Toyota

Australia
Marketing Strategy and
Implementation Plan

Syed Redwanur Rahman, Susan C. Valerio, Wenjing Wan, Chunxiao Zhang

20 May 2012
 PRBM 033 Assessment Rubrics (Assessment 3)
Total Marks: 40%

Assessment High Distinction Distinction Credit Pass F Numeric

Criteria (85% and Above) (75% To 84%) (60% To 74%) (50 To 59%) (Less than 50%) Grade
Total
40%
Report All academic All academic rules Some academic An attempt has Adherence to 07
presentation rules of writing of writing rules of writing been made to academic writing
Structure, format followed by CDU followed by CDU followed by CDU follow the rules has not been
and referencing are adhered to. are adhered to. are adhered to. academic writing demonstrated.
(10 marks) Structure of text, The structure of The structure of rules, structure of Marketing plan
with headings & text and text and market text and format has not
sections, marketing plan plan needs marketing plan been followed.
marketing plan format is further format. Improper
format and generally adhered orientation Referencing has referencing style
proper grammar to. The towards the been used but used, text has
is adopted. All referencing style required format. standards have been pasted in
sources are is well followed. The referencing not been followed. large slices
rightly style is without relevance
referenced as per inconsistent. and proper
CDU standards. recognition.
Analysis of Demonstrates an Demonstrates an Demonstrates an An attempt is Minimal 08
marketing ability to evaluate ability to evaluate understanding of made to use the understanding of
strategies the relevant the relevant the theory to theory to evaluate theory to evaluate
Evaluate all relevant marketing marketing evaluate the the marketing marketing
marketing strategies strategies based strategies based marketing strategies based strategies based
given in the theory, on cost-benefit on cost-benefit strategies based on a weak cost- on a cost-benefit
use credible analysis. analysis. Evidence on cost-benefit benefit analysis. analysis. Limited
research where Evidence of of research skills, analysis. An Limited range of research skills
required in the creative research but better link to attempt is made sources used for demonstrated
analysis. (10 marks) on marketing analysis is to use sources, the research. with poorly
linked to the required. but the link to selected sources.
analysis. analysis is weak.
Application of Demonstrates an Demonstrates an Demonstrates an An attempt is Unable to apply 16
marketing ability to apply ability to apply ability to apply made to apply the the analysis to
strategies the theory and the theory and the analysis to analysis to develop and
Demonstrate ability analysis to analysis to develop the develop and implement a
to recommend & develop and develop a marketing implement marketing
implement implement a marketing strategy, but the marketing strategy for the
marketing strategy marketing strategy for the strategy and its strategy for the B2B product,
for the selected B2B strategy for the B2B product, implementation B2B product, which could be
product. B2B product more support need more needs a better fit integrated into
(20 marks) integrated into from the integration into for success in the the marketing
the marketing implementation is the marketing marketing plan. plan.
plan. required. plan.

Very good report, please see my comments in the report.

TOTAL MARKS: 31/40

Contents
Executive Summary......................................................................................................1
1 Introduction............................................................................................................3
2 Brief Profile of Toyota Global and Toyota Australia................................................3
3 Business Analysis, Concerns and Problems.........................................................4
3.1 Strengths.............................................................................................................4
3.2 Weaknesses.......................................................................................................4
3.3 Opportunities......................................................................................................4
3.4 Threats................................................................................................................4
4 Objectives of the Marketing Strategy.....................................................................5
5 Evaluation of Different Strategies..........................................................................5
5.1 Cost Leadership Strategy.................................................................................5
5.1.1 Benefits or Advantages...............................................................................6
5.1.2 Costs or Disadvantages..................................................................................6
5.2 Product Leadership Strategy..............................................................................6
5.2.1 Benefits or Advantages...................................................................................7
5.2.2 Costs or Disadvantages..................................................................................7
5.3 Focused Strategy................................................................................................8
5.3.1 Benefits or Advantages...................................................................................8
5.3.2 Costs or Disadvantages..................................................................................8
6 Implementation Plan..............................................................................................9
6.1 Four Ps.............................................................................................................9
6.1.1 Product............................................................................................................9
6.1.2 Price..............................................................................................................10
6.1.3 Place..............................................................................................................11
6.1.4 Promotion......................................................................................................12
6.2 Control Measures.............................................................................................12
7 Conclusion...........................................................................................................13
8 References...........................................................................................................14

