Over a period of more than two decades the Indian Automobile industry has been driving its own growth through phases. The entry of Suzuki Corporation in Indian passenger car manufacturing is often pointed as the first sign of India turning to a market economy. Since then the automobile sector witnessed rapid growth year after year. By late-90's the industry reached self reliance in engine and component manufacturing from the status of large scale importer. With comparatively higher rate of economic growth rate index against that of great global powers, India has become a hub of domestic and exports business. The automobile sector has been contributing its share to the shining economic performance of India in the recent years. With the Indian middle class earning higher per capita income, more people are ready to own private vehicles including cars and two-wheelers. Product movements and manned services have boosted in the sales of medium and sized commercial vehicles for passenger and goods transport. Side by side with fresh vehicle sales growth, the automotive components sector has witnessed big growth. The domestic auto components consumption has crossed rupees 9000 crores and an export of one half size of this figure. Overview Of Automobile Industry The Indian automobile industry is going through a technological change where each firm is engaged in changing its processes and technologies to sustain the competitive advantage and provide customers with the optimized products and services. Starting from the two wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the luxury vehicles, the Indian automobile industry has achieved tremendous amount of success in the recent years.


As per Society of Indian Automobile Manufacturers (SIAM) the market share of each segment of the industry is as follows:. The market shares of the segments of the automobile industry

The automobile industry had a growth of 15.4 % during April-January 2007, with the average annual growth of 10-15% over the last decade or so. With the incremental investment of $35-40 billion, the growth is expected to double in the next 10 years. Consistent growth and dedication have made the Indian automobile industry the secondlargest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest commercial vehicle manufacturer in the world. The Indian automobile market is among the largest in Asia. The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors, Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been 2

dominating the vehicle industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., Skoda India Private Ltd., Honda Siel Cars India Ltd. have also entered the market and have catered to the customers’ needs to a large extent.

Not only the Indian companies but also the international car manufacturing companies are focusing on compact cars to be delivered in the Indian market at a much smaller price. Moreover, the automobile companies are coming up with financial schemes such as easy EMI repayment systems to boost sales. There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the technological advancements. Besides, there are many new projects coming up in the automobile industry leading to the growth of the sector. The Government of India has liberalized the foreign exchange and equity regulations and has also reduced the tariff on imports, contributing significantly to the growth of the sector. Having firmly established its presence in the domestic markets, the Indian automobile sector is now penetrating the international arena. Vehicle exports from India are at their highest levels. The leaders of the Indian automobile sector, such as Tata Motors, Maruti and Mahindra and Mahindra are leading the exports to Europe, Middle East and African and Asian markets. The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the motive of making India the most popular manufacturing hub for automobiles and its components in Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting its growth in the domestic as well as international arena.


Top Ten Players in Indian Automobile Sector • • • • • • • • • • Maruti Suzuki India Hero Motors Limited Hero Motors Limited Tata Group Bajaj Auto Limited Mahindra Group Ashok Leyland Yamaha Motor India Hyundai Motors India Limited Toyota Kirloskar Motor Private Limited Honda Siel Cars India Limited 4 . The key players contributing to the growth of the sector are discussed below.Top Ten Players in Indian Automobile Sector The domestic players as well as the foreign players dominate the Indian automobile sector.

1. where eight is regarded as a lucky number. it is still in the textile business and still makes automatic looms (fully computerized. the company name was changed to:    Signify the separation of the founders' work life from home life. Production of the Model AA passenger car started in 1936. which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. COMPANY PROFILE The story of Toyota Motor Corporation began in September 1933 when Toyota Automatic Loom created a new division devoted to the production of automobiles under the direction of the founder's son. Although the founding family name is Toyoda. and electric sewing machines which are available worldwide. Although the Toyota Group is most well known today for its cars. the division produced its first Type A Engine in 1934.2. 5 . of course). was established as an independent company in 1937. Toyota Motor Co. Toyota is considered luckier than Toyoda in Japan. Soon thereafter. and Give the company an auspicious beginning. Kiichiro Toyota. Simplify the pronunciation. and eight is the number of strokes it takes to write Toyota in Katakana.

military trucks were kept as simple as possible. was established (which lasted until July 1982). In 1950 a separate sales company Toyota Motor Sales Co. Replica of the Toyota Model AA. the trucks had only one headlight on the center of the hood. For example. In April 1956 the Toyota dealer chain was established.During the Pacific War the company was dedicated to truck production for the Imperial Army. Because of severe shortages in Japan. the first production model of Toyota in 1936 6 . Commercial passenger car production started in 1947 with the model SA.

Argentina and Czech Republic. Cars from these plants are often exported to other countries. the Corolla. Australia. Poland. Brazil. including its most popular model. France. Toyota has manufacturing or assembly plants in the United States.ORGANISTION STUCTURE OF THE COMPANY HEADQUARTERS: TOYOTA CITY. and more recently India. Canada. manufacturing or assembling vehicles for local markets. Toyota New Zealand assembled vehicles until 1998. JAPAN ASSEMBLY PLANTS OVER THE WORLD Toyota has factories all over the world. 7 . when it switched to importing cars from Japan and Australia. the United Kingdom. Turkey. Indonesia. Toyota also builds and sells cars in China in a joint venture with Tianjin Xiali. South Africa.

Toyota Car Model: Innova Camry Avalon Matrix Corolla 8 .

