The evolving nature of domestic and international markets has a great impact on business operations. Currently, e-commerce and m-commerce are gaining momentum, so that marketing specialists need to adjust their strategies, including those related to the distribution channels. Toyota, a Japanese car manufacturer, is one of the giants in the automotive industry. Research of its strategies will help to analyze the company’s success and failures, depending on which conclusions regarding the optimal marketing channel would be outlined.
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The competition in the automotive industry is high, so that Toyota needs to design unique marketing strategies in order to outperform its rivals. Manufacturers are often forced to attract customers by cutting prices and offering discounts (Li, 2018). There is an additional obstacle in this sphere due to a limited number of distribution channels available. Furthermore, its variety depends on the country of interest along with psychological, social, and economic determinants that influence the buying behavior of its residents (Hoque, Faruque, Shahid, Pasha, & Rahman, 2013).
It is necessary to understand and consider demographic factors in order to reach the target audience. As Toyota acknowledges this, it still prefers to rely on the dealership network. Thus, the development of marketing channels is done under the governance of local dealerships.
There is a variety of marketing channels, but the one-level pattern is prevailing in the automotive industry. According to the agency theory, one entity, Toyota, in this case, delegates responsibility for action to another entity, local dealerships, for instance (Watson, Worm, Palmatier, & Ganesan, 2015). Nonetheless, both parties operate by taking their own interests and risks into consideration. Subsequently, the development of marketing channels for the distribution of Toyota products could vary in different countries.
Toyota has created a huge sales network all over the world and cooperates with local dealers in order to make its products truly acceptable for the customers in a certain region (Li, 2018). That is why factories and plants are sometimes established outside of Japan. The other reasons constitute global migration of labor, supply chain management, and response to crises such as natural disasters because several years ago, the company’s plants were damaged, which resulted in delays in manufacturing and distribution.
Apparently, each local dealership opts for the most appealing marketing strategies to promote Toyota products. The operational activities of each dealer are divided into three stages: selling, service, and maintaining (Li, 2018). Selling is associated with traditional channels, including print and outdoor advertisement, along with TV and internet media, mainly YouTube. Nevertheless, simply selling products is not sufficient nowadays, while retaining customers is in priority (Hoque et al., 2013).
Thus, the interaction with the customers is not over after purchase but continues during the service and maintenance stages. Toyota has managed to create brand loyalty by providing technical support to its consumers in almost every dealership (Hoque et al., 2013). It means that the evolvement of the marketing channel goes far beyond its traditional perception and understanding. In the twenty-first century, the companies that sell items of high value should be targeted not only at promotion and sale but care about customer experiences which highly depend on the initial quality of the product.
Similar to other companies in the automotive industry, Toyota relies on the development of marketing channels of the first level where retails are local dealerships. Such a scheme allows adopting its products according to the needs of local customers. Furthermore, the philosophy of the company and local dealers goes far beyond advertising and distribution because they care about customer retention. Thus, service and maintenance ensure technical support to the already purchased cars, creating high value for consumers and strengthening brand loyalty.
Hoque, I., Faruque, O., Shahid, E. M., Pasha, S., & Rahman, S. O. (2013). Analysis of Toyota’s marketing strategy in the UK market. European Journal of Business and Management, 5(20), 226-231.
Li, Z. (2018). Business network positioning analysis of Toyota. American Journal of Industrial and Business Management, 8, 1693-1699.
Watson, G. F., Worm, S., Palmatier, R. W., & Ganesan, S. (2015). The evolution of marketing channels: Trends and research directions. Journal of Retailing, 91(4), 546-568.