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CUSTOMER SATISFACTION

OF
TOYOTA KIRLOSKAR MOTOR LIMITED

Submitted in Partial Fulfillment For The Award


Of The
Degree Of Bachelor Of Business Administration
2008-11

Project Guide Submitted By


Dr. Lokesh Jindal Mayank Chugh
Reader, MAIT Enrollment No.:
0996111708
BBA(2S) III Semester B
Sec.

-
MAHARAJA AGRASEN INSTITUTE OF MANAGEMENT
STUDIES
Affiliated to Guru Gobind Singh Indraprastha University, Delhi
PSP Area, Plot No.1, Sector 22, Rohini Delhi 110086
STUDENT UNDERTAKING

This is to certify that I have completed the Project titled “”Customer Satisfaction
of Toyota Kirloskar Motor Limited “” in under the guidance of “Dr. Lokesh Jindal
in partial fulfillment of the requirement for the award of degree of Bachelor of
Business Administration at Maharaja Agrasen Institute of Management Studies,
Delhi. This is an original piece of work & I have not submitted it earlier
elsewhere.

MAYANK CHUGH
III Sem
Enrollment No.: 0996111708

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CERTIFICATE

This is to certify that the project titled “Customer Satisfaction of Toyota Kirloskar
Motor Limited” is an academic work done by “MAYANK CHUGH” submitted in the
partial fulfillment of the requirement for the award of the degree of Bachelor Of
Administration from Maharaja Agrasen Institute of Management Studies, Delhi,
under my guidance and direction. To the best of my knowledge and belief the
data and information presented by him/her in the project has not been submitted
earlier.

Dr. Lokesh Jindal.


Reader, MAIT

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
ACKNOWLEDGEMENT

With the blessings of almighty I was able to undertake and complete my project
work on Customer Satisfaction of Toyota Kirloskar Motor Limited. I would like to
thank all those who were always by my side to make my efforts fruitful.
My sincere thanks to my course coordinator, Dr. Lokesh Jindal who helped me in
completion of the project, without whose help the project would not have been
completed.
I, therefore, acknowledge my indebtness to all who generously helped by
sharing their valuable time and experience with me, without which this project
would have never been completed.
In the outset, I convey my sincere Thanks to all those who spared their precious
time for me. For giving me once again a great opportunity to work on the
project and solving our problems, doubts, queries, which I had during the
making of my project.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
EXECUTIVE SUMMARY

Automobiles have become an indispensable part of our lives, an extension of


the human body that provides us faster, cheaper and more convenient mobility
every passing day. Behind this betterment go the efforts of those in the
industry, in the form of improvement through technological research. The Indian
automotive component industry is dominated by around 500 players which
account for more than 85% of the production. Toyota Motor Co. was established
as an independent company in 1937.This project on Toyota tells us about the
satisfaction level of consumers with the Toyota. Firstly Introduction about the
Automobile Industry has been explained in this project. As a joint venture
between Kirloskar Group and Toyota Motor Corporation, Toyota Kirloskar Motor
Limited (TKM) aims to play a major role in the development of the automotive
industry and the creation of employment opportunities, not only through its
dealer network, but also through ancillary industries. Toyota Kirloskar Motor
Limited firmly believes that the success of this venture depends on providing
high quality products and services to all valued customers through the efforts of
its team members. Toyota Kirloskar Motor Limited, along with its dedicated
dealers and suppliers, has adopted the "Growing Together" philosophy of its
parent company TMC to create long-term business growth. In this way, Toyota
Kirloskar Motor Limited aims to further contribute to progress in the Indian

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
automotive industry, realize greater employment opportunities for local citizens,
improve the quality of life of the team members and promote robust economic
activity in India. The next phase looks upon the research carried out for
analyzing the response towards Toyota. This has been done by conducting a
survey.
After conducting the survey it was observed that most of the Toyota owners
were satisfied with their services and its maintenance. The desigining and
interiors are most liked by the customers but few people also want it to be more
affordable.

TABLE OF CONTENTS

Page No.

Chapter 1 Introduction about the Industry


1-8

Chapter 2 About the Organization


9-28

Chapter 3 Research Methodology


29-36
3.1 Purpose of Study 29
3.2 Scope of the Study 30
3.3 Objectives of the Study 31

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
3.4 Methodology 32-35
3.5 Limitation of Study 36

Chapter 4 Findings and Analysis


37-48
4.1 Findings from Primary Data
37-46
4.2 Findings from Secondary Data 47-48

Chapter 5 Conclusion
49

Chapter 6 Recommendations
50

ANNEXURE A1-A9
Annexure I Questionnaire
A1-A2
Annexure II Product Mix of Toyota
A3-A8
Annexure III Newspaper Article A9

Bibliography

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CHAPTER 1

Introduction about the Industry

Introduction

The Indian automotive component industry is dominated by around 500 players


which account for more than 85% of the production. The turnover of this

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
industry has been growing at a mammoth 28.05% per annum from 2002-03
onwards as illustrated in Fig which clarifies its emergence
as one of India's fastest growing manufacturing sectors. During 1990s, the auto
components market in India used to be dominated by supplies to the
aftermarket with only 35% exports sourced by global Tier 1 OEMs (Original
Equipment Manufacturers). The industry made a sustained shift to the global
Tier 1 market and today, the component manufacturers supply 75% of their
exports to global Tier 1 OEMs and the remaining to the aftermarket. This is
largely due to the growing capability of the Indian component suppliers in
understanding technical drawings, conversance with global automotive
standards, economically attractive costs (manufacturing costs are 25%-30%
lower than its western counterparts), flexibility in small batch production and
growing information technology application for design, development and
simulation.

Besides the burgeoning demand of auto components from global majors, the
domestic automobile industry has been showing a sparkling growth caused by
increasing customer base and affordable loans. Based on this, the turnover of
the Indian auto component industry is expected to touch US$ 18.7 billion by
2009 and estimated to reach US$ 40 billion by 2014.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Overview of Indian Automobile Industry

The liberalized policies of the Indian Government paved towards steady


evolution of India as a stable and market driven economy with the real Gross
Domestic Product growth in excess of 8%, foreign exchange reserves crossing
the $150 billion mark, growing value of Indian Rupee compared to US dollar and
reducing inflation rate. 100% Foreign Direct Investment, absence of local
content regulation, manufacturing and imports free from licensing & approvals
in the automobile sector coupled with customs tarifforauto components
reducing to 12.5% resulted in increased number of multinationals establishing
their bases in India and with export markets looking up, the Indian automobile
industry is poised for a phenomenal growth. The automobile production in the
sub-continent has been growing
steadily @ 18.53% per annum from 2002-03 onwards with total vehicle
production standing at a ammoth 1,00,31,296 nos. in 2005-06.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Among the automobiles, 2 wheelers account for 75.77%, cars about 11.09%, 3
wheelers to the tune of 4.33%, tractors about 2.95%, buses & trucks constitute
2.19%, Multi Utility Vehicles (MUVs) to the tune of 1.96% and Light Commercial
Vehicles (LCVs) about 1.71% of the total number of automobiles produced in
the country. Presently, India is the second largest market after China for two &
three wheelers.

