Professional Documents
Culture Documents
and provide customers with the optimized products and services. Starting from the two
wheelers, trucks, and tractors to the multi utility vehicles, commercial vehicles and the
luxury vehicles, the Indian automobile industry has achieved tremendous amount of
success in the recent years.
As per Society of Indian Automobile Manufacturers (SIAM) the market share of each
segment of the industry is as follows:.
The automobile industry had a growth of 15.4 % during April-January 2007, with the average
annual growth of 10-15% over the last decade or so. With the incremental investment of $3540 billion, the growth is expected to double in the next 10 years.
Consistent growth and dedication have made the Indian automobile industry the secondlargest tractor and two-wheeler manufacturer in the world. It is also the fifth-largest
commercial vehicle manufacturer in the world. The Indian automobile market is among the
largest in Asia.
The key players like Hindustan Motors, Maruti Udyog, Fiat India Private Ltd, Tata Motors,
Bajaj Motors, Hero Motors, Ashok Leyland, Mahindra & Mahindra have been dominating
the vehicle industry. A few of the foreign players like Toyota Kirloskar Motor Ltd., Skoda
India Private Ltd., Honda Siel Cars India Ltd. have also entered the market and have catered
to the customers needs to a large extent.
Not only the Indian companies but also the international car manufacturing companies are
focusing on compact cars to be delivered in the Indian market at a much smaller price.
Moreover, the automobile companies are coming up with financial schemes such as easy EMI
repayment systems to boost sales.
There have been exhibitions like Auto-expo at Pragati Maidan, New Delhi to share the
technological advancements. Besides, there are many new projects coming up in the
automobile industry leading to the growth of the sector.
The Government of India has liberalized the foreign exchange and equity regulations and has
also reduced the tariff on imports, contributing significantly to the growth of the sector.
Having firmly established its presence in the domestic markets, the Indian automobile sector
is now penetrating the international arena. Vehicle exports from India are at their highest
levels. The leaders of the Indian automobile sector, such as Tata Motors, Maruti and
Mahindra and Mahindra are leading the exports to Europe, Middle East and African and
Asian markets.
The Ministry of Heavy Industries has released the Automotive Plan 2006-2016, with the
motive of making India the most popular manufacturing hub for automobiles and its
components in Asia. The plan focuses on the removal of all the bottlenecks that are inhibiting
its growth in the domestic as well as international arena.
Tata Group
Mahindra Group
Ashok Leyland
Signify the separation of the founders' work life from home life;
Give the company an auspicious beginning. Toyota is considered luckier than Toyoda
in Japan, where eight is regarded as a lucky number, and eight is the number of
strokes it takes to write
Toyota
in
Katakana
During the Pacific War the company was dedicated to truck production for the Imperial
Army. Because of severe shortages in Japan, military trucks were kept as simple as possible.
For example, the trucks had only one headlight on the center of the hood.
Commercial passenger car production started in 1947 with the model SA. In 1950 a separate
sales company Toyota Motor Sales Co. was established (which lasted until July 1982). In
April 1956 the Toyota dealer chain was established.
Replica of the Toyota Model AA, the first production model of Toyota in 1936
Innova
Camry
Avalon
Matrix
Corolla
Prius
TRUCKS:
Tacoma
Tundra
4runner
Land cruiser
OVERVIEW
In 2006, Toyota was engaged in a variety of projects designed to solidify its foundations while
continuing to grow.
On the product front, Lexus launched its new flagship model, the LS, and the new global Camry went
on sale. In Japan, a new Corolla range was introduced, emphasizing the importance of this bestselling car.
In manufacturing, several new projects were started around the world. In May, manufacture of the
Camry began in Guangzhou, China, while in the United States, the Kentucky plant, which in
October celebrated 20 years of production, started manufacturing the first Toyota hybrid vehicle to be
made in North America, the Camry Hybrid. In November, the Texas plant began producing the new
Tundra truck, a key vehicle in Toyotas North American lineup. In Japan, Toyota Motor Kyushu, Inc.
began full-scale operations at its engine factory, while Toyota Motor Tohoku Co., Ltd. increased its
manufacturing capacity.
In human resources development, following the establishment of the Asia Pacific Global Production
Center in Thailand in August 2005, Toyota established the North American Production Center in the
U.S. in February, and the European Global Production Center in the United Kingdom in March.
Established as branches of the Global Production Center in Japan, these were created to spread
Toyotas manufacturing knowledge and skills throughout the world in pace with the rapid growth of
Toyotas overseas manufacturing. The centers educate trainers for local manufacturing plants in all
regions, with trainees passing on what they learn to team members on their return to their plants.
In R&D, Toyota focused its efforts on three key areas: environment, safety and energy. It made a
special effort in the area of the environment by expanding its lineup of hybrid vehicles, and has
worked on R&D relating to plug-in hybrid. In addition, as part of Toyotas efforts to respond to the
diversification of energy, in 2007 Toyota introduced a flex fuel vehicle* in the Brazilian market that will
run on 100% bio-ethanol fuel. From this point on, based on the philosophy of providing the right car,
in the right place, at the right time, and in accordance with the infrastructure and customer needs of
each region, Toyota will continue to promote efforts to develop environmentally friendly technology
and vehicles.
