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MINOR PROJECT REPORT

ON

(MARKETING STRATEGIES OF TOYOTA)

SUBMITTED BY(HARSH VARDHAN )

16819201711

STUDENT OF

BBAIII SEMESTER

!INGAYA"S !A!ITA DEVI INSTITUTE OF MANAGEMENT #

SCIENCESMANDI ROAD$ NE% DE!HI1100&7

FOR THE PARTIA! FU!FI!!MENT

OF

BACHE!OR IN BUSINESS MANAGEMENT

UNDER THE SUPERVISION

OF

M'PRANAV MISHRA

(P'*+,- I.,/'+)

SUBMITTED TO

GURU GOBIND SINGH INDRAPASTHA UNIVERSITY

DE!HI$ INDIA

1

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CERTIFICATE

Certified that this project report MARKETING STRATEGIES OF

TOYOTA3 is the bonafide work of HARSH VARDHAN3who carried

out the project work under the supervision of MRPRANAV MISHRA

SIGNATURE SIGNATURE

HEAD OF THE DEPARTMENT P'*+,- I.,/'+

2

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DEC!ARATION

I hereby declare that the project work entitled MARK!I"#

$!RA!R#I$ %& !%'%!A C%M(A"') sub*itted to the

#+R+ #%,I"- $I"#. I"-RA(RA$! +"I/R$I!'0 " -.I0

I"-IA 0 is a record of an ori3inal work done by *e under the 3uidance of

MR4(RA"A/ MI$.RA0 5.%-60 I"#A'A7$ AI!A -/I

I"$!I!+! %& MA"A#M"! %& $CI"C$0 MA"-I R%A-0"

-.I81199:;0 and this project work has not perfor*ed the basis for the

award of any -e3ree to the best of *y knowled3e4

.AR$. /AR-.A" 1291;11

?$I#"A!+R %& $!+-"!@

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ACKNO%!EDGEMENT

I owe a 3reat *any thanks to a 3reat *any people who helped and

supported *e durin3 the writin3 of this report4 My deepest thanks toecturer0 Mr4(RA"A/ MI$.RA5the #uide of the project for 3uidin36 for

correctin3 various docu*ents of *ine with attention and care4 .e has

taken pain to 3o throu3h the project and *ake necessary correction as and

when needed4 I eBpress *y thanks to the hod of ,,A for eBtendin3 his

support4 My deep sense of 3ratitude to ?KK #AR#@ support and 3uidance4

!hanks and appreciation to the helpful people at !%'%!A C%M(A"'

for their support4 I would also like to thank *y Institute and *y faculty

*e*bers without who* this project would have been a distant reality4

:

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TAB!E OF CONTENTS

CHAPTER NO CONTENTS PAGE

NO

CERTIFICATE 2

DEC!ARATION 4

AKNO%!DGEMENT &

CHAPTER 15 COMPANY PROFI!E

INTRODUCTION 68

MODE!S 1011

OVERVIE% 12

COPERATE DATA 14

GUIDING PRINCIP!ES 1&

PERCEPTS 1

BOARD OF DIRECTORS 16

17

!OCATION 18

MANUFACTURING SUBSIDIARIES # AFFI!IATES 19

24 GRO%TH 2&

26

OBJECTIVE OF STUDY 27

29

CHAPTER 25 MARKETING STRATEGIES

MARKETING MI 29

STRAGIC FOCUS AND P!AN 40

4&

CHAPTER &5 FINDINGS AND ANA!YSIS &0

&&

!IMITATIONS OF STUDY &

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CHAPTER 5 CONC!USION # RECOMMENDATIONS &6

&8

BIB!IOGRAPHY 0

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;

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COMPANY PROFI!E

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INTRODUCTION

ASSEMB!Y P!ANTS OVER THE

%OR!D

!oyota has factories all over the world0 *anufacturin3 or asse*blin3

vehicles for local *arkets0 includin3 its *ost popular *odel0 the Corolla4

!oyota has *anufacturin3 or asse*bly plants in the +nited $tates0

Australia0 Canada0 Indonesia0 (oland0 $outh Africa0 !urkey0 the +nitedKin3do*0 &rance0 ,raDil0 and *ore recently India0 Ar3entina and CDech