In tractors production, India is one of the two largest manufacturers in the world
along with China. The subcontinent stands as the 4th largest producer of trucks
in the world. Coming to the passenger car segment, the country is positioned
11th in car production in the world. The Indian passenger car market is far from
being saturated leaving ample opportunity for volume growth since the per
capita car penetration per 1000 is only 7 compared to 500 in Germany. The
production of cars in the country has
been growing at a mammoth 27.58% per annum from 2002- 03 onwards. In
general, cars are broadly classified as Mini, Compact, Mid-Size, Executive &
Premium varieties. There has been a steady rise in compact car production from
333,000 in 2002-03 to 715,000 in 2005- 06, mid-size cars from 122,000 to
204,000 nos., executive cars from 2000 to 23,000 nos. and premium variety
cars from 4000 in 2002-03 to 5000 nos. in 2005-06. The mini car segment
production reduced from 150,000 in 2002-03 to 98,000 nos. in 2005-06. These
statistics vividly reveal the increasing capacity of the Indian customer, thus
driving the passenger car demand rapidly up the price ladder. Analysts
speculate car production in the sub-continent to touch 1575,000 in 2009 and
2654,000 by 2014. Cars and MUVs exports rose from 72,000 in 2002-03 to
reach 176,000 nos. in
2005-06 with growth @ 48.155 per annum from 2002-03 onwards.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Out of the two wheelers produced in India, motorcycles account for 81.59%,
scooters about 13.42% and mopeds to the tune of 4.99% of the total
production. The production statistics which shows the growth of 2wheelers @
16.58% per annum from 2002-03 onwards. Out
of this, motorcycles have exhibited production growth @ 19.99% per annum,
scooters @ 6.74% per annum & mopeds @ 2.65% per annum from 2002-03
onwards. Two wheeler production units in India constitute of Japanese OEMS
(Original Equipment Manufacturers) which include Hero Honda Motors, Honda
Motorcycle & scooter India (P) Ltd., Yamaha Motor India (P) Ltd. & Suzuki
Motorcycle India
(P) Ltd. and Indian OEMs consisting of Bajaj Auto L t d . , T V S M o t o r
Company Ltd., LML Ltd.,

Kinetic Engineering Ltd., Majestic Auto Ltd., Kinetic Motor Company Ltd. and
Royal Enfield of Eicher Ltd. Out of the aforementioned, Hero Honda accounts for
39.55%, Bajaj Auto about 26.87%, TVS Motors 17.98%, Honda Motors 7.94%,
Yamaha Motors 3.27%, LML 1.41% and the remaining 2.98%

of the total 2 wheelers production in the country. The exports of two wheelers
made a significant growth from a level of 180,000 in 2002-03 to reach 513,000
nos. in 2005-06. The latest estimates put up production of 2 wheelers to 13.6
million by 2009.

The production of Multi Utility Vehicles (MCVs) has been showing sparkling
growth @ 23.84% per annum, Light Commercial Vehicles (LCVs) @ 35.49% and
Medium & Heavy Commercial Vehicles (M & HCVs) @ 27.33% per annum from
2002-03 onwards in India. Industry analysts put up MUVs production to reach
207,000 in 2009 and 277,000 in 2014. Commercial vehicle exports made a
steady growth from a level of 11,000 in 2002- 03 to 41,000 in 2005-06. The
manufacturing units for four wheelers in India constitute of Japanese OEMs

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
covering Maruti Udyog Ltd., Toyota Kirloskar Motor (P) Ltd., Honda Siel cars
India Ltd. & Swaraj Mazda Ltd., Indian OEMs consisting of Tata Motors
Ltd., Mahindra & Mahindra Ltd., Ashok Leyland Ltd., Force Motors Ltd., Eicher M
o t o r s L t d . & Hindustan Motors Ltd., Korean OEM Hyundai Motor India Ltd.,
American OEMs which include General Motors India (P) Ltd. & Ford India (P) Ltd.
and European OEMs consisting of Skoda Auto India (P) Ltd., Daimler Chrysler
India (P) Ltd., Volvo India (P) Ltd., Tatra Trucks India Ltd. & Fiat India (P) Ltd.
Presently, Maruti Udyog accounted for 33.24%, Tata Motors 26.14%, Hyundia
Motors
15.13%, Mahindra & Mahindra 7.47%, Ashok Leyland 3.78%, Toyota Kirloskar
2.61%, Honda Siel Cars 2.40%, Force Motors 2.08%, General Motors 1.78%,
Ford India 1.57%, Eicher Motors 1.41% and othe4rs 2.39% of the total
production of four wheelers in India.

The tractors production in the country has been making a steady growth @
25.80% and three wheelers @ 19% per annum from 2002-03 onwards. The
Indian automobile industry is flooded with huge investments involving green
field and brown field projects.
Hyundai plans to set up a LCV plant at Pune, India. Toyota would be investing
US$ 4.2 billion for starting production of small cars & Suzuki plans to invest US$
1.6 billion in India.
Isuzu Motor & Nissan Motor belonging to Hitachi Ltd. Of Japan would begin
manufacturing cars in India.

Tata Motors is setting up its novel small car production facility near Kolkata.
Hyundai plans to make India an export base for small cars. Telecon is investing
about US$ 54 million for production of earth moving vehicles/components at
Kharagpur in India. Also, Honda Motorcycles & scooters
have ambitious plan for making this sub-continent a hub for two wheelers
exports. All these forward towards further increase in demand for auto
components.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Auto Components Production Range
In India
India is bestowed with excellent infrastructure for production of auto
components. There are various national and multinational companies in the
country that have put up state of art auto component manufacturing facilities.
The production range of auto components in India. For many of the auto
components, steel remains the dominant material due to its versatility providing
a wide
range of properties through the choice of appropriate combination of
composition and processing.

Along with the above, long term availability of raw materials, good recycling
ability, a relatively favorable price and the large experience based knowledge
favor steel as a choice for use in auto
component manufacturing.

The steel requirements in general for engine parts such as fan, pulley, piston
pin & oil fan are met by low carbon steels, medium carbon steels/alloy steels
based on requisite mechanical properties are applied for crankshafts,
connecting rods, rocker arm shafts e t c . W h i l e l o w carbon/low carbon alloy
case hardening steels are u s e d f o r moderately/severely stressed
components. Transmission parts such as input shaft, output shaft, front axle,
rear axle, kick down & reverse bands, pinion shafts,
clutch discs & plates, automatic transmission components etc. are made with
medium carbon/alloy steels while the gears are made of low carbon/low carbon
alloy case hardening steels. Suspension and steering parts such as knuckle ball
studs, arm sector shafts, arm parts, pitman & idler arms, struts, tie rod ends,
ball joint studs, center link etc. are either made of medium carbon steel or alloy
steel depending upon the conferred properties, spring steels for suspension
springs while low carbon case hardening steels are applied for components that

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
require wear resistance. Various low carbon/low carbon alloy steels are used for
rivets, bolts, nuts & other fastener items. Steel required for chassis components
are met with cold forming & weldable low carbon/microalloyed steel
sheets/plates while deep drawing & extra deep drawing varieties of steel sheets
are employed for body.

Steels are shaped, formed, heat treated and/or machined into automotive
components fulfilling the specific design criteria requiring critical set of
properties like strength & toughness, fatigue & fracture resistance, wear
resistance, corrosion resistance etc. Technology of machining, fabricating or
forming of engineering components has undergone rapid changes with the
advent of Computer Aided Manufacturing systems and robotics. Consequently,
the auto component manufacturers require the highest degree of consistency in
the quality of the steels both metallurgical and dimensional. Also, the changes
in customer expectations for lighter, more powerful & fuel efficient vehicles with
greater
degrees of reliability & safety will continuously drive the steel industry towards
development and manufacturing of steel with closer band of metallurgical
properties, physical properties, leaner alloy compositions, higher strength to
weight ratio etc. at the most competitive prices.

Today, automobile sector accounts for 7% of the total steel consumed in India.
The sparkling growth of the automotive component industry and the automobile
industry in India translates into a tremendous potential and opportunity for
domestic steel producers to cater to the needs of these industries where steel is
the most vital input.

India Emerging as Hub for Auto Components Indian auto component industry is
fast emerging as an
attractive OEM & Tier 1 supplier. The auto component exports from India rose
from a mere US$ 0.760 billion in 2002-03 to US$ 1.8 billion in 2005-06 showing
growth @ 45.61% per annum from 2002-03 onwards. In 2005-06, about 36% of
the component exports headed for Europe, 26% for America, 16% for Asia, 10%

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
to Africa, 10% to Middle East, 1.5% to Oceania and others account for 0.5% of
the total
exports.

