CIF1001: Principles of Marketing

Semester 2, Session 2017/2018

Group 8 - Monday

Lecturer: Dr. Thinaranjeney Thirumoorthi

Marketing Plan: Toyota (Group 8)

Group Members Matric Number

Sangeetha A/P Ravichandran CIA 160151
Areefa Maisara Binti Mahayudin CIB 170008
Hong Chin Han CIB 170034
Ding Xiaorui CIB 170718
Chen Xiaoping NEX170604

Date of Submission: 7 May 2018

Table of Contents

1.0 Executive Summary 3

2.0 Introduction 3-4
3.0 Mission Statement 4-5
4.0 Situation Analysis
4.1 Internal Environment
4.1.1 Financial and non-financial results 5-6

4.2 External Environment

4.2.1 Competitive environment 6
4.2.2 Economic environment 6-7
4.2.3 Demographic environment 7
4.2.4 Social and cultural environment 7
4.2.5 Political and legal environment 7-8
4.2.6 Technological environment 8

4.3 SWOT Analysis 8

4.3.1 Strengths 9-10
4.3.2 Weakness 10
4.3.3 Opportunities 10-11
4.3.4 Threats 11
5.0 Marketing Objectives 11-12
6.0 Marketing Strategies
6.1 Target markets 12
6.2 Product strategies 13
6.3 Pricing strategies 14-15
6.4 Promotion strategies 15-16
6.5 Distribution strategies 16-17
7.0 Recommendations for Change 17
8.0 References 18-20

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1.0 Executive Summary

Toyota is a multinational automotive manufacturer headquartered in Japan. Starting from 1937,

Toyota has now become the most valuable automotive brand in the world. To achieve the mission of
“making ever-better cars and enrich lives of communities”, Toyota has built 15 R&D centers and 53
manufacturing companies covering 28 countries and regions all over the world, and it has been the
largest vehicle manufacturer for the last five years. Besides automotive business, Toyota starts to
expand its business and has made progress in other fields.

This marketing plan focuses on analyzing Toyota’s internal environment, mainly financial and
non-financial results, and external environment, including competitive, economic, demographic,
social and cultural, political and legal, and technological environment to help us make a SWOT
analysis, enabling us to have a deep vision about Toyota’s internal strength, weakness and external
opportunities and threats. In addition, we will set up Toyota’s marketing objectives. Based on these
objectives, a comprehensive marketing strategies mix will be provided, which will involve target
markets, product, pricing, promotion and distribution strategies. Lastly, we will give some
recommendations about which aspects Toyota could change in order to achieve its marketing
strategies and sustain long-term development.

2.0 Introduction

Toyota Motor Corporation is a Japanese automotive manufacturer founded in 1937,

headquartering in Aichi, Toyota City, Japan, with 364,445 employees worldwide. Toyota is one of the
most successful companies in the world, ranking top 5th in the Global 500 list (Fortune), top 8th in the
World’s Most Valuable Brands (Forbes) in 2017, and top 30th in the 2017 BrandZTM Top 100 Most
Valuable Global Brands ranking (BrandZ). For the year ended March, 2017, the total vehicle
production was up to 8,975,509, total vehicle sales were 8,970,860, and net revenues 27,597.1 billion
of yen (Toyota annual report, 2017).

Toyota vehicles are trusted and loved by customers all over the world for “Toyota quality”,
which is due to the aim of “creating great life for people all over the world”. Toyota’s major products
include sport cars, cars, MPVs, Vans, SUVs, Commercial, Hybrids, Plug-in Hybrids, Fuel Cell and
Pick-up Truck. In order to meet the globally expanding demand, Toyota has built global R&D
networks and worldwide production system. Until 2017, Toyota has built 15 design and R&D centers
in U.S.A., Europe, Asia Pacific, China and Japan, and 53 plants and overseas manufacturing
companies in 28 countries and regions, covering North America, Latin America, Europe, Africa,
Oceania and Middle East. Toyota’s vehicles are now selling in more than 170 countries and regions
(Toyota annual report, 2017).

