MARKETING ANALYSIS OF

TOYOTA MOTORS

A Project Report
Submitted in the partial fulfillment of the requirement
for the award of the Degree of Bachelor of Business
Administration
2008-2009

Submitted By: Under the Guidance of:

ARSHLEEN KAUR DR. ASHISH CHANDRA

BHARATI VIDYAPEETH UNIVERSITY

INSTITUTE OF MANAGEMENT & RESEARCH, NEW DELHI
An ISO 9001:2000 Certified Institute
“A” Grade Accreditation by NAAC

1
 Declaration

This is to certify that I have completed a Project titled “MARKETING

ANALYSIS OF TOYOTA MOTORS” under the guidance of Dr. Ashish
Chandra in the partial fulfillment of the requirement for the award of
Bachelors of Business Administration of Bharati Vidyapeeth University,
Pune. This is an original piece of work & I have not submitted it earlier
elsewhere.

Arshleen kaur

2
 Certificate

This is to certify that a project titled “MARKETING

ANALYSIS OF TOYOTA MOTORS” is an academic
work done by “Arshleen kaur” submitted in the
partial fulfillment of the requirement for the
award of the Degree of “Bachelor of Business
Administration” from “Bharati Vidyapeeth
University, Pune” under my guidance &
direction. To the best of my knowledge and
belief the data & information presented by
him/her in the project has not been submitted
earlier.

Dr. Ashish Chandra

3
 Certificate

This is to certify that a project titled “MOTORS

MARKETING ANALYSIS OF TOYOTA” is an
academic work done by “Arshleen kaur”
submitted in the partial fulfillment of the
requirement for the award of the Degree of
“Bachelor of Business Administration” from
“Bharati Vidyapeeth University, Pune”

Dr. S.S.Vernekar
(Director)

4
 Acknowledgement

We are very fortunate to be guided by you. We learnt a lot

in our as your style of teaching was very lucid and detailed.
You made learning very easy and interesting. We are sure
that we will remember your lessons for life long. By doing
a marathon project like this we learnt the practical aspects
of financial and marketing analysis.

My project becomes a reality only because of cooperation

of many people who had helped me in completing this
project. I sincerely extend my gratitude to Dr. Anand
Sharma & DR. Ashish Chandra who has given me this
golden opportunity to have an insight in the corporate
world and who has been a source of guidance and support.

Arshleen kaur

5
 Contents
Chapter 1
Introduction
 Project Overview
 Industry Profile
 Company Profile
 Production system
 SWOT Analysis
Chapter 2
 Research Methodology
 Sources of Data Collection
 Scope of Study
 Limitations
Chapter 3
 Comparative study
 Marketing strategy
 Financial Statement Analysis
6
  Conclusion
 Questionnaire

CHAPTER:1
INTRODUCTION

MARKETING STRATEGY
A marketing strategy is a process that can allow an organization to
concentrate its limited resources on the greatest opportunities to
increase sales and achieve a sustainable competitive advantage. A
marketing strategy should be centered around the key concept that
customer satisfaction is the main goal.

Marketing strategy concerns the decisions marketers make to help the

company satisfy its target market and attain its business and marketing
objectives.

Marketing strategy encompasses selecting and analysing a target

market and creating and maintaining an appropriate marketing mix
that will satisfy those people in the target market (18, 650) ...

FINANCIAL STRATEGY

An investing approach where an investor tries to choose winning stocks

by studying a company's earnings history, balance sheet, management,
product line and other factors that will affect its profitability and
growth.

The service provided by a financial planner. This is a long term service

provided for clients which considers all their financial affairs and which
develops a plan for their financial objectives to be achieve.

7
Planning one's finances in order to achieve financial security and
independence. Planning areas include. tax, retirement, risk
protection,estate, investment, and cash management

PROJECT OVERVIEW
The project assigned to us is to study the financial health and marketing
strategy of TOYOTA MOTORS . The main purpose of the project is to
analyze the Environment in which TOYOTA is operating. EIC -
Environment Industry and Company analysis is done thoroughly to
understand the external factors influencing the company. All various
ratios are calculated and analyzed in length to appreciate their impact
on company performance.

The three financial statements of last three years are identified, studied
and interpreted in light of company s performance. Critical decisions of
distributing dividends, Issue of bonus Debentures and other marketing
methods are analyzed and their impact on the bottom line of the
company is assessed.

Descriptive Research
The type of research Design for this Research Project is
DescriptiveResearch. Under the head of the Descriptive Research this
project is based on the cross sectional studies

8
 3
INDUSTRIAL PROFILE
Historical Industry Development

The first motor car on the streets of India was seen in 1898. Mumbai
had its first taxicabs in the early 1900. Then for the next fifty years, cars
were imported to satisfy domestic demand. Between 1910 and 20's the
automobile industry made a humble beginning by setting up assembly
plants in Mumbai, Calcutta and Chennai. The import/assembly of
vehicles grew consistently after the 1920's, crossing the 30,000 mark in
1930. In 1946, Premier Automobile Ltd (PAL) earned the distinction of
manufacturing the first car in the country by assembling 'Dodge
DeSoto' and 'Plymouth' cars at its Kurla plant. Hindustan Motors
(HM), which started as a manufacturer of auto components graduated
to manufacture cars in 1949.

In 1952, the GOI set up a tariff commission to devise regulations to

develop an indigenous automobile industry in the country. After the
commission submitted its recommendations, the GOI asked assembly
plants, which did not have plans to set up manufacturing facilities, to
shut operations. As a result General Motors, Ford and other assemblers
closed operations in the country. The year was 1954 and this decision of
the government marked a turning point in the history of the Indian car
industry. The GOI also had a say in what type of vehicle each
manufacturer should make. Therefore, each product was safely
cocooned in its own segment with no fears of any impending
competition. Also, no new entrant was allowed even though they had
plans of a full-fledged manufacturing program. The restrictive set of
policies was chiefly aimed at building an indigenous auto industry.
However, the restrictions on foreign collaborations led to limitations on
import of technology through technical agreements.

