The modern age of business can be defined as age of competition. The competition within an industry is gradually increasing with the expansion of business as many new players are entering into the market. There are several reasons behind this intensifying competition. Firstly, globalisation is one of the primary reasons for expansion of trade and business that lead to increase competition. Many business organisations have found greater opportunities in overseas market, and free trade policies and agreements between multiple countries facilitated their market expansion programs. The domestic markets have turned into global markets that heightened competition rivalry among existing domestic and new multinational enterprises. Since last two decades, the society has been experiencing a rapid technological improvement. The technological advancements have led to change the structure entire trade and business. The management tasks and operational process are now backed with technology like e-commerce and e-business. A better grip of technological advancement helps a business organisation to gain an upper hand position. Finally, enhancing economic condition of consumers and increasing their disposable income have strengthened their purchasing power. This has also changed their consumer buying behaviours and they have developed their specific brand preferences (Vashisht, 2005, p.68).
In the modern and competitive business world, business organisations always try to position itself in market for avoiding unnecessary competitions. In this process they aim to achieve strong competitive advantages and core competencies that enable them to gain upper hand position in the market. There are multiple ways to achieve competitive advantages; however, brand development is the most preferred way for creating high business value. The increasing demands of brand development is due to two primary factors i.e. urge for acquiring higher market share and increasing concern towards consumer value. The modern management style and thought process of decision makers have transformed. The modern management concept more focuses on long term benefits by creative a sustainable businesses environment where stakeholders' wealth and value creation is the first priority. When a company is able to meet these responsibilities towards stakeholders, society, community and environment, it is able to create a high brand image in the market. Managements in modern organisation culture follow management theories and models which are very effective in achieving common organisational goal. In this respect, they concentrate on two-way communicational system within cross-functional teams and with its consumers. For example, the existing management system deliberately tries to implement integrated marketing communication that focuses on better marketing strategy for enhancing consumer values. These efforts made by the modern managements are very helpful in brand development and hence, they try to draft specific plans for branding strategies.
This paper will attempt to deal with brand improvement strategies for Toyota Motor Corporation and primary aim of this paper is to offer a plausible set of recommendations based on findings of primary research and secondary research data analysis. At first, a brief description of Toyota Corporation will be offered to understand fundamentals of it. The second section will explain the research question and objective based on which the entire research methodology will be constructed to obtain viable and valid results. The third section will present theoretical background and models relating to marketing and branding. Marketing and branding are interrelated with each other and the later is an integral part of marketing. Multiple marketing theories and models are very helpful for brand development. Moreover, many scholars have developed brand specific theories and models which facilitate brand management tasks. The fourth section will include the research methodology, and research framework will be framed as per the requirements of this research paper. Finally, based on data analyses and its findings, the entire project will be summarized and a set of credible recommendation will be developed.
A Company Overview: Toyota Motor Corporation
Toyota Motor Corporation is a multinational automobile company and it is famous as Toyota in global market. The company is a Japan-based company and it is present in the most of the international markets. Sakichi Toyoda laid the foundations of automobile company and latter, in 1933, his son Kiichiro Toyoda opened an automobile department after conducting an extensive research on engines powered by gasoline. Automobile department was known as Toyoda Automatic Loom Works, Ltd. One of the sister company of Toyota, called Hinode Motors (now known as Aichi Toyota) introduced its first A1 prototype cars and G1 truck during 1935. In 1937, Kiichiro Toyoda established Toyota Motor Company Ltd. and in 1938 he started producing SB trucks in its Honsha plant in 1938 (Toyota-a, 2011). Toyota brought a revolution in automobile industry of Japan during 1930s to 1950s by incorporating innovation and growth oriented business model.
At present, Toyota is one of the leading and the largest automobile manufacturing in the world. It is also one of the pioneers in automobile innovation which is the company's core value. The technological expertise is prime competitive advantage that has helped the company to cater the global automobile market. Since the inception of Toyota, the company is committed to produce reliable and value added vehicles, Innovation is the major tool for the company and it also uses its technological expertise in meeting social and environmental responsibilities. In order to operate in the global market, the company has formed its seven specific guidelines and principles. These principles mainly include with business ethics, respects and honour for every country and its culture, and develop a growth oriented organisation with the business partners etc (Toyota-b, 2011).
Presently, Toyota's global headquarter is at Toyota City, Aichi of Japan and its president and representative director is Akio Toyoda. As of March 31, 2010, the company owned nearly 397.05 billion yen of capital. It has a number of subsidiaries and affiliated companies over the world and currently, it has nearly 320,590 employees in its international business (Toyota-f, 2011).
Currently, Toyota is trying to use its innovation for bringing development in the society and environment. The company has realized increasing negative impacts of industrialization and carbon emission from increasing number of vehicle. Therefore, the company is now focusing on eco-friendly cars like hybrid and electronic cars. Toyota has identified three major environmental issues relating to its vehicle manufacturing and hence, it has developed and incorporated necessary steps for making the things better for environment. Firstly, it attempts to enhance its transmission and engine efficiency by downsizing measures. Secondly, energy management is another major task for Toyota in this respect. Finally, for reducing overall vehicle load, it tries to lessen rolling resistance, air drag and vehicle mass (Toyota-c, 2011).
Quality and safety are two major parameters for Toyota and hence, the company strive to bring constant development in its operational and management process. Toyota's production system “is steeped in the philosophy of "the complete elimination of all waste" imbuing all aspects of production in pursuit of the most efficient methods” (Toyota-d, 2011). The global operation of Toyota is primarily based on two concepts of modern management. “The first is called "jidoka" (which can be loosely translated as "automation with a human touch") which means that when a problem occurs; the equipment stops immediately, preventing defective products from being produced” (Toyota-d, 2011). The second concept is the just-in-time process that helps it to maintain a smooth process of operation without maintaining high inventory.
Table 1: Consolidated Vehicle production
As Toyota has been able to capture significant share of market in these regions, its financial position has been quite strong. The following table and graph present key financial performance indicator and sales revenue by region.
Table 2: Consolidated Performance
As per the above figure and table, during 2009, Toyota faced loss due to the effect of global economic crisis. However, with the recovering economy, the company has been able to regain high profitability. From Japan and North American market, Toyota earns the highest revenue. Besides, from other markets like Europe and Asia, the company generates high revenue.
Toyota was in the face of a grim crisis when one of its leading models of the Lexus and Prius brand was badly hit by a series of manufacturing defects in the US which led to loss of innocent lives. The company had to pay a major price for this defect as its public relations strategy was widely criticised. In addition to this the company had to face major lawsuits which led to payment of hefty fines by the company and large scale product recall that had a wide impact on the brand image of the organization.
The discussions have pointed out the fundamental features and condition of Toyota that make it a successful company in the global automobile market. The efficient operations with technological expertise are the primary base of the company. In each market, it has developed trust and confidence among the target consumer group and hence, it has been able to capture higher market share.
The research paper will be looking at the branding strategies which Toyota may adopt to augment its tarnished brand image. The discussion will be carried out with an analysis of earlier branding strategies of Toyota. Adding to it, some relevant branding strategies of other leading organisations will also be taken into account; so that, an appropriate branding framework can be developed for the company taking references from the company as well as its competitors.
“[Branding is] a 15-second elevator pitch that every employee in the organization can not only get and articulate, but can talk about their role in bringing that to life” -Davis, M. S. (Wiley, 2003, p.1). In today's competitive world of business, marketing and advertising have significant contribution to create ‘branding' of any product or service or may be of a whole organisation.
The significant portion of branding has experienced a dramatic shift in the last few decades. Both the traditional branding and the role of brands were subject to continual review and redefinition. According to Kotler, a brand can be defined as “the name associated with one or more items in the product line that is used to identify the source of character of the item” (Guzman, n.d., p.1).
The American Marketing Association (AMA) has defined a brand as a name, sign, term, design symbol, design or a combination of them which are intended to categorize the products and services offered by one seller or group of sellers. The brands are also used to differentiate them from those of their competitors. Keller has expressed a different view. According to him, whenever an organisation introduces a new name, symbol or logo for a new product, he or she has created a brand. However, today those brands mean much more than that. According to these definitions, in simple term it would not be wrong to say that the brands act as identifiers. Earlier, brands and brand building processes would be thought as just another step towards the marketing or selling off products. Since a long time, brands were treated as a secondary step of the marketing process. According to Kotler, branding has become a significant issue in the product strategy.
The brand communication strategy has its focus towards representation of the brand and the creation of the brand image. In the year 2000, Aaker and Joachimsthaler mentioned that as per the traditional branding model, the objective is to develop the brand image (Ali, 2007). The brand image is a strategy element driving the short term results of the product as well as the organisation. In the year 1997, Kapferer mentioned that the brand is an external sign whose responsibility is to disclose the hidden qualities of the product or service (Nijte, 2005, p.20). In today's competitive business environment, the challenge is to develop a string and distinctive image. The brand is expected to serve as the identifier of a product by displaying the distinguishing elements from the competition.
Powerful brands develop meaningful metaphors in the consumers' minds. The meaningful images are created through development of brand image and enhancement of reputation by differentiating and potentially having an affirmative influence on the consumers' buying behaviour.
The Keller Model has a considerable contribution in the branding theory. The model has identified the concept of customer based brand equity and the brand hierarchy. According to Keller, brand equity is the effect that the brand knowledge would have on the consumer response to the brand marketing, which would have the effect happening when the brand is known and the customers would possess favourable, strong and unique brand associations. This customer-based Brand Equity (CBBE) model has identified about four steps, representing the questions asked by the customers and displaying a branding ladder. In this model, each of the steps is dependent on the achievement of the earlier one. All these steps consist of six brand building blocks which would have a number of sub-dimensions. While building a strong brand, the objective is to reach at the apex of the pyramid where there would exist a harmonious relationship with the customers. At the very first stage, this model should represent a correct brand identity by answering the customers' question ‘Who are you?'. The aim is to develop an identification of the respective brand and display an association with the respective product class or the specific requirements. The initial stage involves of the brand building block ‘salience'. The next step considers the question ‘What are you?'. The question is answered through the establishment of brand meaning in their minds and associating the brand with certain properties. In this step, there are two brand building blocks: performance and imagery.
The following step is ‘brand response', whereas the appropriate customer responses to the brand identification and meaning are brought out. This step is also achieved with two building blocks judgement and feelings and answers the question- What about you? The final step in the model is ‘brand relationships' where the brand response is transformed to a passionate, active loyalty relationship between the customers and the brand. This stage addresses the customer question -What about you and me? The final brand building block is ‘resonance' which is at the apex of the pyramid.
“Keller's conceptual framework provides guidance in building, measuring and managing brand equity. While Keller claims that the model can be applied in a B2B context and a consumer environment, it does not appear to have been tested for industrial brands. The similarities and differences between business and consumer markets have long been debated with organisational buyers found to differ in many ways, suggesting that the application of such a model in a B2B setting will pose challenges” (Kuhn & Alpert, n.d., p.3).
