Brand Audit of Toyota - Essay Example

TABLE OF CONTENTS CONSUMER PROFILE AND MARKET 3 CRITIQUE OF CURRENT MARKETING PROGRAM 3 Festive Promotion 3 Festive Car Spa 3 After-sales Activities3 Christmas Bonanza 4 Toyota Club 4 CUSTOMER BASED BRAND EQUITY ANALYSIS 5 5 Salience 5 Performance 5 Imagery 6 Judgments 6 Feelings 6 Resonance 7 7 BRAND VALUE CHAIN 8 Sources of Brand Equity 8 Sports Marketing 8 Promotions 8 Market Leader 9 Customer Awareness 9 Brand Image Associations 9 Visibility and Strong Distribution Network 9 SUGGESTIONS FOR NEW MARKETING PROGRAMS 11 11 RECOMMENDATIONS 12 Bibliography 13 BRAND AUDIT OF TOYOTA CONSUMER PROFILE AND MARKET The automobile market of Singapore is considered as an attractive market for the car manufacturers because the consumers of Singapore are considered as car aficionado who means that they select a car which may reflect their personality, lifestyle and values. Moreover, because of the cultural heterogeneity and increasing penetration of Western products have increased the demand of foreign cars in the country (Chen, et al. 2010). The automobile industry of Singapore is very competitive and Toyota is the leading motorcar brand in 2009 with 161,074 units sold as compared to Honda with 90,861 cars. The market shares of Toyota in Singapore are 27.8 percent and that of Honda are 15.68 percent (Ng 2010). CRITIQUE OF CURRENT MARKETING PROGRAM Festive Promotion Toyota Singapore has introduced a Festive Promotion Program as a new year delight for the customers of Toyota. Festive promotion is a component of online marketing strategy of Toyota Singapore. Through this program, company is offering an e-discount voucher on all Toyota accessories. These vouchers are available for free on the website of Toyota Singapore and through this voucher the customers of Toyota can save 5 percent on all Toyota accessories. This promotion of the company is available till 28 February 2011 (Borneomotors 2011). Festive Car Spa Toyota Singapore is celebrating Toyota Festive Car Spa which is offering premium revitalization package and heavenly indulgence program from 8 December 2010 to 28 February 2011 (Borneomotors 2011). After-sales Activities The consumers in Singapore consider after sales services very important. They like the new products however; they remain loyal to the brand names. Moreover, prices have to be very competitive for Singaporeans (SMEtookkit n.d.). As an after sales promotion strategy, company has introduced Borneo Motors-Mechelin & Yokohama Tyres Lucky Draw. Each winner of this draw in 2010 has won 4 days and 3 nights all expense paid, holiday with $4,000 package. Another lucky draw for the existing customers of Toyota is the Castrol Edge Football Fever Lucky Draw 2010 through which the winner gets 4 days 3 nights all expense paid holidays worth $8,000 (Borneomotors 2011). Another after-sales promotion is the Toyota Shield Infinity. The warranty gives the customers warranty coverage for 5 years. Company offers both the servicing and repair privileges to its customers through this after-sales promotion. Christmas Bonanza The Christmas Bonanza has been organized to offer accessories of Toyota like TRD products at attractive prices with a discount of up to 20 percent (Hong 2010). Toyota Club To provide the Toyota Enthusiasts a causal and fun environment where they can gather, interact and discuss over their favourite Toyota cars, the company created a Toyota Club in Singapore in 2001. The club started its operations from 22 January 2001 and soon it drew the interest of all Toyota owners in Singapore (Streetdirectory n.d.). The club became a registered car club in 2004 managed by Car Enthusiasts’ Club. CUSTOMER BASED BRAND EQUITY ANALYSIS In order to analyze the dimensions of CBBE, I conducted a survey in which I selected 75 individuals belonging to various fields of life such as students, households, professionals etc. Salience Salience of Toyota in Singapore is high as brand recognition and recall is significantly high. The participants were asked about their perceptions towards different car brands by rating them from 1 to 5 (1 means very strong brand strength and 5 means very weak brand strength). Total 88 percent of the participants rated Toyota as having the very strong brand strength. Participants were also shown the logos of different car brands available in Singapore and all of the participants identified Toyota logo. Performance Toyota has faced various performance issues in its products in Singapore. Toyota recalled 1.53 million of its vehicles because of brake-related problem and Borneo Motors which distributes Toyota vehicles in Singapore tried to reach customers to replace the problem parts for free (Low 2010). However, when participants were asked whether the related news on performance issues make them worried or not and were they hopeful towards the company, 97 percent answered ‘yes’. Moreover, when participants were asked to classify Toyota based on prices of its products, 75 percent classified it as an affordable brand and 25 percent classified it as a low cost brand. Imagery