Marketing Management Report: Toyota Market Analysis and Strategy

This report provides a comprehensive market analysis of Toyota, a leading multinational automobile manufacturer. It begins with an introduction to Toyota, highlighting its growth and profitability in the global market. The report then delves into an industry market analysis, examining growth, profitability, and the macro environment using a PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. The study also explores Toyota's major market segmentation strategies, including geographic, demographic, and psychographic segmentation, and analyzes the involvement of the primary segment. Furthermore, the report assesses the nature of competition, including a SWOT analysis, and concludes with a positioning map of Toyota within the competitive landscape. The report evaluates the opportunities and threats that Toyota faces in the automotive industry.

Running head: MARKETING MANAGEMENT
Marketing Management
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction:....................................................................................................................................2
1. Industry market of organization...................................................................................................2
1.1 Growth.......................................................................................................................................2
1.2 Profitability................................................................................................................................3
1.3 Macro environment....................................................................................................................3
1.3 Macro Environment (PESTLE Analysis)..................................................................................3
2. Major market segmentation of Toyota........................................................................................6
3. Involvement of the Primary Segment..........................................................................................8
4. Nature of the Competition...........................................................................................................9
4.2 Competitive Analysis...............................................................................................................11
5. Positioning Map of Toyota........................................................................................................12
Conclusion.....................................................................................................................................13
Reference List:...............................................................................................................................14

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Q. Consider the market for any organization you choose and evaluate the opportunities
and threats that exist for Toyota
Introduction:
Providing good quality of products as well as services is one of the most significant ways
of maintaining organizational sustainability. At the same time, it is also undeniable that business
experts need to focus on business promotion for gaining recognition of their brands as well as
services. Toyota is one of the most prestigious multinational Japanese manufacturers occupying
a predominant place in the realm of automobile industry. In order to expand the entire process of
business beyond going the regional market Toyota has decided to evaluate the opportunities and
threats that the business experts may have to face for expanding the entire process of business in
different geographical boundaries (toyota.com, 2017). This specific study has provided in-depth
overview about the profitability and growth structure of Toyota along with evaluating the target
market segmentation. After evaluating the target market segmentation an effective competitive
analysis has also been drawn for analyzing the marketing and development plan of Toyota.
Figure 1: Logo of Toyota
(Source: toyota.com, 2017)

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1. Industry market of organization
1.1 Growth
At the initial stage Toyota Motor Corporation has started their journey as an automobile
manufacturer established their business process in the market of Japan. After providing variety of
brands as well as services this specific brand has drawn the attention of large number of people
by expanding the entire process of business in different geographical boundaries. By 2014
Toyota corporate structure has been constituted with 338875 employees (toyota.com, 2017).
Sufficient workforce strength was effective for this brand in order to make a balance customers
demand and supply. Wilson and Gilligan (2012) emphasized that, around 10 million vehicles is
manufactured from the department of Toyota for delivering the brand.
1.2 Profitability
As per the net revenue report of Toyota this particular company in 2016 has earned
59,011,306.09$ which is high in comparison to previous year (toyota.com 2017). In addition this
specific business brand has decided to invest sufficient amount of money for business promotion
(Armstrong et al., 2012). People belonging to different geographical boundary would like to
show their interest in purchasing the products and services only when the brand draws the
attention of customers. After making good promotional activities the business experts of Toyota
have received the response from international customers as well. People belonging to different
geographical markets have showed their interest after viewing the brand in various social media
pages. As per the annual report of 2016, this specific brand in terms of revenue is the fifth largest
automobile brand globally (Reza Jalilvand & Samiei, 2012). However, the marketing executives
are currently interested in expand their entire process of business to other geographical

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boundaries as well. Promotional activities are the most effective ways of drawing the attention of
customers.
1.3 Macro environment
1.3 Macro Environment (PESTLE Analysis)
In order to maintain the competitive existence in the international ground, it is necessary
for the company to exploit the market opportunities and threats. The influence of the political,
economical, social, technological, and legal is the most significant concerns to be taken into
account. The macro environmental analysis of Toyota through PESTLE tools is presented
further.
Political
The political stability is the pragmatic opportunity for the business development in a
competitive scenario. Toyota is subject to the political effects that determine the business
sustainability. The Free Trade Agreements between Japan and other countries ensures the strict
regulations on the company (Turi et al., 2015). This political regulations imposed on the
automobile sector are sometimes affecting the production works due to which the company
might face difficulties. Hence, the political stability is essential for the long-term survival.
Economic Factor
The current economic trends have been influencing the organizational development of
Toyota. The Japan currency Yen has the weaker value than the US Dollar. Hence, when the
company is internationally expanded, the revenues would be collected in dollars and it is a