PRBM003 Syed Redwanur Rahman, Susan C. Valerio, Wenjing Wan, Chunxiao Zhang Page 1
Executive Summary

Private companies carefully select strategies that are supportive of their goals,
objectives and targets. It is logical that they adopt strategies that increase their
market share, maximise their returns and minimise costs to sustain their
operations. The company is guided by these because it has to offer fair
compensation package to its workers, provide the expected stockholders returns,
strengthen market share, meet creditors expectations, continue its corporate social
responsibility role, enhance its goodwill, improve profitability, among others. But
choosing strategies is a difficult decision unless these are backed up by evidence,
data or scientific studies. Each company situation is a unique case. No need for this
introduction to theory

This report selects a strategy that provides solutions to the problems identified in
Toyotas SWOT analysis. Its weaknesses are: Recalls of vehicles globally,
estimated at 15.43 million in 2009-2010, have created negative image to Toyota
(Automotive News 2010). Its operating profit declined by 29.3% annually from
March 2008 to March 2011. As such, operating profit margins went down from 5.4%
in 2006-07 to 1.3% in 2010-11 (IBISWorld 2012, p 28). The following are the threats:
High labour cost in Australia diminishes its advantages in maintaining strong export
sales. Strong Australian dollar reduces its export comparative advantage. There is
strong competition in automobile sales, from local and imported ones. Australia is a
small market. There are legal, economic and political risks in dealing with other
countries.

Given these problems, the following are the objectives of the marketing strategy: To
improve production to prevent product recalls; to produce state-of-the art vehicles
and environment-friendly ones; to produce vehicles that respond to unique business
needs; to develop and strengthen business clients confidence; to increase further
its market share and boost its operating profits.

The paper focuses on the three marketing strategies that Toyota can implement to
achieve those. These are: cost leadership, product leadership and focused
strategy. Owing to time and resource constraints, the report focuses on the
qualitative aspects of cost-benefit analyses.

Cost leadership calls for being a low cost producer in an industry for a given
quality level (Quick MBA 2010). Product leadership strategy involves creating an
innovative product/service and marketing program so it is perceived by a broad
spectrum of customers as being a leading-edge product or service. Focused
strategy concentrates on a narrow market segment by a deep understanding of its
customers and the perception of the value of the product/service offered. The
company provides superior value by segmenting its markets and then tailoring its
product or service to match exactly the needs of targeted customers.

No need for this comparison of strategies here

PRBM003 Syed Redwanur Rahman, Susan C. Valerio, Wenjing Wan, Chunxiao Zhang Page 2
Based on the analyses, the most effective is the product leadership strategy. It
responds well on the marketing objectives. The implementation plan highlights
the four Ps product, price, place and promotion for Toyotas business clients.
Advertising strategies, which carry messages such as your caring partner; we
have solutions to your problems; always at your side, your partner in
sustainable development , will complement the product leadership strategy.

Every staffs understanding and appreciation of the marketing objectives and targets
are imperative. This is to ensure that all departments support each other in the
pursuit of the same direction. Control measures, such as monitoring and continuing
assessments are crucial during implementation phases of the marketing strategy and
promotion activities. These will be undertaken monthly to make adjustments when
performance is off-track or external and internal factors negatively affect the
attainment of the objectives. Contingency plan or Plan B is part of implementation
mechanism so everyone is prepared when there are deviations caused by external
and internal factors.
Good start!

PRBM003 Syed Redwanur Rahman, Susan C. Valerio, Wenjing Wan, Chunxiao Zhang Page 3
1 Introduction

Companies who want to capture the global market innovate and devise ways on how
to deal with the situation. Businesses have unending needs and problems. These
are the opportunities that innovative firms capture to provide solutions to these felt
needs.

The paper focuses on Toyotas marketing plan and the three marketing strategies
that it can implement to increase its market share, improve profitability and enhance
goodwill. These are: cost leadership strategy, product leadership strategy and
focused strategy.

