Marketing Consumer Behaviour: A Detailed Report for Toyota (BUS 301)

This report, prepared for the managing director of Toyota, delves into the intricacies of consumer behavior within the automotive market. It begins with a situation analysis of Toyota, examining its background, historical facts, vision, mission, current market position, industry information, competitors, market share, and marketing strategies. The report then explores Toyota's target market, segmenting buyers based on demographic, psychographic, behavioral, and geographic factors. It further analyzes the target market's decision-making process, including problem recognition, information search, evaluation of alternatives, purchase decisions, and post-purchase evaluation. Social, psychological, and personal influences on buying behavior are also discussed, followed by marketing strategy recommendations to enhance Toyota's market position and consumer engagement. The report concludes by summarizing the key findings and implications for Toyota's marketing efforts, providing a comprehensive overview of consumer behavior in the context of the automotive industry. The report also includes figures and tables to visualize the data and make it easier to understand.

RUNNING HEAD: Marketing consumer behaviour 0
Toyota
Marketing consumer behaviour

Marketing consumer behaviour 1
Contents
Table of figures...........................................................................................................................................1
Introduction.................................................................................................................................................2
1.Situation analysis of the company............................................................................................................2
2. Target Market Description.......................................................................................................................7
3. Target Market Decision Making Process..................................................................................................8
4. Social influences on buying behaviour...................................................................................................10
5. Psychological influences on buying behaviour......................................................................................11
6. Personal factors influences on buying behaviour..................................................................................11
7. Marketing Strategy Recommendations.................................................................................................12
Conclusion.................................................................................................................................................14
References.................................................................................................................................................15
Table of figures
Figure 1: Current market situation of Toyota..............................................................................................4
Figure 2: Market share of Toyota................................................................................................................4
Figure 3: Toyota's marketing strategy.........................................................................................................5

Marketing consumer behaviour 2
Introduction
Consumer behaviour is the study of consumers about what they think, like, dislike & select
between different options. It is about how their behaviour affects to an organization. It is the
study of consumers who go through various stages of pre & post purchase of goods & services.
This report is written to the managing director of Toyota. In this report, the key issues of
consumer behaviour are discussed which the company is facing. These are situation analysis of
the company, target market, decision making process, influences on buying behaviour &
marketing strategy recommendations. It is going to help to understand consumer behaviour &
company could target the market accordingly.
1. Situation analysis of the company
Company’s background
Toyota is an automobile manufacturing company. The company is based in Japan and was
founded by a Japanese manufacturer Toyoda Sakichi in 1926. Nearly 600 subsidiary companies
are involved in the production process of Toyota. In 1999, the company got listed on the London
stock exchange & New York stock exchange.
Historical facts
Toyota was established in 1924 with the setting up of Toyota model G automatic loom. Vehicles
of Toyota are sold in more than 170 countries & regions and employ more than 320000 people in
the world. The company is largest in the Japan & has second place in the world. The company
has a large market share in America & Europe.
Vision
It’s vision is to lead in motor vehicles industry by introducing new technologies.
Mission

Marketing consumer behaviour 3
Toyota’s mission is to be a mobility leader by attracting customers with highly valued products
& services also aiming at providing innovative & better quality (Heitz-Spahn, 2013).
Current market situation Analysis
Toyota has outperformed in the past few years. The company has a strong record of quality.
Innovative production process & to provide great quality at best prices is the core competency of
organization. The company’s production system is based on lean manufacturing concept which
includes innovative practices. Company’s distinctive competency is competitive advantage that
has given a different identity to Toyota (Lantos, 2015). Since 2010, the company’s total revenue
has grown up by 50%. In 2015, the company’s total revenue was 27.2 trillion yen and it
increased by 3.4% & reached to 28.4 trillion.
Figure 1: Current market situation of Toyota
Industry information
Company’s main focus is on the automotive industry but is also involved in the process of
robotics, material handling & textile machinery. The company is leading auto industry in
innovation since 2015. The company is also listed among the top 20 on IPO list and is the only
automaker company.

