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1.1. OVERVIEW - INDIAN AUTOMOBILE INDUSTRY
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 .Top Ten Players in Indian Automobile Sector The domestic players as well as the foreign players dominate the Indian automobile sector. The key players contributing to the growth of the sector are discussed below.
Toyota Motor Co. Simplify the pronunciation. and Give the company an auspicious beginning. Although the Toyota Group is most well known today for its cars. the division produced its first Type A Engine in 1934. of course). the company name was changed to: Signify the separation of the founders' work life from home life. it is still in the textile business and still makes automatic looms (fully computerized. and electric sewing machines which are available worldwide. which was used in the first Model A1 passenger car in May 1935 and the G1 truck in August 1935. Toyota is considered luckier than Toyoda in Japan. Kiichiro Toyota. Although the founding family name is Toyoda.2. 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. where eight is regarded as a lucky number. Soon thereafter. was established as an independent company in 1937. Production of the Model AA passenger car started in 1936. 5 . and eight is the number of strokes it takes to write Toyota in Katakana.1.
military trucks were kept as simple as possible. For example.During the Pacific War the company was dedicated to truck production for the Imperial Army. In April 1956 the Toyota dealer chain was established. Replica of the Toyota Model AA. the first production model of Toyota in 1936 6 . Because of severe shortages in Japan. the trucks had only one headlight on the center of the hood. In 1950 a separate sales company Toyota Motor Sales Co. Commercial passenger car production started in 1947 with the model SA. was established (which lasted until July 1982).
Argentina and Czech Republic. Toyota has manufacturing or assembly plants in the United States. Toyota New Zealand assembled vehicles until 1998. when it switched to importing cars from Japan and Australia. Australia. JAPAN ASSEMBLY PLANTS OVER THE WORLD Toyota has factories all over the world. Cars from these plants are often exported to other countries. manufacturing or assembling vehicles for local markets. Turkey. the Corolla. Indonesia. and more recently India. Poland. Canada. France. South Africa. Brazil. 7 .ORGANISTION STUCTURE OF THE COMPANY HEADQUARTERS: TOYOTA CITY. including its most popular model. the United Kingdom. Toyota also builds and sells cars in China in a joint venture with Tianjin Xiali.
Toyota Car Model: Innova Camry Avalon Matrix Corolla 8 .
Prius TRUCKS: Tacoma Tundra SPORTS UTILITY VEHICLES( SUVs): 4runner 9 .
China. the LS.. a key vehicle in Toyota’s North American lineup.S. manufacture of the Camry began in Guangzhou. with trainees passing on what they learn to team members on their return to their plants. 10 . and the new global Camry went on sale. while in the United States. Toyota was engaged in a variety of projects designed to solidify its foundations while continuing to grow. In Japan. In Japan. Toyota established the North American Production Center in the U. Lexus launched its new flagship model. increased its manufacturing capacity. the Texas plant began producing the new Tundra truck. and the European Global Production Center in the United Kingdom in March. several new projects were started around the world. Inc. In November. The centers educate trainers for local manufacturing plants in all regions. 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. began full-scale operations at its engine factory. which in October celebrated 20 years of production. Ltd. Toyota Motor Kyushu. In manufacturing.Land cruiser OVERVIEW In 2006. started manufacturing the first Toyota hybrid vehicle to be made in North America. On the product front. emphasizing the importance of this best-selling car. the Kentucky plant. the Camry Hybrid. following the establishment of the Asia Pacific Global Production Center in Thailand in August 2005. In May. In human resources development. in February. Established as branches of the Global Production Center in Japan. a new Corolla range was introduced. while Toyota Motor Tohoku Co.
in 2007 Toyota introduced a flex fuel vehicle* in the Brazilian market that will run on 100% bio-ethanol fuel. From this point on. PERCEPTS Be contributive to the development and welfare of the country by working together. Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere through all our activities. and has worked on R&D relating to plug-in hybrid. Foster a corporate culture that enhances individual creativity and teamwork value. in the right place. Work with business partners in research and creation to achieve stable. long-term growth and mutual benefits. as part of Toyota’s efforts to respond to the diversification of energy.In R&D. while keeping ourselves open to new partnerships. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in the communities. Toyota focused its efforts on three key areas: environment. based on the philosophy of providing “the right car. at the right time. In addition. It made a special effort in the area of the environment by expanding its lineup of hybrid vehicles. Toyota will continue to promote efforts to develop environmentally friendly technology and vehicles. 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.” and in accordance with the infrastructure and customer needs of each region. regardless of position. in faithfully fulfilling your duties. Pursue growth in harmony with the global community through innovative management. safety and energy. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide. 11 . while honoring mutual trust and respect between labor and management.
