Toyota Marketing Mix 4 P's

Price

Since 2003, Toyota has taken over to become the world's number two carmaker and they are not very far behind GMC, the number on US carmaker. With their consistency in innovating designs and over a billion dollars spent in advertisement a year, Toyota has become an attraction in the eyes of many auto consumers worldwide. Toyota has built its reputation not only by producing high quality vehicles at affordable prices, but the brand and marketing skills they use through tactful pricing strategies. Toyota has differentiated their prices from the traditional pricing set up of many of the other automobile makers. However, it is their effectiveness in targeting consumers' needs and wants that has pushed them to the top.

Toyota believes the role of purchasing is through long term and stable production of quality products at the lowest price in a fast and timely manner. (Toyota Co. sustainability report 2006). The main objective of administering prices within any company in the automobile industry is profitability and to consistently increase efficiency in their product line. The traditional pricing strategy is formulated into the cost + profit = selling price. When auto companies make changes and improvements , cost of production increases causing the selling prices to go higher. Companies normally do not want to cut their targeted return and therefore the costs are passed on to the consumer to maintain their profit margin. Toyota takes on slightly different approach with a sales - oriented objective. Although the variables are the same, the formula is adjusted strategically into the selling price - cost = profit. Toyota firmly believes that its markets and consumers is what determine the selling price. Waste elimination is given top priority which reduces cost and by continuously reducing these types of costs, it will result in persevering the company's profit growth.

It was in 1929 that Kiichiro Toyoda, founder of Toyota, began traveling and extensive research in the auto industry all around Europe and the United States. Since Kiichiro's main objective was to become the best automaker in the world, he wanted to figure out a way to eliminate wasting time, money and material in the initial stage of production. Toyota eventually developed a breakthrough process that changed the factory equipment allowing production lines to produce different models on the same production line. This way, they are able to consistently produce vehicles faster and more efficiently. This breakthrough has given Toyota a competitive advantage over other automakers. Another system that Toyota has established is Jidoku, a production system that detects defects and abnormalities to obtain sustainability of high quality, low cost vehicles offered to the market.

Toyota spends a tremendous amount of time and money into development, training and marketing. They believe in long term relationships and hold a high level of trust for their manufacturers, distributors and consumers. Toyota has opened business relationships in 160 countries that sell and buy Toyota automobiles and still remain effective in targeting consumer needs and wants. Toyota's profit continues to increase for several different reasons mainly derived from pricing and features offered with their products. One is the increase in Japan's exports, North America being the leader of import requisitions. Another reason is the environmentally friendly and fuel efficient hybrid vehicles such as the Prius that gives up to 60 mpg. This is an incentive that is geared towards what is needed by today's consumers. A third reason is the increase in product mix, such as the luxurious Lexus, which led to extremely strong sales.

According to 2008 financial summary quarter dated October to December 2007, Toyota's unit sold increased from 126,000 units to 2,281,000 units worldwide. The Yaris and Tundra pick-up were the leading models sold with an asking base price of $11,350.00 for the Yaris and $22,290.00 for the Tundra. Toyota has invested heavily into their training, production and marketing with very low defects in their products. This has allowed the company to stand by their mission in satisfying their consumer's needs and wants. Even with the high cost of education and technology used to ensure quality automobiles, Toyota still offers their product at affordable prices.

Citations:

http://uk.tbmcg.com/about/ourroots/pricing_strategy.2007.TBM

Consulting Group, Inc.

www.toyota.co. 2008.Toyota Motor Corporation.

PRODUCTS

Toyota offers a variety of both tangible and intangible product offerings starting from their line of cars to warranties. Toyota has approximately nineteen car models and they are broken down to different categories: Sedan, Trucks, SUVs/Van, and Hybrid. Toyota offers both new and used vehicles and the option to custom build your own vehicles. Toyota's products also include parts, gears, and NASCAR collectibles for the NASCAR fans. As far as their intangible products, Toyota provides car services, financial services, warranties/ extended warranties, and roadside assistance. Toyota extended warranties provide different mileage coverage options from 36,000 miles to 100,000 miles.

Toyota takes into accounts customer's interests in designing their products. Toyota dedicates a research center to gather data on the community expectations of Toyota. Toyota employed the Calty Design Research Incorporated as their subsidiary. As of year 2005, Toyota has invested 22.2 million to this research center. 22.2 million dollars do seem like a lot of money to invest but by having customer's input, Toyota can satisfy their needs and thus build customer relationship and loyalty. This research center also helps Toyota moving in the right directions on their product design/ improvement process. With rising gas price, one innovation that Toyota has put together is the Hybrid product line. The hybrid cars life cycle started with the birth of Toyota Prius Hybrid which allows for 48 miles to its gallon. Prius was first introduced in Japan in year 1997 and later world-wide in year 2001. Highlander hybrid and Camry hybrid follows the Prius on the hybrid line. The Toyota hybrid cars started to enter the stage of market growth around year 2004 with growing sales more than doubled from the previous years.

Source: http://carscoop.blogspot.com/2007/06/toyota-worldwide-hybrid-sales-surpass-1.html