The cost and benefits of each strategy is presented and a strategy is chosen. Owing
to a large number of automobile manufacturers in Australia coupled with limited
domestic market, the product leadership strategy is a tool to produce state-of-the-
art vehicles. The strategy also responds to unique business clients needs and
problems, ensure brand loyalty and increase sales globally.

An implementation plan of the chosen strategy is discussed. The plan also includes
advertising activities to improve Toyotas image and boost its goodwill. Important
consideration is given on the regular monitoring of the plan and the preparation of
contingency measures or plans to warrant the achievement of the objectives.
Discuss more about the company here

2 Brief Profile of Toyota Global and Toyota Australia

Toyota Motor Corporation was established on August 28, 1937 by Mr. Sakichi
Toyoda. The companys main business is the production and sale of motor vehicles.
Its head office is located at Toyota-Cho, Toyota City, Aichi Prefecture, Japan, with Mr
Akio Toyoda as its President. Toyotas design, research and development centres in
Japan, USA, and Europe perform the following activities: product planning, vehicle
engineering and evaluation, basic research, exterior, interior and colour design,
design, prototype development, vehicle testing and evaluation at high speed and
under cold conditions, among others (Toyota Global). The company has 50
overseas manufacturing companies in 26 countries and regions, and the vehicles are
sold in more than 170 countries and regions under the Toyota, Lexus, Daihatsu and
Hino brands (Toyota Australia).

Assembly of Toyota vehicles started in Australia in 1963, but it was only in 1987 that
Toyota Australia became fully owned by Toyota Motor Corporation (Langfield-Smith &
Greenwood 1998, p. 336). With this change in ownership, Toyota Australia has
adopted the Toyota Production System (TPS), which means lean manufacturing
system, few people, less space and inventory, zero waste to produce high-quality
and cost-competitive product (Womack et al in Langfield-Smith & Greenwood
1998, p. 337). Good.

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3 Business Analysis, Concerns and Problems

Australias motor vehicle producers have faced tough time since the onset of global
financial crisis. It had started when consumers began switching to smaller, more fuel-
efficient vehicles because of environmental concerns and rising petrol prices
(IBISWorld 2012, p 5).

Despite competition, Toyota has maintained the lead in motor vehicle sales in 2011
when it sold 17,239 units, for a market share of 20.2%; GM Holden - 10,209
vehicles, 12% share while Hyundai Motor 7,507 vehicles, 8.8% share (IBISWorld
2012, pp 27-29). The best-selling model of Toyota is Corolla with sales of 3,593,
followed by the Toyota Hilux - 3,480, Volkswagen Golf - 3,337 and Mazda 3
3,185 (IBISWorld 2012, pp 27-29).

3.1 Strengths

Toyota is the only car manufacturer that offers medium-sized cars in

Australia; hence its above-average performance in 2011 (IBISWorld 2012, p
27).
The company has strong export sales (IBISWorld 2012, p 27).
Extensive dealership networks throughout Australia;
Wide range of automobile choices.

3.2 Weaknesses

Recalls of vehicles globally, estimated at 15.43 million in 2009-2010, have

created negative image to Toyota (Automotive News 2010). More like threat!
The dependence on suppliers is the weakness here
Its operating profit declined by 29.3% annually from March 2008 to March
2011. As such, operating profit margins went down from 5.4% in 2006-07 to
1.3% in 2010-11 (IBISWorld 2012, p 28). Financial management??

3.3 Opportunities

More government support because of Toyotas campaign on environment-

friendly vehicles. The Australian Federal Government granted $35 million
while the Victorian Government contributed $15 million to produce the hybrid
Camry vehicle (IBISWorld 2012, p 28).
Toyota is one step ahead when it comes to environment-friendly vehicles
(IBISWorld 2012, p 28).
The company continues to increase export sales.

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3.4 Threats

High labour cost in Australia diminishes its advantages in maintaining its

strong export sales.
Strong Australian dollar reduces its export comparative advantage.
Strong competition in automobile manufacturing from local and imported
ones.
Small domestic market
There are legal, economic and political risks in dealing with other countries is
this your target??.

The marketing strategy will respond to the weaknesses and threats identified
while optimising the benefits of its strengths and opportunities.

