Toyota Target Market and Positioning Strategy Essay Sample

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Toyota is the largest global automotive manufacturer and has been successful targeting select markets. For success in the future, they have hired consultants to review its success. The experts will evaluate Toyota’s target market and market positioning in the global automotive industry. Target market will identify demographics, and geographics where they are successful and what changes can be implemented to achieve growth. Market positioning strategy will determine consumer buying behaviors, innovative product life cycle recommendations, and necessary strategic alliances. Branding strategy will also be evaluated to determine if target segments are responding to Toyota’s initiatives. Target Market

Toyota is operating worldwide in the largest developed and developing countries. Each of these represents a different market that requires specific brands targeting. In North America, Toyota is targeting the younger market, large-truck owners, and the luxury SUV (Lexus) market, and has captured 11.2% of the U.S. market (Cravens & Piercy, 2009). The U.S. is Toyota’s largest geographical region (based on sales), and a strong economic recovery is strengthening its market share and enhancing their financial position (Toyota Motor Corporation SWOT Analysis, 2014). The second largest market for Toyota is their native country Japan, and they enjoy a 40%+ share of the market. In Europe, the market demands compact, fuel-efficient, and cleaner diesel engines, and Toyota is lagging the competition in the market with only 4.4% share. Because of economic volatility in South America, Toyota sales revenues are falling. The South American buyer requires affordable and dependable autos, and Toyota’s recall history has damaged its image. Toyota has several opportunities in the target markets where they are failing to capture the market.

In Europe for example, the Lexus brand has not done as well as it has in the U.S. where it overtook the German rivals Mercedes and BMW (Cravens & Piercy, 2009). Today, Lexus is sold side-by-side with economy brands in Europe such as Corolla and Yaris – this cheapens the Lexus brand. In order to appeal to the same target market in Europe, it is recommended that Toyota make Lexus a separate brand. The European buyer wants a luxury shopping experience when they purchase a luxury vehicle; therefore, the dealerships need to focus on these buyers. Another recent opportunity for Toyota is the growing partnership with BMW (Toyota Motor Corporation SWOT Analysis, 2014). This partnership will enable Toyota to increase their technological capabilities and may result in new product innovation, in addition to strengthening their brand image in Europe (Toyota Motor Corporation SWOT Analysis, 2014).

Toyota needs to focus on its operations in emerging markets, such as Africa and Southeast Asia. “Low car ownership combined with rising disposable incomes bode well for the auto market demand in these countries in the long term” (Trefis Team, 2013, April 04). This market’s consumer wants a dependable, no-frills, good value for the money kind of auto, and Toyota has several brands that can win this market over. In Indonesia alone, car sales overall jumped 25%, and it is now the largest automotive market in Southeast Asia – and Toyota has 37% of the market share (Trefis Team, 2013, April 04). Toyota can enhance their market presence and increase their top line performance by focusing intensely on these emerging markets (Toyota Motor Corporation SWOT Analysis, 2014). Buyer Behavior

Market Positioning Strategy
“Positioning strategy is the combination of marketing program strategies used to portray the positioning desired by management to the targeted buyers” (Cravens & Piercy, 2009, Chapter 6). The positioning of an item is going to determine how well an item will sell. In order to achieve the positioning strategy the organization needs to consider all aspects of the plan. Product supporting services, distribution channels, price, and promotion actions that are taken by the company are all areas that should be considered (Cravens & Piercy, 2009, Chapter 6). Toyota can use versatile and low costs processes as a means of strategic positioning. They have created an extensive product portfolio that can appeal to many different lifestyles. Economic and environmental conditions in the market have recently changed. Consumers are electing to be eco-conscious and value oriented.

