SHIVAM Project

8/8/2019 SHIVAM Project

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A PROJECT REPORT

ON

STUDY OF MARKETING STRATEGIES OF

SUBMITTED IN PARTIAL FULFILLMENT

OF THE 3 YEAR COURSE OF BACHELOR OF BUSINESS ADMINISTRATION

(2009-2010)

SUBMITTED TO: SUBMITTED BY:

MR. DEEPAK LALCHANDANI SHIVAM PATHANIA

LECTURER ROLL NO: 0851921708

BBA DEPT BBA III SEMESTER

LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT & SCIENCES

AFFILIATED TO

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY


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CERTIFICATEThis is to certify that Mr. SHIVAM has successfully undertaken the

project entitled Marketing Strategies of TOYOTA under my

guidance.

This is his original work and he has completed this project with full

commitment and enthusiasm.

I wish to him all the best in his endeavors ahead.

MR. DEEPAK LALCHANDANI

(PROJECT INCHARGE)


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ACKNOWLEDGEMENT

I would like to thank Toyota Motors Corporation, for constant guidance

to conduct the present arduous project and untiring cooperation which

he extended to me throughout the duration of my summer training.

I am thankful to Mr. Deepak Lalchandani for allowing me to do

summer training and for this constructive intervention and

encouragement.

My special thanks are for those who spared time for providing

information and responding to the questionnaire.

SHIVAM

ROLL NO: 0851921708


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TABLE OF CONTENTSCONTENTS P.NO

CHAPTER 1: - EXECUTIVE SUMMARY 6

CHAPTER 2: - COMPANY PROFILE

CAR MODELS 9-10 OVERVIEW 11 CORPORATE DATA 12 GUIDING PRINCIPLES 13 PERCEPTS 14 BOARD OF DIRECTORS 15-16 LOCATION 17 MANUFACTURING SUBSIDIARIES & AFFILIATES 18-21 GROWTH 22 MARKET SHARE 23 COMPETITORS 24

CHAPTER 3: - MARKETING STRATEGIES 25-33

PRODUCTS PRICE CUSTOMER SATISFACTION

CHAPTER 4: - RESEARCH METHODOLOGY

OBJECTIVE 38 TYPE OF DATA 39 SAMPLE SIZE AND AREAS COVERED 39 STATISTICAL AND PRESENTATION TOOLS USED 40 LIMITATIONS OF STUDY 40

CHAPTER 5: - FINDINGS AND ANALYSIS 41-44

ANALYSIS BASED ON QUESTIONNAIRE 45-54CHAPTER 6: - CONCLUSION & RECOMMENDATIONS 55-56

CHAPTER 7: - ANNEXURE 57-60

SAMPLE QUESTIONNAIRE BIBLIOGRAPHY


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

EXECUTIVE SUMMARY


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The story of Toyota Motor Corporation began in September 1933 when Toyoda

Automatic Loom created a new division devoted to the production of automobiles

under the direction of the founder's son, Kiichiro Toyoda. Soon thereafter, the

division produced its first Type A Engine in 1934, 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.

Although the Toyota Group is most well known today for its cars, it is still in the

textile business and still makes automatic looms (fully computerized, of course), and

electric sewing machines which are available worldwide.

Toyota Motor Co. was established as an independent company in 1937. Although

the founding family name is Toyoda, the company name was changed to:

Signify the separation of the founders' work life from home life;

Simplify the pronunciation, and

Give the company an auspicious beginning. Toyota is considered luckier thanToyoda in Japan, where eight is regarded as a lucky number, and eight is the

number of strokes it takes to write Toyota in Katakana.

During the Pacific War the company was dedicated to truck production for the

Imperial Army. Because of severe shortages in Japan, military trucks were kept as

simple as possible. For example, the trucks had only one headlight on the center of

the hood.

Commercial passenger car production started in 1947 with the model SA. In 1950 aseparate sales company Toyota Motor Sales Co. was established (which lasted until

July 1982). In April 1956 the Toyopet dealer chain was established.


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COMPANY PROFILE

The Headquarters of Toyota in Toyota City, Japan


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ASSEMBLY PLANTS OVER THE WORLD

Toyota has factories all over the world, manufacturing or assembling vehicles for

local markets, including its most popular model, the Corolla. Toyota has

manufacturing or assembly plants in the United States, Australia, Canada,

Indonesia, Poland, South Africa, Turkey, the United Kingdom, France, Brazil, and

more recently India, Argentina and Czech Republic. Toyota also builds and sells

cars in China in a joint venture with Tianjin Xiali. Toyota New Zealand assembled

vehicles until 1998, when it switched to importing cars from Japan and Australia.

Cars from these plants are often exported to other countries.


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Toyota Car Models:

Innova

Camry

Avalon

Matrix

Corolla

Prius


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Trucks:

Tacoma

Tundra

Vans:

4runner

Land cruiser


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Overview

In 2006, Toyota was engaged in a variety of projects designed to solidify its

foundations while continuing to grow.

On the product front, Lexus launched its new flagship model, the LS, and the new

global Camry went on sale. In Japan, a new Corolla range was introduced,

emphasizing the importance of this best-selling car.

In manufacturing, several new projects were started around the world. In May,

manufacture of the Camry began in Guangzhou, China, while in the United States,

the Kentucky plant, which in

October celebrated 20 years of production, started manufacturing the first Toyota

hybrid vehicle to be made in North America, the Camry Hybrid. In November, the

Texas plant began producing the new Tundra truck, a key vehicle in Toyotas NorthAmerican lineup. In Japan, Toyota Motor Kyushu, Inc. began full-scale operations

at its engine factory, while Toyota Motor Tohoku Co., Ltd. increased its

manufacturing capacity.

