Macro Environmental Factors Affecting Toyota: A Case Study

This case study discusses the impact of macro environmental factors on Toyota, including demographic, economic, and technological factors. It also assesses the product life cycle of Toyota Rav 4, market segmentation, and consumer decision-making process. The study provides recommendations for Toyota to address the challenges and improve sales.

Case Study: Toyota

Table of Contents
Question 1..................................................................................................................................3
Discussion of main Macro environmental factors.................................................................3
Question 2..................................................................................................................................4
Assessment of Possible product life cycle of Toyota Rav 4..................................................4
Question 3..................................................................................................................................5
Market segmentation..............................................................................................................5
Question 4..................................................................................................................................6
Consumer- Decision making and possible recommendations...............................................6
References..................................................................................................................................8

QUESTION 1
Discussion of main Macro environmental factors
Demographic factor
A proper section of audience is targeted while launching any product in the market. The
general public is differentiated on the basis of age, sex and preferences (Travesset-Baro,
Rosas-Casals and Jover, 2015) The advent of RAV4 was defined to focus the youth. It
created an instinct of adventure in the heart of youngsters. This proved to be one of the
strengths of the company, Toyota. People began to identify zeal with the brand product.
Demographic issues seem to take place, wherein people began to shift to suburbs or different
city. Also, RAV4 later started symbolizing the older generation of young families. Due to
this, youngsters could no longer relate to the brand and sale experienced decline. Thus, it
proved as weakness of RAV4.
Economic Factors
Due to recession, many people stopped spending their disposable income on RAV4. In initial
period, it was proved to be one of the most economical SUV in Australia. It was one major
strength that led to productive sale. But later, due to macroeconomic changes, most people
stopped willing to spend amount on the brand. This allowed revenue loss from the proposed
market.
Technological Factors
The obsolete technologies are one the reason due to which product is not accepted easily by
consumers (Onar and et.al. 2016). Therefore, the demand in Australia, for new rising
technologies, began to increase at a large scale. Many existing brands started launching fresh

products in market with different technologies, in order to keep up with public demands. Cars
like Mazda CX3 and Mitsubishi ASX, became new favorites as they were new in style and
technological aspects. It further laid a destructive effect on RAV4 and the general SUV
categorical representation of cars.
QUESTION 2
Assessment of Possible product life cycle of Toyota Rav 4
Product life cycle can be referred as a cycle through which every product has to go. The four
stages which are experienced by each product are: Introduction, Growth, Maturity and
Decline .
RAV4 seems to pass all the four stages of product life cycle. Since, it was gracefully
introduced in the market back in 1994. Despite, being launched at such a tender stage, it
managed to take a productive head start. Even after the advent of 20 years, it continuously
kept on growing in the market (Neubauer and et.al. 2014). All the necessary tools were
implemented to maintain the growing buzz about RAV4. But, each product has an expiry
date, likewise it began to experience decline in terms of sale and demand. Therefore, since,
the managers decided to relaunch it with even more efficiency, it is currently on Maturity
stage.
Hence, it is important for the management authority to apply a proper marketing mix to
achieve the desirable outcomes. It must be kept in consideration to implement the needful
modification to prepare a product which will be able to meet the expected needs of the
general public (Gupta and Sinha, 2015). It is necessary to address the demands of youth as
well, since they are the utmost important demanding section of the market. It is one of the
most competitive stage of the life cycle of the product. Therefore, in the revised production

stage of RAV4, it should be kept in mind to make needful amendments and improvisations,
to give a competitive advantage.
QUESTION 3
Market segmentation
The market segmentation, in general terms refer to distribution of the consumers
categorically on the basis of taste, preferences, potential and demands (Adegbite and
et.al.2018). This act as a useful aid to draw an idea of what kind of customers exists for a
particular brand. It helps in knowing the section which is generating the maximum amount of
business. Target market is entirely based on focusing on these segments in the market in
order to increase sale. Mueller and Nolan, (2016), asserted that it helps in first analyzing the
channels that are bringing more and more business. Later, it helps in knowing the methods
that can help in encouraging these channels to generate revenue. A person who could be an
aid to target marketing must be a business developer. The job of a business developer is to
analyze the segments of the consumers and likewise implement tools. He is the one who
reaches out to the public and agencies to bring business.
The new promotion campaign for RAV4, will be addressing new consumers to attract new
sales (Cartabiano, Suzuki and Sato, 2016). Therefore, the reaction of the existing potential
consumers could be devastating. Since, the company’s main agenda will be to bring in the
strategies which were applied earlier; the focus could be laid towards youth. However, RAV4
already provides a shelter to many old consumers which have believed the name since 1994.
Therefore, observing a shifted focus, the might choose to move to a different brand and name.

QUESTION 4
Consumer- Decision making and possible recommendations
The consumers are bound by 5 stages of decision making process while purchasing any
product. These 5 stages are followed by a critical evaluation to determine whether the product
purchased is useful enough or not.
I. Need
II. Information gathering
III. Evaluating alternatives
IV. Purchase
V. Post purchase evaluation
Every stage of the decision making process is highly influential in allowing or disallowing a
consumer to buy a product. Since, need is the first parameter that falls in the procedure,
RAV4 should be focused on interpreting an ardent need to have, for all the consumers, be it
existing or new. It should be able to address both youngsters and aged ones. Secondly, since
the consumers tend to gather information about the product prior to buying that, there should
be ample amount of material available in the market and internet for RAV4 so that consumers
will be familiar to it. The needful promotions must be there to create a familiar image in the
market (Kalyandurgmath and Mohanty, 2015).
Thirdly, people tend to look for alternatives which might be available at a cheaper rate and
better quality. Therefore, it is important to come up with an image for RAV4, so that it will
be able to eliminate competition from market. Consumers must find RAV4 as the best
product with no competing match.
Fourthly, RAV4 has already emerged as an affordable SUV in Australian market. Therefore,
it must be able to keep up with the same image and better functionalities. A purchase will be

affected in consumer’s mind if they will be able to see good quality at cheaper rate. Lastly,
people also tend to evaluate the product post purchase. Hence, RAV4, must be available in
such a manner that people will be able to identify it as the unmatchable SUV with most
functionalities. They must be able to relate it as a family member so that they will be able to
recommend it to peers which in return will increase sale.

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