4 Objectives of the Marketing Strategy

The Australian automotive industry is characterised by a highly cyclical growth

pattern, high fixed cost requirements, break-even profit operations and few
manufacturers with a small domestic market. With these factors in which Toyota has
direct or no direct control, the following are the objectives of the marketing strategy:

To improve production to prevent product recalls

To develop state-of-the art, environment-friendly vehicles
To produce vehicles that respond to unique business needs
To develop and strengthen business clients confidence
To increase further its market share
To boost its operating profits Try to integrate the objectives

5 Evaluation of Different Strategies

Automotive manufacturing in Australia resembles an oligopolistic market. Thus, any

action of one will have reactions from others. Three marketing strategies are
evaluated to determine which one can bring the biggest benefits to Toyota, and
respond to the objectives of the marketing strategy. These are: cost leadership
strategy, product leadership strategy and focused strategy.

5.1 Cost Leadership Strategy

Low-cost strategy is centred on the capability to produce and deliver products of

competitive quality at lower costs. Cost leadership strategy is based on the belief
that the company can develop, manufacture and distribute products more efficiently
than competitors. It is a concept developed by Michael Porter, which calls for being
the low cost producer in an industry for a given level of quality (Quick MBA 2010).

The cost leadership strategy allows Toyota Australia to be in a strong position

against competitors since low costs allow lower prices to cancel the margin of the

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closest competitor (BLC 2010). Consumers are more and more demanding, looking
for everything at a very attractive price (Maggioni et al 2006). Cost leadership
strategy may help Toyota Australia to translate its cost advantage into price
advantage for its customers and thereby improve its market share. The prospect of
increasing the market share provides a great opportunity for the company to attain
economies of scale and improve its profitability.

A common theme across cost leadership is a good supplier relationship. Toyota

must have sufficient control over in-bound supplies and logistics to ensure the
availability of quality materials. A good supplier relationship warrants that the various
suppliers located globally share Toyotas principle of delivering quality products at
the time they are needed.

5.1.1 Benefits or Advantages

Supplier loyalty is nurtured because of the free trainings and seminars

provided to them.
Availability of needed parts and materials is assured because of the long-
term agreement between Toyota and its suppliers. If there are problems in
one supplier, Toyota can go to other suppliers.
Low costs necessitate production of high volume of output. This means
fixed costs are spread over a larger number of units of the product, resulting
in a lower unit cost. Hence, there is economies of scale.
Proactive in restructuring the value chain, finding innovative ways to
restructure processes and tasks and provide the basics more economically.
With low cost goes with it low price of product. Toyota vehicle range can
respond to the different income levels of its business clients.
With price as a major factor in responding to the needs of the different
businesses, Toyota will be able to expand its market share, thereby increasing
its profitability.

5.1.2 Costs or Disadvantages

Tedious process in screening of suppliers. There is huge man-hour lost in

the administration and screening of suppliers.
Financial costs and man-hours lost in training and educating Toyota suppliers
on the specifics of the materials they need. While there is no direct cost to
suppliers, they still have to spend for their plant layout changes and
acquisition of new machineries.
Toyota suppliers maybe supplying also to Toyota competitors, hence,
possibility of copying the technology or breach of contract.
Toyota and its competitors may engage in price wars that drive their profits to
very low levels.
Toyota must maintain its investments in state-of-the-art equipment or face
the possible entry of more cost-effective competitors.
Major changes in technology may drastically change production processes so
that previous investments in production technology are no longer
advantageous.

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 Toyota may become so concerned with maintaining low costs that they
overlook needed changes in production or marketing.
The cost-leadership strategy may be more difficult in a dynamic environment
because some of the expenses that Toyota may seek to minimise are
research and development costs or marketing research costsexpenses
Toyota may need to remain competitive.
Business consumers may think that low cost strategy means low quality
vehicles.

5.2 Product Leadership Strategy

Product leaders are companies that dominate their markets because they
continuously offer the best and most innovative products or services in their industry.
These companies display the ability and determination to make products that
consumers consider superior and products that deliver more benefits than others
(Verweire).

This strategy concentrates on creating an innovative product/service line and

marketing program so that it is perceived to a broad spectrum of customers as being
leading-edge products or services. They provide superior value by offering its
customers a continuous stream of state-of-the-art products or services. The
company seeks to identify emerging opportunities and continuously strive to develop
and deliver new products. They look for first mover advantages. It is open to new
ideas, relentlessly pursues new solutions and works to reduce cycle times so it can
get new products to market quickly (Kotler & Keller 2008).

