Executive Summary
Toyota manufactures vehicles for sale worldwide. In fact, the company operates in more than 30 countries. This study explores the German auto market in view of introducing the ME.WE Customizable Concept Car. In this paper, analysis of the product and the market is covered in order to give feasible recommendations to the company.
Introduction
Toyota Motor Corporation is among the renowned leaders in auto manufacturing globally. The company is highly innovative with the introduction of new products whenever a competitor brings another in the market. This is achieved by ensuring that there is a strategic plan that facilitates the achievement of the set goals. The company intends to introduce the ME.WE Customizable Concept Car in the market. According to the company reports, this necessitates the development of a marketing plan.
The Company Overview
History
The founder known as Toyoda Sakichi established this corporation. In fact, Toyoda entered the automotive industry in the financial year 1920s after touring US and Europe. He invested 100,000 pounds to start up the company. In Japan, the company has more than 40 percent market share. In the fiscal 2000, it delivered its 10-millionth vehicle to Germany hence becoming the company of choice for the European countries’ customers (Toyota, 2013).
Mission
The company’s mission is to direct the prospect of mobility as well as to enhance lives globally through the most secure and dependable ways.
Vision
The company will meet the demanding goals of the clients through the engagement of the abilities and enthusiasm of individuals who trust that there is always a superior approach (Toyota Global, 2013).
Main Body
According to Baldwin and Laban (1987), it is important for any business company to develop and implement a strategic plan before its launch. The plan regards how the company will market its product and services successfully for the profitability as well as to generate returns on investment. A marketing plan that is well created and outlined is similarly imperative. Before any business is launched, every organization or entrepreneur carries out these precautions.
In this respect, Toyota, which is a company with global reach, has not been left behind. The precautions have been taken since the launch of the company to-date through effective marketing of the model. By marketing the entire Toyota brand the company finds it relatively easy to market specific car models given that it has establish itself worldwide as a company of choice for most consumers not only in Japan, but also in the US and European countries specifically Germany.
In fact, Germans are among the highest purchasers of Toyota models despite the country having globally known auto companies such as Audi, Bavaria Motor Works, Ford, Opel, Porsche and Volkswagen.
Toyota is famous for introducing new models whenever they are ready. In most instances, it withholds new products until a rival company has introduced another product in the market to stay ahead of competition through disruptive innovation. Among the disruptive innovation introduced by Toyota in the recent times is the ME.WE Customizable Concept Car. The move did not come as a surprise. In January 2013, Ford sold the highest number of hybrid automobiles than the previous year.
Volkswagen, Renault, Honda and other manufacturers continue to introduce hybrid vehicles to water down the dominance of Toyota’s hybrid Prius. Other companies such as Chevrolet introduced Chevy Volt that is an auto with electric technology, astonishing fuel efficiency and performance. Nissan introduced the all-electric plug-in Leaf (Tuttle, 2013).
The entire platform changed with Renault introducing the first concept car and Duster from Romania brand (Ramsey, 2013). The new concept car provoked Toyota to announce the release of its ME.WE Customizable Concept Car. Toyota’s move again did not surprise the automobile industry.
By marketing the Toyota ME.WE, the company will lay the foundations for vigorous market activities and objectives that will not be difficult to accomplish (Londre, 2009). Typically, the company carries out the prevailing market position auditing. At the same time, the company develops and subsequently implements the contemporarily achievable goals. These are attainable through:
- The generation of product SWOT analysis
- Conducting customer analysis
- Conducting competitor and stakeholder analysis
- Gathering, analyzing and evaluation of data through market research
- Putting in place the company objectives including the market penetration model, growth and profitability
- Putting in place the goals of the market including the potential market share, and opportunities
- Timely and effective implementation of marketing plan
- Utilizing evaluations to improve marketing efforts (Turkus, 2013)
Product Analysis
SWOT Analysis
The Toyota ME.WE Concept is an innovative automobile manufactured by Toyota. It is among the latest in the vehicle design philosophy. The vehicle is designed to operate in cities, is convertible, a 4×4 and a pick-up. The car is defined by the innovator named Jean-Marie Massaud as ‘anti-excess’. It utilizes innovative materials including bamboo and lightweight Polypropylene (Ross, 2013).
Product Strengths
The car has a tubular aluminum formation. The lightweight polypropylene panels are fitted on the formation. The materials are durable and easy to maintain. The material will act as buffers in the incidence of a collision (McManus, 2013). The car utilizes the in-wheel electric wheels resulting into the capacity to change from a 2-wheel to a 4-wheel. The whole interior can be assigned to passengers or goods.
The rear seat is foldable to be stowed under the front seat. It can also be completely taken away for use as a picnic bench. When the owner requires additional room, the weatherproof foldout cover can be slid in and the rear deck extended. By using bamboo for the floor, the company increases the chances for survival in the currently environmentally sensitive consumer market.
Product Weaknesses
On the other hand, the use of bamboo to make the floor surface presents a weakness of the product. Consumers who are material oriented may consider the fate of the car upon catching fire. That is, the bamboo can easily burn.
Product Opportunities
The economic statuses of many people demand that they utilize as little money as possible to perform many activities. The car can be used for different purposes in different terrains. This increases the chances of people purchasing the car. Additionally, there is a growing automobile market in the new and existing markets.
Product Threats
One of the main threats facing Toyota ME.WE car is the existence of other concept cars developed by rivals. The consumers may prefer other models to the new and innovative ME.WE car. There is also the threat of new entrants with better concept cars at lower prices.
Toyota SWOT
In order to analyze whether the product will be successful in the market or not, it is important to conduct a SWOT analysis of Toyota to establish if the company has the capacity to effectively market the product in the competitive market and gain competitive edge over similar concept vehicles (USDA 2009).
