MKT600 Principles Of Marketing 7 Essay

Question:

The marketing plan is to be based on a company of your choice. You are expected to analyse the current market conditions, target market, marketing mix and then formulate recommendations.

It is suggested that you do NOT choose successful multinationals such as McDonald’s, Apple, Sony, Nike etc. Instead select a company that has a product or service that is a fairly new introduction into the marketplace OR is in the decline stage of the product life cycle.

Answer:

Identification of the target markets

Demographic segmentation

In terms of demographic segmentation, the target customers for Toyota are the age groups between 30 and 55. This age comprises of corporate professionals and business personnel who are having the purchasing power of having the Toyota cars. In addition, both the males and female customers are being targeted for their cars (Sandy, Gosling & Durant, 2013). In terms of the income level, customers from having middle and higher income levels are being targeted due to the reason that Toyota is having both mass market affordable cars as well as premium cars.

Geographic segmentation

In terms of the geographic segmentation, customers from the tier I and II regions and countries are being targeted. This is due to the reasons that Toyota is having huge market penetration across large number of countries across the world (Liu et al., 2013). In addition, their dealerships are having present in urban as well as rural locations. Thus, customers from these locations will be targeted.

Psychographic segmentation

In terms of the psychographic segmentation, customers with having requirement for the feature laden cars will be targeted. This is due to the reason that Toyota offers good number of technologies and features in their cars across different price ranges (Tsai et al., 2015). In addition, the customers having the requirement for safety and price effectiveness will also be targeted due to the fact that Toyota cars are known for their reliability and safety features. In addition, the lower cost of maintenance also helps in targeting the customers.

Positioning strategies

The positioning strategy of Toyota states their inclination towards offering low cost and feature rich products. In the market, the cars of Toyota are positioned as value for money products and provide the highest level of features at the different price points. Thus, this is helping them to target mass market customers by offering affordable price points along with offering the latest technologies (Maarit Jalkala & Keranen, 2014). In addition, it should be noted that Toyota is having higher diversity of products and their premium cars such as Century are positioned against Mercedes and BMW, Prius is positioned against Tesla and Camry and Corolla is slated against Volkswagen.

Evaluation of the extended marketing mix

Product

Products of Toyota range from small and affordable hatchbacks to premium sedans and sports utility vehicles. Thus, their diverse product portfolio is helping in targeting the different customer segments across different price level and requirements. This is enabling them to have larger target customer bases and more volumes and revenue (Shams, Alpert & Brown, 2015). Design of the cars of Toyota is also considered as a augmented level due to the fact that Toyota cars are known for their futuristic designs especially in the case of Toyota prius and C-HR. This is also helping them in attracting the potential customers and meets the aesthetic factor in the automotive market.

However, on the other hand, a few limitations are also being identified. One of the major limitations is slower up-gradation of the product offerings. This is due to the reason that when the current automobile sector is witnessing revolution in terms of electric mobility, Toyota is following defensive product strategy by offering only the hybrid vehicles as of now. This is causing Toyota losing the early mover advantages to their competitors. It is recommended that they should promote more electric vehicles in the market with having the latest technologies (Stark, 2015). This will help them to have largely untapped market and positive market branding for promoting cleaner vehicles. On the other hand, it should also be noted that electric vehicles available currently in the market are having premium pricing. Therefore, if Toyota can offer their electric cars at competitive price with their expertise in building affordable cars, then they will gain competitive advantages in the market.

Price

As of now, Toyota is following both market penetration pricing strategy and premium pricing strategy. This is due to the reason that they are having both affordable cars as well as premium cars. In addition, the market penetration pricing strategy is helping them in catering to larger target segments in the developing and underdeveloped countries (Schmidt, Spann & Zeithammer, 2014). On the other hand, it is also identified that Toyota is also having the policy of promoting price skimming strategy for their newly launched products. This is due to the reason that give the global brand value of Toyota, any of their newly launched products attracts positive and extensive customer buzz in the market. Thus, with the help of the price skimming strategy, Toyota is gaining the larger profitability from their new brands and gradually reducing the price in the further period.