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significant opportunity to ensure the economic growth (Barros, 2015). On the other hand, the
eventual growth in the world economy is also opportune for the company for the long-term
development. Due to the rapid growth in the developing countries, the company has the scope to
increase the revenues through exporting business as well.
Social Factor
The socio-cultural factor has the significant impact on the business sustainability. It is
observed that the company has become more successful in manufacturing the hybrid cars.
Moreover, the increasing interests in the electric cars are quite favourable for the company to
ensure the growing demands (Arvitrida et al., 2015). Considering such demanding factors, the
company can easily recognize the market opportunity in the socio-cultural ground.
Technological Factor
The development of the advanced technologies is strengthening the competitive scenario
in current times. The globalised world seeks for more innovativeness due to which the trends of
the mobile technologies have considerably increased (Thompson, 2015). The company requires
focusing on the development of this technological factor in order to remain competitive in this
globalised business world. In fact, the commendable rise of the e-commerce use is quite
opportune for the company to spread the brand awareness in a short span of time.
Legal Factor
The improvement in the intellectual property of the global business scenario is considered
as the opportunity of the business in current situation. However, it is to be noted that the
increasing number of the complex environmental as well as the consumer laws are sometimes

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imposing threats to the automobile companies (Chung Leng, Hamid and Bakar, 2014). Hence,
the legal factors are quite concerning areas for Toyota.
Environmental Factor
The natural calamity and the climate change are the major determinants for the
development of automobile vehicles. Similarly, Toyota has been facing the difficulties in the
production house due to the environmental impact. In addition to this, the reduction of the
pollutants through the fuels is major concerned area that the company needs to address for
maintaining sustainability. The global environmental laws and the waste management process
have the significant influence on the operational process of Toyota cars.
Figure 2: PESTEL Analysis
(Source: Kapferer, 2012)

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2. Major market segmentation of Toyota
The business experts of Toyota have made STP analysis in order to segregate the target
market. Kapferer (2012) opined that moderate price range is the USP of Toyota. While
manufacturing the brand the product managers intend to focus on designing the brand in such a
way that customers belonging to different level of income status can afford the product.
However, target market has been segregated as per geographic, demographic and psychographic
market segmentation.
 Segmentation:
While segregating the target market the business experts have focused on some of the
geographic locations for targeting the customers. As per market segmentation structure the
marketing executives have focused to decide the target customers as per three individual
segmentations that are as follows:
Geographic segmentation:
As per geographic market segmentation Toyota business executives have primarily
targeted most of the Asian countries so that the marketing managers can target both low cost
customers as well as premium customers. As per the price range of this specific brand business
executives have decided that Asian countries can be the best locations for Toyota to gain
reputation and image of their brand (Luthra, Garg and Haleem, 2015). Among the Asian
countries, India, China, Japan has been chosen as the best geographic location for promoting the
business process of this specific brand. While choosing the geographic location the marketing
executives have decided that Indian consumer behavior is suitable for purchasing different
models of Toyota.

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Demographic segmentation:
Demographic market segmentation is generally decided as per the age, gender and
income status of the customers. While promoting the brand, the marketing executives have
decided to focus on both male and female consumers from 20 to 40 age group of people
primarily. While spreading the entire process of business to different geographic locations the
income status of the individuals of those specific countries are highly significant (Bruhn,
Schoenmueller and Schäfer, 2012). Toyota business experts have fixed a moderate price cost for
their products so that people belonging to Asian countries do not have to struggle in order to
afford the products as well as services.
Psychographic segmentation:
Psychographic market segmentation believes that customers should be segmented as per
psychological beliefs, their cultures and notion. As per the marketing strategy of Toyota the
products should not be segmented in such a way that customers from a particular religious or
cultural backgrounds show their interest in purchasing the brands (Ross, 2013). The product
designs of Toyota ensure that customers belonging to different geographical backgrounds and
attitudes are flexible enough in using the products due to its flexible service process as well as
product variety.
 Target:
As already stated people belonging to different geographical attitudes and backgrounds
belonging to Asian countries are flexible in using the products and services of Toyota. 20 to 40
age group of customers are primary target audience. The marketing executives of this specific

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brand have decided to choose Asian countries in order to draw the attention of both low cost
customers as well as premium customers.
 Positioning:
Social media along with electronic media are the two primary vehicles with the help of
which the marketing executives of Toyota have promoted their marketing campaign to different
geographical markets (Wilson & Gilligan, 2012). In order to gather customers’ feedback
regarding the various positives and negative aspects of marketing strategies the executives have
used the popularity of social media platform as well as public forum.
3. Involvement of the Primary Segment
The strategic approaches undertaken by Toyota have created the significant impact on the
psychographic segment of the market. It has been observed that the maintenance of the high
quality and low cost products influences the customer purchasing behaviour. Similarly, Toyota
maintains the differentiation strategy to produce the high quality car vehicles at a very lower
range. Hence, it influences the psychographic parameter of the customers. The major motive of
the company is to fulfill the customers’ demands by providing the unique and value added
automobile products and services (Rothaermel, 2016). Therefore, while manufacturing the
automobile vehicles, the company pays attention towards the distribution and the supply chain
process. When the production costs are reduced, it would be helpful in minimizing the price of
the vehicles as well. However, it is also necessary to gather the knowledge about the preferences
of the customers. This concentration on the demands of the potential customers would lead the
company towards achieving the psychographic segments.