Republic4 !oyota also builds and sells cars in Chinain a joint venture with

!ianjin Eiali4 !oyota "ew Fealandasse*bled vehicles until 1>>=0 when it

switched to i*portin3 cars fro* Gapan and Australia4 Cars fro* these

plants are often eBported to other countries4

>

http://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Polandhttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Brazilhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Czech_Republichttp://en.wikipedia.org/wiki/Czech_Republichttp://en.wikipedia.org/wiki/Mainland_Chinahttp://en.wikipedia.org/wiki/Tianjin_Xialihttp://en.wikipedia.org/wiki/Toyota_New_Zealandhttp://en.wikipedia.org/wiki/1998http://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/United_Stateshttp://en.wikipedia.org/wiki/Australiahttp://en.wikipedia.org/wiki/Canadahttp://en.wikipedia.org/wiki/Indonesiahttp://en.wikipedia.org/wiki/Polandhttp://en.wikipedia.org/wiki/South_Africahttp://en.wikipedia.org/wiki/Turkeyhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Francehttp://en.wikipedia.org/wiki/Brazilhttp://en.wikipedia.org/wiki/Indiahttp://en.wikipedia.org/wiki/Argentinahttp://en.wikipedia.org/wiki/Czech_Republichttp://en.wikipedia.org/wiki/Czech_Republichttp://en.wikipedia.org/wiki/Mainland_Chinahttp://en.wikipedia.org/wiki/Tianjin_Xialihttp://en.wikipedia.org/wiki/Toyota_New_Zealandhttp://en.wikipedia.org/wiki/1998http://en.wikipedia.org/wiki/Japanhttp://en.wikipedia.org/wiki/Australia

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OVERVIE%

In 299

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infrastructure and customer needs of each region, %oyota will continue to promote efforts to

deelop enironmentally friendly technology and ehicles.

CORPORATEDATA

$ince its foundation0 !oyota has conducted business with

contributin3 to the develop*ent of a prosperous society throu3h

the *anufacture of auto*obiles) as a 3uidin3 principle4 hen I

beca*e president two years a3o0 I called on all e*ployees to

work with *e in returnin3 to our ori3ins and askin3 earnestlywhether !oyota is truly contributin3 to society and whether we

are doin3 everythin3 we should be doin34 %n the occasion of

!oyota7s ;9th anniversary0 we will reinforce our *easures

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desi3ned to return to our core principle0 which is to Jrepay the

earth and society throu3h technolo3ical innovation 5and

contribute to enhancin3 the uality of life everywhere

GUIDINGPRINCIP!ES

.onor the lan3ua3e and spirit of the law of every nation and undertake open and fair

corporate activities to be a 3ood corporate citiDen of the world4

Respect the culture and custo*s of every nation and contribute to econo*ic and social develop*ent throu3h corporate

activities in the co**unities4

-edicate ourselves to providin3 clean and safe products and to enhancin3 the uality of life everywhere throu3h all our

activities4

Create and develop advanced technolo3ies and provide outstandin3 products and services that fulfill the needs of

custo*ers worldwide4

&oster a corporate culture that enhances individual creativity and tea*work value0 while honorin3 *utual trust and respect

between labor and *ana3e*ent4

(ursue 3rowth in har*ony with the 3lobal co**unity throu3h innovative *ana3e*ent4

ork with business partners in research and creation to achieve stable0 lon38ter* 3rowth and *utual benefits0 while

keepin3 ourselves open to new partnerships4

1:

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TOYOTAPERCEPTS

,e contributive to the develop*ent and welfare of the country by

workin3 to3ether0 re3ardless of position0 in faithfully fulfillin3 your

duties4

,e at the van3uard of the ti*es throu3h endless creativity0

inuisitiveness and pursuit of i*prove*ent4

,e practical and avoid frivolity4

,e kind and 3enerousL strive to create a war*0 ho*elike

at*osphere4

,e reverent0 and show 3ratitude for thin3s 3reat and s*all in thou3ht

and deed4

BOARDOFDIRECTORS

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!OCATIONSOFTOYOTAFACI!ITIES

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TOYOTAMANUFACTURINGSUBSIDIARIES

ANDAFFI!IATES

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SUPPORTINGSPIRITOFATH!ETICS

!oyota continued its support of the ideals and spirit e*bodied in

athletics by beco*in30 for the third ti*e since 2990 the %fficial

(artner to the 11th IAA& orld Cha*pionships in Athletics0 held

in %saka0 Gapan0 Au3ust 2th8$epte*ber 2nd4 !hrou3h the

sponsorship and a 3lobal advertisin3 ca*pai3n with the ta3line05/eyond *imits,5 %oyota aims to communicate its support for athletes who, like %oyota,

continually push themseles further in pursuit of the ultimate goal.