Be practical and avoid frivolity. Be kind and generous. Member of the Board 1) Domestic Sales Operations Group and Overseas Planning Operations Group 12 . homelike atmosphere. Be at the vanguard of the times through endless creativity. inquisitiveness and pursuit of improvement. Be reverent. 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. **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. strive to create a warm.
have taken place as follows: Before Changes • General Administration & Human Resources Group • Public Affairs Administration Dept. • Tokyo General Administration Div.The Domestic Sales Operations Group and the Overseas Planning Operations Group have been reorganized. which were divided by region. 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. including Japan. i.e. and to implement the "most-suitable growth strategy from a global perspective" though product. (transfer) • Tokyo General Administration Div. to allow close coordination between TMC and various regions. domestic and overseas. Sales and planning functions. Purpose As a global business management function of Toyota's global headquarters. • Tokyo Secretarial Div. After Changes • Government & Public Affairs Group • Public Affairs Administration Dept. (transfer) • Tokyo Secretarial Div. (transfer) 13 . have been integrated.
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. Oceania & Middle East Operations Group. 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. 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 .
for example. as we globalize our operations. 15 . GROWTH Lasting growth for Toyota will depend on aligning our interests with the larger interests of customers and the community. Survival and growth in our industry will hinge on developing technologies for reducing environmental impact of our products and operations. By the end of 1997. the value of its potential fuel savings could prove greater than its cost premium over conventional vehicles. it actually could save money for car owners. Our economic and industrial contribution in each region grows. as well as improving vehicular safety. Another way to align our interests with the larger interests of the community is through technology. 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. the number of divisions has increased from 228 to 229.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. Equally important. Our hybrid-electric car will have a gasoline engine to generate electricity or provide supplementary power to the wheels. Photos and text on the following pages introduce some of the technologies we are developing to position Toyota as an environmental leader. So. 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.
. We have introduced or demonstrated new power train technologies in the past year that will make Toyotas run cleaner and greener than ever.S. Toyota plans to enter small car segment in India 16 . had a 15. Toyota. retail market share a year earlier. grabbed more U. A direct-injection system that makes gasoline engines more efficient Hybrid-electric systems that double fuel efficiency and reduce noxious emissions Pure electric.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. retail market share than Ford Motor Co.. "zero emission" vehicles that alleviate urban pollution Fuel-cell systems that could transform the automobile in the 21st century. Japan's largest automaker.S.4 percent U.. MARKET SHARE OF TOYOTA Toyota Motor Corp. in early November and it was less than one share point behind General Motors Corp. Those technologies include.
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.
1. AVALON 2. CAMRY 3. CAMRY SALORA 4. COROLLA ALTIS 5. MATRIX 6. PRIUS 7. 4RUNNER 8. HIGH RUNNER 9. LAND CRUISER 10. SEQUOIA 11. SIENNA
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
CAR MODELS (INDIA) INNOVA
EX- SHOWROOM (MUMBAI) AMOUNT IN INR. 8,01,738
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 initial design features indicate that it can be exported to other markets in Asia. Though the new compact car has been designed for the Indian market. We plan to have petrol as well as diesel versions. Daihatsu. to be commissioned by 2010. touted to be the world's cheapest car. though it may be included in future plans. Tata Motors and Bajaj Auto can rest easy for the time being.400 people. Vikram Kirloskar said as much when he commented. The small car will not compete with the upcoming Nano of Tata Motors. The factory will be ready by mid-2010 and we are yet to finalize the launch date of the new car. ''We are working on the new design.'' The plant which is being set up will see an initial investment of Rs1400 crore. will not be involved in designing the compact new car. However. The arrangement of this additional amount required for the plant would be worked out later. Top officials confirmed that the company will soon be introducing its newly designed compact car in the Indian market. A new test track will be included in the second plant. The model is yet to be finalized. indications are that it maybe priced higher than its Indian competitors.The modular plant. But this initial investment won't include certain other costs like installing robots and other automation equipment. Toyota's group company. We have basic concept of the new car ready and very shortly we will finalize the design of the car. Although Okabe confirmed that the new product will be the cheapest in the Toyota stable. which is expected to be spread over 130 acres of land. will have an installed capacity of 100.'' 20 .000 units annually and will employ about 2.