Today, there has been a considerable shift in the brand management processes. Concerning with the brand management process, Aaker and Joachmisthaler have discussed the traditional branding model where the brand management team would be responsible for creating and coordinating with the brand's management programs (Guzman, n.d.). In such a case, the brand manager was not at the top of the management hierarchy and his focus used to be the short term financial results of both the brands and products in the respective markets. The basic objective has been the coordination with the manufacturing and sales departments. The coordination is necessary in order to solve any problem associated with sales and market share. According to this strategy, the responsibility of the brand has solely been the concern of the marketing department. In general, majority of the companies thought that focusing on the latest advertising campaign would mean concentrating on the brand itself. The model is strategically significant and reactive rather than being creative and visionary. The brand has always been referred to as more like a series of tactics and never like any strategy.
In 1997, Kapferer has mentioned that before the 1980's, a different approach was there towards the brands (Kapferer, 1997, p.23). Earlier, the organizations wished to purchase a producer of pasta and chocolate. After 1980, the consumers are looking for Buitoni and KitKat. Such an instance displays the fact that earlier, the consumers were not bothered about the brands; rather they were more focused on the required product. However, after 1980, the consumers are aware of the product names. Buitoni has established the brand name in pasta and KitKat has marked its position in the world of chocolate. This distinction is quite significant. In the first case, the organizations wish to purchase the production capacity and in the later years, they want to create a place in the consumers' minds. In other words, the shift in the focus towards the brand would start as it was understood that the brands are more than plain identifiers. According to Kapferer, a brand serves eight functions: Identification, Practicality, Guarantee, Optimization, Characterization, Continuity, Hedonistic and Ethical. Identification of the brand would enable the consumer to clearly see, make sense of the offer and to quickly identify the required after products (Kapferer, 1997, p.29). Practicality would enable the consumers to save on time and energy through identical purchasing and loyalty. Among the other function, optimization is significant one to make the customers sure of finding the same quality indifferent to the time and place of the product or service. The characterization in brand management reflects the confirmation of the product or service image, presented to others. There must be continuity in the brand which is supposed to bring in satisfaction through familiarity and intimacy with the brands, which were used or consumed by the customers since a long period. The brand is supposed to bring in satisfaction linked to the brand attractiveness; the brand is required to be hedonistic. The brand is also required to be ethical as satisfaction of the consumers must come through reasonable behavior of the products and those must be reflected in its relationship towards the society. Among these eight functions, the first two are quite mechanical and are concerned with the essence of the respective brands. The brands are expected “to function as recognized symbol to facilitate choice and to gain time” (Guzman, n.d., p.2). The next steps are meant for reducing the apparent risk and the final three steps are related with the pleasure side of any brand. The brand value emerges from its ability to attain an exclusive, positive and significant mark in the minds of a large customer base. As a consequence, the organizations must carry out branding and brand building to develop the brand value. He has perceived the brand value to be in monetary terms and accounted the same in the intangible assets. However, according to Doyle, brands fail to explore the value creating opportunities if the managers pursue strategies, not oriented to maximize the shareholders' value (Guzman, n.d.). There are four factors which could be there in the consumers' minds and which could be combined to establish the perceived value of any product or service brand. This would also determine the “brand awareness; the level of perceived quality compared to competitors; the level of confidence, of significance, of empathy, of liking; and the richness and attractiveness of the images conjured up by the brand” (Guzman, n.d.).
According to the theory by Kapferer, adding brand image, perceived quality, evocations, familiarity to the brand awareness would create the brand assets which can also be thought as the brand added value perceived by the customers (Kapferer, 1997, p.123). Deducting both cost of branding and cost of invested capital from the same would be equal to the finance value of the brand or brand equity value.
‘Identity' is very significant for any individual or for any entity to make others feel its presence. In case of marketing, it is very necessary to remain in the mind of target consumers and in the market. It is very important for any business organisation to create a unique identity in market and this identity is very crucial for generating sales revenue. The business organisations or companies can develop identity as per its corporate name, product or services. There are some examples of such identity. Xerox Corporation is a world renowned company that offers printers, copiers, scanners, projectors etc. The company was very successful for its photocopier machines. It used it corporate brand name for marketing the photocopier machines and now, the photocopier machines are now famous as ‘Xerox Machines'. Another famous example of developing identity using product name is ‘Marlboro Cigarette'. It is the world's largest selling cigarette brand manufactured by Altria Group & Philip Morris International. The company's corporate identity is not so popular but it is popular for its product identity i.e. Marlboro. However, the above examples have been explained to make understand the importance of identity for being successful in market and for being famous among the target consumers groups. Therefore, every company must try to build its unique identity though its corporate name, product or services. Each product or services and each company have its own unique identity and consumers' perceptions for each identity are different from other competing product. For example, consumers perceive Mercedes as premium brand as it offers its premium cars to very niche market. On the other hand, Wal-Mart is perceived as low-cost brand as it offers ‘every day low price' to its consumers (Talley, 2011). Both the companies (Mercedes and Wal-Mart) have developed their own typical identity as per their core marketing approaches.
The above discussion has focused on importance and some example of identity. In marketing this identity is known as ‘brand identity'. Different scholars and critics have presented their views regarding brand identity and how it is important for companies for their sustainability in a market. In this respect, Jean-Noël Kapferer has related the brand identity with globalisation. He has offered the definition of brand identity from the globalization perspectives. He believes that brand identity must help a company in globalising of its brand image. He has explained that “the brand must have as identity that will serve as medium for its globalisation, in both tangible and intangible terms” (Kapferer, 2008, p.488). Sometimes, brand identity and brand image is considered to be similar or identical but these two terms are very different from others. The brand image of company or of a product can be defined through the others perception i.e. consumers' view; whereas, brand identity is a company's attempt to project itself before its target consumers (Wilson and Blumenthal, 2008, p.58). Therefore, it can be defined that brand image is an outcome of an attempt to develop brand identity among the consumers groups. Hence, building brand identity is very crucial step for buildings brand image. In the process of framing brand strategy, establishment of brand identity is the foremost task for a company as it offers a company purpose, aim, direction and proper significance to a brand. In order to explain a brand identity, Aaker has identified three prime components in a brand identity. The following diagram shows these three components.
As per the above figure, three essentials of brand identity are core identity, brand essence and extended identity. The core identity refers to the “timeless center of the brand” that must consist of basic features of a company like its values, ethics, belief etc (Salver, 2009, p.41). Brand essence can be defined as soul of a company's brand that makes the core brand more comprehensible, accessible and valuable. The extended brand helps to add more value to the core brand's identity. These three components are not basic integral part of a brand strategy but understanding of brand identity helps brand managers in recognising the prevailing brand position (Salver, 2009, p.41).
Toyota has attempted to develop its brand identity for each of its brand product like Lexus, Prius, Innova, Corolla etc. The brand identity is basically determined by specific features of the product. For example, Toyota Prius has been able to develop its brand identity among the tech-savvy and environmentally conscious people and Lexus had gained its specific brand identity among the luxury car market. Lexus has been a premium brand for its target consumers as they perceive Lexus as high quality and value added vehicle. Toyota has successfully understood the core brand identifies and brand essence, and it has promoted its distinct brand products in accordance to target market (Toyota-h, 2011).
To establish the strong brands in a cheaper, better and faster way, the organisations require pursuing a different, effective and efficient approach altogether to the brand building. The cornerstone of the brand building is the fusion of future economics, organisational capabilities and customer insights. Brand building demands the organisations to focus more on the segments which would drive the organisation develop organisation propositions and deliver products according to the customers' preferences (McKinsey& Company, n.d., p.12).
In the above sections of literature review, the importance and explanation of brand image have been discussed. However, without proper understandings of brand identity and brand awareness, the brand image cannot be formed for target market. A company can build a higher brand image in the mind of consumers when it is able to successfully create its pre-determined brand identity through brand awareness programs. Therefore, the importance and understanding of brand awareness is significant in brand image building process. For building a strong brand, it is necessary to incorporate brand identity and brand awareness. The following model shows the importance and correlation between brand identity, brand awareness and brand image.
The above model shows that in the process of brand building, brand identity and brand awareness are the two primary areas followed by brand image & association, brand quality, brand loyalty and brand broadening.
As per the above figure, brand loyalty is an outcome of brand image that is an effect of successful creation of brand identity and brand awareness. Brand loyalty provides a company a competitive advantage over its key competitors that helps it to counter and avoid unnecessary competition. Brand loyalty can be defined from the availability of brand loyal consumers. However, Knox and Walker has identified that there is significant difference between brand loyalty and repetitive purchasing (Ranchhod and Marandi, 2007, p.80). They explained that “this lack of clarity has led to a great deal of difficulty in interpreting many of the brand loyalty studies” (Ranchhod and Marandi, 2007, p.80). However, they also admitted that brand loyalty also includes the repetitive purchasing and word-of-mouth marketing from consumers' end. Therefore in order to develop significant amount consumers, plausible brand awareness programs are inevitable for a company.
Brand awareness defines the strength of a brand in a consumer's mind, and a strong effect of brand awareness determines the longevity of brand's image in target consumers' mind. According to Keller, brand awareness includes performance of brand recall and brand recognition. Bran recall refers to consumers' ability to regain a brand from their past experiences while making any buying decision. Brand recognition is consumers' knowledge regarding a specific brand. The consumer should be able to recognise their brand when they are given wide ranges of choices. McLoughlin and Aaker have been able to understand major draw backs in implementing brand awareness programs for a company. They believe that, most of the companies consider brand awareness as a promotional mix and hence, they more focuses on promoting a product rather than brand development or brand awareness. Brand awareness is also very necessary for creating brand equity. McLoughlin and Aaker have designed a model showing brand awareness and its important outcomes.
As per the above figure, brand awareness is directly related to brand equity which includes brand related assets and liabilities. Successful implementation of brand awareness and better brand equity lead to develop higher brand loyalty and brand association of consumers.
While discussing about the brand awareness, it is necessary to deal with the consumers' buying behaviours. Brand awareness deals with consumers' perception for an offered brand that helps them in recalling the past experiences while buying. The influences of brand awareness are very substantial in the process of making a buying decision.
Gustafson and Chabot have provided five major steps for planning and implementing brand awareness. These five major steps are given below.
- Cleary identify and understand potential target consumers and market
- Develop a unique name, slogan, and logo for a company or for offer product brand
- Offer value added features and services along with offered branded product or services
- Effective promotional mix and advertising focusing on brand creation
- Develop proper public relation with consumers by following-up the post-sales period (Gustafson and Chabot, 2007)
The above steps are very helpful in establishing a strong brand awareness programs to build brand image in the mind of target consumers.