Apart fro* providin3 a fleet of 229 cars for use as official vehicles at this years cha*pionships0 %oyota

also supported a program to encourage new world records for women6s eents by becoming

the official women6s bib sponsor.

TOYOTA"SFIRSTFFV

!oyota do /razil *%7". 8%7/9 launched %oyota6s first-eer fle& fuel ehicle 822:9, a ehicle

which runs on gasoline, ethanol or any combination of the two, at a line-off ceremony at its

$ndia tuba ;lant in Sepresenting %oyota6s commitment to deeloping

enironmental technologies, the locally produced Corolla 2le& and Corolla 2ielder 2le& are the

first marketed %oyota models that can run on 01 bioethanol. %he introduction of the two

models in /razil, where bioethanol is widely used as fuel and 22:s represent ?@1 of newly

registered ehicles in the market, firmly demonstrates %oyota6s belief in listening to its

customers. $n the first semester of the year, %oyota accounted for almost @@, of the more

than one million ehicles sold in /razil during that period.

IS!ANDADVENTURE

1>

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Me*bers of the (hilippine *otorin3 press had a wet and wild ti*e at the

!oyota Road !rek 0 held May 1st8Gune rd in the archipela3os central

islands4 ,rin3in3 *edia representatives to a variety of well8known

destinations across the country0 the annual road trip is conducted by

!oyota Motor (hilippines Corp4 to de*onstrate the tou3hness and

versatility of its IM/s4 !his year0 the event took over :9 participants on an

island8hoppin3 adventure0 enablin3 the* to fully test the eBceptional

capabilities of the Innova0 &ortuner and .iluB vehicles4

A series of co*petitive0 water8related activities *ade it a truly challen3in3 and fun trip that encoura3ed

tea*work0 ca*araderie and friendship a*on3 all attendees4 !he event was pro*inently featured in *ajor

newspapers and *a3aDines0 further boostin3 the popularity of IM/s in the *arket4

A %AYTO!EARNROADSAFETY

-edicated to pro*otin3 activities that help *ini*iDe traffic accidents in

(akistan0 Indus Motor Co*pany i*ited 5IMC6 in Ganuary launched a

!oyota $chool Road $afety (ro3ra*4 !hrou3h *usic concerts0 skits by

clowns and uiDDes in schools0 the pilot pro3ra* ai*s to educate children

about road safety in a fun and *e*orable way4 !wenty schools in Karachi

and around 1=0999 children have already benefited fro* the pro3ra*0

which is part of IMCs co*prehensive corporate social responsibility

initiative with the slo3an0 JConcern /eyond Cars.5 $)C looks to e&pand the program

to other schools in Karachi and later to other cities, gien the oerwhelming response from the

children and parents who hae so far participated.

29

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CRO%NBAMBOOCONCERT

As part of its 299; ca*pai3n for the Crown with the the*e0 J(layin3 out

your life with intelli3ence0J &A !oyota Motor $ales Co40 td4 held its

Crown ,a*boo Concert at the fa*ous Anji ba*boo forest in Fhejian3

province0 China0 on Au3ust 1=th4 !he classical *usic concert successfully

co**unicated the fla3ship *odels philosophy of har*ony to the 3uests

present0 and was eBtensively featured in various *edia across China4

DREAMINGABOUTFUTURE

!oyota Motor Corporation 3ot a 3li*pse of the future throu3h the eyes of

children across Asia and China when it held the -rea* Car Art Contest

fro* %ctober to Ganuary4 #ivin3 school students a3ed 1 years and

youn3er the eBcitin3 challen3e of drawin3 their ideal car0 the annual

contest 3enerated 3reater awareness of the !oyota brand in the re3ion4 ,y

*eans of a website0 ads in >eader6s 7igest magazine and promotions at local

dealerships, %oyota successfully raised public consciousness about the contest, drawing oer

+, entries from 0+ countries - an eightfold increase from the number of designs submitted

at the first contest in +A.

