MARKETING MANAGEMENT

Assessment 01

[School]
[Course title]
Contents
Executive Summary...................................................................................................................................2
Introduction...............................................................................................................................................3
CHAPTER 01: CURRENT POSITION OF THE SELECTED PRODUCT........................................4
1.1 Application to the Product Life......................................................................................................4
1.2 Recommendations to remain in growth stage................................................................................5
1.2.1 Growth Target for next three years.........................................................................................5
1.2.3 Recommendation to achieve the performance targets...........................................................6
CHAPTER 02: REDESIGN THE EXISTING PROMOTIONAL MIX...............................................8
2.1 Future Marketing Objectives..........................................................................................................8
2.2 Redesigning the Promotional Mix..................................................................................................8
2.3 Critical evaluation on level of capacity of the proposed promotional mix................................10
CHAPTER 03: DELIVER A SATISFACTORY LEVEL PRODUCT................................................12
3.1 Application to the Five Product Levels model.............................................................................12
3.2 Examination about the satisfaction level of the consumer..........................................................12
CHAPTER 04: COMPETITOR ANALYSIS........................................................................................14
4.1 Evaluation of the position of the selected product in the marketplace using the quality and
price......................................................................................................................................................14
4.2 Critical evaluation of the position in relation to the pricing strategy........................................14
CHAPTER 05: SUCCESSFULNESS OF EXISTING SEGMENTATION, TARGETING AND
POSITIONING........................................................................................................................................16
5.1 Segmentation Plan.........................................................................................................................16
5.2 Target Market................................................................................................................................16
5.3 Positioning Strategy.......................................................................................................................17
Conclusion................................................................................................................................................18
References................................................................................................................................................19

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Executive Summary
This report is based on the current business state of the Toyota company. The report is initiated
by providing a brief understanding about the company. Then the product placement within the
product life cycle is recognized with the recommendations for remaining in the growth stage.
This is followed by an evaluation of the existing promotional mix with suggestions for
modifications. The next section identifies the product level model developed by Philip Kotler
pertaining to the Toyota products. Then the pricing strategy is determined while recognizing the
market positioning of the organization in terms of quality and price. Finally, the STP process is
used to explain the practical implications learning theories pertaining to the Toyota company.

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Introduction
Background of the Company

Toyota Motor Corporation is a Japanese own multinationals automotive company where the
headquarters are in Aichi, Japan. The company was founded by Kiichiro Toyoda in 1973.
Currently, Toyota is known to be the largest automobile manufacture in the world with a
production volume of 10 million automotive per year. Toyota is having a worldwide expansion
over North America, Asia, Europe, and Australia. By the end of 2019, Toyota has employed
370,000 employees from all around the world (Corporation, 2021). Toyota is a having a full
array of automotive products starting from compact, mid-size, sports, super luxury, and utility
vehicles (Klippenstein, 2021).

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CHAPTER 01: CURRENT POSITION OF THE SELECTED
PRODUCT

1.1 Application to the Product Life

The product life cycle can be recognized as a curved depiction of the life cycle of a specific
product starting from the market initiation to removal. This demonstration is used to understand
the product evolvement and market attributes in each stage (Rink, 1979). The product life cycle
is mainly divided into 4 phases as introduction, growth, maturity, and decline (Komninos, 2002).

Figure 1: Product life cycle Source: Internet (2021)

Position in the
Application
product life cycle

Decline  The subsidiary of Toyota Motor Corp announces a 36.9%

reduction in the revenue in 2020 with the implications from
the outburst of the Coronavirus pandemic
 In March 2019, Toyota Motor North America was able to
deliver 214,947 vehicles while it was declined up to 135,730
in March 2020 a year later.
 The Coronavirus has coursed temporary terminations of the
production in US, Europe, and Asia.

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  The turbulence in the financial market and the raise of
unemployment has enabled a reduction in the revenue
whereas Toyota has already shuttered car sales operations in
many states in America.

 In the recent few years, Toyota was recalling their vehicles

which has led to weakened financial outcomes and well as
reputational damages

 Toyota has become a victim to the low-cost car manufactures

from China, South Korea and India which has coursed to
decrease their international market presence

Table 1: Reasons for Toyota Decline Source: (Irum, 2020).