9
The other control imposed on carmakers related to production capacity
and distribution. The GOI control even extended to fixation of prices
for cars and dealer commissions. This triggered the start of a protracted
legal battle in 1969 between some carmakers and GOI. Simply put, the
three decades

following the establishment of the passenger car industry in India and

leading upto the early 1980s, proved to be the 'dark ages' for the
consumer, as his choice throughout this period was limited to two
models viz Ambassador and Padmini. It was only in 1985, after the
entry of Maruti Udyog, that the car makers were given a free hand to
fix the prices of cars, thus, effectively abolishing all controls relating to
the pricing of the end product.

In the early 80's, a series of liberal policy changes were announced

marking another turning point for the automobile industry. The GOI
entered the car business, with a 74% stake in Maruti Udyog Ltd (MUL),
the joint venture with Suzuki Motors Ltd of Japan.

In 1985, the GOI announced its famous broadbanding policy which

gave new licenses to broad groups of automotive products like two and
four-wheeled vehicles. Though a liberal move, the licensing system was
still very much intact.

MUL introduced 'Maruti 800' in 1983 providing a complete facelift to

the Indian car industry. The car was launched as a "peoples car" with a
price tag of Rs40,000. This changed the industry's profile dramatically.
Maruti 800 was well accepted by middle income families in the country
and its sales increased from 1,200 units in FY84 to more than 200,000
units in FY99. However in FY2000, this figure came down to 189,184
units, due to rising competition from Hyundai's 'Santro', Telco's Indica
and Daewoo's 'Matiz'.

MUL extended its product range to include vans, multi-utility vehicles

(MUVs) and mid-sized cars. The company has single handedly driven
the sales of cars in the country from 45,000 in FY84 to 409,951 cars by
FY2000, cornering around 79.6% market share.With increasing
competition from new entrants, this market share has plummeted to
almost 62% in FY2000.

10
 The de-licensing of auto industry in 1993 opened the gates to a virtual
flood of international auto makers into the country with an idea to tap
the large population base of 950mn people. Also the lifting of
quantitative restrictions on imports by the recent policy is expected to
add up to the flurry of foreign cars in to the country.

Many companies have entered the car manufacturing sector, to tap the
middle and premium end of car industry. The new entrants are Daewoo
(Matiz), Telco (Indica) and Hyundai (Santro) in upper end of economy
car market. GM, Ford, Peugeot, Mitsubishi, Honda and Fiat have
entered the mid-sized car segment and Mercedes-Benz is in the
premium end of market. Car manufacturers like Malyasia based Proton
are also in line to hit the Indian ramp.

WORLD MOTOR VEHICLE PRODUCTION

« previous year Top 20 motor vehicle producing countries 2007

Motor vehicle production (1000 units)

60007000
8000 9000
Country 1000 2000 3000 4000 5000 10000
11000
12000
Japan 11596
United States 10781
PR China 8882
6213
(includes
Germany
GM
Belgium)
South Korea 4086
France 3019
Brazil 2971
Spain 2890

11
Canada 2578
India 2307
Mexico 2095
UK 1750
Russia 1660
Italy 1284
Thailand 1238
Turkey 1099
Iran 997
Czech Rep. 939
Belgium 844
Poland 785
[hide]
v•d•e
« previous year Top motor vehicle manufacturing companies by
volume 2007
Total motor vehicle production (1000 units)
60007000 8000
Group 1000 2000 3000 4000 5000
9000 10000
Toyota* 9497754
GM 9349818
Volkswagen 6346222
Ford 6247506
Honda 3911814
PSA 3457385
Nissan 3431398
Fiat 2679451
Renault 2669040
Hyundai 2617725
Suzuki 2596316
Chrysler 2538624
Daimler 2096977
BMW 1541503
Mitsubishi 1411975
Kia 1369330
Mazda 1286730
AvtoVAZ 735897
FAW 690712
Tata Motors 588158
Fuji 585028
Chang'an 543787
Isuzu 532013

12
 Beijing 454272
Dongfeng 437035
Chery 427882
SAIC 313002
Brilliance 293588
GAZ 248839
Volvo (trucks) 236024
Harbin Hafei 231488
Geely 216774
JAC 209880
Mahindra 168556
Paccar 126960
Great Wall 122605
Changhe 112083
Porsche 107170
BYD 100376
China National 100202
MAN 98441
Navistar 86758
Fujian 84138
UAZ 72162
Shannxi Auto 68160
Kaima 65790
Heavy
Light Commercial Commercial
Key Cars
Vehicles VehiclesHeavy
Buses
Total global production: 72178476

COMPANY PROFILE
TOYOTA

Toyota Motor Corporation Toyota Jidosha Kabushiki-gaisha?) is a

multinational corporation headquartered in Japan, and currently the
world's largest automaker.[4][5] Toyota employs approximately 316,000
people around the world.

In 1934, while still a department of Toyota Industries, it created its first

product Type A engine and in 1936 its first passenger car the Toyota

13
AA. The company was eventually founded by Kiichiro Toyoda in 1937
as a spinoff from his father's company Toyota Industries to create
automobiles. Toyota currently owns and operates Lexus and Scion
brands and has a majority shareholding stake in Daihatsu Motors,[6]
and minority shareholdings in Fuji Heavy Industries, Isuzu Motors, and
Yamaha Motors. The company includes 522 subsidiaries.[7]

Toyota is headquartered in Toyota City and Nagoya (both in Aichi), and

in Tokyo. In addition to manufacturing automobiles, Toyota provides
financial services through its division Toyota Financial Services and
also creates robots. Toyota Industries and Finance divisions form the
bulk of the Toyota Group, one of the largest conglomerates in the world.