CORPORATE DATA
Head Office
Toyota-Cho, Toyota City , Aichi Prefecture 471-8571 ,
Japan
Phone : (03)3817-7111
Since its foundation, Toyota has conducted business with contributing to the development of a prosperous
society through the manufacture of automobiles as a guiding principle. When I became president two years ago,
I called on all employees to work with me in returning to our origins and asking earnestly whether Toyota is truly
contributing to society and whether we are doing everything we should be doing. On the occasion of Toyotas
70th anniversary, we will reinforce our measures designed to return to our core principle, which is to "repay the
earth and society through technological innovation (and contribute to enhancing the quality of life everywhere.
GUIDING PRINCIPLES
Honor the language and spirit of the law of every nation and undertake open and fair corporate activities to be
a good corporate citizen of the world.
Respect the culture and customs of every nation and contribute to economic and social development through
corporate activities in the communities.
Dedicate ourselves to providing clean and safe products and to enhancing the quality of life everywhere
through all our activities.
Create and develop advanced technologies and provide outstanding products and services that fulfill the needs
of customers worldwide.
Foster a corporate culture that enhances individual creativity and teamwork value, while honoring mutual trust
and respect between labor and management.
Pursue growth in harmony with the global community through innovative management.
Work with business partners in research and creation to achieve stable, long-term growth and mutual benefits,
while keeping ourselves open to new partnerships.
PERCEPTS
Be contributive to the development and welfare of the country by working together, regardless
of position, in faithfully fulfilling your duties.
Be at the vanguard of the times through endless creativity, inquisitiveness and pursuit of
improvement.
MANAGERIAL INFORMATION
1. Executives
1) Board of Directors (26 people)
Name
Title
Fujio Cho*
Chairman
Katsuhiro Nakagawa
Vice Chairman
Katsuaki Watanabe
President
Tokuichi Uranishi
Kazuo Okamoto
Kyoji Sasazu
Mitsuo Kinoshita
Yoshimi Inaba
Takeshi Uchiyamada
Masatami Takimoto
Akio Toyoda
Tetsuo Hattori
Yukitoshi Funo
Takeshi Suzuki
Atsushi Niimi
Hajime Wakayama
Hiroshi Takada
Teiji Tachibana
Shinichi Sasaki
Shin Kanada
Akira Okabe
Yoshio Shirai
Yoichiro Ichimaru
Shoji Ikawa
Shoichiro Toyoda
Honorary Chairman
Hiroshi Okuda**
*Promoted, **Changed
Title
Hideaki Miyahara
Corporate Auditor
Chiaki Yamaguchi
Corporate Auditor
Masaki Nakatsugawa*
Corporate Auditor
Yasutaka Okamura
Yoichi Kaya
Yoichi Morishita*
Akishige Okada*
*Newly appointed
Title
Koichi Ina
Managing Officer
Yoshikazu Amano
Managing Officer
Takeshi Yoshida
Managing Officer
Shinzo Kobuki
Managing Officer
Akira Sasaki
Managing Officer
Hiroshi Kawakami
Managing Officer
Iwao Nihashi
Managing Officer
Tadashi Arashima
Managing Officer
Masamoto Maekawa
Managing Officer
Mamoru Furuhashi
Managing Officer
Satoshi Ozawa
Managing Officer
Seiichi Sudo
Managing Officer
Yasuhiko Ichihashi
Managing Officer
Tadashi Yamashina
Managing Officer
Takashi Hata
Managing Officer
James E. Press
Managing Officer
Gary L. Convis
Managing Officer
Wahei Hirai
Managing Officer
Tatehito Ueda
Managing Officer
Takashi Shigematsu
Managing Officer
Yuzo Ushiyama
Managing Officer
Yasumori Ihara
Managing Officer
Takahiko Ijichi
Managing Officer
Toshio Furutani
Managing Officer
Tetsuo Agata
Managing Officer
Senta Morioka
Managing Officer
Hironobu Inoue
Managing Officer
Kazuhiko Takarada
Managing Officer
Masayuki Nakai
Managing Officer
Toshiki Hayama
Managing Officer
Takahiro Iwase
Managing Officer
Akihito Tsuji
Managing Officer
Yoshihiko Masuda
Managing Officer
Nobuo Kobayashi
Managing Officer
Yoshimasa Ishii
Managing Officer
Tatsuya Kaneko
Managing Officer
Takeshi Shirane
Managing Officer
Masanao Tomozoe
Managing Officer
Katsunori Itasaka
Managing Officer
Tokuyuki Takahashi
Managing Officer
Managing Officer
Ryoichi Sasaki*
Managing Officer
Seiho Kawakami*
Managing Officer
Yasuhiro Yokoi*
Managing Officer
Takahiro Fujioka*
Managing Officer
Masanobu Kawase*
Managing Officer
Yukio Nishikawa*
Managing Officer
Hirofumi Muta*
Managing Officer
Thierry Dombreval*
Managing Officer
*Newly appointed
As a result of the above changes, TMC now has, 1 chairman, 1 vice chairman, 1
president, 8 executive vice presidents, 13 senior managing directors, 1 honorary
chairman, 1 senior advisor, member of the board, 7 auditors and 49 managing
officers, for a total of 82 executives.
