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MARKETING MANAGEMENT

TOYOTA
KELOMPOK 7 MM EKSEKUTIF B 27C
DIAN ATIKA
RAFIKA
RERY INDRA KUSUMA

Content
Case Summary
Main Issue

Problem Statement
Analysis
Recommendation

Case summary
On August 28, 2009, driver and four passengers
of Lexus ES350 were killed because the car
couldnt stop horrified audiences in the United
States and around the world.
For Japan-based Toyota Motor Corporation, a
company once revered for its commitment to
quality and reliability, this incident touched off a
series of recall announcements.
Toyota have to lived up to the high standards and
improving reputation after incident.

Year

History

1937

Toyota was founded by Toyoda Family

1938

Production began

1947

Toyota had produced 100,000 cars

1950

Improvement Toyota system lead to JIT manufacturing


Toyota adopted a system known as jidoka
Ohno and Toyota sought to instill innovation and the idea of continous
improvement (kaizen) on the factory floor

1951

Introduction of a Creative Idea Suggestion system, a form that anyone at


a plant could fill out with a suggestion for how to make processes and
production better.

Culture

Stressed quality, Safety, Duty, Family atmosphere,


Creativity

Year

Toyota in the U.S

1957

Introduced Toyota Crown

The first Japanese passenger car


exported to the U.S

1958

Sales amounted to 287 Crown


Sedans and one Land Cruiser

A four wheel drive SUV

1961

Land Cruiser was the sole Toyota


export to the U.S

1965

Developed and built the larger and


powerful Corona

1967

President Tatsuro Toyoda had a


stroke.

Management passed out the


founding familys hands for the first
time.

1968

Built Corolla

An affordable but technologically


advanced Sedan.

1969-1970 The Corona, Corolla, Land Cruiser


garnered a reputation for quality and
reliability.
Marketing push in The U.S.

Year

Toyota in the U.S

1972

Sold one million vehicles just in The U.S

1974

Improving reputation, consumer


concern for fuel economy

1978

Both cars and trucks made the firm the


number one import brand in sales

1980

Toyota held an 8% unit share of new


cars sold in The U.S.

1983

Compete with German brands

1989

Toyota broke into the crowded luxury


vehicle market by unveiling the Lexus.

1980s- Toyota defined its growth as jojo,


1990s slow and steady.

Toyota increased its capital


investment by 50% in order to
boost production.
Lexus sold 20,000 units.
Global market share of new car
unit sales from 3% in 1980, 8% in
1990, and in 9% in 2000.

Name

History

Strategy

Hiroshi Okuda

Replaced Toyoda in
1995. Okuda step
down as Chairman in
June 2006.

Focused on establishing factories in new


country markets and set aggressive global
resource allocation and profitability targets.

Katsuaki
Watanabe

Become president in
2005.

Kakushin meaning revolutionary change


or radical innovation. He announced new
cost reductions via a program called Value
Innovation.

Akio Toyoda

Become president
(youngest CEO) in
June 2009

A resolve to make a big turn from


emphasizing volume to quality. Rectify
small errors, one after another. We may
stretched more than we should have, and
that made us unable to capitalize on
Toyotas traditional strengths.

Main Issue
Before incident:
Since Toyota was founded, profitability, global presence
and production in the U.S. increased dramatically until an
incident happened on August 28, 2009 around San Diego
highway.
After incident:
Toyota President Akio Toyoda apologize to the public.
First recall :
Recall was met with disbelief but continuing support for
the brand, subsequent revelations and recalls tested the
brands resilience in the U.S.

Recalls Begin
Starting September 2009 January 2010, news of Toyota recalls flooded American media. These
recalls fell into three distinct categories:

1. Pedal entrapment
recall

NHTSA open an investigation into the Lexus ES350 after fielding


consumer complaints about pedal entrapment.

Toyota recalled an additional 2.3 million vehicles on January 21, 2010.


2. Sticky pedal recall

The apparent manufacturing flaw caused the pedal to be hard to


depress and slow to return to resting position.

3. Prius recall

Recall 437,000 Prius and other Toyota hybrid vehicles for brake
failure. Vehicles were susceptible to a momentary loss in braking
capability while travelling on uneven surfaces.

Recall

Problem Statement
How to return Toyota to producing highquality products on a zero-defect basis.
How to convince Congress and the public of
Toyotas sincere commitment to this cause.
Most consumers choose the Toyota brand
because of its reputation, but where does this
prolonged and misunderstood problem leave
the companys reputation?

Toyota Models Recalled: 2009-2010


Years

Floor Mat
Entrapment

2004-2009

Prius

2005-2010

Avalon,
Tacoma

Sticky Pedals

Braking

Lexus

Avalon, Prius,
Highlander

2006-2010

IS 250, IS 350

2007-2010

Tundra

Tundra

2008-2010

Highlander

Sequoia

2009-2010

Corolla, Venza,
Matrix

Matrix, RAV4,
Corolla

Camry

ES 350

Toyota Pedal Assembly

Effect of Recall
Year

Sales in the US

Shares

Januari 2010

Fell 16%

Lost 11.6%

Februari 2010

Fell 8.7%

Lost 11.6%

Analysis
Slow response
In a global corporation with thousands of suppliers,
identifying the problem and getting all the players
alligned took more time.
Saving face
Toyota issued a public apology, explanation about
repairing vehicles, recalls information and interview in
public relations and social media.
Japanese views
Japans media argued that the recalld and critism
of Toyota were a consequence of Toyotas poor
management.

Business Impact
Competitor jumped on the opportunity, offering deals and steal
away Toyotas customers.
Toyota estimates that it was losing approximately 20,000 sales
per week.
Some dealers reported year-on-year sales declines of 25%.
The Camry, Highlander and RAV4 experienced immediate and
massive price drops on dealer lots right after the January recalls.
Out of pocket costs of fixing the recalled cars, lost sales, market
share, pricing power and residual values figured in the
companys valuation and recalls affected them all.
Japanese media argue that Toyotas poor crisis management
might damage the credibility of Japanese manufacturing in
general.

Recommendation
Toyota have to learn that its initial slow response was
the reason why the recall issue had become an
increasing problem, Akio Toyoda should have
announced that he would attend the hearing much
earlier.
Toyoda focused on protecting its brand and image with
accepted a formal invitation to testify before cooperate
with the U.S. Congress.
While Toyodas February 24 testimony would aim to
show that the company sincerely wished to make
things right and renew its commitment to quality.

Recommendation
Toyota organize a clear message around its commitment to
return to quality.
A comprehensive response included taking care of
vehicles on the road today and making them even safer in
the future and being more open and transparent about
safety issues that might arise.
Toyota would set a new standard for transparency and
speed of response on safety issues and would continue to
advance safety and environmental technologies.

THANK YOU

Toko Bunga Surabaya

Jual Karangan Bunga Surabaya

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