Background of the Company
Toyota is a Japanese conglomerate organizations which manufactures diverse lineup of vehicles and global mass market. It is known for its management philosophy and excellent lean manufacturing principles. It is one of the largest vehicle manufacturing company and its major competitors are General Motors, Volkswagen Group and Ford Motors. The company has a separate division for the research and development activities and constantly thrives to manufacture vehicles with latest technology and expertise. Recently, Toyota along with other companies is has started manufacturing hybrid and electric vehicles which are a step towards green technology (Toyota, 2017). In 2016, it was ranked as the fifth most global brand of the year. In terms of revenue and profitability, the company is categorized as one of the largest organization. The company has presence in most of the developed and developing markets. In order to attain market share, the companies adopt a number of strategies. The companies adapt their marketing mix according to different markets or they standardize their global strategy; nonetheless, the selection of the strategy is based on the target market of the company.
Toyota sells its products in all the major markets of the world. It has entered the in the European, American and other developing markets to increase their global dominance. However, while entering the global markets, the companies need to determine the market entry strategy according to the target market. Due to the current globalized market, the companies need to conduct international marketing mix activities wherein they have to make decisions which are critical for the prosperity if the business organizations. The marketing mix activities in the international market are more complicated than that of domestic marketing as the marketer has to deal with the differences in the foreign market environment and domestic market environment. These factors include the differences in the consumer taste, wants, national culture, economy, technology and the market structure. There are different circumstances at which each strategy proves more suitable. The standardization-adaptation perspective is related to the adjustment of the marketing mix elements in different countries. In the standardization strategies, the companies apply a singly strategy in all the foreign markets whereas in the adaptation strategy, the companies apply different strategies in different markets (Brei et al., 2011).
The marketing strategy of the company can be recognized by the marketing mix that the company offers. In this regard, the present section examines the marking mix of the company in different target markets.
Marketing mix of the Company in the UK:
Product: Toyota has a large market share in the UK market. It offers a large number of global cars and vehicles in the UK market. In addition to it, in order to exploit the market of used cars in the country, the company also buys use cars from the customers and sells them at subsidized price. It offers a wide range of products in the UK market such as iQ, AYGO, Yaris, Verso and Avenis. The Lexus vehicle division is the luxurious cars of the company in the UK market. It has a dominant share in luxury car market. The UK government and the citizens are concerned about the environmental impact of the cars and motor vehicles. As a result, the company has introduced Prious which is hybrid vehicle and runs on electricity (Reid and Bojanic, 2009).
Price: The price range of the company is determined so as to cover all the potential market segments. All the cars manufactured by the company falls under two categories, namely, the cars that fall under the law-price category and the cars which are intended to be used by people who want to be distinguished by others. The Prius car of the company comes under the middle price range. The prices of the vehicles are slightly higher than other developing markets as the Britain is observing robust economic growth.
Place: It is important to identify the local taste of the customers before launching products in the market. Some products may be a success in one market, but a failure in another due to the differences in the customer taste. The UK customers are inclined towards the green issues and new technological inventions; therefore, launch of Prius vehicle is suitable for the organization (Foxall, 2014).
Promotion: The marketing of Prius vehicle, especially launched for the UK market, was focused on the early adopters. The marketing campaign for the vehicle highlighted the commitment of the organization towards the environment. It makes collaboration with the UK government and the citizens were not liable for the congestion charges as it was hybrid vehicle (Hoque et al., 2013).
Marketing Mix of Toyota in Brazil
Brazil is one of the promising markets for Toyota. It is a developing economy with a high growth rate and also provides accessibility to other markets in Latin America (France-Presse, 2013). The marketing mix of the company is discussed below:
Product: In Brazilian market, the Toyota Corolla is the major product of the company. Toyota Corolla comes under the category of minivan and passenger cars. It targets thee middle-age customer segment. The luxury models of the Corolla series have a number of features such as automatic transmission, SRS airbag, whiplash injury protection system and anti-lock braking system (Stewart and Raman, 2007).
Price: Due to the inclination of the Brazilian customers towards the Corolla model of the company. The prices of the model were kept high in comparison to other countries. The Corolla model sells in the United States in about sixteen thousand US dollars whereas in Brazil, the product was launched at a whopping price of twenty-nine thousand US dollars (Muller, 2012).
Place: The Brazilian people prefer large and robust vehicles which can be drove easily for long distances. The Corolla model of the company is adapted to appeal to these people.