Based on the sparkling growth in demand for auto components, global auto
majors and domestic giants have been investing heavily in India because of
India's competitive advantage. Accordingly, the total investment in Indian auto
component industry has been showing a tremendous growth @ 22.12% per
annum from 2002-03 onwards. The investment is expected to rise further with
huge strides. Among various investments pumping in India, auto parts maker
Robert Bosch of Germany will investment US$
201.4 million in its Indian subsidiaries over two years with bulk of investment in
Motor Industries Co. Ltd.(MICO). Hitachi Ltd. of Japan is planning to start auto
component manufacturing in India with its
O E M s - I s u z u Motor & Nissan Motor to begin manufacturing cars in India.
GKN Driveline, a wing of UK based auto c o m p o n e n t manufacturer GKN
plans to open a new manufacturing

facility in India. Dubai based auto ancillary Parts International Company plans to
invest about US$ 3.6 million in India over three years which includes setting up
a manufacturing facility to service exports to CIS & SAARC countries. Fiat India
has been taking various measures to become a global sourcing hub for
components by exporting components worth US$ 8.3 million last year to its
operations in South Africa and plans to source components worth US$ 200
million. Toyota already invested US$ 197 million to supply transmission system,
gear boxes, axles, propeller shafts and aluminium pressure die casting products
to global operations. Delphi is planning to source components such as piston
rods, steering system, drive shafts, catalytic converter, stampings in power
train, sheet metal/stampings for chassis
and electrical parts like wiring harnesses & armature motors worth US$ 250
million by 2007. General Motors which presently is sourcing components worth
US$ 6 million from Indian suppliers intends to ship parts worth US$ 1 billion for

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
its global production units by 2010 and the components include crankshaft
forgings, rdiator caps, gear boxes, leaf springs, wiring harnesses & cables. Ford
Motors plan to source components like steering columns, alloy wheels,
crankshafts, exhaust parts, complete engines for IKON model, radiators,
springs, castings, forgings, leaf springs, body panel, horns, dash board
assembly, starters, alternators & door trims from the present level of US$ 150
million to
around US$ 600 million by 2009 from India. Visteon which had already invested
US$ 56 million is sourcing components for exterior, instrument, cluster
assembly & bumpers, AC system, starters, motors, alternators and panel
instrument assembly from India.

Along with this, over 20 OEMs have set up International Purchasing Offices
(IPOs) in India for components and the figure is expected to double by 2010.

Considering the above, Indian auto component manufacturers are substantially


increasing investments in production capacities, establishing partnerships in
India & abroad and have been investing in or acquiring companies overseas. In
continuation with this, global multi nationals are shifting automotive design
centers into India with India evolving as an excellent automotive R & D base for
prototyping, testing, validating and production of auto components caused by
excellent IT skills & exemplary
automotive domain knowledge.

Conclusions

With increased role of outsourcing in an integrated global economy and India


being considered as a low cost automotive component producer possess a

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
greater edge in the global market aspiring to capture 10% share of the global
market which translates into an export target of US$20 billion by 2015. Also, by
the current trends in the domestic automotive industry, the indigenous demand
for auto components is
estimated to reach US$20 billion in the next 10 years. This is expected to
increase the demand for alloy steels providing a great opportunity for alloy steel
producers in the country to capitulate on it.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CHAPTER 2

About the Organization

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
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, Kiichiro Toyota. Soon
thereafter, the division produced its first Type A Engine in 1934, which was used
in the first Model A1 passenger car in May 1935 and the G1 truck in August
1935. Production of the Model AA passenger car started in 1936.
Although the Toyota Group is most well known today for its cars, it is still in the
textile business and still makes automatic looms (fully computerized, of course),
and electric sewing machines which are available worldwide.
Toyota Motor Co. was established as an independent company in 1937.
Although the founding family name is Toyoda, the company name was changed
to:
Signify the separation of the founders' work life from home life;
Simplify the pronunciation, and
Give the company an auspicious beginning. Toyota is considered luckier than
Toyoda in Japan, where eight is regarded as a lucky number, and eight is the
number of strokes it takes to write Toyota in Katakana.

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

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Replica of the Toyota Model AA, the first production model of Toyota in
1936

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
GENERIC STRATEGIES

Generic strategies were used initially in the early 1980s, and seem to be even
more popular today. 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 - are the products differentiated in any way,


or are they the lowest cost producer in an industry? Competitive scope of the
market - does the company target a wide market, or does it focus on a very
narrow, niche market?

The generic strategies are: 1. Cost leadership, 2. Differentiation, and 3. Focus.

1. Cost Leadership

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
The low cost leader in any market gains competitive advantage from being able
to many to produce at the lowest cost. Factories are built and maintained; labor
is recruited and trained to deliver the lowest possible costs of production. 'cost
advantage' is the focus. Costs are shaved off every element of the value chain.
Products tend to be 'no frills.' However, low cost does not always lead to low
price. Producers could price at competitive parity, exploiting the benefits of a
bigger margin than competitors. Some organization, such as Toyota, are very
good not only at producing high quality autos at a low price, but have the brand
and marketing skills to use a premium pricing policy.

2. Differentiation

Differentiated goods and services satisfy the needs of customers through a


sustainable competitive advantage. This allows companies to desensitize prices
and focus on value that generates a comparatively higher price and a better
margin. The benefits of differentiation require producers to segment markets in
order to target goods and services at specific segments, generating a higher
than average price. For example, Toyota differentiates its product and service.
The differentiating organization will incur additional costs in creating their
competitive advantage. These costs must be offset by the increase in revenue
generated by sales. Costs must be recovered. There is also the chance that any
differentiation could be copied by competitors. Therefore there is always an
incentive to innovated and continuously improve.

3. Focus or Niche strategy

The focus strategy is also known as a 'niche' strategy. Where an organization


can afford neither a wide scope cost leadership nor a wide scope differentiation
strategy, a niche strategy could be more suitable. Here an organization focuses
effort and resources on a narrow, defined segment of a market. Competitive

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
advantage is generated specifically for the niche. A niche strategy is often used
by smaller firms. A company could use either a cost focus or a differentiation
focus. With a cost focus a firm aims at being the lowest cost producer in that
niche or segment. With a differentiation focus a firm creates competitive
advantage through differentiation within the niche or segment. There are
potentially problems with the niche approach. Small, specialist niches could
disappear in the long term. Cost focus is unachievable with an industry
depending upon economies of scale e.g. telecommunications.

ASSEMBLY PLANTS OVER THE WORLD

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

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Company Toyota Motor Corporation
Name
Established August 28, 1937

Head Office 4-18, Koraku 1-chome Bunkyo, Tokyo Prefecture


Japan
Tel: 03 3817 7111
Fax: 03 3817 9026

GROWTH

Profit at Toyota Motor jumped 29 percent in the quarter just ended as the
company, the world's second-largest automaker, reaped the benefits of an
ambitious global expansion with sales rising in every major overseas market.
Toyota reported net income of 286.6 billion yen ($2.59 billion), or 86.22 yen a
share, for the quarter ended June 30, compared with 222.6 billion yen, or 64.83
yen a share, in the same quarter last year on growing sales of minivans and
sport-utility vehicles in the United States and a big jump in sales in Asia.
Toyota's profit for the quarter was slightly more than the combined profits of
General Motors and Ford Motor for the same period.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
''This result is exceptionally strong,'' said Koji Endo, auto analyst at Credit
Suisse First Boston in Tokyo. ''Almost every time, in the last couple of quarters,
the results are beating market forecasts by a relatively big margin.''
Toyota, which also makes Lexus luxury vehicles, said that it expected its profit
for the fiscal year ending March 31, 2005, to remain near last year's record
level.
''Toyota will continue its efforts and work hard to maintain the profit levels of
the fiscal year ended March 2004,'' Ryuji Araki, executive vice president at
Toyota, said in a statement.
Toyota's strong profit growth for the quarter just ended was largely the result of
solid increases in sales overseas, including a 65 percent jump in sales in Asia.
Those rising foreign sales more than offset the negative impact of unfavorable
currency fluctuations.
After more than a decade of stagnant vehicle sales at home, Toyota is making a
big push to increase sales overseas, building factories in China, Europe and the
United States. Toyota's president, Fujio Cho, has set a goal for the company to
raise its share of the global auto market to 15 percent by the end of next
decade, from about 10 percent now, which would put it on par with industry
leader General Motors in sales volume. Last year, Toyota surpassed Ford in
global sales to become the world's second-biggest carmaker.
In the United States, Toyota shook off intense competition from Detroit makers
who continued to offer large discounts on their cars and trucks. In particular,
solid sales of the Toyota Sienna minivan and sport-utility vehicles like the Lexus
RX-330, gave a lift to Toyota's bottom line last quarter, analysts said. Toyota's
share of the United States market rose to 11.9 percent for the first six months
of 2004 from 11 percent in the same period last year.