Recently, Toyota has faced a drastic brand crisis in its Swedish market due to quality issues. It caused to develop a negative brand image in the mind of target consumers. Moreover, in American market, the company faced a crisis, and mass media played very active role in spreading the ‘Toyota crisis news'. However, due to previous effective brand awareness programs, certain group of loyal consumers were not influenced by that crisis news. This case provides an evidence for the importance of brand awareness creation in the mind of the target consumers. On the other hand, the prevailing management of Toyota was not able to cope up with that crisis situation. In such situation, management could have restructured its entire brand awareness program to maintain its corporate image (Feng, 2010).
Brand Positioning can best be described as the process of identifying the niche of the market for a certain brand. This can be assumed as one of the oldest marketing tricks as it was found as early as in 1969. During the start of marketing policies the organizations focused only on the benefits which took them away from competition in the market which may also form differentiation.
When we talk about the term ‘positioning' we need to realize what it actually means. It can be defined as making a place in the customers' memory, providing them with reasons or characteristics of brands that would make them choose their brands instead of same brands in the industry from different providers. Customers will only remember the goods when they have once compared the similar properties with other brands. It is the human memory schema.
A new technique, Brand Concept Maps (BCM), has come into light eliciting first and higher order brand associations while overcoming the limitations of existing techniques. Brand Concept Maps are significant technique to measure brand associations. These maps help answering various questions related to brand evaluation and protection. To measure the brand associations, the links among the brand and its associations are evaluated. There are certain steps to create the brand concept maps: Elicitation, Mapping and Aggregation (Loken & John, n.d.).
It would not be wrong to say, brand concept maps make significant contributions in the arena of brand measurement. The technique offers an appropriate way out to the present methods of appraising the brand associations. The maps are expected to create a free association, rating scales by identifying the most significant brand associations and showing the relation among these associations. The relations also revealed the amendments with the changes in the attributes. Brand concept maps can also be assumed to be a reliable and valid technique for brand management.
Brand repositioning refers to the changing the brand positioning. A specific positioning statement may not be suitable for a brand. The following are various reasons, which drive a company to reposition its brands.
- The brand has a confusing or non-existent image
- The respective organisation is altering its strategic direction in a considerable way.
- The organisation is planning to enter into a new business where the present positioning seems to be irrelevant.
- The competitors are enhancing their value propositions.
- Renewal of the company corporate culture has led to the review of brand personality.
- Any company can reposition its brand to broaden the appeal of its brand to the additional consumers or the consumer section for which present brand position is irrelevant. However, there can be certain repercussions for a brand in this regard. Broadening the target consumer base may make the company to lose its appeal by diluting the brand's meaning to the existing consumers.
In today's competitive environment, review of the brand positioning should be carried out in a more frequent pace. Competitive pressure, new entrants and changing consumer requirements have reduced the brand's positioning. At the same time, companies have to bear a considerable amount of marketing expenditures to reposition the brand. As a consequence, in most of the times, the repositioning of brands failed to establish any improvement in the overall image of the company or market share of the same.
The brand repositioning must be done to ensure relevance to a customer's standpoints and beliefs, as that the company can align its repositioning strategy to reflect the same beliefs of its customers. The brand repositioning must be done looking at the combination of the customers' attitudes and the situations reflecting customer insights. It is very significant to make the existing customers feel comfortable about the repositioning of the brands. The company must recognise the customers' permission to see reasonable and logical extension of the existing brands. The company can take the advantage of brand's unique emotional benefits to change the consumers' present perception about the current brand to the intended one. The company must identify the pathway of the performance signals or attributes, convincing the consumers of the new brand positioning. This will also lead to the product or service development ensuring unfailing performance on those respective attributes. Prior to the introduction of new positioning, the company must track and evaluate the product performance against the desirable attributes from the customer perspectives. The company can adopt ‘interim positioning to ascertain the credibility and performance of the respective brand.
While repositioning any brand, it is essential for the marketers to capture both the emotional as well as physical requirements of the customers. The company is also required to realise the dynamics of any situation driving those requirements of the customers. For an instance, isotonic beverages such as Gatorade and Powerade are thirst quenching drinks. However, the consumers are likely to perceive them in the wide context of exercise, sports and physical activity. The parameters or frame of reference sets, which would drive the consumers' preference, will be significant in the repositioning of a brand (McKinsey& Company, n.d.).
“The Toyota brand was built primarily on utilitarian attributes—reliability, quality and dependability.” (McEnally & Chernatony, 1999, p.4-5). When the company wanted to move up to luxury car image, the company management came up with a new brand as they were apprehensive about the fact that the customers may stretch on the concept of the Toyota brand to push that upward to include that in the luxurious car brand segment. This way, Toyota has repositioned itself in the luxury automobile segment.
Brand communication is of considerable importance as it would give information to the customers. The communication can be in terms of transactions such as coupons, mailshots, brochures, websites and direct response ads. However, most of the communication does not consist of any information or any transaction.
Communications can have immediate selling aim which can result to be more productive. While being associated with the direct sales, the direct results could be easily available. However, other communication processes can reap results in the long term, which would be more advantageous for the brand in the long term (Clifton & Ahmad, 2009, p.132).
Product Mix and Product Line Decisions
Product mix is the set of all the product lines and products which are offered to the customers by the organisations. A company product would have a specific length, depth and consistency.
Product Width: The width of a product mix would include the number of distinct product lines in the product mix.
Product Mix Length: The product length in the mix refers to the total item numbers in the product mix including all the product categories, manufactured by the organisation.
Product Depth: The depth of the product mix includes a number of variants, which are offered in each product.
Product Consistency: A product mix consistency refers to the way the products are closely related in the end use.
The product line decisions are pretty closely related as they would perform a similar function which is targeted at the specific consumer groups and the products are marketed through the same channels.
The marketer feels that he or she can increase the profit either by adding or dropping down the products from the product or brand lines. The stretching can take place in the downward direction. In the process, the company would find that the offerings of the company are at the high price market and stretch the same in the downward product market.
The upward stretching of the product line occurs when an organisation enters into the upper end through a line extension. The companies extend the product line to gain higher growth rate, enhanced profit margins. Adding to it, the company can extend the product line in the wish to be a full line marketer.
Line Filling is another marketing strategy to position as well as reposition the brands. A product line can also be extended by the addition of more items within the current product range. For an extent, looking at the various consumer requirements Toyota can increase its product line by adding more car models in it (Verma, 2009).
Line Modernisation is another strategy to enhance and re-develop the brands of any company. The company sometimes may feel that the length of the product line is adequate; however, at the same time, product line is required to be modernised. The company may have a range of products; however, it is required to modernise the product line. The companies can plan the improvements to encourage the customer migration to the higher valued and higher priced product items. However, they must remember certain facts such as extension or improvement in the product line may result in damaging the sales of the other product line. A company can establish strong reputation by introducing new and enhanced products in the product line.
Line featuring is another strategy to establish and develop the brands. The company may have both the high priced as well as low priced product lines. The company may try to boost the demand for any specific brand line.
The product line managers of any company must periodically review the product line for the car models which may be responsible for depressing the profits. In line pruning, the organisations identify the weak product items through the cost and sales analysis. For the brand management, a specific portfolio of the brands can be cut short to enhance the profitability. The company also can tighten any production or extend the same to enhance the profitability.
The marketing communications and promotion mix of an organisation consists of the explicit blend of personal selling, advertising, sales promotion and public relations measurements which are used by the company to pursue the advertising and marketing objectives. The five major types of promotion include
Advertising: Advertising is any paid form of non personal promotion of various ideas, merchandises or services by a recognized sponsor.
Personal Selling: This can be assumed to be a personal presentation carried out by the firm's sales force to make sales and develop the customer relationships.
Public Relations: Establishing the good relationship with the public the company may opt for the favourable publicity, by developing a good corporate image and managing or heading off adverse stories, rumours and events.
Direct Marketing: To boost the sales, a company can directly communicate to the targeted individual consumers to obtain a prompt response from them. The marketers can use telephone, mail, fax, email and various other non personal measurements to directly communicate to the specific consumers. These are also done to communicate a direct response.
Sales promotion: A company can motivate the sales personnel by offering them incentives. The company can also offer promotional offers to encourage the purchase or sale of a merchandise or service.
Each type of promotion has its own measurements. Advertising includes the forms of print, media, outdoor and other forms. Personal selling is fostered by sales presentations, incentive programs and trade shows.
Sales promotion includes point-of-purchase displays, premiums, discounts, coupons, specialty advertising, and demonstrations. Tools like catalogues, fax transmissions, telemarketing and online marketing are used in the direct marketing of products and services. In this arena of advanced technology, marketers can now communicate through traditional media forms such as newspapers, radio, television and telephone. At the same time, the new forms like cellular phones, fax machines, pagers and computers are welcomed by the marketers to foster promotion and sales. More companies have been encouraged by these new technologies. The advancement in technologies has enabled the companies to move from mass communication to focus more on targeted communication and one-on-one dialogue.
“At the same time, communication goes beyond these specific promotion tools. The product's design, its price, the shape and colour of its package, and the stores that sell it—all communicate something to buyers. Thus, although the promotion mix is the company's primary communication activity, the entire marketing mix— promotion and product, price, and place must be coordinated for greatest communication impact” (Pearson Canada, n.d.,p.536).
The Changing Communications Environment
Over the past few decades, the organisations across the globe have shown enough efficiency in the mass marketing. Many companies have shown excellence in selling highly standardised products to the masses of consumers. In the entire process, they have developed successful mass media advertising techniques to successfully implement their mass marketing strategies. This has been possible by regular investment of a considerable amount of money in mass media, reaching a large customer base through a single communication tool. However, as the business environment has changed, marketing communication managers have to face new realities in the arena of marketing communication. Two major factors have been influential to change the face of marketing communication. “First, as mass markets have fragmented, marketers are shifting away from mass marketing and developing focused marketing programs, designed to build closer relationships with customers in more narrowly defined micro markets. Second, vast improvements in information technology are speeding the movement toward segmented marketing” (Pearson Canada, n.d., p. 541). Adding to all these, in today's market, information technology has helped the marketers to track the customer requirements more closely. They are now able to fetch more information about the customers both at the individual as well as house hold level. Advancement of new technologies has also opened new communication avenues.
In the marketing communication of Toyota, the company had recognised the luxury or premium messages the company wanted to put forward. However, it was aware that the brand could be undercut by the middle class perception about the existing dealerships. “To carry the Lexus brand, Toyota required its dealers to establish separate Lexus-branded dealerships that oozed the luxury image” (Segal, 2006).
Integrated Marketing Communication
In today's competitive business environment, any company's marketing programs need to employ customers using an entire range of marketing tools. The environment demands the integration of all forms of communication and messages and where the significance of integrated marketing communications lies in. At the initial stage, ‘Integrated Marketing Communications' means the integration of all the promotional tools, so that all of these tools can work in harmony.