In human resources development, following the establishment of the Asia Pacific

Global Production Center in Thailand in August 2005, Toyota established the North

American Production Center in the U.S. in February, and the European Global

Production Center in the United Kingdom in March. Established as branches of the

Global Production Center in Japan, these were created to spread Toyotas

manufacturing knowledge and skills throughout the world in pace with the rapid

growth of Toyotas overseas manufacturing. The centers educate trainers for localmanufacturing plants in all regions, with trainees passing on what they learn to

team members on their return to their plants.

In R&D, Toyota focused its efforts on three key areas: environment, safety and

energy. It made a special effort in the area of the environment by expanding its

lineup of hybrid vehicles, and has worked on R&D relating to plug-in hybrid. In

addition, as part of Toyotas efforts to respond to the diversification of energy, in

2007 Toyota plans to introduce a flex fuel vehicle* in the Brazilian market that will

run on 100% bio-ethanol fuel. From this point on, based on the philosophy ofproviding the right car, in the right place, at the right time, and in accordance

with the infrastructure and customer needs of each region, Toyota will continue to

promote efforts to develop environmentally friendly technology and vehicles.


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Corporate Data

Since its foundation, Toyota has conducted business with contributing to the

development of a prosperous society through the manufacture of automobiles as

a guiding principle. When I became president two years ago, I called on all

employees to work with me in returning to our origins and asking earnestly

whether Toyota is truly contributing to society and whether we are doing

everything we should be doing. On the occasion of Toyotas 70th anniversary, we

will reinforce our measures designed to return to our core principle, which is to

"repay the earth and society through technological innovation (and contribute to

enhancing the quality of life everywhere

Company Name Toyota Motor Corporation

Head Office 1 Toyota-Cho, Toyota City, Aichi Prefecture 471-8571,

Japan

Phone: (0565)28-2121

Tokyo Head

Office

1-4-18 Koraku, Bunkyo-ku, Tokyo 112-8701, Japan

Phone: (03)3817-7111

Nagoya Office 4-7-1 Meieki, Nakamura-ku, Nagoya City, Aichi

Prefecture 450-8711, Japan

Phone: (052)552-2111

Establishment August 28, 1937


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Guiding Principles

Honor the language and spirit of the law of every nation and undertake open and fair corporateactivities to be a good corporate citizen of the world.

Respect the culture and customs of every nation and contribute to economic and socialdevelopment through corporate activities in the communities.

Dedicate ourselves to providing clean and safe products and to enhancing the quality of lifeeverywhere through all our activities.

Create and develop advanced technologies and provide outstanding products and services thatfulfill the needs of customers worldwide.

Foster a corporate culture that enhances individual creativity and teamwork value, whilehonoring mutual trust and respect between labor and management.

Pursue growth in harmony with the global community through innovative management. Work with business partners in research and creation to achieve stable, long-term growth and

mutual benefits, while keeping ourselves open to new partnerships.


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Toyota Percepts

Be contributive to the development and welfare of the country by workingtogether, regardless of position, in faithfully fulfilling your duties.

Be at the vanguard of the times through endless creativity, inquisitivenessand pursuit of improvement.

Be practical and avoid frivolity.

Be kind and generous; strive to create a warm, homelike atmosphere.

Be reverent, and show gratitude for things great and small in thought anddeed.


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Board of Directors

Chairman and

Representative Director

Fujio Cho

Vice Chairman and


Katsuhiro Nakagawa

President and Representative

Director

Katsuaki Watanabe

Executive Vice President and


Tokuichi Uranishi

Kazuo Okamoto

Kyoji Sasazu

Mitsuo Kinoshita

Takeshi Uchiyamada

Masatami Takimoto

Akio Toyoda

Senior Managing Director Yukitoshi Funo

Takeshi Suzuki

Atsushi Niimi

Hiroshi Takada

Teiji Tachibana

Shinichi Sasaki

Akira Okabe

Yoichiro Ichimaru

Shoji Ikawa

Koichi Ina


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Takeshi Yoshida

Shinzo Kobuki

Akira Sasaki

Hiroshi Kawakami

Tadashi Arashima

Mamoru Furuhashi

Satoshi Ozawa

Honorary Chairman Shoichiro Toyoda

Senior Advisor Hiroshi Okuda


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Locations of Toyota Facilities


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Toyota Manufacturing Subsidiaries and

Affiliates

Main products Start ofoperations

Toyota Motor Kyushu, Inc.

Harrier, Harrier Hybrid,

Kluger, Kluger Hybrid, IS,

ES

Toyota Motor Hokkaido, Inc.

Transmissions, transfers,

aluminum wheels, drivetrain

parts, etc.

Toyota Motor Tohoku Co.,

Ltd.

Mechanical and electronic

parts

Toyota Auto Body Co.,Ltd.

Hiace, Liteace, Voxy, Noah,

Estima, Prius, Land Cruiser,

Alphard, Ipsum, Townace,

Regiusace, Coaster, Estima

Hybrid, Alphard Hybrid,

LX470

Kanto Auto Works, Ltd.

Century, Crown, Corolla

Spacio, Corolla Fielder, Isis,

Belta, SC, Auris, BLADE

Central Motor Co., Ltd.Raum, MR-S, Scion xB,Corolla Axio, Corolla

hatchbacks

Gifu Auto Body Industry

Co., Ltd.Hiace

Daihatsu Motor,Co., Ltd.Rush, Passo, Probox, Succeed,

bB, Porte, SIENTA


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Toyota Today

Supporting Spirit of Athletics

Toyota continued its support of the ideals and spirit embodied in athletics by

becoming, for the third time since 2003, the Official Partner to the 11th IAAF

World Championships in Athletics, held in Osaka, Japan, August 25th-September

2nd. Through the sponsorship and a global advertising campaign with the

tagline,"Beyond Limits," Toyota aims to communicate its support for athletes who,

like Toyota, continually push themselves further in pursuit of the ultimate goal.

Apart from providing a fleet of 220 cars for use as official vehicles at this year's

championships,Toyota also supported a program to encourage new world records

for women's events by becoming the official women's bib sponsor.