Meanwhile, Toyota said it would expand production of its Prius gasoline-electric


hybrid sedan by half to 15,000 vehicles a month to meet demand for the fuel-
efficient cars in the United States. It also said it would delay the introduction of

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
the hybrid version of the Lexus RX-330 until early next year instead of
December.

Over all, Toyota's revenue for the quarter ended in June increased 10 percent to
4.51 trillion yen ($40.75 billion) from 4.09 trillion yen a year earlier, as its global
vehicle sales volume increased 12 percent to 1.79 million vehicles.
Toyota's vehicle sales in Asia for the quarter jumped by two-thirds to 202,000
vehicles, whiles its sales in Europe rose 6 percent to 247,000. In the crucial
North American market vehicle sales gained 12 percent to 572,000 vehicles.
The fact that Toyota was able to simultaneously increase sales volumes in all
the major overseas markets in the last quarter shows the company has become
adept at developing vehicles for very different customers, analysts said. In the
last few years, Toyota rolled out a series of new minivans and S.U.V.'s for the
United States market, developed new small and inexpensive sedans for Asia
and, in Europe, unveiled sporty cars powered by the kind of diesel engines
popular there.
''The company has been very successful at introducing the right products,'' Mr.
Endo said. ''Toyota seems to be the only volume maker in the world whose
sales are growing almost everywhere.''
For the fiscal year ending in March 2005, Toyota forecast global sales of 7.2
million vehicles, which would be an increase of 7.2 percent from 6.72 million in
its last fiscal year. The company forecast North American sales would increase
5.6 percent, to 2.22 million vehicles.
Toyota said cost-cutting also contributed to its profit growth for the quarter. The
company is aiming to cut costs by 200 billion yen ($1.8 billion) for the year
ending next March, mostly by simplifying the designs of new vehicles so that
more parts can be shared among different models and assembly is easier.
Toyota said such cost-saving measures increased its operating profit by 40
billion yen ($361 million) for the quarter just ended.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
MARKET SHARE

The world's most profitable automaker - and soon to be its biggest - now has a
15% market share in the U.S., where it sold 2.5 million cars and trucks last year.
Because Toyota is already bigger than Chrysler in the U.S. and is about to pass
Ford, Automotive News, the industry bible, has retired the "Big Three" moniker;
GM (Charts), Ford (Charts), and Chrysler (Charts) will henceforth be known as
the Detroit Three.
Toyota's presence in the U.S. is now so routine that the 3,322 business leaders
Fortune surveyed named Toyota one of America's Most Admired Companies for
the second year in a row - boosting it to third place overall, behind two
American perennials, General Electric and Starbucks. Toyota has returned the
compliment, making an entrance into that most American of sports - we're

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
talking NASCAR - and introducing a full-sized, Texas-built pickup truck, the
Tundra.
As the story of the tarnished Crown hints, nothing was inevitable about Toyota's
success. It has managed to survive discriminatory taxes, import restraints, and
the occasional xenophobic hissy fit - U.S. workers taking sledgehammers to
imported cars - to become something of a model citizen.
There's no question that coming in fresh, Toyota had some advantages over
Detroit: It was unburdened by retiree obligations, union contracts that had been
bid up over decades, and brands like Oldsmobile that refused to make money
(or die). And yes, it was lucky to have small cars ready to sell when the first oil
shocks hit in the 1970s.

But the most important reason that Toyota became America's most prestigious
automaker is that this quintessentially Japanese company has been better than
Detroit at reading the American car psyche. Toyota has never been a style
leader. It has never created a car as iconic as, say, the Ford Mustang. But it
discerned correctly that many car buyers don't need the next hot thing. They
just want a trouble-free product that looks fine - and they will pay a premium for
it.
One way Toyota reads the public mind is the think tank at Toyota Motor Sales in
Torrance, Calif., where a research department staffed by 116 people monitors
the industry and keeps tabs on demographic and economic developments. Its
mission: to predict consumer trends and create a lineup of cars and trucks to
capitalize on them. Each professional is expected to spend time out in the field
talking to car buyers. The Japanese have a name for it: genchi genbutsu - go to
the scene and confirm the actual happenings.
Most big companies have something like it; what distinguishes Toyota is that its
executives actually listen and have turned those insights into profits. When
researchers found in the mid-1990s that Toyota was losing young buyers to
hipper brands like VW, its marketers dreamed up the hugely successful Scion.
Another case: GM was fooling around with electric cars as far back as the
1980s, but it was Toyota that tapped into the appeal of the green revolution

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
with the hybrid-powered Prius. The Prius accounts for less than 5% of U.S. sales,
but Toyota has won a fortune in good publicity.
The new Tundra is an inflection point for Toyota in the U.S. On the one hand,
Lentz has to figure out how to make it succeed in the auto market of the future;
on the other, it's a big investment that needs to succeed right away. Inside the
company it's common to hear the Tundra described as the riskiest launch in its
history, because it is highly visible - and frankly, a test of the company's
machismo.

Toyota has high expectations: more than 200,000 truck sales this year (nearly
twice that of the previous smaller model), 300,000 eventually. It's a direct
challenge to Motown. Full-sized pickups are the highest-volume vehicles sold by
the Detroit Three and make a tidy profit. Buyers are loyal, and imports have had
a tough time breaking in.
Toyota approached the new Tundra cautiously - and characteristically. Planning
started seven years ago, when engineers gathered in 2000 to drive different
trucks and experiment with hauling trailers - a weakness in the old version.
They even stopped at national parks to talk to recreational users. Such nitty-
gritty consumer study, bolstered by other research, told Toyota it should stay
away from cowboy imagery and country music; the competition had covered
that territory. "Buyers said, 'Don't waste our time. Tell me why I should buy the
truck,'" Lentz says. The upshot: Emphasize brute strength and performance.

During the Super Bowl, Toyota did just that. One ad for the Tundra showed it
hauling a 10,000-pound load; another depicted it braking inches before it
hurtled off a precipice (the truck was restrained by a tether). To show that it
was serious, Toyota decided to build a brand-new plant dedicated to this model
in San Antonio. Far from normal transportation routes, the location is difficult
logistically, but it did plop Toyota in the heart of truck country - and in a big,
powerful state.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
TOYOTA PHILOSOPHY

Toyota's management philosophy has evolved from the company's origins and
has been reflected in the terms "Lean Manufacturing" and Just In Time
Production, which it was instrumental in developing. The Toyota Way has four
components:

1. Long-term thinking as a basis for management decisions.


2. A process for problem-solving.
3. Adding value to the organization by developing its people.
4. Recognizing that continuously solving root problems drives organizational
learning.

The Toyota Way incorporates the Toyota Production System.