Prius TRUCKS: Tacoma Tundra SPORTS UTILITY VEHICLES( SUVs): 4runner 9 .

The centers educate trainers for local manufacturing plants in all regions. In Japan. a key vehicle in Toyota’s North American lineup. In human resources development. and the European Global Production Center in the United Kingdom in March. In manufacturing. In November. In Japan.. the Camry Hybrid. following the establishment of the Asia Pacific Global Production Center in Thailand in August 2005. China. several new projects were started around the world. with trainees passing on what they learn to team members on their return to their plants. which in October celebrated 20 years of production. Toyota established the North American Production Center in the U. these were created to spread Toyota’s manufacturing knowledge and skills throughout the world in pace with the rapid growth of Toyota’s overseas manufacturing. and the new global Camry went on sale. manufacture of the Camry began in Guangzhou. a new Corolla range was introduced. while Toyota Motor Tohoku Co. in February. started manufacturing the first Toyota hybrid vehicle to be made in North America. the Texas plant began producing the new Tundra truck. Toyota was engaged in a variety of projects designed to solidify its foundations while continuing to grow.S.Land cruiser OVERVIEW In 2006. began full-scale operations at its engine factory. while in the United States. In May. Established as branches of the Global Production Center in Japan. 10 . On the product front. the Kentucky plant. Inc. the LS. Lexus launched its new flagship model. emphasizing the importance of this best-selling car. increased its manufacturing capacity. Toyota Motor Kyushu. Ltd.

as part of Toyota’s efforts to respond to the diversification of energy.  Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities.In R&D. at the right time. while keeping ourselves open to new partnerships. From this point on. in the right place. in 2007 Toyota introduced a flex fuel vehicle* in the Brazilian market that will run on 100% bio-ethanol fuel. while honoring mutual trust and respect between labor and management.  Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. in faithfully fulfilling your duties. safety and energy. based on the philosophy of providing “the right car. GUIDING PRINCIPLES  Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be a good corporate citizen of the world. In addition.  Pursue growth in harmony with the global community through innovative management. Toyota focused its efforts on three key areas: environment.  Foster a corporate culture that enhances individual creativity and teamwork value. and has worked on R&D relating to plug-in hybrid. PERCEPTS  Be contributive to the development and welfare of the country by working together. long-term growth and mutual benefits. 11 . regardless of position. Toyota will continue to promote efforts to develop environmentally friendly technology and vehicles.  Work with business partners in research and creation to achieve stable.  Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities. It made a special effort in the area of the environment by expanding its lineup of hybrid vehicles.” and in accordance with the infrastructure and customer needs of each region.

Member of the Board 1) Domestic Sales Operations Group and Overseas Planning Operations Group 12 . and show gratitude for things great and small in thought and deed MANAGERIAL INFORMATION Executives Board of Directors NAME Fujio Cho* Katsuhiro Nakagawa Katsuaki Watanabe Tokuichi Uranishi Kazuo Okamoto Takeshi Uchiyamada Akio Toyoda Takeshi Suzuki Hiroshi Takada Shinichi Sasaki Shin Kanada Shoichiro Toyoda Hiroshi Okuda** *Promoted.  Be kind and generous. **Changed Organizational Changes Chairman Vice Chairman President TITLE Executive Vice President Executive Vice President Executive Vice President Executive Vice President Senior Managing Director Senior Managing Director Senior Managing Director Senior Managing Director Honorary Chairman Senior Advisor. inquisitiveness and pursuit of improvement. Be at the vanguard of the times through endless creativity.  Be practical and avoid frivolity. strive to create a warm. Be reverent. homelike atmosphere.

The Domestic Sales Operations Group and the Overseas Planning Operations Group have been reorganized. i. (transfer) 13 . have been integrated. Purpose As a global business management function of Toyota's global headquarters. including Japan. and to implement the "most-suitable growth strategy from a global perspective" though product. have taken place as follows: Before Changes • General Administration & Human Resources Group • Public Affairs Administration Dept. • Tokyo General Administration Div. price and supply-and-demand strategies 2) Government & Public Affairs Group / General Administration & Human Resources Group The transfer of some divisions/departments of the General Administration & Human Resources Group to the Government & Public Affairs Group. After Changes • Government & Public Affairs Group • Public Affairs Administration Dept. (transfer) • Tokyo Secretarial Div. domestic and overseas. Sales and planning functions. (transfer) • Tokyo General Administration Div. which were divided by region. • Tokyo Secretarial Div.e. to allow close coordination between TMC and various regions.

Oceania & Middle East Operations Group. Asia.Purpose To optimize the structural organization and distribution of human resources by consolidating the divisions and departments relevant to government & public affairs 3) Production Control & Logistics Group Before Change • Production Control & Logistics Group After Change • Strategic Production Planning Group (name changed) Purpose To create a name that reflects a strengthened stance toward planning that considers the actual situation of global production activities 4) Housing Group (Housing Company) The name of the Housing Group (Housing Company) has changed. Oceania & Middle East Operations Group • Taiwan Office (transfer) • China Office (transfer) 14 . Before Changes • Divisions/departments not belonging to a Group • Taiwan Office • China Office After Changes • Asia. China Operations Group The transfer of some divisions/departments to relevant groups. Before Change • Housing Group (Housing Company) After Change • Housing Group (name changed) Purpose To reflect the achievement of the original objective to reinforce operational structures through the introduction of the "company" system 5) Divisions/departments not belonging to a group.