Based on product leadership strategy, Toyota needs to consistently strive to provide

its markets with leading edge automobiles or useful new applications of existing
products or services. The strategy begins with a deep understanding of what
customers need and ends with building organisational capabilities to satisfy these
needs better than rivals (Thompson, 1999).

5.2.1 Benefits or Advantages

The strategy maintains an environment in which creativity can flourish. It

requires a culture that encourages experimentation and risk-taking, one in
which developed plans that fail are viewed as opportunities rather than
weaknesses.
The strategy supports team-based approach in which dialogues and
consultations are encouraged. They usually work in multifunctional teams to
shorten response times and development cycles. They recognise the
importance of developing platform technologies and products that become
the foundation for future products.
Business buyers are all very unique in their consuming behaviours and
different business buyers have different business needs. Thus, product
leadership strategy responds to these diverse problems. Toyota can
customise to respond to the problems of the business and customers, i.e.,
vehicles that have low fuel-consumption, environment-friendly, supportive of

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 small and medium-sized businesses, durable, many and strategically-located
dealers, etc.
Toyota Australia can establish its automobiles as the industry standard,
making it difficult for followers to gain customers.
It can build a strong Toyota brand by the best and most innovative
automobile and after-sales services. As a product leader, Toyota Australia will
have rare problems with powerful buyers because it offers them the best and
unique product and services. As it is the only one who can supply that kind
of vehicle and after-purchase services, it commands brand loyalty.
Innovative vehicle and services which result to brand loyalty also create a
barrier to entry for other companies seeking to enter the automobile industry.

5.2.2 Costs or Disadvantages

Toyota Australia will spend much time and high expenses in managing and
keeping people talent. The strategy will require different resources and skills.
It also implies differing organisational arrangements, control procedures and
inventive systems.
Toyota Australia will spend more expenses in advertising and market
research. It has to prepare markets and educate potential customers to
accept products that never existed before. At the same time, the company
will take high risk in launching innovation in their products and services range.

5.3 Focused Strategy

This strategy concentrates on a narrow market segment by a deep understanding of

its customer and their perception of the value of the product or service offered. The
company provides superior value by segmenting its markets and then tailoring its
products or services to match exactly the needs of targeted customers. It specialises
in satisfying unique customer needs through a close relationship with, and intimate
knowledge of the customers. It builds detailed customer databases for segmenting
and targeting. The strategy empowers its marketing people to respond quickly to
customer needs. It serves customers who are willing to pay a premium for a service
or special attention they receive (Kotler & Keller 2008).

Business focuses on understanding the customers and their perception of the value
of the product or service offered. Accompanying this orientation is a focus on the
lifetime value of a relationship. It costs only about one-fifth as much to make an
additional sale to an existing customer as it does to attract and sell to a new one.
Thus the concepts of customer equity and customer share instead of market
share are central to this strategy (Slater & Olson 2001).

5.3.1 Benefits or Advantages

As a specific market niche is served, costs required are lower.

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 Toyota will be able to offer niche market something they perceive is always
instrumental for achieving high customer loyalty and long term company
reputation.

This strategy works best when it is costly or difficult for multi-segment

competitors to meet the specialised needs of the target market niche.

5.3.2 Costs or Disadvantages

Errors in focusing may result in lost market/customers/business.

Narrow focus or segments of markets limit market share and profitability.
Higher expenses on market research to have updated information on its target
customers.

In the choice of a marketing strategy, the greatest consideration is the one that will
address the problems of Toyota and respond to its objectives. Being part of a
volatile automobile industry, competitively-priced automobiles respond to price-
conscious customers. But the increasing labour costs even in developing countries,
the rising costs of production and the difficulties of maintaining good supplier
relationship, among others, do not guarantee that a cost leadership strategy can be
sustained in the long run.

The notion of focusing only in a small segment of the market does not respond to the
problems identified and objectives set. Costs are lower but it does not guarantee
that market share increases and profitability rises and sustained. Focused strategy
may not be appropriate then.

