TOYOTA COMPANY

Introduction to the company! Toyota was established in 1937 in Japan. First time it introduced its product Corona in the US in 1965. By the 70s, Toyota was the best-selling import brand in the US. During the 80s, it started manufacturing vehicles in the US. In 2006, it had globally become the second largest car seller and third largest car sellers in the US having more than fifteen percent market share. It is estimated that by 2008 it is going to be the number one car producer and seller both in the US and across the world. This profound success of Toyota is associated with its most proficient market strategy. The case of Toyota notably proves that how important is market strategy in the life of a company to be a market leader. Mission Toyotas mission statement is as follows: To sustain sustainable growth by providing the best customer experience and dealer support. (Toyota, 2007) Customer satisfaction is the driving force for Toyota, which inspires it to provide the highest quality products and services. Kaizen is a word that Toyota upholds, which means continuous improvement of its technology, products, and services. In short, Kaizen for customer satisfaction is Toyotas mission. Toyota further explains its mission as follows: Around here our values are just like yours. We are hard working. We are active in community. We are creating jobs. We celebrate our diversity. We are building cleaner greener cars. And this is just the beginning. (Toyota, 2007)

MARKETING PLAN FOR TOYOTA COROLLA MARKETING CONCEPT Marketing is the process associated with promotion for sale of goods or services. It is considered a "social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others." It is an integrated process through which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Marketing is used to create the customer, to keep the customer and to satisfy the customer. With the customer as the focus of its activities, it can be concluded that marketing management is one of the major components of business management. The evolution of marketing was caused due to mature markets and overcapacities in the last decades. Companies then shifted the focus from production to the customer in order to stay profitable. The term marketing Concept holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions. It proposes that in order to satisfy its organizational objectives, an organization should anticipate the needs and wants of consumers and satisfy these more effectively than competitors. STRATEGIC PLANNING Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) PEST analysis (political, economic, social and technological). Strategic planning is the formal consideration of an organizations future course. All strategic planning deals with at least one of three key questions: 1."What do we do?" 2 . " F o r w ho m do w e do i t? " 3 . " H o w do w e e x c e l ? " In many organizations, this is viewed as a process for determining where an organization is going over the next year or more, typically 3to 5 years, although some extend their vision to 20 years. In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. The resulting document is called the strategic plan."It is

also true that strategic planning may be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Therefore, strategic innovation and tinkering with the strategic plan' have to be a cornerstone strategy for an organization to survive the turbulent business climate. MARKETING PLANING A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for product or service, a brand, or a product line. Marketing plans cover between one and five years. A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use. THE MARKETING PLANNING PROCESS In most organizations, "strategic planning" is an annual process, typically covering just the year ahead. Occasionally, a few organizations may look at a practical plan which stretches three or more years ahead. To be most effective, the plan has to be formalized, usually in written form, as a formal "marketing plan." The essence of the process is that it moves from the general to the specific; from the overall objectives of the organization down to the individual action plan for a part of one marketing program. It is also an interactive process, so that the draft output of each stage is checked to see what impact it has on the earlier stages and is then amended accordingly. The marketing planning process can thus be elaborated in just a fewpoints which will cover each and every important aspect of the market that can be beneficial for an effective marketing plan. These steps can be elaborated as: Review of the marketing environment. A study of the organization's markets, customers, competitors and the over all economic, political, cultural and technical environment; covering developing trends, as well as the current situation. Review of the marketing system. A study of the marketing organization, marketing research systems and the current marketing objectives and strategies. The last of these is too frequently ignored.