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 Besides its achievement in automotive business, Toyota is extending its business into various
other fields, including e-business, housing, energy, bio-technology, agriculture and marine. Toyota
provides financial services, mainly auto loans and leasing, to more than 26 million customers in more
than 35 countries and regions. In fiscal 2017, the financial services business recorded net revenues of
¥1,823.6 billion and operating income of ¥222.4 billion. Toyota also engages in house market, such as
house construction, renovation and development (Toyota annual report, 2017). In fiscal 2017, the
housing services business sold 10,321 units on a consolidated basis and generated net revenues of
¥300.8 billion. (Toyota company profile, 2017).

As a company with high sense of social responsibility, Toyota conducts a variety of institute,
community and region activities in Japan and overseas, aiming at protecting environment, improving
people’s safety awareness and enhancing individual comprehensive development, such as building
Toyota Foundation, supporting various social work all over the world, offering traffic safety education,
environmental protection, health-care service, and financial support in many countries and regions
(Toyota company profile, 2017).

3.0 Mission Statement

Toyota is an automotive company, producing various vehicles including sport cars, cars, MPVs,
Vans, SUVs, Commercial, Hybrids, Plug-in Hybrids, Fuel Cell and Pick-up Truck. Although Toyota
is now expanding into other areas, automotive is still Toyota’s major business, which means that
“making cars” is still Toyota’s product-oriented mission. In the terms of satisfying customers’ needs,
Toyota has positioned “making ever-better cars” that exceed customers’ expectation and “enriching
lives of communities” by contributing to communities and the future of mobility as marketing-
oriented mission.

Although Toyota’s vehicles have gained wide support all over the world, and has accumulated
certain number of loyal customers, to stabilize Toyota’s market status and take up more market shares
in the highly competitive automotive markets, Toyota still needs to continually renew itself, face
challenges and improve its technology in producing cleaner, safer and more convenient cars.

Except making “always better cars” and being rewarded with a smile, Toyota’s ultimate mission
is to enrich lives of communities. Using experience in making cars, Toyota is trying to build new
strategic business models of Electrification, Information and Intelligence. Environmental protection is
still a hot global topic in the next decades, hence larger numbers of customers will concern about
vehicles’ emission performance. Using its technology in producing Hybrid vehicles, Toyota will
accelerates its electrification technology development to further reduce greenhouse gas emission. In
order to provide customers with better services, such as accident prediction and precise car tracking,
and safe driving assistance, Toyota is working to build a big data web, which could collect cars

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information and cooperated with other industries and IT companies. To achieve the goal of leading
the way to a future of mobility, Toyota is making effort to develop advanced automatic driving
technology, which could contribute to people’s lives by making movement more convenient, and
Toyota is also considering to initiate in areas such as automated driving, AI, and robotics. Toyota
believed that by achieving breakthroughs in Electrification, Information and Intelligence, it could
ultimately accomplish the goal of enriching lives of communities. (Toyota annual _report, 2017).

4.0 Situation Analysis

4.1 Internal Environment.

4.1.1 Financial and Non-Financial Results

According to Toyota global financial report 2018<TMC Announces April-December 2017 Financial
results, we can easily know that Toyota really did a great job in last year. In 2017 April to December
Toyota totally vehicle sold 6,678,279 unites in worldwide, it increased 34,893 unites compare with
the same period in 2016. Overall, the net revenues total is 19.8 million US dollar, it increased 8.1%.
operating income went from 14.2 million US dollar to 16.2 million US dollar. It increased 13.8%, the
major factors that affected to the operating income included currency fluctuations and the increase of
cost reduction. At the same time, Toyota’s global market share in 2017 by brand is 9.2%, it retained
its top position in global market share among other brands such as Honda and Nissan. Toyota
Malaysia also performed very well in 2017. In the passenger vehicle it sole 47615 unites which
increased 3029 units and the passenger vehicle market share also went up to 9.3% (2016, 8.7%). In
commercial vehicle, it sold 21877 units which increased 2716 units and the market share went up to
35.3% (2016, 29.2%). While in commercial vehicle Toyota has the largest market share in Malaysia.
In 2017 Toyota totally sold 69462 units in Malaysia, it increased 9% compare with 2016 (63757
unites) and the total market share in Malaysia is 12.1%.it increased 1.1% compare with 2016 (11%)
vehicle sales performance in Malaysia 2017 vs 2016.