“Integrated Marketing Communications encompasses general advertising, direct marketing, sales promotion and public relations. None of the four elements of IMC is inherently superior or inferior; they all have important functions in an integrated campaign. The campaign should focus on a “big idea” and a graphic look those threads through all four elements. This maximizes the chances that consumers will get the message and then have the message reinforced and layered in their memories without the “cognitive dissonance” that arises from mixed messages or incongruous graphic element” (Jones, 2008, p.3).
Promotion is a significant component of the marketing mix. The component includes a mix of communication tools. All these communication tools work better when they are together in synchronization, rather than in isolation. The togetherness has greater significance as they consistently speak one single voice at one time. The marketing gets enhanced as the integration simply goes beyond the fundamental communication tools. There are certain other levels of integration including internal, external, horizontal, vertical, and data integration. This is the way which would help in strengthening integrated communications.
Horizontal integration can occur across all the marketing mix and across all the business functions. For an instance, the production, finance, distribution and communication units should work in coordination and must be conscious about the decisions and actions in which the messages are communicated to the customers. While a number of departments such as direct mail, sales and advertising can coordinate with each other through appropriate data integration. Integrated marketing communication requires the marketing information system to collect and share the relevant data across various departments. In the vertical integration, the corporate objectives and corporate missions must be supported by the marketing and communication objectives.
The other types of integration such as internal integration demands all of its internal marketing components to be integrated, keeping all employees informed and motivated about all the new developments including new advertisements, new service standards, new corporate identities, new strategic partners, new service standards etc. On the other hand, external integration demands the external partners to work in close coordination to deliver an efficient solution. These external partners are components like advertising, PR agencies and offer a cohesive message or an integrated message.
Benefits of Integrated Marketing Communication
Integrated marketing communications in any company requires a considerable amount of efforts which in turn delivers a number of benefits. These benefits can create competitive advantages enhancing revenue and profitability while saving money, stress and time. Integrated marketing communications wrap up the communications around the customers and assist the customers through various stages of the purchase process. Through an integrated marketing communication process, an organisation simultaneously secures its image developing a dialogue and nurturing the company's relationship with its customers.
The ‘Relationship Marketing' creates a loyalty bond with the customers, protecting them from the unavoidable arena of competition. The ability of an organisation to retain a customer for a prolonged period is surely a strong competitive advantage. IMC also enhances profits through increased effectiveness and productivity. At a fundamental level, an integrated message is more effective than an incoherent myriad of messages.
In this competitive world, a steady, integrated and clear message has a better chance to communicate with the customers. Another research has suggested that the images shared through advertising, direct mail boosting both advertising awareness and the responses of the customers. So, integrated marketing communications can boost up the sales by expanding the messages across all the communication tools to open up more avenues for the consumers to become aroused, aware and in turn make them to purchase.
Carefully integrated messages also offer timely reminders, updated information and promotional offers to the purchasers. The planned sequence of these messages helps the customers by assisting them to move through the stages of the buying process. This, in turn, helps the customers to make choices in this busy, competitive world. Integrated marketing communications also helps to make the messages more reliable and therefore more convincing. This has reduced the risk from the customers' perspectives, which would, in turn, reduce the search process and assists the customers to dictate the consequence of the comparisons among the brands. Communications individually send disjointed messages, diluting the impact of the communication messages. Communication of the messages individually may also create confusion, frustration and anxiety in the customers. On the other hand, an integrated communication would offer an encouraging sense of order.
Consistent images and appropriate, useful messages would help in nurturing the long term relationships with the customer base. The consumer databases can help to identify the customer requirements more precisely and the same information can be used throughout the buying life.
The Integrated Marketing Communication helps the company to save on the costs by sharing advertisements, exhibitions and sales efforts. The company would be able to reduce the agency fees as a single agency would be used for all the communications. Even if there are many other agencies, using integrated marketing would save on the time as all the agencies would come together for the briefings, strategic planning and creative events. All these are expected to bring down the workload and following stress levels. This is also a significant benefit of integrated marketing communication.
However, a company may have to face many challenges while trying to implement integrated marketing communication. The employees may take an adverse attitude to the changes. Adding to it, there can be certain other issues while communicating through wide base of target audiences including stifled creativity, functional silos, time scale conflicts and a lack of management know-how.
Managers in the inflexible organisational structure protect both the budgets and their power bases. It was sad to notice that the some organisational structures detach data, communication and even the managers from each other. For an instance, there may not be any coordination among the PR departments and marketing divisions. It is very important that PR department must report to the marketing. In many instances, the sales force rarely meets the people doing advertising and promotional activities. The consequences can be adverse when the sales representatives would be unaware of the promotional offers. He or she would not be able to inform the customers about the same, which would in turn, result in comparatively lower sales. All these can be intensified by the internal power battles among the divisional and functional managers where the specific managers may not prefer their decisions or budget to be modified or influenced by someone in the another division.
Integrates Marketing communication can be a barrier to the creative ideas. It does not encourage creative idea and innovative sales promotion activities unless those fit into the overall marketing communication strategy. An advertising company may not be enthusiastic about the creative ideas generated by a public relation executive or a direct marketing consultant. The joy of wild creativity has lost its space. However, in the process of integration, creative challenges can be greater and in turn more satisfying being operated within an integrated and rigid environment. There can be an issue regarding the time line in the integrated marketing. For an instance, image advertising is designed to cultivate the brand over a long period of time. However, in the process its time line may not be in alignment with the advertising and sales promotions which are designed to be for shorter term as these are meant to foster the quarterly sales figures. This demands a careful integration of all the marketing communication efforts to accommodate these two objectives without any conflict among them.
However, this kind of planning is not at all simple. A survey conducted back in the year 1995, revealed that the corporate managers lack expertise in the ‘Integrated marketing communication'. This is also true about the agencies involved in the process as there is more number of single discipline agencies. Very few people have the real experience in the arena of marketing communication. The lack of knowledge in the marketing communication disciplines is intensified by a lack of devotion. The managers must understand the barriers to become successful in the implementation of integrated marketing communication.
The initial marketing strategy of Toyota is intended to target the innovators as well as the initial adopters of the new technologies. Toyota has introduced vehicles which are environment friendly and at the same time, the company has come up with campaigns which have showed off this characteristic of Toyota brand. The company has enabled its customers to visit the website flaunting information about the development of Pirus. “Toyota used focus groups and clinics with target consumers to evaluate different aspects of the Prius. Toyota found that the consumers valued high technology, affordable price, clean operation, comfort, quality, convenient design, and safety” (Rodriguez & Page, 2004, p.2).
Developing Brand Strategy
With changing business environment and business concerns, the importance of brand has been increasing gradually. Business organisations are trying to achieve a higher brand position in market for developing consumer loyalty and high brand image. The above sections have covered important areas and factors of branding like brand positioning, brand image, brand identity, brand awareness, integrated marketing communication and consumer relationship for brand development. Understandings of these aspects are vital for planning brand strategy for a company. Traditional concepts of management do not focus on brand development strategy as they believe that constant higher performances help to build brand image in market automatically. However, brand strategies are helpful to deliver constant higher performances that lead to bring better brand establishments for a company.
In this respect, brand managers can follow brand strategy model to frame brand specific strategies. However, like strategic formulation process, it is necessary to scan the brand related external and internal environment before framing brand strategies. Understanding the brand environment is inevitable for drafting reasonable and relevant strategies. There are certain factors that influence a brand of a company rather than core business strategies.
The management of Toyota has realized that merely effective marketing strategy will not be able to counter the intensifying competition in the global automobile market. The management has recognized that it must invest for creating brand value rather than marketing of the product. Therefore, it has brought significant improvement in its business operations such as Toyota Production System which strives to enhance the corporate skills. According to Stefaniak, one of a Toyota's marketing communications professional, Toyota has started to focus on the creation of value-added framework for meeting consumers' preferences and “strong company reputations can contribute to the product being a safe choice” (Teresko, 2007).
This literature review is based on data and information collected from several research works, books and journal articles. Branding has been an integral part of marketing. With using appropriate marketing tools, a branding strategy cannot be developed for Toyota. As a result, in this chapter branding concepts have been discussed with a discussion of significant marketing tools. Concepts like Branding, Brand identity, Brand Repositioning, Brand Strategy have been discussed with the inclusion of marketing tools like product and marketing mix and integrated marketing communication.
Plutchick R has said that “Research has its origin in a team which means to go around or to explore... And it is a combination of Re + Search” (Khan, 2008, p.2). Research can be looked at as comprehensive, sincere, rational searching for the facts and figures, the inference or significance in accordance with the issue under study. The research is looked at as methodical, objective, well-framed scientific investigation processes. The research includes increasingly more methodological, objective and systematic investigation structure. At the end of this research, the research has the research must result into the systemic project report. As per Young PV, the research can be assumed as the systematic methodology of discovering the new information and data as well as verifying the old facts and figures, the trends, relationships among the information, explanation and interpretation of the same and the environment governing all these associations (Khan, 2008, p.2).
This research is carried out by verifying the old facts and figures about Toyota, verifying the information, analysing and interpreting the same. The competitive environment of the organisation, which has governed the operating activities, has also been discussed in this project.
A research must aim to seek answers to issues through the appliance of various scientific methodologies. This results in collection and analysis of unbiased as well as reliable data as scientific methodology ensures the accumulation of relevant data and information in compliance with the research process. However, sometimes it may become expensive to do the research through an outside agency. It is pretty important that the researcher must carry an affirmative attitude towards the entire research, the findings and its applicability. Thus it can be seen as the media to figure out the application of theory in the real life scenarios and at the end, infer a conclusion out of the entire research analysis. It is pretty true that the findings through scientific methodology are expected to reap valid results. However, one must ensure that the findings are not result of manipulations to reach at some pre-set ends. For an instance, presentation of some specific findings or biased sampling may result in deceptive research results. Hence, it cannot be denied that credibility in both the research information and research are expected. In this research, effort has been taken not to influence the results in any day, not even through some individual viewpoints. The research has been done based only on the facts either referred from other articles or fetched through primary and secondary analysis.
There are a number of advantages in scientific research. First of all this is objective in nature as the research does not rely on the opinions as well as individual experiences with pre-set biases. The research can control personal prejudice and subjectivity. The scientific methodology of research recognises all these biased information and controls the same by using several tested techniques and methods. This type of research is systematic as the research would identify the issue and frame out the suitable design and investigation plan to put recommendations to solve the issue. In such research, all the required steps, pre-set conditions and precautions are explored thoroughly in alignment with the pre-determined requirements. As irrelevant situations or cases can be eliminated or controlled from the accumulation of data and analysis of the same, one can expect proper generalised conclusions which are easy to infer keeping other things constant.
The research must not collect unstructured observations. Since the issue is defined at an earlier stage, the accumulation of data and information serving the explicit intention to understand solution to the issues. Hence, it eliminates the irrelevancy in the research process. The entire research process is expected to be purposive and systematic. The methodology identifies various tools, techniques and methods to realise and solve the problems with less effort and difficulty. The research must not incur much cost and at the same time must ensure the required quality by honouring a number of scientific research requirements (Khan, 2008, p.2-3).