Some of their products such as Prius are being sold at premium due to the fact that these products are positioned as halo product in the market. Thus, Toyota is gaining more profitability from the sales of their premium and halo cars (Davcik & Sharma, 2015). However, it is also recommended to them that economy pricing strategy can be initiated by them and this will further increase their sales volumes for their small cars. This is due to the reason that some of their cars are already having cult following in the global market and they do not need any more promotion and advertising. Thus, Toyota can reduce the cost of promotion and advertisement from these brands and offer the cars in more competitive price. It should be noted that Toyota is having different types of cars but they are not having compact cars in their portfolio and in this segment, Suzuki is the market leader. The major advantage of these compact cars is their low price and high sales volume. Thus, initiation of the economy pricing will help Toyota to reduce the price of some of their products and compete with Suzuki.


Promotion

Toyota is considered as the largest automaker in the world in terms of sales volume. Thus, they are already involving different promotional mediums including both online and offline modes in their promotional strategy. One of their major promotional strategies is social media marketing. It is reported that social media marketing of Toyota involved different platforms and initiates customized marketing campaigns according to the different cultural differences in different markets (Ashley & Tuten, 2015). It is also identified that promotional strategy of Toyota is the perfect balance of traditional and online media marketing. Among the traditional mediums, Toyota involves print and television mediums to cater to the conservative customers and mainly the customers from the developing and underdeveloped countries.

On the other hand, pay per click is also initiated by them mainly for their newly introduced products. This is due to the reason that with the help of the pay per click marketing, brand visibility is increasing for them along with targeting the new and potential customers (King, Abrahams & Ragsdale, 2015). Road shows are also being initiated by them to relate with the psychological factors of the customers. Initiation of the road shows involves the live demonstration of their cars in the public place and directly interacting with the customers. Toyota is also getting benefited by having the opportunities of displaying the ability of their cars. However, one of the gap areas in their promotion strategy is the lower concentration of the green marketing and societal marketing. Thus, it is recommended that Toyota should more leverage on their social responsibilities in promoting their brand. This will help them to promote themselves as a more social brand in the market, which will help them in gaining in the long term. On the other hand, initiation of the green marketing will further enable them to create the marketing opportunities for their electric and future products.

Place

Toyota cars are mainly being sold through their offline retail outlets across the world. Toyota follows the exclusive distribution strategy in their business operation. This is helping them to sell their cars only from their authorized car dealers and maintain the universal approach and service level across all their stores in the world. It is identified that online distribution option is less for them as it is offered in certain specific countries and for certain products (Yeung & Mok, 2013). They are having number of manufacturing units located across all the continents, which is helping Toyota in supplying the products within a certain geographical distances. Furthermore, having number of manufacturing units in different countries is also helping Toyota in catering to different products needs in different regions.

However, in the current time, the distribution strategy of the automakers is changing rapidly and it is further disrupted by the distribution strategies of the new entrants such as Tesla. Hence, it is recommended that Toyota should have more extensive distribution strategy and should have more visibility in the market. In this case, they can have their outlets in some unconventional locations such as in the shopping malls. This will not be their mainstream stores but will act as a more lifestyle oriented approach. Toyota can have more customer interactions with the help of this approach and the effectiveness of the entire distribution strategy will get increased.

People

Toyota is having effective process of human resource management for their diverse workforce across the world and is one of the few companies with having lower employee issue and higher retention rate. However, it is recommended that Toyota should initiate country adaptation strategy in initiating their human resource approach (Alfes et al., 2013). This is due to the reason that each country is having different sets of cultural and social environments and universal human resource strategy will not be applicable.