TOYOTATURNS&0

!oyota A# 5!A#60 !oyotas distributor in $witDerland0 celebrates its :9th

anniversary with year8lon3 pro*otions and a series of activities for its

21

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custo*ers and partners4 Kickin3 off its co**e*orative year with an

elaborate Auris *edia launch on &ebruary 199 associates0 dealers

and partners served to thank everyone within the !A# &a*ily for their

support and encoura3e*ent throu3hout the distributors four decades in the

country4

GRO%THOFTOYOTA

astin3 3rowth for !oyota will depend on ali3nin3 our interests with the

lar3er interests of custo*ers and the co**unity4 e *ust be a co*pany

where people think seriously about the role and responsibility of their

co*pany in the world4

%ur econo*ic and industrial contribution in each re3ion 3rows0 for

eBa*ple0 as we 3lobaliDe our operations4 Another way to ali3n our interests

with the lar3er interests of the co**unity is throu3h technolo3y4

,y the end of 1>>;0 we will introduce the worlds first new8ener3y

transport that is co**ercially co*petitive with conventional auto*obiles4

22

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!hat is when we will put a hybrid8electric passen3er car onto the *arket in

Gapan4 %ur hybrid8electric car will have a 3asoline en3ine to 3enerate

electricity or provide supple*entary power to the wheels4 It is twice as

fuel8efficient as conventionally powered vehicles of co*parable siDe and

perfor*ance4 ually i*portant0 the value of its potential fuel savin3s

could prove 3reater than its cost pre*iu* over conventional vehicles4 $o0

it actually could save *oney for car owners4

$urvival and 3rowth in our industry will hin3e on developin3 technolo3ies

for reducin3 environ*ental i*pact of our products and operations0 as well

as i*provin3 vehicular safety4 (hotos and teBt on the followin3 pa3es

introduce so*e of the technolo3ies we are developin3 to position !oyota

as an environ*ental leader4

PRIORITIESFORTOYOTAINTHEGRO%TH

2

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&ortifyin3 our product line

Assertin3 a co*petitive ed3e in technolo3y

Acceleratin3 3lobaliDation

Reclai*in3 *arket share in Gapan

Cultivatin3 de*and in new business sectors

Measures for assertin3 a co*petitive ed3e in technolo3y have centered on

environ*ental the*es4 e have introduced or de*onstrated new power

train technolo3ies in the past year that will *ake !oyotas run cleaner and

3reener than ever4 !hose technolo3ies include444

A direct8injection syste* that *akes 3asoline en3ines *ore

efficient

.ybrid8electric syste*s that double fuel efficiency and reduce

noBious e*issions

(ure electric0 JDero e*issionJ vehicles that alleviate urbanpollution

2:

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&uel8cell syste*s that could transfor* the auto*obile in the

21st century4

OBJECTIVEOFTHESTUDY

!he object of report is not only to focus on co*petitors but also to

3et the co*petitive position in the national as well as international

*arket throu3h custo*er satisfaction4 !hese are as follows4

!o discover and translate the needs and desire of custo*er into

products and services so as to create the de*and of the product

5throu3h plannin3 and producin3 planned product64

!o serve the custo*er throu3h channel of distribution4

2

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!o face the keen co*petition4

!o know about the *arketin3 strate3ies used by !oyota4

!o know about the *arketin3 strate3ies of the co*petitors of

!oyota4

!o find out the *arket share of !oyota4

RESEARCHMETHODO!OGY

TYPEOFDATACO!!ECTED

!his project depends upon the pri*ary as well as secondary sources which

are as follows4

(ri*ary $ource

%bservation

Bperi*ent

2

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PRESENTATION AND ANA!YSIS

MARKETING MI

!his consists of the four *arketin3 *iB ele*ents that are desi3ned to

fit the *arket in ter*s of their needs and ability to access such products and

services4

1 PRODUCTSTRATEGY

!he Co*pany is believed to be *ovin3 with a strate3y of *ass

production of which it has enabled it to sell widely in the 3lobal *arket4 Ithas also included the strate3y of hybrid product0 where it can double the

a*ount of production for the arisin3 needs in the *arket4

2 PRICESTRATEGY

!he reputation of the Co*pany has been developed by producin3

hi3h uality vehicles that can be bou3ht at a reasonable price4 !he

Co*pany has also been usin3 tactful pricin3 strate3ies throu3h price

differentiation so that they are different fro* other auto*obile producers4

4 !OCATIONSTRATEGY

2=

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,ein3 a 3lobal producer and supplier of !oyota auto*obiles and their

co*ponents0 !oyota Co*pany has positioned itself all over the world 3ivin3

it a clear cut within the *arket4 ithin three years to co*e0 it is workin3

towards the achieve*ent of about percent of the *arket share0 and this

will *ake it to be best and top supplier of auto*obile products4

& PROMOTIONSTRATEGY

!he Co*pany is deter*ined to use a pricin3 *echanis* that will

3ive it a co*petitive ed3e over its *ain co*petitors4 !his is a *echanis*that it is usin3 to *arket itself so that it can 3et hold of *arket share that