for example. the value of its potential fuel savings could prove greater than its cost premium over conventional vehicles. So. the number of divisions has increased from 228 to 229. Another way to align our interests with the larger interests of the community is through technology. By the end of 1997. GROWTH Lasting growth for Toyota will depend on aligning our interests with the larger interests of customers and the community. it actually could save money for car owners. as well as improving vehicular safety. Our economic and industrial contribution in each region grows. Photos and text on the following pages introduce some of the technologies we are developing to position Toyota as an environmental leader. Survival and growth in our industry will hinge on developing technologies for reducing environmental impact of our products and operations.Purpose To clarify the chain of command and to optimize the structural organization and distribution of human resources As a result of the above changes. 15 . Equally important. That is when we will put a hybrid-electric passenger car onto the market in Japan. We must be a company where people think seriously about the role and responsibility of their company in the world. It is twice as fuel-efficient as conventionally powered vehicles of comparable size and performance. we will introduce the world's first new-energy transport that is commercially competitive with conventional automobiles. as we globalize our operations. Our hybrid-electric car will have a gasoline engine to generate electricity or provide supplementary power to the wheels.

.PRIORITIES OF TOYOTA IN GROWTH STRATEGY      Fortifying our product line Asserting a competitive edge in technology Accelerating globalization Reclaiming market share in Japan Cultivating demand in new business sectors Measures for asserting a competitive edge in technology have centered on environmental themes. Toyota plans to enter small car segment in India 16 . Toyota.   MARKET SHARE OF TOYOTA Toyota Motor Corp.. had a 15.4 percent U. "zero emission" vehicles that alleviate urban pollution Fuel-cell systems that could transform the automobile in the 21st century. retail market share than Ford Motor Co. retail market share a year earlier. grabbed more U. Japan's largest automaker..S.   A direct-injection system that makes gasoline engines more efficient Hybrid-electric systems that double fuel efficiency and reduce noxious emissions Pure electric.S. Those technologies include. in early November and it was less than one share point behind General Motors Corp. We have introduced or demonstrated new power train technologies in the past year that will make Toyotas run cleaner and greener than ever.

World’s second largest automaker wants to get offensive in the Indian domestic auto market. Toyota is very much interested in launching a small car here in the segment currently dominated by Maruti Suzuki and Hyundai. Tata also has a decent presence in the market with their Indica range of diesel vehicles. Toyota is at the moment carrying out a feasibility study for launching such a vehicle in the domestic market where it has models like the Innova and Camry amongst others. They have had an incredible success with their stopped Qualis model and are selling Toyota Innova in large numbers. T Ino, director (marketing), Toyota Kirloskar Motor Pvt Limited has expressed that the Indian auto market is a huge one and has the capacity to involve more players in the small car segment. Toyota has a variety of interesting models in its global lineup, which it can consider to launch in the Indian market. Some of these are Vios, Platz, and Passo. The company also expects to break even here in India this year with all the accumulated losses were expected to be wiped out during 2005. They also plan to invest around Rs 130 crores during the current year to enhance efficiency.



PRICE:As far as pricing strategy of Toyota is concerned. They are focusing on the very segment of the market not only particular segment. Basically they are focusing on official and business class people









Table 1.1


India's car population may be growing but the growth is mainly concentrated in the small car sector, and not without reason. With increasing interest rates making buying cars costlier and the government slapping new duties on larger vehicles in addition to the existing favorable tax regime for smaller cars, even premium players are wading into the small-car scene. Indian passenger car sales rose by 11.79 per cent between April 2007 and March 2008 to 1.2 million units. Competition in the small car segment is set to increase in 2009, with planned launches by Maruti Suzuki (A-Star and Splash), Honda (Jazz) and as yet unnamed models from Ford, GM and Volkswagen. Japanese carmaker Toyota, all set to surpass General Motors as the world's largest, is the latest entrant when it made its intentions clear on the occasion of the laying of the foundation stone for its second factory in India. The decade-old Indian joint venture of the Japanese automaker, Toyota Kirloskar, is building its second plant at Bidadi, about 40 kilometers from India's IT hub of Bangalore, with an upfront investment of Rs14,000 crore ($329 million) to manufacture a range of passenger cars and multi-utility vehicles. Toyota is the majority partner with an 89-per cent stake with Kirloskar owning the rest. Karnataka chief minister B S Yeddyurappa unveiled the foundation stone for the new plant that will have a test track and additional space for suppliers and other vendors. The ceremony was attended by Toyota senior managing director Akira Okabe, chairman Ryoichi Sasaki, vice-chairman Vikram Kirloskar and managing director Hiroshi Nakagawa.


