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TOYOTA AVANZA

(THE ROLLOUT)

Introduction
Identified market opportunity in All
Purpose Vehicle (APV) segment in
Indonesia.
Head of Marketing Planning & Analysis
Department convinced that TAM had the
capability to capture the market.
Head of Marketing Planning & Analysis
Department ought to carefully lay out a
marketing strategy that upheld the Toyota
image and customer expectation.

PT Toyota Astra Motor


PT Toyota Astra Motor (TAM) merged with
three other companies: PT Multi Astra (a
manufacturing company), PT Toyota Mobilindo
(body parts manufacturing company), and PT
Toyota Engine Indonesia (specializing in
engine manufacturing).
The merger was carried out with the goal to
improve efficiency, to meet increasing
consumers demand for quality, and to
effectively face current competition in
automotive industry.

Indonesian Automotive
Industry
In 1997, Indonesian industries were
negatively impacted by economic crisis.
This economic crisis resulting in a major
decrease in the countrys nominal income
and purchasing power.
The price of vehicles to be far from
affordable for the population.
Automotive market was shrinking from
400.000 vehicles sold to a low 75.000 in
1998.

Indonesian Automotive
Market

Indonesian automotive market showd a posotive growth trend,


indicating a recovering market after the economic crisis.

Composition Market

The composition of the overall market had dynamically


specifically in the 4x2 class.

4x2 Market Growths and


Composition
Before crisis in 1998, Toyota did not initially
manufacture any product in the low 4x2 segments, but
manufactured Kijang model in the medium 4x2 class.
After the crisis, the buying power of people decreased.
Price for medium 4x2 vehicles jumped beyond reach
for the majority of working class. For that reason
people inclined to purchase the lowest class or the low
4x2 segments.
Because of that situation, Toyota had to created a new
product in low 4x2 segments and provided similar
characteristics as medium 4x2 but with considerably
lower price.

Marketing Research
Marketing report showed that market was
composed of
High 4x2
Medium 4x2 (78% of sales in 2000)
Low 4x2

The low 4x2 market had significant growth with


just 18,3 % in 2000 to reach 37,4 % in 2005
This situation of low 4x2 growth is in line with
economic recovery as working class of people
strongly growing back

Low 4x2 Market Distribution

Based on data, the markets for low 4x2 were increasing in all
areas, and were concentrated in Jakarta, followed by West
Java and East Java.

4x2 Market Competition

Even when it was evident that low 4x2 had a constant growth for the past several years
and was showing an increasing future trend, yet, the prospect of low 4x2 market had
attracted numerous brands to compete in the market. The market competition concluded
that Suzuki was dominant in both 4x2 city car model and 4x3 MPV.

Research Result
Toyotas brand image was strong among
this 4x2 low segment.
The potential car buyers could be divided
into 3 segments based on their life stages:
(1) young people who just started their
career; (2) older people who were less
likely to improve their social economic
status; (3) young students from the
wealthier family where they still depended
on.

New Product Development


The product concepts and design were directed
represent five keywords: (1) advanced & modern
styling; (2) fun to drive & ride; (3) economical; (4)
multipurpose car; (5) minivan body concepts.
The Toyota low 4x2 car prototype had a compact size
body with 3 rows seats car that can carry up to 7
adults comfortably an suitable for many kinds of user.
Another advantages were engine performance, fuel
economy, and comfort level & accessibility.
The exterior design was advanced and modern. The
interior design was also advanced, modern, high
quality, and comfortable.

Marketing Challenge
The new Toyota was to be named
Avanza.
Considering the tight competition in
the low 4x2 markets and strong
opponent like Suzuki, the new Toyota
had to be carefully and effectively
launched.