Toyota Business Management Practices
COMPARING AND CONTRASTING TOYOTA’S MARKETING STRATEGIES IN UK AND SAUDI ARABIA
TABLE OF CONTENTS PAGE
INTRODUCTION 3 -4
COMPARISON AND CONTRASTING ANALYSIS 5-16
Marketing strategy has been defined as a “process or model to allow a company or organization to focus limited resources on the best opportunities to increase sales and thereby achieve a sustainable competitive advantage”. (http://www.easy-marketing-strategies.com)
Marketing strategy is the arrow that points to the way sales can increase as well as profit. It is the way. It is the pointer to help a company get the best out of the scarce budget. Once a company decides on its business goals, it then goes to define its marketing strategies. After the marketing strategies, it goes to get the marketing mix together (Products, Price, Promotion and Place) from which it then prepares it marketing plans. (http://www.easy-marketing-strategies.com) The diagram below gives a good simple illustration.
Verifiable evidence points out that the usefulness of any marketing strategies depends on the environment organisations are operating,( Katsikeas et al, 2006),( Bahadir, et al 2015)
Contingency theory has suggested that companies marketing strategies and subsequent performance are affected by the environment in which they operate. (Child, 1972),( Miller et al 1983)( Bahadir, et al 2015)
In developing a marketing strategy, an organisation must know the market it is going into because there are many external environmental variables that characterise a market, such as Political factors, Economic situations, Social and Cultural factors, Technology, Legal factors(PESTLE). Also the following forces are equally necessary to consider in designing a marketing strategy: the effects of competition, the threat from easily available substitute, threat from buyers bargaining power, the threat from suppliers bargaining power,(POTER’S FORCES). The organisation certainly will have to look inward to check its preparations using the following factors, Its Strengths, Weaknesses, Opportunities and Threats (SWOT). To make its product or brand to penetrate a market well, the organisation must do its home work properly on Market Segmentation, Target Consumers and Positioning of its brand,( STP) ((http://www.easy-marketing-strategies.com)
Toyota automobile was established by Kiichiro Toyoda in 1937, as an offshoot of Toyota Industries founded by his father. In 1934, while still a department under Toyota Industries, the automobile company manufactured its first car called Type A. Later in 1936, it manufactured the first passenger car called Toyota AA. The company is now known as Toyota Motor Corporation. It is currently the largest car manufacturer in Asia and in 2016; it was rated as the second largest motor company after General Motors. It was made number one motor company to produce more than 10 million per annum automobiles (Flynn, Malcolm (July 25, 2012).
Toyota has a mission statement that says it has an aim to create motor vehicles which are popular with the users, (Toyota Mission for Technologies).
It has established a recognisable auto market shares in U.S, Africa, Europe and maintains a leading position in the Australian auto sector. It has set up many factories all over the world for the production and assembly of Toyota brands for the local markets. For examples, it has productions or assembly sites in Canada, USA, Indonesia, Australia, South Africa, Turkey, Poland, Mexico, China, Pakistan, Argentina Brazil, India, Thailand, Venezuela, France, Malaysia, United Kingdom and Czech Republic. It currently produces vehicles in Japan under five brands namely, Toyota, Lexus, Hino, Daihatsu and Ranz. It has secured a 16.66% holding in Subaru Corporation and a 5.9% investment in Isuzu Motors. In China, it went into two joint-venture agreements known as GAC Toyota and Sichuan FAW Toyota to manufacture Toyota brands. Similar joint venture agreements were made respectively with Kirloskar Motors India and Peugoet Citreon Automobile in Czech Republic to produce Toyota brands. (www.toyota-global .com) (http://www.toyota- lobal.com/company/profile/non_automotive_business)
As at 2014 its global staff strength was 338,875 employees. By 2016 its revenue was regarded as the ninth largest in the whole world. As at present time, Toyota is regarded as being on top in the world wide auto market for the sales of electric vehicles. As January 2017, its Prius brand is the world best selling hybrid car, (http://media.toyota.co.uk/)
TOYOTA IN UK
In December, 1989, Toyota established a plant for car production in the UK .It has two plants in the UK, one at Burnaston in Derbyshire and the other at Deeside in North Wales. The total investment was more than £2.2 billion. It has staff strength of over 3,400 employees. Its first car, a Carina E, to be manufactured in UK came out of production line in 1992(http://www.toyotauk.com) Toyota UK is the one that takes care of its marketing strategies, sales and after sales care, satisfaction of customers’ needs.