The model is yet to be finalized. Tata Motors and Bajaj Auto can rest easy for the time being. will have an installed capacity of 100. ''We are working on the new design. Toyota's group company. the initial design features indicate that it can be exported to other markets in Asia. will not be involved in designing the compact new car. The factory will be ready by mid-2010 and we are yet to finalize the launch date of the new car. Daihatsu. Though the new compact car has been designed for the Indian market.'' The plant which is being set up will see an initial investment of Rs1400 crore. Vikram Kirloskar said as much when he commented. We have basic concept of the new car ready and very shortly we will finalize the design of the car. touted to be the world's cheapest car.400 people. The arrangement of this additional amount required for the plant would be worked out later. We plan to have petrol as well as diesel versions. though it may be included in future plans.'' 20 . But this initial investment won't include certain other costs like installing robots and other automation equipment. Although Okabe confirmed that the new product will be the cheapest in the Toyota stable. indications are that it maybe priced higher than its Indian competitors. which is expected to be spread over 130 acres of land. A new test track will be included in the second plant. to be commissioned by 2010. The small car will not compete with the upcoming Nano of Tata Motors. However. Top officials confirmed that the company will soon be introducing its newly designed compact car in the Indian market.000 units annually and will employ about 2.The modular plant.

niche market? Figure 1. or does it focus on a very narrow. They outline the three main strategic options open to organization that wish to achieve a sustainable competitive advantage.are the products differentiated in any way.GENERIC STRATEGIES Generic strategies were used initially in the early 1980s. and seem to be even more popular today.does the company target a wide market. or are they the lowest cost producer in an industry? Competitive scope of the market . Each of the three options are considered within the context of two aspects of the competitive environment: Sources of competitive advantage .1 The generic strategies are: 21 .

There is also the chance that any differentiation could be copied by competitors. Products tend to be 'no frills. generating a higher than average price. low cost does not always lead to low price. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin. For example. Differentiation Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. 2. The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments. labor is recruited and trained to deliver the lowest possible costs of production. exploiting the benefits of a bigger margin than competitors. Producers could price at competitive parity. 'cost advantage' is the focus. 3. Toyota differentiates its product and service.1. Some organization. Factories are built and maintained. Cost Leadership The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. Costs must be recovered. These costs must be offset by the increase in revenue generated by sales. Cost leadership 2.' However. Therefore there is always an incentive to innovated and continuously improve. but have the brand and marketing skills to use a premium pricing policy. 1. Costs are shaved off every element of the value chain. Differentiation 3. Focus. are very good not only at producing high quality autos at a low price. The differentiating organization will incur additional costs in creating their competitive advantage. such as Toyota. Focus or Niche Strategy 22 .

Cost focus is unachievable with an industry depending upon economies of scale e. The company uses marketing techniques to identify and satisfy 23 . from the small Yaris to large trucks.78 million units. In 2003 Toyota knocked its rivals Ford into third spot. £5. With a differentiation focus a firm creates competitive advantage through differentiation within the niche or segment.The focus strategy is also known as a 'niche' strategy.59 million units in the same period. Small.8% to 1. 1. a niche strategy could be more suitable. highly targeted marketing and a commitment to lean manufacturing and quality. Where an organization can afford neither a wide scope cost leadership nor a wide scope differentiation strategy.55 trillion yen. The company makes a large range of vehicles for both private customers and commercial organisations. targeting and positioning in a number of countries. There are potentially problems with the niche approach. This is an example of very focused segmentation.3% higher at 18. defined segment of a market. specialist niches could disappear in the long term.g. Here an organization focuses effort and resources on a narrow. A niche strategy is often used by smaller firms. Competitive advantage is generated specifically for the niche. while sales were 7. to become the World's second largest carmaker with 6. Its strong industry position is based upon a number of factors including a diversified product range. With a cost focus a firm aims at being the lowest cost producer in that niche or segment. Net profits rose 0. Commentators argue that this is because the company has the right mix of products for the markets that it serves. The company is still behind rivals General Motors with 8.85bn). A company could use either a cost focus or a differentiation focus.T ANALYSIS Strengths New investment by Toyota in factories in the US and China saw 2005 profits rise.4 S.W.O. against the worldwide motor industry trend.17 trillion yen ($11bn. telecommunications.

the company could see over capapacity. So if the car market experiences a down turn. The World market for cars is in a condition of over supply and so car manufacturers need to make sure that it is their models that consumers want. Toyota markets most of its products in the US and in Japan. it takes time to accommodate. Car plants represent a huge investment in expensive fixed costs.g. Both are based upon advance technologies developed by the organization. as well as the high costs of training and retaining labour. OPPURTUNITIES Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. If on the other hand the car market experiences an upturn. Its brand is a household name. Total Quality Management). The company also maximizes profit through efficient manufacturing approaches (e.e. then the company may miss out on potential sales due to under capacity i. and Toyota has it Prius.customer needs. WEAKNESS Being big has its own problems. Lexus has RX 400h hybrid. for example Ford has bought into the technology for its new Explorer 24 . This is a typical problem with high volume car manufacturing. Rocketing oil prices have seen sales of the new hybrid vehicles increase. The company needs to keep producing cars in order to retain its operational efficiency. Movements in exchange rates could see the already narrow margins in the car market being reduced. Perhaps that is why the company is beginning to shift its attentions to the emerging Chinese market. Toyota has also sold on its technology to other motor manufacturers. Therefore it is exposed to fluctuating economic and political conditions those markets.

The vehicle itself is a unique convertible. In 2005 the company had to recall 880. 1. Toyota faces tremendous competitive rivalry in the car market.000. The first vehicle was released for sale in December 1983.O. Europe and Australia. Toyota did not give details of how much the recall would cost. Better 25 . but it proved to be spacious enough to carry four adults.5 COMPETITVE S. 65. Toyota is to target the 'urban youth' market. Initially. with a 796cc 3cylinder engine that delivered 39.SUV Hybrid. the car was criticized for its diminutive size. steel and fuel. As with any car manufacturer. Such moves can only firm up Toyota's interest and investment in hybrid R&D. Competition is increasing almost daily. The company has launched its new Aygo. which is targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ culture in a very competitive segment. South Korea and new plants in Eastern Europe. MUL rolled out its first car. with new entrants coming into the market from China. the M800.5bhp at an affordable price of Rs.W. The majority of affected vehicles were sold in the US. THREATS Product recalls are always a problem for vehicle manufacturers. The company is also exposed to any movement in the price of raw materials such as rubber.T ANALYSIS STRENGTH In an era when owning a car was a distant dream for a vast majority of Indians.00 sports utility vehicles and pick up trucks due to faulty front suspension systems. The company labeled it a people's car. with models extending at their rear! The narrow segment is notorious for it narrow margins and difficulties for branding. while the rest were sold in Japan.