Yoshiro Hayashi
(Appointed as Advisor)
Hiroshi Okabe
(Appointed as Advisor)
Tadashi Ishikawa
(Appointed as Advisor)
Hitoshi Nishiyama
(Appointed as Advisor)
Alan J. Jones
Yoshikatsu Tanaka
(Appointed as Advisor)
Nobuyoshi Hisada
(Appointed as Advisor)
Mitsuhisa Kato
(Appointed as Advisor)
John H. Conomos
Takis J. Athanasopoulos
New
Former
(Chief Officer)
-Design Group (Chief Officer)
-Motorsport Business
Management Dept.
-Motor Sports Div.
Kyoji
Sasazu
Mitsuo
Executive Vice President
Kinoshita -Corporate Planning
-General Administration & Human
Resources
-Accounting
-Information Systems
-Business Development
-Government & Public Affairs
-Housing
-General Administration & Human
Resources Group (Chief Officer)
-Global Audit Div.
-Corporate Planning Div.
Yoshimi
Executive Vice President
Inaba
-Overseas (China)
-Customer Service
-China Operations Group (Chief
Officer)
Takeshi Executive Vice President
Uchiyamada-Production
-TQM
-Environmental Affairs
Toyoda
Tetsuo
Hattori
-Product Management
-IT & ITS
-Purchasing
-Quality
-IT & ITS Group (Chief Officer)
-e-TOYOTA Div.
-Product Management
-IT & ITS
-Purchasing
-IT & ITS Group (Chief Officer)
-e-TOYOTA Div.
Atsushi
Niimi
Hajime
Senior Managing Director
Senior Managing Director
Wakayama -Purchasing Group (Chief Officer) -Business Development Group
(Chief Officer)
-Purchasing Group (Chief Officer)
Hiroshi
Takada
Teiji
Senior Managing Director
Tachibana -Government & Public Affairs
Group
(Chief Officer)
Shinichi
Sasaki
Shin
Kanada
Akira
Okabe
Yoshio
Shirai
Shoji
Ikawa
New
Former
Koichi
Ina
Akira
Sasaki
-China Div.
-Toyota Technical Center, China
Iwao
Nihashi
Satoshi
-Secretarial Div.
Ozawa
-General Administration Div.
-Human Resources Div.
-Labor Relations Div.
-Toyota Institute
-Nagoya General Administration
Div.
-Toyota Technical Skills Academy
-Medical Support Div.
Seiichi
Sudo
Yasuhiko
Ichihashi
Tadashi
Takashi
Hata
James
E. Press
Gary
L. Convis
-e-TOYOTA Div.
-Business Development Div.
-Marine Business Div.
-Biotechnology & Afforestation
Business Div. (General Manager)
-IT & ITS Planning Div.
-IT & ITS Sales Div.
-Secretarial Division
-General Administration Div.
-Human Resources Div.
-Labor Relations Div.
-Toyota Institute
-Nagoya General Administration
Div.
-Toyota Technical Skills Academy
-Medical Support Division
Toshio
Furutani
Tetsuo
Agata
Kazuhiko
Takarada
Takahiro
Iwase
Ryoichi
-Asia, Oceania & Middle East
Sasaki*
Project Div.
-Toyota Motor Asia Pacific PTE Ltd
(Singapore)
-Toyota Motor Asia Pacific Co., Ltd
(Thailand)
-Toyota Motor Thailand Co., Ltd
-TOYOTA Development Center 2
Seiho
Kawakami* (Deputy General Manager)
Yasuhiko
Yokoi*
Takahiro
Fujioka*
-e-TOYOTA Div.
-Business Development Div.
-Marine Business Div.
-Biotechnology & Afforestation
Business Div.
-IT & ITS Planning Div.
-IT & ITS Sales Div.
Hirofumi
Muta*
* Newly appointed
**On April 1, 2006, Toyota Motor Engineering and Manufacturing North America, Inc.
was established by integrating the functions of Toyota Technical Center, U.S.A., Inc.
and Toyota Motor Manufacturing North America, Inc.
4. Organizational Changes
1) Domestic Sales Operations Group and Overseas Planning Operations Group
- The Domestic Sales Operations Group and the Overseas Planning Operations Group
have been reorganized.
- Sales and planning functions, which were divided by region, i.e. domestic and
overseas, have been integrated.
Purpose
As a global business management function of Toyota's global headquarters, to allow
close coordination between TMC and various regions, including Japan, and to
implement the "most-suitable growth strategy from a global perspective" though
Before Changes
General Administration & Human
Resources Group
- Public Affairs Administration
Dept.
- Tokyo Secretarial Div.
- Tokyo General Administration
Div.
