MARKETING STRATEGY
INTRODUCTION2PART 1: Situation analysis: Customer analysis and
target market2 Competitor analysis4 Industry analysis5 SWOT
analysis8 Recommendation10PART 2: Marketing plan: Marketing
objectives10 Marketing mix strategies11 Action programs -
timeline12CONCLUSION13REFERENCES14APPENDIX16
Analysis and evaluation of Toyotas Marketing Strategy
AbstractThis report is made based on the Toyota Motor Vietnam
Company, an international company with many years of working in
different countries. This report aims to identify the strengths,
weaknesses, opportunities and challenges faced by Toyota Vietnam in
business. Since then, the company can choose the marketing
strategy, media targeting the market segment in Vietnam. In
addition, said the report also explains the influence of cultural,
social, political and economic with Toyota's business activities
and along with suggestions for improving and developing business
activities in Vietnam. The problem that managers face is always a
hot topic in the business of Toyota Vietnam.
IntroductionToday, Toyota's automotive industry is growing
rapidly in many countries around the world. Under the development,
Toyota becomes one of the largest manufacturers in the world. Only
in July 2012, the company has produced 200 million vehicles. In
addition, Toyota's automotive industry in Vietnam has considerable
achievements as production capacity is 36,500 vehicles/year/2
working shifts, over 1,600 employees This shows the remarkable
development of Toyota in Vietnam. However, during the world
economic crisis, Toyota Vietnam is facing many problems need to be
addressed. The following report below will look at the factors
affecting the company's business activities. From there, make
suggestions on marketing strategy to overcome, limiting the impact
of the world economic crisis for Toyota Vietnam.
Part 1: Situational analysis:Customer analysis:Demand trends:For
many countries in the world, the rate of car use in Vietnam is
still low. However, with the continuous development of economy and
with a young population structure, Vietnam is considered the large
consumer market in the future. In addition, the demand of using
automobiles in Vietnam is very diverse. The vehicles on the market
today are abundant with many different models and many different
brands such as Mercedes, Audi, BMW, Lifan, Chery... In January
2013, sales of Vietnam car market reached 8989, up 50% compared to
the same period last year. Information above shows that even though
the per capita income in Vietnam is still low compared to many
countries in the world but there is a high demand trends for
personal automobile use.
Buying pattern:For a majority of people, a car fit the economy
is extremely important. A car with the average selling price is
always the center of attention of many people. These models are not
only affordable prices but also have advanced technology, low
operating costs and trendy. However, for those with high income, an
expensive luxury car is what they are looking for. Therefore, the
cars in Vietnam is also divided into 2 different cars are luxury
cars and ordinary car.
Potential consumers:In theory, per capita income in Vietnam is
not high and this proves this is not the big car market to can meet
the expectations of automakers. Another cause of curbing the car
market in Vietnam that is by infrastructure and tax policy of the
state. These are the barriers created pressure on consumers.
However, Vietnam is the country with a large population and a young
population structure. Most Vietnamese people want to have their own
car, especially those with middle-income and high-income. In the
future, the policy of the state to overcome the transport,
infrastructure and policies to support the automotive industry will
help Vietnam become a major auto market. In other words, potential
consumers in Vietnam in the future are highly. This is also the
main reason why Toyota decided to invest in Vietnam market.
Segmentation Targeting & Positioning Market Segmentation: At
Vietnam market, the product of Toyota focusing on the market
segment of medium and high level, this market include those with
middle income and high finance who want to get comfort in moving.
The popular products of Toyota on the market include Camry,
Corolla, Inova, Fortuner, Hiace and Yaris. Each product of Toyota
carries a unique style and fit on the intended use of the consumer.
At Vietnam, Toyota focuses mainly on demographic segmentation.
Target Marketing: In this report, potential customers of Toyota
are people with middle income and high income. These people usually
work in the field of business and often move to work with their
business partners. In addition, they are also having the trips with
family in the weekend. In Vietnam, to create own style and express
themselves, they are willing to spend a large sum of money to buy
themselves a personal car.
Positioning Strategy: Toyota is one of the pioneers companies in
the establishment of car assembly facility in Vietnam. From past to
now, Toyota always get high market share in the cheap automotive
industry in Vietnam. However, to further improve the market share
compared to other competitors, Toyota has stepped into the luxury
car segment with the brand Lenus. Initially, they will price their
products cheaper than competitors to participate in the market.