Toyota in UK invests a lot in its people. In UK, Toyota has a production plant that is people oriented whereby production designs and marketing strategy management are done by UK head office staff and not Japan. It means that in UK, Toyota empowers the staff in their operations. This helps to positively improve customers’ expectations.
In UK, Toyota also has established a Training Academy, where employees are trained to degree and various certificate levels, in order to improve their skills and performance levels. The educational academy trains and produces auto engineers, electrical engineers, car painters, maintenance engineers and a host of other experts. The UK plant manpower is trained to handle the designing, manufacturing, sales, promotion and after sales services of the various brands. By this strategy, the employees are encouraged to be creative to emerge as the best in the market.
This type of people oriented strategy is not available in Saudi Arabia. The main reason being that Toyota only exports complete built vehicles to Saudi for distributors to market. The distributor handles the customer relations and after sales services.
UK Toyota managing director and the staff are the ones that design the marketing strategies to ensure high sales volume in the entire UK market. Therefore, its management structure has been greatly devolved to the lower levels where it has direct link with employees to monitor how they deal with clients ( Rajasekera J, 2013) (https://prowriterz.com) This strategy is not available in Saudi Arabia because of its export penetration strategy.
In Saudi Arabia, the management of staff of the distributors are not direct function of Toyota, hence staff creativity is not boosted nor their customer service
performance enhanced by constant trainings as obtain in UK. The budget for staff training is the sole responsibility of the distributor in Saudi.
TOYOTA IN SAUDI ARABIA
Toyota has been operating Saudi Arabia since 1945 but through distributorship only. Its main distributor in Saudi is Abdil Latif Jameel, (http://www.toyota.com.sa).. Toyota only exports complete built vehicles to Saudi Arabia. This is because of the system of government in Saudi in which the royal ruling monarchy controls what foreign investments are allowed in Saudi Arabia. The political and legal environments in Saudi are not the same with UK. In UK, democracy allows the citizens through their members of parliament and executive government to make decisions regarding foreign investments that allowed in Britain. It clearly shows that citizens of UK determine their economic development, whereas in Saudi, the ruling royal monarchy decides the shape of the economy. Of recent, in March 2107, Toyota signed a memorandum of understanding (MOU) with a Saudi Arabian government agency to conduct a feasibility study into producing vehicles and parts in Saudi. (http://www.reuters.com/article). Before now, Saudi Arabia and other Gulf oil exporters have failed to develop auto making industry because they lack broad industrial bases and a skilled local workforce (. http://www.reuters.com/article)
COMPARING AND CONTRASTING TOYOTA MARKETING STRATEGIES IN UK AND SAUDI ARABIA
Toyota has spread worldwide as a global entity. It has its brands being marketed and used in UK and Saudi Arabia. These two counties are two different geographical locations with different environmental factors which affect the marketing strategies that Toyota has adopted. This work will attempt to compare and contrast Toyota’s marketing strategies in both countries. The marketing mix factors and other relevant marketing concepts shall be used as tools to analyse these similarities and differences.
Toyota also allows its overseas production sites to be self-reliant. By this it allows the overseas plants to use local know how to improve its brand instead of depending on knowledge from Home Country Japan. To spread this concept, Toyota decided to establish education centres in its regional production centres located in United Kingdom, USA, North America, Europe, in Japan and Asia -Pacific, Thailand,(www.toyota-global.com)
Toyota’s adopted marketing mix (4Ps) shows the company’s strategies for relating with its targeted market. Its target markets are diverse in terms of consumers’ preferences, regional environments and local market conditions. Because of these variable factors, the firm’s marketing mix is structured to address these variations.