1.2 Recommendations to remain in growth stage

1.2.1 Growth Target for next three years

Criteria 1st year 2nd year 3rd year

New product introduction to Reduction of the

the market Utilization of Lean Increasing the sales
cost to income
management techniques by 10% by
Growing trend toward Hybrid for reducing the cost to ratio by 5% by
decreasing the cost
vehicles with the increase in income ratio by 3.5% using channel
to income ratio
environmental concerns migration

Adopting
Increasing the
ecofriendly and
Grow Market Share revenue by 6% by
Increasing the revenue ethical practices
leveraging corporate
Increasing the growth of the by 5% by penetrating customers and
for future stability
revenue by 20% emerging markets. that can derive
penetrating
into 10% increase
emerging markets
in the revenue.
Whenever a major
issue is detected
Retain Existing Customers Minimizing the Initiation of 250
in the promised
customer quality
Ensuring quality issues are customer inconvenience offices in North qualities of the
appropriately identified and by solving issues within vehicle immediate
America, Europe,
addressed. the shortest lead time recall of the
and Asian regions.
vehicles within 2
weeks.

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Table 2 : Recommendation to remain on the Growth Stage

1.2.3 Recommendation to achieve the performance targets

Ansoff’s matrix can be used as a tool when recognizing the strategic direction for Toyota. The
matrix is heavily used for strategic planning whereas it is consisted of 4 pillars (Market
Penetration, Market Development, Product Development, and Diversification) (Ansoff, 1957)

Figure 2: Ansoff's Matrix. Source: Internet (2021)

Product development strategy can be regarded as the idea solution for Toyota with regards to the
achievements of the determined targets. As per the product development strategy, a new product
will be developed by the organization to cater the demand of the prevailing market. This involves
a greater deal of extensive research and developing the product range of the organization. This
strategy is recommended to initiate when the organization is having an adequate understanding
about the prevailing market and has the capacity to provide solutions to cater the demand of the
market (Hussain, 2013)

Toyota is regarded worldwide as an innovative brand for automobiles. The company mainly
focuses on rapid product innovations in terms of bringing fuel efficiency and safer vehicles in the
market. Therefore, the company is putting a heavy weight on research and development whereas
the company product portfolio can stand outstanding admits the competition. Apart from that, the
company also invested at automated driving technology. Through the product development

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strategy, the company can achieve a superior growth as well as a competitive advantage (Pratap,
2021).

Characteristics of the Strategic Direction

Criteria Expand into a New Grow Market Retain existing

Market Share customers

Product development strategy Possibility to reach Increasing the Ensure highest

a new customer revenue by the quality and
group through the increased demand customer
introduction of by a new product satisfaction
new product that through
cater a specific constantly
demand that was improving the
not fulfilled products
before.

Table 3: Identification of the strategic direction of Toyota Source: (MotorBeam, 2021)

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CHAPTER 02: REDESIGN THE EXISTING PROMOTIONAL
MIX
2.1 Future Marketing Objectives
This table represents the promotional targets for next 3 years

Criteria 1st year 2nd year 3rd year

To Face Competition Increasing the revenue Increasing the revenue Increasing the revenue
from Hybrid vehicles from Hybrid vehicles from Hybrid vehicles
New product introduction to by 15% the end of FY by 18% the end of FY by 18% the end of FY
the market 2022 2023 2024
To Stimulate Demand To achieve an overall Increasing the market Becoming the market
market share of 30% share by 10% by leader by the revenue
Increasing the revenue by the end of FY 2022 practicing sustainable wise by the end of
growth by 20% production practices 2024 by defeating the
competition through
an ethical agenda
To Create or Improve Introduction of a fully Increasing the Increasing the
Image functional automated automated vehicles automated vehicles
driving production revenue by 10% at the revenue by 30% at the
Aiming for a world with line by the end of FY end of FY 2023 end of FY 2024 by
zero traffic casualties 2022 achieving 10%
through automated driving reduction in traffic
technologies casualties through
Toyota vehicles by the
end of FY 2021
Table 4: Future Marketing Objective. Source: (Toyota-global, 2021)

2.2 Redesigning the Promotional Mix

Promotion can be known as the extent to which the promotional components and activities are
incorporated to generate promotional strategies (Mahafzah, 2015). The promotional mix is
comprised of 4 elements namely, advertising, sales promotion, direct marketing, and personal
selling. These elements are used to address the target audience for achieving marketing
objectives (Al-Abdallah, 2012).

