Toyota Marketing Mix 4 P’s
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Since 2003, Toyota has taken over to become the worlds 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 companys 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 Kiichiros 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. Toyotas profit continues to increase for several different reasons mainly derived from pricing and features offered with their products. One is the increase in Japans 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, Toyotas 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