Introduction
A customer is the backbone of any given company; the main decision that a marketing manager should make determining his company’s market segment. A market segment is a homogenous subset of the main market, which share similar characteristics which make it demand similar goods. A segment is also stimulated by similar innovations. After developing a marketing segment the next step is to develop mechanisms to enable him sell in the target market.
One of the ways to enter in the target market is marketing mix. An effective marketing mix ensures that goods are available to the target customer, when they need them at and they are affordable (Anctil, 2008). Toyota is the world leading automobile manufacture, its success has been tagged to its strong marketing strategy; it uses 4Ps to market its products. This paper looks into marketing mix (specifically 4Ps of marketing mix). It will also discuss how Toyota Company has utilized this strategy in its marketing.
Concept of 4Ps
4ps concept was developed in 1960 by a marketing expert called E J McCarthy (Mind tools, 2010). The Ps represents Price, product/service, promotion, and place;
Price
The price of a commodity is an element of total cost plus a profit margin. When a target market has been established, there is need to determine the price affordable to the customers. A marketer should be aware of consumer trends and their potential. The social class that the product is targeted will influence the price of the products.
The price parameter can be approached from the actual product price or the possibility that the product can be divided into smaller parts, not necessarily cheap, but to enhance affordability. From a broader point of view the market can be divided into three sections; the high class, the middle class, and the lower class.
The high class is not interested on how expensive a product is, but their point of interest is the utility that the product is going to give. When they are buying things they are looking for something extra that can make them feel special and different. To target this group, the product should try to show how it is different from others, the price can be set high since the possibility is ,this group will think that the higher the price the higher the utility. The middle class buy the common goods in the market.
When they are the target group, the price should be harmonized with competitor’s prices. When the target is the lower class, price is the determinant of the market, the lower the price the better. The products can be packed in smaller quantities at “lower prices”. Understanding of the market segment is thus crucial.
Place
The market segment that the marketer want to target, will influence the distribution that he is going to use. Where the customer is more likely to be found should be the place that the goods are provided. If the target customers are people who value recognition, most of them are in the high class, they are more likely to be found in the shopping malls and “designer” shops. The products should be displayed on these stalls.
The possibility that these kind of client will be in the back street shops is unlikely and thus the products should not be there. The common market is also a place that they are unlikely to go. If the products are targeting the lower class, they should be distributed in the supermarkets that are expected to be less expensive than the shopping mall. There are also some places that are regarded to be the high class estates. These are found in the areas that people of a certain class live.
If the target is the low class the goods should be available in the local slum and suburbs’ shops. If the target is for the middle class place products where the competitor products are, the focus should be more on strategies to persuade them. The middle class are known to be looking for something extra at the same price. There will be no harm if the products are distributed in the competitors area; efforts should be the way we display what we are offering extra (NetMBA.com, 2010).
Promotion
Promotions are done in the effort to either introduce a new product or increase the market segment. To engage in a promotion, the first thing to understand is the availability of the target customers. Where are they likely to be found? Are they free in the mornings, is it in the afternoon? After realizing their availability and when they can give you time, and know the age of the market.
The promotion for the youth should be designed to target the youth. The behavior of the youth is that they don’t want something that feels so common, let the promotion give a different good-feel on the customer. If the promotion focus on introducing a new product, then a lot should be invested in assuring the client of better quality than what is offered by the competitor.
The existence of opinion leaders should be evaluated. Customers are likely to follow the opinion leaders in making their decisions. The existence of groups in the society and their matching lifestyles can also be of great use. If the promotion is for an already existing product in the market, the approach should be from the angle that we are thanking our customers. If the customer feel appreciated and recognized he will develop loyalty and influence other to follow his way.
Product
When a company is developing a product, there is a need that the product is supposed to fulfill. The higher the utility the customer gets, the higher the demand for the product.
When products are developed, the team should always invest in offering something extra to the consumer. If target customers are aware of the expected ingredients, the campaigns should have a lot of emphasis in the ingredient used. On the other hand, if the customers are not much interested in the ingredients, or they even are not aware of the ingredients, the focus should be the outcome that the product will give.
The marketing campaigns should explain to the customer what benefit he will derive from using the goods. What does the target customers expect, what are they likely to be moved by? What is the age of the target customer? If the target customer are children- by extension the parents, the products should have attractive bright colors that are more likely to attract children.