TOYOTA PRODUCTION SYSTEM

Toyota has long been recognized as an industry leader in manufacturing and


production. Three stories of its origin have been found, one that they studied
Piggly-Wiggly's just-in-time distribution system, one that they followed the
writings of W. Edwards Deming, and one that they were given the principles

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
from an Army training program. It is possible that all are true. Regardless of the
origin, the principles, described in Toyota's management philosophy, The
Toyota Way, are as follows:

1. Base your management decisions on a long-term philosophy, even at the


expense of short-term goals
2. Create continuous process flow to bring problems to the surface
3. Use "pull" systems to avoid overproduction
4. Level out the workload
5. Build a culture of stopping to fix problems, to get quality right the first
time
6. Standardized tasks are the foundation for continuous improvement and
employee empowerment
7. Use visual control so no problems are hidden
8. Use only reliable, thoroughly tested technology that serves your people
and processes
9. Grow leaders who thoroughly understand the work, live the philosophy,
and teach it to others
10. Develop exceptional people and teams who follow your company’s
philosophy
11. Respect your extended network of partners and suppliers by
challenging them and helping them improve
12. Go and see for yourself to thoroughly understand the situation
(genchi genbutsu)
13. Make decisions slowly by consensus, thoroughly considering all
options; implement decisions rapidly
14. Become a learning organization through relentless reflection and
continuous improvement.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
FUTURE PLANS

It must be incomprehensibly tough to fight against auto-giant Toyota. No sooner


had Bill Ford, the amiable spokesman and ever optimistic CEO of the automaker
that bears his great-grandfathers name, announced that 50 percent of its
models will come equipped with its proprietary gasoline-electric full-hybrid
system, which will be the equivalent of about 8 percent of the automakers
lineup, than Toyota, now the worlds second largest automaker (rubbing more
salt into an open wound) responds with an announcement that it plans on
offering its arguably most advanced Hybrid Synergy Drive system in every
model it produces!
“In the future, the cars you see from Toyota will be 100 percent hybrid,”
executive vice president Kazuo Okamoto told a media scrum attending the
Frankfurt auto show in Germany on Monday.
While Okamoto wouldnt offer an ETA for his grand future plans, no-one would be
foolish enough to doubt that, if Japans number one brand decides that such a
move is in its best long-term interests, it will happen.
Okamoto cited high gasoline prices as the impetus behind such a decision, and
with placards popping up in various locations across the nation at $1.50 per
liter, an end to rising fuel costs hardly looks near.
So what are its short-term goals? Toyota is targeting up to 400,000 hybrid-
electric vehicles (HEVs) worldwide in 2006, or so said the automakers president,
Katsuaki Watanabe at an investor conference in New York on Monday, which will
include its dedicated Prius hybrid compact-to-midsize liftback, as well as the
Highlander Hybrid midsize SUV, and upcoming Camry hybrid. Toyotas Lexus
brand will continue forward with its RX 400h model, which shares components
with the Highlander Hybrid, as well as a new midsize GS 450h. Also, the

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
companys Coaster buses will be outfitted with a version of the automakers HEV
system. This would equal a 60 percent rise over its 2005 hybrid sales.
Not only does Toyotas 2006 HEV sales goal represent a sharp increase in
production over one year, but its 400,000 prospective annual unit sales would
almost equal its total hybrid sales to date - approximately 425,000 since its
first-generation Prius was launched in 1997 - if its targets are realized.

And how will Toyota achieve such a dramatic rise in HEV fortunes? Well,
factoring in high consumer demand - the automaker could sell every hybrid it
produces twice over with a waiting list remaining - and a reduction in production
costs since integrating the alternative technology into its traditional assembly
line process - all Toyota hybrids are now built alongside conventionally-powered
models

instead of the dedicated plant that previously built Prius; and then taking in
consideration that increased volumes will reduce component costs and
therefore increase the potential for HEV profitability - prices
will inevitably come down making the technologys value proposition more
attractive to mainstream (read lightweight environmentalists) consumers.
Watanabe is planning to reduce production costs and in the process halve the
$5,000 price premium average HEV buyers get charged over a conventionally
powered model with the same features, or so the Detroit News reports.
But in the case of Toyotas new Highlander and Lexus RX 400h, which along with
Hondas new Accord Hybrid buck HEV convention in order to deliver strong
performance benefits along with fuel savings and significant emissions
reductions, there are no gasoline-only-powered equivalents to compare them
to. Rather, the Lexus, for instance, would need to be tested side-by-side with a
V8-powered luxury SUV to equal its luxurious appointments and acceleration off
the line and during passing. It matches BMWs 4.4-liter X5, for instance, and
prior to this year completely outclassed Mercedes-Benzs ML430 for straight-line
performance at 6.7 seconds to 60 mph.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
While Toyota and Honda have been under attack from some motoring media
scribes for enacting this new hybrid philosophy, citing real world fuel
consumption results that arent anywhere near as optimistic as the EPA
estimates suggest (which is par for the course with EPA ratings for most
conventionally-powered vehicles), such reporters are missing the entire point.
The Highlander Hybrid is all about performance, with the added benefit of
reasonably good fuel economy and, of course, its “green” attributes.

There has been some talk among HEV insiders that a driver controlled system is
on the way, which would optimize fuel savings when “dialed in” to do so, or
performance if out-accelerating your stoplight neighbor is needed. Such a
system would be flexible enough for one vehicle and engine configuration to
meet the needs of multiple driving styles, and in-turn, reduce production costs
overall.
And if Toyota wants this or any other technology to become popular, it has
ample capitalization to make sure its plans are carried out; which is the real
reason consumers shouldnt be concerned about any negative implications that
may or may not revolve around jumping on the hybrid bandwagon.

Still, there are factors outside of Toyotas direct control that could keep the
automaker from reaching its short and long-term goals, the first being a
shortage of hybrid parts; a problem that has plagued the company throughout
the year. Watanabes predecessor, Fujio Cho, had previously set his sights on
300,000 HEV unit sales globally for 2005, but the automaker is currently only on
target for 240,000 to 250,000 deliveries. According to Jim Press, Toyota Motor
Sales, U.S.A. VP of sales, a lack of batteries and other components are the
cause of the problem.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Still, Toyota most likely has plans to overcome such setbacks, reach its 400,000
HEV units sales by year-end 2006, and then on past 1 million hybrid models per
year by 2010 - its longer-term target. And who can stop them. GM? Ford?
DaimlerChrysler? Not likely. Toyotas lead is too long, its technical know-how too
rich, and pockets too deep for any competitor, less Honda, to put up a
significant threat.

MARKETING

What is marketing?

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
There are many different definitions of marketing. 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, 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. They all try to embody the
essence of marketing:
• Marketing is about meeting the needs and wants of customers;
• Marketing is a business-wide function – it is not something that operates alone
from 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, you may find it helpful to often refer to the
following diagram which summarises the key elements of marketing and their
relationships:

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
MARKETING CONCEPT AND ORIENTATION

It is a fundamental idea of marketing that organisations survive and prosper


through meeting the needs and wants of customers. This important perspective
is commonly known as the marketing concept.
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.
Businesses do not undertake marketing activities alone. They face threats from
competitors, and changes in the political, economic, social and technological
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.
An organisation that adopts the marketing concept accepts the needs of
potential customers as the basis for its operations. Success is dependent on
satisfying customer needs.
What are customer needs and wants?
A need is a basic requirement that an individual wishes to satisfy.
People have basic needs for food, shelter, affection, esteem and self-
development. Many of these needs are created from human biology and the
nature of social relationships. Customer needs are, therefore, very broad.
Customer needs are broad, customer wants are usually quite narrow.
A want is a desire for a specific product or service to satisfy the underlying
need.
Consider this example:
Consumers need to eat when they are hungry.
What they want to eat and in what kind of environment will vary enormously.
For some, eating at McDonalds satisfies the need to meet hunger. For others a
microwaved ready-meal meets the need. Some consumers are never satisfied
unless their food comes served with a bottle of fine Chardonnay.
Consumer wants are shaped by social and cultural forces, the media and
marketing activities of businesses.
This leads onto another important concept - that of customer demand:

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Consumer demand is a want for a specific product supported by an ability and
willingness to pay for it.
For example, many consumers around the globe want a Mercedes. But
relatively few are able and willing to buy one.
Businesses therefore have not only to make products that consumers want, but
they also have to make them affordable to a sufficient number to create
profitable demand.