1 The generic strategies are: 21 .are the products differentiated in any way.does the company target a wide market.GENERIC STRATEGIES Generic strategies were used initially in the early 1980s. They outline the three main strategic options open to organization that wish to achieve a sustainable competitive advantage. Each of the three options are considered within the context of two aspects of the competitive environment: Sources of competitive advantage . niche market? Figure 1. or does it focus on a very narrow. and seem to be even more popular today. or are they the lowest cost producer in an industry? Competitive scope of the market .
such as Toyota. Producers could price at competitive parity. Differentiation 3. These costs must be offset by the increase in revenue generated by sales. The differentiating organization will incur additional costs in creating their competitive advantage. exploiting the benefits of a bigger margin than competitors. Costs are shaved off every element of the value chain. but have the brand and marketing skills to use a premium pricing policy. Costs must be recovered. are very good not only at producing high quality autos at a low price. Cost Leadership The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. low cost does not always lead to low price. Differentiation Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. Factories are built and maintained. Cost leadership 2. 'cost advantage' is the focus. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin. 1. Therefore there is always an incentive to innovated and continuously improve. Focus. Products tend to be 'no frills. Some organization. The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments. Focus or Niche Strategy 22 . labor is recruited and trained to deliver the lowest possible costs of production. generating a higher than average price.1. For example. Toyota differentiates its product and service. 3. 2.' However. There is also the chance that any differentiation could be copied by competitors.
defined segment of a market. against the worldwide motor industry trend. while sales were 7.O. Where an organization can afford neither a wide scope cost leadership nor a wide scope differentiation strategy. With a cost focus a firm aims at being the lowest cost producer in that niche or segment. from the small Yaris to large trucks.78 million units. In 2003 Toyota knocked its rivals Ford into third spot. The company uses marketing techniques to identify and satisfy 23 . Commentators argue that this is because the company has the right mix of products for the markets that it serves. Small. Here an organization focuses effort and resources on a narrow. £5. to become the World's second largest carmaker with 6.g. highly targeted marketing and a commitment to lean manufacturing and quality. A company could use either a cost focus or a differentiation focus. With a differentiation focus a firm creates competitive advantage through differentiation within the niche or segment.8% to 1. Its strong industry position is based upon a number of factors including a diversified product range. Net profits rose 0.T ANALYSIS Strengths New investment by Toyota in factories in the US and China saw 2005 profits rise. The company makes a large range of vehicles for both private customers and commercial organisations.3% higher at 18. Cost focus is unachievable with an industry depending upon economies of scale e.55 trillion yen. This is an example of very focused segmentation.W. 1. A niche strategy is often used by smaller firms. There are potentially problems with the niche approach. Competitive advantage is generated specifically for the niche. a niche strategy could be more suitable. specialist niches could disappear in the long term.17 trillion yen ($11bn. targeting and positioning in a number of countries. The company is still behind rivals General Motors with 8.85bn). telecommunications.59 million units in the same period.The focus strategy is also known as a 'niche' strategy.4 S.