Name

Toyota headquarters in Toyota City, Japan

Vehicles were originally sold under the name "Toyoda" (トヨダ), from
the family name of the company's founder, Kiichiro Toyoda. In
September 1936, the company ran a public competition to design a new
logo. Out of 27,000 entries the winning entry was the three Japanese
katakana letters for "Toyoda" in a circle. But Risaburo Toyoda, who
had married into the family and was not born with that name, preferred
"Toyota" (トヨタ) because it took eight brush strokes (a fortuitous
number) to write in Japanese, was visually simpler (leaving off two ticks
at the end) and with a voiceless consonant instead of a voiced one
(voiced consonant is considered "murky" or "muddy" sound compared
to the voiceless consonant, which is "clear"). Since "Toyoda" literally
means "fertile rice paddies", changing the name also helped to distance
the company from associations with old fashioned farming. The newly
formed word was trademarked and the company was registered in
August 1937 as the "Toyota Motor Company".

14
In predominantly Chinese speaking countries, Toyota is known as "豊
田".[11] These are the same characters as the founding family's name
"Toyoda" in Japanese, which translate to "fertile rice paddies" in the
Chinese language as well.

From September 1947, Toyota's small-sized vehicles were sold under

the name "Toyopet" The first vehicle sold under this name was the
Toyopet SA[13] but it also included vehicles such as the Toyopet SB light
truck, Toyopet Stout light truck, Toyopet Crown and the Toyopet
Corona. However, when Toyota eventually entered the American
market in 1957 with the Crown, the name was not well received due to
connotations of Toys and pets. The name was soon dropped for the
American market but continued in other markets until the mid 1960's.

HISTORY

15
Toyota founder Kiichiro Toyoda

Toyota automatic loom (Type G)

Replica of the Toyota Model AA, the first production model of Toyota
in 1936

In 1933, Toyoda Automatic Loom Works created a new division

devoted to the production of automobiles under the direction of the
founder's son, Kiichiro Toyoda. Kiichiro Toyoda had traveled to
Europe and the United States in 1929 to investigate automobile
production and had begun researching gasoline-powered engines in
1930.[16] Toyoda Automatic Loom Works was encouraged to develop
automobile production by the Japanese government, which needed

16
domestic vehicle production partly due to the worldwide money
shortage and partly due to the war with China.[17] In 1934, the division
produced its first Type A Engine, which was used in the first Model A1
passenger car in May 1935 and the G1 truck in August 1935.
Production of the Model AA passenger car started in 1936. Early
vehicles bear a striking resemblance to the Dodge Power Wagon and
Chevrolet, with some parts actually interchanging with their American
originals.[17]

Although the Toyota Group is best known today for its cars, it is still in
the textile business and still makes automatic looms, which are now
computerized, and electric sewing machines which are available
worldwide.

Toyota Motor Co. was established as an independent and separate

company in 1937. Although the founding family's name is Toyoda (豊
田), the company name was changed in order to signify the separation
of the founders' work life from home life, to simplify the pronunciation,
and to give the company a happy beginning. Toyota (トヨタ) is
considered luckier than Toyoda (豊田) in Japan, where eight is
regarded as a lucky number, and eight is the number of strokes it takes
to write Toyota in katakana.[18] In Chinese, the company and its vehicles
are still referred to by the equivalent characters (traditional Chinese: 豐
田; simplified Chinese: 丰田; pinyin: fēng tián), with Chinese reading.

During the Pacific War (World War II) the company was dedicated to
truck production for the Imperial Japanese 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.
The war ended shortly before a scheduled Allied bombing run on the
Toyota factories in Aichi.

17
1947 Toyopet Model SA

1957 Toyopet Crown

After the war, 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 Toyopet dealer chain was established. The following year, the
Crown became the first Japanese car to be exported to the United States
and Toyota's American and Brazilian divisions, Toyota Motor Sales Inc.
and Toyota do Brasil S.A., were also established.

Toyota began to expand in the 1960s with a new research and

development facility, a presence in Thailand was established, the 10
millionth model was produced, a Deming Prize and partnerships with
Hino Motors and Daihatsu were also established. The first Toyota built
outside Japan was in April 1963, at Port Melbourne in Australia.[19] By
the end of the decade, Toyota had established a worldwide presence, as
the company had exported its one-millionth unit.

With high gas prices and a weak US economy in the summer of 2008,
Toyota reported a double-digit decline in sales for the month of June,
similar to figures reported by the Detroit Big Three. For Toyota, these
were attributed mainly to slow sales of its Tundra pickup, as well as
shortages of its fuel-efficient vehicles such as the Prius, Corolla and
Yaris. In response, the company has announced plans to idle its truck
plants, while shifting production at other facilities to manufacture in-
demand vehicles.

Company overview

18
Concept i-unit

Concept PM

The Toyota Motor Company was awarded its first Japanese Quality
Control Award at the start 1980s and began participating in a wide
variety of Motorsports. Due to the 1973 oil crisis consumers in the
lucrative U.S. market began turning to small cars with better fuel
economy. American car manufacturers had considered small economy
cars to be an "entry level" product, and their small vehicles were made
to a low level of quality in order to keep the price low. Japanese
customers, however, had a long-standing tradition of demanding small
fuel-efficient cars that were manufactured to a high level of quality.[citation
needed]
Because of this, companies like Toyota, Honda, and Nissan
established a growing presence in North America in the 1970s.[citation needed]

In 1982, the Toyota Motor Company and Toyota Motor Sales merged
into one company, the Toyota Motor Corporation. Two years later,
Toyota entered into a joint venture with GM called NUMMI, the New
United Motor Manufacturing, Inc, operating an automobile
manufacturing plant in Fremont, California. The factory was an old
General Motors plant that had been closed for two years. Toyota then
started to establish new brands at the end of the 1980s, with the launch
of their luxury division Lexus in 1989.