Toyotas First FFV

Toyota do Brasil LTDA. (TDB) launched Toyota's first-ever flex fuel vehicle (FFV),

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

ceremony at its Indaiatuba Plant in So Paulo on May 29th. Representing Toyota's

commitment to developing environmental technologies, the locally produced Corolla

Flex and Corolla Fielder Flex are the first marketed Toyota models that can run on

100% bioethanol. The introduction of the two models in Brazil, where bioethanol is

widely used as fuel and FFVs represent 83% of newly registered vehicles in themarket, firmly demonstrates Toyota's belief in listening to its customers. In the first

semester of the year, Toyota accounted for almost 33,000 of the more than one

million vehicles sold in Brazil during that period.


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Island Adventure

Members of the Philippine motoring press had a wet and wild time at the Toyota

Road Trek 3, held May 31st-June 3rd in the archipelago's central islands. Bringing

media representatives to a variety of well-known destinations across the country, theannual road trip is conducted by Toyota Motor Philippines Corp. to demonstrate

the toughness and versatility of its IMVs. This year, the event took over 40

participants on an island-hopping adventure, enabling them to fully test the

exceptional capabilities of the Innova, Fortuner and Hilux vehicles.

A series of competitive, water-related activities made it a truly challenging and fun

trip that encouraged teamwork, camaraderie and friendship among all attendees.

The event was prominently featured in major newspapers and magazines, further

boosting the popularity of IMVs in the market.

A Way to Learn Road Safety

Dedicated to promoting activities that help minimize traffic accidents in Pakistan,

Indus Motor Company Limited (IMC) in January launched a Toyota School Road

Safety Program. Through music concerts, skits by clowns and quizzes in schools, the

pilot program aims to educate children about road safety in a fun and memorable

way. Twenty schools in Karachi and around 18,000 children have already benefited

from the program, which is part of IMC's comprehensive corporate social

responsibility initiative with the slogan, "Concern Beyond Cars." IMC looks to

expand the program to other schools in Karachi and later to other cities, given theoverwhelming response from the children and parents who have so far participated.

Crown Bamboo Concert

As part of its 2007 campaign for the Crown with the theme, "Playing out your life

with intelligence," FAW Toyota Motor Sales Co., Ltd. held its Crown BambooConcert at the famous Anji bamboo forest in Zhejiang province, China, on August

18th. The classical music concert successfully communicated the flagship model's

philosophy of harmony to the guests present, and was extensively featured in

various media across China.

Dreaming about Future


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Toyota Motor Corporation got a glimpse of the future through the eyes of children

across Asia and China when it held the Dream Car Art Contest from October to

January. Giving school students aged 15 years and younger the exciting challenge of

drawing their ideal car, the annual contest generated greater awareness of the

Toyota brand in the region. By means of a website, ads in Reader's Digestmagazine

and promotions at local dealerships, Toyota successfully raised public consciousnessabout the contest, drawing over 20,000 entries from 12 countries - an eightfold

increase from the number of designs submitted at the first contest in 2004.

Toyota Turns 40

Toyota AG (TAG), Toyota's distributor in Switzerland, celebrates its 40th

anniversary with year-long promotions and a series of activities for its customers

and partners. Kicking off its commemorative year with an elaborate Auris media

launch on February 16th, TAG has since initiated a comprehensive advertising

campaign that creates awareness of its special promotion packages for customers aswell as Toyota's successful history in Switzerland. In March, a birthday gala dinner

for 900 associates, dealers and partners served to thank everyone within the TAG

Family for their support and encouragement throughout the distributor's four

decades in the country.


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Growth of Toyota

Lasting growth for Toyota will depend on aligning our interests with the larger

interests of customers and the community. We must be a company where people

think seriously about the role and responsibility of their company in the world.

Our economic and industrial contribution in each region grows, for example, as we

globalize our operations. Another way to align our interests with the larger interests

of the community is through technology.

By the end of 1997, we will introduce the world's first new-energy transport that is

commercially competitive with conventional automobiles. That is when we will put a

hybrid-electric passenger car onto the market in Japan. Our hybrid-electric car will

have a gasoline engine to generate electricity or provide supplementary power to the

wheels. It is twice as fuel-efficient as conventionally powered vehicles of comparablesize and performance. Equally important, the value of its potential fuel savings

could prove greater than its cost premium over conventional vehicles. So, it actually

could save money for car owners.

Survival and growth in our industry will hinge on developing technologies for

reducing environmental impact of our products and operations, as well as

improving vehicular safety. Photos and text on the following pages introduce some

of the technologies we are developing to position Toyota as an environmental leader.

Priorities for Toyota in the growth Strategy

Fortifying our product line Asserting a competitive edge in technology Accelerating globalization Reclaiming market share in Japan Cultivating demand in new business sectors

Measures for asserting a competitive edge in technology have centered on

environmental themes. We have introduced or demonstrated new power train

technologies in the past year that will make Toyotas run cleaner and greener than

ever. Those technologies include...

A direct-injection system that makes gasoline engines more efficient Hybrid-electric systems that double fuel efficiency and reduce noxious

emissions

Pure electric, "zero emission" vehicles that alleviate urban pollution Fuel-cell systems that could transform the automobile in the 21st

century.


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Market Share of Toyota

Toyota Motor Corp. grabbed more U.S. retail market share than Ford Motor Co. inearly November and it was less than one share point behind General Motors Corp.,

Toyota, Japan's largest automaker, had a 15.4 percent U.S. retail market share a

year earlier.

Toyota plans to enter small car segment in India

Worlds second largest automaker wants to get offensive in the Indian domestic auto

market. Toyota is very much interested in launching a small car here in the segment

currently dominated by Maruti Suzuki and Hyundai. Tata also has a decent

presence in the market with their Indica range of diesel vehicles.