Then, they create a difference by helping consumers can test their
products at the showroom. The positioning strategy of Toyota aimed
at car manufacturers of Mercedes and BMW, the line luxury car get
high market share in Vietnam.
Competitor analysis:Vietnam market is a potential market for the
automotive industry. This explains why Vietnam has more car
manufacturers in the world join to market. After Vietnam joined the
WTO, the competition is increasing in the market. Currently, Toyota
has both direct competitors in the domestic and foreign.There are
three big companies direct competitions with Toyota are:Honda
Motors CompanyKIA Motors CompanyFord Motors CompanyHonda has been
present in Vietnam for over 10 years and has constantly strive to
get great trust from consumers Vietnam. For the motorcycle in
Vietnam, Honda makes up 90% in major cities. In March 2005, Honda
officially established automobile factory in Vietnam, the plant has
a capacity of 10,000 / year. The current cars of Honda on the
market include Civic, CR-V and Accord.(http://www.honda.com.vn)
KIA Motors Company was founded in 1944, is the first automobile
manufacturer at Korea. KIA is a member of the Hyundai-Kia, Hyundai
ranked fifth in the world in the number of vehicles sold in the
market in 2008. Kia is one of the car manufacturers have the
world's fastest growth rate. KIA has 13 manufacturing factory and
assembly of automobiles in 8 different countries including Vietnam
with an annual capacity of up to 1.5 million vehicles. Some of the
popular products of KIA in the world are Cerato, Rio, Carens,
Sportage, Morning, Sorento,
Carnival.(http://www.truonghaiauto.com.vn)
Ford Vietnam was founded in 1995 and opened assembly plants at
the Hai Duong province. Two years later in the month 11/1997, the
plant capacity has been achieved 14,000 cars per year with six
product lines are Transit, Ranger, Escape, Mondeo, Everest and
Focus. With over 100 years of operating on the international market
and 10 years in the Vietnam market. Ford Vietnam has grown
continuously from the 7th position on the market when company
started operations in Vietnam in 1997, Ford Vietnam has rapidly
developed and at the end of 2004, Ford Vietnam was ranked second in
the market with 14% of market share.(http://www.ford.com.vn)
Industrial analysis:PESTLE:PESTEL is a method of analyzing the
elements of the business environment. This is an essential tool for
operating and strategic planning for the Toyota Company. Political
- Legal Factors:In the context of the economic crisis in many
countries around the world include Vietnam. Each countrys
government has carried out policies to recovery, protecting and
stimulating the important industry including automotive industry.
Toyota has influenced and has trouble in the global financial
crisis. Because of this, they had to ask for a loan of about $2
billion dollars from the Japanese government. Loans from government
policies can support the car companies survive in difficult times
of financial crisis. In addition, with the export policies, Toyota
will get more incentives from the Japanese government.About
political, diplomatic relations between Japan and Vietnam is very
good. This relationship is the basis for the success of all the
business in Vietnam has FDI of Japanese such as Toyota. In
addition, tax policy also supports Toyota development in Vietnam.
For example: According Law on Domestic Investment Promotion (1995),
corporate income tax exemption or reduction in some years after its
establishment company in Vietnam. Import duty on cars components
for the domestic automotive assembly much lower with import duty on
automobiles. Government supports infrastructure, land for foreign
businesses investing in Vietnam. Government has establishment of
funds to support and encourage investment in Vietnam in the medium
and long term. Toyota has captured these advantages to become the
first car company to invest in Vietnam.In addition, the nations of
the world in general and Vietnam in particular also have legal
policies to protect the interests of domestic automobile companies.
At Vietnam, protection policy is the policy brings many benefits
for Toyota. One of the most obvious manifestations of the policy is
the customs barriers against with imported automobiles. For
example: Before January 1/1999, imported cars are taxed 155% (55%
import duty, 100% excise tax), after this time shall be banned from
import, taxable in 2004 up to 180% (excluding value added tax). As
a result, competition in the Vietnam market is very weak. The price
of cars assembled in Vietnam will not be affected by the
relationship between supply and demand. In such environment, Toyota
has possible long-term investment in Vietnam.