Purpose
To optimize the structural organization and distribution of human resources by
consolidating the divisions and departments relevant to government & public affairs
3) Production Control & Logistics Group
- The name of the Production Control & Logistics Group has changed.
After Change
Strategic Production Planning
Group
(name changed)
Before Change
Production Control & Logistics
Group
Purpose
To create a name that reflects a strengthened stance toward planning that considers
the actual situation of global production activities
4) Housing Group (Housing Company)
- The name of the Housing Group (Housing Company) has changed.
After Change
Housing Group (name changed)
Before Change
Housing Group (Housing Company)
Purpose
To reflect the achievement of the original objective to reinforce operational structures
through the introduction of the "company" system
5) Divisions/departments not belonging to a group; Asia, Oceania & Middle East
Operations Group; China Operations Group
- The transfer of some divisions/departments to relevant groups.
After Changes
Asia, Oceania & Middle East Operations
Group
- Taiwan Office (transfer)
China Operations Group
- China Office (transfer)
Before Changes
Divisions/departments not
belonging to a Group
- Taiwan Office
- China Office
Purpose
To clarify the chain of command and to optimize the structural organization and
distribution of human resources
As a result of the above changes, the number of divisions has increased from 228 to
229.
GROWTH
Lasting growth for Toyota will depend on aligning our interests with the larger interests of
customers and the community. We must be a company where people think seriously about
the role and responsibility of their company in the world.
Our economic and industrial contribution in each region grows, for example, as we globalize
our operations. Another way to align our interests with the larger interests of the community
is through technology.
By the end of 1997, we will introduce the world's first new-energy transport that is
commercially competitive with conventional automobiles. That is when we will put a hybridelectric passenger car onto the market in Japan. Our hybrid-electric car will have a gasoline
engine to generate electricity or provide supplementary power to the wheels. It is twice as
fuel-efficient as conventionally powered vehicles of comparable size and performance.
Equally important, the value of its potential fuel savings could prove greater than its cost
premium over conventional vehicles. So, it actually could save money for car owners.
Survival and growth in our industry will hinge on developing technologies for reducing
environmental impact of our products and operations, as well as improving vehicular safety.
Photos and text on the following pages introduce some of the technologies we are developing
to position Toyota as an environmental leader.
Accelerating globalization
Fuel-cell systems that could transform the automobile in the 21st century.
Toyota Motor Corp. grabbed more U.S. retail market share than Ford Motor Co. in early
November and it was less than one share point behind General Motors Corp.,
Toyota, Japan's largest automaker, had a 15.4 percent U.S. retail market share a year earlier.
Toyota plans to enter small car segment in India
Worlds second largest automaker wants to get offensive in the Indian domestic auto market.
Toyota is very much interested in launching a small car here in the segment currently
dominated by Maruti Suzuki and Hyundai. Tata also has a decent presence in the market with
their Indica range of diesel vehicles.
Toyota is at the moment carrying out a feasibility study for launching such a vehicle in the
domestic market where it has models like the Innova and Camry amongst others. They have
had an incredible success with their stopped Qualis model and are selling Toyota Innova in
large numbers. T Ino, director (marketing), Toyota Kirloskar Motor Pvt Limited has
expressed that the Indian auto market is a huge one and has the capacity to involve more
players in the small car segment.
Toyota has a variety of interesting models in its global lineup, which it can consider to launch
in the Indian market. Some of these are Vios, Platz, and Passo. The company also expects to
break even here in India this year with all the accumulated losses were expected to be wiped
out during 2005. They also plan to invest around Rs 130 crores during the current year to
enhance efficiency.
PRODUCTS (GLOBAL):
1. AVALON
2. CAMRY
3. CAMRY SALORA
4. COROLLA ALTIS
5. MATRIX
6. PRIUS
7. 4RUNNER
8. HIGH RUNNER
9. LAND CRUISER
10.SEQUOIA
11.SIENNA
PRICE:As far as pricing strategy of Toyota is concerned. They are focusing on the very segment of
the market not only particular segment. Basically they are focusing on official and business
class people
CAR MODELS
(INDIA)
AMOUNT IN INR.
INNOVA
8,01,738
COROLLA ALTIS
11,31,900
CAMRY
22,84,800
PRADO
42,27,300
Table 1.1
FUTURE PLANS
India's car population may be growing but the growth is mainly concentrated in the small car
sector, and not without reason. With increasing interest rates making buying cars costlier and
the government slapping new duties on larger vehicles in addition to the existing favorable
tax regime for smaller cars, even premium players are wading into the small-car scene.
Indian passenger car sales rose by 11.79 per cent between April 2007 and March 2008 to 1.2
million units. Competition in the small car segment is set to increase in 2009, with planned
launches by Maruti Suzuki (A-Star and Splash), Honda (Jazz) and as yet unnamed models
from Ford, GM and Volkswagen.
Japanese carmaker Toyota, all set to surpass General Motors as the world's largest, is the
latest entrant when it made its intentions clear on the occasion of the laying of the foundation
stone for its second factory in India.