g. Toyota markets most of its products in the US and in Japan. as well as the high costs of training and retaining labour. The company also maximizes profit through efficient manufacturing approaches (e. Therefore it is exposed to fluctuating economic and political conditions those markets. 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. WEAKNESS Being big has its own problems. Lexus has RX 400h hybrid. Total Quality Management). Rocketing oil prices have seen sales of the new hybrid vehicles increase. Toyota has also sold on its technology to other motor manufacturers. the company could see over capapacity. The company needs to keep producing cars in order to retain its operational efficiency. Perhaps that is why the company is beginning to shift its attentions to the emerging Chinese market.e. This is a typical problem with high volume car manufacturing. Both are based upon advance technologies developed by the organization. Its brand is a household name. OPPURTUNITIES Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. Movements in exchange rates could see the already narrow margins in the car market being reduced. and Toyota has it Prius.customer needs. If on the other hand the car market experiences an upturn. So if the car market experiences a down turn. for example Ford has bought into the technology for its new Explorer 24 . it takes time to accommodate. then the company may miss out on potential sales due to under capacity i. Car plants represent a huge investment in expensive fixed costs.
T ANALYSIS STRENGTH In an era when owning a car was a distant dream for a vast majority of Indians. MUL rolled out its first car. Toyota is to target the 'urban youth' market. Better 25 .O. steel and fuel. The company labeled it a people's car. Toyota did not give details of how much the recall would cost. In 2005 the company had to recall 880. Competition is increasing almost daily. with a 796cc 3cylinder engine that delivered 39. Initially. with models extending at their rear! The narrow segment is notorious for it narrow margins and difficulties for branding. South Korea and new plants in Eastern Europe. while the rest were sold in Japan. 65. 1. but it proved to be spacious enough to carry four adults. Such moves can only firm up Toyota's interest and investment in hybrid R&D.W.00 sports utility vehicles and pick up trucks due to faulty front suspension systems. The vehicle itself is a unique convertible.SUV Hybrid. Toyota faces tremendous competitive rivalry in the car market. the car was criticized for its diminutive size. As with any car manufacturer. The first vehicle was released for sale in December 1983. The company has launched its new Aygo. Europe and Australia. 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. the M800. THREATS Product recalls are always a problem for vehicle manufacturers. The majority of affected vehicles were sold in the US. with new entrants coming into the market from China.000.5 COMPETITVE S.5bhp at an affordable price of Rs. The company is also exposed to any movement in the price of raw materials such as rubber.
Maruti Suzuki also needs to invest in capacity and research and development in India to stay abreast of competition.324 and 9. Alto For the first few months of 2004. 26 . selling 15. began eating into M800's share. February and March respectively. 0. But gradually Alto. M800 performed well.23 mn in the first week of April 2004. its sales increased to 9. Also the Research and developments headquarters for engine development of Maruti Suzuki are in Japan which is a major weak point. Alto took over M800's position as the largest selling car with sale of 10. they should focus on acquiring product design and lean production knowhow (as the Korean firms did in the eighties and early nineties.000 followed by the launch of the non-AC Alto for Rs. Analysts felt that Alto had taken the top spot because of its price reduction in September 2003 by Rs. 23.518 units in February and 15. 8.399 units. In the coming years.301 units in January. In April. another MUL product.technology 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.011 units in January. slightly over M800's sales of 10.016 units. is the lack of product design capability.540 in March.373 units.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 members. Alto reported sales of 8. 13.
manufacturing six million vehicles at 56 plants in 25 countries. Toyota Motor Corporation. In India." Yoshio Ishizaka.2 million units by 2005. replacing Sachio Yamazaki. the company has evolved a new strategy to capture 15 per cent market share in the Indian automotive segment. Innova has successfully become a category creator. We will continue to meet the ever-challenging customer expectations and will come out with innovative marketing strategies. "Competition is intense in the Indian market for domestic and foreign companies. the Toyota Quails notched sales of 25." "In the last one year. Toyota sold 3. With a change of guard at Toyota Kirloskar Motor Ltd. which has made Innova the most successful product. Their dealers have also worked hard to provide their high levels of customer support..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. Toyota has taken many initiatives. According to analysts. Toyota's strategy to corner a significant chunk of the Indian market involves "superior product offering and dedicated technology". Effective from January 1. Executive Vice-President. Atsushi Toyoshima has been appointed Managing Director of the company. The Indian market is important for Toyota with potential to aid its growth strategy.8 million units overseas. said. In this 27 .000 units since its launch last year. Last year.OBJECTIVE AND METHODOLOGY 2. he said. the Indian market would touch annual sales of 1.