Economic Factors:Toyota joined Vietnam with the aim of looking
for new markets. According to a report Finnish advisory group
Global Intelligence Alliance (GIA), Vietnam ranked 3rd in top
non-BRIC emerging markets - for the 2012 2017 periods. Vietnam has
a total GDP about US$ 135.411 billion (2011 estimate), surpassed
the per capita income of low-income groups of countries. Vietnam is
among the countries with the domestic market leading growth in the
world, an economy with high growth in world trade transactions with
total exports is US$72.03 billion f.o.b. (2010 estimate) and total
imports is US$79.37 billion f.o.b. (2008 estimate). In addition,
Vietnam has the trust of many countries in the world. This is
reflected by the amount of funding (ODA pledges 7.905 billion USD
for Vietnam in 2011) in world economic crisis. These criteria and
the numbers above is a reasonable basis to Toyota to invest in
Vietnam.
Social Factors:Vietnam has a population of over 85 million
people has always been the country to attract foreign investment.
Along with a large consumer market, high social needs, this is also
a young market with abundant human resources. Social Vietnam tends
to learn new things, improving education. From that, labor quality
has improved and development. Low cost of human resources explains
the increase of FDI in Vietnam automotive industry. Toyota has
always regarded the market as a factor affecting the
characteristics of the product. A multi-national company such as
Toyota always needs the product diversity and prices to suit the
culture and society of each place.
Technology Factors:Toyota also benefited from the policy of
research and technological development of the Japanese.
Furthermore, the technological research cooperation between
government and the business was always supported. Thus,
environmental science and technology research in the country have
created favorable conditions for development of Toyota. The world's
automotive industry in general and Vietnam in particular are always
strongly affected by technology. This forced Toyota Vietnam to
constantly self-study and application of modern technologies in the
production. The development and change constantly help Toyota get
leading position in Vietnam and have trust from consumers.
Environmental Factors:Environmental factors include weather,
geography, tsunamis, earthquakes, volcanoes and all the natural
conditions in the territory of each country. If Toyota interested
in the environment in production activities and create
environmentally friendly products will bring trust and support from
consumers.For example: According Toyota's Initiatives on the
Environment: Establishing a low-carbon society Establishing a
recycling-based society Environmental protection and establishing a
society in harmony with nature
Analyzing the external environment (PESTLE) helped identify
advantages and difficulties from Political, Legal, Social,
Technology and Environmental around Toyota Company at Vietnam.
Since then, applying the strengths, opportunities to grow and avoid
the risks and threats from external environment. External
environmental factors impact to business operations of Toyota.
Toyota Vietnam should to regularly update, change and planning
long-term strategies to overcome and minimize the impact from the
external environmental. This helps Toyota Vietnam can maintain
market share in the market and increase development in the
future.
SWOTCorporate appraisal (SWOT) is a methodology to identifying
the strengths, weaknesses, opportunities and threats in the
automotive industry. Since then, Toyota can make decisions and
develop marketing strategies. Based on the SWOT analysis, Toyota
can develop their strengths, looking for opportunities as well as
overcome the weaknesses and avoid threats.STRENGTHSWEAKNESSES
Toyota Vietnam is the first company implementation of the
localization process in Vietnam. Prestigious brand image and high
quality Toyota Vietnam at the forefront of the opening of the first
automobile assembly plant in Vietnam. Strengths of Toyota is
producing high-quality cars and affordable. The system distribution
network product all over the country. Consumers can easily search
for the spare parts of Toyota at Vietnam. The law at Vietnam
applicable to the industry has many loopholes cause difficulties
for automotive businesses in general and Toyota in particular.
Toyota Vietnam has not yet established the channels of information
systems needed to support internal systems within the company as
well as with customers and dealers. Some issues about the quality
of products cause loss in consumer confidence as motor vehicle
rust, unpleasant smell when motor get high speed. The government
not yet provides consistent policy and encourage automobile
industry development at Vietnam.