The marketing system itself needs to be regularly questioned, because the validity of the whole marketing plan is reliant upon the accuracy of the input from this system, and `garbage in, garbage out' applies with a vengeance. Product Situation T o y o t a Co r o l l a i s t h e m a r ke t l e a de r i n i t s c l a s s . T o y o ta Co r o l l a i s manufactured both in Diesel and Petrol engines i.e. 2000cc diesel and 1300cc and 1600cc petrol versions. Its main attributes are: Competitive pricing. High reliability. Easy availability of spare-parts.High goodwill. Aggressive styling. After sales services. Swift distribution channels.High resale value. Competitors Situation SUZUKI MOTORS Suzuki is the leading name in small commercial vehicl e s a n d p a s s en g er ca r s . S u z uk i co m m e n ce d i ts o per a ti o n by a s s e m b l i ng small 800 cc cars. Suzuki has been so far a sole leader in 800cc and 1 0 0 0c c pa s s e ng er ca r s a s w e l l a s 1 0 0 0c c j e ep Po to h a r . B u t t he emergence of so many competitors in the market will definitely trigger a very hard time to Pak Suzuki. Suzuki has launched Mehran 800cc,Cultus 1000cc, Baleno 1.3 & 1.6 Eli and Gxi, Bolan van & Ravi pickup 800cc and Potohar jeep.Pak Suzukis sales during FY08 portrayed 31 per cent upsurge. Sales figures of Pak Suzuki Motors during FY08 posted sanguine growth at31 per cent to 99,104 units compared to 75,720 units during FY07. Honda: Honda started its operation in Pakistan in 1994. Honda is enjoying its key position in the segment of 1300 cc and above. Honda h a s launched many models like Civic 1.5 cc, City 1.3 cc to 1.5 cc etc. VTI brand continued to be popular among customers. D u r i n g F Y 0 8 , H o n d a A t l a s C a r s s a l e s s o a r e d b y 1 7 p e r c e n t t o 28, 134 units as against 24,066 units previously. Currently, Honda Atlas assembles only two vehicles namely Honda Civic and Honda C i t y to t a p t he u p pe r - e n d s eg me n t o f c a r ma r k et. Dewan Farooque Motors: It is the major competitor which has commenced its operation with aw i d e r a n g e o f p r o d u c t s i n d o m e s t i c a u t o m o b i l e m a r k e t . D

e w a n Motors is basically collaboration with Hyundai and Kia, two Korean auto manufacturers. The initial response to Dewan's offering in them a r k e t w i t h r e c o r d c o m p a n y b o o k i n g o f i t s S a n t r o P l u s . I t h a s launched its Kia classic 1300 cc car with sophisticated features. Infuture wide range of models like Kia Shuma 1500-1800cc car, Kia Sportage 2000 cc sports utility are expected to launch in the market.D ew a n ha s a l s o l a u n c he d i ts 1. 5 to n s S h e hzo r e, t he a s s e m bl y o f Hyundai light commercial vehicle has already started at the SindhEngineering Plant in Karachi under contractual agreement. Dewan's presence in the market will give the major move to the auto industry in Pakistan. The intense competition will give the benefit to the potential buyer in the market. Daihatsu: Daihatsu, another new player in the market with its Cuore 850 cc ,increased the competition in the market . Daihatsu and Indus Motor s i g ne d a n a g r ee me n t to l a un c h t he Co ur e i n m a r ke t. T he pr o j e c t worth Rs 750 million was developed at Port Qasim between Daihatsu a n d I nd u s M o t o r to p r o d uc e Co u r e. D a i ha ts u a l s o h ea t ed u p t h e competition in small car segments. Suzuki for the first time faces competition in small car business. It is for the first time that Daihatsu will produce its car in Toyota Plant in Karachi. The assembly plant of Daihatsu has the capacity to produce1 0 , 0 0 0 Cuo r e ca r s i n th e y ea r . B ut th e ex pe c te d l ev el o f o u tp u t inf u t u r e w i l l b e s o m e a b o u t 5 0 0 0 c a r s i n t h e s t a r t i n g y e a r o f i t s operation. Distribution Situation Toyota's corporate philosophy revolves around customer satisfaction, which is symbolized in the 3S Concept. Toyota is the Pioneer in the 3S System, which offers Sales, Service and Spare Parts all from the same facility. Indus Motor Company is privileged to have the most modern Service Network in the country. All our Toyota and Daihatsu Dealers operateo n " 3 S " b a s i s ( S a l e s , S e r v i c e , a n d S p a r e P a r t s ) . C u s t o m e r Satisfaction is the cornerstone of our Marketing philosophy. Modern equipment and facilities exist at each dealership that is named by professionally trained Service Technicians. The Service network under-went recent expansion and comprises of 25 Dealerships in 14 cities. Our Service