Toyota has to invest in research and development in order to meet the changing
needs and preferences of the market. Toyota has to export in order to widen its
market share. Thus, it needs to carefully invest in product and service innovation
to provide solutions to the divergent inclinations of its business customers in the
different countries. Despite economic turmoil, businesses still prefer automobiles
that have the state-of-the-art features of the dynamic world. Businesses want to
lower cost, so they prefer automobiles which are fuel-efficient, environment-friendly,
durable, have extensive dealer networks, among others.

Based on the cost benefit analyses of the three strategies, Toyota can better adopt
the product leadership strategy. Business needs and problems are unending.
The market is dynamic, technology changes fast. Thus, the innovation and product
and service uniqueness offered by the strategy clearly responds to the diverse
problems of every business client. Good analysis, could even use a table format

6 Implementation Plan

At the start of the financial year, the goals, objectives, targets and strategies
should be understood, appreciated, approved and supported by all decision-makers
of Toyota. These decision-makers are in the purchasing, engineering, research
and development, manufacturing/assembly, production, administration,

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marketing departments, operations, among others. The assessment of previous
years or quarters performance should also be reviewed as the starting points. Each
department then should provide a venue where each employee understands and
appreciates how his/her tasks and responsibilities are related with the
departments targets and the companys overall goals and objectives.

Product leadership strategy responds to Toyotas marketing objectives of developing

environment-friendly automobiles, increasing market share and improving business
confidence, among others. Its implementation plan will consist of four controllable
categories: product, price, place and promotion.

6.1 Four Ps

6.1.1 Product

In most business-to-business (B2B) markets, customers regard product quality and

durability as a necessary requirement. Performance must be high for the supplier of
the product to be considered. Toyota must not only maintain high quality and
durability in manufacturing cars but they must bring enough innovation in car
manufacturing and value added features. Car companies such as Ford and
General Motors focus on manufacturing hybrid cars, as there have been growing
demand for hybrid cars from business customers.
Toyota should ensure that their automobiles provide solutions to the unique needs
or problems of every business client. This guarantees stronger and sustainable
relationship.

Hence, Toyota must come up with more innovation in hybrid category and add
value features so they can capture the B2B market share more. While developing
new cars, Toyota must focus on increasing performance ability and design so the
overall quality of Toyota cars is assured.

The following concerns or criteria should be incorporated in the product plan for
Toyota Australia. The research, purchasing and production departments will be
responsible for the product plan. Product leadership is the strategy, hence, these
five criteria should make Toyota vehicles stand out with the rest. Toyota Australia
may benefit from technology leadership by applying for patents for their
technology to prevent other companies from copying it.

Efficiency Fuel efficient cars are becoming popular due to higher fuel costs,
increasing gas taxes as well as environmental issues.
Safety Develop more precise features and build higher safety system
standard to enhance the safety of Toyota automobiles and minimise
product recalls.
Longevity Taxi operators, government agencies, travel agencies, among
others are cost-conscious; hence, it is imperative to improve quality
to extend the lifetime of Toyota vehicles. Similarly, the company
needs to enhance its after-purchases services to keep the

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 longevity of Toyota vehicles.

Innovation Encourage staff creation and department innovation.

Design Humane functional design and attractive appearance should be
included into the companys product plan. Different businesses,
i.e., taxi companies, police, tour operators, hotels, schools, not-for-
profit organisations, etc., have different vehicle design
requirements.

6.1.2 Price

Price plan is a significant part of the implementation plan as it may affect Toyota
Australias market shares, revenue and customer loyalty. Price is a major concern
of production, engineering and operations departments. The price plan may adopt
the following:

Value-added pricing in which buyers are willing to pay more for a superior
offer, usually based on service, brand and other benefits or features of the
vehicle itself. Toyota can easily go for value added pricing, as the business
customers are expected to be convinced by the superior innovation, value
added features and overall quality of the cars. They will be convinced to pay
that extra price for the superior benefits they will enjoy.

Suggest different retail prices in different markets/countries. Due to different

economic conditions, size of population and industry competitions, Toyota
Australia can set different suggested retail prices. Toyota can offer relative
lower price in capital cities which have large population and high industry
competitions.

