Market Segmentation Analysis of Toyota Brand

Running Head: TOYOTA BRAND MARKET SEGMENTATION
1
Market Segmentation Analysis of Toyota Brand
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University Affiliation
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TOYOTA BRAND MARKET SEGMENTATION 2
Table of Contents
Cover Page.............................................................................................. 1
Brand Choice............................................................................................ 3
Market Segmentation and Description Using Customer Segmentation Framework............ 3
Relative Attractiveness of the Segments.............................................................. 5
Primary Target Market................................................................................. 6
Appendices............................................................................................... 9
References................................................................................................11

TOYOTA BRAND MARKET SEGMENTATION 3
Brand Choice
Toyota Motor Corporation is a Japan-based multinational automobile and automobile
spare parts manufacturer with its headquarters in Toyota city. The corporation was established by
Toyoda Sakichi in 1933 as a subsidiary of Toyoda Automatic Loom Works Ltd (Toyota Motor
Corporation, 2018). It is among the world’s top three automobile manufactures with over seventy
production facilities across the globe, which produce over ten million vehicles per year. The
company is well known for adopting technology in its production thus increasing its productivity
and efficiency of its automobiles.
Toyota Motor Corporation has partnered with several companies since its inception.
These companies form its divisions with the largest divisions being; the Toyota Brand, Hino
brand, Lexus brand, Ranz brand, Daihatsu brand (Toyota Motor Corporation, 2018). Toyota
brand is the largest division and most popular among many motor vehicle owners in the world,
therefore, this market segmentation analysis focuses on the Toyota brand in the United States of
America.
Market Segmentation and Description Using Customer Segmentation Framework
Toyota provides a variety of vehicles to United States of America residents, the vehicles
are differentiated to meet the needs of particular market segments. The major framework that
Toyota can use to segment its market is the demographic framework under which it would focus
on the level of income/ income status of the residents, in which there are three market segments
which are:
Lower Middle class: This refers to the category of people who earn an average annual
income that ranges between $30000- $100000. It mainly consists of blue-collar jobs which

TOYOTA BRAND MARKET SEGMENTATION 4
requires a vocational or low-level college training, they include both employed and self-
employed people such as; electricians, factory workers, and police officers, among others (Zhou,
& Wodtke, 2018). Due to their income levels, Toyota has provided them with cheap vehicles in
terms of purchasing cost, fuel consumption, and maintenance cost among others. Such vehicles
include but not limited to: Vitz, Fielder, Premio, Allion, Auris, and Corolla. In this segment,
Buying is influenced by factors such as; the price of the vehicle, durability, nature of work, and
family size (Swar, 2018). This constitutes 30% of the total market population that Toyota targets
in the United States since they can only afford to have one vehicle per household.
Upper Middle Class: This refer to the cluster of people earning an annual income that
ranges from $100000-$150000. It mainly consists of professionals such as; lawyers, doctors,
managers, and lecturers among others (Goodin & Le Grand, 2018) who leave a comfortable life
and desire vehicles which are neither too low in terms of social perspective nor too high in terms
of affordability. Toyota provides them with Sport Utility Vehicles (SUVs) such as Rav4,
Fortuner, Hilux, Harrier, and Surf among others. They are several factors that influence their
purchase needs which include and not limited to; product efficiency, product features, job status,
and price (Amron, 2018). In most cases, this group can have two vehicles and above per
household, therefore, it constitutes about 45% of the total market.
Upper Class: This group consist of the affluent members of the society who have an
average income of over $160000. They are mainly corporate executives/senior managers,
prosperous business people, people with inherited wealth, and top-government officials among
others (Cowan, 2018). Toyota provides them with luxury vehicles such as the Prado and the
Land Curser V8 which are characterized with high buying price, high fuel consumption rate, and
high maintenance cost. The buying need for these people is mainly influenced by social class and