network has over 750 stalls where catering to General Jobs, Car Wash, and Body Paint Jobs are undertaken. Governments investment policies The Government has liberalized the investment policy environment for domestic as well as foreign private investment in the industrials e c t o r . T h e r e i s n o u p p e r l i m i t o n f o r e i g n e q u i t y a n d f o r e i g n ownership of industrial projects. There is al s o n o r e s t r i c t i o n o n remittance of profit, dividends, payment of royalty and technical fee. The Government is also encouraging joint ventures, technology tie-ups, co-manufacturing and co-exporting arrangements with foreign investors. Even relocation of projects is being encouraged in view of the transformation of developed economies into hi-tech areas. Major advantages for investment in Pakistan are as follows: Abundant land and natural resources Vast human resources Growing domestic market Well established infrastructure Strategic geographical location Fundamental problems in the automotive sector are as follows: Low volumes / under utilization of capacity High prices Slow transfer of technology Pakistans investment space is vast. Imperatives of the investment c o n t i nu u m e. g . eco no mi c i n ter es t o f t h e co u n tr y a n d t h e f i na n ci a l interest of the individual investors are the key considerations. There is a kind of an organic link between the national economic interest on t h e o n e h a n d a nd t h e i nd i v i d ua l s f i n a n c i a l i n ter es t o n t he o t h er . Sustainability of this linkage is the key to a win-win situation. This is b e i n g a c hi ev e d by co m pl e t el y f r ee i ng th e G o v er nm e n t f r o m t he upfront controls and regulatory overhang which it had instituted oni n v es t me n t o v e r t h e y e a r s . T r a d e a n d i n d us tr y i s no mo r e be i n gc o n t r o l l e d b y t h e G o v e r n m e n t . T h e p r i v a t e s e c t o r i s n o w i n t h e drivers seat. The Government is trying to put it on the high road of development. Approach is fast-track.

The policy focus is shifting tothe provision of the following requirements; namely: Adequate policy framework Simplified operating procedures Strong support mechanisms Easy access to capital Upgrading technologies Enhanced productivity Reliable quality control Enhanced management skills Well-trained manpower Improved marketing skills. T h u s a r el i a b l e i n v es t m e n t e nv i r o n me nt i s b ei ng d e v el o p e d. T he s t r a te g i c pr e f er e n c e i s m a s s i v e ch a n g e i ns t ea d o f ma r g i na l o n e . Val ue-addition is our national priority for increasing national wealth. This requires upgrading of technology and capacity-building in design development for improving our position on the value chain. There is therefore an immense scope of cooperation and technology tie-upsfor cost-effective comanufacturing of automotive vehicles in Pakistanfor domestic and export requirements. The Asian and Pacific regionssupport to Pakistans volumestarved automotive sector and nascentv e n d o r i n d u s t r y m a n u f a c t u r i n g a u t o p a r t s f o r O E M a n d e x p o r t markets is therefore a felt need of Pakistan. SWOT ANALYSIS Strengths Competitive pricing.High market share.High durability. Easy availability of spare parts.Aerodynamic body shape. Elegant body features.Comfortable ride.Luxurious car interior.High goodwill.Prestigious car history.Good resale value.Swift distribution channels.Updated safety features (Air-bags, seat-belts, ABS braking,Safety beams etc.) Low fuel consumption As production of vehicle is based on foreign joint ventures of Japanese origin, the product quality is of international standard.