Toyota is at the moment carrying out a feasibility study for launching such a vehicle

in the domestic market where it has models like the Innova and Camry amongst

others. They have had an incredible success with their stopped Qualis model and

are selling Toyota Innova in large numbers. T Ino, director (marketing), Toyota

Kirloskar Motor Pvt Limited has expressed that the Indian auto market is a huge

one and has the capacity to involve more players in the small car segment.

Toyota has a variety of interesting models in its global lineup, which it can consider

to launch in the Indian market. Some of these are Vios, Platz, and Passo. The

company also expects to break even here in India this year with all the accumulatedlosses were expected to be wiped out during 2005. They also plan to invest around

Rs 130 crores during the current year to enhance efficiency.

Toyota plans to open up another manufacturing plant in India and is currently

looking for a location, which suits its requirement.


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Competitors

Hyundai Motors India Limited (HMIL)

A decade after the Korean War and during the period of reconstruction, Hyundai

Motor Company began its fledgling efforts at automobile manufacturing by

entering into a technology transfer agreement with Ford of Great Britain, receiving

design and styling from Ital Design of Italy, and assembling technology from both

England and Japan, all of which made the production of our first model car, the

"Pony," possible. In just ten years, in 1976 Hyundai began to export to the world

market. In 1986, we entered the U.S. market establishing the Excel as a new

contender among small cars and promoting the image of the Korean automobile

industry.

Upon expansion of our Ulsan plant, which enabled Hyundai Motor Company to

have a large scale production base, and the founding of HM Canadian Corporation,

which established Hyundai throughout North America, we produced a record 10

million cars and exported over 4 million, breaking records in a short span of time.

No other automobile company can boast of these figures over such a short time

span. We also poured our efforts in creating concept cars such as the HCD-I,

followed by the HCD-II and III, electric cars, and high technology hybrid cars that

will bear fruit in the future with their low pollution emissions, safety features, and

environmentally-friendly recyclable components. From Pony to Equus, Hyundai

Motor Company is committed to its growth as a mature company, constantlykeeping in mind its customer-oriented mottoes: "Customer Satisfaction" and

"Create Value for Customers."


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The Price Strategy

In August 2004, a leading business newspaper reported that Hyundai Motors India

Limited (HMIL), an Indian subsidiary of the South Korea- based Hyundai Motors

Company (HMC) was expected to reduce the price of its flagship car - Santro - by as

much as Rs 40,000. Industry experts were expecting a reduction in Santro's price inresponse to the price war being waged by the market leader in India - Maruti Udyog

Limited (MUL), which had reduced the price of its largest selling car in the B

segment - Alto - by Rs 58,000 in two price cuts starting from September 2003. This

move had resulted in Alto replacing Santro as the largest selling car in the B

segment in the period January to June 2004 (Refer Exhibit I for the market

segmentation of the Indian car industry).

Rebutting the report on price cuts, HMIL's managing director, BVR Subbu (Subbu)

said, "We are not cutting prices on the Santro. We have allowed our competitors the

prerogative of cutting prices." Several dealers of HMIL also felt that the company

would not reduce Santro's price as it had not adopted such tactics earlier.

Santro had been the most successful product of HMIL and was also the largest

selling car in the B segment till the fiscal year 2003-04. Introduced in late 1998,

Santro had emerged as the second largest selling car in India after MUL's M800 and

had retained its position till March 2004 (Refer Exhibit II for the total units and

value sales of the top eleven car models in India). In mid 2004, HMIL with its four

models, Santro, Accent, Sonata and Elantra, was the second largest car company in

India with 19% market share in the industry. The company was planning to launch

another model, 'Getz', in September 2004.


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Competitive analysis

Strength of Hyundai

Volumes has been Hyundai's main strength, as can be seen with the rollout of its

2,00,000th car in 32 months from its Chennai plant. The company also returned a

profit of Rs 67.61 crore in its very first year of operations in 2000.

Hyundai Motor India will not get into CBU (completely built unit) imports like the

other car manufacturers, as the company wants to concentrate only on models that

will fetch it high volumes hyundai have already announced that they would be

importing CBUs for niche markets, either in the high-end bracket or in the sports

car segment in limited editions.

Weakness of Hyundai

Hyundai's traditional weakness has been the chassis, which has never really

matched the competition, especially European rivals, but the company claims this

has been sorted out.

Brutal price cuts failed to prop up the Sonata's flagging sales, and worse, tarnished

Hyundai's image, proving price isn't everything in the upper crust of the market

I have had numerous problems with the Hyundai dealerships also. When I

complained directly to the maufacturer, their response was to offer me a Hyundai

totebag or other promotional itme of my choosing.

Brand Strategy

Hyundai-Kia Automotive Group today announced the launch of its new global

brand management strategy, in which Kia and Hyundai will pursue differentiated

brand images as a means of boosting the Groups overall market share and

increasing the value of the two brands.

In accordance with the new strategy, Hyundai and Kia will be promoted under two

separate brand slogans. The Hyundai slogan - "Drive your way" - is designed tocommunicate the companys refined and confident brand attributes, while the

slogan - "The Power to Surprise" - is aimed at embodying the exciting and

enabling values of the Kia brand.


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Maruti Udyog Limited (MUL)

It was established in Feb 1981 through an Act of Parliament, to meet the growingdemand of a personal mode of transport caused by the lack of an efficient public

transport system.

Suzuki Motor Company was chosen from seven prospective partners worldwide.

This was due not only to their undisputed leadership in small cars but also to their

commitment to actively bring to MUL contemporary technology and Japanese

management practices (which had catapulted Japan over USA to the status of the

top auto manufacturing country in the world).

A license and a Joint Venture agreement were signed between Govt of India and

Suzuki Motor Company (now Suzuki Motor Corporation of Japan) in Oct 1982.

The objectives of MUL then were:

Modernization of the Indian Automobile Industry. Production of fuel-efficient vehicles to conserve scarce resources. Production of large number of motor vehicles which was necessary

for economic growth.


