Part II. Market Audit and Competitive Market Analysis
Executive Summary
Toyota is a global automotive giant with operations in over 170 countries. The corporation must routinely evaluate and review its strategic market strategy to succeed in overseas markets. Through a market audit and competitive market research, we found substantial opportunities and obstacles for Toyota in its target market. Its biggest prospects are Toyota's worldwide reach, varied product line, and excellent brand recognition. Quality and dependability are its goods' advantages, and they meet the demands of its target market. However, high pricing and the need for distinctiveness and innovation in a competitive market may hinder product uptake. Toyota focuses on North America, Asia, and Europe. Strong transportation and communication networks enable effective product distribution in these locations. Consumers value utility and convenience. Hence, the corporation distributes through retail stores, dealerships, and intermediaries. Toyota advertises via conventional and digital media, sales campaigns and discounts. Discounts and financing are available, and its cost is typical. The research shows that Toyota's marketing mix needs competitive pricing, distinctiveness, innovation, and a strong presence in rising areas like electric and hybrid automobiles. Toyota could use targeted pricing, engage in R&D for creative and eco-friendly goods, and extend its distribution network and alliances in important areas to solve these issues. The corporation should also capitalize on its excellent brand recognition and alter its marketing mix to target consumer demands and preferences.
I Introduction
Toyota, a Japanese automaker, is known worldwide for its quality and reliability. Toyota is a household name and automotive industry leader, operating in over 170 countries (Lucky & Takim, 2015). However, a changing competitive environment and market conditions in different nations require the corporation to continually evaluate and analyze its strategic market goals. Toyota market audits and competitive market analyses are key here. This research will examine Toyota's strategic market planning, market audit, and competitive market analysis. First, the study will explore the relevance and complexity of a corporation operating in several foreign markets. This will demonstrate the need for a thorough market assessment and competition research. Next, the paper will examine this process's principles and components and their importance to the company's international market performance. Finally, the paper will demonstrate how the country notebook from Part I is useful for market analysis.
II. The Product
A. The product as an innovation as the intended market perceives it
· Relative advantage.
The first thing to examine when considering Toyota as an innovation for its target market is its relative advantage. Toyota has an edge in this scenario due to its reputation for high-quality and reliable automobiles (Aoki & Wilhelm, 2017). The firm has produced automobiles with higher performance, efficiency, and safety through continual innovation and technical enhancement. The market values this since it meets their demands for a reliable and durable car.
· Compatibility
Toyota's product compatibility with its target market is also important. Toyota makes cars for a wide spectrum of customers with different wants and tastes (Allera, 2022). Toyota's varied product lineup—from tiny vehicles to premium sedans and SUVs—reflects its awareness of its different markets. Compatibility increases market reach and consumer happiness by offering relevant solutions.
· Complexity
Market acceptability might depend on product complexity. Toyota designs products with simplicity in mind. The firm emphasizes making automobiles that are simple to operate for regular consumers. Consumers' preference for simple products has helped the brand succeed in its target market.
· Trialability
Trialability is another factor in assessing Toyota as an innovation. The company's global reach and reputation allow potential consumers to test and sample their items before buying. This follows the company's concept of allowing customers to try their items to build trust and loyalty.
· Observability
Finally, the market perception of Toyota as an invention depends on observability. Toyota's success in numerous areas, substantial marketing, and media and popular culture presence make it visible. This boosts the brand's market credibility, making it a consumer favourite.
B. Major problems and resistance to product acceptance
Despite Toyota's goods' apparent benefits and suitability in its target market, the firm may confront issues and product acceptance resistance (James, 2021). Toyota needs help with the perceived high prices of its automobiles. In undeveloped nations, Toyota vehicles may be too expensive for many people. This can slow product adoption and the company's growth in these markets. Toyota's apparent lack of product innovation and uniqueness may be another issue. Toyota is known for quality and dependability, but it may need help to separate in a competitive market where competitors always introduce new features. This might hinder Toyota's market acceptability by making recruiting and maintaining consumers harder.
The complexity of Toyota's products can also hinder adoption. The business makes basic, user-friendly automobiles, but technology and competition have led to more sophisticated features (Wang et al., 2016). Toyota may need help keeping up with these advances, leading potential buyers to view its products as outdated or lacking functionality. Finally, cultural and socioeconomic variations may prevent Toyota from being accepted in some areas despite its worldwide reach. In rural locations, bigger vehicles may be more popular than tiny automobiles, which Toyota excels at in metropolitan areas. This might make it difficult for the corporation to match market demands and preferences, resulting in product rejection.
III. The Market (the target market)
A. The market(s) in which the product is to be sold
· Geographical region(s)
Toyota operates in approximately 170 countries and all major worldwide areas, targeting a large market. The corporation prioritizes North America, Asia, and Europe (O’Callaghan, 2016). Toyota is well-established in the US, Canada, and Mexico, its largest market. Toyota is popular in China, Japan, and India. The corporation dominates Germany, France, and the U.K. in Europe.