Weaknesses P eo pl e o f te n cr i ti ci z e t he br ea ki ng o f t he ca r a l tho ug h th a t brakin g system of the car has been updated to ABS but still the body rolls when the brakes are applied at high speed.T he c he es y o f t h e ca r i s no t s ta bl e w hi l e d o i ng hi g h - s pe e d sharp turns.The body of the car is too heavy.The rims and tires of the car are not impressive. T h e c a r s s te er i n g i s a b i t l i g ht a n d t h e d r i v er ca n no t f e el t h e road. Opportunities Making a sporty version of the car just like the CIVIC TYPE-R,this is the faster racing version of HONDA CIVIC having 200bhpand a sports body frame.Extra market can be captured by introducing Company fittedCNG Kitts in the car. Threats Swift competition from other manufacturers mainly Japanese and Korean car-makers. High oil prices resulting in decrease in demand of fuel thirstys e d a n s . B u t t h e f u e l C o n s u m p t i o n o f T o y o t a C o r o l l a i s f a i r l y decent.Global inflation due to increase in population and high oil pricesmay result in decrease in demand of sedans. Increase in demand of other cars may result in downward trendof the brands goodwill.Lower prices of Korean car manufacturers may be a threat in the future. But presently Korean cars are not making a big impactin the market because of reliability and resale problems. C u r r e n t l y P a k S u z u k i i s p o s i n g a t h r e a t a s P a k S u z u k i i s pr o d u c i ng c he a p c a r s a n d i s ta r g e ti ng t h e l o w er - mi d dl e a n d middle income group consumers. Permission given by the Government to the overs e a s Pakistanis to import used cars in Pakistan.

MARKETING STRATEGY Product Development: Alloy rims should be introduced in all the versions of Corollaso as to contribute to smooth braking, stability, comfort & vibrant look of the car. Speedometer panels should be developed into digital units to compete with new Honda Civic. Accessories like Traction Control should be introduced in the car so as to improve its traction on rainy and s n o w y surfaces. It will also enhance high speed cornering stability. This new product feature will attract extra customers in the Pakistani market. Electronic Sunroof should be etched in the Saloon versions(2.0D Saloon and 1.8 VVT-i) as it is in Honda Civic. Concentric Diversification Strategy: A s Co r o l l a i s th e m a r ke t l ea de r i n m a n uf a c tu r i ng S e d a ns a n d i s e n joying wide customer base and high good will, it should ta k e advantage of the present situation and develop a Sports version of Corolla because of the following reasons: To compete with the Civic Type-R, this is the sport version of Honda Civic. To increase its customer base. To increase its sales revenue. Pricing Strategy: The prices of the present Corolla should be reassessed for the 1.8 Corolla Altis VVT-i (Manual and automatic) units which are the frontline competitors to the new Honda Civic 2006

The prices for the above model should be increased up to a minimumof Rs. 30,000 because of the following reasons: The new Honda Civic is charging from Rs. 1.32 million to 1.5million, whereas Corolla being the market leader is chargingfrom Rs. 1.22 million to 1.31 million ( Corolla Altis M/T 1.8Land Corolla Altis A/T 1.8L) respectively. As the demand for Toyota Corolla is considerably more thanthe supply, thus, an increase in prices will not harm the currentdemand. Due to double-digit growth in inflation and subsequent increasein production costs

References CNN Money, (2007), Americas Best Car Companies, March 7, 2007 available on http://money.cnn.com/magazines/fortune/fortune_archive/2007/03/19/840232 4/index.htm , visited on Nov. 20, 2007. Fuel Economy, (2008), 2008 Hybrid Vehicles, available on http://www.fueleconomy.gov/feg/hybrid_sbs.shtml , visited on Nov. 22, 2007. Kelly Blue Book, (2007), The Most Researched Sedans, available on http://www.kbb.com/kbb/ReviewsAndRatings/default.aspx?trid=3&gclid=CKrS8r HMgI8CFTa oGgodgyqT2w#ManufacturerId=49&ModelId=286 visited on Nov. 27, 2007. Kotler, Phlipe & Keller,Kevin Lane (2006), Marketing Management, Prentice Hall, 12th ed.