MARKETING STRATEGY

INTRODUCTION2PART 1: Situation analysis: Customer analysis and target market2 Competitor analysis4 Industry analysis5 SWOT analysis8 Recommendation10PART 2: Marketing plan: Marketing objectives10 Marketing mix strategies11 Action programs - timeline12CONCLUSION13REFERENCES14APPENDIX16

Analysis and evaluation of Toyotas Marketing Strategy

AbstractThis report is made based on the Toyota Motor Vietnam Company, an international company with many years of working in different countries. This report aims to identify the strengths, weaknesses, opportunities and challenges faced by Toyota Vietnam in business. Since then, the company can choose the marketing strategy, media targeting the market segment in Vietnam. In addition, said the report also explains the influence of cultural, social, political and economic with Toyota's business activities and along with suggestions for improving and developing business activities in Vietnam. The problem that managers face is always a hot topic in the business of Toyota Vietnam.

IntroductionToday, Toyota's automotive industry is growing rapidly in many countries around the world. Under the development, Toyota becomes one of the largest manufacturers in the world. Only in July 2012, the company has produced 200 million vehicles. In addition, Toyota's automotive industry in Vietnam has considerable achievements as production capacity is 36,500 vehicles/year/2 working shifts, over 1,600 employees This shows the remarkable development of Toyota in Vietnam. However, during the world economic crisis, Toyota Vietnam is facing many problems need to be addressed. The following report below will look at the factors affecting the company's business activities. From there, make suggestions on marketing strategy to overcome, limiting the impact of the world economic crisis for Toyota Vietnam.

Part 1: Situational analysis:Customer analysis:Demand trends:For many countries in the world, the rate of car use in Vietnam is still low. However, with the continuous development of economy and with a young population structure, Vietnam is considered the large consumer market in the future. In addition, the demand of using automobiles in Vietnam is very diverse. The vehicles on the market today are abundant with many different models and many different brands such as Mercedes, Audi, BMW, Lifan, Chery... In January 2013, sales of Vietnam car market reached 8989, up 50% compared to the same period last year. Information above shows that even though the per capita income in Vietnam is still low compared to many countries in the world but there is a high demand trends for personal automobile use.

Buying pattern:For a majority of people, a car fit the economy is extremely important. A car with the average selling price is always the center of attention of many people. These models are not only affordable prices but also have advanced technology, low operating costs and trendy. However, for those with high income, an expensive luxury car is what they are looking for. Therefore, the cars in Vietnam is also divided into 2 different cars are luxury cars and ordinary car.

Potential consumers:In theory, per capita income in Vietnam is not high and this proves this is not the big car market to can meet the expectations of automakers. Another cause of curbing the car market in Vietnam that is by infrastructure and tax policy of the state. These are the barriers created pressure on consumers. However, Vietnam is the country with a large population and a young population structure. Most Vietnamese people want to have their own car, especially those with middle-income and high-income. In the future, the policy of the state to overcome the transport, infrastructure and policies to support the automotive industry will help Vietnam become a major auto market. In other words, potential consumers in Vietnam in the future are highly. This is also the main reason why Toyota decided to invest in Vietnam market.

Segmentation Targeting & Positioning Market Segmentation: At Vietnam market, the product of Toyota focusing on the market segment of medium and high level, this market include those with middle income and high finance who want to get comfort in moving. The popular products of Toyota on the market include Camry, Corolla, Inova, Fortuner, Hiace and Yaris. Each product of Toyota carries a unique style and fit on the intended use of the consumer. At Vietnam, Toyota focuses mainly on demographic segmentation.

Target Marketing: In this report, potential customers of Toyota are people with middle income and high income. These people usually work in the field of business and often move to work with their business partners. In addition, they are also having the trips with family in the weekend. In Vietnam, to create own style and express themselves, they are willing to spend a large sum of money to buy themselves a personal car.

Positioning Strategy: Toyota is one of the pioneers companies in the establishment of car assembly facility in Vietnam. From past to now, Toyota always get high market share in the cheap automotive industry in Vietnam. However, to further improve the market share compared to other competitors, Toyota has stepped into the luxury car segment with the brand Lenus. Initially, they will price their products cheaper than competitors to participate in the market. Then, they create a difference by helping consumers can test their products at the showroom. The positioning strategy of Toyota aimed at car manufacturers of Mercedes and BMW, the line luxury car get high market share in Vietnam.