The decade-old Indian joint venture of the Japanese automaker, Toyota Kirloskar, is building
its second plant at Bidadi, about 40 kilometers from India's IT hub of Bangalore, with an
upfront investment of Rs14,000 crore ($329 million) to manufacture a range of passenger
cars and multi-utility vehicles. Toyota is the majority partner with an 89-per cent stake with
Kirloskar owning the rest.
Karnataka chief minister B S Yeddyurappa unveiled the foundation stone for the new plant
that will have a test track and additional space for suppliers and other vendors. The ceremony
was attended by Toyota senior managing director Akira Okabe, chairman Ryoichi Sasaki,
vice-chairman Vikram Kirloskar and managing director Hiroshi Nakagawa.
The modular plant, to be commissioned by 2010, will have an installed capacity of 100,000
units annually and will employ about 2,400 people. Top officials confirmed that the company
will soon be introducing its newly designed compact car in the Indian market.
The factory will be ready by mid-2010 and we are yet to finalize the launch date of the new
car. We have basic concept of the new car ready and very shortly we will finalize the design
of the car.''
The plant which is being set up will see an initial investment of Rs1400 crore. But this initial
investment won't include certain other costs like installing robots and other automation
equipment.
The arrangement of this additional amount required for the plant would be worked out later.
A new test track will be included in the second plant, which is expected to be spread over 130
acres of land.
Though the new compact car has been designed for the Indian market, the initial design
features indicate that it can be exported to other markets in Asia. Daihatsu, Toyota's group
company, will not be involved in designing the compact new car, though it may be included
in future plans.
However, Tata Motors and Bajaj Auto can rest easy for the time being. Although Okabe
confirmed that the new product will be the cheapest in the Toyota stable, indications are that
it maybe priced higher than its Indian competitors.
Vikram Kirloskar said as much when he commented, ''We are working on the new design.
The model is yet to be finalized. We plan to have petrol as well as diesel versions. The small
car will not compete with the upcoming Nano of Tata Motors, touted to be the world's
cheapest car.''
GENERIC STRATEGIES
Generic strategies were used initially in the early 1980s, and seem to be even more popular
today. They outline the three main strategic options open to organization that wish to achieve
a sustainable competitive advantage. Each of the three options are considered within the
context of two aspects of the competitive environment:
Sources of competitive advantage - are the products differentiated in any way, or are they the
lowest cost producer in an industry? Competitive scope of the market - does the company
target a wide market, or does it focus on a very narrow, niche market?
Figure 1.1
not always lead to low price. Producers could price at competitive parity, exploiting the
benefits of a bigger margin than competitors. Some organization, such as Toyota, are very
good not only at producing high quality autos at a low price, but have the brand and
marketing skills to use a premium pricing policy.
2. Differentiation
Differentiated goods and services satisfy the needs of customers through a sustainable
competitive advantage. This allows companies to desensitize prices and focus on value that
generates a comparatively higher price and a better margin. The benefits of differentiation
require producers to segment markets in order to target goods and services at specific
segments, generating a higher than average price. For example, Toyota differentiates its
product and service. The differentiating organization will incur additional costs in creating
their competitive advantage. These costs must be offset by the increase in revenue generated
by sales. Costs must be recovered. There is also the chance that any differentiation could be
copied by competitors. Therefore there is always an incentive to innovated and continuously
improve.
Strengths
New investment by Toyota in factories in the US and China saw 2005 profits rise, against the
worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion yen ($11bn; 5.85bn),
while sales were 7.3% higher at 18.55 trillion yen. Commentators argue that this is because
the company has the right mix of products for the markets that it serves. This is an example
of very focused segmentation, targeting and positioning in a number of countries.
In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second largest
carmaker with 6.78 million units. The company is still behind rivals General Motors with
8.59 million units in the same period. Its strong industry position is based upon a number of
factors including a diversified product range, highly targeted marketing and a commitment to
lean manufacturing and quality. The company makes a large range of vehicles for both
private customers and commercial organisations, from the small Yaris to large trucks. The
company uses marketing techniques to identify and satisfy customer needs. Its brand is a
household name. The company also maximizes profit through efficient manufacturing
approaches (e.g. Total Quality Management).
WEAKNESS
Being big has its own problems. The World market for cars is in a condition of over supply
and so car manufacturers need to make sure that it is their models that consumers want.
Toyota markets most of its products in the US and in Japan. Therefore it is exposed to
fluctuating economic and political conditions those markets. Perhaps that is why the company
is beginning to shift its attentions to the emerging Chinese market. Movements in exchange
rates could see the already narrow margins in the car market being reduced.
The company needs to keep producing cars in order to retain its operational efficiency. Car
plants represent a huge investment in expensive fixed costs, as well as the high costs of
training and retaining labour. So if the car market experiences a down turn, the company
could see over capapacity. If on the other hand the car market experiences an upturn, then the
company may miss out on potential sales due to under capacity i.e. it takes time to
accommodate. This is a typical problem with high volume car manufacturing.
