TOYOTA MOTOR CORPORATION

Top Management Of Toyota Motor

1 INTRODUCTION
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Sakichi Toyoda and First Model

Since the birth of Toyota, the company’s philosophy has always been to “contribute to
society.” The first article of the Toyoda Precepts, original statement of purpose as a
company in 1935, states that we must contribute to the development and welfare of each
country we operate in by working together—regardless of individual position—in
faithfully fulfilling our duties. “Contributing to society” at Toyota means two things.
First, it means, “to manufacture automobiles that meet the needs of society and enrich
people's lives." And second, “to take root in the communities toyota serve by creating
jobs, earning profits and paying taxes, thereby enriching the local economies where toyota
operate." The 70-year history of Toyota has been filled with many challenges. Toyota
stood close to the verge of bankruptcy in 1950 and suffered a labor dispute that reduced its
workforce by a quarter. As a result, the president and other top executives chose to take
responsibility for the situation by resigning. This experience marked the starting point of
the strong labor-management relations that have supported Toyota to this day. In the
1970s, air pollution standards and two oil crises again threatened the auto industry, but
Toyota prevailed by building cleaner, more fuel-efficient cars. In the 1980s, Toyota faced
trade frictions and voluntary export restraints that threatened the business, but Toyota
overcame these by expanding production outside Japan. During the last 10 years, Toyota
has seen a big increase in international sales and production. Since 2003, the pace of
expansion has exceeded half a million vehicles a year.

2 MARKETING TOOL (4P’S)

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2.1 Toyota Marketing Mix

Corporations need efficient strategy planning to carry on in our aggressive markets. This
does not call for the company to come up with a strategy, but to figure out which strategy
is best for them given the objectives and resources. They must also consider the strengths
and weaknesses of the company as well as opportunities and threats. To enhance the
aptitude of the companies, a marketing strategy is introduced. The marketing strategy will
create lucrative marketing mixes for defined target markets.
The marketing mix is composed of four key elements to execute or examine for marketing
campaigns. The chief goal of the marketing committee is to optimize the marketing mix.
Marketers can enhance their outcomes and marketing value by implementing the right
combination of the four P’s. Discrete alterations made to the marketing mix are looked at
as tactical changes, while rendering huge changes to it can be considered strategic. The
“Four P’s” of marketing are: product, price, placement, and promotion.

2.1.1 Product
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Hybrid Generation

A product is an object or a service that is mass produced or manufactured on a large scale

with a specific volume of units. This piece of the market mix also encompasses how the
product is packaged, the overall performance of the product/service, and the design and
structure of the product.
TOYOTA endeavors to produce high-quality Toyota and Lexus vehicles
and parts and deliver them in an efficient manner in order to meet
customers’ expectations. In order to realize such production and supply
goals, TOYOTA endeavors to build the “world’s optimum production
network” and a “global distribution network”. In addition, in order to
enhance the global competitiveness of Toyota and Lexus vehicles,
TOYOTA developed the Toyota Production System, which continues to
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evolve according to the characteristics of particular regions of the world

and aims to achieve worker and environmentally
friendly plants. Toyota endeavor to maintain the safety and quality of
products and to comply with laws related to production and distribution.

Toyota Motor Corporation's vehicle production system is a way of "making things" that is
sometimes referred to as a "lean manufacturing system" or a "Just-in-Time (JIT) system,"
and has come to be well known and studied worldwide.
This production control system has been established based on many years of continuous
improvements, with the objective of "making the vehicles ordered by customers in the
quickest and most efficient way, in order to deliver the vehicles as quickly as possible."
The Toyota Production System (TPS) was established based on two concepts: The first is
called "jidoka"(which can be loosely translated as "automation with a human touch")
which means that when a problem occurs, the equipment stops immediately, preventing
defective products from being produced; The second is the concept of "Just-in-Time," in
which each process produces only what is needed by the next process in a continuous flow.
Based on the basic philosophies of jidoka and Just-in-Time, the TPS can efficiently and
quickly produce vehicles of sound quality, one at a time, that fully satisfy customer
require. The product of Toyota are :