Toyota has a philosophy called Global Quality Assurance. This is a sort of globalised manufacturing standard. By this philosophy, it makes sure that no matter which regional or country plant that manufactures a brand, the brand must carry the label “made by Toyota” This philosophy helps Toyota to maintain its quality standard called “Toyota Way” all over the world. It means the philosophy does not allow labels like “made in Britain or made in Japan”, rather it uses one general label that says, “made by Toyota”( www.toyota-global.com)
TOYOTA’S MARKETING STRATEGY
Toyota’s Marketing strategy consists of the various courses of activities that it desires to take, to help it fulfil its marketing goals ( Doole. L,2008) (https://businessresearch123)
Because of different geographical market areas influenced by different external environmental factors, Toyota has employed different marketing strategies in UK and Saudi Arabia markets. Toyota builds vehicles to suit each individual market, (http://www.toyota-global.com).Its marketing strategies are also to give it a competitive advantage over it rivals in both different markets. It is worth mentioning that the marketing requirements in UK and Saudi Arabia affect the Toyota’s marketing strategy in both countries and they certainly differs from each other.
Toyota chooses the target market by using the demographic and psychographic segmentation systems. By demographic segmentation Toyota tends to target middle or medium upper income consumers with large or medium family size. Toyota brands like Camry, Prado and Land Cruiser are made to target this upper medium income group.
In the psychographic segment, Toyota focuses on high class high income earners. This group has tastes and passion. Sport Utilities Vehicles are made to attract this group of customers.
Toyota’s marketing strategy serves as its differentiation strategy, because it helps to differentiate Toyota’s products from its rival’s brands. For example, while Ford motors secure their market share using same type of global marketing strategy, Toyota on the other hand uses specific marketing strategy to secure its own market share. Whereas, Ford produces one particular brand of car at certain time, it markets it globally, Toyota on the other hand, makes brands to be sold world wide, and also brands to be offered specifically in a certain geographical location.(https://businessresearch123) (Toyota SA, 2012).
What Toyota does is that it makes brands bearing in mind the tastes of the local buyers and users of its brands. Therefore, in a place like Saudi Arabia, not all of Toyota’s global brand models would be effective because of climate and environmental differences. While the brands for UK market come with heaters due long winter season, the brands in Saudi Arabia come with air conditioner because of the hot temperature. Also the brands in UK are mostly of medium and small sizes because of lack of land parking space in UK which happens to be an Island- ( a piece of land surrounded by water). Whereas, in Saudi Arabia, the large sandy land encourages Toyota brands to be made in big and wide sizes. For example, Sedan trucks built for long range journey are exported to Saudi market. As a result, Toyota aspires to satisfy its local users by supplying them with tailored made brands that meets their environment purposes and usage,(Toyota SA, 2012). (https://businessresearch123)
UNDERSTANDING TOYOTA’S MARKETING MIX
Doole and Lowe (2008) stated that marketing mix consists of Product, Price, Place and Promotion as marketing strategies.
To understand the concept of marketing mix, it would not be out of place to explain the concept of marketing. Marketing has been defined by the American Marketing Association as “the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create and satisfy individual and organizational objectives “ (1985), ( Keith Bois, 2000, p.517).
The United Kingdom Chartered Institute of Marketing (1996) has defined it as “the management process of planning, anticipating and satisfying customer requirements profitably”.
Philip Kotler et al (2007, p.5) on the other hand, defined marketing as “the process of creating value for customers and building strong customer relationships in order to capture value from customers in return.”
From the above definitions of marketing, it can be seen it is contains a core concept of system called “process” The aim of the process is to create satisfaction for the customer and the same time achieve a return from the activity. The process contains elements which are called marketing mix.
2 THE 4 Ps MARKETING MIX (marketingmix.co.uk)
The term marketing mix can be traced to Professor James Culliton of Harvard University, (1948), He was credited to have used the term “marketing mixer when he called marketers “mixers of ingredients” in his article titled” The Management of Marketing Costs”
It was Neil Borden (1975) who was regarded to have made attempts of using the phrase marketing mix when he introduced the term marketing components namely, (1) consumer attitudes and habits,(2) trade attitudes and methods, (3) competition and (4) government control.” ( Baker 2007, p.328).