Toyota can set volume discounts and wholesale pricing to attract key business
customers. For example, Toyota can provide discounts and limited time free
services for taxi companies, tour operators, hotels, schools, police and other
government departments which may purchase large volume of automobiles.
These companies can also help promote Toyota automobiles with their peers
or company networks.

6.1.3 Place

The marketing and sales departments shall be involved in this category, among
their other concerns. Toyota Australia has to improve its business-to-business
distribution systems through the following:

Dealership
- Recruiting the best vehicle dealers in the local area
- Provide professional training for Toyota accredited dealers
- Focus on teamwork among different departments - including services,
parts, sales, finance and administration
- Carefully study the strategic locations of the dealers

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 Toyota can continue its Toyota Environmental Dealership (TED) program
which promotes environmental leadership in the dealer network (Toyota
Australia 2012b). The program has seven dimensions which aim to integrate
sustainable business practices in daily operations and to encourage dealers
to continuously improve their environmental performance. This is done by
benchmarking their performance against other dealers and showcasing their
environmental initiatives. These benchmarks are: risk management and
commitment, energy use (carbon emissions), recycling and waste
management, water use, environmentally-preferred purchasing staff , training
and communication, social contribution and innovation (Toyota Australia
2012b).

Order processing
Build accurate and fast order processing system between marketing center
and Toyota dealers. Toyota can innovate in their distribution system in
making the selling and buying process automated. Toyota can have a
dedicated website where all their cars and their offers will be posted for the
review of their business clients. It can receive orders and payments online.
This can minimise the hassle of having too many intermediaries in the
distribution process.

Improve warehouse management regarding warehouse staff, controlling

stock/storage procedures and inventory management system.

6.1.4 Promotion

The marketing, sales, administration and operations departments, in close

coordination with their dealers, shall be involved in this category. Proper promotion
method can help Toyota Australia communicate with business customers and entice
them to purchase. It can combine pull and push strategies to keep the marketing
message going on a consistent basis while ensuring automobile availability in terms
of production demands. Apply push marketing strategy on first class or luxury
automobiles but pull marketing strategy on economy automobiles.

In its advertising strategies, the following are its objectives: to improve the company
image, to increase goodwill and to expand its business clients. Among the
messages that it can develop are: your caring partner; we have solutions to your
problems; always at your side, your partner in sustainable development.
These taglines should be translated into actions.

In carrying out its advertising messages, Toyota will utilise internet, personal selling
and sales promotion. The use of internet is promising to reach and affect
automobile market. Personal selling is likewise important because it affords more
conviction for purchase. This will be carried out by the local dealers who have been
trained to be familiar with Toyota automobile specifications through their dealership
materials and agreements.

The company shall also employ sales promotion through the use of volume discount

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to attract key customers. Toyota Australia also can offer service discount or annual
free service for key business customers.

The company should develop positive public relationships with media and the
community through its corporate social responsibility (CSR) programs. It has to
maintain good public relations to obtain favorable publicity as well as to handle
successfully negative feedbacks. Its TED program plays a major role in this image
building.

Toyota, together with their local dealers, can take part in trade shows and run
different promotional campaign from time to time. Toyota can also provide some
extra to the cars existing features without additional payment from business clients.
This can enhance business customers loyalty.

If the advertising objectives are not met, the concerned departments should
evaluate their messages and media tools for appropriate adjustments. There are
direct financial expenses on staff meetings for activity assessments and evaluation.
But the cost of closer coordination and constant dialogues among the workers is
less than the benefits of having fixed the problems promptly. Good discussion here.

6.2 Control Measures

Monthly meetings will be conducted among department managers to check their

performance vis--vis their marketing targets for the period. The usual and simple
problems, their implications and solutions are discussed.

Despite clarity, understanding and appreciation of the companys goals, problems,

marketing objectives and targets, it is always possible that deviations may happen.
External factors such as unfavourable economic conditions and bleak employment
scenario are possible to happen during the strategy implementation. Likewise,
company labour unrests and suppliers breach of contract, among others, have
serious negative impacts on the company operations. Thus, Toyota should prepare
plan B or contingency plan to respond to any eventuality.