A) Sedan
- COROLLA ALTIS
- COROLLA ALTIS SPORT
- CAMRY
- YARIS
- PRIUS

B) Suv and Vans

- LAND CRUISER
- SIENNA

C) Hybrid
- PRIUS
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- CAMRY HYBRID

2.1.2 Price

The price is the cost that a buyer pays for a particular item. Pricing is determined by a
number of factors including market share, competition, material costs, product identity and
the customer's perceived value of the product. Pricing will vary due to demographics.
Additionally, the product’s price will also be influenced by the competitive forces around
the company. The price point will also be conceived by considering the choices that it
could be: luxurious, inexpensive, or something in between. 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.
The customers of Toyota are given value in terms of several elements like warranty,
quality, customer support etc. The company thus wins loyal customers by charging a fairly
low price for a quality offering. Thus, the company reengineers its operations to become a
low–cost producer without sacrificing quality, to attract a large number of value-conscious
customers.

2.1.2. I Pricing Strategy

- Optional-Feature Pricing : e.g. an Innova customer can order mud flaps,
side steppers or other accessories.
- Promotional Pricing : Low Interest financing, this technique is for short period
and is mainly used in festive seasons. Longer Payment Terms, the company
stretches loans over longer periods and thus lowers the monthly payments.
- Warranties and Service contracts, the company provides 3 year or 10 000 KM
(whichever earlier) warranty on all repairs using Toyota genuine parts.
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Prius Price List

Peninsular Malaysia
Individual Private
RM 175,000.00 Company Private
RM 175,764.00

Schedule 1 (price list example)

Toyota Camry 2.0E Price list

Peninsular Malaysia
Individual Private
RM 144,990.00 Company Private
RM 145,816.10

Schedule 2 (price list example)

2.1.3 Place

Place represents the location, where the product can be purchased. Selection and
management of channels and product flow to consumers. The Toyota company
manufactures vehicles in 27 countries and regions throughout the world and sells them in
more than 170 countries and locations. TOYOTA engages in business worldwide and
many of its activities are conducted outside Japan, including not only manufacturing
activities, but also research and development. TOYOTA recognizes the ever-changing
environment surrounding its business operations, global diversity, the specificity of each
local area in terms of its own rules and customs, etc., and the rapid changes in world
political and economic climate. TOYOTA respects international rules and laws, as well as
the culture, customs and history of local societies. Thus, TOYOTA promotes its business
activities from “both a global and local” standpoint so as to contribute to the development
of local economies and society.

The place or country where Toyota had achieve :

- America
- Europe
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- Africa
- Asia & Oceania

2.1.4 Promotion

TOYOTA uses many different techniques of advertising as most of Print advertisement of

the product are individually targeted at factors like comfort, performance, styling, power,
leg room and driving pleasure. The commercials mainly target at the youth and young
executives.

2.1.4. I Personal Selling

Personal selling involves two-way, personal communication between sales people

and other customers. Personal selling largely takes place at the dealer’s end. The
way the customer is attended depends mainly on the dealer as he acts as an
interface between the company and the customer. Mostly in case of individual
sales the customer goes to the showroom and takes a look at the product. There he
is attended by the sales personnel of the dealership. Personal selling is also
practised at trade fairs wherein the company appointed sales personnel prospective
customers and also book their orders.

2.1.4. II Sales Promotion

TOYOTA develops and provides attractive product lineups, various styles of dealer
showrooms and sales styles, and a meticulous customer and revenue management
system. TOYOTA does this to contribute to the improvement of sales efficiency
and profitability of its dedicated dealers, to build mutual trust and to bring mutual
growth. Sales Promotion includes tools for Toyota Company uses major sources of
sales promotion such as Trade fairs, like auto expo, motor shows. In these fairs, the
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company showcase its various varieties of car. These fairs help customers to draw
comparison between different cars on the basis of color, features etc.

