover, the continuing sluggish economy compels businesses to focus on sustaining businesses through their extended social networks and existing customer database.
We witness enormous growth coming from offline businesses, particularly in automotive industry, with firms hoping to imitate a more profitable and scalable “social buzz” without losing margin and control. Enhanced, low-cost social media and email marketing tools will enable Toyota to maintain its low-cost strategy and drive sales to a higher level.
Another change to the current e-marketing approach is to embrace the concept of online video marketing. While consumers steer brands to engage with them on many platforms, online and mobile video will emerge as the major elements of e-marketing, extending their reach further and enabling marketers to reach consumers up and about.
Toyota needs to respond to and engage their target customers in this space. What the company needs to do is to exploit online communities such as YouTube and Facebook by posting videos on them. The cost of developing video advertisements is continuing to fall hence making them a bigger part of the media mix.
Action plan
In a dynamic technological environment, digital marketing techniques become vulnerable to changes hence requiring systematic implementation and caution when spending.
Similarly, the recommended integration of email marketing with social media as well as establishment of online video marketing will call for a step-wise action and controlled budget.
Moreover, the changes in the current digital marketing calls for a timely implementation in order to ensure that Toyota meets its strategic goals and objectives.
Tactical activities and responsibilities
Time line
Budget
References
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Child, J. (1994). Organization: a guide to problems and practice. New York, NY: SAGE.
Cope, B., & Mason, D. (2001). Creator to consumer in a digital age: Australian book production in transition. Sydney, Australia: Common Ground.
Federal Chamber of Automotive Industry. (2008). Submission to the review of Australia’s Automotive Industry. Web.
Groves, E. (2011). The constant guide to email marketing. Constant Contact Guide to Email Marketing – Business Book Summaries, 1(1), 1.
Hays, J. M., & Hill, A. V. (2000). A preliminary investigation of the relationship between employee motivation/vision, service learning and perceived service quality. Journal of Operaions Management, 250(6), 1-15.
IBISWorld. (2012). Motor vehicle manufacturing in Australia. Web.
Kasavana, M. L. (2001). Emarketing. Journal of Hospitality & Leisure Marketing, 9(3/4), 161-178.
Madhani, P. (2012). Value creation through integration of supply chain management and marketing strategy. IUP Journal of Business Strategy, 9(1), 7-26.
Mamaghani, F. (2009). Search engine marketing: Techniques, tools and utilization. Review of Business Research, 9(3), 130-137.
Mawoli, M. A., & Babandako, A. Y. (2011). An evaluation of staff motivation, dissatisfaction and job performance in an academic setting. Australian Journal of Business & Management Research, 1(9), 1-1.
Miller, R. K. & Washington, K. 2012). Email marketing. Consumer Behavior, 6(6), 423-426.
Moran, A. (2011). Multiculturalism as nation-building in Australia: inclusive nation identity and the embrace of diversity. Ethnic & Racial Studies, 34(12), 2153-2172.
O’Guinn, T., Allen, C., & Semenik, R. (2008). Advertising and Integrated Brand Promotion. Florence, KY: Cengage Learning.
Osaki, T. (2008). Global marketing strategy in the digital age: an analysis of Japanese mobile phone manufacturers. Marketing Review, 8(4), 329-341.
Sengupta, S. (2005). Brand positioning: strategies for competitive advantage. Tata McGraw-Hill Education.
Smutkupt, P., Krairit, D., & Esichaikul, V. (2010). Mobile marketing: Implications for marketing strategy. International Journal of Mobile Marketing, 5(2), 126-139.
Steenburgh, T., & Ahearne, M. (2012). Motivating salespeople: what really works? Harvard Business Review, 90(7/8), 70-75.
Toyota Motor Corporation Australia Limited. (2008). Annual report. Web.
Westlund, R. (2010). Email marketing. Brandweek, 51(5), EM1-EM10.
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