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Marketing strategy of Maruti:

Maruti 800

Maruti versa

Omni

Gypsy

Zen

Wagnor

Esteem


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Swift

Alto

PRICE STRATEGY: - (RS.-LAKHS)Maruti 800 2,00,850

Maruti versa 4,24,214

Omni 2,51,000

Zen 2,85,000

Wagnor 3,43,221-4,68,609

Esteem 4,25,000-

5,09,000

Baleno 6,62,556

GrandVitara-xl7 17,31,400


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THE COMPETITION (Maruti)

Since 1985, Maruti Udyog Limited (MUL) has been the market leader in the

passenger car industry in India. Its flagship product - M800 had the distinction of

being the largest selling car model in India since its launch in December 1983.Positioned as people's car, M800 ruled the Indian passenger car market and

remained unchallenged ever since it occupied the top slot, five months after its

introduction. In March 2003, MUL sold 20,687 units of M800, the highest ever sales

by any single model in a month. It was also the highest sales since M800 debuted,

surpassing its previous monthly high of 18,735 units in August 1999.

For the first few months of 2004, M800 performed well, selling 15,301 units in

January, 13,518 units in February and 15,540 in March. But gradually Alto, another

MUL product, began eating into M800's share. Alto reported sales of 8,399 units,

8,324 and 9,011 units in January, February and March respectively. In April, its

sales increased to 9,350 units and in May 2004, Alto took over M800's position as thelargest selling car with sale of 10,373 units, slightly over M800's sales of 10,016 units.

Analysts felt that Alto had taken the top spot because of its price reduction in

September 2003 by Rs. 23,000 followed by the launch of the non-AC Alto for Rs.

0.23 mn in the first week of April 2004.

On reducing the gap between its bread and butter model M800 and its compact car

Alto, MUL said it had "long term" plans for M800. Commenting on Alto's pricing

strategy, Jagdish Khattar (Khattar), managing director of MUL, said, "The new

price positioning of the Alto would cannibalize existing A1 segment product the

M800 which is also considered an old model. But, the cannibalization will remain

within the Maruti family and the bigger numbers will help Maruti depreciate Altofaster. Net M800 sales may be less but we would be pushing more Alto and the more

we sell the Alto the faster it will depreciate."

Though industry analysts said this move would boost MUL's profits, they also

expressed their views that MUL's long-term plan might be to discontinue M800 and

replace the entry segment with Alto. However, Khattar clarified that MUL's pricing

strategy was not meant to replace M800 with Alto. He said, "Now, we have two cars

in entry-level. Maruti 800 is still a dream of Indians, how can I replace it?"


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Competitive Analysis

Strength

In an era when owning a car was a distant dream for a vast majority of Indians,

MUL rolled out its first car, the M800. The company labeled it a people's car, with a

796cc 3-cylinder engine that delivered 39.5bhp at an affordable price of Rs. 65,000.

The first vehicle was released for sale in December 1983. Initially, the car was

criticized for its diminutive size, but it proved to be spacious enough to carry four

adults. Better technology and an affordable price due to a higher level of

indigenization helped MUL achieve a dominant position in the Indian passenger car

market

WeaknessMUL reduced the price difference between these two models positioning them on an

almost equal platform, which resulted in confusion in the minds of consumers and

industry analysts.

Threat

M800 had ruled the passenger car market as the only car in the entry-level segment

in the Indian automobile industry and was now facing the danger of cannibalizationfrom one of its own family members, Alto




8,324 and 9,011 units in January, February and March respectively. In April, its

sales increased to 9,350 units and in May 2004, Alto took over M800's position as the

largest selling car with sale of 10,373 units, slightly over M800's sales of 10,016 units.





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Main Report Analysis

Marketing Strategies of Toyota

Products:

Avalon

Camry

Camry Salora

Corolla

Matrix

Prius

4runner

Highrunner

Land Cruiser

Sequoia

Sienna

Price:-


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As far as pricing strategy of Toyota is concerned. They are focusing on the very

segment of the market not only particular segment. Basically they are focusing on

official and business class people

Product Line

Avalon $26,625 $28,875 $31,075 $33,815

Camry $18,445(standard) $19,545(LE) $20,375(SE) $22,795(XLE)

Camry Salora $19,530 $21,025 $23,405 $26,942

Corolla $14,005 $15,050 $15,215 $17,780

Matrix $15,110 $16,590 $19,100

Prius $21,725

4runner $27,635

Highrunner $34,625

Land Cruiser $56,115

Sequoia $32,820Sienna $23,625

Generic Strategies - Michael Porter

(1980)

Generic strategies were used initially in the early 1980s, and seem to be even more

popular today. They outline the three main strategic options open to organization

that wish to achieve a sustainable competitive advantage. Each of the three options

are considered within the context of two aspects of the competitive environment:

Sources of competitive advantage - are the products differentiated in any way, orare

they the lowest cost producer in an industry? Competitive scope of the market - does

the company target a wide market, ordoes it focus on a very narrow, niche market?


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The generic strategies are: 1. Cost leadership, 2. Differentiation, and 3. Focus.

1. Cost Leadership

The low cost leader in any market gains competitive advantage from being able tomany to produce at the lowest cost. Factories are built and maintained; labor is

recruited and trained to deliver the lowest possible costs of production. 'cost

advantage' is the focus. Costs are shaved off every element of the value chain.

Products tend to be 'no frills.' However, low cost does not always lead to low price.

Producers could price at competitive parity, exploiting the benefits of a bigger

margin than competitors. Some organization, such as Toyota, are very good not only

at producing high quality autos at a low price, but have the brand and marketing

skills to use a premium pricing policy.

2. Differentiation

Differentiated goods and services satisfy the needs of customers through a

sustainable competitive advantage. This allows companies to desensitize prices and

focus on value that generates a comparatively higher price and a better margin. The

benefits of differentiation require producers to segment markets in order to target

goods and services at specific segments, generating a higher than average price. For


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example, Toyota differentiates its product and service. The differentiating

organization will incur additional costs in creating their competitive advantage.