There can be a number of research types. Descriptive research would include various surveys as well as various kinds of fact findings. The descriptive research would aim to describe the cases and situations. The researcher does not have any control over the required variables, rather the research would be more or less based on whatever has happened or happening presently. The descriptive type of research would employ a number of survey methods. In the analytical research methods, the researchers use readily available facts and figures and analyse the same to carry out a critical assessment of the same to infer a conclusion at the end.
In this project, a questionnaire has been used using certain variables as the attributes of cars to fetch the responses from the interviewees. Apart from that, the secondary research has been done using readily available facts, figures and data and a conclusion has been inferred from the required data and information gathered from books, research papers, articles and journals. It would not be wrong to say that this research is based on analytical research methodology.
On the other hand, any research can be basic or fundamental research or applied research. Fundamental research is mainly associated with academia with gathering of knowledge with formulation of theories. The applied research efforts aim to find an appropriate solution for some immediate problems experienced by an organisation, institution or the society (Kumar, 2008, p.6-8).
Since a considerable time period, Toyota has been suffering from certain manufacturing problems. This has created enough pressure on the brand image of Toyota. This is definitely a significant issue from the perspective of Toyota. This academic paper is an effort to find out the solution of this issue experienced by Toyota. Hence, this research can be thought as an applied research paper.
The research can be either quantitative or qualitative. Each of these research types has certain advantages as well as disadvantages. Sometimes, both the research types are used to fetch the benefits of both the ends.
Quantitative research is rooted through the quantity measurement. The applicability is mostly appropriate when there is a number of figures are required to be analysed. While the qualitative analysis takes into account the information and qualitative data. In quantitative methods, the research would include several processes of accumulation, analysis, interpretation and reporting of the study results. A number of specific methods exist both in the survey as well as experimental research which can relate to the identification of population and sample. This also relates to the specification of inquiry strategies, collection and analysis of data, presentation of the results, carrying out the interpretation and accumulation of the research report in compliance with the experimental study (Creswell, 2003).
This report has included quantitative as well as qualitative research in this case. The research has used information which had been referred from books, journals and research works. This has made it qualitative in nature. On the other hand, the responses from the primary research have been analysed using graphs and charts and at the same time quantitative data such as financial data have been used in this research. So, it would not be wrong to say that the research has used both the quantitative as well as qualitative data.
Developing an appropriate research framework is pretty significant for any dissertation. This is expected to increase the accuracy and validity of a research paper. The research framework offers a definite direction for the research procedures. In this research framework, some components are required to be taken into consideration. Elements such as specific population and sample size, appropriate research methodology are significant in the research framework.
A research can either take inductive or deductive research approach. In deductive research approach, the reasoning works from more general area to more specific one. This approach can also be said as ‘top down approach'. The conclusion is inferred logically from the available facts and figures. In the inductive research, the reasoning moves from the specific observations to wider generalisation of theories. This approach is informally called as ‘bottom up' approach. The likely conclusion is inferred with a degree of uncertainty.
Population and Sample Size
Toyota has got around 77 complaints from the overseas. The company has got more than 140 complaints in Japan. Out of the 77 complaints overseas, Toyota has received 75 complaints from North America. This is why the primary research has been done in United States, where the company used to be one of leading automobile brand in terms of sales. Toyota is required to strive high to regain and enhance its brand image. The primary research has been carried out in the United States. Around 100 people were chosen as the sample size to carry out the primary research.
In this research both primary and secondary research instruments are used. The focus was mainly on the general areas of marketing in the secondary research meanwhile the focus was on the branding of the same. The primary research has been carried out using a questionnaire. The questionnaire consists of 16 questions which are expected to reveal a lot of information about the customers and their requirements in a car. This research focuses on the branding which is undoubtedly an integral part of marketing of Toyota.
The data is collected through a questionnaire. The primary research was used to accumulate the data. The questionnaire was distributed in places where people got time, like the cinema hall, park and such other places. Around 100 respondents were used to carry out the research. In the secondary research the data and information were collected from various books, journal, academic articles, research reports and online articles. Effort has been taken to collect the right data with minimal error in it.
According to Scooper and Schindler, “Ethics is made up of norms and standards of behaviour that guide moral choices about our behaviour and our relationships with other” (Herbst & Coldwell, 2004, p.18). The ethical side in research aims to make sure that no one would suffer from the negative consequences of the research activities. Some other ethical considerations include that the researcher must not present any misleading information to the readers. The researcher must not make any amendment in the respondents' answers to reach at the solution of the pre-set questions. Sometimes the researchers may have any pre-set solution to satisfy the research requirements. Researchers must not distort the outcome of the surveys.
Moreover, the research professionals must not inflate the significance of the results by incorporating any change to the findings. It would not be wrong to say that the research professionals are responsible to both the respondents and clients for fair analysis of the facts and accurate reporting. For an instance, the ethical consideration can come to an end when any researcher would first interview few respondents and then fill up the rest of the questionnaires by him or herself. This would result in distorted viewpoint and misleading conclusion. Adding to this, any significant error taking place during the research process must be reported by the researcher.
The researcher must conduct the research considering the scientific requirements of the project. An issue may arise when the researcher would not disclose the findings of any research process which are inconsistent with the pre-set expectations or the findings are not even justified by available data. Another issue may emerge when the researcher would manipulate the findings by using unnecessary technical jargons and complicated statistical analysis (Herbst & Coldwell, 2004, p.18-19). In this research paper, all the above mentioned ethical aspects have been considered appropriately. Moreover, care has been taken to present the data with proper referencing and without any amendment of the same.
The project has been carried out using both the quantitative and qualitative analysis. The sampling has been done in USA while Toyota has its presence across a number of various countries. So, there may be a regional influence or biasness in the findings. To carry out this research, 100 respondents have been considered to find out the outcomes. A larger number of samples could have resulted in more precision in the findings. The research has been heavily relied on secondary research data. Limitation in the quality and quantity of required amount of data can limit the results of the research and may not come up with the desired outcomes. The research paper does not consist of any complicated statistical tool which could have resulted in better analysis and more detailed findings. There is further scope to carry out the project with the incorporation of more sophisticated tools and techniques as well as the research can be further enhanced considering an increasing number of samples from some other regions, where Toyota has significant presence.
The research paper has taken both qualitative as well as quantitative data including both primary and secondary research methodologies. The required primary data has been collected using a relevant and detailed questionnaire while the secondary analysis was based on secondary data accumulated from various sources including books, journals, academic articles and online websites. While carrying out the research ethical considerations have been taken care of. The research limitations have been defined at the end of the research methodology chapter mentioning further scope of research in this arena.
Data Analysis, Discussion and Findings
Secondary Data Analysis and Findings
The major criterion of this paper is to offer a set of plausible recommendations for bringing improvement in Toyota brand for its global market. Therefore, as per the research framework, primary as well as secondary data analysis is required. The primary data is useful for understanding the consumers' perceptions regarding Toyota brand. However, in order to understand the prevailing market condition, underlying competition, opportunities, threats and industry outlook, the secondary data analysis is needful. In this respect, the secondary data are obtained from various authenticated sources to determine the overall market scenario of global automobile industry. The global automobile industry is influenced by a number of factors like technology, government regulation, economic condition of consumers, market demand, fuel price, competitors, environmental concerns etc. The assessment of these influencing factors is very necessary to identify the existing and future state of global automobile industry.
The global automobile industry has experienced a significance growth in the last two decades. The global demand for automobile industry has increased due to several factors. Vehicles have become an important part of daily life and sometimes, it is also referred as necessity for human daily life. This importance of vehicle has increased production of automobile in the global market. However comparing to 2007, the production of vehicle in 2008, 2009 and 2010 has remained low. The primary reason behind this low production is the decreasing demand of consumers. The financial crisis of 2007-2008 has led to reduce the consumers' purchasing power causing lower demand of vehicle. According to the International Organisation of Motor Vehicle Manufacturers, the global production of vehicles including cars and commercial vehicles has reduced by 12.8 out of 100. As per the table given in appendix 1, there have been significant reductions in vehicle production in most of the developed countries like US (a reduction of 34.3 out of 100), UK (a reduction of 33.9 out of 100), Germany (a reduction of 13.8 out of 100), Japan (a reduction of 31.5 out of 100), Australia (a reduction of 14.1 out of 100 vehicles) etc. During economic crisis, these developed countries were very badly affected and financial strength of these economies became very weak. However, in some of the developing countries, production of cars has increased significantly as they are experiencing rapid economic development. China's (48.3 out of 100) car production growth rate is recorded to be the highest in world followed by Taiwan (23.7 out of 100) and India (12.9 out of 100) (International Organization of Motor Vehicle Manufacturers, 2009).
Europe is one of the popular markets for automobile manufacturers. The European automobile industry is extremely developed due to high technological improvements, presence of the market leaders and proper government regulations. The countries like UK, Germany, Austria, France, etc are the powerful economies and consumers' economy condition is highly improved. According to report by European Automobile Manufactures' Association, there has been growth in total number of vehicle usage from 2003 to 2008 (appendix 2). All the countries in Europe have increased their vehicle usage and overall growth rate of vehicle usage in Europe grew by 2 from 100 in 2008 comparing to 2007 (European Automobile Manufactures' Association-a, 2010). However, the global car fleet growth of the five major international market including Europe and USA has reduced slightly. Appendix 3 shows that China and India have experienced the highest growth in overall car fleet followed by Russia and Brazil (European Automobile Manufactures' Association-b, 2010). International comparison of car density for each country shows that Europe has the highest car density per 1000 people followed by USA and Japan (appendix: 4). In Europe, USA and Japan have 470, 454 and 444 cars on per 1000 people respectively (European Automobile Manufactures' Association-b, 2010).
Technology is one the most crucial parameters in automobile industry. The automobile manufacturers who are advanced in technological expertises are very successful in market. The consumer behaviours in automobile industry are constantly changing and now, people more prefer technological advanced cars. The car manufacturers implement advance technologies for brining efficiency and safety in their product. The increasing number of motor vehicle accidents is major social issue for manufactures and hence, most of the leading car manufactures have developed better research and development programs for better safety level. The automobile industry is one of the major contributors to increasing global warming. Therefore, the leading car manufacturers are now trying to develop eco-friendly vehicles. Global automakers are investing huge amount of capital for bringing improvements in air quality by developing vehicles that will run on alternative fuels.
