Consumer Behavior Analysis: Marketing Strategies for Toyota Singapore

This report provides a comprehensive analysis of consumer behavior within the context of Toyota Singapore's automotive business. It begins with an executive summary outlining the study's purpose: to understand consumer behavior's significance in the automotive sector, specifically focusing on Toyota's position in Singapore. The report includes a situation analysis of Toyota, covering core competencies, distinctive competencies, and a SWOT analysis. It also examines the target market, decision-making processes, and various social, psychological, and personal influences on consumer buying behavior. Furthermore, the report offers marketing strategy recommendations for Toyota, considering the competitive landscape with Honda and the evolving market demand for electric vehicles. The external environment analysis explores political, economic, social, technological, environmental, and legal factors impacting Toyota's operations. The conclusion summarizes key findings and recommendations, emphasizing the importance of adapting to consumer preferences and market trends, especially the growing demand for EVs in Singapore. References are also provided.

Running head: CONSUMER BEHAVIOR
Consumer Behavior
[Toyota Singapore]
Name of the student:
Name of the university:
Author note:

1CONSUMER BEHAVIOR
Executive summary-
The study is aimed at understanding the importance of consumer behavior in automotive
industry. The paper depicts this in reference to Toyota in Singapore. The company is one of the
leading names in the automotive industry in Singapore. However, the paper highlights a tough
competition with Honda. Additionally, the study also helps to understand a stagnant future for
Non-EVs cars. Therefore, the paper recommends some strategies for Toyota to expand its
business in Singapore through EVs.

2CONSUMER BEHAVIOR
Table of Contents
Introduction-....................................................................................................................................3
1. Situation analysis of Toyota-.......................................................................................................3
2. Target market description-...........................................................................................................8
3. Target market decision making process-.....................................................................................9
4. Two social influences on buying behavior-.................................................................................9
5. Two psychological influences on buying behavior-....................................................................9
6. Two personal influences on buying behavior-...........................................................................10
7. Four marketing strategy recommendations-..............................................................................10
Conclusion-....................................................................................................................................12
References-....................................................................................................................................13

3CONSUMER BEHAVIOR
Introduction-
Consumer behavior has become a key factor for the success of innumerous kinds of
business across the globe. The automobile industry is not any exception. It is indeed much
explored to customer responses. There are ample numbers of car manufacturing brands, which
operate at the global platform. However, a global operation is attained after conducting an
extensive business planning such as market planning. Such planning is a very vast topic, which
challenges the strategic capabilities of reputed car brands across the globe (MacDuffie, 2013).
This particular assignment is focused on one of such brands “Toyota”. It is one of such
companies, which is continually focused on developing the future by using unmatched
innovation capability. Whether it be interconnected safety & traffic management, substitute
energy resources and human assisting robots, Toyota is continually focused on improving the
future from good to better (CORPORATION., 2017). The main purpose of this assignment is to
understand the importance of consumer behavior on the automobile industry. The study focuses
on Toyota Singapore as a case study company to understand the purpose of this paper.
1. Situation analysis of Toyota-
Core competencies-
The core competency of the company is to produce quality products at best prices. The
company beliefs in providing values to the money that customer spend on purchasing a car. It
has maintained an utmost use of innovation, which has challenged the other brands in their
respective period. The company has responded to the demand by putting an emphasis on the

4CONSUMER BEHAVIOR
production of electric vehicles. Additionally, the use of human assisting robots and an
interconnected safety system are the few examples of innovative capabilities (Nkomo, 2013).
Distinctive competency-
The production system of Toyota known as “Toyota Production System (TPS)” is its
distinctive competency. It is influenced by lean manufacturing strategies. The strategy includes
many other practices like Just in Time, Six Sigma and Kaizen. The company has worked
effortlessly over the years to generate such capabilities. It is an undeniable fact that the
innovative capabilities of Toyota is unmatched by any other car brand in the world. It has
become a sustainable brand and one of the market leaders as well (Nkomo, 2013).
SWOT analysis-
Strengths-
One of the biggest strengths of Toyota is its diverse product line, which suits the needs
of diverse range of people. The low cost strategy is another strength that has produced much
success to the company. The cost leadership strategy is attainable for the company through the
use of lean manufacturing process, effective relationship with the suppliers, capable distribution
process and low cost servicing for premium products (Hoque et al., 2013).
Weaknesses-
The hierarchical organizational structure is one of the weaknesses of Toyota. Product
recalls in recent years is another weakness that has challenged the innovative capability of the
company. The secrecy in organizational culture is anther weakness that delays the response for a
highlighted issue (Hoque et al., 2013).