Process

Toyota is having lean manufacturing process across all their facilities around the world. In addition, they are also known for their effective process of assembly lines in their manufacturing process (Kumar et al., 2013). This is helping them in having lower average cost of operation compared to the industry standards. It is also recommended that they should have more assembly lines in more countries, which will help in catering to more diverse customer profiles with more varieties of products.

Physical evidence

Physical evidence for Toyota is their cars with different designs based on different preference patterns of the targeted customers. Considering the reliability of the cars of Toyota, physical evidence for them is long lasting with the customers. It is recommended that new generation of the existing cars should be introduced in order to cope up with the current trends in designs maintain the physical evidence as updated as possible.

Partnerships

Toyota is having multiple joint ventures and partnerships with number of brands in different countries such with GAC in China, Kirloskar in India, with now defunct Holden in Australia and with Mazda (Balcet, 2014). These partnerships are helping them in tapping the competitiveness of different companies in different countries. It is recommended that Toyota should have partnerships in their forward integration that will help them in gaining competitiveness from multiple sources.

Conclusion

This report concludes that Toyota is having an effective process and approach of marketing mix strategies according to the target market customers of them. In this report, the marketing mix elements of them are analyzed and evaluated. A few negative areas being identified and recommended steps are included in the discussion. It is expected that implementation of the recommended steps will help Toyota in enhancing their business further and gain competitive advantages in the market.

References

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Tsai, C. F., Hu, Y. H., & Lu, Y. H. (2015). Customer segmentation issues and strategies for an automobile dealership with two clustering techniques. Expert Systems, 32(1), 65-76.

Maarit Jalkala, A., & Ker?nen, J. (2014). Brand positioning strategies for industrial firms providing customer solutions. Journal of Business & Industrial Marketing, 29(3), 253-264.

Shams, R., Alpert, F., & Brown, M. (2015). Consumer perceived brand innovativeness: Conceptualization and operationalization. European Journal of Marketing, 49(9/10), 1589-1615.

Stark, J. (2015). Product lifecycle management. In Product Lifecycle Management (Volume 1) (pp. 1-29). Springer, Cham.

Schmidt, K. M., Spann, M., & Zeithammer, R. (2014). Pay what you want as a marketing strategy in monopolistic and competitive markets. Management Science, 61(6), 1217-1236.

Davcik, N. S., & Sharma, P. (2015). Impact of product differentiation, marketing investments and brand equity on pricing strategies: A brand level investigation. European Journal of Marketing, 49(5/6), 760-781.

Ashley, C., & Tuten, T. (2015). Creative strategies in social media marketing: An exploratory study of branded social content and consumer engagement. Psychology & Marketing, 32(1), 15-27.

Yeung, G., & Mok, V. (2013). Manufacturing and distribution strategies, distribution channels, and transaction costs: The case of parallel imported automobiles. Managerial and decision economics, 34(1), 44-58.

Alfes, K., Shantz, A. D., Truss, C., & Soane, E. C. (2013). The link between perceived human resource management practices, engagement and employee behaviour: a moderated mediation model. The international journal of human resource management, 24(2), 330-351.

Kumar, N., Kumar, S., Haleem, A., & Gahlot, P. (2013). Implementing lean manufacturing system: ISM approach. Journal of Industrial Engineering and Management, 6(4), 996-1012.

Balcet, G. (2014). Joint Ventures, Technology Acquisition and Emerging Multinationals: The Case of the Chinese Automotive Industry. In Strategies of Multinational Corporations and Social Regulations (pp. 93-106). Springer, Berlin, Heidelberg.

King, M. A., Abrahams, A. S., & Ragsdale, C. T. (2015). Ensemble learning methods for pay-per-click campaign management. Expert Systems with Applications, 42(10), 4818-4829.

Liu, B., Fu, Y., Yao, Z., & Xiong, H. (2013, August). Learning geographical preferences for point-of-interest recommendation. In Proceedings of the 19th ACM SIGKDD international conference on Knowledge discovery and data mining (pp. 1043-1051). ACM.

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