Third. also give a proper shape to company's target profit and growth. agility and power of a sedan.context. the Indian consumer wants to take his vehicle for long drives with friends and family. every market research provides useful suggestions to the 28 . Innova brings together the space and fuel economy of an MPV with the style. the change of leadership in Toyota's Indian division is important. skills and resources and its changing market opportunities. sales schemes and what impact does it has on the dealers and consumers. so that they can maintain a viable fit between the organizational objectives. including auto components. the C. while passenger car buyers look for better styling and improved riding comfort. First. The multi utility vehicle segment has also grown at doubledigit levels. Second. it provides feedback to the organization about their sales. Toyota Kirloskar Motor has described it as the first three-row seating passenger car in the Indian market 2." Mr. The very essence of every project related to marketing is providing a view to management for chalk out the organization. Atsushi Toyoshima. including those owning MPVs. to seek attributes like greater interior space and overloading ability. 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. Toyoshima said According to the managing director of Toyota Kirloskar Motor. "Bangalore is an ideal location to meet all of Toyota's needs. the decision to introduce Innova here (India) was based on three factors. over the last five years. indicating a more important role for the company's manufacturing base in Bangalore.2 MANAGERIAL USEFULLNESS The marketing department can use this study to enhance their marketing strategies for better sales.segment (between Rs 5 lakh to Rs 10 lakh) of the car market has grown by 20 per cent every year. with an improving lifestyle and better roads. there is a latent desire of customers.
To know about the marketing strategies of the competitors of Toyota. To serve the customer through channel of distribution. 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.organization. To know about the marketing strategies used by Toyota. Marketing research helps the firm in every component of total marketing task. 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).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. Every market research proves useful to the organization. To face the keen competition. 2. 29 . These are as follows. it also aids the formulation of the marketing mix. it also helps in taking the information of competitor's strategies and their impact on the buyer. To find out the market share of Toyota. To know where Toyota stands as far as the BCG –matrix models concerned. distribution and pricing needs. marketing research helps the firm in every component of the total marketing task. product. it helps the firm acquire a better understanding of the buyer. the competition and the marketing environment.
retailers and distributors. The study can be used to design a proper product. 2. This study can be applied to find out an effective distribution channel to enhance the sale of various products of Toyota motors. The result of marketing success can be interpreted to assess the rate of employee satisfaction in various departments. place and promotional strategy for the market. 3. Primary Source: Observation Experiment Talking with consumers.2. 2.4 SCOPE OF THE STUDY These are some of the scope of the study : 1. 30 . From the present study we can know the market share of different products and accordingly formulated strategy to enhance it. 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. 5. price. 4.
e. systematically arranged in columns and rows. After classifying is represented in the form of tables i.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. grouped qualitatively and quantitatively according to the situation or the type of the data which was collected. SECONDARY DATA is represented: In the form of tables. Some of the data is also graphically represented in the form of PIE DIAGRAM. 31 . Because it was not possible to consider each and every person of those cities or of villages so. PROBABILITY SAMPLE or RANDOM SAMPLE was taken. STATISTICAL AND PRESENTATION TOOLS PRIMARY DATA is represented: First classified i. By the way of BAR GRAPHS and SUBDIVIDED BAR GRAPHS (Graphical presentation).e.
Co- operation on the part of informants. Some of them are as follows: Because of illiteracy. 32 . in some cases. So. Questionnaire method involves some uncertainty of response. It is possible that the information supplied by the informants may be incorrect.6 LIMITATIONS OF THE STUDY Since the road to improvement is never ending. it was a time consuming method in which continuous guidance was required.2. the study may lack accuracy. so this study also suffers from certain limitations. was difficult to presume.
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.CONCEPTUAL DISCUSSION MARKETING What is marketing? There are many different definitions of marketing. • Marketing is a business-wide function – it is not something that operates alone from 33 . They all try to embody the essence of marketing: • Marketing is about meeting the needs and wants of customers. 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 are.
• Marketing is about understanding customers and finding ways to provide products or services which customers demand To help put things into context.other business activities. you may find it helpful to often refer to the following diagram which summarises the key elements of marketing and their relationships: 34 .