5CONSUMER BEHAVIOR
Opportunities-
Greenhouse gas emission is an opportunity for Toyota. They can switch over to a more
reliable and an environmental friendly product to support the worldwide concern for greenhouse
gas reduction from air. The company has already started investing on solar power, which is one
of the cleanest options for renewable energy. The innovative capabilities that the Toyota has will
provide it a comparatively better opportunity in the future (Hoque et al., 2013).
Threats-
An incrementing competition in the automobile industry is a threat to Toyota. They need
to be more flexible now with their different strategic capabilities. The volatile behavior of prices
of different products such as rubber, glass, fuel and steel is another concern for their low cost
strategy. There is a need to have a better strategy to cope with the volatile behavior of prices to
remain cost effective in the market (Hoque et al., 2013).
Segmentation-
The company uses two methods to reach to its target market. Following are the two
segmentation methods that Toyota uses:
Demographic segmentation: In this segment, it targets the upper middle and high income groups.
Land Cruiser and Parado are some of such cars, which have been targeted at the high income
group and the upper middle class families (Ahmed, 2013).
Psychographic segmentation: This segment has targeted the high class income group who have
sporty attitude. Examples of such cars are Toyota Fortuner and Toyota Altis Sport model
(Ahmed, 2013).

6CONSUMER BEHAVIOR
Positioning-
The company targets almost the entire groups who are capable of purchasing automobile.
The positioning strategy of the company is both the differentiation and the low-cost strategy. The
Toyota Wish is for upper middle and high income groups. On the other hand, Toyota Previa,
Toyota Camry etc. are few examples of cars targeted at high income groups. They offer Sedans,
MPVs, SUVs, Commercial and Hybrids. Such a wide range of different models just shows their
differentiation strategy (Rahmani, Najafi & Delshad, 2016).
Differentiation-
It has been quite a successful company in differentiating with the different products based
on quality and design. The recalls problems have been quite efficiently handled by Toyota. This
is another point that shows their differentiating strategy than to its competitors. They are
differentiating in nature in relation to the use of technology. Toyota was the first successful
company that introduced hybrid cars in the market. It had also allowed the company to gain a
high market shares in the hybrid car market (Nortje & Snaddon, 2013).
External Environment analysis-
Political:
A sudden political change in Singapore will have its impact on the profitability venture of
Toyota in the country. The local government has already announced an annual cut on the number
of cars from February, 2018 (Tong, 2017). The country is left with very fewer lands, which is
why the government has felt the need of a better utilization of the remaining land area. This
move will influence the annual sales figure of Toyota in coming years.

7CONSUMER BEHAVIOR
Economic:
There has been saturation in the Singapore market due to the limited land area.
Additionally, the talk is more on switching over to the EVs cars. The diversity will be in the
industry; however, the sales will remain constant. It means there is no further scope for
automotive companies such as Toyota in Singapore. The scope is there with the different
environmental friendly models; however, sales will remain constant (Sgc.org.sg, 2017).
Social:
People are now much aware of greenhouse gas emission and its consequences. The
awareness is much higher in Singapore as well. EVs have picked up in demand. Additionally,
there is an automotive industry has been constant in Singapore. There is no further scope of
growth for one kind of car due to a cut down announcement made by the local government of
Singapore. The changed social behavior and a changed political-economic background will
affect the sales of Toyota. It will still have a god market for EVs cars (Flynn et al., 2016).
Technology:
Singapore is still developing in terms of technology. There are space for technologies
such as artificial intelligence (AI), cyber security, Internet of things (IoT) and much other. The
development of such technology will only smooth the manufacturing of cars. Toyota will also be
benefitted from such growth (Som et al., 2012).
Environmental:
The change in this sector will benefit Toyota in future. People and the local government
have now more concerns for renewable energy resources. This has fueled the necessity of EVs in

8CONSUMER BEHAVIOR
Singapore. Toyota has already started investing in the solar power. They are actually running up
with the paced demand (Som et al., 2012).
Legal:
Buying vehicle is very expensive in Singapore. This is due to additional expenses on
Certificate of Entitlement (COE), road usage charges and high custom duties. These all make
purchasing a challenging task. This fact will also challenge Toyota because it will influence its
strategy to produce cost-effective cars (Som et al., 2012).
Competitors-
It has stiff competition from Honda, which is currently at top in Singapore in terms of
sales. Honda has experienced a significant appreciation in its sales in Singapore. On the other
hand, Toyota is on a declining graph. The other competitors are Mazda, Mercedes, Nissan and
BMW. Mazda is also climbing up quickly to reach in close to Toyota (The New Paper, 2017).
2. Target market description-
Toyota uses two strategies such as Market-oriented pricing and Value-based pricing to
construct its target market. The Market-oriented pricing helps the company to be cost-effective
with the different types of cars such as SUVs. However, value-based pricing encourages the
differentiation strategy that Toyota uses to give values to the customer’s money. Through this
strategy Toyota actually attracts the high income group and the upper middle class families. The
target market thus can be divided into two sections such as high income group and high income
group & upper middle class families (Rahmani, Najafi & Delshad, 2016).