M800 performed well. began eating into M800's share. Also the Research and developments headquarters for engine development of Maruti Suzuki are in Japan which is a major weak point.011 units in January.373 units.016 units. Alto For the first few months of 2004. 8.000 followed by the launch of the non-AC Alto for Rs.324 and 9. 23. Alto reported sales of 8. February and March respectively. But gradually Alto. slightly over M800's sales of 10.301 units in January. 0. they should focus on acquiring product design and lean production knowhow (as the Korean firms did in the eighties and early nineties. 26 .23 mn in the first week of April 2004. Alto took over M800's position as the largest selling car with sale of 10. its sales increased to 9.540 in March. In April.350 units and in May 2004. THREAT M800 had ruled the passenger car market as the only car in the entry-level segment in the Indian automobile industry and was now facing the danger of cannibalization from one of its own family and an affordable price due to a higher level of indigenization helped MUL achieve a dominant position in the Indian passenger car market WEAKNESS MARUTI SUZUKI’s biggest weakness. Analysts felt that Alto had taken the top spot because of its price reduction in September 2003 by Rs. is the lack of product design capability.399 units.518 units in February and 15. Maruti Suzuki also needs to invest in capacity and research and development in India to stay abreast of competition. In the coming years. another MUL product. 13. selling 15.

1 SIGNIFICANCE Toyota's believes in putting the customer first and aims to provide the best levels of customer satisfaction as its main marketing strategy. According to analysts. the Toyota Quails notched sales of 25.OBJECTIVE AND METHODOLOGY 2. manufacturing six million vehicles at 56 plants in 25 countries. Their dealers have also worked hard to provide their high levels of customer support. Toyota's strategy to corner a significant chunk of the Indian market involves "superior product offering and dedicated technology". the company has evolved a new strategy to capture 15 per cent market share in the Indian automotive segment. Toyota sold 3. Toyota Motor Corporation. the Indian market would touch annual sales of 1." "In the last one year. Toyota has taken many initiatives. "Competition is intense in the Indian market for domestic and foreign companies. We will continue to meet the ever-challenging customer expectations and will come out with innovative marketing strategies.8 million units overseas. which has made Innova the most successful product. Atsushi Toyoshima has been appointed Managing Director of the company.000 units since its launch last year." Yoshio Ishizaka.. Executive Vice-President. he said. The Indian market is important for Toyota with potential to aid its growth strategy. In this 27 . In India. said. Innova has successfully become a category creator.2 million units by 2005. Effective from January 1. With a change of guard at Toyota Kirloskar Motor Ltd. replacing Sachio Yamazaki. Last year.

The multi utility vehicle segment has also grown at doubledigit levels. there is a latent desire of customers. every market research provides useful suggestions to the 28 . the decision to introduce Innova here (India) was based on three factors. skills and resources and its changing market opportunities. the Indian consumer wants to take his vehicle for long drives with friends and family.context. with an improving lifestyle and better roads. to seek attributes like greater interior space and overloading ability. Third. also give a proper shape to company's target profit and growth. "Bangalore is an ideal location to meet all of Toyota's needs. agility and power of a sedan. while passenger car buyers look for better styling and improved riding comfort. Toyota Kirloskar Motor has described it as the first three-row seating passenger car in the Indian market 2. Innova brings together the space and fuel economy of an MPV with the style. including auto components. it provides feedback to the organization about their sales. sales schemes and what impact does it has on the dealers and consumers. Atsushi Toyoshima. including those owning MPVs. the change of leadership in Toyota's Indian division is important. the C.2 MANAGERIAL USEFULLNESS The marketing department can use this study to enhance their marketing strategies for better sales. indicating a more important role for the company's manufacturing base in Bangalore. Toyoshima said According to the managing director of Toyota Kirloskar Motor. The very essence of every project related to marketing is providing a view to management for chalk out the organization.segment (between Rs 5 lakh to Rs 10 lakh) of the car market has grown by 20 per cent every year. over the last five years. Second." Mr. This report helps the marketing department in taking decisions to what change in distribution channels and what should be done so that marketing problem could be sorted out and how to sell their range of product in the competitive market. so that they can maintain a viable fit between the organizational objectives. First.

marketing research helps the firm in every component of the total marketing task. the competition and the marketing environment.  To find out the market share of Toyota.organization. the study reveals the fact that may have come up during the project and these facts can either be used a opportunities in exploring and expanding the business as well as can be used as safeguard against threats by competitors to prepare an effective marketing strategy. Marketing research helps the firm in every component of total marketing task.3 OBJECTIVES OF STUDY The object of report is not only to focus on competitors but also to get the competitive position in the national as well as international market through customer satisfaction. it also aids the formulation of the marketing mix.  To know about the marketing strategies used by Toyota. Every market research proves useful to the organization. product.  To serve the customer through channel of distribution.  To know about the marketing strategies of the competitors of Toyota. These are as follows. it also helps in taking the information of competitor's strategies and their impact on the buyer.  To know where Toyota stands as far as the BCG –matrix models concerned.  To discover and translate the needs and desire of customer into products and services so as to create the demand of the product (through planning and producing planned product). 2. 29 . it helps the firm acquire a better understanding of the buyer.  To face the keen competition. distribution and pricing needs.

