Marketing Principles Seminar assignments Toyota Corolla PDF

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market segmentation Toyota Corolla - market analysis Toyota Australia merged files: Market_segmentation_corolla.doc - toyota_australia_market_analysis.docx...

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Toyota Corolla

TOYOTA COROLLA AUSTRALIA: MARKET SEGMENTATION

MARK101

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Toyota Corolla

Toyota Corolla is now a leader in the car market of Australia. The market segmentation has become in favor of Toyota, and this statistics provides different reasons why Toyota Corolla puts competitive pressure on the main rivals. The latter are Mazda 3, Hyundai i30, and Ford Focus (McGavin, 2012). Others remarkable rivals are Ford Falcon and Holden Commodore. However, both of them are losing points on different levels of market competition. At this point, the first level of competition refers to the brand name. Toyota has made a good showing during the previous 10 years when it was not at the top of sales. Since 2014, Toyota has eclipsed the main rival Mazda 3 with a tally of 43,735, just 422 sales ahead of the Mazda 3 with 43,313 deliveries (Dowling, 2015). Therefore, the race started in 2014 with more deliveries and sales across the Australian market. The price tag is another advantage of Toyota Corolla. It is especially important understanding that the price for cars in Australia largely differs from the costs in Japan, Europe, or the United States, because components and counterparts for Toyota Corolla manufactured in Australia is 1.5 to 6 times more expensive than in Japan (Patrick, 2013). Nevertheless, Toyota Corolla hatch with its new and refreshed versions of Corolla Ascent and Ascent Sport along with the sportier SX and ZR models suggests better pricing strategy offering Australian customers better solutions: The price of the range-topping CVT-only Toyota Corolla ZR falls $1000 to $28,990 before on-road costs. The SX manual retains its $23,490 price tag, while the Ascent and Ascent Sport manual variants rise $300 to $19,790 and $20,790 respectively (CVT adds $2000) (Beissmann, 2015, p. 1). It means that the main rivals still lag behind the scene (except of Mazda 3 and its small underrun), because the aggregate demand for Toyota Corolla is still higher than for any other brand. Moreover, it is all about the economic and eco-friendly factors that the brand is at the top. Toyota Corolla hatch is now improved in terms of fuel economy cutting fuel use by as much as 7.6% in conjunction with revamped design and improved driving features (Lander Toyota, 2015). All in all, even though Toyota is still getting through the downfall in sales since 2008, it could manage to increase the buying power in Australia with the main focus on its new top-selling models. On the other hand, it is vital to note that the designers made a good job in making new Corolla fit into the Australian roads and off-road sceneries. Tony Cramb, Toyota Australia’s executive director sales and marketing emphasized a great road presence for a new Toyota Corolla hatch (Bober, 2015). The main difference is that it combines features of the European hatch and American sporty looks. Based on the statistics, Ford got through a shocker with its sales (79,700) in decline during the previous 23 years, while Holden has even worse statistics overcome by Mazda (100,700) and Hyundai (100,010) (Dowling, 2015). Additionally, the success of Toyota Corolla is in its efficient perception of the needs among Australian families in terms of their changing and frantic-paced nature. Blending of hatch and sedan speeded up the popularity of new Corolla. Hence, with the first place in the market, Corolla is still facing competition with Mazda, Hyundai, Ford, and Holden.

Reference List Beissmann, T., 2015. 2015 Toyota Corolla hatch pricing and specifications. [Online] Available at: http://www.caradvice.com.au/358981/2015-toyota-corolla-hatch-pricing-and-specifications/ [Accessed 14 October 2015]. Bober, I., 2015. EUROPEAN AND AMERICAN 2015 TOYOTA COROLLA TO SELL IN AUSTRALIA. [Online] Available at: https://practicalmotoring.com.au/car-news/european-and-american-2015-toyota-corolla-to-sell-inaustralia/ [Accessed 14 October 2015]. Dowling, J., 2015. Toyota Corolla is Australia's top selling car in 2014. [Online] Available at: http://www.carsguide.com.au/car-news/toyota-corolla-is-australias-top-selling-car-in-2014-30604 [Accessed 14 October 2015]. Lander Toyota, 2015. New Corolla Hatch: More Style, Sharper Dynamics, Less Fuel. [Online] Available at: http://www.landertoyota.com.au/news/new-corolla-hatch-more-style-sharper-dynamics-less-fuel/ [Accessed 14 October 2015]. McGavin, C., 2012. What small car should I buy?. [Online] Available at: http://www.drive.com.au/what-car-should-i-buy/what-small-car-should-i-buy-20121220-

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Toyota Corolla

2bpks.html [Accessed 14 October 2015]. Patrick, H. T., 2013. Pacific Basin Industries in Distress: Structural Adjustment and Trade Policy in the Nine Industrialized Economies. New York, NY: Columbia University Press.