International Organization of Motor Vehicle Manufacturers has reported that automobile industry causes the third highest CO2 emission followed by generating electricity & heating, and manufacturing & construction. The road transport contributes nearly 15.9 out of 100 carbon emission in air (International Organization of Motor Vehicle Manufacturers-a, 2008). Therefore, this international organisation has developed five integrated approaches to control the increasing carbon emission from automobile section. Firstly, automobile manufacturers should improve their vehicle technologies for enhancing engine efficiency. Secondly, automobile companies must try to introduce cars run on alternative fuels like electric. Thirdly, it is the responsibility of every car manufacturing to create awareness regarding driving behaviours that improve fuel consumption rate and fuel efficiencies. Fourthly, infrastructural development like proper roadways, better traffic maintenance is necessary in reducing fuel wastages. Finally, specific taxation structure will influence consumers' choice in buying automobile.
The pollution reducing technologies is a major trend in automobile industry. In this respect, the engine technologies and transmission technologies are the two concern areas for automobile manufactures. At present, due to increasing environmental concerns, hybrid technology has become very famous in most of developed markets like Japan, Europe and USA. Hybrid cars can run on alternative fuels i.e. gasoline and electric. These types of cars are efficient in fuel and energy conservation. In case of unavailability of gasoline fuels, the hybrid cars use energy stored in battery. During 2004 and 2005, the leading car manufacturers like Toyota and Honda introduced their hybrid cars and since then, the demand of hybrid cars is rising with increasing environmental concern of consumers. The hybrid cars sell have experience a steady growth in last five years. However, during 2008, due to economic downturn, sales and production of hybrid cars were reduced significantly. Generally, hybrid cars are quite expensive comparing to gasoline fuel cars as it requires higher technologies. With the recovering economies and appreciation in consumers' purchasing power, sales of hybrid cars are again increasing a decent rate. Besides, a drastic increase in gasoline price also leads to enhance the demand of hybrid cars. During 2007, the monthly sales of hybrid cars were the highest and then in 2009, the sales figures were down (appendix 5) (Green Energy Efficient Homes, 2010). Considering the better opportunity in hybrid cars segments, many automobile companies have already introduced their hybrid cars. However, in this respect, Toyota's Prius and Honda's Insight are the most popular hybrid cars. These two have been the most successful in meeting consumers' expectations and especially, these cars are very famous among tech-savvy consumers.
This paper deals with brand improvements of Toyota. Therefore, competition is one of major factor that can influence Toyota's strategy for its brand positioning. It is very necessary to assess the various forces that intensify the competition level. In this process, the Porter's five forces model is very useful. Michael Porter has identified five major forces of competition influencing competition in an industry. These five forces are bargaining power of customer, threat from substitute product, bargaining of suppliers, threat from substitute, and competition from rivalry (Rave, 2010, p.23). Intensity of the competition in industry affects the profitability as well as the strategic moves of the each player. Moreover, this also influence brand name of the company. However, Toyota is trying to counter the intensity of the competition using its established brand image in market. Therefore, it is necessary to assess the prevailing degree of competition in respect of Toyota.
Bargaining power buyers: in automobile industry, the consumers buying behaviours is essential as it influence the growth of entire industry. Their economic condition is another major factor that plays very important role in their purchasing decision making process. The consumer's bargaining power depends on various segment of car market like luxury cars, economical cars etc. Companies who target very niche market like Mercedes and Rolls Royal etc, have lower bargaining power as they have developed their own brand loyal consumers. However, on the other hand, the companies like Toyota, Ford, Honda, GM, Fiat etc offer same ranges of cars and consumer have lower switching cost. While buying cars, they consider a number of factors like technology, fuel expenses, servicing charge, brand, price etc. According to a report published by the National Academies Press, the automotive market is replacement market. Due to constant enhancement in economic condition of consumers and shift in consumer preferences, consumers tend to resale their existing cars and buy trendy cars. As per graph portrayed in appendix 6, total sales and total scrap pages are positively correlated with each other and with time, this trend is increasing gradually (National Academy of Sciences, 2011). Therefore, the resale value of cars is very important in determining the consumers bargaining power. In order to gain better consumers response, Toyota is trying to produce durable cars so that, consumers can avail better resale value.
Bargaining power of suppliers: The automobile industry is a vast industry and it includes a variety of sectors like parts and equipment sector, fuel sector etc. Relationship with suppliers in automobile industry is very crucial for the manufacturing companies. Suppliers barging power is very influential for the growth of industry. In the global automobile market, a large number of automobile equipment and parts manufactures are available. Besides, the leading automobile companies like Toyota, GM, Honda, Fiat, Ford etc are dominating over these suppliers as they are able to influence suppliers' pricing strategy very easily. Growing demand of vehicles has also facilitated the automobile parts and equipments sectors and many new entrants have already entered in this sector that ultimately reduces the bargaining power of suppliers. Besides, the international suppliers are also available for vehicle manufacturer. However, a decline in car sales during 2009 has also caused a declined in equipments and parts manufacturing. This market for original equipments has diminished 13.8 equipments out of 100 in 2009 (appendix 7) (Original Equipment Suppliers Association, 2010).
Threats from new entrants: Threats from new entrants in automobile is quite lower as barriers to entries are very high in this industry. Starting a venture of car manufacturing requires huge capital investment, high technological expertise, brand identify etc. Besides, presence of market leaders in global market is the biggest hindrances for new entrants. However, in case of specific market, international companies can be threat as new entrants. They face lower entry barrier as they have significant amount of required capital, expertises and a global brand image. For example, Japanese companies like Toyota and Honda are successful in USA and European markets since they have entered in US marking in 1980s.
Threat from substitute: This force is supposed be mild for this industry. There are other ways of transportation available like railways, airways and waterways but in case of domestic travelling, vehicles hold a special place in human life in terms of independence, utility, convenience etc. Automobile is also related with the cultural and social attitude that cannot be met by any other substitute.
Existing rivalry: This is the most critical factor that has dramatically intensified the degree of competitions. In automobile market, a large number of market leaders are available. Most of the car manufacturers in the global market belong to the same category and they have the same target market. Moreover, high bargaining power of consumers and lower consumers' switching cost intensify the degree of competition among the rivals. However, this has impacted the overall industry profitability and return on net asset. Appendix 8 presents a graph showing the reducing return on net assets with increasing time. The return on net asset in US market is highly affected followed by European market. However comparing to these markets, Japanese market is in better position (Hoffecker, 2009, p.4). Every market leaders are trying to serve their target consumers by meeting their requirements. For example, they are trying to develop fuel efficient cars that will helps consumer to reduce fuel expenses. In terms of car manufacturing, as given in appendix 9, Toyota stood in the first place by producing 7,234,439 vehicles in 2009, followed by GM (6,459,053 vehicles), Volkswagen (6,067,208 vehicle), Ford (4,685,394 vehicles) and Hyundai (4,645,776 vehicles) (International Organization of Motor Vehicle Manufacturers-b, 2009).
The existing rivals are competing with other on the basis of the brand name, consumer loyalty, and innovative product developments. Toyota has developed its popular production system known as ‘Toyota Production System (TPS)' which aims to counter the existing competition. Besides, Toyota has also trying to shape strong core competencies using TPS operational process and it helps to emphasise on the Toyota's commitment to “the importance of appropriately integrating people, processes, tools and technology to add value to the customer and society” (Teresko-a, 2007).
However, in spite of intense competition in prevailing market, the future demand of vehicles is expected to increase with recovering economy. Specifically, the demand of small cars including hybrid cars will increase at higher rate. The hybrid car market is likely to grow by 12 points between 2008 and 2015, and in US market, hybrid car sales will be cross over 1 million by 2012. In Japan, the projected hybrid car sales will rise by 6.6 points within 2011 (PRLog, 2008). The emerging countries like China and India are expected to experience massive growth in their domestic automobile industry and Chinese market will record half of total growth (appendix 10). Demand of the small cars will be the highest in these emerging economies (appendix 11) (Hoffecker, 2009, p.21-22). Appendix 12 represents a projection of international car sales in 2011 and total sales on cars is expected to reach at 60.91milliom with a rise of 57.13 out of 100 sales (Gomes, 2011). Toyota has realized the underlying opportunities in the hybrid car segment. By launching the America's most successful hybrid car, called, Prius, it has been able to reposition itself in hybrid car market. It has influenced the entire market by bringing a number of technologies with this hybrid car. Moreover, main reason for the huge success of Toyota Prius was the marketing and promotional strategy. Primarily, it has used IMC strategy to promote its hybrid cars in the market which has further helped to gain a upper hand brand in hybrid car segment (Hallbright and Dunn, 2010).
There is no such iota of doubt that Toyota has become one of the leading beloved car companies across the globe. In the year 2005, Lexus has been the best selling luxury auto brand in the United States. Regarding the technology, the Prius hybrid electric car has enabled Toyota to maintain an impression of clean, green and tech savvy company.
Since the inception, Toyota has preferred to be customer centric. All of its divisions give preference to customers and quality in all of its activities. The company values the feedbacks of the customers and are transferred to the respective departments so that they can use the information to improve the corporate activities as well as the consumers' perception about the brand. The company maintains direct touch with its customers through Customer Relations Divisions. The employees strive to enhance customer satisfaction by offering specific and quick as well as cordial responses to the customer consultations in a way that the consumers can have the confidence in Toyota. The organisation also tries to reflect the opinions of its customers in the development of products, in the sales and marketing of them as well as the after sales activities of the products. These all are done to further improve the customer satisfaction ().
Toyota publishes the customers' opinions and requests on the intranet of the company. This not only helps the employees to be aware of the consumers' perception and requirements regarding the friend, but to reflect the desired attributes in the products to offer a better response to the customers. The customer assistance centre conducts hands on training for their employees to handle customers in an effective way. Employees are encouraged to take part in the internal forums to listen to the actual opinions of the customers.
“In order to enhance customer relations capabilities, CR Training Seminars are held in Europe, Central and South America, and other regions, and a customer relations conference with leading distributors from around the world is held twice a year in Japan. The CR News, a pamphlet that introduces customer relations best practices in various countries, is issued to distributors around the world to encourage further improvements in customer relations” (Toyota, n.d., p.1).
The above image displays the customer relationship management process of Toyota.
Toyota has put considerable preference over quality. As a consequence, the company has given its divisions the responsibility of planning, development, production engineering, purchasing and sales to assure the product quality. Each of the divisions undertakes activities and company policies to ensure quality based on the quality functions. Toyota has put its efforts in three major directions. All its products and services must be in alignment with the customer expectations, related regulations of any specific country where the business is being conducted in. The organisation has always out its efforts to raise the quality high to prevent any quality issue.
In case, an issue has been emerged, the driving causes should be identified in a rapid pace. In case a product is sold, appropriate action is expected to be taken to enable early detection and resolution of the issues. The company has conducted audits to confirm if all the divisions are taking enough action to uphold high quality levels. This demands the divisions to work on any area which requires improvement (Toyota, n.d.). Repositioning a brand far from the frame of reference can be devastating for the company creating customer confusion regarding the product or service.
