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Environmental Factors Paper - Essay Example

Toyota is one of the world’s leading car manufacturing companies which produce and market more than 8 million cars every year. It has a global presence with manufacturing units in more than 27 countries and vehicles sold in more than 170 countries and regions (Toyota, 2010). This paper discusses how various environmental factors affect the marketing decisions of Toyota. Influence of global economic interdependence and the impact of trade practices and agreements It is quite important that Toyota understand the importance of economic interdependence and the impact of trade practices since the current economic situation calls all the countries in the world to be highly interdependent. Toyota can efficiently procure the vehicle parts from specific countries and strategically increase the market share in the countries where they do business. On May 2009, Toyota reported a record loss of $4.2 billion due to the global financial crisis. This shows that the performance of the firm is highly related to global economic conditions. Differences in tariffs, taxes and trade agreements between different countries need to be considered while pricing the products. A high import duty will make a country less attractive to do business with. On the other hand a subsidy on international trade will make a country more attractive to trade. Importance of demographics and physical infrastructure Demographics and physical infrastructure are both macro environmental factors that affect the marketing decision of any firm. The marketing decisions of Toyota are shaped by the demographic factors of human population such as size, location, gender, occupation, race, etc. For example, Toyota cannot supply vehicles to a location where it does not get a cost advantage. So it has to decide on the feasibility of opening a manufacturing unit in that location if the consumer demand is high. The demographic environment can also be classified on the basis of generations. They are Baby Boomers, Generation X and Generation Y. The needs and aspirations of these different generations are different in the form of vehicle design, performance, mileage, pricing etc. Promotional measures should also be made in order to give the right appeal for each of these segments. Physical infrastructure also plays a major role in designing the marketing decisions of Toyota. The vehicles marketed in one country may not be apt for some other countries due to the infrastructure those countries have. In such cases, there needs to be a structural redesign on the vehicle before it can be marketed to such countries. Also the availability of good physical infrastructure will help determine whether it is beneficial to open up manufacturing units for reasons of easy availability of energy, water supply, telecommunication facility, etc. Influence of Cultural Differences Toyota has over the years developed an image of trust and value among the minds of the customers. The marketing strategies will be aimed at making people associate themselves with these qualities in order to affect their purchase decision. People perceive Toyota as a lifestyle brand in some countries whereas in some other countries they consider it as a quality brand. It is the ability of the marketing department that enables Toyota to position the vehicles in the minds of the ...Show more


Economic Factors Affecting Marketing Decision Markets aim to discover the needs and want of customers and communicate the benefits of their products and services to them. In order to do this efficiently, the management needs to understand the marketing environment in which they operate…
Author : emmett34
Environmental Factors Paper
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