These costs must be offset by the increase in revenue generated by sales. Costs must

be recovered. There is also the chance that any differentiation could be copied by

competitors. Therefore there is always an incentive to innovated and continuously

improve.

3. Focus or Niche strategy

The focus strategy is also known as a 'niche' strategy. Where an organization can

afford neither a wide scope cost leadership nor a wide scope differentiation strategy,

a niche strategy could be more suitable. Here an organization focuses effort and

resources on a narrow, defined segment of a market. Competitive advantage is

generated specifically for the niche. A niche strategy is often used by smaller firms.

A company could use either a cost focus or a differentiation focus. With a cost focusa firm aims at being the lowest cost producer in that niche or segment. With a

differentiation focus a firm creates competitive advantage through differentiation

within the niche or segment. There are potentially problems with the niche

approach. Small, specialist niches could disappear in the long term. Cost focus is

unachievable with an industry depending upon economies of scale e.g.

telecommunications.


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Customer satisfaction

Toyota's believes in putting the customer first and aims to provide the best levels of

customer satisfaction as its main marketing strategy. Their dealers have also

worked hard to provide their high levels of customer support."

"In the last one year, Toyota has taken many initiatives, which has made Innova the

most successful product. Innova has successfully become a category creator.

We will continue to meet the ever-challenging customer expectations and will come

out with innovative marketing strategies.

With a change of guard at Toyota Kirloskar Motor Ltd., the company has evolved a

new strategy to capture 15 per cent market share in the Indian automotive segment.

Effective from January 1, Atsushi Toyoshima has been appointed Managing

Director of the company, replacing Sachio Yamazaki. "Competition is intense in theIndian market for domestic and foreign companies. The Indian market is important

for Toyota with potential to aid its growth strategy," Yoshio Ishizaka, Executive

Vice-President, Toyota Motor Corporation, said.

According to analysts, the Indian market would touch annual sales of 1.2 million

units by 2005. Last year, Toyota sold 3.8 million units overseas, manufacturing six

million vehicles at 56 plants in 25 countries. In India, the Toyota Quails notched

sales of 25,000 units since its launch last year, he said. Toyota's strategy to corner a

significant chunk of the Indian market involves "superior product offering and

dedicated technology". In this context, the change of leadership in Toyota's Indian

division is important, indicating a more important role for the company'smanufacturing base in Bangalore.

"Bangalore is an ideal location to meet all of Toyota's needs, including auto

components," Mr. Toyoshima said

According to the managing director of Toyota Kirloskar Motor, Atsushi Toyoshima,

the decision to introduce Innova here (India) was based on three factors. First, over

the last five years, the C- segment (between Rs 5 lakh to Rs 10 lakh) of the car

market has grown by 20 per cent every year. The multi utility vehicle segment has

also grown at double-digit levels. Second, with an improving lifestyle and better

roads, the Indian consumer wants to take his vehicle for long drives with friendsand family. Third, there is a latent desire of customers, including those owning

MPVs, to seek attributes like greater interior space and overloading ability, while

passenger car buyers look for better styling and improved riding comfort. Innova

brings together the space and fuel economy of an MPV with the style, agility and

power of a sedan. Toyota Kirloskar Motor has described it as the first three-row

seating passenger car in the Indian market.


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Research Methodology

Objective of the study

The object of report is not only to focus on competitors but also to get thecompetitive position in the national as well as international market through

customer satisfaction. These are as follows.

To discover and translate the needs and desire of customer into products andservices so as to create the demand of the product (through planning and

producing planned product).

To serve the customer through channel of distribution.

To face the keen competition.

To know about the marketing strategies used by Toyota.

To know about the marketing strategies of the competitors of Toyota.

To find out the market share of Toyota.

To know where Toyota stands as far as the BCG matrix models concerned.


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Type of Data Collected

This project depends upon the primary as well as secondary sources which are as

follows.

Primary Source:

Observation Experiment Talking with distributors, retailers and so on

Secondary Source:

Balance sheet of the company Company website

Sample Size & Areas Covered

A customer-based survey was conducted in which 100 people were asked to fill the

questionnaire in which 50 people belong to cities of Delhi and GURGAON.

Because it was not possible to consider each and every person of those cities or of

villages so, PROBABILITY SAMPLE or RANDOM SAMPLE was taken.


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Statistical and Presentation Tools

Used

PRIMARYDATA is: First classified i.e. grouped qualitatively and quantitatively according to the

situation or the type of the data which was collected.

After classifying is represented in the form of tables i.e. systematicallyarranged in columns and rows.

Some of the data is also graphically represented in the form of PIEDIAGRAM.

SECONDARY DATA is represented:

In the form of tables. By the way of BAR GRAPHS and SUBDIVIDED BAR GRAPHS (Graphicalpresentation).

Limitations of the Study

Since the road to improvement is never ending, so this study also suffers from

certain limitations. Some of them are as follows:

Because of illiteracy, it was a time consuming method in which continuousguidance was required.

Questionnaire method involves some uncertainty of response. Co-operation onthe part of informants, in some cases, was difficult to presume.

It is possible that the information supplied by the informants may beincorrect. So, the study may lack accuracy.


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Findings

The strong industry position of toyota is based upon a number of factorsincluding a diversified product range, highly targeted marketing and a

commitment to lean manufacturing and quality. The company(Toyota) uses marketing techniques to identify and satisfy

customer needs. Its brand is a household name. The company also maximizes

profit through efficient manufacturing approaches (e.g. Total Quality

Management).

Toyota is to target the 'urban youth' market. The company has launched itsnew Aygo, which is targeted at the streetwise youth market and captures (or

attempts to) the nature of dance and DJ culture in a very competitive

segment.