2. 5. 2. 30 . 4. 2. The present study can be extended to access the present marketing condition of Indian automobile sector.5 RESEARCH METHODOLOGY This project depends upon the primary as well as secondary sources which are as follows. From the present study we can know the market share of different products and accordingly formulated strategy to enhance it.retailers and distributors. 3. place and promotional strategy for the market.4 SCOPE OF THE STUDY These are some of the scope of the study : 1. The study can be used to design a proper product. The result of marketing success can be interpreted to assess the rate of employee satisfaction in various departments. This study can be applied to find out an effective distribution channel to enhance the sale of various products of Toyota motors. Primary Source:  Observation  Experiment  Talking with consumers. price.

e. 31 .e. STATISTICAL AND PRESENTATION TOOLS PRIMARY DATA is represented:  First classified i. grouped qualitatively and quantitatively according to the situation or the type of the data which was collected.  By the way of BAR GRAPHS and SUBDIVIDED BAR GRAPHS (Graphical presentation).  Some of the data is also graphically represented in the form of PIE DIAGRAM. Because it was not possible to consider each and every person of those cities or of villages so. SECONDARY DATA is represented:  In the form of tables. PROBABILITY SAMPLE or RANDOM SAMPLE was taken.Secondary Source:  Balance sheet of the company  Company website SAMPLE SIZE AND AREAS COVERED A customer-based survey was conducted in which 100 people were asked to fill the questionnaire in which 50 people belong to cities of Delhi and GURGAON. systematically arranged in columns and rows.  After classifying is represented in the form of tables i.

It is possible that the information supplied by the informants may be  incorrect. so this study also suffers from certain limitations. it was a time consuming method in which  continuous guidance was required.2. 32 . Co-  operation on the part of informants. Questionnaire method involves some uncertainty of response. Some of them are as follows: Because of illiteracy. So. in some cases.6 LIMITATIONS OF THE STUDY Since the road to improvement is never ending. was difficult to presume. the study may lack accuracy.

CONCEPTUAL DISCUSSION MARKETING What is marketing? There are many different definitions of marketing. anticipates and supplies customer requirements efficiently and profitably” “Marketing may be defined as a set of human activities directed at facilitating and consummating exchanges” Which definition is right? In short. They all try to embody the essence of marketing: • Marketing is about meeting the needs and wants of customers. they all are. Consider some of the following alternative definitions: “The all-embracing function that links the business with customer needs and wants in order to get the right product to the right place at the right time” “The achievement of corporate goals through meeting and exceeding customer needs better than the competition” “The management process that identifies. • Marketing is a business-wide function – it is not something that operates alone from 33 .

you may find it helpful to often refer to the following diagram which summarises the key elements of marketing and their relationships: 34 .other business activities. • Marketing is about understanding customers and finding ways to provide products or services which customers demand To help put things into context.

shelter. esteem and self-development. 35 . economic.Figure 1. affection. Customer needs are. The marketing concept is about matching a company's capabilities with customer wants. What are customer needs and wants? A need is a basic requirement that an individual wishes to satisfy. very broad. Whilst customer needs are broad. An organisation that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. They face threats from competitors. This important perspective is commonly known as the marketing concept. therefore. and changes in the political. All these factors have to be taken into account as a business tries to match its capabilities with the needs and wants of its target customers. Many of these needs are created from human biology and the nature of social relationships. customer wants are usually quite narrow. Businesses do not undertake marketing activities alone. social and technological environment. People have basic needs for food. This matching process takes place in what is called the marketing environment. Success is dependent on satisfying customer needs.2 MARKETING CONCEPT AND ORIENTATION It is a fundamental idea of marketing that organisations survive and prosper through meeting the needs and wants of customers.

Businesses do not create customer needs or the social status in which customer needs are influenced. Consider this example: Consumers need to eat when they are hungry. However. the media and marketing activities of businesses. businesses do try to influence demand by designing products and services that are • Attractive • Work well • Are affordable • Are available 36 . Businesses therefore have not only to make products that consumers want. eating at McDonalds satisfies the need to meet hunger. But relatively few are able and willing to buy one. For some. It is not McDonalds that makes people hungry. For others a microwaved readymeal meets the need. Consumer wants are shaped by social and cultural forces. many consumers around the globe want a Mercedes. but they also have to make them affordable to a sufficient number to create profitable demand. Some consumers are never satisfied unless their food comes served with a bottle of fine Chardonnay.that of customer demand: Consumer demand is a want for a specific product supported by an ability and willingness to pay for it. What they want to eat and in what kind of environment will vary enormously. This leads onto another important concept .A want is a desire for a specific product or service to satisfy the underlying need. For example.