Marketing consumer behaviour 4
Competitors
Toyota has fierce competition with Hyundai, Honda and Ford. There is good competition
between these brands & Toyota is leaving behind the competitors & leading in the automobile
industry.
Market share
In 2008 Toyota was announced as the world’s largest automaker and its market share stood at
13.8%. It had a global market share of 11% in 2015 and it surpassed General motors. North
America has the largest market share & Japan has the second largest market share of the
company.
Figure 2: Market share of Toyota
Marketing Strategy
When the company was established then the marketing was considered as an important tool of
promotion for attaining success. Good promotional tools help to win the trust of customers which
brings growth to the company.

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Advertisement: Toyota is one of the biggest advertisement spenders which is 1.6% of it’s
revenues (Goh, Heng & Lin, 2013). It includes print & electronic media & outdoor
advertisement.
Dealers’ network: Vehicles are sold in 190 countries through 170 distributors. Network of
dealers is maintained through these distributors.
Figure 3: Toyota's marketing strategy
PEST Analysis
Political factors
 Policies of government:
Ease policies of
government give freedom
to Toyota expand &
regulate business.
 Political stability:
Economic factors
 Better economic
condition: Better
economic conditions
provide the
opportunity to Toyota
for better employment.
Social factors
 Increasing interest in
top models: Society’s
interest is increasing in
top model cars which
is status symbol also
now days.

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Political stability has
positive effect on the
businesses. It has increases
revenues & profits of
Toyota (Oyserman &
Schwarz, 2017).
 Eco-friendly products: The
government can satisfy
environment expectations
by producing eco-friendly
products.
 Higher purchasing
power: It leads to more
sales & profits.
 Growth of developing
countries: Growth of
developing countries
leads to more demand
for cars.
 Focus on localization:
Focus on localization
is given to connect
local customers.
 Wealth gap: It is threat
for the Toyota because
only the top & middle
class remains the target
area.
Technological factors
 Better brand
technology: Better the
technology higher the
sales are of Toyota.
 Innovative brands:
New technology leads
to innovative brands.
 Effective marketing:
Technology leads to
effective marketing of
Toyota products.
Environmental factors
 Impact: Government is
also supporting Toyota
because of it’s
environment impact.
 Sustainability: Toyota
is investing in
sustainability.
 Environmental
protection: Toyota is
protecting environment
with it’s fuel saving
technology.
Legal Factors
 Laws: Labor laws &
quantity laws do not
result loss of Toyota.
 Passenger safety:
Toyota is protecting
passengers with safe
air bags.
 Education& training
programs: Toyota
conducts training &
programs to corrupt
prevention measures.

Marketing consumer behaviour 7
SWOT Analysis
Strengths:
 Huge market share: Toyota is on
second rank in the world & has huge
market share.
 Superior quality of vehicles: Toyota
provides reliable & high quality
products.
 Focus on Research & Development:
Toyota spends the most on Research &
Development among all competitors.
Weaknesses:
 Increasing costs: Toyota has increased
costs due to inflation is becoming
weakness.
 Toyota has competitors such as Honda,
Hyundai & Ford.
 Toyota’s sales are declining due to
increased competition.
Opportunities:
 Joint venture with other companies has
increased opportunity for more
production & innovation.
 Declining interest rates & automotive
taxes has increased opportunity to
Toyota for selling vehicles.
 Demand is increasing for full efficient
cars & Toyota has such quality.
Threats:
 Increasing exchange rate of Japanese
yen is becoming threat to Toyota.
 Toyota is facing threat because of
innovations by other competitors.
 Uncertainty of oil prices declines the
demand for cars.

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2. Target Market Description
Market segmentation helps Toyota to know target areas. It divides a market into smaller groups
on the basis of need, taste, income or habits. A company can gain competitive advantage by
focusing on the target market (Solomon, 2014). Buyer’s characteristics on the basis of which
markets segmented are:
Demographic factors:
Buyers who are males & are of age 25 & more having income of $5000 & above are supposed to
be well informed & qualified adults. The target of Toyota has been adult age group & these are
middle to high income customers (Ostinelli, Luna & Ringberg, 2014).These customers go for the
car models like avanza, vios, camry & fortuner.
Psychographic factors:
In the psychographic segment, Toyota has targeted the family size & people of middle income
group. These people have general requirements & are supposed to spend on eco-friendly models
such as camry , etios & corolla altis. These cars have high comfort & reliability.
Behavioural factors:
Choice of car depends upon the age, taste & requirement of consumers. Like sporty look car
attracts to teenagers & kids. Families prefer more to buy reliable & economic cars.
Geographic factors:
Toyota targets market on the basis of geographical considerations. In the tropical countries there
is need of reliable cars which can be driven roughly such as innova & hilux. So, country like
Singapore has got better option of cars from Toyota.