Businesses do not create customer needs or the social status in which customer
needs are influenced. It is not McDonalds that makes people hungry. However,
businesses do try to influence demand by designing products and services that
are
• Attractive
• Work well
• Are affordable
• Are available
Businesses also try to communicate the relevant features of their products
through advertising and other marketing promotion.

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. 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. This
version continued in 1953 when Neil Borden, in his American Marketing
Association presidential address, took the recipe idea one step further and
coined the term 'Marketing-Mix'. A prominent marketer, E. Jerome McCarthy,

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
proposed a 4 P classification in 1960, which would see wide popularity. The four
Ps concept is explained in most marketing textbooks and classes.

DEFINITION

Although some marketers have added other Ps, such as personnel and
packaging, 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. A typical example of a mass
produced service is the hotel industry. A less obvious but ubiquitous mass
produced service is a computer operating system. Typical examples of a mass
produced objects are the motor car and the disposable razor.

Price – The price is the amount a customer pays for the product. It is
determined by a number of factors including market share, competition,
material costs, product identity and the customer's perceived value of the
product. The business may increase or decrease the price of product if other
stores have the same product.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Place – Place represents the location where a product can be purchased. It is
often referred to as the distribution channel. It can include any physical store as
well as virtual stores on the Internet.

Promotion – Promotion represents all of the communications that a marketer


may use in the marketplace. Promotion has four distinct elements - advertising,
public relations, word of mouth and point of sale. A certain amount of crossover
occurs when promotion uses the four principal elements together, which is
common in film promotion. Advertising covers any communication that is paid
for, from television and cinema commercials, radio and Internet adverts through
print media and billboards. One of the most notable means of promotion today
is the Promotional Product, 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. It is the only form of advertising
that targets all five senses and has the recipient thanking the giver. Public
relations are where the communication is not directly paid for and includes
press releases, sponsorship deals, exhibitions, conferences, seminars or trade
fairs and events. Word of mouth is any apparently informal communication
about the product by ordinary individuals, satisfied customers or people
specifically engaged to create word of mouth momentum. Sales staff often
plays an important role in word of mouth and Public Relations.

Broadly defined, optimizing the marketing mix is the primary responsibility of


marketing. By offering the product with the right combination of the four Ps
marketers can improve their results and marketing effectiveness. Making small
changes in the marketing mix is typically considered to be a tactical change.

Making large changes in any of the four Ps can be considered strategic. For
example, a large change in the price, say from $19.00 to $39.00 would be
considered a strategic change in the position of the product. However a change

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
of $131 to $130.99 would be considered a tactical change, potentially related to
a promotional offer.

MARKET RESEARCH

Market research is for discovering what people want, need, or believe. It can
also involve discovering how they act. 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, the supply and the demand. Information about the markets can be
obtained in several different varieties and formats.
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. Widely used bases for segmenting include geographic
differences, personality differences, demographic differences, use of product
differences, and psychographic differences.

Market trends

The upward or downward movements of a market, during a period of time. The


market size is more difficult to estimate if you are starting with something

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
completely new. In this case, you will have to derive the figures from the
number of potential customers or customer segments.

But besides information about the target market you also need information
about your competitor, your customers, products etc. A few techniques are:

Customer analysis Risk analysis


Product research Choice Modelling
Advertising research Competitor analysis

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CHAPTER 3

Research Methodology

3.1) Purpose of the Study

3.2) Scope of the Study

3.3) Objectives of the Study

3.4) Methodology
3.4.1) Population
3.4.2) Sample Design
3.4.3) Sample Frame
3.4.4) Sample Size
3.4.5) Sources of Information
3.4.6) Data Collection Tools

3.5) Limitations of the Study

3.1 PURPOSE OF THE STUDY

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
 Toyota is an interesting topic.
 To study the marketing stratigies of Toyota.
 I want to pursue my career in Automobile Sector.
 To study the growing market of Toyota.
 Data is easily available.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
3.2 SCOPE OF THE STUDY

 The present study can be extended to access the present marketing


condition of Indian automobile sector.
 The study can be used to design a proper product, price, place and
promotional strategy for the market.
 From the present study we can know the market share of different
products and accordingly formulated strategy to enhance it.
 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.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
3.3 OBJECTIVES OF THE 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. These are as follows:

 To know about the marketing strategies used by Toyota.


 To find out the market share of Toyota.
 To study the customer satisfaction of Toyota owners.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
3.4 METHODOLOGY

Research can be defined to be search for knowledge or any systematic


investigation to establish facts. The primary purpose for applied research is
discovering interpreting and the development of methods and systems for the
advancement of human knowledge on a wide variety of scientific matters of our
world and the universe.

Research Methodology can be defined as:

1. The analysis of the principles of methods, rules, and postulates employed


by a discipline;
2. The systematic study of methods that are, can be, or have been applied
within a discipline or
3. A particular procedure or set of procedures.

3.4.1 Population
The main emphasis of the study was on the customers of Toyota in New Delhi.

3.4.2 Sample Design

Marketing research can classify in one of three categories:

• Exploratory research
• Descriptive research
• Causal research

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
These classifications are made according to the objective of the research. In
some cases the research will fall into one of these categories, but in other cases
different phases of the same research project will fall into different categories.

• Exploratory research has the goal of formulating problems more


precisely, clarifying concepts, gathering explanations, gaining insight, eliminating
impractical ideas, and forming hypotheses. Exploratory research can be
performed using a literature search, surveying certain people about their
experiences, focus groups, and case studies. When surveying people, exploratory
research studies would not try to acquire a representative sample, but rather,
seek to interview those who are knowledgeable and who might be able to provide
insight concerning the relationship among variables. Case studies can include
contrasting situations or benchmarking against an organization known for its
excellence. Exploratory research may develop hypotheses, but it does not seek
to test them. Exploratory research is characterized by its flexibility.

● Descriptive research is more rigid than exploratory research and seeks to


describe users of a product, determine the proportion of the population that
uses a product, or predict future demand for a product. As opposed to
exploratory research, descriptive research should define questions, people
surveyed, and the method of analysis prior to beginning data collection. In other
words, the who, what, where, when, why, and how aspects of the research should
be defined. Such preparation allows one the opportunity to make any required
changes before the costly process of data collection has begun.

There are two basic types of descriptive research: longitudinal studies and cross-
sectional studies. Longitudinal studies are time series analyses that make
repeated measurements of the same individuals, thus allowing one to monitor
behavior such as brand-switching. However, longitudinal studies are not

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
necessarily representative since many people may refuse to participate because
of the commitment required. Cross-sectional studies sample the population to
make measurements at a specific point in time. A special type of cross-sectional
analysis is a cohort analysis, which tracks an aggregate of individuals who
experience the same event within the same time interval over time. Cohort
analyses are useful for long-term forecasting of product demand.

● Causal research seeks to find cause and effect relationships between


variables. It accomplishes this goal through laboratory and field experiments.

The research associated to my project is EXPLORATORY RESEARCH.

3.4.3 Sample Frame


Toyota customers in Bhera Enclave.

3.4.4 Sample Size


How many people should be surveyed? Large samples give more reliable esults
than small samples. However, it is not necessary to sample the entire target
population or even a substantial portion to achieve reliable results.
Samples of less than 1 percent of a population can often provide good reliability
given a credible
sampling procedure.

n = Z2.σ2/E2
where
Z = Z value based on level of confidence
σ = sample standard deviation or estimate of the population standard deviation.
E = acceptable magnitude of error, plus or minus error factor.