Promotion: The Company used print media and magazines extensively for the promotion of the vehicle. The advertisements contained the theme of Brazil and thee industrializing in the country (Wolfe, 2010).
Marketing Mix in US Market
The business activities of Toyota in the US market are highly profitable. It is due to the high adaptability of the Japanese companies as well as the lack of culture of domestic product in the country.
Product: The product of Toyota is highly popular in the USA as the company has adapted the product according to the target market of the country. The distances are larger in the United States of America and the public transportation in poor. Therefore, the company has launched a range of trucks and SUVs which can be used for long distance travels. The customers are also aware of the environment pollution; therefore, Toyota has also launched a number of hybrid vehicles to appeal the target market (Richter, 2012).
Price: The Company has established an image where it provides quality products at reasonable price. The products of the company cannot be categorized as cheap; however, the products are reasonable priced according to the quality offered.
Place: The Company has adapted its products according the location. The cars promoted in the United States are robust and durable (Toyota, 2017).
Promotion: It adopts an extensive marketing strategy in the American market due to intensive competition. The marketing budget of the company is constantly increasing in line with the tendency of the automobile industry. It uses a combination of sales promotion techniques such as public relations, direct marketing and print and media advertising to target the customers in this market (Dudovskiy, 2016).
Appropriateness of Strategy
It can be critiqued that Toyota Motors has adopted the adaption strategy to venture into the foreign markets. The company has adapted its marketing mix according to the target market segments in different market. It can be posited that the adaptation strategy is appropriate for the company to venture into foreign markets. The company has attained substantial market share in all the major markets of the world due to its adaptation strategy. As the company has adapted itself to the local markets of different countries, it has assisted it in establishing excellent image. It has also assisted the company in creating product demand in different markets.
Toyota has instantly attained a substantial market share by identifying the demand in different customer segments and responding to it. For instance, the company identified that the customers in the UK are concerned about the environmental impact of their motor vehicle and launched hybrid vehicles in its response. The vehicle gathered instant popularity. It also increased the price of Toyota Corolla in Brazilian market to bank on its huge popularity in the country.
Toyota was a successful and leading automobile manufacturing organization in Japan before it ventured into the international markets. The company undergone various expansion phases and later became a multinational corporation. It initiated its internationalization process by venturing into the Denmark market. It started exporting the cars to Denmark to understand more about the country and the consumer characteristics. After the market knowledge acquisition, the company opened its first office in Belgium (1993). Later, the company began its operations in Eurasian market by launching a joint venture with Mitsubishi in Turkey and consequently started manufacturing there from 2002. Then after, the company established number of production centers in France, Russia, Brazil and the USA and become a giant Multinational Enterprise (Chowdhury, 2015).
It could be critiqued that the internationalization process of Toyota can be best explained by Uppsala Model. According to this model, the business organizations adopt an incremental steps or phases. It means that the business organizations learn about the new market with the passing time. They gather the market knowledge, commitment decision, current activities and the market commitment to enhance the knowledge of the foreign market and explore further opportunities. According to this model, the market knowledge is obtained once the company enters into the foreign market. Moreover, the companies also try to obtain the market commitment at this stage. The companies learn from these activities and determine their strategic moves in the market (Fonfora, 2012). However, several theorists have concerns regarding the viability of Uppsala theory and state the importance of technology in the incremental process of internationalization. The network theory is another model which explains the process of internationalization in the multinational firms. It is stated that the business organization work within a network or along with links such as subcontractors, customers, employees and other actors in the market. According to this model, collective efforts are required for the progression of the business and creating positive and progressive relationships with the partners (Lee & Carter, 2012). According to this model, networking with local subcontractors and business entities is important source of knowledge required for the development of business in international markets.
Toyota Motors is one of the leading brands in the international market. The company has successfully ventured into a number of markets which are geographically as well as demographically separated from each other. Yet, despite it, Toyota has been able to attain large market share in these locations. It is due to its adaptation strategy. In the report, the marketing mix of the company at different geographical location has been discussed. It has been identified that the company has used the adaptation marketing strategy in which the marketing mix offered to different markets is different. The company has adapted its marketing mix according to the local preference of the target customers. It can be concluded that the adaptation strategy has been successfully used by the company to become the leaders in the global automobile industry. Toyota was a leading Japanese automobile manufacturing company before it ventured to the international markets. The company implemented its international expansion in phases which can be best explained by the Uppsala model. It ventured in Denmark to learn about the business methods and he consumer preference of the European automobile customers.
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