Customer and employee satisfaction. If a company wants to sustainable development and increase the
amount of customer they have to pay attention on customer satisfaction. Because customer
satisfaction is the most competitive factor for a company to survive and development in today’s
society. According to Toyota (customer satisfaction survey report 2017) it shows that more than 80%
customers had a good experience by shopping with Toyota and they also satisfied with the service
offered by Toyota. However, it’s not enough for a company to survive by having customer
satisfaction only, employee satisfaction is also very important. To improve employees satisfaction
Toyota holds a meeting every year Toyota organization and structure, they will gather all main
branches managers in worldwide to discuss about how to improve their employee satisfaction system

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in which can help employees more willing to work and get better life by working with Toyota. The
conclusion of discussion will be used for each branch to make the following year’s policy.

4.2 External Environment

4.2.1 Competition environment

Toyota Motor Corporation is known as world’s second largest manufacture of automobile. It
had positioned its brand into the consumers’ mind-set as “All About The drive” environment which
refer to Toyota will make things even more exciting, by expanding the boundaries of consumer
vehicle technology with exciting innovation, making journeys in Toyota vehicles safer and more
enjoyable, fully adapted to the fast-changing lifestyles of Malaysian. However due to the increasing in
vehicle production, rapid technologies changes, new entrants and saturation in the market lead to
automotive market is highly competitive.
Toyota direct competitors are Ford, Volkswagen, and Honda. Ford attract their customer by
produce product such as Ford Fiesta, Ford Mustang, Ford Explorer and Ford Mondeo. Volkswagen
come out with attractive product such as Passat, Jetta and Touareg while Honda major product was
Civic, Accord and CRV. Although there are many competitors to Toyota, but Toyota still beats them
because most models of Toyota focusing on safety where it introduces Toyota Safety Sense which
will help to prevent from potential hazard. This competitive environment helps Toyota boosting their
sales as they keep trying to improve the quality of products. Therefore, the company can retain as well
as increase their market share in the industry.

4.2.2 Economic Environment

Toyota Motor Corporation can use economic factor such as growth rate, employment rate,
inflation rate and Goods and Service Tax(GST), consumer spending rate and etc to forecast the
growth path of the industry. For instance, Star Online has been stated that the price of international
cars in Malaysia is costly about 50 to 100 percent more than the price of the similar car in other
countries. This is due to the higher tax imposed on the car at Malaysia. The higher taxes affect the
purchasing power of consumer (Tong, 2015)
Other than that, Dr Yean Kim Leng the economist and dean of Malaysia University of
Science and Technology said that inflation will negatively affect the genuine salary of the 40% of
Malaysian households where the monthly salary would be less than RM3,000. The consumer only
affords to spend on essential goods such as food and fuels (Ng, 2014). In the year of 2014, Toyota
Motor Corporation sold 103,636 vehicles while in 2015 they only able to sold around 95,861 vehicles
due to the effect of goods and services tax implementation and also the economic slowdown. (UMW
Toyota sold over 95,000 vehicles last year; record sales for Lexus, 2016)This scenario clearly show
that consumer have less income which lead to the corruption of automobile industry because when the

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consumer has less disposal income, they tend to shop for cheaper brands cars. So, Toyota Motor
Corporation should reduce the price due to this economic boom so that it can beat other brands.

4.2.3 Demographic Environment

The Demographic environment focusing on the human population in the term of age, gender,
family size, income, occupation, education, race, generation, nationality and others. Toyota mainly
emphasis on family size and income factor. For the bigger family size, Toyota come out with Noah &
Voxy while for the normal family, they can buy Corolla or Yaris. For a single person, Toyota also
produce cars such as Supra, Celica etc. From the basis of income factor cars such as Allion, Corolla,
Matrix, Camry, Prius are mainly concern for those with medium income and Avalon, RAV4, Venza
and Lexus are mainly focusing on those with high income.