Whilst customer needs are broad. shelter. very broad. social and technological environment. therefore. An organisation that adopts the marketing concept accepts the needs of potential customers as the basis for its operations. People have basic needs for food. Businesses do not undertake marketing activities alone. What are customer needs and wants? A need is a basic requirement that an individual wishes to satisfy. affection. and changes in the political. esteem and self-development. Customer needs are. Success is dependent on satisfying customer needs. They face threats from competitors. This important perspective is commonly known as the marketing concept. economic.Figure 1.2 MARKETING CONCEPT AND ORIENTATION It is a fundamental idea of marketing that organisations survive and prosper through meeting the needs and wants of customers. Many of these needs are created from human biology and the nature of social relationships. The marketing concept is about matching a company's capabilities with customer wants. This matching process takes place in what is called the marketing environment. 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. 35 . customer wants are usually quite narrow.
Businesses do not create customer needs or the social status in which customer needs are influenced. many consumers around the globe want a Mercedes. the media and marketing activities of businesses. Businesses therefore have not only to make products that consumers want. Some consumers are never satisfied unless their food comes served with a bottle of fine Chardonnay. businesses do try to influence demand by designing products and services that are • Attractive • Work well • Are affordable • Are available 36 .A want is a desire for a specific product or service to satisfy the underlying need. It is not McDonalds that makes people hungry. What they want to eat and in what kind of environment will vary enormously. But relatively few are able and willing to buy one. but they also have to make them affordable to a sufficient number to create profitable demand. Consumer wants are shaped by social and cultural forces.that of customer demand: Consumer demand is a want for a specific product supported by an ability and willingness to pay for it. For some. eating at McDonalds satisfies the need to meet hunger. For others a microwaved readymeal meets the need. For example. However. Consider this example: Consumers need to eat when they are hungry. This leads onto another important concept .
product identity 37 . Typical examples of a mass produced objects are the motor car and the disposable razor.Businesses also try to communicate the relevant features of their products through advertising and other marketing promotion. took the recipe idea one step further and coined the term 'Marketing-Mix'. 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. DEFINITION Although some marketers[who?] have added other Ps. Jerome McCarthy. proposed a 4 P classification in 1960. such as personnel and packaging. It is determined by a number of factors including market share. A less obvious but ubiquitous mass produced service is a computer operating system. which would see wide popularity. material costs. in his American Marketing Association presidential address. This version continued in 1953 when Neil Borden. competition. E. A prominent marketer. Price – The price is the amount a customer pays for the product. 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. The four Ps concept is explained in most marketing textbooks and classes. A typical example of a mass produced service is the hotel industry. 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.
as in useful items distributed to targeted audiences with no obligation attached. One of the most notable means of promotion today is the Promotional Product. from television and cinema commercials. For example. The business may increase or decrease the price of product if other stores have the same product. Advertising covers any communication that is paid for. Making small changes in the marketing mix is typically considered to be a tactical change.00 would be considered a strategic change in the position of the product. Making large changes in any of the four Ps can be considered strategic. Sales staff often plays an important role in word of mouth and Public Relations (see Product above).99 would be considered a tactical change. Word of mouth is any apparently informal communication about the product by ordinary individuals. However a change of $131 to $130. Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. conferences. exhibitions. sponsorship deals. satisfied customers or people specifically engaged to create word of mouth momentum.advertising. It can include any physical store as well as virtual stores on the Internet. This category has grown each year for the past decade while most other forms have suffered. A certain amount of crossover occurs when promotion uses the four principal elements together. Promotion has four distinct elements . optimizing the marketing mix is the primary responsibility of marketing.00 to $39. Public relations are where the communication is not directly paid for and includes press releases. public relations. 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. Broadly defined. 38 . seminars or trade fairs and events. word of mouth and point of sale. potentially related to a promotional offer. a large change in the price. It is often referred to as the distribution channel. Place – Place represents the location where a product can be purchased.and the customer's perceived value of the product. say from $19. which is common in film promotion. By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness.