Z = 1.28 (90% Confidence Level)

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
σ = 100
E = 15

n = (1.28)2 * (100)2/ (15)2


= 1.6384 * 10000/225
= 72.8

A customer-based survey was conducted in which 73 people were asked


to fill the questionnaire.
I will be using statistical method for sample size determination.

3.4.5 Sources of Information

1. Primary Sources
2. Secondary Sources

Primary Resources

Primary source, (also called original source), is a term used in a number of


disciplines to describe source material that is closest to the person, information,
period, or idea being studied.

Secondary Sources

In library and information science, historiography and other areas of


scholarship, a secondary source is a document or recording that relates or
discusses information originally presented elsewhere. A secondary source

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
contrasts with a primary source, which is an original source of the information
being discussed. Secondary sources involve generalization, analysis, synthesis,
interpretation, or evaluation of the original information

3.4.6 Data Collection Tool


As mentioned earlier, the objective of my study is to formulate a Marketing
Strategy for Toyota Automobile Industry. While recommending the said strategy
detailed information was collected from both primary and secondary sources
and thus analysed. This included:

Primary Sources
• Questionnaire – To analyse buying behaviour and in order to gain an
insight into the buyer need-satisfaction level, a questionnaire was
formulated and administered among 70 people.
• Interviews were also conducted with some dealers and retailers to get the
related information.

Secondary Sources
• Books
• Newspaper
• Internet websites

3.5 LIMITATIONS OF THE STUDY

Since the road to improvement is never ending, so this study also suffers from
certain limitations. Some of them are as follows:

 Because of illiteracy, it was a time consuming method in which


continuous guidance was required.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
 Questionnaire method involves some uncertainty of response. Co-
operation on the part of informants, in some cases, was difficult to
presume.
 It is possible that the information supplied by the informants may
be incorrect. So, the study may lack accuracy.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CHAPTER 4

Findings and Analysis


4.1) Findings from Primary Data

4.2) Findings from Secondary Data

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Findings from Primary Data

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
PERCENTAGE OF TOYOTA OWNERS

24%

YES
NO

76%

INFERENCE:

 76% of the respondents were owners of Toyota.


 Whereas 24% of the respondents were owners of others.

According to the survey, most of the people like Toyota cars and they trust
Toyota.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CUSTOMER SATISFACTION

17%

SATISFIED
DISSATISFIED

83%

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.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
High satisfaction level of consumer shows that the consumers are satisfied
with the cars and services of Toyota.

CHARGES AND TIMELY DELIVERY

NO
40%

YES
60%

INFERENCE:

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
 60% of the Respondents were happy with their charges and timely
delivery they were offering.

 However 40% of the Respondents were not happy at the same time.

This shows that consumers are happy with the reasonable charges
according to the quality and their delivery on time.

FUEL EFFICIENCY OF TOYOTA

100 78
80
60
40 22
20
0
NO
YES

INFERENCE:

 78% of the respondents felt that Toyota has the most fuel efficiency.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
 While 22% felt it isn’t the most fuel efficient.

According to the survey, most of the people are satisfied with the fuel
efficiency of cars of Toyota.

FEATURES OF TOYOTA

NOT SO GOOD
8%

VERY GOOD
10%

SATISFACTORY
12%

GOOD
70%

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
INFERENCE:

 70% of the respondents felt that the features of the Toyota are good.

 While 8% of respondents thought it was not so good, 10% thought it was


very good and 12% felt satisfactory about the features.

We can analyse that people admire Toyota’s features and are satisfied.

FEATURES THAT BEST DESCRIBES TOYOTA

40 38
35
30 29
25
20 18
15
15
10
5
0
HANDLING FUEL EFFICIENCY DESIGN COMFORT

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
INFERENCE:

 Toyota is best known for its design & comfort.

 Then comes Handling and Fuel Efficiency.

This shows that people buy Toyota because they are attracted by the Designing first and then by
Comfort, Fuel Efficiency and Handling

HOW DO YOU FIND THE INTERIORS OF TOYOTA

16%
VERY GOOD
3%
GOOD
7%
SATISFACTORY
74% NOT SO GOOD

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
INFERENCE:

 The interiors of Toyota are good according to 74% of the respondents.

 16% said it was very good, 7% said it was satisfactory and 3% felt it was
not so good.

According to the survey, most of the Toyota owners like the Interiors of
Toyota because of the quality used in making the Interiors.

WHAT SHOULD BE DONE TO IMPROVE TOYOTA?

MORE
SERVICE
STATION
S
13%
CHEAPE
R SPARE
PARTS MAKE IT
15% AFFORD
ABLE
72%

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
INFERENCE:

 If Toyota is made more affordable then it would win more customers, a theory
which was backed by 72% of the respondents.

 15% and 13% respectively want cheaper spare parts and more service stations.

Till now Toyota has its name in luxury and expensive car segments
but it should be made more affordable so that people who want can
buy it.

WHAT SHOULD BE DONE TO MAKE TOYOTA THE

BEST CAR?

60
60
50
40
30
20 20
20
10
0
MAKE
Mayank Chugh, IT MORE
0996111708, BBA MAKE IT MORE
(2S), III SEM, B Sec GIVE IT A
Batch: 2008-11FUTURISTIC SPORTY CONCEPT CAR
LOOK
INFERENCE:

 To make it the best car in its class it should be made more


futuristic which was felt by 60% of the respondents.

 20% of the respondents thought it should be made more sporty.

 20% wanted to give it a concept car look.

According to the survey, as people expect more from Toyota so they


want it to be a Futuristic car.

ARE YOU HAPPY WITH THE AFTER SALES SERVICES

PROVIDED BY TOYOTA

10%
YES
15%
NO

YES BUT IT CAN


75% BE BETTER
Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec
Batch: 2008-11
INFERENCE:

 Overall 75% of the respondents were happy with the after sales
service provided by Toyota.

 15% were unhappy with Toyota due to poor after sales services
provided by them.

 10% said that they are happy but it can be better.

This shows that most of the Toyota owners are satisfied with the After
Sales Service even after years of buying.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Findings from Secondary Data

SWOT ANALYSIS

Strengths:
New investment by Toyota in factories in the US and China saw 2005 profits
rise, against the worldwide motor industry trend. Net profits rose 0.8% to 1.17
trillion yen ($11bn; £5.85bn), while sales were 7.3% higher at 18.55 trillion yen.
Commentators argue that this is because the company has the right mix of
products for the markets that it serves. This is an example of very focused
segmentation, targeting and positioning in a number of countries.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
In 2003 Toyota knocked its rivals Ford into third spot, to become the World's
second largest carmaker with 6.78 million units. The company is still behind
rivals General Motors with 8.59 million units in the same period. Its strong
industry position is based upon a number of factors including a diversified
product range, highly targeted marketing and a commitment to lean
manufacturing and quality. The company makes a large range of vehicles for
both private customers and commercial organizations, from the small Yaris to
large trucks. The company uses marketing techniques to identify and satisfy
customer needs. Its brand is a household name. The company also maximizes
profit through efficient manufacturing approaches (e.g. Total Quality
Management).

Weaknesses:
Being big has its own problems. 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. Therefore it is exposed to fluctuating economic and political conditions
those markets. Perhaps that is why the company is beginning to shift its
attentions to the emerging Chinese market. Movements in exchange rates could
see the already narrow margins in the car market being reduced.
The company needs to keep producing cars in order to retain its operational
efficiency. Car plants represent a huge investment in expensive fixed costs, as
well as the high costs of training and retaining labour. So if the car market
experiences a down turn, the company could see over capacity. If on the other
hand the car market experiences an upturn, then the company may miss out on
potential sales due to under capacity i.e. it takes time to accommodate. This is
a typical problem with high volume car manufacturing.