With this change in the public’s response, Toyota must make changes to not only the product that is being sold but also ensure that the new product melds with their positioning strategy. Batten (2011, May 23), “Environmental changes or shifting consumer preferences often force firms to rethink their positioning strategy” (para. 9). Toyota’s initiative to create diverse vehicles, has led to the Toyota name as recognition of a very high-quality company that produces long lasting cars. Being able to adjust its positioning strategy will give the public a notion that the company is reliable and can change its value chain instantly. The preference of consumers is constantly evolving, meaning the positioning strategy will need to be adjusted continually. Positioning Strategy

The core of this strategy is how management wants the new product to be positioned in theeyes and minds of the targeted buyers. Several positioning decisions are made during marketingstrategy development. Issues such as packaging, name selection, sizes, and other aspects of the product must be decided. (Cravens & Piercy, 2009, p. 260). Nokia’s positioning strategy includes aggressive innovation initiatives, a very effective global value chain network, competitive pricing, and effective promotion strategies matched to its major global markets in Asia, Europe, Middle East, Africa, and the Americas (Cravens & Piercy, 2009, p. 197).

Innovation and Product Life Cycles
Toyotas innovation can be viewed in their mission statement “Through improvements of conventional technology, as well as pioneering efforts in the application of new technologies, Toyota is taking great steps to develop eco-cars which will help us become a low carbon society” (Toyota, 2010). Product life cycle analysis is a very important tool in the hands of a marketer. It gives a better understanding in managing the profitable products and eliminating the unprofitable products to a marketer. As the product moves from one stage to another, the marketing manager evaluates and adjusts strategies to promote that particular product.

Whether it is alternative energy sources, interconnected traffic & safety systems, human assisting robots or new modes of personal transport, Toyota is constantly focused on developing for the future. Toyota continues to strive for the technology that prevents and minimizes the damage of an accident in any situation. “What causes accidents?” “What can be done to prevent accidents?” “What mitigates the damage of accidents that have occurred?” These are the questions Toyota asks to inspire innovation. Its technology development will continue to advance toward the ultimate goal of making a vehicle that is safe for everybody.

Toyota turned a bad experience into a new stage of innovation with recent automobile safety recalls. The main objective is refocusing on the core imperative aspects of the brand that made its operations so successful, such as, safety, quality, and volume. Thus, focusing on processes related to the assembly line efficiency, suppliers/vendors for manufacturing parts, and subsidiaries in global markets for following the Toyota Production System model (Case Study 2010). By establishing the framework of importance, Toyota demonstrates areas of weakness needing improvement for increasing the brand identity within the targeted marketplace. In the beginning of Toyota Motor Corporation, the three main areas of safety, quality and volume provided the global success to earning customer loyalty and expectation as a dependable brand (Case Study, 2010).

To extend product life cycle, Toyota’s strategy entails extensive customer research as well as feedback to the types of preferred beneficial aspects in the product. By doing so, Toyota identified the customer’s preferences and builds an exceptional automobile. To grow the brand in overseas markets, they need to increase the brand identity as well as the brand equity. Prius hybrid cars are known for the fuel efficiency and eco-conscious hybrid electric technology. Sales of the product are declining in Japan, to cope with it, marketing analysts of Toyota are offering some more additional incentives and seeking new markets for the Prius (Principal of Marketing, 2008). Strategic Alliances

Alliances were generally formed among primeval people as to fight for a common purpose together. In today’s business world, alliances have become very common. The past few decades witnessed a huge boost in the development of international strategic alliances and in the studies dedicated to understanding alliances (Armstrong & Kotler, 2005, p. 225). In pursuit of expanding the brand identity, Toyota utilized the expansion within the United States and other global markets. The process requires an overhaul to the fundamental basis of Toyota’s philosophy of success; Toyota Production System (TPS) relates to processes at the assembly line, suppliers/vendors for manufacturing parts, and subsidiaries in global markets. Within TPS, two concepts indicate the prevention of defective products from being produced and each process only produces what the next process requires (Case Study 2010). In 2001, the company expanded into other global marketplaces, risking overexposure and under-productivity regarding quality that became too diluted as Toyota focused on global growth overseas.