Promotion.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. An expanded system based on Seven Ps stresses the importance of Place. Some people claim the four Ps are too strongly oriented towards consumer markets and do not offer an appropriate model for industrial product marketing. People. and Physical evidence 39 . Doyle claims that developing marketing based objectives while ignoring profitability has resulted in the dot-com crash and the Japanese economic collapse. Price. He also claims that pursuing a ROI approach while ignoring marketing objectives is just as problematic. Others claim it has too strong of a product market perspective and is not appropriate for the marketing of services. Objectives such as providing solutions for customers at low cost have not generated adequate profit margins. He argues that a net present value approach maximizing shareholder value provides a "rational framework" for managing the marketing mix. According to Doyle it has never been clear what criteria to use in determining an optimum marketing mix. Process. Product.
Market trends 40 . personality differences. the supply and the demand. or believe. need. use of product differences. demographic differences. Widely used bases for segmenting include geographic differences. and psychographic differences.MARKET RESEARCH Market research is for discovering what people want. 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. It can also involve discovering how they act. Information about the markets can be obtained in several different varieties and formats. Once that research is complete it can be used to determine how to market your specific product. 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.
A few techniques are: Customer analysis Choice Modelling Competitor analysis Risk analysis Product research Advertising research 41 . your customers. The market size is more difficult to estimate if you are starting with something completely new. [Ilar 1998] But besides information about the target market you also need information about your competitor.The upward or downward movements of a market. you will have to derive the figures from the number of potential customers or customer segments. products etc. In this case. during a period of time.
Tata. Maruti Suzuki. etc 42 .1 PERCENTAGE OF TOYOTA OWNERS OW NERS OF TOYOTA YES 24% NO 76% YES NO Figure 1.3 INFERENCE: 24% of the respondents were owners of Toyota 76% of the respondents were owners of Honda.DATA ANALYSIS 4.
4. 43 .2 CUSTOMER SATISFACTION RATING CUSTOMER SATISFACTION 17% SATISFIED DISSATISFIED 83% Figure 1.4 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.
4.5 INFERENCE: 19% of the respondents would prefer to buy a Toyota car against its competitors. 44 . 19% and 24% respectively preferred for Hyundai & Honda. 38% of respondents preferred for Maruti.3 PREFERENCES OF BUYING A NEW CAR PREFERENCES OF BUYING A NEW CAR 40 30 20 10 0 TOYOTA HYUNDAI MARUTI HONDA Figure 1.
and Dealers for providing the information. 45 .6 INFERENCE: Information through Internet and Print media accounts for more than half or 75% of the information shared with the masses. INTERNET Figure 1.4.V.V.4 WHERE DO YOU MANAGE TO FIND INFORMATION ABOUT TOYOTA INFORMATION ABOUT TOYOTA 12% 20% 55% 13% DEALERS PRINT MEDIA T. Rest 25% was shared by T.
While 22% felt it isn’t the most fuel efficient.4. 46 .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 1.7 INFERENCE: 78% of the respondents felt that Toyota has the most fuel efficiency.
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. While 8% of respondents thought it was not so good.8 INFERENCE: • • 70% of the respondents felt that the features of the Toyota are good. 47 . 10% thought it was very good and 12% felt satisfactory about the features.4.
4.7 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 1.9 INFERENCE: Toyota is best known for its design & comfort. 48 . Then comes Handling and Fuel Efficiency.
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 1.10 INFERENCE: • • The interiors of Toyota are very good according to 74% of the respondents.4. 16% said it was very good. 7% said it was satisfactory and 3% felt it was not so good.
15% and 13% respectively want cheaper spare parts and more service stations.11 INFERENCE: If Toyota is made more affordable then it would win more customers.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. 50 .4. a theory which was backed by 72% of the respondents.
4.12 INFERENCE: 51 .10 WHAT SHOULD BE DONE TO MAKE TOYOTA THE BEST CAR WHAT SHOULD BE DONE TO MAKE TOYOTA THE BEST CAR 15 10 15 60 MAKE IT MORE FUTURISTIC MAKE IT MORE SPORTY GIVE IT A RETRO LOOK GIVE IT A CONCEPT CAR LOOK Figure 1.