4.2.4 Social and Cultural Environment

Social-culture comprise of society’s basic values, perceptions, preferences, and behaviours
toward a market. Basically, social environment is all about ethics and responsibilities. UMW Toyota
Motor’s Sdn.Bhd has contributed to some activities that bring benefits to society. In 2001, Toyota has
conducted a programme called Toyota Eco Youth Programme. Every year Toyota come out with new
theme. For example, in 2016 it introduces the challenge to tackle solid waste management while in
2017 it come out with the theme of reducing carbon footprint. This activity is about an eco-
competition between selected schools in Malaysia. Toyota Motor had donated about RM 6 million for
this programme where it enabled students to develop their technical and soft skills in finding solutions
to environment protection. (Company challenges students to find green solutions)
Cultural environment can be described as the current fashions and trends. Based on the result
from a survey, it founded that the demand for cars result in Malaysia increase because the public
transportation system in Malaysia was less attractive due to the high cost of fuels subsidiary policy.
So, owning a car become a necessity for most people in Malaysia. (Jetin, B. 2015)

4.2.5 Political and Legal Environment

Basically, for the company such as UMW Toyota Motor’, mostly the political factors are
determined on how the government is influencing the economy of this industry. In Malaysia the local
automobile industry was protected by government. The National Automotive Policy (NAP) offer
serious attention towards further development of local automobile industry manufacturing such as
Proton and Perodoa. Until year 2013, there is no tax charge for the certain hybrid cars as a support for
go green. (Aqilah, 2013) Government incentive and other grants lead the domestic cars become more
reasonable to purchase where this issue creates tough competition for Toyota in Malaysia markets.
However, in the year of 2016, The Toyota Camry 2.5 Hybrid was the first in its class to be
eligible as an Energy Efficient Vehicle (EEV) by the Malaysian government under the National

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Automotive Policy. This cause price of Camry 2.5 Hybrid to be reduced and UMW Toyota Motor
gives the full benefits to its customers. Moreover, in 2017 Toyota Fortuner will be reduced around by
RM 16,000 as this model also qualified as an Energy Efficient Vehicle (EEV) by the Malaysian
Government.

4.2.6 Technological Environment

Technological environment is a force that create new technologies, creating new product and
market opportunity. UMW Toyota Motor’s has integrated advance car technology designing to make
consumers life easier. They introduce Hybrid Cars. The example of Toyota Hybrids cars is Yaris
Hybrid, Auris Hybrid, Toyota C-HR and RAV4 Hybrid
This Hybrid features are saving fuels and reducing emission to produce their own recycled
energy. (Soon, 2014)Since the petrol price is increasing, hybrid car play an important role in saving
cost of fuel. Hybrid car recycle the energy and consists of two engines which is one petrol and one
electric working in harmony to deliver figures as impressively low as 3 litres of petrol consumed per
62miles/100km.
Other than that, the engines work together to deliver smooth power and responsive torque, as
and when user need it. If consumer need any extra performance for instance, when consumer want to
overtake they just simply can press the Power button and enjoy an immediate reply. The system also
reprocesses the kinetic energy to charge the battery. The most advanced features are the both petrol
and electric engine will shut down automatically where no energy is wasted.

4.3 SWOT Analysis

Figure 1: SWOT analysis diagram

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4.3.1 Strengths

 Toyota is the most valuable automotive brands in the world.

Brands value is the total financial value of a brand, which can indicate the level of customer
recognition to the product and its marketing. In 2017, Toyota ranks the world’s 7th and 8th most
valuable brands respectively in the Best Global Brands 2017 Rankings of Interbrand (Interbrand), and
The World's Most Valuable Brands of Forbes.