Strengths
Strong market position and recognition
The company enjoys a strong market position in key markets globally. The market share for the company in the financial year 2012 in the Japanese market was over 45 percent with the exclusion of mini vehicles. In North America, the company has over 12 percent market share and over 13 percent in Asia. The strong market position presents the company with unchallenged competitive advantage. Thus, the consumers will easily associate with the WE.ME car.
Strong focus on research and development
The company invests heavily in its research and development. This has helped the company to expand its product portfolio. It has improved the functionality, features, security and environmental compliance of its products by creating a strong brand. The concept car has been studied well by the research team considering the many features integrated to meet the needs of the user.
Extensive production and supply chain
The company has over 50 manufacturing plants in twenty-seven countries with elaborate distribution channels. Once the concept car is launched, customers will easily access it for viewing and buying.
Weaknesses
Product recalls
The company in the recent years has recalled a variety of products. As a result, this has affected the brand image (Medeiros, 2007). In fact, the potential buyers may be guarded while buying the concept car for fear that it may be defective. Thus, it may take the company several years for customers to develop enough confidence to buy the car.
Declining sales
In the FY2012, Toyota experienced declining sales in the leading markets in N. America, Europe and Asia. This may be due to the loss in confidence in the company products and the availability of alternative products. The same fate may befall the concept car as prospected in the marketing plan.
Opportunities
Increasing global vehicle industry
The industry has been growing in the recent years. The industry performance is bound to hasten thus creating a market share for the concept car. Besides, new markets are opening up in Africa, Asia and other emerging economies.
Growing partnership with BMW
The company signed a memorandum of understanding with BMW in 2012 as a long-term strategic technological cooperation (Marketline, 2013). This increases the chances for further advancement of the concept car. Additionally, there will be synergy in marketing the car.
Threats
Intense competition
The industry is very competitive. This accrues from the fact that there are competitors in a variety of markets. The existence and entrance of other concept cars may threaten the sale of Toyota’s concept car. The car may be threatened by pricing that is yet to be analyzed, tagged as well as the reliability that will be determined by time.
Customer Analysis
Target Market
The concept car will be availed in the German market. This will occur after considerations that the Germany economy is performing considerably well and the company already has a wide customer base. It has a good percentage of loyal customers. Toyota enjoys a significant market share in the German market. The collaboration with BMW will ease access to many German locations in addition to the existing Toyota outlets. Germans are popular for buying Toyota products in volumes due to the loyalty established.
Competitor Analysis
Existing products
Currently, concept cars do not exist in the German market. In any case, few companies have managed to manufacture the cars.
Benefits or features
Concept cars manufactured by other companies do not have as comprehensive and advanced technology as found in the Toyota’s concept car (Desmond, 2013). They typically have partial electric supply of energy and are not extendable to pick-ups. However, ME.WE is fully electric and multipurpose (Adam, 2013).
Size of competitors
Competitors such as Audi and BMW are considerably big and financially endowed. However, the collaboration with BMW eliminates one aspect of the threat. Additionally, Audi has not indicated its intention to compete in Germany through concept cars.
Market share
Competitors have small market share in the German market with regard to concept cars. None of the competitors has managed to penetrate the market.
Reaction to entry
Companies such as Audi and Ford are likely to employ disruptive invention to regulate Toyota’s penetration with a new product.
Conclusion
Gaps identified
In the German auto industry, older models of vehicles seemingly dominate the market. The existence of leading competitors poses a challenge for Toyota to conduct comprehensive market research. The introduction of the concept car that has not been sold anywhere else will be challenging.
Overall strategic approach
Toyota should develop a marketing plan that is accurate and attainable. It should then implement the plan and make appropriate reviews when necessary. The company should develop marketing strategies that are different from those employed in other models.
Recommendations
Toyota should devise a promotion plan for successful entry into the German market by building brand awareness. The existing reputation should be maintained if not enhanced. The company should further increase investment in market research to develop the correct image in the market.
When pricing the concept car, competitive pricing should be given a priority to enable the company to enter successfully in the market. Since the company has a reputable brand name in the German market, it should ensure that it uses the name alongside ME.WE to ensure that customers can easily associate the concept car with the company.
References
Adam, B. 2013, Is Toyota’s endlessly customizable Me.We concept the car of the future?. Web.
Baldwin, N. & Laban, B. 1987, ‘The world guide to automobile manufacturers,’ Facts on File, vol.1 no.2, pp. 43-44.
Desmond, M. 2013, ‘High-concept cars,’ Journal of Technology, vol. 2, no.1, pp. 81-82.
Londre, L. S. 2009, Marketing, IMC, advertising, promotion, media and more, Wiley & Sons Perth, Australia.
Marketline 2013, ‘Toyota motor corporation’, Data monitor Business, vol. 2 no. 2, pp.1-11.
McManus, W. 2013, Toyota ME.WE concept unveiled. Web.
Medeiros, J. 2007, Toyota Motor Corporation: strategic analysis. Web.
Ramsey, J. 2013, Renault twin Z concept revealed, twingo replacement takes shape. Web.
Ross, J. 2013, Toyota Me.We concept is a multifunction Tupperware car. Web.
Toyota 2013, Concept cars. Web.
Toyota 2013, The history of Toyota – at a glance. Web.
Toyota Global 2013, Corporate governance. Web.
Turkus, B. 2013, Renault promises new concept car and Dacia Duster in Frankfurt. Web.
Tuttle, B. 2013, Hybrid-car competition heats up: does the Toyota Prius finally have a worthy challenger?. Web.
USDA 2009. SWOT Analysis: a tool for making better business decisions, Routledge, Perth, Australia.