10% wanted it to have a retro look and 15% wanted to give it a concept car look.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. 15% of the respondents thought it should be made more sporty. 4.13 INFERENCE: 52 . To make it the best car in its class it should be made more futuristic which was felt by 60% of the respondents.
53 . 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.
While 8% of respondents thought it was not so good. If Toyota is made more affordable then it would win more customers.1 FINDINGS 76% of the respondents were owners of Toyota 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 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. Rest 25% was shared by T.FINDINGS AND RECOMMENDATIONS 5. 10% thought it was very good and 12% felt satisfactory about the features Toyota is best known for its design & comfort. 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. 54 .15% and 13% respectively want cheaper spare parts and more service stations.V. a theory which was backed by 72% of the respondents. Then comes Handling and Fuel Efficiency.
5.10% wanted it to have a retro look and 15% wanted to give it a concept car look. This market is dominated by Maruti Suzuki and Hyundai in the Indian domestic auto market. 55 .becaue it faces the problem of over and under capacity in case of upturn and downturn of the market.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. 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 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. Toyota should conduct market survey in Indian market for quails in order to know the perception of Indian consumers.15% of the respondents thought it should be made more sporty. Toyota must plan out an ideal marketing producing capacity .
000 _________Above 75.000 _________25. DO YOU OWN A CAR? o YES NO IF YES.000-75.ANNEXURE QUESTIONNAIRE FOR CONSUMER A) NAME B) ADDRESS C) CONTACT NUMBER D) INCOME GROUP _________15. THEN WHICH ONE? (i)TOYOTA (ii) HYUNDAI (iii) MARUTI 2. 000-50. HOW SATISFIED ARE YOU WITH THE SERVICES OFFERED BY TOYOTA ? (i)SATISFIED (ii) DISSATISFIED 56 .000 1.000-25.000 _________50.
(ii) PRINT MEDIA (iv)INTERNET 6. IF SATISFIED. IF GIVEN A CHOICE TO CHOOSE A CAR COMPANY. HOW DO YOU FIND THE FEATURES OF TOYOTA AS COMPARED TO OTHER CARS? (i)GOOD (iii)NOT SO GOOD (ii) VERY GOOD (iv) SATISFACTORY 57 . WHERE DO YOU MANAGE TO FIND INFORMATION ABOUT TOYOTA ? (i)DEALERS (iii)T.V. WHICH COMPANY WOULD YOU CHOOSE? (i) TOYOTA (ii) MARUTI (iii) HYUNDAI 5. THEN ARE YOU HAPPY WITH THEIR CHARGES AND TIMELY DELIVERY THEY WERE OFFERING? (i)HAPPY (ii) UNHAPPY 4.3. DO YOU THINK TOYOTA HAS THE MOST FUEL EFFICIENCY (i)YES (ii) NO 7.
8. ACCORDING TO YOU WHAT SHOULD BE DONE TO TOYOTA ? (i) MAKE IT MORE AFFORDABLE (ii) CHEAPER SPARE PARTS (iii)MORE SERVICE STATIONS IMPROVE 11. ACCORDING TO YOU WHAT SHOULD BE DONE TO MAKE TOYOTA THE BEST CAR? (i)MAKE IT MORE FUTURISTIC (ii)MAKE IT MORE SPORTY 58 . HOW DO YOU FIND THE INTERIORS OF TOYOTA ? (i)GOOD (iii)SATISFACTORY (ii) VERY GOOD (iv) NOT SO GOOD 10. WHICH OF THESE QUALITIES DO YOU THINK BEST DESCRIBES TOYOTA ? (i)HANDLING (iii)DESIGN (ii) FUEL EFFICIENCY (iv)COMFORT 9.
com www.google. Marketing management 2005 C.(iii)GIVE IT A RETRO LOOK (iv)GIVE IT A CONCEPT CAR LOOK 12. Gupta..B.N. Marketing Management: 30th Edition Chabra T. 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. Marketing management 2006 Magazines Business standard Motoring May 2008 edition Internet: www.com 59 .toyota .
yahoo.domain-b.com 60 .com www.wikipedia.www.com www.
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