It is recommended that Toyota continue its alliance with Tesla. Working with Tesla will be a great step in developing electric vehicle technologies. Currently Toyota manufactures the Prius plugin-in hybrid-electric vehicle. If the venture continues Toyota can attain $50 million of Tesla’s stock, but more importantly it will be purchasing the company’s sense of daring and adventure. “When we look at Tesla’s venture business spirit, we recall how Toyota started back in the day,” said Jana Hartline, Toyota’s environmental communications manager, in an interview with “Toyota would like to learn from the challenging spirit, quick decision-making, and flexibility that Tesla has,” Toyota President Akio Toyoda, said in a press release, ( in return Tesla will gain more legitimacy in the automobile industry.

Branding Strategy
A brand is usually represented by a name, logo, design, image, and or a symbol (Priddle, 2015, November 25). The designated symbol, logo, etc. is a representation of the company. It allows people to identify the organization easily. Toyota has managed to create a brand, which allows a premium position within its industry. The Toyota brand has an established brand strategy, which enables the organization to distinguish its products and services from competitors. Branding strategies are pertinent to an organization’s success because an organization cannot be successful if all its services and products are similar. “Sustaining and building brand strengths is a continuing challenge for managers” (Cravens & Piercy, 2009, p. 291). Toyota has managed to overcome the struggles of creating a successful brand. Currently, Toyota continues to make decisions in efforts to maintain its brand. “Internal and External factors to overcome when building product and branding strategies are as followed: Price and Competitive pressures

Fragmentation of markets and media
Complex brand strategies and relationships
Pressure to invest elsewhere
Short term pressures” (Cravens & Piercy, 2009, p. 292-295). Toyota has had to consider the above factors in an effort to create and maintain its brand. Toyota’s global market branding strategy is conducive to its vision “passionate pursuit of perfection” (Lexus, n.d.). An example of Toyota’s innovative branding strategy is Lexus. Toyota introduced Lexus as a luxury brand. Lexus has a specific target market. The new Lexus NX will be released in December 2015. The bas price for the NX will be $35,000. “The target market is buyers in their 30s and 40s” (Priddle, 2015, November 25). While competitors such as BMW and Audi are lowering the price ceiling of luxury vehicles to attract younger buyers, Toyota has decided not to follow. Toyota’s decision not to follow it competitors is a tactic to separate its self from competitors; therefore, the luxury brand that Toyota has created with Lexus remains stable. Toyota’s brand is valued at $29.6 billion, 21% more than its value in 2013; therefore, Toyota does not need to make any immediate adjustments to its brand strategy (Bond, 2014, May 21). Conclusion

Toyota is the global automotive industry leader that has diversified its product portfolio to target specific markets and position itself for sustainable growth. They target the younger market, large-truck owners, and the luxury SUV (Lexus). Toyota is successful in the US and Japan, but continue to struggle in Europe and South America. Strategic alliances with BMW and TESLA provide an opportunity for Toyota to develop new technology with shared resources. Toyota uses efficient assembly line processes that are versatile and can accommodate market demands. It prevents waste and generates additional revenues that reduce its environmental impact. Toyota continues to innovate with hybrid-electric technology and crash avoidance systems to increase vehicle safety and product lifecycles.

Sales incentives are also implemented to extend product life cycles of stagnate vehicles models that are often allocated to successful markets. Lexus and Toyota brands were discussed and have distinctive target markets and branding strategies. Luxury is associated with Lexus and value is associated with Toyota. The brands are distributed in separate establishments and should not deviate to remain sustainable. Toyotas brand continues to increase in value; strategies will only require adjustment to the Lexus brand in Europe to align with U.S. positioning. Future success of Toyota is dependent on emerging markets in Africa and Southeast Asia, which demand a no frills economy vehicle that Toyota can provide.


Armstrong, G., & Kotler, P. (2005). Marketing: An Introduction (7th ed.). Retrieved from Armstrong, G., & Kotler, P. (2002). Marketing: an introduction (International edition). New Jersey: Prentice Hall. Retrieved October 7, 2010 from  Batten, S. (2011, May 23). Product Positioning: Stand Out From the Crowd. Retrieved from Bond, V. (2014, May 21). Automotive News. Retrieved from Case Study (2010) Toyota: The Accelerator Crisis, Ethics, Public Policy” 13-th edition, page 2010

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