But it was E. Jerome McCarthy (1960) that presented the components of marketing mix as 4 Ps, namely the Product, Price, Promotion and People. However, Phillip Kotler, was the one who was regarded to have spread and made popular the 4 Ps marketing mix as known today, (Keelson, S . A .2012)
In praise of the 4 Ps marketing mix, David Jobber (2001),wrote that the 4Ps strength lies in the fact that it presents a formidable and practical model for marketers in their strategic decision making process and it has also rendered itself relevant for analysing case studies.
Critics and scholars have made their disagreements known regarding the traditional 4Ps marketing mix model. Fords et al, (1986) pointed out that organisations’ success does not depend only on the effectiveness of the 4Ps marketing mix. They argued that a company success depends also by it establishing a durable relationship with costumers They tried to bring into the marketing mix the theory of customer relationship. Gronroos, (2000) added that the 4Ps marketing mix theory is very limited in usage. In a terse statement, Gummesson wrote that the 4Ps marketing mix strategy is not perfect in satisfying the expectations of the totality of marketing concept. In mentioning, other sectors, Zineldin (1995) argued that the traditional 4Ps marketing mix approach does not render itself useable in the services sector.
In criticising the 4 Ps marketing mix, E. Constantinides (2006), Robins (1991) wrote that the 4Ps principle of marketing mix relates more to the internal elements of the company but lays little emphasis on the external factors like the Competitors, Capabilities, Customers and the Company. Even Kotler (1984) pointed out that external factors like competition and customers environmental variables needed to be part of the marketing strategy.
Despite the criticisms, Vignali (2001) wrote that “For many years the traditional 4Ps model of strategies has been the principle foundations on which a marketing plan is based”.
According to the Economic Times a product is the item produced for sale or consumption. It can also be in the form a service. Product may be in physical or virtual form. A product always has a useful life cycle and end time by which it could be replaced .For a product to be relevant it must have a user, who can either be a primary or secondary or final user. It therefore means a product must be functional for the purposes it is made. It becomes relevant that a product must be of a good quality ( http://economictimes.indiatimes.com)
Since a product has a functional use, it must be communicated to the users detailing its usefulness. A product cannot be communicated without a name; therefore, a product must have a name identity which is known as the brand.
A product can be marketed across national borders. This brings the issue of standardisation or adaptation of a product in order to meet the customers’ needs with a view to fitting into the countries cultural preferences. Standardisation and adaption are part of a product element that helps to make a product meet customers’ needs in cultural preferences
In understanding cultural preferences, Hofstede (1984), wrote that, culture is the totality of collective programming of human’s mind, which help to distinguish members of a category from the other. From this definition, it implies that cultures is a shared patterns of behaviour which identify members belonging to a certain cultural entity while distinguishing the members of another group. The buying of a product is strongly influenced by environmental cultural factors, the consumers’ tastes, their habits and income abilities.
Baalbaki et al, (1993) are of the view that products are amenable to adaptation in foreign markets. They listed the following elements of a product as being amenable to adaptations, namely, the product quality, it features, the design, its packaging, tastes, supporting after sale services, brand identity
Toyota’s products are the first part of its marketing mix. According to Cusumano ( 2011) ( https://prowriterz.com) the success of Toyota products or brands is that they are diverse and meet customers’ requirements and needs.
Toyota supplies the same brand of its products in UK and Saudi Arabia but with adaptations such as in their heating and air cooling control system, capacity sizes due to availability of land parking spaces. What this means is that, Toyota customises its brands according to targets taste and choices in both countries. What Toyota produces and supplies to UK market is more differentiated from what it exports to Saudi Arabia market.