Typical examples of a mass produced objects are the motor car and the disposable razor. product identity 37 . One version of the origins of the marketing mix starts in 1948 when James Culliton said that a marketing decision should be a result of something similar to a recipe.Businesses also try to communicate the relevant features of their products through advertising and other marketing promotion. Jerome McCarthy. took the recipe idea one step further and coined the term 'Marketing-Mix'. The four Ps concept is explained in most marketing textbooks and classes. in his American Marketing Association presidential address. Price – The price is the amount a customer pays for the product. such as personnel and packaging. competition. A less obvious but ubiquitous mass produced service is a computer operating system. MARKETING MIX The marketing mix is generally accepted as the use and specification of the four Ps describing the strategic position of a product in the marketplace. proposed a 4 P classification in 1960. It is determined by a number of factors including market share. This version continued in 1953 when Neil Borden. A prominent marketer. A typical example of a mass produced service is the hotel industry. E. material costs. DEFINITION Although some marketers[who?] have added other Ps. the fundamentals of marketing typically identifies the four Ps of the marketing mix as referring to: Product -An object or a service that is mass produced or manufactured on a large scale with a specific volume of units. which would see wide popularity.

a large change in the price.advertising. exhibitions. Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. public relations. as in useful items distributed to targeted audiences with no obligation attached. This category has grown each year for the past decade while most other forms have suffered. However a change of $131 to $130.and the customer's perceived value of the product. Broadly defined.99 would be considered a tactical change. Public relations are where the communication is not directly paid for and includes press releases. say from $19. The business may increase or decrease the price of product if other stores have the same product. Making large changes in any of the four Ps can be considered strategic. A certain amount of crossover occurs when promotion uses the four principal elements together. Advertising covers any communication that is paid for. One of the most notable means of promotion today is the Promotional Product. satisfied customers or people specifically engaged to create word of mouth momentum. Promotion has four distinct elements . It can include any physical store as well as virtual stores on the Internet. optimizing the marketing mix is the primary responsibility of marketing.00 to $39. from television and cinema commercials. sponsorship deals. Place – Place represents the location where a product can be purchased. For example. which is common in film promotion. Word of mouth is any apparently informal communication about the product by ordinary individuals. potentially related to a promotional offer. word of mouth and point of sale. conferences. It is often referred to as the distribution channel. 38 . radio and Internet adverts through print media and billboards. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. seminars or trade fairs and events.00 would be considered a strategic change in the position of the product. By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness. Sales staff often plays an important role in word of mouth and Public Relations (see Product above). Making small changes in the marketing mix is typically considered to be a tactical change.

He argues that a net present value approach maximizing shareholder value provides a "rational framework" for managing the marketing mix. Process. Price. and Physical evidence 39 . Promotion. People. Others claim it has too strong of a product market perspective and is not appropriate for the marketing of services. Doyle claims that developing marketing based objectives while ignoring profitability has resulted in the dot-com crash and the Japanese economic collapse. Objectives such as providing solutions for customers at low cost have not generated adequate profit margins. Some people claim the four Ps are too strongly oriented towards consumer markets and do not offer an appropriate model for industrial product marketing. An expanded system based on Seven Ps stresses the importance of Place. He also claims that pursuing a ROI approach while ignoring marketing objectives is just as problematic. Product.CRITICISMS Peter Doyle claims that the marketing mix approach leads to unprofitable decisions because it is not grounded in financial objectives such as increasing shareholder value. According to Doyle it has never been clear what criteria to use in determining an optimum marketing mix.

MR-Anywhere is a very good platform for market research and analysis For starting up a business there are a few things that are important: Market information Market information is making known the prices of the different commodities in the market.MARKET RESEARCH Market research is for discovering what people want. Widely used bases for segmenting include geographic differences. or believe. demographic differences. use of product differences. need. Information about the markets can be obtained in several different varieties and formats. and psychographic differences. It can also involve discovering how they act. personality differences. Once that research is complete it can be used to determine how to market your specific product. Market trends 40 . the supply and the demand. Examples of market information questions are: Who are the customers? Where are they located and how can they be contacted? What quantity and quality do they want? When is the best time to sell? Market segmentation Market segmentation is the division of the market or population into subgroups with similar motivations.

A few techniques are: Customer analysis Choice Modelling Competitor analysis Risk analysis Product research Advertising research 41 . products etc. The market size is more difficult to estimate if you are starting with something completely new. In this case. [Ilar 1998] But besides information about the target market you also need information about your competitor.The upward or downward movements of a market. during a period of time. your customers. you will have to derive the figures from the number of potential customers or customer segments.

Maruti Suzuki.DATA ANALYSIS 4.3 INFERENCE:  24% of the respondents were owners of Toyota  76% of the respondents were owners of Honda. Tata.1 PERCENTAGE OF TOYOTA OWNERS OW NERS OF TOYOTA YES 24% NO 76% YES NO Figure 1. etc 42 .

4 INFERENCE:  83% of the Respondents were satisfied with their cars and the services of TOYOTA  However 17% of the Respondents were dissatisfied at the same time.2 CUSTOMER SATISFACTION RATING CUSTOMER SATISFACTION 17% SATISFIED DISSATISFIED 83% Figure 1.4. 43 .

 19% and 24% respectively preferred for Hyundai & Honda.3 PREFERENCES OF BUYING A NEW CAR PREFERENCES OF BUYING A NEW CAR 40 30 20 10 0 TOYOTA HYUNDAI MARUTI HONDA Figure 1.4. 44 .5 INFERENCE:  19% of the respondents would prefer to buy a Toyota car against its competitors.  38% of respondents preferred for Maruti.