In the 1990s Toyota began to branch out from producing mostly

compact cars by adding many larger and more luxurious vehicles to its

19
lineup, including a full sized pickup, the T100 (and later the Tundra),
several lines of SUVs, a sport version of the Camry, known as the
Camry Solara, and the Scion brand, a group of several affordable, yet
sporty, automobiles targeted specifically to young adults. Toyota also
began production of the world's best selling hybrid car, the Prius, in
1997.

With a major presence with Europe, due to the success of Toyota Team
Europe, the corporation decided to set up TMME, Toyota Motor Europe
Marketing & Engineering, to help market vehicles in the continent. Two
years later, Toyota set up a base in the United Kingdom, TMUK, as the
company's cars had become very popular among British drivers. Bases
in Indiana, Virginia and Tianjin were also set up. In 1999, the company
decided to list itself on the New York and London Stock Exchange.

With over 30 million sold, the Corolla is one of the most popular and
best selling cars in the world.

In 2001, Toyota's Toyo Trust and Banking merged to form the UFJ,
United Financials of Japan, which was accused of corruption by the
Japan's government for making bad loans to alleged Yakuza crime
syndicates with executives accused of blocking Financial Service Agency
inspections.[24] The UFJ was listed among Fortune Magazine's largest
money-losing corporations in the world, with Toyota's chairman serving
as a director.[25] At the time, the UFJ was one of the largest shareholders
of Toyota. As a result of Japan's banking crisis, the UFJ was merged
again to become Mitsubishi UFJ Financial Group.

In 2002, Toyota managed to enter a Formula One works team and

establish joint ventures with French motoring companies Citroën and
Peugeot, a year after Toyota started producing cars in France.

Toyota ranked eight on Forbes 2000 list of worlds leading companies for
the year 2005. The company was number one in global automobile sales
for the first quarter of 2008.

20
On December 7, 2004, a U.S. press release was issued stating that
Toyota would be offering Sirius Satellite Radios. However, as late as
Jan. 27, 2007, Sirius Satellite Radio and XM Satellite radio kits were not
available for Toyota factory radios.[citation needed] While the press release
enumerated nine models, only limited availability existed at the dealer
level in the U.S. As of 2008, all Toyota and Scion models have either
standard or available XM radio kits. Major Lexus dealerships have
been offering satellite radio kits for Lexus vehicles since 2005, in
addition to factory-equipped satellite radio models.

In 2007, Toyota released an update of its full size truck, the Tundra,
produced in two American factories, one in Texas and one in Indiana.
"Motor Trend" named the Tundra "Truck of the Year," and the 2007
Toyota Camry "Car of the Year" for 2007. It also began the
construction of two new factories, one to build the RAV4 in Woodstock,
Ontario and the other to build the Toyota Prius in Blue Springs,
Mississippi. This plant was originally intended to build the Toyota
Highlander, but Toyota decided to use the plant in Princeton, Indiana
instead. The company has also found recent success with its smaller
models - the Corolla and Yaris - as gas prices have risen rapidly in the
last few years.

THE TOYOTA PRODUCTION SYSTEM

Main article: Toyota Production System

21
Toyota has long been recognized as an industry leader in manufacturing
and production. Three stories of its origin have been found, one that
they studied Piggly-Wiggly's just-in-time distribution system, one that
they followed the writings of W. Edwards Deming, and one that they
were given the principles from an Army training program. It is possible
that all are true. Regardless of the origin, the principles, described in
Toyota's management philosophy, The Toyota Way, are as follows:

1. Base your management decisions on a long-term philosophy, even

at the expense of short-term goals
2. Create continuous process flow to bring problems to the surface
3. Use "pull" systems to avoid overproduction
4. Level out the workload
5. Build a culture of stopping to fix problems, to get quality right the
first time
6. Standardized tasks are the foundation for continuous
improvement and employee empowerment
7. Use visual control so no problems are hidden
8. Use only reliable, thoroughly tested technology that serves your
people and processes
9. Grow leaders who thoroughly understand the work, live the
philosophy, and teach it to others
10.Develop exceptional people and teams who follow your company’s
philosophy
11.Respect your extended network of partners and suppliers by
challenging them and helping them improve
12.Go and see for yourself to thoroughly understand the situation
(genchi genbutsu)
13.Make decisions slowly by consensus, thoroughly considering all
options; implement decisions rapidly
14. Become a learning organization through relentless reflection and
continuous improvement

SWOT ANALYSIS OF TOYOTA

22
Strengths
• Global organization, with a strong international position in 170
countries worldwide.
• High financial strength (1997, sales turnover, £131,511 million),
sales growth of 29.3%.
• Strong brand image based on quality, environmental friendly
(greener), customized range.
• Industry leader in manufacturing and production. Maximizes
profit through efficient lean manufacturing approaches (e.g. Total
Quality Management) and JIT (Just in Time) manufacturing and
first mover in car research and development.
• Excellent penetration in key markets (US, China, EMEA) and
now the second largest car manufacturer in the world, surpassing
Ford.

Weakness
• Japanese car manufacturer - seen as a foreign importer.
• Production capacity. Toyota produces most of its cars in US and
Japan whereas competitors may be more strategically located
worldwide to take advantage of global efficiency gains.
• Some criticism has been made due to large-scale re-call made in
2005, quality issues.