OPPURTUNITIES
Lexus and Toyota now have a reputation for manufacturing environmentally friendly
vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are based upon advance
technologies developed by the organization. Rocketing oil prices have seen sales of the new
hybrid vehicles increase. Toyota has also sold on its technology to other motor
manufacturers, for example Ford has bought into the technology for its new Explorer SUV
Hybrid. Such moves can only firm up Toyota's interest and investment in hybrid R&D.
Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which
is targeted at the streetwise youth market and captures (or attempts to) the nature of dance
and DJ culture in a very competitive segment. The vehicle itself is a unique convertible, with
models extending at their rear! The narrow segment is notorious for it narrow margins and
difficulties for branding.
THREATS
Product recalls are always a problem for vehicle manufacturers. In 2005 the company had to
recall 880,00 sports utility vehicles and pick up trucks due to faulty front suspension systems.
Toyota did not give details of how much the recall would cost. The majority of affected
vehicles were sold in the US, while the rest were sold in Japan, Europe and Australia.
As with any car manufacturer, Toyota faces tremendous competitive rivalry in the car market.
Competition is increasing almost daily, with new entrants coming into the market from
China, South Korea and new plants in Eastern Europe. The company is also exposed to any
movement in the price of raw materials such as rubber, steel and fuel.
STRENGTH
In an era when owning a car was a distant dream for a vast majority of Indians, MUL rolled
out its first car, the M800. The company labeled it a people's car, with a 796cc 3-cylinder
engine that delivered 39.5bhp at an affordable price of Rs. 65,000. The first vehicle was
released for sale in December 1983. Initially, the car was criticized for its diminutive size, but
it proved to be spacious enough to carry four adults. Better technology and an affordable
price due to a higher level of indigenization helped MUL achieve a dominant position in the
Indian passenger car market
WEAKNESS
MARUTI SUZUKIs biggest weakness, is the lack of product design capability. In the
coming years, they should focus on acquiring product design and lean production know-how
(as the Korean firms did in the eighties and early nineties. Also the Research and
developments headquarters for engine development of Maruti Suzuki are in Japan which is a
major weak point. Maruti Suzuki also needs to invest in capacity and research and
development in India to stay abreast of competition.
THREAT
M800 had ruled the passenger car market as the only car in the entry-level segment in the
Indian automobile industry and was now facing the danger of cannibalization from one of its
own family members, Alto For the first few months of 2004, M800 performed well, selling
15,301 units in January, 13,518 units in February and 15,540 in March. But gradually Alto,
another MUL product, began eating into M800's share. Alto reported sales of 8,399 units,
8,324 and 9,011 units in January, February and March respectively. In April, its sales
increased to 9,350 units and in May 2004, Alto took over M800's position as the largest
selling car with sale of 10,373 units, slightly over M800's sales of 10,016 units. Analysts felt
that Alto had taken the top spot because of its price reduction in September 2003 by Rs.
23,000 followed by the launch of the non-AC Alto for Rs. 0.23 mn in the first week of April
2004.
According to the managing director of Toyota Kirloskar Motor, Atsushi Toyoshima, the
decision to introduce Innova here (India) was based on three factors. First, over the last five
years, the C- segment (between Rs 5 lakh to Rs 10 lakh) of the car market has grown by 20
per cent every year. The multi utility vehicle segment has also grown at double-digit levels.
Second, with an improving lifestyle and better roads, the Indian consumer wants to take his
vehicle for long drives with friends and family. Third, there is a latent desire of customers,
including those owning MPVs, to seek attributes like greater interior space and overloading
ability, while passenger car buyers look for better styling and improved riding comfort.
Innova brings together the space and fuel economy of an MPV with the style, agility and
power of a sedan. Toyota Kirloskar Motor has described it as the first three-row seating
passenger car in the Indian market
also helps in taking the information of competitor's strategies and their impact on the buyer.
the study reveals the fact that may have come up during the project and these facts can either
be used a opportunities in exploring and expanding the business as well as can be used as
safeguard against threats by competitors to prepare an effective marketing strategy. Every
market research proves useful to the organization. Marketing research helps the firm in every
component of total marketing task.
Primary Source:
Observation
Experiment
Talking with consumers,retailers and distributors.
Secondary Source:
Balance sheet of the company
Company website
presentation).
Figure 1.2
meets the need. Some consumers are never satisfied unless their food comes served with a
bottle of fine Chardonnay.
Consumer wants are shaped by social and cultural forces, the media and marketing activities
of businesses.
This leads onto another important concept - that of customer demand:
Consumer demand is a want for a specific product supported by an ability and willingness to
pay for it.
For example, many consumers around the globe want a Mercedes. But relatively few are able
and willing to buy one.
Businesses therefore have not only to make products that consumers want, but they also have
to make them affordable to a sufficient number to create profitable demand.
Businesses do not create customer needs or the social status in which customer needs are
influenced. It is not McDonalds that makes people hungry. However, businesses do try to
influence demand by designing products and services that are
Attractive
Work well
Are affordable
Are available
Businesses also try to communicate the relevant features of their products through advertising
and other marketing promotion.