For example, while it produces and supplies UK markets brands fixed with both heating system for winter and also air cooling system for hot summer weather, it only supplies Saudi market with vehicles fitted with air cooling system because Saudi weather is most times very hot. Small and medium vehicles like, AYGO, Yaris, Avensis, Verso, Prius, RAV4 are produced mostly for UK targets because of lack of parking space. Whereas for Saudi market, Toyota exports the popular passenger vehicles like, Tacoma, Highlander, Hilux,FJ Cruiser, Camry, Corolla, Land Cruiser, SUVs. These are big sizes vehicles meant for big parking spaces which Saudi large land expanse can afford,(Toyota SA, 2012) (https://businessresearch123) .
Toyota has made impact in Saudi auto market with its brands. It has dominated the auto market by an estimate of 40 percent. In 2013, it was reported that more than half of vehicles on Saudi’s road were made by Toyota. (www.export.gov/article- Overview-of-Automotive-parts-in-Saudi-Arabia)
Toyota’s product’s in the Marketing mix
Toyota’s pricing strategy must be right, because, if its brands are expensive and out of reach, then the sales will fall. Also on the hand, if the prices are too low and cheap then Toyota will be out of business. Therefore, the price strategy must be right in both UK and Saudi Arabia so that Toyota’s products will sell in each country. The price of the products must be competitive in each country for Toyota to sell well.
Toyota’s automobiles prices differ from each other because they are based on the types of products line, product types or brands. Toyota uses the following strategies to price its automobiles:
- Market-oriented pricing- under this strategy Toyota fixes the prices based on the market conditions. This market conditions encompass the prices of competitors as well. The market orientated pricing strategy is mostly used to price vehicles like the sedan and trucks. The different macro environmental factors that might have played an important role in the market oriented pricing strategy can be the exchange rates, interest rates, taxes, and various other factors like the size of the markets. (https://businessresearch123).
- Value-based pricing- Toyota also adopts the value-based pricing strategy, which depends on customers’ real and perceived value of the product. This pricing strategy is applied to sophisticated, high-end, expensive auto models like Lexus brands.
Because Toyota has a manufacturing plant in UK, both the market orientated pricing and value based pricing strategies are used. This is because of the social cultural environments in UK and constantly expanding economic growth that encourage physical developments. Toyota in UK has its own registered car finance organisation. The flexible credit finance system in UK encourages more Toyota car production and sales in UK, even for second hand brands
The social cultural environment in UK allows both men and women to own and drive cars. The high end sophisticated models can be owned by men and women as their tastes and economic purchasing power dictate. Women are in employment and owned businesses as well like the men, therefore, they earn good income like men and buy and ride expensive automobiles. This justifies the use of value based pricing strategy in UK. So also in UK, single parenthood is not a taboo, hence single mothers can afford to buy sedan models for family use just as men buy for family purposes.
The growing economy in UK makes the demand for trucks to be growing as well. In another word, the market oriented pricing strategy works well in fixing the prices for trucks in UK.
In Saudi Arabia, Toyota tends to adopt more of the value based pricing strategy because of its mode of entrance into Saudi market and also the peculiar prevailing social cultural environment in the country which limits vehicle driving to men alone. Toyota operates in Saudi market through distributorships. This is because of the nature of government in Saudi which is a royal monarchy. Every foreign investment gets approved by the royal authority which leans more to the American influence. From 1945 that Toyota signed distributorship agreement with Saudi Arabia, exports to Saudi were doing well until sales slowed down due to reduced global demand for crude oil as price of oil went down.(www.toyota-global.com)
Because, Toyota does not have a production plant in Saudi, it then means that it is the tastes and perceptions of the customers in Saudi that determine the products that it exports or would sell fast in Saudi country. In most cases it is the sophisticated and expensive models that are in demand. This fact is supported by the knowledge that in Saudi Arabia oil wealth flows around. The men dominate every stratum of the environment and control the oil wealth. The population is not large. The system of government is the Kingship monarchy, which allows the women to be seen and not to be heard. The Islamic religious beliefs also do not encourage women to work nor drive vehicles. The implication of all these is that only masculine preferences determine the Toyota brand that is exported to Saudi market. So it is the rich men that compete and buy the expensive Toyota brands just to show off their wealth.
