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Toyota's Hybrid Cars: A Marketing Plan

Info: 3110 words (12 pages) Essay
Published: 11th Oct 2021 in Marketing

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CONTENTS

EXECUTIVE SUMMARY 1

BUSINESS MISSION 1

MARKETING ENVIRONMENT 2

MICRO - ENVIRONMENT 2

RIVALRY AMONG EXISTING COMPETITORS 2

THREAT OF NEW ENTRANTS 2

BARGAINING POWER OF BUYERS 2

THREAT OF SUBSTITUTE PRODUCTS 2

BARGAINING POWER OF SUPPLIERS 3

MACRO - ENVIRONMENT 3

POLITICAL 3

ECONOMIC 3

SOCIAL-DEMOGRAPHIC/CULTURAL 3

TECHNOLOGICAL 3

ENVIRONMENTAL 3

LEGAL 3

SWOT 4

STRENGTHS 4

WEAKNESSES 4

OPPORTUNITIES 4

THREATS 4

MARKET STRATEGY 4

PRODUCT 4

PRICE 5

PLACE 5

PROMOTION 5

MARKET IMPLEMENTATION 6

BUDGET 7

REFERENCES 7

EXECUTIVE SUMMARY

Car pollution is one of the biggest contributors to climate change. This is caused by the burning of fossil fuels that are released into the atmosphere which in turn accelerate the rate of climate change.

Hybrid cars are the up and coming cars of the future and have already been around for a few years. These cars combine a petrol and diesel engine with an electric motor. Hybrids consume less fuel as well as reduce the amount of carbon dioxide levels that are emitted into the atmosphere. These kinds of cars are also known to be much quieter than normal cars which in turn will also reduce the amount of noise pollution being emitted.

Hybrid cars also do not need to be charged as they are self-charging. This in turn also reduces the amount of electricity that is used compared to that of a fully electric car.

The goal of the marketing plan is to improve certain aspects of a Toyota's hybrid cars in order to make it even more environmentally friendly as well as make sure that it is easily accessible to all target markets.

The car must be reasonably priced, not totally out of the target markets price range. It must also still be able to fairly compete with competitor's prices for the same product.

It must meet/exceed the needs and expectations of existing and potential customers. This can be achieved by incorporating aspects into the car that competitors do not necessarily have yet or are not yet well developed.

Make use of marketing models and tools to ensure that the anticipated results are achieved as well as gain the maximum amount of market share possible.

BUSINESS MISSION

"Toyota will lead the future mobility society, enriching lives around the world with the safest and most responsible ways of moving people. Through our commitment to quality, ceaseless innovation, and respect for the planet, we strive to exceed expectations and be rewarded with a smile. We will meet challenging goals by engaging the talent and passion of people who believe there is always a better way." Toyota. 2019.

Toyota Global Vision. [ONLINE] Available at: https://global.toyota/en/ company/vision-and-philosophy/global-vision/. [Accessed 8 October 2019].

MARKETING ENVIRONMENT

The target market for hybrid cars tend to drift more towards well educated, higher class consumers. Environmentally friendly consumers show a bigger interest in hybrid cars and buy cars that are more fuel efficient.

MICRO - ENVIRONMENT

The micro-environment can be assessed by making use of Porter's 5 forces model.

RIVALRY AMONG EXISTING COMPETITORS

There are a moderate number of competitors in the market. They each have their own unique aspects. Toyota makes use of unique styles as well as cutting edge technology to make customers feel as safe as possible. Customers know that they will always get value for money when it comes to Toyota. This promotes brand loyalty.

There is room for growth in the hybrid car industry as it is still new to many people. Toyota will continuously come up with new ways to improve their services and gain competitive edge over the other well-known car brands.

If Toyota were to leave the market they would incur huge losses. It would be in their best interest to stay in the market.

THREAT OF NEW ENTRANTS

It is highly unlikely that any new company that enters the market will become a threat to any of the existing companies. This is because a large amount of capital will be required. Existing car companies have already established their brand image and reputation. A new company won't find it difficult to find suppliers and distributors.

Governments protect local companies by introducing high import taxes. Any new company will have a hard time making any profits.

Consumers mainly differentiate products according to the cars design and engineering quality.

BARGAINING POWER OF BUYERS

There are many buyers in the industry. Most consumers will only buy one car but companies buy fleets of cars and will therefore bargain for a lower price.

Customers can easily start using other methods of transportation or switch to a different car brand. Most customers base their final decision on how much the car costs, so it is important to price the car correctly.