· Forms of transportation and communication available in (those) regions
Regional transportation and communication differ, although most marketplaces have well-developed infrastructures. Toyota can reach its target market more easily because of its major roads, airports, and modern telecommunication infrastructure network. These transportation and communication solutions help distribute the company's products efficiently.
· Consumer buying habits
(1) Product-use patterns
Toyota's target market uses its cars for everyday commuting, family excursions, and occasional road vacations. This implies that the company's products must be sturdy and tolerate regular usage and long-distance travel. Consumers demand innovative technology, roomy interiors, and fuel efficiency.
(2) Product feature preferences
Toyota's target market increasingly uses internet research and comparative shopping to buy. This shows the rising importance of e-commerce and digital marketing in reaching customers. Customers may also test drive and investigate alternatives at actual showrooms before buying.
(3) Shopping habits
Toyota's target market also has different car-buying habits. Customers may directly select authorized dealers or third-party re-sellers or the manufacturer in specific locations. To serve varied markets, a strong and diverse distribution network is essential.
· Distribution of the product
(1) Typical retail outlets
Toyota dealerships are strategically positioned in major cities and business areas. These dealerships sell Toyota cars from entry-level to premium models, giving consumers a one-stop shop. Toyota also operates hybrid and electric car dealerships in some areas to meet the demand for eco-friendly automobiles.
(2) Product sales by other middlemen
In addition to retail stores, Toyota uses independent vehicle dealers to expand its market reach. These intermediaries frequently know the local market and consumer preferences, helping Toyota reach more people. This distribution channel variety helps Toyota fulfil target consumer demands and preferences.
· Advertising and promotion
(1)Advertising media usually used to reach your target market(s)
Toyota employs coupons, rebates, and financing to promote sales. Holiday and special event promotions are used to attract clients and boost sales. Toyota's loyalty program gives discounts and special incentives to returning customers.
(2) Sales promotions customarily used (sampling, coupons, etc.)
Also, the corporation holds sample and test drive events to let potential buyers try the product. Automotive buyers typically want to test a product before buying it, making this crucial. Toyota can raise brand awareness and attract consumers with these sales campaigns.
· Pricing strategy
(1) Customary markup
Toyota uses the usual markup to compete with similar cars while maintaining brand image and value. This lets the organization maintain its quality and reliability while giving affordable costs to its target market.
(2) Types of discounts available
Customers can receive cash-back or zero-interest financing incentives. Special campaigns and new model releases use these reductions to boost sales. Toyota also discounts military veterans and recent college graduates as a marketing strategy.
B. Product and the competition’s product(s).
· Competitor’s product(s)
(1)Brand name
The name is the Volkswagen Golf. This brand sells the Golf, Golf GTI, and Golf e-Golf.
(2) Features
The Golf has adaptive cruise control, lane assist, and a touchscreen infotainment system. Its fuel-efficient engines and large cabin are also available.
(3) Package
Volkswagen Golf consumers may customize their cars with a panoramic sunroof, sophisticated audio system, and sporty appearance.
· Competitor’s prices
Volkswagen Golf costs vary by model and features. Golf GTIs cost up to $37,690, while basic models cost $23,195. Customers can add packages and improvements, which might raise the vehicle's price. Volkswagen, like Toyota, provides incentives and financing to boost sales (Sarangal et al., 2023). Volkswagen's premium and performance vehicles may explain why their pricing approach is higher than Toyota's. Higher prices may influence people to choose Toyota over Volkswagen, especially in price-sensitive areas.
· Competitor’s promotion and advertising methods
Volkswagen promotes and advertises using conventional and digital media. The company's ads emphasize its brand, quality, performance, and innovation. Test drives and auto exhibitions help Volkswagen promote its goods and recruit buyers. Volkswagen targets certain market segments with bespoke email marketing and social media adverts. Discounts and promotions like special financing and customer loyalty programs help the firm recruit and keep consumers. Volkswagen's marketing strategy, like Toyota's, emphasizes brand strengths and sales incentives to entice buyers.
· Competitor’s distribution channels
Like Toyota, Volkswagen has a robust retail network of company-owned and independent dealers. Customers may investigate and buy autos on the company's website. Volkswagen can reach various clients and meet their purchase channel preferences. Volkswagen uses third-party distributors like independent vehicle dealerships to expand its market reach. This guarantees that the brand is present in several regions and can serve diverse market groups. Volkswagen's distribution channels are similar to Toyota's, demonstrating the need for a varied and effective distribution network in the competitive automobile industry.
C. Market size
(1) Estimated industry sales for the planning year
Forecasted industry sales for the planning year include all automotive sector sales. Economic conditions, customer preferences, and competition affect industry sales. The global automotive sector is expected to rise by 4.5% this year due to rising demand for sophisticated and connected automobiles (Madoh et al., 2019). North America is predicted to have the most sales, followed by Asia and Europe. Toyota and other major automakers are already present in these locations. Companies can monitor their performance and analyze market changes using the planned year's expected industry sales.