Because Saudi Arabia is a small country, though economically strong and stable, the physical expansion or developmental programme of the kingdom is not on a scale as one would expect in UK. The land terrain in Saudi consists of also of savannah. It therefore means that the demand for big size Toyota vehicles like Toyota sedan trucks would be in high demand because of rough savannah roads. However, the availability of most of American models in Saudi Arabia affects the demand for Toyota models; therefore, the value oriented pricing strategy works well than the market oriented pricing strategy for Toyota’s brands in Saudi market.
Promotion is a vital part of the marketing mix (Kotler, 2001) (https://businessresearch123). Oldani (2015) (https://prowriterz.com) states that promotion represents the way by which customers get informed about the existence and locations of goods, brands and services. Toyota has different promotional strategies in UK and in Saudi Arabia. The strategies are based on who does the promotion. In UK it is the Toyota company, whereas in Saudi, it is the main appointed distributor that handles the promotion strategies. The area of similarities is that in both countries localised indigenised advertising media are used. TV, bill boards, catalogue, newspapers, test drive offers promotional offers are all adopted in both countries. In UK, Toyota company advertises offer for credit financing, but in Saudi it is the main distributor of Toyota vehicles that organises offers to the customers.Since Toyota exports whole built fully complete autos to Saudi, it falls on the Saudi local distributors to organise their own credit facilities and offers for their customers by themselves. (http://www.toyota.com.sa
Figure 4 Prius has lower emission than a goat (http://www.toyotauk.com)
In UK, the above Toyota advert says Prius car has lower emission than a goat. This is an environmental friendly targeted advert. But, in Saudi it is not a good statement to make at all because it may be considered at Islam. Also environmental issues are not promoted as done in UK.
In Saudi adverts are restricted to men only and it is not so in UK. There are a handful of environmental factors responsible for the restrictions; examples are Islamic religion dictates, social cultural beliefs, government regulations. Religious beliefs play a very opposing force against the promotional adverts in Saudi.
In UK, Toyota can use women and children in their multimedia adverts. However, in Saudi Arabia, it is not allowed because of their cultural and religious beliefs that women should not expose themselves to the public. In essence, masculinity is encouraged in Saudi media as against liberalisation in UK where women are encouraged to participate in media adverts as well as men.
Toyota also promotes its products in UK by organising public visitation programme.
By this strategy the members of the public, customers and business organisations are allowed to visit the plants to learn about Toyota’s operations and the culture. (www.toyotauk.com)
Toyota main distributor in Saudi Arabia, Abdul Latif Jameel, organises periodic campaign for the various imported Toyota brands in the region,(www.toyota.com.sa/offers)
As a form of disguised promotion, Toyota UK has set up a Charitable Trust through which it performs social responsibilities by contributing to local community programmes. So far it has spent more £5.5 million contributions towards various local charitable causes,(www.toyotauk.com/the-toyota-charitable-trust).
In Saudi Arabia Toyota does not operate a charitable Trust because it uses export distributors to sell it products.
Place as part of the marketing mix refers to how a product will get to the ultimate consumer. Therefore, place is about distribution of company’s product. According to Austin (1990), physical access to company’s products or services remains a key challenge for both consumers and the producing company. The product of a company determines how it would be distributed.
Place equally means how a company’s product is purchased and where it is sold. This movement could be through a combination of channels like wholesalers or distributors. In present day of advanced technology, internet marketing has come to play a vital role in distribution of products to the consumers.
When Place is right, it will help a company to increase its sales and achieve a large share of the market. It will also help a company to reach the target customers on time. Storage and transporting of goods are facilitated by effective Placement strategy of a company.
Placement of goods can be done either by selling directly to the customers. This is known as direct distribution. An advantage of selling directly to consumers is that it enables the company to have a close contact with the customers and to also have personal experience of the market. The interaction with the customers and feel of the market helps the company to quickly make changes to their marketing strategy. Further advantage of direct selling to customers is that it enables companies to effectively control the products pricing process and distribution methods. Direct selling can take the form of door to door, factory site sales, retailing, electronic commerce or mail order.