Opportunities
• Innovation -first to develop commercial mass-produced hybrid
gas-electric vehicles (gas and electric), e.g. Prius model. Based on
advanced technologies and R&D activity. With oil prices at an all
time high - this investment and widening of product portfolio fits
consumers looking to alternative sources of fuels away from gas
guzzling cars.
• To expand more aggressively into new segments of the market.
The launch of Aygo model by Toyota is intended to take market
share in youth market.
• To produce cars which are more fuel efficient, have greater
performance and less impact on the environment.
• To develop new cars which respond to social and institutional
needs and wants. The development of electric cars, hybrid fuels,

23
 and components reduces the impact on the environment. Toyota's
Eco-Vehicle Assessment System (Eco-VAS) has helped in
production, usage, and disposal.
• Continued global expansion - especially in the emerging markets
e.g. China and India, Russia, where population and demand is
accelerating.

Threats
• Saturation and increased competition, intense marketing
campaigns increasing competitive pressures.
• Shifts in the exchange rates affecting profits and cost of raw
materials.
• Predictions of a downturn in the economy e.g. recession, will
affect car purchases (especially new cars). As household budgets
tighten - this could lead a decline in new car sales and possible
rationalization of dealerships.
• Changing demographics e.g. number of large families is declining.
Undermining the demand for large family cars.
• Changing usage - families using the car less for taking children to
schools. Home deliveries. Businesses - restricting business travel
(tele-conferencing). Governments encouraging alternative forms
of transport - cycling and incentives to use public transport across
Europe.
• Rising oil prices (fuel costs) and the costs of maintaining cars.
Increase in families who have chosen not to own a car, or decided
to use their car less.

24
CHAPTER :2
RESEARCH METHODOLOGY

TOYOTA GLOBAL VISION 2010

 Innovation into the Future - A Passion to Create a Better Society
Through "Monozukuri - manufacturing of value - added products"
and "technological innovation," Toyota is helping to create a more
prosperous society.

 “TODAY for TOMORROW – Think to the future and take action

right now”; which is to say, contemplating what we must do today in
order to achieve a bright future and then carrying it out.

 One of the objectives Toyota has set is “to create automobiles and a
mobility society in which people can live with a sense of safety, peace
of mind, and comfort,” in preparation for the coming age of ITS and
a ubiquitous-network society.

 Toyota believes that the ideal scenario is to achieve sustainable

mobility in the three areas of safety, the environment, and comfort,
while balancing the twin visions of Zeronize and Maximize at a
higher level.

MISSION

Placing customer satisfaction first, Integrating sales with service and

serviceparts in a single convenient location, we contribute to speedy and
efficient service, allowing customers to experience the convience and
pleasure of owning Toyota automobile.

SOURCES OF DATA COLLECTION

www.toyota.com

25
www.automobileindustry.com
www.toyotawikipedia.com
www.automobilewikipedia.com
http://www.canadiandriver.com/news/040423-5.htm”,
http://www.autointell-news.com/news-2000/February- 2000/February-
22-00-p6.htm
. http://www.autointell-news.com/news-2000/July- 2000/July-25-00-
p5.htm
www.motortrend.com/roadtests/alternative/112_news46/index.html
www.autotechdaily.com/pdfs/T09-25~1.PDF.
http://www.pdma.org/library/glossary.html
http://www.pdma.org/library/glossary.html
www.isixsigma.com

SCOPE OF STUDY

It gave a chance to use the conceptual knowledge in actual

environment and prepare the researcher to use the knowledge in future

26
endeavours. It helps in accessing the factors which influevce the
retailers purchasing and selling the product to the consumers of
TOYOTA.
The study is essential for BBA curicullam as it is a part of industrial
exposure subject and gives the practical exposure to the industry.
It also tell the different marketing strategies and production process
followed by TOYOTA.

27
LIMITATIONS

1. Limited time available for gathering the information as we

are approaching towards our external exams.

2. All information is taken from secondary data.

3. No practical experience ,as all project is done with the help

of internet and one of the employee.

4. Main emphasis were given on the marketing strategies

adopted by the firm.

28
CHAPTER 3
COMPARATIVE STUDY

A Comparison of Toyota and Honda Hybrid Vehicle

Marketing Strategies
Introduction
Recognizing consumer demand for better fuel economy and reduced
emissions, both Toyota and Honda have introduced hybrid vehicles to
the American market. Toyota introduced the Prius to the U.S. in 2000.
Honda began selling the hybrid two-seater Insight in the U.S. in 1999.
U.S. Sales in the hybrid vehicle industry have increased over 570
percent since model year 20001. Today, hybrid vehicles hold a 1%
market share in the U.S.,2 and there are three models of hybrid vehicles
dominating the market: the Toyota Prius, Honda Insight, and the
Honda Civic Hybrid.

2003 Hybrid Market Share Breakdown (U.S.)

Toyota Prius 39%
Honda Insight 3%
DiamlerChrysler 1%
General Motors 2%*
Honda Civic Hybrid55%
* Hybrid versions of the Chevrolet Silverado and GMC
Sierra are available to GM fleet customers only 3

The Toyota Prius

Toyota’s initial marketing strategy for the Prius targeted innovators

and early adopters of new technologies.* The 2000 “Prius/genius”
campaign focused on highlighting Toyota’s
* For a description of the segments of the innovation curve, see the
Appendix.
commitment to creating environmentally responsible vehicles4 and on
using online space to engage technophiles early on in the production
process.
Toyota enabled interested customers to visit a special website about
Prius development as