OPPORTUNITIESTHREATS
Market competition in Vietnam is very weak by protectionist
policies. According to the plan, by 2020, the automobile industry
in Vietnam will become an important sector of the country Toyota
quickly develop environmentally friendly cars. This is in
accordance with social needs. Vietnam joined the WTO is a positive
sign signaling a market development and more opportunities in
Vietnam. Toyota under pressure from other brands and the imported
cars when Vietnam joined the WTO. Toyota's market share in Vietnam
market will also divide to other brands and the imported cars. Car
faulty cause loss of consumer confidence in Vietnam. In 2012,
Toyota recalls 5,300 cars to fix power window problem. Vietnam
consumers tend to use the products and models from other brands
instead of Toyota.
Recommendations: Toyota should focus on the study of the market,
frequently offering new products to attract and meet the consumers
needs. Toyota needs to improve product quality, fix errors in the
production process. In addition, staff and sales service system
also should be improved to enhance reputation with consumers.
Toyota also should pay attention to the environment, to promote the
development of environmentally friendly products. In addition,
Toyota will also need join participate in social activities at
Vietnam. This is a solid direction for future of Toyota Motor
Vietnam.
Part 2: Marketing planMarketing objectives:The objectives of
Toyota in the next 12 months are based on SMART objectives
(Specific, Measurable, Achievable or Agreed, Realistic and
Time-related). According to the situational analysis of Toyota
Vietnam, there are three objectives need to achievement. Objective
1: Increase brand awareness among 90% of potential customers of
Toyota in the first 6 months.
Objective 2: Increase retail sale in Vietnam market up to 20%
within next 6 months. Objective 3: Increase the market share added
10% by the end of year.
The objectives above are clear, specific and measurable. In
addition, these goals are realistic objectives because Toyota is a
big company and the oldest at Vietnam in the automotive industry.
They are eligible and resources to achieve these objectives. With
the growing economic situation in Vietnam and with Toyota Company
resources, these goals can fully completed within one year.
However, Toyota needs the specific scheduling to monitor and ensure
the implementation of the plan. An effective strategy will help
Toyota achieve these objectives.
Marketing mix for Toyota:An effective strategy is often built on
the basis of the marketing mix: Product, Price, Place, and
Promotion. Product: Toyota in Vietnam is known as a low-cost car.
The products of Toyota also are diverse and rich in variety and
style. However, to develop and improve market share in Vietnam,
Toyota should have a plan to develop the product line to use clean
fuel (Butanol fuel, Ethanol fuel) for middle-income and
high-income. It means that the current products instead of using
petrol and polluting the environment, Toyota will develop the
product line to use clean fuel and do not pollute the environment,
create a new trend in the market.
Price: Pricing strategy is an important strategy when Toyota
wants to implement marketing plans. With new products and
environmentally friendly, Toyota should offer a reasonable price
and in accordance with the consumer. This price should not be set
too high, a low price will help the product quickly participate to
the market and take back market share. This will help to Toyota
customers have a good look with the company, the high quality
products but prices are consistent with the consumer.
Place: In Vietnam, along with the retail branch of Toyota,
Toyota also needs to set up the showroom so that the consumer can
directly test the company's products. This helps shorten the
distance between the consumer and the company, create shopping
habits of customers in Vietnam when come to Toyota. In addition,
company can display their products at major trade center at Vietnam
such as Vincom, Nowzone, Diamond... The diversity of distribution
channels will help products easily exposed with consumers.
Promotion: Toyota should regularly hold exhibition and display
products. In addition, the company can invite a number of
celebrities to promote new products for company such as Cristiano
Ronaldo and Messi come to Vietnam. Product images associated with
these famous people will help the company to quickly dominate the
market. In addition, the campaign marketing on mass media such as
television, internet, newspapers... will also bring high
efficiency. Finally, Toyota needs to set up the channels of
information systems, the service to support consumers and show the
company's warranty program. This will help build customer loyalty
with Toyota.
Action programsTo achieve the objectives set out, company should
perform the following steps:1) Improve the quality of current
production systems plant2) Improving the quality of human
resources3) Expand product distribution channels
ConclusionAt Vietnam market, Toyota has still always been a
great brand and get high market share in the automotive industry.
But now, due to government policies and developing economies has
make appeared many competitors in the market. So Toyota is facing
many difficulties in developing. This report includes a number of
proposals in the marketing strategy to help Toyota increase market
share in Vietnam and confirmed their place in the future.
References
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APPENDIX:
Marketing mix (4P)
16