Marketing consumer behaviour 9
3. Target Market Decision Making Process
Decision making process of Toyota includes PDCA. PDCA is plan, do, check & act. It is taught
to each employee of organization. This process is used for continuous improvement. Decision
making process of Toyota is:
3.1- Problem recognition:
The step of problem recognition initiates a purchase decision. Problem recognition results when
difference is found out in the actual product & the product a customer wants to purchase. First
nature of problem is known after that the methods for measuring problem recognition & then the
market strategies are find out.
3.1a- Market induced: It is marketer’s action that leads to not to content to customer’s real
situation. Advertisement such as hybrid cars creates insecurity to have them so that a consumer
can save the cost of petrol & diesel.
3.2b- New stage in life: New products & services are launched in the market to solve the
problem of consumers. Problem recognition happens when the innovative products are launched
& comes in the notice of consumers.
3.2-Information search:
Information search is the second step in the decision making process. Once a consumer
recognizes a problem, it can be satisfied by purchasing a product or service.
3.2a- Level of risk: Level of risk is low when it is given by the market experts. When a person
does not have relevant information, then the level of risk is high.
3.2b- Level of product knowledge: To make a purchase decision a consumer searches for the
information. Initial search is made by the past experiences and knowledge regarding various
products. The information received refers to internal search (Heitz-Spahn, 2013). External
sources can be friends, relatives, public media such as advertisement & newspapers and market
experts.

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10
3.3- Evaluation:
In this stage, consumer thinks & reminds of the options which the consumer can buy & are
suitable to satisfy the needs. In this stage focus is given on options to make purchases.
3.3a- List of evoked set: The various purchasing options such as different brands are considered
in evaluation processes which are known as list of consumer’s evoked set.
3.3b- Compensatory & non compensatory rules: Compensatory rules provide sound performance
of Toyota & are simple and understandable. To understand non-compensatory rules it is must to
understand mathematical concepts to evaluate.
3.3c- Evaluation criteria: Car buyers may have single criteria & multiple criteria depend upon
their preference. Single criteria can be price and multiple criteria are fuel efficiency, speed,
quality, price, performance & warranty.
3.4- Purchase:
Once purchase decision is made a consumer stops searching & evaluating about the alternative
brands.
3.4a- Availability of products/ substitute product: A person chooses to buy a brand, but can
implement the plan before making final decision (Juster, 2015). It is not necessary to buy the
product which was decided by consumer earlier. It can happen due to unavailability of products.
3.4b- Retail factors: There are many retail factors such as consumer preferences, innovation &
technology. While taking decision if a consumer faces such changes then there is possibility to
change the purchase decision.
3.5- Post purchase evaluation:
The post purchase evaluation stage arises after purchase. A consumer’s response can be known
only after using the product.
3.5a- Post purchase feelings: A consumer can be satisfied only if the performance of car matches
with the expectation of consumer and a satisfied consumer is always happy. A consumer is

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11
unhappy when the performance is below expectations; as a result the consumer is dissatisfied. A
consumer is just neutral when the requirement is just fulfilled & don’t get any additional benefits
(Gruber & Schlegelmilch, 2014).
3.5b- A number of strategies can be used to reduce cognitive dissonance such as provide
consumers, products of good quality that always meet their expectations. Marketers should be
well aware of their advertising tools that it does not create confusion (Becerra, Henriquez &
Guzman, 2014).
4. Social influences on buying behaviour
Buying behaviour is influenced by innovation of cars & brands, motivation from friends &
family, preference towards brands, knowledge from colleagues & family members.
4.1- Social class:
Social groups are not made of formal groups, they are formed by individuals. There are various
features of social class which differentiates from each another like education level, behaviour,
attitude, lifestyle & values. Toyota has variety of options for every group of society (Vida,
Damjan & Fairhurst, 2015).
4.2- Opinion leadership & diffusion of innovation:
Toyota has leadership in brands because of it’s techniques, knowledge & presentation. Company
attracts customers by diffusion of innovation (Ghose, Ipeirotis & Li, 2014). The company keeps
on adding new feature to the cars.
5. Psychological influences on buying behaviour
5.1- Personality & self-concept:
Every person is different from another in terms of personalities, it affects their buying decision.
So buying cars differentiates on the basis of class (Claiborne & Sirgy, 2015). A person who
belongs to higher class & maintains good personality will surely prefer to buy top models like
fortuner & lexus.