Toyota encourages innovative ideas to emerge from every level of the organisation. It may be seemed to be little unrealistic but in a year, the company implements a million ideas. It seems that that every idea has its own significance in this organisation. The culture encourages the employees to bring in higher levels of employee productivity through the engagement, continual improvement and ongoing creativity. Constant innovation has remained important criterion for the brand improvements in existing global automobile market. In this respect, Toyota has successfully upgraded its existing products by integrating innovative features. For example, “Toyota has announced plans to introduce a plug-in version of the Prius in 2011” and it is expected to increase consumers' overall value (Valdes-Dapena, 2010).
Primary Data Analysis and Findings
In a research paper, primary data analysis has its own significance. The questionnaire consists of 16 questions. Around 100 people were questioned, among which 7 people are entrepreneurs, while around 20 people are students. Among rest of the respondents 54 were doing service. Majority of the remaining people were unemployed or housewives. The following graph visualise the segmentation of the respondents.
The second question was to know about the respondents' loyalty towards the automobile brands. There were options like Toyota, Hyundai, Ford and others. Around 29 people said that they are loyal to Toyota than other brands. Around 35 people said that they like Ford while around 15 would prefer Hyundai and other automobile brands. The rest of the respondents said that they are not loyal to any brand; they would go by the attributes of the car rather than the brand name. The following pic chart dislays off the information articulated above.
In the third question, around 20 people said that they like the way Toyota communicates with its customers. BMW has the majority of them with its communciation process. Around 31 people like BMW's communication process. The rest find communication of other automobiles to be more effective. The follwing chart represents the data collected in the third question.
The next question is regarding the salary where many respondents may feel uncomfortable in. However, that is why the respondents were asked to choose the salary in various ranges. The maximum respondents have the salary ranging from USD 15,000 to USD 30,000. Among the respondents, 46 people have said that their salary ranges from USD 15,000 to USD 30,000.
Among the remaining respondents, 24 people used to earn USD 15,000 or less than that. Around 13 people earn more than USD 45000, while the reminaing people had salary in the range of USD 30,000 to 45,000.
Later on, the respondents were asked about their family incomes. The rationale behind asking this question was the fact that now-a days in most of the houses both the spouse work. In this case, knowldege about the total income is significnat. While the respondants were asked on the same, around 54 people said that they have family income of USD 30,000or less, while 36 respondents' family income ranges from USD 30,000 from USD 50,000. Among the remaining ones, 14 people have their family income ranging from USD 50,000 to USD 70,000, while 8 people have their family income more than 70,000.
While answering the question ‘Do you own a car?' 78 people have come up with positive ‘yes'. These people either have their cars at their homes or offices, or have them at both of the places, while 22 people say that they do not own any car. While the answers were coupled with the income ranges of the respondents, it was not tough to find out that all the people with income more than USD 30,000 own cars either at home or office or they own cars at both of the places.
Around 18 people with the income of USD 15000 or less do not possess any car of their own, while among the people with the income range of USD 15000 to USD 30,000, 4 people do not possess any car. Out of these 78 people, around 21 people said that they own a Toyota car, while 20 respondents have said that they own Ford car. Around 21 respondents have said that they own Honda cars, while 10 people own glamorous BMW cars. Among the remaining 6 people, 3 respondents own Volkswagen cars, 1 respondent own Hyundai car while 2 people did not write the name of their automotive brands.
The next question was ‘If given choice & situation which one brand of car you would like to buy again?' Around 20 people said that they would prefer BMW as their second car. Among them, there were 7 people who already have BMW as their first cars. Around 13 respondents said that they would prefer to buy Toyota as their second cars. Only four of them own Toyota cars and said that they would prefer to buy Toyota cars again. Around 16 people would like to buy Ford cars while 14 people would opt for Honda. The remaining 15 would like to buy other cars like Volkswagen, Hyundai. Around 20 people have Ford cars, out of which 8 people said that they would like to buy Ford again. Around 21 people have Honda cars, out of which 10 people would like to have the same brand as in their next car.
It is noticed that customer loyalty towards BMW is much more than other brands. In case of Ford and Honda, 40-50 existing customers would like to buy the same brand again. In case of Toyota, the situation seems to be quite disheartening. Only 20 existing customers would like to have the same brand in their next car models. Toyota must work in the enhancement of the products as well as in their after sales services to retain their existing customer base as well as to attract new customers.
The respondents were asked about their preferable attributes. They were asked to rank them according to their choices. Attributes like Brand name, Safety, Physical Appearance, Accessories, Comfort in Driving, Mileage, Convenience in handling, Price, After Sales Service and Guarantees or Warrantees. Around 30 people have said that they would look for brand name while purchasing a car; they ranked this as ‘1', i.e. the most preferable one. Around 10 people said that they would give preference to ‘price' and ranked it as the most preferable one. Around 20 people said that they would look for mileage and preferred to have that as the most preferable characteristic.
Around 20 respondents have chosen ‘Physical Appearance' as the most preferable feature in a car. Among the respondents around 5 people preferred to opt for after sales service and have ranked this as ‘1'. The attribute ‘comfort in driving' was chosen by 5 people. Among the respondents only 5 people were such consumers who can be attracted by offering guarantees or warrantees come along with the cars. They feel that these kinds of guarantees are significant as the maintenance cost of the cars may emerge to be huge. It was quite surprising to see that only 5 people were really bothered about their safety and have given the highest rank to this attribute. It was more surprising to see that the most preferred attribute has been ‘Brand name' over price and other attributes like physical appearance and safety. However, one rationale can be given to explain this event. The customers may think that a company with a good brand name would offer almost all the necessary features. Other significant attributes, preferable according to majority of the customers, are mileage, physical appearance and price of the cars.
Around 20 people have said that they would prefer brand name as the second most preferable attribute. Among the remaining ones, 20 respondents have given ‘Physical attribute; as the second most preferable feature. Around 20 respondents prefer safety to be one of the significant desirable attributes while opting for a car. Around 5 people think that it is important to have comfort in driving. Around 15 people think that mileage is the second most significant factor while purchasing cars of their own. Around 10 of the respondents think that convenience in handling and price are two significant factors which can be assumed to be the second most desirable attributes.
Among the respondents, 15 people think that brand name is important; however, they think brand name is not so important to offer a rank ‘1' to this attribute, rather they would prefer this feature as the third most significant attribute. There were 15 more people who also think that ‘physical appearance' is important and have given this attribute a rank of ‘3'. A considerable number of people think that after sales service, guarantees, mileage, price and safety should be evaluated while purchasing a car as these are valued as significant factors of any car model.
Around 10 respondents feel that brand name does not have so much importance and have given this attribute a rank of ‘4'. Around 15 and 16 respondents have give attributes like physical appearance and price as ‘4'.
Around 25 people think that brand name does not matter in the comparison to other important attributes and have ranked this feature as ‘6' to ‘9'. Among the respondents, 30 people think that physical appearance should come either at ‘5th' or ‘6th' position. Around 46 people think safety is not that important as have ranked them in ‘5th', ‘6th' or ‘7th'. It was very much visible from all these respondents that they do not count accessories to be one of the most significant attributes and have ranked them starting from ‘7th' to ‘10th' position. Around 23 respondents feel that mileage should be given a rank of ‘6'. This is the last ranking given to this attribute by the respondents. The remaining 77 people think that the attribute is significant enough to be ranked among the top five features of any car. Around 51 people think that comfort in driving would come with good brand names and other attributes. So, the customer should not look for it at the fist hand and that is why the specific group did not keep the attribute among the top five ones. A considerable number of people think that while choosing a car after sales service, guarantee or warrantees are not of much importance. This is surprising; however, the outcome can be explained with few common known facts such as majority of people think that good after sales service or effective guarantees come along with well recognised and well established brand names; so, one do not need to go for looking for such attributes, rather they can go for certain other attributes like brand name, price, physical appearance etc. Some interesting facts were also revealed while the responses were bundled with other responses from other questions like ‘what do you enjoy most doing?' Around 20 people who rank ‘comfort in driving' as ‘1' to ‘4' enjoy the driving most. Some of them also think that ‘mileage' is important as they would like to save on the cost on the fuel charge.
The respondents were asked about the specific brand of car. They were asked whether they would choose the car because of attributes mentioned above, advertisement by the company, promotional offer or gifts, influence of the family members or peer groups, sales personnel behaviour or because of the dealer influence.
Around 30 respondents have said these are the attributes which are the most influential factors in driving them to purchase the automobiles. They feel that one must choose a car by having a look at the attributes like brand name, physical appearance, safety, accessories, and comfort in driving, mileage, price, after sales service, convenience in handling, guarantee or warrantees.
Around 25 people think that they were mostly attracted by the promotional offers and discounts offered in some specific seasons. They feel that this is important as they would be able to fetch some extra benefits through the promotional offers and discounts. Around 12 sample size thinks that they are majorly attracted by the company advertisements. Around 11 sample size thinks that they would buy a car under the pressure of the peer groups. Among the respondents, 9 people think that they would choose a specific brand of car under the family influence. Around 8 people think that they would get mostly influenced by the dealers pushing them for specific car brands. The remaining 5 respondents think that they were lured by the company advertisements. From the analysis of this question, it was revealed that the attributes and features are most significant and preferred by a majority of the customers. The second most preferable attribute by the customers is the ‘promotional offer/ gift'. Other significant attributes are ‘sales personnel behaviour', ‘peer group influence' and ‘family influence', which are pretty important for any customer.
The next question was regarding the attributes, attracting the customers for brands like Toyota, BMW and Honda. Around 40 people have said that in case of Toyota they would mostly rely on ‘word of mouth', 40 respondents think that they are mostly lured by the television advertisements and the remaining 20 think they would look for the print advertisements.
In case of BMW, 50 respondents think that they are mostly attracted by the televisions advertisements; 30 people think that print advertisements are attractive in case of BMW. The remaining 20 respondents think that they would rely on the ‘word of mouth' while purchasing a BMW car. In case of Honda, 40 people are lured by the television advertisements; around 32 respondents think that they would look for the Honda print advertisements, while the remaining 28 respondents think that they would mostly rely on the ‘word of mouth' while purchasing a Honda car.
It has been noticed that the majority percentage of the sample population are mostly attracted by the television advertisements. However, a considerable number of people think that they would rely on the ‘word of mouth' while opting for a car.
In the next stage, the respondents were asked about the dealer efficiency while opting for a specific brand of car. A number of options were given the customers to choose from the various brand models such as BMW, Honda, Toyota and others. Around 40 respondents think that in case of dealer effectiveness, Honda is one of the leading automobile brands. Among the respondents; 25 people have said that they have noticed that dealers are more effective in case of BMW. Around 25 people think that Toyota dealers are most effective among the car brands. Among the respondents, 10 people think that brands like Volkswagen, Hyundai have an effective dealer network.
Around 40 people have ranked ‘Toyota' as ‘2' in the dealer effectiveness. Around 20 people think that ‘Honda' would rank as ‘2' in the dealer effectiveness.