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 Promotional Mix Existing status Recommendation to redesign

 Television  Social Media

Advertising Broadcasting 08-20 seconds Effective utilization of social media
commercials during the TV platforms like Facebook, twitter, and
series and news. Instagram for enhancing the brand
awareness and create effective
 Radio communication between the prevailing
Casting 15-second adverts and potential customers.
during Talk shows on FM Using the influencers and celebrity
channels. figures to create content about the
 Billboards products through their social media
platforms
Displaying eye catching
billboards around famous  YouTube
locations in cities. Displaying adverts on trending
YouTube videos.
Using YouTubers for creating contents
centred upon the product
.
 Sponsorships Providing sponsorships for corporate
events based upon work life balance
Public relations through Zoom and WebEx platforms.
Creating of an emotional attachment
towards the products through
incorporating ethical and
environmentally friendly business
practises.
Providing motivational attributes
towards the working crowd and
contributing to build up the economy
of the country within the pandemic
hardships.
 Promotional leaflets  Emails
Direct marketing Inclusion of promotional leaflets Sending emails to prevailing B2B
in Toyota outlets including the customers
service centres.
 Promotional Calls
 Toyota bills
Recognizing new B2B customer

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 Incorporating some advertising segments and giving the promotional
within the bills that are issued calls and following up with text
by Toyota messages
 Social media
Active engagement with the customers
through social media by attending to
their inquiries and feedbacks in an
attentive manner.
 Raffle draws and give  Test drives
away
Sales promotions Giving opportunities for test drives in
new vehicle launches and automobiles
exhibitions
 Financing facilities
Toyota financing services can be used
to provide leasing facilities for
customers for lower interest rates and
cheaper prices
Table 5: Redesigning the promotional mix

2.3 Critical evaluation on level of capacity of the proposed promotional mix

Criteria Sales Direct Public

Advertising
Promotions Marketing relation
s
The social media is Having financial Can approach the Creating a
a highly interacting support from the customers and sense of
platform for same company personally and belonginess
To Face potential new with a lowered can specifically withing the
Competition customers specially interest rate can cater their customers and
millennials and help to attract demand. all the other
Gen-z customers who are stakeholders
not able pay for a
vehicle at one go.
Recognizing the Customer Direct marketing
trending the segments like Gen- enables to tap into
patterns within the z and Millennials the new customer
To social media and usually do not have segments and
Stimulate creating contents in enough savings for converting them
Demand accordance with paying full for into new buyers
those trends. vehicles whereas by catering to
Similarly, social by providing them their requirements

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 media can also used the financial
as a tool to create support can
one’s own trends to increase demand
tap the untouched for the vehicles.
customer segments.
Effectively placing Giving chances for Ability to reach
the values and the test drives will the people
fundamentals that help to enjoy the personally and
To Create or the organizations product as well as giving them of
Improve stand for within the creation of an adequate insight
Image mindsets of the urgency to about the
people. purchase the company and
products after products.
experiencing the
product.
Table 6: Critical evaluation on level of capacity of the proposed promotional mix

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CHAPTER 03: DELIVER A SATISFACTORY LEVEL PRODUCT
3.1 Application to the Five Product Levels model
Five product level model

The five-product level model can be known as a way of showing different stages of need
satisfactions expected by customers with regards to a specific product. The needs will be
stipulating from the core needs to psychological needs whereas additional values will be
incorporated in each level (Kotler, 2012)

Level Existing stage of the product

The need for getting from one place to another

Core product
A car with 4 wheels for operating at its own
Generic product

The specific working condition of a Toyota vehicle whereas it can be

Expected product used for traveling and it has a reasonable fuel efficacy.
The Toyota vehicles are with a fully working conditions with
Augmented product attractive exterior and interior designs, passed safety tests, airbags,
air condition and warranties.
Much safer and environmentally friendly product than the
Potential product competitor’s products
Table 7: Existing five product levels

3.2 Examination about the satisfaction level of the consumer

Fulfilment of the needs and wants

Level Level of satisfaction
achieved
A vehicle for transportation is provided
Core product Can get from a vehicle sale
of for rent

A vehicle with 4 wheels provided

Generic product
4 wheels are available in all
vehicles

Fuel efficacy Fuel efficacy is improved

Expected product
through hybrid technology
Attractive exterior and interior designs, Features incorporated in all
Augmented product
passed safety tests, airbags, air condition
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 and warranties. the vehicle models