MARKETING MIX
The marketing mix is generally accepted as the use and specification of the four Ps describing
the strategic position of a product in the marketplace. One version of the origins of the
marketing mix starts in 1948 when James Culliton said that a marketing decision should be a
result of something similar to a recipe. This version continued in 1953 when Neil Borden, in
his American Marketing Association presidential address, took the recipe idea one step
further and coined the term 'Marketing-Mix'. A prominent marketer, E. Jerome McCarthy,
proposed a 4 P classification in 1960, which would see wide popularity. The four Ps concept
is explained in most marketing textbooks and classes.
DEFINITION
Although some marketers[who?] have added other Ps, such as personnel and packaging, the
fundamentals of marketing typically identifies the four Ps of the marketing mix as referring
to:
Product -An object or a service that is mass produced or manufactured on a large scale with a
specific volume of units. A typical example of a mass produced service is the hotel industry.
A less obvious but ubiquitous mass produced service is a computer operating system. Typical
examples of a mass produced objects are the motor car and the disposable razor.
Price - The price is the amount a customer pays for the product. It is determined by a number
of factors including market share, competition, material costs, product identity and the
customer's perceived value of the product. The business may increase or decrease the price of
product if other stores have the same product.
Place - Place represents the location where a product can be purchased. It is often referred to
as the distribution channel. It can include any physical store as well as virtual stores on the
Internet.
Promotion - Promotion represents all of the communications that a marketer may use in the
marketplace. Promotion has four distinct elements - advertising, public relations, word of
mouth and point of sale. A certain amount of crossover occurs when promotion uses the four
principal elements together, which is common in film promotion. Advertising covers any
communication that is paid for, from television and cinema commercials, radio and Internet
adverts through print media and billboards. One of the most notable means of promotion
today is the Promotional Product, as in useful items distributed to targeted audiences with no
obligation attached. This category has grown each year for the past decade while most other
forms have suffered. It is the only form of advertising that targets all five senses and has the
recipient thanking the giver. Public relations are where the communication is not directly paid
for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade
fairs and events. Word of mouth is any apparently informal communication about the product
by ordinary individuals, satisfied customers or people specifically engaged to create word of
mouth momentum. Sales staff often plays an important role in word of mouth and Public
Relations (see Product above).
Broadly defined, optimizing the marketing mix is the primary responsibility of marketing. By
offering the product with the right combination of the four Ps marketers can improve their
results and marketing effectiveness. Making small changes in the marketing mix is typically
considered to be a tactical change. Making large changes in any of the four Ps can be
considered strategic. For example, a large change in the price, say from $19.00 to $39.00
would be considered a strategic change in the position of the product. However a change of
$131 to $130.99 would be considered a tactical change, potentially related to a promotional
offer.
CRITICISMS
Peter Doyle claims that the marketing mix approach leads to unprofitable decisions because it
is not grounded in financial objectives such as increasing shareholder value. According to
Doyle it has never been clear what criteria to use in determining an optimum marketing mix.
Objectives such as providing solutions for customers at low cost have not generated adequate
profit margins. Doyle claims that developing marketing based objectives while ignoring
profitability has resulted in the dot-com crash and the Japanese economic collapse. He also
claims that pursuing a ROI approach while ignoring marketing objectives is just as
problematic. He argues that a net present value approach maximizing shareholder value
provides a "rational framework" for managing the marketing mix.
Some people claim the four Ps are too strongly oriented towards consumer markets and do
not offer an appropriate model for industrial product marketing. Others claim it has too strong
of a product market perspective and is not appropriate for the marketing of services.
An expanded system based on Seven Ps stresses the importance of Place, Product, Price,
Promotion, People, Process, and Physical evidence
MARKET RESEARCH
Market research is for discovering what people want, need, or believe. It can also involve
discovering how they act. Once that research is complete it can be used to determine how to
market your specific product. MR-Anywhere is a very good platform for market research and
analysis
For starting up a business there are a few things that are important:
Market information
Market information is making known the prices of the different commodities in the market,
the supply and the demand. Information about the markets can be obtained in several
different varieties and formats.
Examples of market information questions are:
4.1
OWNERS OF TOYOTA
YES
24%
YES
NO
NO
76%
Figure 1.3
INFERENCE:
24% of the respondents were owners of Honda
76% of the respondents were owners of Toyota
CUSTOMER SATISFACTION
17%
SATISFIED
DISSATISFIED
83%
Figure 1.4
INFERENCE:
83% of the Respondents were satisfied with their cars and the services of TOYOTA
However 17% of the Respondents were dissatisfied at the same time.
HONDA
Figure 1.5
INFERENCE:
18% of the respondents would prefer to buy a Toyota car against its competitors.
37% of respondents preferred for Maruti.
21% and 24% respectively preferred for Hyundai & Honda.
DEALERS
PRINT MEDIA
T.V.
55%
13%
INTERNET
Figure 1.6
INFERENCE:
Information through Internet and Print media accounts for more than half or 75% of
the information shared with the masses.
Rest 25% was shared by T.V. and Dealers for providing the information.
4.5
78
80
60
40
22
20
0
Y ES
NO
Figure 1.7
INFERENCE:
78% of the respondents felt that Toyota has the most fuel efficiency.