29
early as two years before the introduction of the product. Toyota used
focus groups and clinics with target consumers to evaluate different
aspects of the Prius. Toyota found that
the consumers valued high technology, affordable price, clean
operation, comfort,quality, convenient design, and safety.
Toyota’s television and print ads underscored the evolutionary aspects
of hybrid technology and freedom from dependence on oil. Toyota
created online e-brochures with a 17-second video clip that were sent to
the almost 44,000 people.5 In addition, Toyota benefited from various
celebrity endorsements that attracted attention to the new Prius.
As a ‘purchase accelerator’ among its target buyers who requested
information on the Prius, Toyota offered these customers the
opportunity to preorder cars, which were then finalized by the
dealerships. Before the car was even delivered to dealerships in August
of 2000, 1,800 units were sold. 6.
A significant portion of the initial advertising budget for the Prius went
to materials to help dealers communicate the new hybrid technology to
customers. Toyota also coordinated with approximately 900 dealers to
execute a ‘rental’ program, which allowed interested customers to have
the car for a one-day, extended test drive.
The first generation Toyota Prius experienced great success in the U.S.,
with salesgrowing 32% from 2001 to 2003.
Second-generation Prius
The second-generation of the Prius was introduced in 2004, targeting
the ‘early majority’of consumers who tend to demand reliable,
affordable, proven products, as contrasted to the “early adopters”
targeted in the 2000 campaign.
Toyota responded to the American demand for larger vehicles by
introducing a roomier ‘mid-size’ Prius, which could be sold at the same
price as the first generation car due to efficiencies achieved in the
production process.7 Toyota used its television advertising
primarily to tout the size and power, along with the environmental
benefits, of the second generation Prius to convince the early majority
that it was a performance car that happened to be environmentally
friendly.
By maintaining relationships with the ‘Prius Pioneers’ who bought the
first generation car, Toyota was able to leverage this connection and a
special purchase offer into approximately 1,200 pre-orders for the next
generation vehicle. Toyota continued to work to educate the early
majority and mainstream consumer on how hybrid vehicle

30
technology works by rolling out television spots reminding consumers
that the Priusdoesn’t need to be plugged in Current demand for the
Toyota Prius is exceeding supply in areas such as Los Angeles,
California, where the current waiting list is over a year long and
consumers are paying anywhere from $3,000 to $6,000 over MSRP.

Honda Insight and Civic Hybrid

Honda introduced the hybrid Honda Insight in 1999, a two-seater
targeted at tech-lovers.
The initial marketing strategy for the Honda Insight included a small
budget for national television and Internet advertising, most of which
was spent on educational and promotional materials for dealers to
present regionally to local media. Currently, the Honda Insight is a
small proportion of Honda’s vehicle offerings: it sells about 80-100 units
per month in the U.S..
The Civic Hybrid, a sedan seating five, has taken off, experiencing a
59% increase from 2002 to 2003. It is now the top-selling hybrid vehicle
in the U.S. Honda’s objective in creating the Civic Hybrid was to
produce a mainstream five-passenger sedan with superior fuel economy
and solid performance that was as easy to use as a conventional car.
In contrast with Toyota’s efforts to position its hybrid sedan as a unique
product initially geared towards technophiles and then move on to
pursuing the ‘early majority’, Honda introduced the Civic hybrid as a
product to appeal directly to the mass market, as the traditional version
of the Honda Civic is the best selling compact car in America.
By leveraging its existing Civic brand, Honda produced a hybrid
product that included many of the features that consumers had grown
to expect, thereby positioning the car as a standard Civic with the added
benefits of increased gas mileage and environmental ‘friendliness’.
Because of this existing brand equity and differential targeting, Honda
did little to link the Insight to the Civic Hybrid. More hybrid vehicles
are due out later in 2004. Honda is rolling out a hybrid Accord and
Toyota will be producing a Highlander and Lexus RX 400. American
manufacturers will
begin offering hybrid versions of popular truck/SUV models, with GM
introducing the Chevy Silverado, GMC Sierra, and Dodge Ram Pickup
and Ford rolling out the Ford Escape (SUV) Hybrid.

The Future

31
Due to impending arrivals of additional competitors, the hybrid market
share picture is projected to change dramatically by 2008. In 2008,
hybrid vehicle sales are expected capture 2% of the overall U.S. auto
market,16 of which 64% are expected to be trucks.

Appendix: Technology Adoption and Market Segmentation

Market segmentation and strategy for high technology products follows

a typical pattern called the “Technology Adoption Life Cycle”. When
new technologies are introduced, a typical marketing strategy focuses
on attracting the “Innovators” and subsequently the “Early Adopters”.
Innovators are defined as those who pursue products with new
technology aggressively,
consider technology to be a central interest in their life, and buy because
they enjoy exploring the new technology features of a product.18 They
represent a small segment of the total market (approximately 2.5%19)
but they are critical to accelerating adoption in later stages. They
validate a new product’s functionality and bear the burden of testing
for other market segments. Often the Early Adopter segment, an
estimated 13.5% of the market, is pursued in conjunction with the
Innovators. Early adopters, perceived as ‘visionaries’ in the market,
buy into new products early in the life cycle, are imaginative thinkers
who find it easy to envision and use new technology, rely on their own
intuition in purchasing, as opposed to depending on references from
others, and are more tolerant of bugs or glitches in new products than
the average consumer. A member of the Early Majority is considered to
be highly practical and watches and waits for proven technology. As a
pragmatist, this consumer is disinterested in fads, as they want
technological evolution to enhance existing technology. It is estimated
that 34%20 of the total market for a given product falls in to the Early
Majority segment.
Following them is the Late Majority, 34% of the potential buyers.
Laggards are at the tail end of this distribution. Little attention is paid
to this segment by marketers due to its refusal to adopt or understand
new technologies.