will see it better in achievin3 the hi3hest level in the *arket4

STRATEGICFOCUSANDP!AN

!here are three aspects of the eBistin3 corporate strate3y that aredeveloped in relation to their overall i*pacts caused to the *arketin3 plan

of !oyota Co*pany4 !hese areL

1MISSIONSTATEMENTOFTHECOMPANY

!oyota seeks to create a *ore prosperous society throu3h auto*otive

*anufacturin3 5.iroshu0 29964 !herefore0 the Co*pany is ai*ed at

achievin3 a stable and lon38ter* 3rowth in future0 and this is supposed to

be in synchroniDation with a nu*ber of factors the si3nificant

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environ*ent0 3lobal econo*y0 local co**unities served0 and the Internal

nviron*ent of stakeholders

2 THECOMPANY"SGOA!S

!he co*pany has co**itted itself to offerin3 of hybrid alternatives

for every *odel that is sold in the *arket4 !his is ai*ed at enablin3 the

Co*pany to *ake a total sale of 1 *illion hybrid vehicles within a year0

and this 3oal has been set to have been achieved by the year 29124

!oyota Co*pany has i*proved its 2911 nviron*ental Action (lan and it

is co**itted in siB different key areas0 which are the nviron*ental

Mana3e*entL chan3es in ner3y and Cli*ateL the Nuality of AirL

concerned $ubstancesL the aspects of Recyclin3 and I*proved Resource

utiliDationL and $ocietal Cooperation4 !he Co*pany is co**itted to

reduce carbon dioBide e*ission and it is believed to take co*bined actions

of ensurin3 that the environ*ent is kept clean all the ti*e by observin3 the

stated fuel econo*y values4

4 CORECOMPETENCYANDSUSTAINAB!E

COMPETITIVEADVANTAGE

!oyota Co*pany is workin3 towards the achieve*ent of a better

and *ore sustainable econo*y by havin3 a stable 3lobal *arket4 ith

advance*ent in new technolo3y and other related *atters0 the Co*pany is

investin3 in various strate3ies that will enable it to realiDe its set 3oals and

objectives over a period of ti*e4 !he Co*pany has a well developed and

euipped network of eBpertise that are into research and develop*ent over

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2 THECOMPANY"SGOA!S

!he co*pany has co**itted itself to offerin3 of hybrid alternatives

for every *odel that is sold in the *arket4 !his is ai*ed at enablin3 theCo*pany to *ake a total sale of 1 *illion hybrid vehicles within a year0

and this 3oal has been set to have been achieved by the year 29124

!oyota Co*pany has i*proved its 2911 nviron*ental Action (lan

and it is co**itted in siB different key areas0 which are the nviron*ental

Mana3e*entL chan3es in ner3y and Cli*ateL the Nuality of AirL

concerned $ubstancesL the aspects of Recyclin3 and I*proved Resource

utiliDationL and $ocietal Cooperation4 !he Co*pany is co**itted to

reduce carbon dioBide e*ission and it is believed to take co*bined actions

of ensurin3 that the environ*ent is kept clean all the ti*e by observin3 the

stated fuel econo*y values4

4 CORECOMPETENCYANDSUSTAINAB!E

COMPETITIVEADVANTAGE

!oyota Co*pany is workin3 towards the achieve*ent of a better

and *ore sustainable econo*y by havin3 a stable 3lobal *arket4 ith

advance*ent in new technolo3y and other related *atters0 the Co*pany is

investin3 in various strate3ies that will enable it to realiDe its set 3oals and

objectives over a period of ti*e4 !he Co*pany has a well developed and

euipped network of eBpertise that are into research and develop*ent over

aspects that are to keep the Co*pany on top in product and service

delivery to its 3lobal *arket4 Also it has a wide ran3e of distribution

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network allover the world and this has enabled it to reach a portion of the

*arket that is seein3 it throu3h to 3reater levels4

COMPETITORS

HYUNDAIMOTORSINDIA!IMITED

(HMI!)