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5.2- Perception:
Perception is absorbing the situation & taking decisions accordingly. Every person has different
perception to liking & buying things. Some people think that only the top models are good &
prefer to buy those. It is just the perception of humans which define their interest to buy cars.(
Mullen & Johnson, 2013).
6. Personal factors influences on buying behaviour
6.1- Personality & self-concept:
Personality is psychological traits how people see it. It makes a person unique. Traits of
personality are:
Openness: How open a customer is to new experiences.
Extraversion: Extraversion is how shy a customer is to accept innovations (Bossuyt, Van
Kenhove & De Bock, 2016).
Neuroticism: How liable customers are to negative mental states. When any problem occurs in
any vehicle, this is how a customer deals.
Self-concept is how a customer sees himself positive or negative. Consumers buy products to
become a better version of them.
6.2- Age:
Age influences to buying behaviour of customers. Persons who are above 60 are stereotypes and
prefer to buy reliable & economic cars. They are happy with the old method of cars. Persons who
are adult prefer to buy sport cars as it reflects their personality (Griskevicius & Kenrick, 2013).
7. Marketing Strategy Recommendations
Marketing Strategy

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13
Toyota’s target market is segmented on the basis of preference & taste of consumer & local
market conditions. The company has grown from a small business to large empire in the
automotive industry. The four P’s of Toyota defines the firm’s strategy for it’s target market:
Products:
Toyota is the best-selling brand. The company provides both tangible & intangible products.
Cars & vehicle parts come in the tangible products. Intangible products cover financial services,
car services & warranties (Zhang, 2015). Toyota production mix includes:
Toyota automobiles
Material handling equipment
Welcab series
Textile machinery
Spare parts & accessories
Lexus automobiles
Prices:
Toyota’s price segment defines how the company sets price for it’s products. Toyota adopts two
pricing strategies- market oriented pricing depends upon the condition & Prices of other
companies & value based pricing is used on the basis of actual & perceived value of the product.
It is used for the luxurious cars (Aviv, Wei & Zhang, 2015).
Place/ Distribution:
This element defines the place where a customer can get products. Before choosing a place,
different segments of the market should be understood (Jost, 2017). Main places for distribution
are:

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Dealership: Toyota believes on dealers & sales personnel to sell it’s products in the target
market.
Retailers: Retailers also sells the company products such as spare parts.
Promotion:
Toyota uses promotional activities to communicate with the target market (Wrenn, Loudon &
Della Bitta, 2014).Promotional activities are:
Direct selling: Direct selling is done for corporate clients.
Personal selling: Personal selling is used by Toyota in which dealer sale personally to potential
buyers.
Sales promotion: Special deals & offers are provided by Toyota to promote products.
Marketing Strategy Recommendations
Penetration Pricing Marketing strategy improvement:
Toyota could improve penetration pricing strategy by initially selling at low prices & once the
brand is established, can slowly increase the prices.
Social media marketing strategy improvement:
Toyota can improve it’s social media marketing strategy by studying competitor’s performance
& can promote it’s products through new platforms of media.
Conclusion
From this report, it is understood that Toyota always put quality first. Company’s situation
analysis, target markets, target market decision making process, social, psychological & personal
influences on buying behaviour & marketing strategy recommendations are sign of best customer
service. To understand consumer’s requirement it is necessary to understand market segment
which are demographic, political, geographical, psychological & social. Market segments are

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evaluated on the basis of size & growth, structure & resources. Fast growing segments not
always attracts the company (Morales, Amir & Lee, 2017). Marketing strategies also helps to
understand customer’s choice & preference. Consumer’s preference is for safety & more air bags
and they are getting good service from Toyota. Advertisement has great impact on customers
which helps companies to sell it’s cars and other accessories. Customers are happy & satisfied
from Toyota.

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