Competitor analysis:Vietnam market is a potential market for the automotive industry. This explains why Vietnam has more car manufacturers in the world join to market. After Vietnam joined the WTO, the competition is increasing in the market. Currently, Toyota has both direct competitors in the domestic and foreign.There are three big companies direct competitions with Toyota are:Honda Motors CompanyKIA Motors CompanyFord Motors CompanyHonda has been present in Vietnam for over 10 years and has constantly strive to get great trust from consumers Vietnam. For the motorcycle in Vietnam, Honda makes up 90% in major cities. In March 2005, Honda officially established automobile factory in Vietnam, the plant has a capacity of 10,000 / year. The current cars of Honda on the market include Civic, CR-V and Accord.(http://www.honda.com.vn)

KIA Motors Company was founded in 1944, is the first automobile manufacturer at Korea. KIA is a member of the Hyundai-Kia, Hyundai ranked fifth in the world in the number of vehicles sold in the market in 2008. Kia is one of the car manufacturers have the world's fastest growth rate. KIA has 13 manufacturing factory and assembly of automobiles in 8 different countries including Vietnam with an annual capacity of up to 1.5 million vehicles. Some of the popular products of KIA in the world are Cerato, Rio, Carens, Sportage, Morning, Sorento, Carnival.(http://www.truonghaiauto.com.vn)

Ford Vietnam was founded in 1995 and opened assembly plants at the Hai Duong province. Two years later in the month 11/1997, the plant capacity has been achieved 14,000 cars per year with six product lines are Transit, Ranger, Escape, Mondeo, Everest and Focus. With over 100 years of operating on the international market and 10 years in the Vietnam market. Ford Vietnam has grown continuously from the 7th position on the market when company started operations in Vietnam in 1997, Ford Vietnam has rapidly developed and at the end of 2004, Ford Vietnam was ranked second in the market with 14% of market share.(http://www.ford.com.vn)

Industrial analysis:PESTLE:PESTEL is a method of analyzing the elements of the business environment. This is an essential tool for operating and strategic planning for the Toyota Company. Political - Legal Factors:In the context of the economic crisis in many countries around the world include Vietnam. Each countrys government has carried out policies to recovery, protecting and stimulating the important industry including automotive industry. Toyota has influenced and has trouble in the global financial crisis. Because of this, they had to ask for a loan of about $2 billion dollars from the Japanese government. Loans from government policies can support the car companies survive in difficult times of financial crisis. In addition, with the export policies, Toyota will get more incentives from the Japanese government.About political, diplomatic relations between Japan and Vietnam is very good. This relationship is the basis for the success of all the business in Vietnam has FDI of Japanese such as Toyota. In addition, tax policy also supports Toyota development in Vietnam. For example: According Law on Domestic Investment Promotion (1995), corporate income tax exemption or reduction in some years after its establishment company in Vietnam. Import duty on cars components for the domestic automotive assembly much lower with import duty on automobiles. Government supports infrastructure, land for foreign businesses investing in Vietnam. Government has establishment of funds to support and encourage investment in Vietnam in the medium and long term. Toyota has captured these advantages to become the first car company to invest in Vietnam.In addition, the nations of the world in general and Vietnam in particular also have legal policies to protect the interests of domestic automobile companies. At Vietnam, protection policy is the policy brings many benefits for Toyota. One of the most obvious manifestations of the policy is the customs barriers against with imported automobiles. For example: Before January 1/1999, imported cars are taxed 155% (55% import duty, 100% excise tax), after this time shall be banned from import, taxable in 2004 up to 180% (excluding value added tax). As a result, competition in the Vietnam market is very weak. The price of cars assembled in Vietnam will not be affected by the relationship between supply and demand. In such environment, Toyota has possible long-term investment in Vietnam.

Economic Factors:Toyota joined Vietnam with the aim of looking for new markets. According to a report Finnish advisory group Global Intelligence Alliance (GIA), Vietnam ranked 3rd in top non-BRIC emerging markets - for the 2012 2017 periods. Vietnam has a total GDP about US$ 135.411 billion (2011 estimate), surpassed the per capita income of low-income groups of countries. Vietnam is among the countries with the domestic market leading growth in the world, an economy with high growth in world trade transactions with total exports is US$72.03 billion f.o.b. (2010 estimate) and total imports is US$79.37 billion f.o.b. (2008 estimate). In addition, Vietnam has the trust of many countries in the world. This is reflected by the amount of funding (ODA pledges 7.905 billion USD for Vietnam in 2011) in world economic crisis. These criteria and the numbers above is a reasonable basis to Toyota to invest in Vietnam.