Table 1: Best Global Brands 2017 Rankings of Interbrand (Interbrand)

Ranking Brands Brand Value Overall ranking

(Automotive) (US$ billions) in 2017
1 Toyota $50.2 B 7
2 Mercedes-Benz $47.8 B 9
3 BMW $41.5 B 13
4 HONDA $22.6 B 20
5 FORD $13.6 B 33
6 Hyundai $13.1 B 35
7 AUDI $12.0 B 38
*Source: Interbrand

• Toyota is the largest automotive manufacturer in the world.

Toyota’s annual vehicle production is larger ahead of its competitors, such as Volkswagen,
General Motors, Hyundai and Ford. In 2016, Toyota’s annual vehicle production is 10,213,486,
ranking 1st in the vehicle manufacturer by production list. Toyota has been the largest annual vehicles
production company for at least five years from 2012, and is the first automotive manufacturer that
annual production exceeds 10 million in 2012. In 1999, Toyota’s cumulative domestic production
exceeds 100 million vehicles and in 2012, cumulative worldwide production exceeds 200 million
vehicles (company profile).

• Toyota Production System

Toyota production system (TPS) is the fundamental concept of manufacturing system developed
by Toyota based on the principle of “customer first”. Supporting by the two pillars, which is Jidoka
and Just in time, TPS aims to achieve the goal of high quality, prompt delivery and low costs by
thoroughly eliminating waste from manufacturing process.

Jidoka, which means quality must be built in the manufacturing process and never sending
defective items on to the next process, allow Toyota to develop good-quality and lower- cost vehicles.
Just in time, which means making what is needed, when it is needed in the amount of needed, help the

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company to decrease manufacturing time, increase manufacturing efficiency and eliminate
manufacturing waste. Toyota has now produced vehicles in plants spreading to 28 countries and
regions, where TPS is implementing. Toyota production system has now taken root worldwide, taking
efforts to encourage Toyota personnel to make ever better cars and enrich communities.

4.3.2 Weaknesses

• Bad publicity due to recall issues

Although Toyota is very careful in developing vehicle quality, Toyota still faces the problem of
bad publicity due to the recall crisis, which is harmful to its brand reputation and customer loyalty.

Since 2018, Toyota has been conducted six safety recalls in the North America due to the quality
problems. In March 2018, Toyota has recalled 1,730 vehicles due to engine piston problem. In April
2018, Toyota Motor North America has announced that it recalls certain Model Year 2018 and 2017
vehicles due to the vacuum pump problem. In February 2016, Toyota announced to recall 1.98 million
vehicles due to the airbag inflator problem. In June, 2014, Toyota recalled 844 thousand U.S. cars for
shrapnel shooting airbags (Toyota_recall)

• Reliance on supply chain

Toyota relies on suppliers for the provision of certain supplies, including parts, components and
raw materials. Defection on supplies or high price of raw materials, which increase burden on
suppliers, could slow down Toyota’s vehicle production process and thus negatively affect Toyota’s
profitability.

Toyota does well at keeping good relationships with suppliers in Japan, allowing engineers from
both sides to constantly discuss, communicate and jointly develop vehicle quality. However, Toyota
needs to find other overseas suppliers to meet its global expansion demand, which means Toyota’s
quality may be affected. Besides, the growing price of raw materials is a big burden for suppliers,
which in turn may damage components’ quality. A safety recall problem due to accelerator pedals
problem made by America Company CTS Corp indicated Toyota’s dependency on suppliers (Industry
week).

4.3.3 Opportunities

• Rising demand for clean cars

Under the influence of rising fuel costs and severe climate change caused by rising levels of
greenhouse gases, environmental performance has become an important standard for customers
choosing cars. The rising trend of hybrid electric vehicles, which are more fuel efficient and cleaner
than conventional gasoline vehicles, presents Toyota an opportunity to focus on introducing new
green technologies to make greener cars, hence taking more market shares.

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 Toyota has positioned environment protection as primary management issue, carried out
technology development of clean emission vehicles with high fuel efficiency. Toyota has released the
world’s mass-produced hybrid vehicle – the Pirus in 1997, and the full cell vehicles – “Mirai”, which
run on hydrogen, emit zero CO2 during driving. Since Toyota’s introduction of Hybrid vehicles to the
market, Toyota’s Hybrid vehicles have gained wide support from customers. In January 2017,
Toyota’s cumulative sales of hybrid vehicles surpassed 10 million vehicles.