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TOYOTA AUSTRALIA – MARKETING ANALYSIS 1

TOYOTA AUSTRALIA – MARKETING ANALYSIS

TOYOTA AUSTRALIA – MARKETING ANALYSIS 2 Toyota Australia – Marketing Analysis Introduction Toyota Australia competes on a dynamic market, facing the evolving needs of its market. Besides the technological innovations developed for answering or exceeding the consumers’ needs, the organization’s success in Australia is also attributed to its marketing efforts. Knowing the target market and best answering its needs implies market segmentation strategies. Similarly, competing in an industry with intense rivalry, Toyota faces various strong competitors that it approaches distinctly, depending on its marketing plans. This essay addresses Toyota Australia’s marketing segmentation variables, the different levels of competitiveness that it faces and it analyzes the characteristics of one of its targeted segments. 1. Market segmentation represents the process of dividing a market by grouping consumers together based on shared characteristics, needs or interests, which allow organization to better address the identified homogenous needs and interests (Lamb, Hair and McDaniel, 2015). There are different segmentation variables that guide the segmentation process for better matching specific consumer needs with the suited solutions. Generally, managers can guide the segmentation process based on five variables: “geographic, demographic, psychographic, behavioral, and benefits” (Reid and Bojanic, 2009, p. 130). For Toyota Australia, the above identified market segmentation variables comprise the entire market, so that specific Toyota products available in Australia respond to certain consumer needs. Geographic segmentation groups consumers by region within a country, in this case (Lamb, Hair and McDaniel, 2015). Geographical factors, such as the type of work that prevails in specific regions, the climate or weather can influence consumers’ choice for specific automobile selection. There are differences mostly between the urban and rural

TOYOTA AUSTRALIA – MARKETING ANALYSIS 3 environment, because the different landscape and infrastructure require for different transportation means (Deloitte, 2014). For the rural regions in Australia, the company promotes Corolla, Toyota Hillux or LandCruiser Prado, as suited for these regions (Toyota Australia official website; Curry, 2015). While these models are also fit for the urban environment, the geographic segmentation for this area include the Prius, Toyota Camry or RAV 4 (Toyota Australia official website). The demographic segmentation divides markets in terms of age, income, gender, ethnicity or family life cycle (Lamb, Hair and McDaniel, 2015). Toyota RAV 4 targets the young couples in search of adventure, but who also search for the comfort of a large interior space, as the TV commercial indicates (“Toyota RAV4”, 2006). Toyota HiLux targets the workingmen demographics, promoting the advantages of a strong car, capable of resisting difficult and heavy choruses (“The New Look Toyota HiLux”, 2011). The psychographic segmentation segments consumers based on lifestyles, personality or attitudes (Reid and Bojanic, 2010). Toyota Hybrid Camry targets the young professionals who are sensitive to the environmental sustainability, while still enjoying modern technology (“Mid-Sedan: Toyota Camry Hybrid 2010”, 2010). Attitude towards environment and personality are targeted in Toyota Hybrid Camry commercial. Behavioral market segmentation variable defines the consumers’ tendency to being loyal or on the contrary, being easily convinced by other companies’ promotional offers (Reid and Bojanic, 2010). This variable is essential for the organization to define loyalty plans for the loyal consumers and to propose competitive offers for the other, non – loyal consumers, who have the potential of becoming loyal. Toyota Corolla, Toyota Camry or Toyota HiLux are appreciated brands that drive the biggest sales in Australia, and Yarris is used for attracting the non-loyal consumers.

TOYOTA AUSTRALIA – MARKETING ANALYSIS 4 Finally, the benefits variable indicates certain advantages sought by the consumers, such as the safety, space, luxury or price. Toyota Aurion targets consumers based on the safety factor, Camry is focused on space targeting, LandCruiser 200 sets the luxury benefits and Yarris the low price advantage (Toyota Australia official website). Information about Toyota Australia segmentation variables were found on the company’s website, financial information and news about its sales records and YouTube commercial, which signaled the various market segments. 2. In the current economy, influenced by rapid technological advancement, an instable global economy, increased consumer sophistication, driven by the interactive media and the elevated concern for the environment sustainability, competition in the auto industry focuses on different levels. There are different levels of competition to which Toyota could be exposed in Australia: collusion, co-operation, co-existence, competition and conflict (Keillor, 2007). Collusion represents the act of working together with competitor(s) to conspire against injuring a third party, being considered illegal (Keillor, 2007). Although the horizontal collusion (between competing firms) does not apply for Toyota, the vertical collusion did apply, as the company colluded with its dealers, being fined for this behavior (Cleary, 2009). Cooperation brings competing firms into working together for achieving mutual benefits that serve a common goal (Keillor, 2007). The company is engaged in a cooperative relationship with BMW, with which it works for creating “lightweight construction, fuel cells and electric drivetrains”, for the common purpose of reducing their costs and meeting enhanced environmental regulations (Rauwald, 2012, para 1).