A decade after the Korean ar and durin3 the period of reconstruction0

.yundai Motor Co*pany be3an its fled3lin3 efforts at auto*obile

*anufacturin3 by enterin3 into a technolo3y transfer a3ree*ent with &ord

of #reat ,ritain0 receivin3 desi3n and stylin3 fro* Ital -esi3n of Italy0 and

asse*blin3 technolo3y fro* both n3land and Gapan0 all of which *ade

the production of our first *odel car0 the J(ony0J possible4 In just ten

years0 in 1>;< .yundai be3an to eBport to the world *arket4 In 1>=

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Canadian Corporation0 which established .yundai throu3hout "orth

A*erica0 we produced a record 19 *illion cars and eBported over :

*illion0 breakin3 records in a short span of ti*e4 "o other auto*obile

co*pany can boast of these fi3ures over such a short ti*e span4 e also

poured our efforts in creatin3 concept cars such as the .C-8I0 followed by

the .C-8II and III0 electric cars0 and hi3h technolo3y hybrid cars that will

bear fruit in the future with their low pollution e*issions0 safety features0

and environ*entally8friendly recyclable co*ponents4 &ro* (ony to

uips0 .yundai Motor Co*pany is co**itted to its 3rowth as a *ature

co*pany0 constantly keepin3 in *ind its custo*er8oriented *ottoesJCusto*er $atisfactionJ and JCreate /alue for Custo*ers4J

MARUTIUDYOG!IMITED(MU!)

It was established in &eb 1>=1 throu3h an Act of (arlia*ent0 to *eet the

3rowin3 de*and of a personal *ode of transport caused by the lack of an

efficient public transport syste*4

$uDuki Motor Co*pany was chosen fro* seven prospective partners

worldwide4 !his was due not only to their undisputed leadership in s*all

cars but also to their co**it*ent to actively brin3 to M+ conte*porary

technolo3y and Gapanese *ana3e*ent practices 5which had catapulted

Gapan over +$A to the status of the top auto *anufacturin3 country in the

world64

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A license and a Goint /enture a3ree*ent were si3ned between #ovt of

India and $uDuki Motor Co*pany 5now $uDuki Motor Corporation of

Gapan6 in %ct 1>=24

GENERICSTRATEGIES MICHAE!PORTER

(1980)

#eneric strate3ies were used initially in the early 1>=9s0 and see* to be

even *ore popular today4 !hey outline the three *ain strate3ic options

open to or3aniDation that wish to achieve a sustainable co*petitive

advanta3e4 ach of the three options are considered within the conteBt of

two aspects of the co*petitive environ*ent

$ources of co*petitive advanta3e 8 are the products differentiated in any

way0 or are they the lowest cost producer in an industryO Co*petitive

scope of the *arket 8 does the co*pany tar3et a wide *arket0 or does it

focus on a very narrow0 niche *arketO

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1 COST!EADERSHIP

!he low cost leader in any *arket 3ains co*petitive advanta3e fro* bein3

able to *any to produce at the lowest cost4 &actories are built and

*aintainedL labor is recruited and trained to deliver the lowest possible

costs of production4 cost advanta3e is the focus4 Costs are shaved off

every ele*ent of the value chain4 (roducts tend to be no frills4 .owever0

low cost does not always lead to low price4 (roducers could price at

co*petitive parity0 eBploitin3 the benefits of a bi33er *ar3in than

co*petitors4 $o*e or3aniDation0 such as !oyota0 are very 3ood not only at

producin3 hi3h uality autos at a low price0 but have the brand and

*arketin3 skills to use a pre*iu* pricin3 policy4

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2 DIFFERENTIATION

-ifferentiated 3oods and services satisfy the needs of custo*ers throu3h a

sustainable co*petitive advanta3e4 !his allows co*panies to desensitiDe

prices and focus on value that 3enerates a co*paratively hi3her price and a

better *ar3in4 !he benefits of differentiation reuire producers to se3*ent

*arkets in order to tar3et 3oods and services at specific se3*ents0

3eneratin3 a hi3her than avera3e price4 &or eBa*ple0 !oyota differentiates

its product and service4 !he differentiatin3 or3aniDation will incur

additional costs in creatin3 their co*petitive advanta3e4 !hese costs *ust

be offset by the increase in revenue 3enerated by sales4 Costs *ust be

recovered4 !here is also the chance that any differentiation could be copied

by co*petitors4 !herefore there is always an incentive to innovated and

continuously i*prove4

4 FOCUSORNICHESTRATEGY

!he focus strate3y is also known as a niche strate3y4 here an

or3aniDation can afford neither a wide scope cost leadership nor a wide

scope differentiation strate3y0 a niche strate3y could be *ore suitable4

.ere an or3aniDation focuses effort and resources on a narrow0 defined

se3*ent of a *arket4 Co*petitive advanta3e is 3enerated specifically

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a differentiation focus a fir* creates co*petitive advanta3e throu3h