THREAT OF SUBSTITIUTE PRODCUTS

There are other methods of transportation such as using a bicycle or public transport. These may cost less in the long run and are more environmentally friendly but are less convenient.

BARGAINING POWER OF SUPPLIERS

There are a large number of suppliers available in the industry. Some of these suppliers are large companies but most of them are small. Different companies use different types of material. These materials are easily accessible.

Macro – EnvironMEnt

The PESTEL model can be used to assess the macro-environment.

POLITICAL

Political stability of major markets provides opportunities for Toyota to grow. Free trade agreements between Japan and other countries where Toyota operates, provide opportunities to improve their market penetration. Governments supporting eco-friendly products provide Toyota with opportunities to improve their products in order to help the environment. Panmore Institute. 2017. Toyota PESTEL analysis. [ONLINE] Available at: http://panmore.com/toyota-pestel-pestle-analysis-recommendations. [Accessed 8 October 2019].

ECONOMIC

Examples affecting economic factors are the rate of inflation, currency exchange rate (yen), cost of labour and tax rates. These factors directly or indirectly affect Toyota's revenues. The fluctuations of currency exchange rates are a major factor that directly affect Toyota's revenue.

SOCIAL – DEMOGRAPHIC/CULTURAL

There is an increasing interest in hybrid cars that Toyota can use to provide more products to satisfy customer's needs. Toyota have to take into consideration the wealth gap that is growing between consumers. This is a threat as the middle class, who are a main source of revenue, are declining.

TECHNOLOGICAL

Toyota can make use of electronic transactions via the internet to improve its sales of some of its products, such as spare parts. The mobile technology trend gives Toyota the opportunity to enhance the mobile app that they provide in order to increase customer engagement and loyalty. This does, however, also come with the threat of cybercrime.

ENVIRONMENTAL

Climate change provides Toyota with the opportunity to provide an eco-friendly product such as hybrid cars. Declining global oil reserves also present a gap in the market for consumers to start looking towards hybrid/ electric cars.

LEGAL

Governments are working towards improving intellectual property protection. This gives Toyota the opportunity to grow without having to worry about breaking the law with regards to its intellectual property rights.

Increasingly complex consumer laws provide Toyota with the opportunity to offer consumers much safer and more satisfactory products.

SWOT

STRENGTHS

  • Strong market position and brand recognition.
  • Strong focus on research and development leading to some of the most innovative cars in the world.
  • Global supply chain.
  • Offers a wide range of cars which satisfies all consumer markets.

WEAKNESSES

  • Have had to recall many vehicles in the past causing financial and brand damage.
  • Toyota doesn't have a strong presence in emerging markets such as China and India.
  • Dependence on suppliers.

OPPORTUNITIES

  • Toyota can grow the market for hybrid cars as consumers around the world are taking more of an interest.
  • Staying in tune with customer needs and tastes will help them to produce models that satisfy their needs.
  • Toyota can acquire other car companies and expand into emerging markets. This adds market share.

THREATS

  • Rise in the cost of raw materials.
  • Increased competition as other companies are making hybrid cars.
  • Constant threat of exchange rates (yen).
  • Natural disasters. Many manufacturing plants are located in countries that are subjected to many natural disasters.

MARKET STRATEGY

Toyota is the biggest car manufacturer in the world, having factories in various countries. They have their headquarters in Japan and are one of the world's most profitable and successful car companies.

Toyota's marketing strategy can be analysed by using the 4 P's of marketing.

PRODUCT

Toyota have an array of car models to offer that suit the needs of everyone. They offer tangible and intangible products to their customers which can range between cars, car parts and warranties.

Their intangible parts consist of warrantees, financial services, road assistance and car services. They also offer extended warrantees which are based on a certain amount of mileage cover. Customers are a priority for Toyota, so they have developed a research centre that is solely dedicated to gathering data about consumer expectations of Toyota.

They have released their hybrid car line to offer an environmentally friendly way to deal with the rising prices of petrol. It kills two birds with one stone. Reduces the issue of the rising price of petrol for consumers and helps the environment.

PRICE

Toyota creates high quality cars with innovative designs which are moderately priced. Their prices are flexible to changing marketing conditions and to those of competitors. The price range also changes according to the model and make of each car – you pay for what you get. In this way, they cater for every customer niche in the market.

Their innovative designs and huge investment in promoting their products have led to customers all over the world feeling as if they need the products that Toyota offer.

Most companies normally calculate their selling price by taking the cost price and profit of the product and putting it together. Toyota, however, uses that formula slightly differently in order to provide customers with the best possible price. Instead of calculating a selling price, they calculate the profit. The formula will then look like this: selling price – cost price = profit.