Toyota has positioned it as a brand which offers compelling value to its customers at valuable prices. Therefore, when Toyota planned to enter into the luxury car market, it could not change the minds of consumers as consumers remained unable to associate Toyota with luxury car image. In consideration to that Toyota launched its luxury brand Lexus as an independent brand (Roll 2010). The classification of Toyota as an affordable brand by majority of the participants reflects that consumers consider Toyota as a brand for middle level income group. Judgments These are the consumers’ personal thoughts and evaluations of a brand. In a university students survey, the students of Fu Jen and Singapore Management University has rated Toyota just after Mercedes which means that Toyota has established a significant level of confidence despite the problems which it is facing in the Singapore market (Tropea-Gray, et al. 2010). When the participants of survey were asked to rate quality of Toyota brand, 72 percent rated it as a high quality brand, 19 percent rated it as a low quality brand and 12 percent rated it as a very high quality brand. Around 92 percent rated it as a highly trustworthy brand and likeable brand whereas, 8 percent rated it as a low brand on these dimensions. Around 94 percent of the participants that they will buy the brand and out of this majority has associated the brand with their lifestyle. Moreover, 96 percent of the participants have rated Toyota as a superior brand as compared to other brands available in the market. Feelings To learn about brand feelings of participants towards Toyota three questions were asked. 88 percent of the participants agree with the security feeling of the Toyota brands, 96 percent agree with the statement that Toyota brands are acceptable in their social group and 76 percent of the participants said ‘yes’ when asked whether Toyota makes them feel pride and need fulfillment. Resonance To analyze the participants’ loyalty towards Toyota brand, they were asked whether they would like to choose Toyota. Out of 75 participants 33 were the Toyota customers and out of 33, 29 said ‘yes’ they will go for another Toyota brand next time. On the other hand, out of 42 participants who were not Toyota users, 11 said ‘yes’ they will go for Toyota no matter what are the circumstances. BRAND VALUE CHAIN Sources of Brand Equity Brand equity is equal to the multiplication percentage of effective market share with relative price and durability (Economywatch). All brands have brand equity which can be either positive or negative based on what makes the customer more or less like to purchase it thereby, making equity from strong to weak (Roberts n.d.). Roberts has given the example of Toyota and GM and explained how Toyota brand equity is greater than GM. He argues that the joint venture between GM and Toyota since 1989 manufactured cars and the cars were available both at GM and Toyota retailers’ outlet. However, Toyota sold more cars at relatively higher prices during 19900-1994 and generated an operating profit of $108 million and its dealers generated $128 million more as compared to GM. It is because customers believe that Toyota cars are superior to GM although the cars were manufactured by the joint venture of both companies. Sports Marketing Toyota has been sponsoring sports events which also made significant contributions to the brand equity of company. For example, Toyota is one of the major sponsors of F1 Sponsor program in Singapore and company spends around $US 400 million each year in F1 sponsor program. According to an official statement given by a representative of Toyota Motors in Singapore, the participation of Toyota in F1 program contributes to the prosperity of company and develops a competent automotive culture (Pandey 2009). Promotions For example, when company planned to launch Corollas Altis in Singapore, company focused on road show at the ground level of Shaw Centre and adopted SingTel location-based advertising strategy. In this campaign, the subscribers of SingTel, living along Orchard Road, were sent MMS to have a test drive of the new car and also provided the information on how to win car through lucky draw (Writer 2008). Since prices are very important for Singaporeans therefore, discount-based strategies have also helped the company to stimulate Singaporean customers. Market Leader As mentioned previously, Toyota is the market leader in the motorcar industry of Singapore, which is another source of brand equity for the company. Acoording to Yomiuri newspaper, Toyota is expected to generate 100 billion yen in 2010. Although recalls and accidents had spoiled the image of company in the world market however, company has maintained its position as a market leader and expects to generate an operating profit of 46 billion yen (Kumar 2010). Value-based Prices Toyota is recognized as a Japanese car manufacturer that offers cars of their actual worth. The company name is always associated with affordable prices because the company offers value-based pricing to its