Safer and environmentally friendly

Potential product Toyota high end products
product than the competitors

Table 8: Level of Satisfaction by the customers

CHAPTER 04: COMPETITOR ANALYSIS

4.1 Evaluation of the position of the selected product in the marketplace using the
quality and price

Position of Ford Honda Nissan BMW GM Toyota

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 the product
Quality Low High
Price Low Medium Low High Medium Medium
Style High Medium High Low
Table 9 : Product position in the market

Figure 1: Product position in the market

4.2 Critical evaluation of the position in relation to the pricing strategy

Pricing Strategy

Pricing can be known as one of the most important aspects of the marketing process (Borden,
1964). As per (Gijsbrechts, 1993), development of a sound pricing structure can be difficult as
well as fundamentally critical. The pricing strategy will be relied upon several variables such as
environmental factors, organizational objectives, customer behavior and pricing situations.

Characteristics of the pricing strategy Critical evaluation

Market-oriented pricing Market-oriented pricing, often known as a
competition-based strategy, equivalences
parallel items available on the market. The

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 vendor then decides whether to charge more
or less than their competitors.
Toyota uses the market pricing technique to
determine prices based on market subtleties
and price comparisons with competitors. This
price strategy is extraordinary for the great
majority of Toyota products, including sedans
and vans.
Value-based pricing Value-based pricing is a method of adjusting
the price of a product or service based on its
professed value other than its past price. The
value-based pricing approach is utilized to
generate revenue by raising prices without
affecting volume significantly.
The Toyota company also uses a value-based
pricing strategy, which determines rates based
on the true and perceived worth of the
product. The company employs value-based
pricing for high-end or more expensive items,
like as the Prius and Lexus automobiles. This
component of Toyota's marketing mix shows
how the company sets pricing levels built on
market conditions and customer acuities.
Table 10: Pricing Strategy

CHAPTER 05: SUCCESSFULNESS OF EXISTING

SEGMENTATION, TARGETING AND POSITIONING
5.1 Segmentation Plan
Vehicle Geographica
Demographical Lifestyle Occupation Expectations
Type l

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 Economy Global Both Males and Consumers Consumers Ambitious and
Female over 18 who can who have committed to
years accommodate newly started achieve
a small saving working in a success
after attaining path to elevate
basic needs higher career
ladders
Sub Premium Global Both Males and Consumers Middle level Ambitious and
Female over 25 who are at the managers, committed to
years edge of entrepreneurs achieve
starting their with the success also
own families growth stage seek
after reaching within their convenience
social businesses and capacity
acceptance to support the
stage requirements
of families
Premium Global Both Male and Consumers Senior Reaching self-
Female over 35 who are Managers actualization
years aspired to be with need for
influential being accepted
personalities by the society
in the society
Super Global Both Male and Consumers CEOs Self-
Premium Female over 35 who are Business actualization
years having higher professionals needs and
life standards Government maintaining
and representatives higher social
considered to status
be influential
personalities
in the society
Table 11: Customer Segmentation

5.2 Target Market

Geographical
Emerging markets in
China, India,
Bangladesh, and Brazil
Table 12: Selected Target Market
Demographical Lifestyle Occupation
Both Male and Female Consumers who are CEOs
over 35 years aspired to be influential Business Professionals,
personalities in the Government
society Representatives
Both Male and Female Consumers who are at Middle level managers,
between 18 to 30 years the edge of starting entrepreneurs with the
of age their own families after growth stage within
reaching social their businesses
acceptance stage

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5.3 Positioning Strategy
Positioning Strategy Application

Differentiation Globalization has led to create an exclusive

competitiveness while reducing physical limits
while pursuing the companies trying out new
alternatives. One of the significant features of these
difficulties is to create an awareness about the new
technological advancements that are necessary to
meet the competition successfully.

Toyota is using differentiation as their strategy for

expansion. By that the company aims at attracting
new consumers whereas it will support the growth
of the organization.

This aggressive growth aspect is used by the

organizations in the base of continuous innovation.
The company is well known for being a pioneer
with innovations. For example, through the
introduction of vehicles like Toyota Prius, company
was able to approach a market segment who were
worried about the environmental implications.

This approach is promoting a wide standardized

differentiation policy of Toyota by utilizing
products that are desirable to individuality and
advanced features. This approach is supported by
the Toyota’s broad generic differentiation strategy.

Table 13: Selected Positioning Strategy

Conclusion
The Toyota company can come back to the growth stage with use the use product development
strategy with a modification to the promotional mix. Similarly, STP was recognized alongside
the practical implications.

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