2.1.4. III Public Relations

Contribute toward a prosperous society and its sustainable development, Toyota

has been engaged in various social contribution activities worldwide with the goal
of becoming “a good corporate citizen.” The Corporate Citizenship Division was
established in January 2006 to reinforce social contribution activities and integrate
corporate social contribution functions that had been performed by multiple
divisions. Toyota focuses on environmental issues, traffic safety, and education on
a global basis. In Japan, in addition to these areas, Toyota works to actively
promote corporate social contribution activities using its technology and expertise
in response to societal needs in areas such as the arts and culture, and achieving a
harmonious society. Toyota provides relief in the event of natural disasters, assists
welfare organizations, supports various activities conducted in the vicinity of its
business sites throughout Japan, and supports volunteer activities by employees.

2.1.4. IV Direct Marketing

Direct marketing is the use of consumer-direct channels to reach and deliver goods
and services to customers without using marketing middlemen. The company
officials directly contact the prospective buyers with the information available
through various sources such as the internet.
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Online Purchasing

2.1.4. V Advertising

Advertising is a 'paid for' communication. It is used to develop attitudes, create

awareness, and transmit information in order to gain a response from the target
market. It is any paid form of non personal presentation and promotion of ideas,
goods or services by an identified sponsor. The methods Toyota use for advertising
include television and radio adverts, newspaper and magazine adverts, and events
at dealerships and other places.
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Brochures

The Brochures, Posters, Leaflets showcase that Toyota Corolla, Innova, land
Cruiser, Prado are all for the people who demand performance, style, power and
sheer driving. The other sources of advertisement includes Bill Boards, Display
signs, bulletins and broad cast advertisement. The company does the advertising
of corolla, Innova and other product by placing billboards at various
expressway and highways.

2.1.4. VI Sponsorship
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Nascar and F1

Sponsorship is where an organization pays to be associated with a particular event,

cause or image. Companies will sponsor sports events such as the Olympics or
Formula One. The attributes of the event are then associated with the sponsoring
organization. Toyota sponsor and participant including in US NASCAR Sprint Cup
Series, as well as Japan's SUPER GT and Formula NIPPON.
The Toyota Foundation is a private, non-profit, grant-making organization
dedicated to realizing a more people-oriented society and greater individual
happiness, and was established by Toyota Motor Corporation in 1974 to mark the
40th anniversary of the start of automobile production. The Foundation views
events from a global perspective as it works to support activities for the benefit of
society. Its support aims to identify current problems in the following areas, human
and natural environments, social welfare and education and culture. Grants are
provided for research and projects consistent with these interests.
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3 SITUATION ANAYLYSIS (SWOTS)

Swot Anaylysis

3.1 Strength

New investment by Toyota in factories in the US and China saw 2005 profits rise,
against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion yen
($11bn; £5.85bn), while sales were 7.3% higher at 18.55 trillion yen. Commentators
argue that this is because the company has the right mix of products for the markets
that it serves. This is an example of very focused segmentation, targeting and
positioning in a number of countries.

In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second
largest carmaker with 6.78 million units. The company is still behind rivals General
Motors with 8.59 million units in the same period. Its strong industry position is based
upon a number of factors including a diversified product range, highly targeted
marketing and a commitment to lean manufacturing and quality. The company makes a
large range of vehicles for both private customers and commercial organizations, from
the small Yaris to large trucks. The company uses marketing techniques to identify and
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satisfy customer needs. Its brand is a household name. The company also maximizes
profit through efficient manufacturing approaches (e.g. Total Quality Management).

3.2 Weakness

Being big has its own problems. The World market for cars is in a condition of over
supply and so car manufacturers need to make sure that it is their models that
consumers want. Toyota markets most of its products in the US and in Japan. Therefore
it is exposed to fluctuating economic and political conditions those markets. Perhaps
that is why the company is beginning to shift its attentions to the emerging Chinese
market. Movements in exchange rates could see the already narrow margins in the car
market being reduced.

The company needs to keep producing cars in order to retain its operational efficiency.
Car plants represent a huge investment in expensive fixed costs, as well as the high
costs of training and retaining labour. So if the car market experiences a down turn, the
company could see over capacity. If on the other hand the car market experiences an
upturn, then the company may miss out on potential sales due to under capacity i.e. it
takes time to accommodate. This is a typical problem with high volume car
manufacturing.