9CONSUMER BEHAVIOR
3. Target market decision making process-
The decision making process happens in two stages that includes considering the
demographic and the psychographic factors. This is the two strategies that Toyota uses to reach
to a particular segment of market. Through demographic factor, it has targeted the upper middle
class families to high income groups. On the other hand, the psychographic factor helps to target
the high income group only (Rahmani, Najafi & Delshad, 2016).
4. Two social influences on buying behavior-
The study has helped to analyze the two social factors, which influence the buying
behavior. One of such factors is the rising pollution in air. This has produced the urgency to
switch over to EVs in future. This awareness has also encouraged the business behavior of
Toyota. The company has already considered investing on the solar power. This is a response
against the identified urgency of switching to a renewable energy resource (Flynn et al., 2016).
Market trend is another factor that influences the buying behavior. Toyota has also introduced
cars according to the trends. Toyota has introduced every type of cars that ranges from luxury to
spotty cars. However, the paper has already highlighted a saturated market for such cars. The
Singapore government will cut down on car manufacturing due to the saturation in the market.
The saturation is due to the availability of limited land. There is no further scope for growth of
such cars. However, EVs cars will pick up in demand (SHIM, 2013).
5. Two psychological influences on buying behavior-
Attitude is one of the psychological factors that influence the buying behavior of
customers. This has also influenced the buying behavior of customers in Singapore. This is due
to the fact Toyota has introduced irrespective types of cars from luxury cars to spotty cars. The

10CONSUMER BEHAVIOR
attitude is changing in Singapore, which is why the demand for EVs has picked up in the
country. Motivation is the other factor, which influence the buying behavior. It does so by letting
the customers feel the needs of buying a car. Toyota has done it before in Singapore. It is doing it
now also. However, the trend is shifting from non-EVs to EVs cars. There is expected a constant
graph of sales of the other types of cars. There is indeed a need to invest more on generating non-
renewable energy resources to accelerate the production of EVs (Boztepe, 2012).
6. Two personal influences on buying behavior-
Income is one of the personal factors that influence the buying behavior. Buying a car in
Singapore is very costlier because of extra expenses needed to spend on Certificate of
Entitlement (COE), road usage charges etc. On the other hand, the economy has come down to
the saturation level. This means that the buying capability will remain the same. Moreover, the
different types of cars will fall into a constant graph and will have no further progress. EVs will
instead pick up the speed. Age is the other personal factor that influences the buying behavior.
For example, baby boomers will not head for spotty cars. They will probably look for traditional
favorites. On the other hand, Millennials will look for either luxury or spotty cars (Kaufmann,
Panni & Orphanidou, 2012).
7. Four marketing strategy recommendations-
The future car in the form of EVs needs a superior support of marketing strategies to grab
the attention of Singaporean customers. The political-economic background has already prepared
platform for EVs. Now, there is a need to use efficient marketing stuffs to grab the attention of
customers. Following are some recommendations for marketing strategies necessary for Toyota
in Singapore:

11CONSUMER BEHAVIOR
Explaining its advantages-
There is a need to explain the benefits that the EVs will supply to the surrounding
environment and to the customers using those. Many customers are still unaware of the facts
related to EVs. They generally have misconception about it such as it runs on batteries; hence,
this will be challenging to get the charging stations available when needed. This is indeed not
true because infrastructure development is still under process. Prospect is there for compatibility
with the EVs as the local government of Singapore will also support such vehicles to reduce the
greenhouse gas emission from air. Moreover, the government has already announced a cut down
on the annual production of non-EVs cars.
Explaining the relations between the hybrid cars and the EVs-
Hybrid cars and EVs are same in one respect that both the cars run on batteries. The
hybrid cars of Toyota are already popular in Singapore. The company should explain the
interrelationship of the two different types of cars. This will help them connect to the EVs.
Going social-
This is very necessary because EVs are still a new concept to many. Educated customers
only buy the EVs. It provides a good opportunity to Toyota to prepare such a social platform that
it educates customers on social sites. Professionals are required who could make videos
explaining the entire prospects of EVs. Such videos will be needed to upload on various social
sites. This will not only help to catch a mass view but this will also educate them on the
prospects of EVs.
Emphasizing the innovation-