differentiation within the niche or se3*ent4 !here are potentially proble*s

with the niche approach4 $*all0 specialist niches could disappear in the

lon3 ter*4 Cost focus is unachievable with an industry dependin3 upon

econo*ies of scale e434 teleco**unications4

S%OT ANA!YSISTOYOTA

STRENGTHS

"ew invest*ent by !oyota in factories in the +$ and China saw 299

profits rise0 a3ainst the worldwide *otor industry trend4 "et profits rose

94=P to 141; trillion yen 5Q11bnL 4=bn60 while sales were ;4P hi3her at

1=4 trillion yen4 Co**entators ar3ue that this is because the co*pany

has the ri3ht *iB of products for the *arkets that it serves4 !his is an

eBa*ple of very focused se3*entation0 tar3etin3 and positionin3 in a

nu*ber of countries4

In 299 !oyota knocked its rivals &ord into third spot0 to beco*e the

orlds second lar3est car*aker with *illion units in the sa*e

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period4 Its stron3 industry position is based upon a nu*ber of factors

includin3 a diversified product ran3e0 hi3hly tar3eted *arketin3 and a

co**it*ent to lean *anufacturin3 and uality4 !he co*pany *akes a

lar3e ran3e of vehicles for both private custo*ers and co**ercial

or3anisations0 fro* the s*all 'aris to lar3e trucks4 !he co*pany uses

*arketin3 techniues to identify and satisfy custo*er needs4 Its brand is a

household na*e4 !he co*pany also *aBi*iDes profit throu3h efficient

*anufacturin3 approaches 5e434 !otal Nuality Mana3e*ent64

%EAKNESSES

,ein3 bi3 has its own proble*s4 !he orld *arket for cars is in a

condition of over supply and so car *anufacturers need to *ake sure that it

is their *odels that consu*ers want4 !oyota *arkets *ost of its products

in the +$ and in Gapan4 !herefore it is eBposed to fluctuatin3 econo*ic and

political conditions those *arkets4 (erhaps that is why the co*pany is

be3innin3 to shift its attentions to the e*er3in3 Chinese *arket4

Move*ents in eBchan3e rates could see the already narrow *ar3ins in the

car *arket bein3 reduced4

!he co*pany needs to keep producin3 cars in order to retain its

operational efficiency4 Car plants represent a hu3e invest*ent in eBpensive

fiBed costs0 as well as the hi3h costs of trainin3 and retainin3 labour4 $o if

the car *arket eBperiences a down turn0 the co*pany could see over

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capapacity4 If on the other hand the car *arket eBperiences an upturn0 then

the co*pany *ay *iss out on potential sales due to under capacity i4e4 it

takes ti*e to acco**odate4 !his is a typical proble* with hi3h volu*e car

*anufacturin34

OPPORTUNITIES

eBus and !oyota now have a reputation for *anufacturin3

environ*entally friendly vehicles4 eBus has RE :99h hybrid0 and !oyota

has it (rius4 ,oth are based upon advance technolo3ies developed by the

or3aniDation4 Rocketin3 oil prices have seen sales of the new hybrid

vehicles increase4 !oyota has also sold on its technolo3y to other *otor

*anufacturers0 for eBa*ple &ord has bou3ht into the technolo3y for its

new Bplorer $+/ .ybrid4 $uch *oves can only fir* up !oyotas interest

and invest*ent in hybrid RH-4

!oyota is to tar3et the urban youth *arket4 !he co*pany has launched its

new Ay3o0 which is tar3eted at the streetwise youth *arket and captures

5or atte*pts to6 the nature of dance and -G culture in a very co*petitive

se3*ent4 !he vehicle itself is a uniue convertible0 with *odels eBtendin3

at their rearS !he narrow se3*ent is notorious for it narrow *ar3ins and

difficulties for brandin34

THREATS

:1

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(roduct recalls are always a proble* for vehicle *anufacturers4 In 299