customers. Customer Awareness Brand awareness and brand meaning are the major sources of brand equity (Lovelock, Wirtz, & Chatterjee 2008). Consumers in the Singapore market are aware of the features which Toyota offers to its customers. The customers are aware of the performance, quality, cheap spare parts and accessories and about other benefits of Toyota brands. Brand Image Associations Although Toyota is facing many significant challenges in Singapore especially the quality challenges however, consumers have developed brand image associations of Toyota such as durability, quality etc. Visibility and Strong Distribution Network The brand equity value is associated to firm’s visibility (Torres, Tribo, & Bijmolt 2010). The high brand visibility of Toyota is another source of brand equity for the company and company has established a strong distribution network in Singapore. Brand Value Chain of Toyota Singapore SUGGESTIONS FOR NEW MARKETING PROGRAMS Toyota has faced significant challenges related to marketing in 2009. According to public relation experts of company in Singapore, the lack of timely and direct communication of Toyota marketers has made it difficult for the customers and community to trust the company (Low 2010). From the evaluation of the current marketing programs of Toyota in Singapore I have analyzed that company is not focusing on marketing programs directly interacting with customers. Therefore, company should more aggressively develop new marketing campaigns. RECOMMENDATIONS Although it appears in the brand equity chain that company has been able to maintain its brand equity efficiently however, it has been noticed that performance of quality issues of company products are increasing and in the long run they can influence consumers’ perceptions negatively. Therefore, it is suggested that company should reduce quality concerns as Toyota has built a strong association with quality. New product development is an important source of brand equity in car industry however, Toyota should consider the fact that it may keep a brand image consistency as it maintained when it launched Lexus. Bibliography Borneomotors. Aftersales Activities. 2011. http://www.borneomotors.com.sg/e-advantage/ (accessed February 1, 2011). Borneomotors. Usher in the New Yearwith Our Festive Promotion. 2011. http://www.borneomotors.com.sg/e-advantage/ (accessed February 1, 2011). Chen, Benjamin, John Church, Andy McNair, Alix Reisinger, and Candice Wilmuth. Selling Sedans in Southeast Asia. March 15, 2010. http://www.kellogg.northwestern.edu/Departments/International/InternationalFocus/Article/2008_Automobiles_in_Singapore_and_Vietnam.aspx (accessed February 2, 2011). Economywatch. Brand Equity. (n.d.). http://www.economywatch.com/marketing/brand-equity.html (accessed February 3, 2011). Hong, Koh Ching. Seasons Greetings. 2010. http://www.borneomotors.com.sg/e-advantage/issue_05/index.html (accessed February 2, 2011). Kumar, Jaideep. Toyota’s Profit May Touch 100 Billion Yen . May 9, 2010. http://www.topnews.com.sg/content/21561-toyota-s-profit-may-touch-100-billion-yen (accessed February 3, 2011). Lovelock, Christopher, Wirtz, Joschen, & Chatterjee, Jayanta. Service Marketing People, Technology, Strategy, (2008). 5/e. Pearson Education India. Low, Elizabeth. Toyota in the doghouse. October 22, 2010. http://www.marketing-interactive.com/news/22726 (accessed February 2, 2011). Ng, Haw Cheng. Singapore. 2010. http://www.buyusa.gov/auto/singapore.pdf (accessed February 2, 2011). Pandey, Rayana. Toyota slams the brakes on F1 sponsorship. November 5, 2009. http://www.marketing-interactive.com/news/16174 (accessed February 2, 2011). Roberts, Kenneth J. Building Powerful Strategies that Strengthen Brand. http://www.lippincott.com/pdfs/s95_creating.pdf (accessed February 2, 2011). Roll, Martin. Crafting a competitive brand strategy . September 30, 2010. http://www.globeasia.com/index.php?option=com_content&view=article&id=126:crafting-a-competititve&catid=2:columnists&Itemid=3 (accessed February 2, 2011). SMEtookkit. Reaching the consumers. http://southafrica.smetoolkit.org/sa/en/content/en/7326/Singapore-Selling-and-buying (accessed February 2, 2011). Streetdirectory. History of Toyota Club Singapore (TCS). http://www.academia-research.com/writer/index.php?pg=ordp&e_id=497382 (accessed February 1, 2011). Torres, A., Tribo, J. A., & Bijmolt, T. H. Generating Global Brand Equity through Corporate Social Responsibility to Key Stakeholders. 2010. from http://docs.google.com/viewer?a=v&q=cache:hLod1300ptMJ:e-archivo.uc3m.es/bitstream/10016/9314/1/indemwp10_04.pdf+visibility%2B+brand+equity&hl=en&gl=pk&pid=bl&srcid=ADGEEShyTvZPdXVLoSTfUCIVXUtQi2RAw38JqGbiMtzi-Qqd5A8Q6Mm4HHPF6HgsGVwGa1HTYuDr5QPhPDSQ0iybuk(accessed February 1, 2011). Tropea-Gray, Allen P, Michael Lee, Dan Ross, and Wee Liang Tan. Lessons from Toyota Crisis. July 2010. http://cjbe.jesuitbusinessschools.com/resources/297.pdf (accessed February 2, 2011). Writer, Staff. Shaw gets Toyota feeling. May 5, 2008. http://www.marketing-interactive.com/news/6529 (accessed February 3, 2011). Read More