If the problems are caused by external factors, the company should prioritise
strategic research and development activities to lower costs. But still, the main
strategy is product leadership. At this period, consumers are price-sensitive and
business buyers may be satisfied with a basic product and may not be willing to pay
higher price for the extra features. The purchasing, production and marketing
departments may also revise their sales targets to properly manage their inventory.
Dealers feedback should be taken timely to get the updated and constant changing
scenario of the market.

If the problems are caused by internal factors, the concerned departments should
alert others of the contingency measures. The purchasing department, for instance,
may start negotiating with other countries for raw materials delivery. The production
department may have institutionalised a pool of trained workers who can be on call
when labour problems occur. The marketing and sales department should be
properly advised on how to respond to booked sales or future orders. In this way, all

PRBM003 Syed Redwanur Rahman, Susan C. Valerio, Wenjing Wan, Chunxiao Zhang Page 14
are prepared to implement the contingency plan or plan B. You can discuss about
the urgent steps to be taken in the strategy or implementation to fix any issues rising
from the control measures

7 Conclusion

The dynamic world and fast-paced technology necessitate companies to respond to

the problems of their business clients. Competition drives companies to innovate to
expand their business customers and capture the global market. Businesses
have unending needs and problems. Businesses work with companies that provide
solutions to their problems.

These are the opportunities that innovative firms capture to provide answers to these
felt needs. Automobiles are not anymore viewed as a luxury item but a necessity
because these facilitate business activities. As such, new product and service
features should come out from manufacturers.

Toyota should implement product leadership strategy to address the problems and
achieve the objectives identified. The negative impacts of automobile recalls can be
addressed by a high quality, state-of-the-art automobiles as a result of massive
research and development efforts. Toyota can respond to every unique business
problem through its innovations. With this reputation, businesses confidence can
increase, resulting in higher market share. Wider market share means more sales,
which can be translated into higher profitability.

Product leadership strategy can be complemented by other strategies to optimise the

benefits. Due to the cyclical nature of the automotive industry, attractive promotional
offers can be employed because business clients are price-sensitive while others
are not.
The regular monitoring and evaluation of the targets vis--vis the accomplishments
should be institutionalised and religiously done by the concerned staff. The timely
response to a problem minimises the damages, and adjustments can be easily fixed.
The preparation of contingency plan or plan B is imperative to address the negative
impacts of external and internal factors on the company operations.

8 References

BLC see Business Learning Centre

Business Learning Centre, 2010, Cost leadership strategy, viewed 06 May, 2012,
http://www.seedeebee.com/business-strategy/cost-leadership-strategy-184.html

IBISWorld 2012, Industry report C2811: Motor vehicle manufacturing in Australia,

January 2012, viewed 05 May 2012
http://www.ibisworld.com.au/reports/reportdownload.aspx?cid=61&rtid=101

Kotler. P & Keller, L, 2008, Marketing management 2008, 13th ed, Prentice Hall,
New Jersey

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Langfield-Smith, K, Greenwood, M, 1998, Developing Co-operative Buyer-Supplier
Relationship: The Case of Toyota, Journal of Management Studies, 35:33, May
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Maggioni, S, Thiele, R, Rivard, S, Turner, A, 2006, Leadership in the automobile
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Quick MBA, 2010, Porters generic strategies, viewed 05 May 2012,

http://www.quickmba.com/strategy/generic.shtml

Slater, S F & Olson E R, 2001, Marketing's contribution to the implementation of

business strategy: an empirical analysis, Strategic Management Journal, Vol. 22, no.
11, pp. 1055-1067.

Thompson, A, 1999, Marketing management, 11th ed, McGraw Hill, London.

Toyota Australia, Toyota production system, viewed 28 April 2012

http://www.toyota.com.au/toyota/company/operations/toyota-production-system

Toyota Australia, 2012b, Customers, Dealers, viewed 28 April 2012

http://www.toyota.com.au/toyota/sustainability/community-and-
stakeholders/customers
Toyota Global, Just-in-time, productivity improvement, viewed 02 May 2012
http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/

Verweire , K and Escalier, J, Product leadership tool, Vlerick Leuven Gen

Management School, viewed 05 May, 2012,
http://tools.vlerick.com/en/product-leadership-tool/start

PRBM003 Syed Redwanur Rahman, Susan C. Valerio, Wenjing Wan, Chunxiao Zhang Page 16