Toyota Motor Corporation: Operational and Marketing Analysis Report

This report provides a comprehensive analysis of Toyota Motor Corporation's operational and marketing challenges. It begins with an overview of Toyota's background, mission, vision, and business segments, followed by an identification and evaluation of key operational issues, particularly focusing on quality problems and the need for digitalization in marketing. The report then delves into specific marketing issues, such as poor marketing staff performance, quality concerns, customer loyalty challenges, and deficiencies in digital marketing strategies. It recommends solutions, including training and recruitment, addressing negative publicity, refining marketing strategies, and embracing digital marketing. The report also examines Toyota's marketing model, specifically the 7Ps marketing mix, and suggests improvements for enhanced efficiency and effectiveness. This report aims to provide insights into Toyota's operational and marketing strategies and offer recommendations for future success.

BUSINESS OPERATIONS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. About Toyota Motor Corporation...................................................................................................1
2. Identify and evaluate key operational issues.................................................................................2
3. Operational marketing issues Toyota faces...................................................................................3
4. How should Toyota address above Issues?....................................................................................4
5- Marketing model used by Toyota...................................................................................................5
6- Making market model more efficient in order to solve its issues...............................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
In competitive era of today’s period, companies are not involved in a single activity and
carry out multiple of activities and functions to expand their presence and attain commendable
success. All the day-to-day activities that a firm execute are the part of their key operational area.
With the changing period, now-a-days, marketing has become an essential part of the corporate
operations which is primarily concerned with establishing connection between organization and
users to convey them information about their product quality and value. Despite its advantages,
in practical world, firms face number of challenges in marketing practices. Toyota Motor
Corporation is a Japanese automotive organization that operates at multinational level all around
the globe. It produces luxury vehicles, engines, commercial vehicles and automobile products
and serve worldwide. The present report aims at examining key operational issues that the
organization is facing in the area of marketing. Owing to this, solutions will be recommended
about resolving the issues.
1. About Toyota Motor Corporation
Toyota Motor Corporation is a public limited company founded in 1937, headquartered
in Japan and operates in automotive industry. Its product portfolio consists of luxury vehicles,
engines, commercial vehicles and automobile products. Hino, Lexus, Ranz, Daihatsu and Toyota
Brand are some of the popular brand name of Toyota Motor Corporation. It is world’s top
automobile manufacturing company that produces above 10 million vehicles every year. The
company also earned market leadership in the hybrid electric vehicle sales. It is primary listed on
TYO while secondary listing includes LSE and NYSE. It has a worldwide presence as it operates
in North America, Europe and Australia. In 2017, Global Fortune Ranking, Toyota is ranked at
5th position by having revenue of $254,694m with the employee base of 364,445 in worldwide
operations (Toyota Motor Corporation, 2017).
Mission: “To attract and retain maximum customer base by offering highly valued goods and
services satisfying users requirements”
Vision: “To become the most successful company by championship in the automotive industry”
Business segments:
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 Automotive segment: manufacturing and selling passenger cars, vehicles and associated
parts and accessories
 Financial service: Loan and financing services to the buyers
 Other: Industrial vehicles
Strategic operational objectives
 To maximize wealth of shareholders and deliver increased return on money invested.
 To take actions to control cost and maximize profitability
 To make appropriate allocation of utilization of resources manpower, funds, assets etc.
 To deliver top quality products with that meet consumer specification
 To use the best technology in vehicle designing and manufacturing for quality production
 To create sound corporate image in the market by delivering increased value to the
buyers
 To maintain high level of honesty, professionalism and integrity by ethical working
practices
 To undertake corporate social responsibilities program to satisfy all the stakeholders i.e.
customers, employees, community and others
2. Identify and evaluate key operational issues
Toyota is engaged in production of number of vehicles, cars and its components i.e.