Opportunities:
Lexus and Toyota now have a reputation for manufacturing environmentally
friendly vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
based upon advance technologies developed by the organization. Rocketing oil
prices have seen sales of the new hybrid vehicles increase. Toyota has also sold
on its technology to other motor manufacturers, for example Ford has bought
into the technology for its new Explorer SUV Hybrid. Such moves can only firm
up Toyota's interest and investment in hybrid R&D.
Toyota is to target the 'urban youth' market. 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.
The vehicle itself is a unique convertible, with models extending at their rear!
The narrow segment is notorious for it narrow margins and difficulties for
branding.

Threats:
Product recalls are always a problem for vehicle manufacturers. In 2005 the
company had to recall 880, 00 sports utility vehicles and pick up trucks due to
faulty front suspension systems. Toyota did not g give details of how much the
recall would cost. The majority of affected vehicles were sold in the US, while
the rest were sold in Japan, Europe and Australia.
As with any car manufacturer, Toyota faces tremendous competitive rivalry in
the car market. Competition is increasing almost daily, with new entrants
coming into the market from China, South Korea and new plants in Eastern
Europe. The company is also exposed to any movement in the price of raw
materials such as rubber, steel and fuel. The key economies in the Pacific, the
US and Europe also experience slow downs. These economic factors are
potential threats for Toyota.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CHAPTER 5

Conclusion

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CONCLUSION

Toyota Motor Co. was established as an independent company in 1937.


Although the founding family name is Toyoda, the company name was changed
to:
Signify the separation of the founders' work life fro m home life;
Simplify the pronunciation, and
Give the company an auspicious beginning. Toyota is considered luckier than
Toyoda in Japan, where eight is regarded as a lucky number, and eight is the
number of strokes it takes to write Toyota in Katakana.

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

Conclusion of this project can be drawn as:


• Most of the people surveyed were owners of Toyota.
• Maximum number of Toyota owners are satisfied with their cars and
services as well as pre-sales services of charges and timely delivery.
• Toyota owners are satisfied with the fuel efficiency so it makes it more
affordable for the customers.
• People buy Toyota because of its features as they are attracted by the
Designing first and then by Comfort, Fuel Efficiency and Handling.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
• As Toyota provides good quality of Interiors, people tend to get attracted
towards it and thus love to buy Toyota cars.
• After the survey it was observed that the people who wants to buy a
Toyota are not able to buy as it is an expensive car so they suggest that it
should be make affordable to buy and to maintain afterwards.
• As people expect more from Toyota so they want it to be a Futuristic car.
• After analyzing it was observed that most of the Toyota owners are
satisfied with the After Sales Service even after years of buying.

CHAPTER 6

Recommendations

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
RECOMMENDATIONS

 Toyota should adopt the defensive marketing strategy because as being


the second largest car producer in the international market.

 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 adopt an offensive marketing strategy for entering in the


small car segment. This market is dominated by Maruti Suzuki and
Hyundai in the Indian domestic auto market.

 Toyota must plan out an ideal marketing producing capacity, because it


faces the problem of over and under capacity in case of upturn and
downturn of the market.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
ANNEXURES
• Annexure I – Questionnaire

• Annexure II – Product Mix of Toyota

• Annexure III – Newspaper Article

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Annexure I

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Questionnaire

QUESTIONNAIRE

• Name: …………………………………………………………………….

• Address: …………………………………………….............................

............................................................................................................

• Contact Number: …………………………………………………........

(Questionnaire will be used for academical purpose only.)

Q1) Do you own a car?

Yes No

o If Yes then which one?

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
(i)Toyota (ii) Hyundai (iii) Maruti

Q2) Are you satisfied with the services offered by Toyota?

(i)Satisfied (ii) Dissatisfied

Q3) Are you happy with their charges and timely delivery they

were offering?

(i)Happy (ii) Unhappy

Q4) Do you think Toyota has the most fuel efficiency?

(i)Yes (ii) No

Q5) How do you find the features of Toyota as compared to

other cars?

(i) Very good (ii) Good

(iii) Satisfactory (iv) Not so good

Q6) Which of these qualities do you think best describes

Toyota?

(i)Handling (ii) Fuel efficiency

(iii)Design (iv) Comfort

Q7) How do you find the interiors of Toyota?

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
(i) Very good (ii) Good

(iii)Satisfactory (iv) Not so good

Q8) According to you what should be done to improve Toyota?

(i) Make it more affordable

(ii) Cheaper spare parts

(iii) More service stations

Q9) According to you what should be done to make Toyota

the best car?

(i)Make it more futuristic

(ii)Make it more sporty

(iii)Give it a concept car look

Q10) Are you happy with the after sales services provided by

Toyota?

(i)Yes (ii) No

(iii) Happy but it can be better

Thank you so much for your time and support.

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Annexure II

Product Mix of Toyota

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Toyota Car Models

INNOVA

Sl. No. Grade Model Seater Ex-Showroom Price Rs.

2.5 EV (Diesel) MS 8 769,000

2.5 EV (Diesel) MS 7 773,000


1 E
2.5 EV (Diesel) PS 8 794,000

2.5 EV (Diesel) PS 7 798,000

2.0 G (Gasoline) 8 806,000


2 G
2.5 G (Diesel) 8 875,000

2.5 GX (Diesel) 8 950,000

3 GX 2.5 GX (Diesel) 7 946,000

2.0 GX (Gasoline) 8 887,000

2.0 VX (Gasoline) 8 1,060,000

4 VX 2.5 VX (Diesel) 8 1,121,000

2.5 VX (Diesel) 7 1,117,000

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
LAND CRUISER PRADO

Sl. No. Grade Transmission Ex-Showroom Price Rs.

1. VX Automatic 4,395,000

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
LAND CRUISER 200

Sl.
Grade Transmission Ex-Showroom Price Rs.
No.

VX
1. Automatic 8495000
Premium
VX
2. Automatic 8345000
Standard

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
FORTUNER

Sl. No. Grade Transmission Ex-Showroom Price Rs.

1. FA Manual 1845000

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
CAMRY

Sl.
Grade Transmission Ex-Showroom Price Rs.
No.

1. W1 Manual 2,116,580

2. W2 Automatic 2,278,480

3. W3 Manual 2,166,580

4. W4 Automatic 2,328,480

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
COROLLA ALTIS

Model Model Ex-Showroom Price Rs.

1. 1.8J 970,000

2. 1.8G 1,100,000

3. 1.8GL 1,225,000

4. 1.8VL 1,318,000
Corolla Altis Sport w.e.f 1st June 2009

5. 1.8Sport 1,135,000

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Annexure III

Newspaper Article

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Source: Times of India, 04/05/09, New Delhi

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Source: Times of India, 06/06/09, New Delhi

BIBLIOGRAPHY

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
Bibliography

1) Books

• Kothari, C.R. Research Methodology, 3rd edition, 1997, Vikas Publishing


House Pvt. Ltd.,
New Delhi.
• Kotler, Philip Marketing Management, 13th edition, 2009, Dorling
Kindersley (India) Pvt.
Ltd., South Asia.
• Varshney & Gupta; Marketing Management, Sultan Chand & Sons,
2005.
• Gupta, S.L., Marketing Research, Excel Books, 2004.
• Kotler & Armstrong; Principles of Marketing Management, Prentice hall
India, 2003.
• Aaker; Marketing Research, John Willey & Sons, 2001.

2) Newspapers

• Times of India, 04/05/09, New Delhi


• Times of India, 06/06/09, New Delhi

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11
3) Websites
• http://www.nytimes.com/2004/08/04/business/global-growth-gives-
toyota-29-rise-in-profit.html
• http://money.cnn.com/magazines/fortune/fortune_archive/2007/03/19/8
402324/index.htm
• http://www.automobile.com/industry-report-toyota-plans-for-hybrid-
alternative-in-100-percent-of-models-in-future.html

Mayank Chugh, 0996111708, BBA (2S), III SEM, B Sec


Batch: 2008-11