32
MARKETING STATEGY

Campaign Objectives

Objectives are important to clarify and set an objective set of targets

that ought to be achieved by the planned actions. Objectives exist on
three levels; Corporate, marketing and communication. Corporate
objective can be summarized as shareholder wealth maximisation and is
ultimately
achieved through higher profits and increased sales. Marketing
objectives are the successful introduction of a new car to the market.
However, in the first place the Prius was not expected to be a profit
generating commercial car. In fact in the USA the Prius is sold under its
production cost. The Prius was derived from a research project and its
conversion to a
mass produced car might be more with the intend to improve Toyota’s
image, a kind of practical socially responsibility report, showcasing
Toyota’s engineering capabilities at the same time. Marketing
communication activities are a vital part in achieving the above two and
have to be
coordinated with all other company activities (production, sales,
purchasing).
- Strengthening the relationship with the Toyota brand
- Increase the consideration of Toyota when planning a new car
purchase.
- The target market should be reached as fully as possible
- Customer and Consumers have to be made aware of a new product
and its brand name.
- Being a new product with a new technology, a prime objective is to
educate consumers and explain the working of the Prius and advantages
of this.
- Target markets should be excited about the new Prius and spread
buzz/ word of mouth.
- Communications should motivate consumers to find out more about
the Prius; visit the website, order brochures, visit a local dealer, order a
test drive.

33
- The Prius should be considered as a full and valid alternative to
traditional cars.
- Ultimately communications should lead to a purchase, a higher
percentage of showroom visits should be turned into sales
In a perfect world communications will guide the target through the
AIDA chain. As this product is new there are no historical data that
would allow some form of trend extrapolation to determine what is
possible or what is realistic. However the Prius has been launched in
Japan and the USA, but these are two different markets with a different
environment and therefore only to some degree of valid to be
compared with the EU and UK market. If all or some of these objectives
will be met can only be determined by post campaign research which
should start during the campaign and be continued in intervals to
monitor the situation. Considering the performance of the Prius in other
markets sales of around 1500 units in the first year should be set a goal,
2000 in the second and 3000 in the third. With only two cars in the
hybrid market
the Prius should become the market leader.

Creative Strategy

The Prius offers features that now other car offers. These unique selling
points should be emphasized in the promotions and any barriers to
purchase be weakened at the same time (unique selling proposition
strategy). Promotions messages are like to change over time, early
promotion should
concentrate on the awareness and education aspect, whereas later
executions can focus on creating excitement and focus on specific
benefits.
To appeal to the target market promotions should promote the car and
its users to be innovative, imaginative, bold, intelligent, revolutionary
and pioneering. Identified barriers to purchase (high initial
cost, unproven technology, product ignorance) should be overcome by
stressing the long run efficiency, success in Japan and product
information/explanation. It is important to stress that the Prius
does not need any external recharging (confusion with traditional
electric vehicles) and offers the same convenience as a normal car, the
Prius should therefore perceived as ‘least brown’ and not ‘green’ (and

34
all the disadvantages associated with that). The campaign is intended
“to make the
technology come alive” (Bernasconi, CD, Oasis Advertising, NY).
It would make sense to create different executions to target one of the
three mindsets identified in the target market and emphasising their
reasons to buy and refute their individual barriers to buy. This can be
done in a subtle style and will not change the style of the promotion.
Consequently promotions should appear in media where one
psychographic profile is more dominant then the others. The tone of
voice should be modern, intelligent and witty/ humours if possible,
maybe screening one of the USP against a conventional competitor.

Communications Mix

There are various communication methods. Two important factors have

to be considered when selecting the communication for the Prius: The
type of product (high involvement) and its stage in the product life cycle
(introduction). These two factors influence the consumer/customer
buying behaviour and therefore the mix has to be adjusted to fit these
conditions. Public relations, “the development and maintenance of good
relationships with different publics” (Smith, 1997), are essentially
information within an independent medium (e.g. magazine, newspaper)
that occurred because a company provided them with those (e.g. press
release). Public relations are useful because they enjoy a high credibility
at a low cost, but the exact message cannot be controlled. This
communication form will be of major importance for the Prius
campaign as many buyers draw
their information from the media. Being represented, talked about in
those will be an essential step in at least being considered as a choice.
Personal selling is very important because a car is a high involvement
product and affords more
conviction for purchase which is given by PS. Personal selling will be
carried out by the local dealers
who in advance should have been trained to be familiar with the Prius
car (dealership launch material,conferences) and its advantages and
how to overcome objections.
Personal selling will also be of major importance when targeting the
corporate/ fleet buying segment, because these customers buy in bulk
they expect to be given a presentation by a Toyota’s

35
representative to convince them that Prius is suitable for their fleet. The
cost of training and personal selling are assumed to be covered in
dealer’s and Toyota’s
overheads. Sales promotion, monetary incentives to buy, is most
effective to trigger a decision or purchase. SP is
useful at the beginning of the product life cycle to increase acceptance
or provoke a trial. Toyota is already selling the Prius beneath its
production cost. However an additional third party sales promotion 12
Toyota Prius mechanism has been put into place: Powershift, a
government backed agency, charged with
encouraging cleaner fuels, will refund a £1000 to the first 200 buyers of
the Prius. To get the biggest benefit out of this Toyota should advertise
this fact. Otherwise SP should be used spontaneously once a slow down
in sales can be detected (PLC). Advertising, a paid form of non-personal
mass communication from an identified sponsor, should be
the major communication mix ingredient for this campaign. Advertising
is controllable, but expensive esp TV. Advertising can be used to
increase awareness, create interest and inform about Prius USPs.
Customers or consumer are reached by placing adverts in their target
media. Direct mail in the form of newsletters can useful for this
campaign to create awareness (pre launch) and inform or offer of
opportunity to book a test drive. Toyota has already a database in place
but can
also buy further data. Direct mail is also important when targeting the
corporate buyers and provides them with detailed information about
the Prius. People who receive direct mail in error or those who are not
interested in the offers might feel annoyed and lower their image of
Toyota.
Recommended Campaign

Pre-testing is important esp. for a totally new product, to check if the

message sent is conceived as intended by the target market. Testing will
help to determine the optimum mix between imagery and
copy and reduce the risk of failure in general. Testing with test
audiences who represent the general public and the target audience
should include concept, style and creative strategy of all intended
communications and executions. A share of the
budget has to be allocated for pre-testing.