engine, accessories and others. Therefore, it is important for the organization to oversee the
designing and other operational function to undertake sound operational management. Currently,
poor quality is the main challenge that the organization is suffering from and resultant defects
(Zanjani and Nourelfath, 2014). Company’s production system and guidelines are not properly
followed as many consumers are dissatisfied due to material flaws and missing components or
vehicle parts. . The quality issues have a huge impact on its brand equity and reputation resulting
loss of its competitive strength (Buchanan, and Huczynski, 2010). Due to defects in
manufacturing, many clients switched and starting using rivalry’s goods resultant loss of
Toyota’s market share. However, in current times, attracting and retaining new consumers is not
only tough but also very costly (Converse, 2010). Due to ineffective designing and flaws,
company’s sales in its domestic country survive through stagnation phase. Instead of this, self-
acceleration problem due to use of faulty electronics can be seen as its example. Thus, firm need
to implement immediate measures for quality control and assurance. Besides this, in the area of
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marketing, firm is facing challenges due to lack of digitalization. Toyota’s marketing strategies
heavily dependent upon traditional models, however, with the change of market need, firm need
to introduce innovative techniques. Radio commercials, banner ads are the promotional tools
used by Toyota which arise difficulty for the firm to convince consumers to buy vehicles (Parker,
2016). No-doubt, fierce competitive period also arises numerous challenges which only can be
defeated through having satisfied and loyal customer base. For this, company must adopt newer
and digitalized way of marketing instead of focusing only on ads, lobbying campaign and public
relation and build user loyalty. At the time of first social media marketing for Yaris model,
inappropriate language and innuendos made ads offensive (Ayyagari, Beck and Demirguc-Kunt,
2007).
In spite of this, poor marketing management, lack of talented and digitalized manpower
are several challenges that the entity had faced. Marketing team of the company did not learn
from the past experience and do not implement corrective measures timely to prevent
reoccurrence of faults (Holm, 2006). It arises need for the organization to review its marketing
team and educate & train them with exceptional marketing skills so as to make stronger
connectivity with the users and satisfy their expectations in an appropriate manner to promote
brand equity (Li and et. al., 2014).
3. Operational marketing issues Toyota faces
Marketing is very important function in organisation by which company can aware the
customers for their products and attract them for buying their new products and services.
Marketing in Toyota is also very important so thethat information related to new cars and
services can be communicated to customers easily (Beaumont, Whitaker, and Pederson, 2013).
This help in increasing sales of company and also generates trust among customers.
Toyota is the company which produces car for their willing customers but the face many
problems and criticism because of marketing issues in the organisations. This marketing issues
reduce their sales and affects the profitability of Toyota. The marketing issues affect brand image
of Toyota and also affect trust of customers on the brand. Important marketing issues face by
Toyota which are need to be solved soon:
 Poor marketing staff performance: The performance of the marketing staff is poor in
current fiscal year which reduced income of company by 31.3 percent. The revenues are
not only declining but there is increase in marketing expenses of company. The
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performance of marketing staff affectsthe image of brand and also their share of market.
Marketing staff is not so efficient in Toyota but has a high salary demand. Marketing
function is not performed properly to improve the promotions strategies. They follow
traditional marketing process which not attract the customers towards their cars.
Marketing staff is not trained because of which they are not able to handle advancement
in marketing techniques. The marketing function is also not funded more by Toyota
which reduces motivation level of employees.
 Quality problems: Toyota faces a serious issue related to the quality of auto mobiles. The
media make it popular that Toyota has defects in their quality which is not true as per
actual data (Brooks, and Simkin, 2012). The rumours are publicized in market that
Toyota has unintended acceleration,this effect their position in market. This quality issues
affects marketing strategies of the company. This is duty of marketing to keep safe image
of company otherwise it affects sales of company. Negative marketing of company in
media reduces the faith of customers on auto-mobiles produces by Toyota.
 Customers loyalty: This is also a big marketing problem as the customers are not loyal
towards the company because of high prices of Toyota auto-mobiles. New companies
with the latest technologies enter in market which attracts customers with low prices and
effective discounting strategies (Glynn, 2011).
 Digital marketing issues: Toyota promotes their products mostly through traditional
mediums. In modern era there are many new methods of marketing available which is not
followed in Toyota. Communication of Toyota with their customers is very bad because
they are not using modern tools to communicate with customers.
4. How should Toyota address above Issues?
Above are the marketing issues faced by Toyota which effects their image in market and
customers loyalty (Buchanan, and Huczynski, 2010). The results of not solving these issues less
sales in Toyota. These issues can be solved by Toyota in following manner.