If the target markets are the youth, then the fashion should be of emphasis. Packaging should gives a sense of superiority to the product. The youth will always want to have a better product than their peers. Effort should be made to ensure that the product is portrayed to give the impression of superiority. The language on the product packaging should be targeted at the desired group age.
If the prices have reduced and are lower than the market prices, it is important to include them on the package. In all the marketing of the products whether they are target to the high class, middle class, low class, the old, and the youth, the marketer should assure the customers of the availability of the products at all times (See appendix 1). Understanding the target market segment cannot be overlooked (Anctil, 2008).
The case of Toyota Company
Toyota was incorporated in 1937 in Japan by Kiichiro Toyoda; it has grown to be the world number one automobile provider. It assumed the number one automobile producer in 2008 after it surpassed general motors. The company operates on a five principal policy; Kaizen (continuo’s improvement), teamwork, Challenges, Respect and Genchi Genbutsu (go and see). Alongside these policies the company has a strong marketing strategy. Let’s examine how it markets its products;
The company has two market segmentation; they are developed and developing countries. Its products are designed to meet the needs of the various markets. One of the ways that it has adopted is a continuous improvement of its products.
There is a research department that has the aim of undertaking its policy of Genchi Genbutsu (go and see). The section is supposed to survey the market and come up with various recommendations that are aimed at improve the company’s services.
As it conducted this duty, the issue of technology came up and the company had to implement the change. Other than just implementing it started a long term policy to ensure that there is continuity in the works. The company’s first car was a high fuel consuming passenger car called A1 and G1. The vehicles were manually modeled.
Today, the numerous models in the market are as a result of computer aided modeling. All along we are hearing of Toyota X new model. This shows how they have continually improved their products to remain competitive in the world. Secondly, another area that the company has improved is on the fuel consumption in the vehicles. This has been ongoing and in 1980s it saw the company get Japanese Quality Control award, this was due to the rewarding innovations especially in the fuel section that the company had gotten.
On the same angle in 1973, during world fuel crisis, the company was able to penetrate the American market when Americans preferred automobiles from the company due to its low fuel consumption. All the above are not coming to the company as mere luck but are deliberate planning and organizing of the available physical and human resources. A lot more that the company intend to bring are the electric automobiles that are on testing stage (Hino, 2006).
When it comes to price, there are different models which cost differently depending with the target customer. In developing countries where it is considered to have a market that require less expensive good, the company has engaged in what is referred to as Custom Bonded Factories; these are factories placed in less developed countries and receives CKDs (completely Knocked Down) parts from Toyota and assemble them into a complete automobile.
This takes the benefit of low labor thus the products can be sold in their country of assembly at a lower price. On the other hand, these are government and Toyota programs so there are arrangements made to reduce taxes on these CKDs, this makes them even cheaper and affordable (See appendix 2).
The product is advertised in the individual countries according to the capability of the customer there. There is an also “door to door” promotion where the company approach companies, governments, corporate bodies and offer the products that they have that can meet the need of the customer.
In case the company does not have a full order in their warehouse, the policies of the company allows for the neighboring country to export to the country of deficit. All Toyota branches are located in city centers where they are likely to tap the greatest number of customers (CIOinsight, 2004).
Conclusion
A customer is the backbone of a company; the main decision that a marketing manager should make determining his company’s market segment. One of the ways to enter in the target market is marketing mix. The 4Ps represent Price, product/service, promotion, and place.
An effective marketing ensures that goods are available to the target customer, when they need them at and they are affordable. Toyota is one of the companies that have benefited from using the strategy. It manufactures different models which costs differently and makes them available to target customers.
Reference List
Anctil, E. (2008). Marketing and Advertising the Intangible. ASHE Higher Education Report, 34(2), 31-47. Web.
CIOinsight. (2004). Toyota’s Business Intelligence: Oh! What a Feeling. Page 3-4. Web.
Hino, S. (2006). Inside the mind of Toyota: management principles for enduring growth. Tokyo: Productivity Press.
Mind tools. (2010). Marketing Mix and 4Ps. Web.
NetMBA. (2010). The Marketing Mix (4Ps of marketing). Web.
Appendixes
Appendix 1
Appendix 2