4.3.4 Threats

• Competitive automotive market

Global automotive market is highly competitive. Toyota faces the threat coming from new players in
China, Korean, and India, and traditional automotive manufacturers, like Hyundai, Ford, General
Motors, expanding aggressively into these markets.

New local Chinese car companies like Geely Auto and Haval, have competitive advantages by
providing lower prices. Toyota has operated in India automotive market over a decade ago, but still
has limited success. India’s local automotive company, Maruti Suzuki, takes up about 50% of market
shares in the local car market, and the No.2 market taker is Hyundai Motor, while Toyota mostly
remained a fringe player in the India’s car market with only 4.7% of market shares (India times).
Toyota also faces technology innovation threats from its global competitors. Hyundai has spent large
amount of money to develop hydrogen fuel cells technology, making it the first company to mass
produce Tucson that using only with fuel cells (Hyundai). Toyota’s success depends on its ability to
offer new, innovative, and competitively priced products that meet customer demand on a time basis,
which requires Toyota to rapidly introduce and develop new technologies

5.0 Marketing Objectives

 Increase the market share

The reason of setting marketing objectives as increase the market share is because Toyota is the
largest automobile company and they have a matured system to produce a car that can ensure their
market share is being secured. Apart from that, Toyota also is a well-known company that make them
still in the automobile industry. The Toyota main objectives are to earn the profit before they can do
any cooperate social responsibility to make a positive image towards the public. Increase the market
share in the market not only generating the profit to Toyota, at the same time, Toyota also can invest
in the research and development of the new technology to increase the customer satisfactions in
driving.

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  Perform more vehicle testing and safety measure to create safer vehicles
Toyota has been facing a lot of recall issues due to technical problems and if they’re not fixed, the
affected vehicles will have a risk of crashing. So, Toyota objective would be creating safer vehicles
by performing more vehicle testing and implement new safety measures to prevent defects in the first
place. This is to ensure their customer stay safe while driving on the road. Toyota has been collecting
a lot of data on accidents from both domestic and international countries. Then they do their own
actual accident investigation and collision experiments to develop a magnificent passenger safeguard
equipment. Moreover, Toyota carefully checks and tests every single part of the vehicles from engines
to vacuum to airbags to make sure it has no casualties at all. If in case there is, they will repair or
replce the faulty parts with brand new and better quality parts at zero cost so the car is now safer for
driving.On top of that, Toyota inspects the effectiveness of their technology to make sure it works
properly. They’ve included advanced safety technology to stop cars from causing problems. Other
than that, they use crash test dummies and computer-based virtual human model to evaluate the
impact on the passengers during a crash test. All these actions are taken to help create safer vehicles.

6.0 Marketing strategies

6.1 Target market

 The target to increase the market share:

o Men
o Age: 35 to 50 years.
o Income: RM 3000 above.

The reason why targeted men with the age of 35 years until 50 years, with an income of RM 3500
above is because a person needs to have a stable income before they can purchase a car, or else, they
will need a guarantor to purchase a car (https://www.expatfocus.com/expatriate-malaysia-car-
purchase). Apart from that, usually men will be more interested on car rather than women is because
of men will do the emotional decision easily. Men also easily attracted by the powerful engine of the
car and the joyful of driving the car.

Other than that, Toyota’s Lexus line consists of high end performance cars which are targeted toward
upper class, wealthy and image-conscious individuals who have a luxurious lifestyle. The Lexus cars
have stunning features such as ergonomic interior, aerodynamics and more power level of efficiency.
It’s not just about being luxury but the Lexus cars also give a satisfaction of achievement to the
owners. As usual, the Lexus line is also targeted towards mostly men and they’ve widen their market
appeal to reach younger people.