3.3 Opportunities

Lexus and Toyota now have a reputation for manufacturing environmentally friendly
vehicles. Lexus has RX 400h hybrid, and Toyota has it Prius. Both are based upon
advance technologies developed by the organization. Rocketing oil prices have seen
sales of the new hybrid vehicles increase. Toyota has also sold on its technology to
other motor manufacturers, for example Ford has bought into the technology for its
new Explorer SUV Hybrid. Such moves can only firm up Toyota's interest and
investment in hybrid R&D.
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Toyota is to target the 'urban youth' market. The company has launched its new Aygo,
which is targeted at the streetwise youth market and captures (or attempts to) the nature
of dance and DJ culture in a very competitive segment. The vehicle itself is a unique
convertible, with models extending at their rear! The narrow segment is notorious for it
narrow margins and difficulties for branding.

3.4 Threats

Product recalls are always a problem for vehicle manufacturers. In 2005 the company
had to recall 880,00 sports utility vehicles and pick up trucks due to faulty front
suspension systems. Toyota did not give details of how much the recall would cost.
The majority of affected vehicles were sold in the US, while the rest were sold in
Japan, Europe and Australia.

As with any car manufacturer, Toyota faces tremendous competitive rivalry in the car
market. Competition is increasing almost daily, with new entrants coming into the
market from China, South Korea and new plants in Eastern Europe. The company is
also exposed to any movement in the price of raw materials such as rubber, steel and
fuel. The key economies in the Pacific, the US and Europe also experience slow
downs. These economic factors are potential threats for Toyota.

4 RECOMMENDATION

On basis of above mentioned data, we propose following changes to be in Toyota :

- Improvement in quality of parts used.

- Better quality control to monitor manufacturing process to ensure there are no

manufacturing defects.

- Reduction in prices.
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- Have to more allert in Quality Control to make the production release a quality

product without any default.

- Training user with new skills and knowledge with the especially with the new

product for examples hybrid cars.

- Monopoly issue such as the withdrawal the new hybrid model where the Toyota

management have to react faster with the issue to public with their explanations and

advices.

5 CONCLUSION

Toyota Motor Corporation is Japan’s number one carmaker. Toyota has international

presence in over 170 countries worldwide. It manufactures cars, pickups, minivans,

and SUVs include models such as Camry, Corolla, Qualls, Prado, Solara, the luxury

Lexus line, and full-sized pickup trucks. It has huge financial strength, with large

capitalizations, high technologies and high cost cutting strategies. The marketing and

brand strategies that Toyota is distinct affordable and profit able for the company

Majority of the respondent believes that Toyota has good image in the market research

shown that people show more concern for car which is fuel efficient .
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REFERENCE :

Toyota Motor Corporation

Company.Vision & Philosophy.
http://www.toyota.com

Toyota Motor Corporation

Company.History Of Toyota.
http://www.toyota.com

Toyota Motor Corporation

Corporate Responsibility.Social Contribution.
http://www.toyota.com

Toyota Motor Corporation

Corporate Responsibility.Corporate Responsibility Top.
http://www.toyota.com

Toyota Commemorative Museum Of Industry and Technology

History Of Toyota.Chronological Record of Sakichi Toyoda’s life.
http://www.tcmit.org/english

Autoevolution
Toyota.News and Articles.
http://www.autoevolution.com
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APPENDIX :

Suggested Reading Materials

Autoevolution
Toyota.News and Articles.
http://www.autoevolution.com

Toyota Commemorative Museum Of Industry and Technology

History Of Toyota.Chronological Record of Sakichi Toyoda’s life.
http://www.tcmit.org/english

Toyota Motor Corporation

Company.Vision & Philosophy.
http://www.toyota.com

Toyota Motor Corporation

Company.History Of Toyota.
http://www.toyota.com

Toyota Motor Corporation

Corporate Responsibility.Social Contribution.
http://www.toyota.com

Toyota Motor Corporation

Corporate Responsibility.Corporate Responsibility Top.
http://www.toyota.com