Placement or distribution can also take the form of selling products through intermediaries like retailers or wholesalers. This method of distribution enables a company’s product to get to a wider market. Another advantage of using this placement strategy is that the problem of storage is reduced for the manufacturer. Also the cost and pressure of managing a distribution system are minimised. However, there are some disadvantages in using intermediaries. One is that the company looses personal contact with the ultimate consumer. Also, the intermediary may require that the product is sold with their own brand name, as a result of this the company tends to loose its identity. This certainly will not be good for a new product trying to enter the market.
Figure 5 https://2012books.lardbucket.org
A company may decide to sharpen its distribution strategy by adopting one of the following strategies: (1) selective distribution (2) Intensive distribution (3) exclusive distribution.
The selective distribution helps a company to enables the company reach only selected customers. This strategy is good for sale of high quality items. Adopting this strategy helps a company to set up and build relationships with the customers.
The Intensive distribution strategy enables a company to reach and cover very wide market areas. It helps a company to achieve a nationwide or global coverage with it’s products. Multi National Corporations (NCs) tend to adopt this distribution strategy.
The Exclusive distribution strategy makes a company to limit the sale of its products to particular or chosen intermediary. The intermediary will then have the sole or exclusive rights to sell to the consumers. This strategy is suitable for specialised or prestigious products.
In UK, Toyota has set up a different company called Toyota (GB) PLC in Epsom, Surrey, to handle its national sales and marketing, after sales and customer relations. From the national office in UK, Toyota sells directly to customers and also supplies to local retailers. From the above facts, Toyota seems to have adopt the both direct and indirect sales strategy.(http://media.toyota.co.uk) Apart from adopting the direct and indirect sales strategies, Toyota also employs the Intensive distribution strategy to enable its products reach and cover very wide market areas in UK. This has helped it to establish a brand name and achieve a nationwide coverage with its products.
In Saudi Arabia Toyota seems to have adopted an indirect sale and exclusive distribution strategy because it only exports full complete built vehicles to its main distributor in the country- Abdul Latif Jeemel. The main distributor in Saudi is responsible for the national sales, marketing, distribution, after sales and customer relations of the imported brands
Recommendation for Improvements:
Toyota can improve its marketing strategies by making inlet into a separate target segment. What is being recommended is that Toyota can establish target segments for high net worth customers or wealthy customers. The strategy will involve producing specially and privately designed brands for unique customers only. It is apparently noted that the market for expensive cars in Saudi Arabia and UK is increasing as the rich class is increasing as well. This class of targets likes to distinguish themselves by the type of automobiles they use. If Toyota designs a marketing strategy for them it would pay off well for Toyota. This idea will also help Toyota to increase its brands diversification thereby adding more to its customers long list. This recommended high net worth segment will add to its profit margins. By further implication of this recommendation, Toyota will be meeting the needs of local clients or local customers in local markets.(Lowe, Doole, 2008) (https://businessresearch123.wordpress)
Finally, Toyota will also be able to add to its achievements if it invests massively into electric cars and driverless cars innovation so that it can enlist the interest of new customers that are hungry for innovations. This increasing age of technological advancement calls for forward looking investments in automobile innovations. Toyota will gain an advantageous competitive edge over its rivals in the automobiles market.
Toyota’s differentiation strategies have helped it to produce brands that are different from the rivals’ brands in UK and Saudi Arabia markets. It has given Toyota an advantage over it rivals prices and sales figures(https://businessresearch123)
Toyota’s marketing strategies have been helpful in that it has enabled Toyota to secure its own market share, since it is able to supply brands that meet customers’ tastes and requirements. Toyota’s marketing goals in UK and Saudi Arabia are accomplished as a result of unique and separate marketing strategies used in different geographical locations (www.Toyota, 2012) (https://businessresearch123).
Looking at Ford which attempts to sell similar brands worldwide, it brought itself disappointment and losses. (Ford, 2012) (https://businessresearch123), Toyota did not fall into that trap because of its customer focus marketing strategies. The implication of this analysis is that one fit all strategy used by Ford globally for all global different markets cannot work as it would not meet all the customers’ needs nor tastes. Therefore, the marketing strategy of an organisation ought to be laid out to meet the geographical local market.
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