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6.2 Product strategies

Figure 2 : Toyota product line

The above chart shows the product line of Toyota. Toyota has wide variety of products such as
the vehicles, accessories, engines, marine products, Welcab series and Lexus automobiles. The marine
products are boats that produced by Toyota. The Welcab series is the car that is modified for the
disabled so they can easily get in and out of the car. Some of the features of the Welcab series are lift-
up front passenger seat model which the passenger seat comes out of the car automatically and
wheelchair-adapted model which people can get in the car without getting out of their wheelchair.

The Lexus Automobile is the luxury car known for its bold shaped and modern design that are
produced for the high-income customers who seek perfection and ultimate comfort. However, Toyota
focuses more on the vehicles because they are the main revenue for them. The vehicles have 4 types
which is van, car, MPV, SUV and 4WD to cater different demands of the customers based on their
income, family size and lifestyle. For example, The SUVs are perfect for people who have an
adventurous lifestyle and loves challenging trips because they are meant to travel on tougher roads.
On the other hand, Toyota’s hybrid vehicles are suitable for people who are concern and worry about
the environment and fuel efficiency because these cars can reduce the emissions of carbon dioxide
and bring eco-friendly driving into the mainstream. This shows that Toyota reaches a wide market
through a diverse product line.

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6.3 Pricing strategies

Toyota offer vehicles of all price range. Toyota uses a few different strategies to price their products
such as customer value-based pricing, market-oriented pricing and penetration pricing.

 Customer value-based pricing

Toyota uses customer value-based pricing to set prices based on the amount that customers are willing
to pay. To make the customers feel worthier, the concept of value added pricing is added inside the
price of the car which meant that the car is included with the global navigation system (GPS), tinted
and so on. For example, Toyota charge high price for their Lexus cars because it has special features
that are used to increase the perceived value so that it can elevate the customer experience and as a
result, allowing for premium pricing. Another example would be, Vios have different prices among
the edition of the car. Vios 1.5J with manual starts from RM74980 whereas the Vios 1.5J with Auto
starts from RM77980. With a suitable pricing that customers can afford, the market share of Toyota
can be increased because of Toyota have a complete production system to produce a car.

 Market-oriented pricing

Toyota also uses market-oriented pricing strategy to set prices based on the market conditions &
prices of their competitors to stay competitive in the market. Toyota uses of this strategy is noticeable
for their vehicles such as sedans and trucks. Let say if Toyota’s competitors are pricing their products
at a lower price, then Toyota can choose to either price their products higher or below their
competitor’s price. This strategy allows Toyota to change the prices according to changes in the
market condition.

 Penetration pricing

This strategy caters to the price sensitive consumers in order to maximise sales and get widespread
market share. They can achieve this by selling some of their vehicles at the low end of the price
spectrum. Toyota’s use of the penetration pricing strategy can be seen when they introduced their
Yaris Subcompact car to the Europe market which enables them to compete with other popular brands
such as Ford and Volkswagen. (Wood, 2007)

Table 2 : Pricing of Toyota Vehicles

Vehicles Price
a. Car
• Vios From RM 74980
• Corolla Altis From RM 117400

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 • Camry 2.0 From RM 148600
• Camry Hybrid From RM 160200

b. MPV
• Avanza From RM 70200
• Innova From RM 107800
• Sienta From RM 97000
• Alphard From RM 429800
• Vellfire From RM 350800

c. SUV & 4WD

• C-HR From RM 145500
• Hilux From RM 87200
• Fortuner From RM 169800
• Harrier From RM 238000

d. Van
 Hiace From RM 94900

6.4 Promotion strategies

Toyota uses several ways to increase their sales. Some of the ways are advertising, sales promotion,
public relations, direct and digital marketing. The reason Toyota uses promotional activities is to
create the awareness of public towards Toyota brand. Apart from that, by advertising, Toyota can
protect their customers from being stolen by their competitors. The promotional strategies which can
be used are:

 Advertising

Advertising can be in the form of printed media or electronic media. To ensure the effectiveness,
Toyota have to make sure that printed media such as magazine, newspaper and the brochure convey
the same message regarding the promotion of Toyota’s car. Whereas for the electronic media, Toyota
can advertise through its webpage, social media such as Facebook, Twitter, Instagram, TV and radio.
The message that they can convey is the customers can get all the features such as global navigation
system (GPS) and tinted window for free if they buy Toyota’s car.