4 WHERE DO YOU MANAGE TO FIND INFORMATION ABOUT TOYOTA INFORMATION ABOUT TOYOTA 12% 20% 55% 13% DEALERS PRINT MEDIA T.6 INFERENCE:  Information through Internet and Print media accounts for more than half or 75% of the information shared with the masses. and Dealers for providing the information.  Rest 25% was shared by T.V.4.V. INTERNET Figure 1. 45 .

7 INFERENCE:  78% of the respondents felt that Toyota has the most fuel efficiency.4. 46 .  While 22% felt it isn’t the most fuel efficient.5 TOYOTA CARS HAS THE MOST FUEL EFFICIENCY F UE L E F F IC IE NC Y O F T O YO T A 100 80 60 40 20 0 78 22 Y ES NO Figure 1.

47 .8 INFERENCE: • • 70% of the respondents felt that the features of the Toyota are good.4. While 8% of respondents thought it was not so good. 10% thought it was very good and 12% felt satisfactory about the features.6 THE FEATURES OF TOYOTA AS COMPARED TO OTHER CARS FEATURES OF TOYOTA 12% 8% GOOD 10% VERY GOOD 70% NOT SO GOOD SATISFACTORY Figure 1.

48 .9 INFERENCE:  Toyota is best known for its design & comfort.  Then comes Handling and Fuel Efficiency.7 THE QUALITIES THAT BEST DESCRIBES TOYOTA FEATURES THAT BEST DESCRIBES TOYOTA 40 30 20 10 0 HANDLING FUEL EFFICIENCY DESIGN COM FORT 15 18 38 29 Figure 1.4.

7% said it was satisfactory and 3% felt it was not so good.10 INFERENCE: • • The interiors of Toyota are very good according to 74% of the respondents. 49 .8 HOW DO YOU FIND THE INTERIORS OF TOYOTA INTERIORS OF TOYOTA 3% 16% 7% GOOD VERY GOOD NOT SO GOOD 74% SATISFACTORY Figure 1. 16% said it was very good.4.

 15% and 13% respectively want cheaper spare parts and more service stations.4. 50 . a theory which was backed by 72% of the respondents.9 WHAT SHOULD BE DONE TO IMPROVE TOYOTA ? WHAT SHOULD BE DONE TO IMPROVE TOYOTA 13% 15% 72% MAKE IT MORE AFFORDABLE CHEAPER SPARE PARTS MORE SERVICE STATIONS Figure 1.11 INFERENCE:  If Toyota is made more affordable then it would win more customers.


 To make it the best car in its class it should be made more futuristic which was felt by 60% of the respondents.  10% wanted it to have a retro look and 15% wanted to give it a concept car look.13 INFERENCE: 52 .  15% of the respondents thought it should be made more sporty.11 ARE YOU HAPPY WITH THE AFTER SALES SERVICES PROVIDED BY TOYOTA HAPPY WITH AFTER SALES SERVICES PROVIDED BY TOYOTA 15% HAPPY UNHAPPY 85% Figure 1. 4.

 15% were unhappy with Toyota due to poor after sales services provided by them. Overall 85% of the respondents were happy with the after sales service provided by Toyota. 53 .

1 FINDINGS  76% of the respondents were owners of Toyota  83% of the Respondents were satisfied with their cars and the services of TOYOTA.FINDINGS AND RECOMMENDATIONS 5.15% and 13% respectively want cheaper spare parts and more service stations. Then comes Handling and Fuel Efficiency. and Dealers for providing the information  78% of the respondents felt that Toyota has the most fuel efficiency  70% of the respondents felt that the features of the Toyota are good.V. Rest 25% was shared by T.  If Toyota is made more affordable then it would win more customers. While 8% of respondents thought it was not so good. 10% thought it was very good and 12% felt satisfactory about the features  Toyota is best known for its design & comfort. However 17% of the Respondents were dissatisfied at the same time  18% of the respondents would prefer to buy a Toyota car against its competitors  Information through Internet and Print media accounts for more than half or 75% of the information shared with the masses. 54 . a theory which was backed by 72% of the respondents.

becaue it faces the problem of over and under capacity in case of upturn and downturn of the market. 5.  Toyota should conduct market survey in Indian market for quails in order to know the perception of Indian consumers. To make it the best car in its class it should be made more futuristic which was felt by 60% of the respondents.  Toyota must plan out an ideal marketing producing capacity .10% wanted it to have a retro look and 15% wanted to give it a concept car look.15% of the respondents thought it should be made more sporty.  Toyota must at the moment carry out a feasibility study for launching a vehicle in the domestic market where it has models like the Innova and Camry amongst others.2 RECOMMENDATIONS  Toyota should adopt the defensive marketing strategy because as being the second largest car producer in the international market.  Toyota should adopt an offensive marketing strategy for entering in the small car segment. 55 . This market is dominated by Maruti Suzuki and Hyundai in the Indian domestic auto market.




Marketing Management: 30th Edition Chabra www. 59 .. ARE YOU HAPPY WITH THE AFTER SALES SERVICES PROVIDED BY TOYOTA ? (i)YES (ii) NO (iii) HAPPY BUT IT CAN BE BETTER BIBLIOGRAPHY Books: Kotler Philips.(iii)GIVE IT A RETRO LOOK (iv)GIVE IT A CONCEPT CAR LOOK 12. Marketing management 2006 Magazines Business standard Motoring May 2008 edition Internet: www. Marketing management 2005 C.

com 60 .

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