 Training and recruitment: First marketing issue i.e. poor performance of marketing staff
can be solved through effective trainings and development programmes related to new
marketing techniques. New staff is to be recruited with high level of marketing skills and
for existing staff training program are organised to develop new skills related to new
marketing techniques.
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 Stop rumours: Toyota has to make plans to stop rumours related to their auto- mobiles
and vehicles(Glynn, 2011). They can do it publicizing information opposite to rumours.
In case when there are rumours related to unintended acceleration Toyota publicized the
investigation of products. They need to provide evidence opposite to negative rumours to
proof that the rumours are not correct.
 Marketing strategies: Proper marketing strategies are required to be developed to solve
the issues related to customer’s loyalty. Customer’s loyalty is affected due to bad image
in the market so to produce good image in market there is a need to develop plans. The
company have to interact with customers on regular basis to understand their demands
and problems related to cars and then make plans as per their demands. These actions
attract customers towards the brand and also maintain their loyalty.
 Digital marketing: Toyota has to adopt digital marketing functions which help in
promoting their vehicles and cars (Holm, 2006). Digital marketing is modern marketing
tool which includes email marketing, social media marketing like on Face book, twitter
etc. this help in promoting Toyota cars in large number of customers. This helps
increasing sales and also helps to increase market share. This ultimately helps in growth
of business and increase the profitability.
5- Marketing model used by Toyota
The marketing model that can be used by this company in order to make customer aware
about the products and services that is provided by Toyota Company is 7P's marketing mix
model.
Products – By this company both tangible and non-tangible products are provided to its
customers. In the tangible products' i.e. cars with advanced technology are offered and intangible
products and services such as warranties, insurance etc.are provided to its clients. The high-
quality product is self-market by this company and this makes the company so desirable. There
are about 18 models of car that has been manufactured by this company. The parts of vehicles
such as gears and other parts are also being offered by this company(Moon and Alle, 2015). The
financial services such as warranties, road assistance etc have been also been provided to its
customer in terms of intangible products. In the list of priorities for Toyota, interests of customer
are at top. This company has a research centre in which data is gathered on the expectation of
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customers. In their research centre they have invested about 22.1 million. In order to deal with
cost of gas they have put together hybrid product line.
Place - The customers are kept in the top priority by this company. It makes its product
available to target customer. Through dealership they sell their vehicles. In teams sales staff
works together. The highly skilled and talented staff have been hired by this company. The staff
is not only well skilled in sales but also in other things such taking order, product information,
finance information etc. The strategy that is used by this company is “pull” strategy and based on
these cars are manufactured for customers. In different tiers they have organized suppliers and in
the product development team thefirst level suppliers work. The individual parts are made in
second tier.
Pricing – In the year 2003 Toyota became second largest two-car maker company. The
innovative design is made by this company due to which it is at this position today. All over the
globe they have customers entices . Thehigh-quality vehicles are built by them and price
accordingly. Bye costs price the selling price of any product is usually determined. If there is
been increase in the cost of production then it is based to clients in terms of selling price. But
increase of this company it does not calculate selling price the profit is calculated by them
(Marketing products of Toyota, 2017).
Promotion – In order to increase its sales different strategies have been used by this
company. By using radio, newspaper, television, internet etc they advertise themselves. In order
to draw attention of customer towards their brand they make use of catchy slogan. The cash back
offer has also been started by this company. Such offers mainly attract non-cash buyers.
People – In service and production line this company is keen to empower its entire
workforce. Due to this the workers that are working in this company are too creative and friendly
with customers. The self-image of the company has been hosted with this and also it is being
able to respond to expectation of customer efficiently.
Process- A lean production model has been embraced by this company and with this it si
able to produce just- in-time products. The wastage has been reduced due to proper management.
The efficiency has also been increased due to decrease in production cost (Wacker and Lummus,
2012). The huge market share has been captured by this company due to these reasons.
Physical evidence- The tangible presence has been made by this company. And with new
and old clients it has a stable dealership. With the company customer have gained confidence
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and more sales have been increased due to this reason. In different places Toyota sells its
products and services. The online shops, telemarketing and mail order is used by Toyota.