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  Sales Promotion

Sales promotion is a short-term incentive to encourage the customers to buy their products. For
example, the customers can get all the features such as global navigation system (GPS) and tinted
window for free if they buy a car like what the advertising broadcast. The purpose of sales promotion
is to attract the attention of public by offering them free items if they buy Toyota’s car. The difference
between advertising and sales promotion is that advertising uses visual and sound effect while the
sales promotion uses words that can give huge impact to the customers. Other than the free item
promotion, they can also offer the customer loyalty programme such as lucky draw for those who
have the member card.

 Public Relation

Public relation is important to build a good brand image towards the public. Like what the SWOT
analysis has stated, the weakness of Toyota is the bad publicity they received due to the recall issue of
the quality. The way to fix this problem is through the strict quality supervision system to prevent any
quality problem and follow by public relation activities to clean their image from the negative
publicity. For example, Toyota can offer scholarships for the university students who lack money to
pursue their studies. Other than that, Toyota can also do charity work by clamming 1% of their sales
that they get to be donated to the charity. With these action, the image of Toyota towards the public
will be more positive and increase the sales of Toyota indirectly.

 Direct and Digital Marketing

Direct and digital marketing is using the apps, email and website to advertise the promotion. The
benefit of direct and digital marketing is that its convenient to use because of the low cost and
interactive tools. Toyota can make it interactive by using bright colours and high-quality images of
their vehicles which can attract the customers to know more about their products no matter in email,
mobile apps or blog. For example, Toyota can make a mobile app to let the customers check their
membership status and, the free item promotion. By doing this, the message can be conveyed to users
successfully.

6.5 Distribution Strategies

The distribution strategies relate to the distribution channel that Toyota use to deliver the product to
customers. Toyota vehicles are currently sold through a channel of more than 175 distributors in more
than 190 countries and regions worldwide. The distribution channels consist of retailers, wholesalers
and distributors. Toyota mainly depends on retailing seller to sell and deliver their product to

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customer as well as when Toyota wants to come out with a design of a car that suits user’s perception.
Not only that, Toyota also uses retailer to attract the customer to buy a car. Even for the aftersales
service, Toyota still needs to rely on them to provide the service to customers such as the spare parts.
To prevent Toyota to depend too much on retailers, Toyota can set up a one-stop centre at each state
to provide the service such as purchases of car and customer service. This one stop centre will
decrease the supply chain cost and reliance of Toyota towards the retailers.

7.0 Recommendations for Change

Toyota’s strength is their brand value of their products and being the largest automotive manufacturer.
So Toyota can use these advantages to produce more variety of automobile cars and other product line.
Most Toyota cars comes in basic colours such as black, red and silver so maybe they should add more
variety of choices by adding more feminine and unique colours to their vehicles such as teal, dusty
pink or mauve to attract female customers.

For the weakness, they have to face bad publicity due to recall issue of quality but they can be
improved by using a stricter surveillance system to maintain the quality of the product line. Not only
that, Toyota should also take extra effort to examine and inspect carefully every aspect of their
vehicles before releasing them to the market. There’s no point of releasing new exciting models if
they’re not safe to use. If this problem continues, consumer will assume that Toyota is not being
serious about safety measures. So they must take serious steps by doing a lot more crash testing,
careful examination and implement new safety technology to ensure all parts of their vehicles work
efficiently and effectively.

Next is the reliance on the supply chain problem which can be reduced by setting up a one-stop centre
that provide all the services that customers might need. The services include customer services,
purchasing a car and after sales service such as maintenance and providing spare parts.

While Toyota’s opportunity is the rising demand in green car, so Toyota can invest in the production
of green car that uses solar energy or even the electricity to move a car. This decision can ensure
Toyota become the leader in the market if Toyota successfully develop a green car. Toyota can also
improve the loyalty programme by organizing a monthly lucky draw with awesome prizes as a reward
for the customers to protect their market.

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