(2) Estimated sales for your company for the planning Year
Based on Toyota's past performance and market analysis, the planning year's global sales are forecasted to be 10 million vehicles. This would be up from 9.73 million automobiles sold last year, reflecting the company's continued expansion (Loureiro et al., 2017). These sales estimates match industry growth of 4.5%. Toyota's sales are predicted to be highest in North America, followed by Asia and Europe. This is because the brand is well-known in these locations. Toyota is expected to sell 2.2 million automobiles in North America in the planned year, adding to the region's 17 million vehicle sales. These anticipated sales show Toyota's market dominance and development potential.
D. Government participation in the marketplace
· Agencies that can help you
Several government entities may help Toyota participate in the market. The U.S. Department of Commerce's International Trade Administration (ITA) is one. U.S. enterprises in overseas markets receive market research, trade advice, and trade negotiation representation from the ITA. Toyota can also use the World Commerce Organization (WTO), which encourages commerce between its members. Japan, where Toyota is located, follows WTO standards, which might improve the company's operations and international commerce.
· Regulations you must follow.
Toyota must follow worldwide government rules as a market-oriented firm. One of these policies is connected to emissions and environmental standards in nations with stricter climate change rules. Toyota is developing electric and hybrid automobiles and boosting sustainable operations to meet these standards. Toyota must also observe labour and safety requirements in its operating nations. Toyota's "Toyota Production System" emphasizes continuous improvement and staff training, and other safety standards and workplace policies comply with these laws. These initiatives assist the firm in complying with local laws and preserving a good reputation.
Conclusion
Marketing Plan:
Objective:
· To increase market share and brand awareness in key regions.
· To launch innovative and eco-friendly products to meet changing consumer preferences and government regulations.
· To maintain a strong brand reputation and differentiation in a competitive market.
Target Market:
· Primarily in North America, Asia, and Europe, focusing on urban areas and younger demographics.
Product:
· Invest in R&D for innovative and environmentally friendly vehicles.
· Expand product portfolio to include a mix of traditional and electric/hybrid models.
· Focus on simplicity, functionality, and convenience in product design.
Price:
· Align pricing strategy with customary markup and offer competitive pricing to cater to price-sensitive markets.
· Offer discounts and financing options to attract customers.
· Explore strategies to reduce production costs and improve profit margins.
Place:
· Maintain a strong presence in well-developed markets through retail outlets, dealerships, and partnerships with intermediaries.
· Expand distribution and partnerships in emerging markets, particularly for eco-friendly vehicles.
· Implement digital platforms for online sales and research.
Promotion:
· Utilize traditional and digital media, focusing on T.V. commercials, print ads, and targeted online advertisements.
· Conduct test drive events and offer sales promotions during the holiday seasons.
References
Allera, G. (2022). Similarities and differences of entry strategies of international automotive companies in host developed and developing countries: the case of Toyota in the USA, the U.K., Indonesia, and China. Managerial decision making. https://tesi.luiss.it/id/eprint/34129
Aoki, K., & Wilhelm, M. (2017). The role of ambidexterity in managing buyer–supplier relationships: The Toyota case. Organization Science, 28(6), 1080-1097. https://doi.org/10.1287/orsc.2017.1156
James, R. (2021). The Toyota Way or the unions’ way?: Examining the nexus between lean and unions in Toyota Australia. The International Journal of Human Resource Management, 32(6), 1273–1311. https://doi.org/10.1080/09585192.2018.1513413
Loureiro, S. M. C., Sarmento, E. M., & Le Bellego, G. (2017). The effect of corporate brand reputation on brand attachment and loyalty: Automobile sector. Cogent Business & Management, 4(1), 1360031. https://doi.org/10.1080/23311975.2017.1360031
Lucky, B. O., & Takim, S. (2015). Manufacturing defects in the automobile industry, a case study of the remote causes and effects of Toyotas transmission malfunctions in cars. International Journal of Engineering and Applied Sciences, 2(8), 257854. https://www.neliti.com/publications/257854/manufacturing-defects-in-the-automobile-industry-a-case-study-of-the-remote-caus#cite
Madoh, A., Alenazi, J., Alkhamees, L., & Panwar, A. (2019). Case study on market mix strategies of Toyota Motor Corporation. Asia Pacific Journal of Management and Education (APJME), 2(3), 70-78. https://doi.org/10.32535/apjme.v2i3.630
O’Callaghan, T. (2016). The rise and fall and rise of the Toyota Way. In Reputation Risk and Globalisation (pp. 126–150). Edward Elgar Publishing. https://doi.org/10.4337/9781786431745.00013
Sarangal, R., Kumar, A., Bathla, D., Chauhan, P., Dangwal, A., & Mehta, M. (2023). Strategic Alliance Between Toyota and Suzuki: Is It a Win for Toyota or a Loss for Suzuki? In Cases on the Resurgence of Emerging Businesses (pp. 206-214). IGI Global. http://dx.doi.org/10.4018/978-1-6684-8488-3.ch014
Wang, C. N., Huang, Y. F., Le, T. N., & Ta, T. T. (2016). An innovative approach to enhancing the sustainable development of Japanese automobile suppliers. Sustainability, 8(5), 420. http://dx.doi.org/10.3390/su8050420
