Problem:
Using information from at least three different sources, describe the elements of all marketing mix (product, place, price and promotion). In addition, select an organization with which you are familiar and describe how each one of the four elements of the marketing mix impacts the development of the organization's marketing strategy and tactics.
Case Journal: Marketing Mix & Strategy
Marketing mix is comprised of four elements known as product, price, place, and promotion. These marketing mix elements are then further broken down and categorized into a plethora of sub-elements. A major task in marketing is the assembly of a marketing mix, but once assembled a marketing mix helps develop and provide value to customers. Assembling a marketing mix involves numerous decisions relating to the four marketing mix elements. Decision making is crucial and forms the integral part of a marketing strategy. (Perreault,2004).
Marketing mix is constantly being changed and adjusted in order to yield optimal performance, thus assembling the marketing mix is a continuous task and not a onetime assignment. A forever valid marketing mix does not exist, due to the continuous change of consumer demand, hence a marketing manager has to carefully monitor consumer demand and react accordingly. (Perreault, 2004).
Product – Product is related to physical products or the services provided to the customers. Various decisions related to product such as brand name, packaging, quality, functionality and style has to be made.
Pricing – Prices are set after considering profit margins and analyzing competitor pricing. Price includes retail price, financing, discounts, and pricing discrimination.
Place- Place refers to the distribution channel through which products or services are offered to consumers. The functions involve distribution channels, warehousing, transportation, and logistics.
Promotion- Promotion is communicating and advertising products to consumers. The various decisions are advertising, sales promotions, marketing budget etc.
Products
In the 1937 a man who went by the name Kiichiro Toyoda started an operating automobile industry known as Toyota Motor Corporation, and is now the second biggest operating automobile corporation in the world. Toyota Motor Corporation headquarters are located in Japan although Toyota’s operations span all across the globe to all of its 522 subsidiaries. The company branches off into financial services and production of robots, meanwhile owning various premier brands like Lexus and Scion. The company owns a majority of the shares in Daihatsu Motors while holding on to a number of shares in Isuzu Motors, Yamaha Motors, and Fuji Heavy Industries. Toyota’s main products include cars, trucks, sports utility vehicles, vans, and hybrids. Car brands include Avalon, Camry, Corolla and Matrix. Customers who purchase these cars are rewarded with a hi-design car of astounding style and comfort. Truck categories include Tacoma and Tundra which are both very fuel efficient trucks. Toyota’s wide selection of SUV’s (sports utility Vehicles) which differ in style, provides Toyota customers with many options to choose from.
The company has attained leadership position in the area of innovation, quality, profitability, and modern design. When it comes to customer satisfaction, Toyota Motors Corporation has set the bar high and shows precedence over many automobile corporations thanks to its highly effective productive system. Toyota is constantly finding knew innovating products. Engineers continuously work hard to design products which will suit the needs of its diverse range of customers. Toyota was the first company to commercially produce and market hybrid cars which attracted many younger customers and helped retain existing customers. The marketing department has undertaken focused segmentation to fulfill the varying consumer needs. For instance, Toyota developed the design of THS for the Prius. Prius is the main hybrid car being sold in the U.S. market. It was adapted for different road conditions and driving cycles before being introduced in Europe and North America. The new model has a more fuel efficient engine and also reduces gas emission rates. Overall, the power and performance of the Prius is excellent (About Toyota, 2009).
The products impact the strategy of Toyota Corporation. The company has a wide range of products which cater to the needs of different segments. Due to the extensive range, company emphasizes on quality and innovation. The changing demands and trends of consumers require innovative designs at affordable prices.
Sales
Toyota Motors Corporation is known for its innovative designs and high quality products. Due to these strengths, the company has become highly attractive and successful. The company has not only developed its brand image through high quality products at reasonable cost but from marketing policies applied through effective pricing strategies. This multinational company has adopted differentiated pricing strategy. The pricing policy is differentiated from the other automobile manufacturers. The needs and wants of the consumers are properly focused which has resulted in huge success for the company. Toyota believes that in the long term, sales can be maintained if quality remains excellent, and is provided at the lowest possible prices and timely delivery.
In the beginning half of 2008, Toyota sold 4.8 million vehicles, which topped General Motors sales. In recent years, even though Toyota has achieved huge success it has also been impacted by the downturn in the automobile sector. World automakers are suffering from overcapacity due to the financial crisis, high fuel prices, high raw material costs, and rising inflation. Toyotas sales have also been affected by the extreme competition which has lead to a decrease in quality and decrease in overall sales. (World cars: Key player – Toyota, 2008). The sales of sports utility vehicles and light trucks have faded away due to rising prices of petroleum.
The company has an extensive range of product portfolios which vary in price. Automaker is known for its commitment to its customers and client, and dedication to delivering its products in a timely fashion with very competitive pricing. The company also offers post sell services to its customers.
Price significantly influences the strategy and policies. Due to the differentiated pricing strategy, the company focuses on excellent customer services and differentiated products. Toyota offers vehicles for premium segment that have very high prices. Company has geographically segmented its market for the luxury products.
Place
The company has achieved great success in a market which was once completely dominated by automotive companies such as General Motors. Thirty percent of Toyota’s total sales occur in North America. Toyota is expected to stay on course and produce similar results in upcoming years. In spite of the downturn in the Japanese automotive market, Toyota still dominated. Domestic sales are expected to remain stagnant in 2009. Asian markets are highly attractive for the automobile industry due to their developing economies.
The main business operations of the company are in the U.S. The company has its stores in all the major countries of the world. In U.S. only, there are about 1400 dealers associated with the company (Toyota moving forward, 2008). The key market of Toyota Corporation is North America, where 12 manufacturing plants are located (World cars: Key player – Toyota, 2008).
Toyota operates in many countries all around the globe, developing a strong network of dealers and suppliers. In the past few months, industry is facing downturn and significant decline in sales. This has led to a transition towards other emerging markets of the world. The company is focusing on increasing sales in these developing markets. Previously, the majority of sales revenue was generated from U.S. & Europe markets. Toyota has planned to sell about one million vehicles in China by 2010. Joint ventures and strategic alliances also depend upon the marketing mix elements. For the expansion plan in the Indian market, Toyota has set up a joint venture with the local producer NK Minta. Toyota is also producing a small car for the Indian consumers (World cars: Key player – Toyota, 2008).
Promotion:
Toyota provides detailed information about all their products on their website. There are also numerous television commercials which show the perks of driving a Toyota. The economic and consumer demand has changed, demanding management’s attention to adjust its marketing policies. Toyota introduced promotional videos in the form of multimedia players. This allows for Toyota dealers t get all promotional content through a video in a very efficient manner, also reducing marketing cost. Toyota also makes high use of television broadcasting in order to familiarize viewers with its products. Toyota also conducts surveys and uses such research procedures in order to better understand its customer’s demands and preferences which it will then use to make crucial decisions about its marketing policies.