Toyota's believes in putting the customer first and aims to provide the bestlevels of customer satisfaction as its main marketing strategy. Their dealers

have also worked hard to provide their high levels of customer support." Competition is intense in the Indian market for domestic and foreign

companies. The Indian market is important for Toyota with potential to aid

its growth strategy,

They have had an incredible success with their stopped Qualis model and areselling Toyota Innova in large numbers.

While Suzuki-Maruti, Tata Motors, Hyundai, Mahindra & Mahindra andToyota command the top five positions in the domestic passenger vehicle

segment, Honda, GM and Ford are fighting each other for the sixth position.


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SWOT Analysis Toyota

Strengths

New investment by Toyota in factories in the US and China saw 2005 profits rise,

against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion

yen ($11bn; 5.85bn), while sales were 7.3% higher at 18.55 trillion yen.

Commentators argue that this is because the company has the right mix of products

for the markets that it serves. This is an example of very focused segmentation,

targeting and positioning in a number of countries.

In 2003 Toyota knocked its rivals Ford into third spot, to become the World's

second largest carmaker with 6.78 million units. The company is still behind rivalsGeneral Motors with 8.59 million units in the same period. Its strong industry

position is based upon a number of factors including a diversified product range,

highly targeted marketing and a commitment to lean manufacturing and quality.

The company makes a large range of vehicles for both private customers and

commercial organisations, from the small Yaris to large trucks. The company uses

marketing techniques to identify and satisfy customer needs. Its brand is a

household name. The company also maximizes profit through efficient

manufacturing approaches (e.g. Total Quality Management).

Weaknesses

Being big has its own problems. The World market for cars is in a condition of over

supply and so car manufacturers need to make sure that it is their models that

consumers want. Toyota markets most of its products in the US and in Japan.

Therefore it is exposed to fluctuating economic and political conditions those

markets. Perhaps that is why the company is beginning to shift its attentions to the

emerging Chinese market. Movements in exchange rates could see the already

narrow margins in the car market being reduced.

The company needs to keep producing cars in order to retain its operational

efficiency. Car plants represent a huge investment in expensive fixed costs, as well as

the high costs of training and retaining labour. So if the car market experiences a

down turn, the company could see over capapacity. If on the other hand the car

market experiences an upturn, then the company may miss out on potential sales

due to under capacity i.e. it takes time to accommodate. This is a typical problem

with high volume car manufacturing.


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Opportunities

Lexus and Toyota now have a reputation for manufacturing environmentallyfriendly vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are

based upon advance technologies developed by the organization. Rocketing oil

prices have seen sales of the new hybrid vehicles increase. Toyota has also sold on its

technology to other motor manufacturers, for example Ford has bought into the

technology for its new Explorer SUV Hybrid. Such moves can only firm up Toyota's

interest and investment in hybrid R&D.

Toyota is to target the 'urban youth' market. The company has launched its new

Aygo, which is targeted at the streetwise youth market and captures (or attempts to)

the nature of dance and DJ culture in a very competitive segment. The vehicle itself

is a unique convertible, with models extending at their rear! The narrow segment isnotorious for it narrow margins and difficulties for branding.

Threats

Product recalls are always a problem for vehicle manufacturers. In 2005 the

company had to recall 880,00 sports utility vehicles and pick up trucks due to faulty

front suspension systems. Toyota did not give details of how much the recall would

cost. The majority of affected vehicles were sold in the US, while the rest were soldin Japan, Europe and Australia.

As with any car manufacturer, Toyota faces tremendous competitive rivalry in the

car market. Competition is increasing almost daily, with new entrants coming into

the market from China, South Korea and new plants in Eastern Europe. The

company is also exposed to any movement in the price of raw materials such as

rubber, steel and fuel. The key economies in the Pacific, the US and Europe also

experience slow downs. These economic factors are potential threats for Toyota .


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Competitive Analysis

Strength

In an era when owning a car was a distant dream for a vast majority of Indians,

MUL rolled out its first car, the M800. The company labeled it a people's car, with a

796cc 3-cylinder engine that delivered 39.5bhp at an affordable price of Rs. 65,000.

The first vehicle was released for sale in December 1983. Initially, the car was

criticized for its diminutive size, but it proved to be spacious enough to carry four

adults. Better technology and an affordable price due to a higher level of

indigenization helped MUL achieve a dominant position in the Indian passenger car

market

Weakness

MUL reduced the price difference between these two models positioning them on an

almost equal platform, which resulted in confusion in the minds of consumers and

industry analysts.

Threat

M800 had ruled the passenger car market as the only car in the entry-level segment

in the Indian automobile industry and was now facing the danger of cannibalization

from one of its own family members, Alto




8,324 and 9,011 units in January, February and March respectively. In April, itssales increased to 9,350 units and in May 2004, Alto took over M800's position as the

largest selling car with sale of 10,373 units, slightly over M800's sales of 10,016 units.





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FINDINGS BASED ON

QUESTIONNAIRE

INFERENCE:

24% of the respondents were owners of Honda City


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INFERENCE:

83% of the Respondents were satisfied with theircars and the services of TOYOTA

However 17% of the Respondents were dissatisfiedat the same time.


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INFERENCE:

18% of the respondents would prefer to buy aToyota car against its competitors.

37% of respondents preferred for Maruti.21% and 24% respectively preferred for Hyundai

& Honda.


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INFERENCE:

Information through Internet and Print mediaaccounts for more than half or 75% of the

information shared with the masses.

Rest 25% was shared by T.V. and Dealers forproviding the information.


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INFERENCE:

78% of the respondents felt that Toyota has themost fuel efficiency.

While 22% felt it isnt the most fuel efficient.


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INFERENCE:

y 70% of the respondents felt that the features of theToyota are good.

y While 8% of respondents thought it was not sogood, 10% thought it was very good and 12% felt

satisfactory about the features.


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INFERENCE:

Toyota is best known for its design & comfort.Then comes Handling and Fuel Efficiency.