the co*pany had to recall ==9099 sports utility vehicles and pick up trucks

due to faulty front suspension syste*s4 !oyota did not 3ive details of how

*uch the recall would cost4 !he *ajority of affected vehicles were sold in

the +$0 while the rest were sold in Gapan0 urope and Australia4

As with any car *anufacturer0 !oyota faces tre*endous co*petitive

rivalry in the car *arket4 Co*petition is increasin3 al*ost daily0 with new

entrants co*in3 into the *arket fro* China0 $outh Korea and new plants

in astern urope4 !he co*pany is also eBposed to any *ove*ent in the

price of raw *aterials such as rubber0 steel and fuel4 !he key econo*ies in

the (acific0 the +$ and urope also eBperience slow downs4 !hese

econo*ic factors are potential threats for !oyota 4

COMPETITIVEANA!YSIS

STRENGTH

In an era when ownin3 a car was a distant drea* for a vast *ajority of

Indians0 M+ rolled out its first car0 the M=994 !he co*pany labeled it a

peoples car0 with a ;>4bhp at an

affordable price of Rs4 =4 Initially0 the car was criticiDed for its di*inutive siDe0 but

it proved to be spacious enou3h to carry four adults4 ,etter technolo3y and

an affordable price due to a hi3her level of indi3eniDation helped M+

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achieve a do*inant position in the Indian passen3er car *arket4

%EAKNESS

M+ reduced the price difference between these two *odels positionin3

the* on an al*ost eual platfor*0 which resulted in confusion in the

*inds of consu*ers and industry analysts4

THREAT

M=99 had ruled the passen3er car *arket as the only car in the entry8level

se3*ent in the Indian auto*obile industry and was now facin3 the dan3er

of cannibaliDation fro* one of its own fa*ily *e*bers0 Alto

&or the first few *onths of 299:0 M=99 perfor*ed well0 sellin3 1091

units in Ganuary0 101= units in &ebruary and 10:9 in March4 ,ut

3radually Alto0 another M+ product0 be3an eatin3 into M=99s share4

Alto reported sales of =0>> units0 =02: and >0911 units in Ganuary0

&ebruary and March respectively4 In April0 its sales increased to >09

units and in May 299:0 Alto took over M=99s position as the lar3est

sellin3 car with sale of 190; units0 sli3htly over M=99s sales of 19091 lakh units0 followed by !ata Motors with ;90922 units0 .yundai

Motor India with :=00;>; units4

Co*petitive pricin3 and a better value offerin3s were drivin3 the sales of

*ost auto *ajors for the past few *onths4 -espite a co*petitive business

environ*ent0 *ost of the car *ajors were able to hold on to their *arket

shares in the April to Au3ust 79: period4 !he eBceptions were .yundai0

Mahindra H Mahindra0 .industan Motors and &iat0 who saw their *arket

shares fall *ar3inally4

!he *arket is slow and there are visible si3ns of discountin30 particularly

in the hi3her end of the car se3*ent4 .owever0 since entry level and

co*pact cars are volu*e se3*ents0 the slowdown7s effect is *ore visiblehere4

&or *any auto*obile co*panies0 it was a double wha**y in Au3ust 79:4

!he truckers7 strike and adhik*as 5inauspicious period6 last *onth

affected dispatches of *ost car co*panies0 includin3 Maruti +dyo30#eneral Motors and !ata Motors0 resultin3 in lower sales4 !he eBceptions

were .onda $iel Cars India0 &ord India and !oyota Kirloskar4

:

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RECOMMENDATION

!oyota should adopt the defensive *arketin3 strate3y because as

bein3 the second lar3est car producer in the international *arket0

!oyota *ust at the *o*ent carry out a feasibility study for

launchin3 a vehicle in the do*estic *arket where it has *odels like

the Innova and Ca*ry a*on3st others4

!oyota should conduct *arket survey in Indian *arket for uails in

order to know the perception of Indian consu*ers4

!oyota should adopt an offensive *arketin3 strate3y for enterin3 in

the s*all car se3*ent4 !his *arket is do*inated by Maruti $uDuki

and .yundai in the Indian do*estic auto *arket4

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!oyota *ust plan out an ideal *arketin3 producin3 capacity 0becaue

it faces the proble* of over and under capacity in case of upturn and

downturn of the *arket4

BIB!IOGRAPHY

,ooks referred 8

Marketin3 Mana3e*ent 9thediton 8 (hilip Kotler

Marketin3 Mana3e*ent 299 8 !4 "4 Chabra

Marketin3 Mana3e*ent 299< 8 C4 ,4 #upta

eb $ites 8

#oo3le search en3ine

www4toyotaprivate li*ited4co*

www4yahoo4co*

:=

http://www.toyota/http://www.toyota/

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:>

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