Social Factors:Vietnam has a population of over 85 million people has always been the country to attract foreign investment. Along with a large consumer market, high social needs, this is also a young market with abundant human resources. Social Vietnam tends to learn new things, improving education. From that, labor quality has improved and development. Low cost of human resources explains the increase of FDI in Vietnam automotive industry. Toyota has always regarded the market as a factor affecting the characteristics of the product. A multi-national company such as Toyota always needs the product diversity and prices to suit the culture and society of each place.

Technology Factors:Toyota also benefited from the policy of research and technological development of the Japanese. Furthermore, the technological research cooperation between government and the business was always supported. Thus, environmental science and technology research in the country have created favorable conditions for development of Toyota. The world's automotive industry in general and Vietnam in particular are always strongly affected by technology. This forced Toyota Vietnam to constantly self-study and application of modern technologies in the production. The development and change constantly help Toyota get leading position in Vietnam and have trust from consumers.

Environmental Factors:Environmental factors include weather, geography, tsunamis, earthquakes, volcanoes and all the natural conditions in the territory of each country. If Toyota interested in the environment in production activities and create environmentally friendly products will bring trust and support from consumers.For example: According Toyota's Initiatives on the Environment: Establishing a low-carbon society Establishing a recycling-based society Environmental protection and establishing a society in harmony with nature

Analyzing the external environment (PESTLE) helped identify advantages and difficulties from Political, Legal, Social, Technology and Environmental around Toyota Company at Vietnam. Since then, applying the strengths, opportunities to grow and avoid the risks and threats from external environment. External environmental factors impact to business operations of Toyota. Toyota Vietnam should to regularly update, change and planning long-term strategies to overcome and minimize the impact from the external environmental. This helps Toyota Vietnam can maintain market share in the market and increase development in the future.

SWOTCorporate appraisal (SWOT) is a methodology to identifying the strengths, weaknesses, opportunities and threats in the automotive industry. Since then, Toyota can make decisions and develop marketing strategies. Based on the SWOT analysis, Toyota can develop their strengths, looking for opportunities as well as overcome the weaknesses and avoid threats.STRENGTHSWEAKNESSES

Toyota Vietnam is the first company implementation of the localization process in Vietnam. Prestigious brand image and high quality Toyota Vietnam at the forefront of the opening of the first automobile assembly plant in Vietnam. Strengths of Toyota is producing high-quality cars and affordable. The system distribution network product all over the country. Consumers can easily search for the spare parts of Toyota at Vietnam. The law at Vietnam applicable to the industry has many loopholes cause difficulties for automotive businesses in general and Toyota in particular. Toyota Vietnam has not yet established the channels of information systems needed to support internal systems within the company as well as with customers and dealers. Some issues about the quality of products cause loss in consumer confidence as motor vehicle rust, unpleasant smell when motor get high speed. The government not yet provides consistent policy and encourage automobile industry development at Vietnam.

OPPORTUNITIESTHREATS

Market competition in Vietnam is very weak by protectionist policies. According to the plan, by 2020, the automobile industry in Vietnam will become an important sector of the country Toyota quickly develop environmentally friendly cars. This is in accordance with social needs. Vietnam joined the WTO is a positive sign signaling a market development and more opportunities in Vietnam. Toyota under pressure from other brands and the imported cars when Vietnam joined the WTO. Toyota's market share in Vietnam market will also divide to other brands and the imported cars. Car faulty cause loss of consumer confidence in Vietnam. In 2012, Toyota recalls 5,300 cars to fix power window problem. Vietnam consumers tend to use the products and models from other brands instead of Toyota.

Recommendations: Toyota should focus on the study of the market, frequently offering new products to attract and meet the consumers needs. Toyota needs to improve product quality, fix errors in the production process. In addition, staff and sales service system also should be improved to enhance reputation with consumers. Toyota also should pay attention to the environment, to promote the development of environmentally friendly products. In addition, Toyota will also need join participate in social activities at Vietnam. This is a solid direction for future of Toyota Motor Vietnam.

Part 2: Marketing planMarketing objectives:The objectives of Toyota in the next 12 months are based on SMART objectives (Specific, Measurable, Achievable or Agreed, Realistic and Time-related). According to the situational analysis of Toyota Vietnam, there are three objectives need to achievement. Objective 1: Increase brand awareness among 90% of potential customers of Toyota in the first 6 months.