36
Direct mail should be one of the first activities with pre-launch
awareness letters being sent to existing Toyota customers; those in
segment C and above OR fit the target group description (above seg.C
because 40% of buyers in USA & Japan previously owned a more
expensive car). Toyota can also buy additional databases from media
that their target has subscribed to (e.g. Daily Telegraph, as far
as legally possible) and then filter these for the target demographic
profile.
A second wave of direct mail upon the launch with more discrete
information should follow and
formally announce the launch of the Prius. On this occasion the
audience should be given the opportunity to either pre-order the car
(benefit of Toyota loyalty) or request a test drive at a local
dealer. It will have to be integrated/tuned with local dealer’s own
mailing efforts. Direct mail should also be sent to corporate buyers,
which ought to be included in Toyota’s database. Their mailings
should be customized to emphasize the features that are important for
fleet buyers Direct mail should also be used in a digital form (email) to
underline the Prius contemporary image. Emails could be designed to
enable to directly pre-order the car and purchase the car online,
something that would appeal to the pioneer mindset. Newsletters should
include detailed brochures and eventually a CD-Rom.
Press releases and press conferences ought create positive public
relations. These can be used for the launch and early stages of the Prius
to raise awareness and create interest for the new product just as
educate the public about the Prius’ working and advantages.
Effectiveness will be increased when PR appears in media consumed by
the target market. Considering the Prius revolutionary
technology media will be prepared to talk about this product and even a
certain amount of requested coverage could be expected.
The Prius will be exhibited in suitable shows and exhibitions in the
motor industry to initiate some buzz and prepare the market.

Marketing Communications Plan

Sponsorship, related to PR, offers a good opportunity later in the
product life cycle, to enhance awareness and image. Esp. for activities
that stand for the same social benefits as the Prius or are
associated with the target group.

37
Advertising will be utilized as one of the most important communication
methods, along with PR. The use of TV, Print, Internet and Outdoor
seems most promising to reach and affect the target market.
The creative strategy will used to place advertising in target media, with
slightly different executions to meet each of the three mindsets in their
individual media.
Advertising will go through different stages to aware, educate and
interest the target audience and then hopefully result in a dealer visit.
Personal selling (discussed above) is very important to win over both
consumers and customers in the car market. Internal communication
has to make sure these are executed integrated and in line with
other communications. Sales Promotion has been discussed above and a
£200.000 mechanism is already in place (Powershift) und should suffice
for the start. Providing up to ten vehicles as prizes in several prizedraws
is recommended, which should be conducted in target market consumed
media.
Obviously the campaign wil be a mix between push and pull, the
consumer market should be driven rather by a pull predominated
strategy whereas the business customer market is recommended by a
slightly more aggressive push strategy.

Media Strategy
TV is a favourite medium because of its wide reach and its high impact
that is useful for showcasing a high impact product such as a car. The
volume of TV ads however is limited by its costs but popular
target group programmes (consult research) and times should be used
as extensively as possible. Identified TV stations: BBC one, two, ITV,
channel4 Print adverts will be placed in quality newspapers and esp.
their weekend supplements (back cover & second page). Additional ads
are placed in car industry magazines and those read by the target
group. Titles identified to read by the target audience: Daily Telegraph,
The Times, The Independent, Financial Times, National Geographic,
Stuff, New Scientist, Vanity Fair, Waitrose Food Illustrate, Auto
Express, Car, WhatCar etc. PR activities will concentrate on target
audience print publications but also involve TV programmes
that deal with cars (Top Gear, 5th Gear, new technology programmes)
the environment and maybe even radio programmes. Press releases will
be provided to car industry and target group used media
(see above).

38
Outdoor billboards should be placed in urban areas to reach the broad
audience of car drivers at a low cost. Placing these at busy junctions will
complement TV and print advertising and be visible where
the Prius is of best use: on the street. Internet plays an important role,
direct mail will be sent as email where possible and enable buyers to
purchase the Prius online. A Prius specific microsite will offer all
information e-brochures for download. All adverts should bear the
Prius web address to make it easy for users to find.
Direct mail and sales promotion have been discussed above.
14 Toyota Prius We will not use cinema because a low usage amongst
our target has been detected and the extra expenses are not likely to pay
off. Directories are not suitable for the image of the Prius. Regional
press will not be considered because traditionally these media are used
by local dealers. Radio advertising might be useful but we feel that
radio will not be able to exert the necessary impact to
convince; the Prius should be visible to make sure the audience
understands that it is a modern and full car.

Timing and Budgets

It is important to notice that marketing communications should start

before the product is actually launched, for launch activities to unfold
their full potential. Even long before that all departments that
contribute to the product and communication will have to meet
regularly to tune into an integrated strategy.
Pre-Launch: The setup of a microsite round the Prius will happen once
the Prius has been shown on exhibitions. Direct mail will be sent before
and after the launch. PR will be provided scarcely before
and fully after Launch. Advertising and will set in once the product is
available. TV adverts will start in a ‘wedge pattern’9 (initial ‘Blitz’)9
and flow into a ‘awareness pattern’9 after six months to maintain
awareness for a product that has a long purchase cycle and a long
decision time.

39
CONCLUSION

We recommend a communications strategy that makes use of

advertising, PR, new media and direct mail. Personal selling will be
provided by the existing network of local dealers. Advertising will use
TV, Print and outdoor media to initiate purchases. The Internet will
play an important role for both
advertising and direct mail, using a modern medium to underline the
advanced character of this car. However that this plan sofar is only a
model/ plan, and not definitive, it can and is likely to change esp.if pre
or post-testing give negative results.

40
Before realizing the proposed action a long planning period with
frequent meetings of all parties is necessary to ensure the integrity and
unanimous messages of the campaign.

41
QUESTIONNAIRE

42