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4. Nature of the Competition
Analysis of the internal and external market influence provides the insightful knowledge
about the nature of the competitive market. In this section of the study, the description of the
competitive scenario faced by Toyota will be explained by understanding the external threats and
opportunities. The further analysis is presented below:
4.1 SWOT Analysis
The description of the SWOT analysis interprets the underlying strengths and
weaknesses of the company to measure the business potentiality for longer sustainability in a
competitive market. On the other hand, the analysis of this strategic tool also presents the
information about the market opportunities and threats to sustain in a globalised business
scenario. The SWOT analysis of Toyota is presented below:
SWOT Analysis
Strengths 1. Commendable and strong brand image
2. Rapid innovation capabilities of the company
3. Remarkable global supply chain management
4. Effective competence skills in hybrid vehicle
production
Weaknesses 1. Hierarchical organisational structure
2. Impact of the current product recalls
3. Ineffective brand portfolio
4. Negative publicity due to the recalls of the large
vehicles
Opportunities 1. The assumptions of the increasing costs of the

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fuels in future
2. Increasing demands for the autonomous vehicles
3. Growing markets in developing countries
4. Increasing level of the interests on advanced
electronics in using advanced vehicles
Threats 1. The increasing number of the low-cost
competitors
2. The automotive industry has been facing the
considerable challenges due to the extreme
government regulations.
3. The natural disaster has the negative impact on
the production works
4. Rapid innovations in the automotive industry
worldwide
Table 1: SWOT Analysis of Toyota
(Source: Sindi and Roe, 2017)
The above analysis implies that in spite of the effective brand image and commendable
competency skills, the increasing market competition has become the major determinant of the
business. The current recalls from the customers have created the negative impact due to which it
is quite difficult for the company to sustain the competitive position (Pisano, 2015). Moreover,
the globalised business world seeks more innovations and advancements. The lack of adequate
knowledge in maintaining these technicalities would be threatening for the future survival of the

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company. In addition to this, the increasing number of the competitors is also much challenging
in current business situation.
4.2 Competitive Analysis
Toyota Motors has captured the leading position in automotive industry worldwide. It has
been observed that the company has been selling the larger cards within the smallest continents
of the world. On the other hand, the unique Lean Manufacturing Concept maintained by the
company is the distinctive competency skill that is fruitful enough for participating in a
competitive scenario (Parnell, Long and Lester, 2015). The major competitors of Toyota Motors
are the Ford Motor Company, Honda Motor, and GM Holden. The customers are much
inclined towards developed and advanced technologies while purchasing automobile vehicles.
The competitors are also looking forward to develop the advanced techniques to draw the
attention of the customers. However, it has been noticed that Toyota has ensured the stronger
outlook for manufacturing high quality cars and strengthening the competitive position. The
recognition of the continuous growth in the economic parameter signifies that the company has
the considerable competitive values of sustaining the competitive position in the future scenario.
In past few years, the financial performance of Toyota has signified the much commendable
profitability to participate in the global competition level (Farhana & Bimenyimana, 2015).
However, it has been observed that the changes in the currency value and the natural disaster are
the most challenging factors for the company that may affect the brand value in a significant
manner. In order to minimize such risks, it is essential for the company to develop the
technological components that can lead towards accomplishing the business goals.

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5. Positioning Map of Toyota
The use of the differentiation strategy has helped the company to sustain the competitive
position in this globalised business world. The threats of the rivalries are still the major concern
for Toyota. Therefore, the company has paid attention towards the low cost generic model apart
from developing the differentiation strategy.
Figure 3: Brand Positioning Map of Toyota
(Source: Barros, 2015)

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It is to be stated that Toyota is the successful automobile company to differentiate the
unique value of the quality and designs. The maintenance of such unique values has led the
company towards establishing the remarkable brand image. The company has established the
entity by adopting the low cost leadership strategy with a proper control of suppliers (Dorota &
Rymaszewska, 2014). The company manufactures the eco-friendly, innovative, efficient, and
affordable vehicles that are quite demanding to the potential customers. In fact, the vehicles are
quite easier to maintain than the other luxurious cars in the market. Hence, the company has
captured the strong value positioning in the competitive market.
Conclusion
It can be concluded that the market competitiveness has the significant impact on the
business in this globalised world. The major competitors of Toyota Motors are the Ford Motor
Company, Honda Motor, and GM Holden. The company has the commendable competency
skills of manufacturing the high quality automobile cars. It is much helpful in attributing towards
the development of the production practices. Toyota has been maintaining both the low cost and
differentiation strategies to sustain the competitive position. The influence of the external market
is quite a considerable factor for the company for a longer run.

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