Around 27 sample population thinks that BMW would be ranked as the second brand with having significant dealer effectiveness. Around 13 people think that car brands like Volkswagen, Hyundai and other brands are more effective than other brands. Around 24 people think that BMW ranks at ‘3' in the dealer effectiveness while 27 people think that the ‘Toyota' car brands rank as ‘3' while it comes to the dealer effectiveness. Among the respondents, 23 sample sizes think that Honda dealers would rank as ‘3'. Around 8 sample population thinks that Toyota dealers are not doing well as the dealer effectiveness is low to be ranked as ‘4'.
Among the 22 respondents, who do not have cars, around 5 people do not want to buy any car. They were asked about the reasons behind this. All of them were bothered about the high prices and mentioned that as the reason that they are not able to buy any car. The last question was pretty detailed with the inclusion of various attributes like brand name, price, appearance, features, accessories, comfort in driving, convenience in handling, after sales service, mileage, guarantees or warrantees. In the attribute ‘Brand Name', BMW has marked its presence high. Around 40 people said that they would prefer BMW most when it comes to the brand names. When it comes to the attribute ‘price', around 30 people think that Honda is most preferable. In ‘appearance', BMW is preferable by 17 sample population. In features and accessories, around 40 people have said that Volkswagen is best. Around 33 respondents think that BMW has been best in comfort in driving. Around 34 people said that Toyota has been best in convenience in handling. Around 22 people said that Honda has been pretty good in the after sales service, white Toyota is being preferred by a considerable number of people while it comes to an attribute like ‘mileage'. Almost 22 sample population have preferred BMW as the best car offering guarantees/ warrantees.
Around 20 people said that they would prefer Toyota in this section. Around 21 people said that they think Toyota is best when it comes to attributes like ‘Brand name' of any car model. After the analysis, it has been noticed only in case of comfort in driving and convenience in handling, Toyota is preferred by a considerable number of people. While in the attributes like ‘appearance' and ‘accessories', Toyota has done pretty bad as there are not many people who would prefer the ‘Toyota' brand.
Toyota must pull up its socks and frame up an appropriate strategy framework to boost up the sales by regaining the consumer trust. Toyota forgot the fact that consumers want to see a company realising the full responsibility, to be emphatic to the victimised consumers and their families. They want the organisation to be in control by outlining the issue and a true intension to solve the same. Toyota has failed on this ground. There are certain arenas which are required to be considered by the organisation to get back its tarnished brand image. When an issue arises, Toyota must respond it in a much quicker way. The company must monitor the feedback of the consumers and must communicate with the customers in an effective way. The company is required to use these feedbacks effectively to frame up the marketing strategies to develop an extremely strong brand with flexible brand management processes. Toyota is required to be transparent in its operation; it should forget the fact the covering up the problems can raise more issues in the coming years.
Certain steps are required to be realised by the company and at the same the company must act in accordance to it to manage and enhance its branding. In this competitive era, international brands and companies cannot operate in isolation. The stakeholders of the company are very much involved with the brands. That is why Toyota management must put its best foot forward to manage the stakeholders by properly communicating the situation to its stakeholders. At the early stage, there would be few people who would have the knowledge about the issues. By communicating early would develop the trust with the stakeholders as well as with the customers.
As Toyota's brand value is declining, the company must strategise properly to regain its brand value and improve the same. An appropriate marketing is significant and can be said as the stepping stone to enhance the brand value. As of now Toyota has accepted 77 complaints overseas and more than 140 complaints in Japan. Out of these 77 overseas complaints, 75 complaints have been received from the North America region.
The research has been carried out in US considering the fact that one of the significant regions where Toyota lost its face majorly is United States. After the analysis, it is recommended that the company must many customers who already own a Toyota car do not want to buy the car again; they prefer cars like BMW, Honda over the same. The customers have felt that the company has not been much efficient in its after sales service. The company must enhance its after sales service to retain its brand name among the existing customer base. The research has revealed that a considerable number of respondents think that attributes like brand name, physical appearance, mileage and price to be the most significant ones in a car. A major portion of the sample population thinks that ‘Toyota' has marked its presence in ‘comfort in driving' and ‘convenience in handling'. The company must enhance all these attributes to retain its customer base and develop new customer base. This is also very important as a considerable number of people think that they would reply mostly on ‘word of mouth' while purchasing a new car. Advertisement and promotional activities through ‘word of mouth' would only be possible when Toyota would be able to satisfy its customers with better service, safety and enhanced quality products. Apart from that, Toyota must improve its televisions advertisements as well as promotional activities to enhance its brand value. There are many more other attributes like physical appearance, features, accessories and guarantees or the warrantees which are required to be enhanced by the company. The company must look into these attributes and the proper promotional activities to regain its tarnished brand value across US as well as other countries. The company is required to develop the strategies with the help of its distinctive competencies, resources and capabilities.
The company must include the best resources in under its sleeve and at the same time must nurture the same to make them the company's competitive advantage over its competitors in the market. Toyota's valuable tangible resources include various equipments associated with the lean production system, introduced by the company itself and used the same in the factories. These resources have enabled the company to reduce its operation cost as compared to the competitors. With its valuable resources, the company has been able to develop distinctive competencies by manufacturing techniques such as just in time inventory systems, self managing teams and reduced set up times for the complex equipment. The company must develop the capabilities to nurture its resources to develop the competitive advantages.
The above sections of this paper have discussed very crucial areas which are helpful to realize the entire prevailing situation of global automobile industry for brand related strategy formulation. Brief overview of the company has explained its organisational culture, operational process and its other major activities. This discussion has help to understand the underlying strengths and weaknesses of Toyota. The literature review section has provided theoretical background relating to branding and marketing. Effective and efficient marketing strategy is the foundation for developing higher brand image in the mind of target consumers. However, the brand related specific models and theories are helpful to concentrate on brand development strategy. The secondary data analysis have examined prevailing market situation and it has reflected various aspect which are extremely influencing in determining brand related strategy. Toyota must consider the market opportunity, market demand, competitions and future growth for framing branding strategies. The primary data has been obtained through a set of relevant plausible questionnaire. The questions in the given questionnaire have been framed to understand consumers' brand preferences, brand choice and their buying behaviours in automobile purchasing. These stated sections have reflected very significant areas for drafting recommendation for Toyota.
Before offering recommendations, it is necessary to summarize the major attributes of a successful automobile company. At present, all the automobile companies must possess some specific attributes relating to effective cost-structure, efficient production operation, well focused strategy, well-esteemed brand image and identity and reliable products and services offerings. Each of these attributes is explained to understand their significances. Firstly, in automobile industry, product efficiency is the first priory for being successful in market. In these respect, Toyota's production efficiency is the most flourishing and efficient comparing to its key rivals. The company aims to achieve total quality management (TQM) as it has implemented ‘jidoka' and ‘JIT' to control and manage operational process for maintaining higher quality. Secondly, well established management system and organisation are vital internal criterion for automobile companies. Flexibility is also necessary for managing foreign market. Toyota is also expert in this respect as it has successfully expanded and managed its overseas markets. Thirdly, every company who tries to create their brand in market must develop brand specific managements and committee for enhancing market prestige through better consumer relationship. Toyota has developed its teams for quality maintenance and for CSR programs but it should develop a committee for brand development. Fourthly, focused strategy for branding and integrated marketing is inevitable for leading automobile manufacturers for brand repositioning in existing market. The giant companies like Toyota, GM, and Ford etc have their own specific strategies for marketing but brand specific strategies are very useful for countering intense competition in automobile industry. Finally, the most important aspect is product and services that must meet the consumers' expectations. Target consumers have certain hope from their brand companies and these companies must offer latest technological innovations and higher reliability and safety level. The successful and leading automakers have offered wide ranges of product by targeting different segments of market. For example, Toyota has introduced its Prius which is one of the best cars for tech-savvy and environmental conscious people. Therefore, Toyota should keep introducing such products that will enhance its market image among its target consumers.
Identification of market trends and understating of changing consumer behaviours are two vital areas for Toyota for its brand improvements. Therefore, the latest trend in automobile market is the technological innovation. Toyota must have a strong grip on latest technological expertise for offering consumers' specific demand. Negative impact of automobile industry on environment is another major issue for the entire industry. Governments and other international organisations are now becoming stricter regarding carbon emission. Therefore, Toyota must try to develop its operational process and business model that will strive to develop more number of fuel efficient vehicles. As per the secondary data analysis, the growth of automobile industry is most of developing countries is expected to be lower comparing to emerging counties like China, India and Taiwan. Therefore, Toyota should more focus on these markets for brand developments before other multinational companies can identify this opportunity. As per the theories and models in literature review, Toyota should implement integrated marketing approach for enhancing brand awareness and brand identity in developed and emerging markets. It must create higher level of trust and confidence among its target consumer by incorporating better communications and consumers services.
Memory down the lane, many people would remember that Toyota's brand was one of its main advantages. However, situation has changes in these days; as of now, its brand architecture has become one of significant strategic problem. Toyota has been suffering from a number of quality issues. The company has recalled approximately 1.7 million cars in the concern of fuel leaks. It has added another dent to the tarnished reputation in the crucial US market. The latest recall of the company are mostly in Japan, including the IS and GS Lexus Luxury models in North America. The company has faced the biggest difficulties in winning back the consumer trust.
The US sales of the organisation were reduced in the year 2010, despite of the fact that Toyota has emerged as the industry leader in 2008 with an increasing revenue amount. In the process, the company have recalled around 1.7 million vehicles, which surely put an adverse effect on the company brand image.
Like a number of Japanese companies, Toyota has developed its business with an intensive focus on a single corporate brand. The company markets Lexus and Scion, however, a considerable amount of its revenue comes from selling off its sub brands. The earlier concentrated approach has certain distinctive benefits. This strategy has enabled Toyota to maintain a single, united organisational culture which was significant for the success of Toyota. However, brand architectures have several strengths and weaknesses, and the same is true for Toyota, one of the leading automotive companies across the globe. Earlier, the company used to invest all its money to its master brands rather than pumping that into the sub-brands for enhanced marketing efficiency. Undoubtedly, this strategy has been able to reap well for the Toyota brand. One single brand has reduced the number of components required as several components are common and shared among the sub brands. This has been one of the significant reasons behind the success of the company. Focusing on a single brand approach where Toyota sub brand cars are linked to one single corporate brand. This means that an issue emerging with any Toyota vehicle model would not only affect the sales of another model, but across the entire automobile range. Back in the year 1990, Professor Marry Sullivan has used quantitative modelling to explore the effect of brand architecture on the automotive sales. The research has revealed that any adverse situation in any brand model can affect the other models as well as in different intensities. A downturn in one brand would also affect the other brands as well as sub brands which are yet to launch. Putting all the sub brands in one basket can emerge as a bad move in the arena of branding and marketing. An appropriate marketing framework with the suitable strategies is required to retrieve the tarnished brand image of Toyota.