TOYOTA AUSTRALIA – MARKETING ANALYSIS 5 The coexistence refers to a business attitude of ignoring rival companies, as the organization seek to serve different niches, engaging in an indirect competition for market share (Keillor, 2007). In this sense, Toyota is in a coexistence relationship with automakers who are serving the super – premium, luxury markets, such as Honda (“Honda Accord Sport Hybrid v Toyota Camry”). The next level of rivalry is the competition, an acerb relationship of overpassing rival businesses for attracting more market share through meeting or exceeding customers’ expectations. Toyota Camry is one of the most appreciated automobiles in Australia and locally designed. Its close competitor in the midsize sedan submarket is Hyundai Sonata. Compared with Hyundai Sonata based on the reliability level of competition, both cars have the same rating in the Power Circle Ratings, which is a 4 circle, above the average reliability. However, on the fuel economy competition level, Camry also advances its Hyundai counterpart with 43mpg city/39 mpg hwy, versus 28 mpg city/3 mpg hwy as Sonata returns (DeMuro, 2014). The most intense level of competition is the conflict, wherein rival firms are engaged in a direct confrontation, pursuing destructive measures between firms activating in the same industry (Keillor, 2007). In Australia, Toyota practices the conflicting competition through pricing strategy, targeting customers interested in the cost benefit, but also through reliability and environmental focus, as it is the case between Honda Accord Sport Hybrid and Toyota Camry (“Honda Accord Sport Hybrid v Toyota Camry”). Honda’s vehicle is placed on the premium market, although it is similar to Camry in terms of size, packaging and refinement, only the price is much higher for Honda (“Honda Accord Sport Hybrid v Toyota Camry”). 3.

Because one of Toyota’s major competitive advantages consists in its hybrid engine, a

significant market segment that the company targets is the one of environmentally focused

TOYOTA AUSTRALIA – MARKETING ANALYSIS 6 consumers. These consumers are generally young, embracing a new life philosophy specific to a new wave of the 21st century, which is the environmental awareness. The consumers in this market segment are employed, having specialists or expert roles and focused on their career growth, while in the same time contemplate the benefits of enjoying a balance between the professional and personal life. They are mostly located in the urban area, which allows them career prospects, but they are spending increasingly more time in the outdoors in their free time. They have a good financial income, allowing them to support environmental sustainability and to integrate it across their lifestyles. This market segment consists of well – educated people, who are in general at least holders of a BA degree, or higher education. They usually live alone, enjoying the independence in their life, although they are very sociable individuals, having friends at work and in the private environment. They like to go out in the weekends and adventure to new destinations as often as they can. Moreover, they incorporate environmental friendly actions in various actions that they get involve either in the personal or professional context. In addition, they act like environmental ambassadors, preaching the benefits of recycling, saving energy and other prime resources each time they have the opportunity. This segment of consumers engages with friends through social media websites. In addition, the individuals in this category consume other types of media, mostly from online specialized websites. Conclusion While technology is a significant source of competitive advantage, companies require devoted marketing efforts for reaching their target market and the identified market segments. This essay described how Toyota Australia uses the market segment variables to group its consumers in order to effectively communicate with them, looking also into different levels of competition for understanding how the organization tackles its competition.

TOYOTA AUSTRALIA – MARKETING ANALYSIS 7 References Clearly, P. 2009. Run, run as fast as you can. Victoria: Trafford Publishing. Curry, I. 2015. New diesel Toyota Prado tested on and off road. [online] Availabe at http://www.sunshinecoastdaily.com.au/news/strength-in-depth/2763816/#/0. [10 October 2015]. Deloitte. 2014 Australian business trends 2014. New South Wales: Deloitte. DeMuro, D. 2014. 2015 Toyota Camry. 2015 Hyundai Sonata: Which in Better. [online] Available at http://www.autotrader.com/car-reviews/2015-toyota-camry-vs-2015hyundai-sonata-which-is-better-231630 [10 October 2015]. Keillor, B.D. (2007) Marketing in the 21st century: Interactive and multi – channel marketing. London: Praeger Perspective. Lamb, C., Hair, J. and McDaniel, C. 2015 Marketing. Mason: Cengage Learning. Mid-Sedan: Toyota Camry Hybrid 2010, Australian commercial. N.d [online] Available at https://www.youtube.com/watch?v=3tAwdoS3UiA. [10 October 2015]. Rauwald, C. [10 October 2015]. BMW, Toyota to widen cooperation. [online] Available at http://www.wsj.com/articles/SB10001424052702303561504577496343206370920. [10 October 2015]. Reid, R.D. and Bojanic, D.C. 2010. Hospitality marketing management. New Jersey: Wiley & Sons, Inc. The new look Toyota HiLux unbreakable extended. n.d. [online] Available at https://www.youtube.com/watch?v=mMBQQpXm81A. [10 October 2015]. Toyota Land Cruiser Commercial. n.d. Available at https://www.youtube.com/watch?v=9o3g6_auxWM. [10 October 2015]. Toyota Australia official website. n.d. [online] Available at http://www.toyota.com.au/. [10 October 2015].

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