Objective 2: Increase retail sale in Vietnam market up to 20% within next 6 months. Objective 3: Increase the market share added 10% by the end of year.

The objectives above are clear, specific and measurable. In addition, these goals are realistic objectives because Toyota is a big company and the oldest at Vietnam in the automotive industry. They are eligible and resources to achieve these objectives. With the growing economic situation in Vietnam and with Toyota Company resources, these goals can fully completed within one year. However, Toyota needs the specific scheduling to monitor and ensure the implementation of the plan. An effective strategy will help Toyota achieve these objectives.

Marketing mix for Toyota:An effective strategy is often built on the basis of the marketing mix: Product, Price, Place, and Promotion. Product: Toyota in Vietnam is known as a low-cost car. The products of Toyota also are diverse and rich in variety and style. However, to develop and improve market share in Vietnam, Toyota should have a plan to develop the product line to use clean fuel (Butanol fuel, Ethanol fuel) for middle-income and high-income. It means that the current products instead of using petrol and polluting the environment, Toyota will develop the product line to use clean fuel and do not pollute the environment, create a new trend in the market.

Price: Pricing strategy is an important strategy when Toyota wants to implement marketing plans. With new products and environmentally friendly, Toyota should offer a reasonable price and in accordance with the consumer. This price should not be set too high, a low price will help the product quickly participate to the market and take back market share. This will help to Toyota customers have a good look with the company, the high quality products but prices are consistent with the consumer.

Place: In Vietnam, along with the retail branch of Toyota, Toyota also needs to set up the showroom so that the consumer can directly test the company's products. This helps shorten the distance between the consumer and the company, create shopping habits of customers in Vietnam when come to Toyota. In addition, company can display their products at major trade center at Vietnam such as Vincom, Nowzone, Diamond... The diversity of distribution channels will help products easily exposed with consumers.

Promotion: Toyota should regularly hold exhibition and display products. In addition, the company can invite a number of celebrities to promote new products for company such as Cristiano Ronaldo and Messi come to Vietnam. Product images associated with these famous people will help the company to quickly dominate the market. In addition, the campaign marketing on mass media such as television, internet, newspapers... will also bring high efficiency. Finally, Toyota needs to set up the channels of information systems, the service to support consumers and show the company's warranty program. This will help build customer loyalty with Toyota.

Action programsTo achieve the objectives set out, company should perform the following steps:1) Improve the quality of current production systems plant2) Improving the quality of human resources3) Expand product distribution channels

ConclusionAt Vietnam market, Toyota has still always been a great brand and get high market share in the automotive industry. But now, due to government policies and developing economies has make appeared many competitors in the market. So Toyota is facing many difficulties in developing. This report includes a number of proposals in the marketing strategy to help Toyota increase market share in Vietnam and confirmed their place in the future.

References

Malcolm Flynn (2012) Toyota: 77 Years, 200 Million Vehicles [online]. Available from: [Accessed 25 March 2013]

Autonet (2013) Car market 01/2013 increased 50% compared to 01/2012 [online]. Available from: [Accessed 25 March 2013]

Honda.com.vn (n.d.) General introduction [online]. Available from: [Accessed 25 March 2013]

Truonghai Auto (n.d.) KIA Motors Company [online]. Available from: [Accessed 26 March 2013]

Ford.com.vn (n.d.) Company History [online]. Available from: [Accessed 26 March 2013]

Jonathan Soble (2009) Toyota seeks $2bn crisis loan [online]. Available from: [Accessed 26 March 2013]

Lanta brand (2006) Automobile industry Vietnam [online]. Available from: [Accessed 27 March 2013]

The Library of Congress Country Studies; CIA World Factbook (1994) Japan Export Policies [online]. Available from: [Accessed 27 March 2013]

Park.org (1994) Vietnam legal [online]. Available from: [Accessed 27 March 2013]

Global Intelligence (2012) 46% Benelux Companies Look to Emerging Markets for Growth [online]. Available from: [Accessed 28 March 2013]

Global Finance (n.d.) Vietnam Country Report [online]. Available from: [Accessed 28 March 2013]

Vietnam Plus (2010) VN gets nearly 8 billion USD in 2011 ODA pledges [online]. Available from: [Accessed 29 March 2013]

Toyota Global (n.d.) Environmental Responsibility [online]. Available from: [Accessed 29 March 2013]

Thanh Nien News (2012) Toyota recalls 5,300 cars to fix power window problem [online]. Available from: [Accessed 29 March 2013]

APPENDIX:

Marketing mix (4P)

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