6- Making market model more efficient in order to solve its issues
The issue that is faced by this company currently is that employees are not skilled and
talented in order to explain the customer regarding information of product and services that is
given by this company. In order to solve this issue company will provide training to theses
employees of that there way of interaction with clients can be improved .The company will also
recruit and hire talented employees for this company who can manage the customers and provide
essential information about products customers. The recruitment process and training for staff
will solve this issues that is faced by Toyota.
The second issues that is faced by this company is quality of products is not up to-mark
So, in order to make its product quality better the company can make use of six sigma, total
quality assurance in order to enhance its quality of products and services. If the company will use
total quality management then it will provide more customer satisfaction as it is long-term
approach for success (Kennedy and Avila, 2013). In the improvement of the process, products ,
services all members of the organization will make an effort. As per the needs of customer the
quality will be defined and for quality improvement the top management will be give direct
responsibility. In this way these problems can also be solved in the organization.
In order to make their communication effective so that more number of products is purchase by
the customers the company can make use of A.I.D.A model.
Attention – At the beginning this will take place. In order to recognize a problem a
shocking fact will be represented.
Interests – In the next step the interest in the product is maintained so that to keep the
recipient engaged.
Desire – In this stage the problem is solved regarding the product and services. The
benefits of the products and services are shown.
Action – In this the immediate action is taken by the prospects. The company can makes
sales in this step.
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CONCLUSION
The investigation made it clear that although Toyota is the most powerful and successful
company in automotive sector, still, currently, it is facing challenges in the field of marketing
such as digitalization, unavailable talented marketing personnel, product defects and many
others. Thus, in order to combat such issues, company needs to educate people, specifically ,
marketing staff about new ways of marketing and digitalized skills. Moreover, putting innovative
quality control mechanism seems necessary, in this; Total Quality Management (TQM) is found
best technique for quality production.
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REFERENCES
Books and Journals
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globe. Small Business Economics. 29(4). pp.415-434.
Beaumont, J. R., Whitaker, B. and Pederson, L., 2013. Managing the Environment: business
opportunity and responsibility. Elsevier.
Brooks, N. and Simkin, L., 2012. Judging marketing mix effectiveness. Marketing Intelligence
& Planning. 30(5). pp. 494 – 514.
Buchanan, D. and Huczynski, A., 2010. Organizational Behavior and Companion Website
Access. Financial Times/Prentice Hall.
Converse, P. D., 2010. Introduction to Marketing - Principles of Wholesale and Retail
Distribution. Meisel Press.
Glynn, M., 2011. The Relationship Marketer: Rethinking Strategic Relationship Marketing.
Journal of Product & Brand Management. 20(1). pp. 85–85.
Holm, O., 2006 Integrated marketing communication: from tactics to strategy. Corporate
Communications: An International Journal. 11(1). pp. 23–33.
Kennedy, P. J. and Avila, R. J., 2013. Decision making under extreme uncertainty: blending
quantitative modeling and scenario planning. Strategy & Leadership. 41(4). pp. 30–36.
Li, L. and et. al., 2014. Mathematical model based on the product sales market forecast of
markov forecasting and application. Journal of Chemical and Pharmaceutical Research.
6(6). Pp. 1359-1365.
Moon, M. and Alle, P., 2015. From Sales & Operations Planning to Business Integration.
Foresight: The International Journal of Applied Forecasting. (37). pp. 5-12.
Wacker, J. G. and Lummus, R. R., 2012. Sales forecasting for strategic resource planning.
International Journal of Operations & Production Management. 22(9). pp.1014 – 1031.
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Zanjani, M. K. and Nourelfath, M., 2014. Integrated spare parts logistics and operations planning
for maintenance service providers. International Journal of Production Economics. 158.
pp. 44-53.
Online
Marketing products of Toyota. 2017. [Online] Available through:
<https://www.marketing91.com/marketing-mix-toyota/>.
Parker, J., 2016. Overview about Toyota Motor Corporation. [Online]. Available through:
<http://marketrealist.com/2016/05/overview-need-know-toyota-motor-corporation/>.
Toyota Motor Corporation. 2017. [Online]. Available through:
<http://fortune.com/global500/toyota-motor/>.
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