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INFERENCE:

y The interiors of Toyota are very good according to74% of the respondents.

y 16% said it was very good, 7% said it wassatisfactory and 3% felt it was not so good.

INFERENCE:

If Toyota is made more affordable then itwould win more customers, a theory which

was backed by 72% of the respondents.


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15% and 13% respectively want cheaperspare parts and more service stations.

INFERENCE:

To make it the best car in its class it shouldbe made more futuristic which was felt by

60% of the respondents.

15% of the respondents thought it should bemade more sporty.

10% wanted it to have a retro look and 15%wanted to give it a concept car look.


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INFERENCE:

Overall 85% of the respondents were happywith the after sales service provided by

Toyota.

15% were unhappy with Toyota due to poorafter sales services provided by them.


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Conclusion

While Suzuki-Maruti, Tata Motors, Hyundai, Mahindra & Mahindra and Toyota

command the top five positions in the domestic passenger vehicle segment, Honda,

GM and Ford are fighting each other for the sixth position. Incidentally, in the firstfive months of the fiscal (Apr-Aug 04) Skoda has moved to the tenth position,

overtaking Italian major Fiat.

Maruti Udyog (MUL), which has been the market leader in the mini, compact and

mid-size segments, retains its leadership position with sales of 1.9 lakh units,

followed by Tata Motors with 70,022 units, Hyundai Motor India with 48,360 units,

Mahindra with 28,530 units and Toyota with 19,797 units.

Competitive pricing and a better value offerings were driving the sales of most automajors for the past few months. Despite a competitive business environment, most

of the car majors were able to hold on to their market shares in the April to August

04 period. The exceptions were Hyundai, Mahindra & Mahindra, Hindustan

Motors and Fiat, who saw their market shares fall marginally.

The market is slow and there are visible signs of discounting, particularly in the

higher end of the car segment. However, since entry level and compact cars are

volume segments, the slowdowns effect is more visible here.

For many automobile companies, it was a double whammy in August 04. The

truckers strike and adhikmas (inauspicious period) last month affected dispatches

of most car companies, including Maruti Udyog, General Motors and Tata Motors,

resulting in lower sales. The exceptions were Honda Siel Cars India, Ford India andToyota Kirloskar.


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Recommendation

Toyota should adopt the defensive marketing strategy because as being thesecond largest car producer in the international market,

Toyota must at the moment carry out a feasibility study for launching avehicle in the domestic market where it has models like the Innova and

Camry amongst others.

Toyota should conduct market survey in Indian market for quails in order toknow the perception of Indian consumers.

Toyota should adopt an offensive marketing strategy for entering in thesmall car segment. This market is dominated by Maruti Suzuki and Hyundai

in the Indian domestic auto market.

Toyota must plan out an ideal marketing producing capacity ,becaue it facesthe problem of over and under capacity in case of upturn and downturn of

the market.


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Annexure


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QUESTIONNAIRE FOR CONSUMER

A)NAMEB)ADDRESSC)CONTACT NUMBERD)INCOME GROUP

_________15,000-25,000 _________25, 000-50,000

_________50,000-75,000 _________Above 75,000

1. DO YOU OWN A CAR?(i)YES (ii) NO

IF YES, THEN WHICH ONE?

(i)TOYOTA (ii) HYUNDAI (iii) MARUTI

2. HOW SATISFIED ARE YOU WITH THE SERVICES OFFERED BYTOYOTA ?

(i)SATISFIED (ii) DISSATISFIED

3. IF SATISFIED, THEN ARE YOU HAPPY WITH THEIR CHARGESAND TIMELY DELIVERY THEY WERE OFFERING?

(i)HAPPY (ii) UNHAPPY

4. IF GIVEN A CHOICE TO CHOOSE A CAR COMPANY, WHICHCOMPANY WOULD YOU CHOOSE?

(i) TOYOTA (ii) MARUTI (iii) HYUNDAI


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5. WHERE DO YOU MANAGE TO FIND INFORMATION ABOUTTOYOTA ?

(i)DEALERS (ii) PRINT MEDIA

(iii)T.V. (iv)INTERNET

6. DO YOU THINK TOYOTA HAS THE MOST FUEL EFFICIENCY(i)YES (ii) NO

7. HOW DO YOU FIND THE FEATURES OF TOYOTA ASCOMPARED TO OTHER CARS?

(i)GOOD (ii) VERY GOOD

(iii)NOT SO GOOD (iv) SATISFACTORY

8. WHICH OF THESE QUALITIES DO YOU THINK BESTDESCRIBES TOYOTA ?

(i)HANDLING (ii) FUEL EFFICIENCY

(iii)DESIGN (iv)COMFORT

9. HOW DO YOU FIND THE INTERIORS OF TOYOTA ?(i)GOOD (ii) VERY GOOD

(iii)SATISFACTORY (iv) NOT SO GOOD

10. ACCORDING TO YOU WHAT SHOULD BE DONE TOIMPROVE TOYOTA ?

(i) MAKE IT MORE AFFORDABLE

(ii) CHEAPER SPARE PARTS

(iii)MORE SERVICE STATIONS


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11. ACCORDING TO YOU WHAT SHOULD BE DONE TO MAKETOYOTA THE BEST CAR?

(i)MAKE IT MORE FUTURISTIC

(ii)MAKE IT MORE SPORTY

(iii)GIVE IT A RETRO LOOK

(iv)GIVE IT A CONCEPT CAR LOOK

12. ARE YOU HAPPY WITH THE AFTER SALES SERVICESPROVIDED BY TOYOTA ?

(i)HAPPY (ii) UNHAPPY

BIBLIOGRAPHY:

Books referred: -

Marketing Management 30th editon - Philip Kotler Marketing Management 2005 - T. N. Chabra

Marketing Management 2006 - C. B. Gupta

Web Sites: -

Google search enginewww.toyota private limited.comwww.yahoo.com


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