PLACE

Toyota has ensured that their products are readily available to their target audience. They are based in Japan and are a global brand. They have 172 distributors globally who are the main sales channels for Toyota.

They make use of dealerships and sales staff to sell their cars. The sales staff work in teams of around 8 and sell the cars on a one to one basis. The dealerships help them to reach a maximum amount of customers as possible. This gives them an increased amount of market share. The sales staff in each dealership are highly skilled in sales, product information, data collection and finance.

Toyota make use of the "pull" strategy. They do this by making cars that the customer demands. They also create a want for their products between consumers within the market.

They aim to minimise supply chain costs within their dealerships while also maintaining a reasonable service and providing high quality products.

PROMOTION

Toyota use an array of promotional strategies in order to increase their sales volumes. They spend billions on both traditional and digital promotion each year.

They make use of social media and other advertising techniques to promote their products. These advertising techniques range between radio, television, billboards, word of mouth, etc. They also make use of catchy slogans and celebrities who act as brand ambassadors.

Their main promotional strategy is to be aggressive and have as much brand reach as they can possibly gain. Because Toyota is already so well established in the market and because of their brand image and size of the company, they already gain a lot of exposure in the media.

Toyota has an image of being responsible and technologically innovative which has also helped with the marketing and promotion of the brand. It has also invested in multiple environmental campaigns which also boosts its brand image.

MARKET IMPLEMENTATION

Toyota will make use of Porters 5 forces model in order to implement the market plan as efficiently as possible.

The cost leadership strategy refers to minimizing the cost of building the cars as well as the costs of their selling prices. Toyota also need to ensure that they maintain competitive advantage over other car companies by remaining innovative and making sure their products are unique. This also assists in customers being brand loyal as Toyota are continuously coming up with new ideas to cater to their needs and desires. All of these aspects support Toyotas global reach in all market segments.

Toyota will make use of the just-in-time manufacturing method in order to minimize the cost of production. This minimizes waste, inventory costs and response time. This aids the company in achieving maximum business efficiency.

MARKETING MIX

START DATE

END DATE

Social media (Instagram, Facebook, Youtube, etc.)

1st March 2020/ 31st August 2020

31st June 2020/

31st February 2021

Newspaper advertisements

1st May 2020

31st August 2020

Adverts on TV

5 April 2020

31st June 2020

Billboards

1st June 2020

31st September

BUDGET

 

2020

2021

2022

2023

2024

Estimated Sales

(thousands of units)

9,000

9,900

10,890

11,979

13,176

Price per unit

£24,245.00

£26,669.50

£29,336.45

£32,270.00

£35,497.00

Cost of production

£17,698.85

£19,468.73

£21,415.60

£23,557.17

£25,912.88

Profits per unit

£6,546.15

£7,200.77

£7,920.85

£8,712.83

£9,584.12

Overall profits

£58,915,350.00

£71,287,623.00

£86,258,056.50

£104,370,990.57

£126,280,365.12

REFERENCES

Bhasin, H. (2019). Marketing mix of Toyota. [online] Marketing 91. Available at: https://www.marketing91. com/marketing-mix-toyota/ [Accessed 16 Oct. 2019].

Ferguson, E. (2017). Toyota PESTEL. [online] Panmore Institute. Available at: http://panmore.com/toyotapestel-pestle-analysis-recommendations [Accessed 8 Oct. 2019].

Kotler, P., Armstrong, G., Harris, L. and Piercy, N. (2017). Principles of Marketing. 7th ed. Great Britain: Pearson.

mba skool. (n.d.). Toyota marketing mix. [online] Available at: https://www.mbaskool.com/marketing-mix/ products/16884-toyota.html [Accessed 16 Oct. 2019].

Meister, P. (2018). A breakdown of how much it costs to make a car. [online] Car from japan. Available at: https://carfromjapan.com/article/industry-knowledge/how-much-does-it-cost-to-make-a-car/ [Accessed 18 Oct. 2019].

Nkomo, T. (n.d.). Analysis of Toyota Motor Corporation. [online] Harvard Scholar. Available at: https:// scholar.harvard.edu/files/tnkomo/files/analysis_of_toyota.pdf [Accessed 16 Oct. 2019].

Toyota. (n.d.). Hybris FAQ's. [online] Available at: https://www.toyota.co.uk/hybrid/hybrid-faq/ [Accessed 16 Oct. 2019].

Toyota global. (2017). Annual report. [online] Available at: https://www.toyota-global.com/pages/contents/ investors/ir_library/annual/pdf/2017/annual_report_2017_fie.pdf [Accessed 18 Oct. 2019].

 

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