While 22% felt it isnt the most fuel efficient.
FEATURES OF TOYOTA
12%
8%
GOOD
10%
VERY GOOD
NOT SO GOOD
70%
SATISFACTORY
Figure 1.8
INFERENCE:
70% of the respondents felt that the features of the Toyota are good.
While 8% of respondents thought it was not so good, 10% thought it was very good
and 12% felt satisfactory about the features.
4.7
40
29
30
20
15
18
10
0
HANDLING
FUEL
DESIGN
COMFORT
EFFICIENCY
Figure 1.9
INFERENCE:
Toyota is best known for its design & comfort.
Then comes Handling and Fuel Efficiency.
4.8
INTERIORS OF TOYOTA
3%7%
GOOD
16%
VERY GOOD
NOT SO GOOD
74%
SATISFACTORY
Figure 1.10
INFERENCE:
The interiors of Toyota are very good according to 74% of the respondents.
16% said it was very good, 7% said it was satisfactory and 3% felt it was not so good.
15%
CHEAPER SPARE
PARTS
72%
MORE SERVICE
STATIONS
Figure 1.11
INFERENCE:
If Toyota is made more affordable then it would win more customers, a
theory which was backed by 72% of the respondents.
15% and 13% respectively want cheaper spare parts and more service
stations.
4.10
15
FUTURISTIC
MAKE IT MORE
SPORTY
10
GIVE IT A RETRO
15
60
LOOK
GIVE IT A
CONCEPT CAR
LOOK
Figure 1.12
INFERENCE:
To make it the best car in its class it should be made more futuristic which
was felt by 60% of the respondents.
15% of the respondents thought it should be made more sporty.
10% wanted it to have a retro look and 15% wanted to give it a concept car
look.
4.11 ARE YOU HAPPY WITH THE AFTER SALES SERVICES PROVIDED
BY TOYOTA
15%
HAPPY
UNHAPPY
85%
Figure 1.13
INFERENCE:
Overall 85% of the respondents were happy with the after sales service
provided by Toyota.
15% were unhappy with Toyota due to poor after sales services provided by
them.
83% of the Respondents were satisfied with their cars and the services of TOYOTA,
18% of the respondents would prefer to buy a Toyota car against its competitors
Information through Internet and Print media accounts for more than half or 75% of
the information shared with the masses. Rest 25% was shared by T.V. and Dealers for
providing the information
78% of the respondents felt that Toyota has the most fuel efficiency
70% of the respondents felt that the features of the Toyota are good. While 8% of
respondents thought it was not so good, 10% thought it was very good and 12% felt
satisfactory about the features
Toyota is best known for its design & comfort. Then comes Handling and Fuel
Efficiency.
If Toyota is made more affordable then it would win more customers, a theory which
was backed by 72% of the respondents.15% and 13% respectively want cheaper spare
parts and more service stations.
To make it the best car in its class it should be made more futuristic which was felt by
60% of the respondents.15% of the respondents thought it should be made more
sporty.10% wanted it to have a retro look and 15% wanted to give it a concept car
look.
5.2 RECOMMENDATIONS
Toyota should adopt the defensive marketing strategy because as being the second
largest car producer in the international market,
Toyota must at the moment carry out a feasibility study for launching a vehicle in the
domestic market where it has models like the Innova and Camry amongst others.
Toyota should conduct market survey in Indian market for quails in order to know the
perception of Indian consumers.
Toyota should adopt an offensive marketing strategy for entering in the small car
segment. This market is dominated by Maruti Suzuki and Hyundai in the Indian
domestic auto market.
Toyota must plan out an ideal marketing producing capacity ,becaue it faces the
problem of over and under capacity in case of upturn and downturn of the market.
ANNEXURE
QUESTIONNAIRE FOR CONSUMER
A) NAME
B) ADDRESS
C) CONTACT NUMBER
D) INCOME GROUP
_________15,000-25,000
_________25, 000-50,000
_________50,000-75,000
_________Above 75,000
NO
(ii) HYUNDAI
(iii) MARUTI
(ii) DISSATISFIED
(ii) UNHAPPY
(ii) MARUTI
(iii) HYUNDAI
(iii)T.V.
(iv)INTERNET
(iii)NOT SO GOOD
(iv) SATISFACTORY
(i)HANDLING
(iii)DESIGN
(iv)COMFORT
(iii)SATISFACTORY
?
(i) MAKE IT MORE AFFORDABLE
(ii) CHEAPER SPARE PARTS
(iii)MORE SERVICE STATIONS
12. ARE YOU HAPPY WITH THE AFTER SALES SERVICES PROVIDED BY
TOYOTA
(i)YES
?
(ii) NO
(iii) HAPPY BUT IT CAN BE BETTER
BIBLIOGRAPHY
Books:
Kotler Philips, Marketing Management: 30th Edition
Chabra T.N., Marketing management 2005
C.B. Gupta, Marketing management 2006
Magazines
Business standard Motoring May 2008 edition
Internet:
www.google.com
www.toyota .com
www.yahoo.com
www.domain-b.com
www.wikipedia.com