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Summary Case
This presentation focuses in: Toyotas innovation and product differentiation areas. Reasoning of Vietnam market is not ready for Toyotas hybrid car (Prius) and young brand (Scion).
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About Team
Team name: Toyota Teams member: Nguyen Van Thanh Tran Dao Anh Vu Ngo Kim Tu Vuong Gia Bao
Table of Content
3 Product Differentiation 3.
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Founded in 1937.
Company Analysis
It employs more than 320,000 people worldwide (Toyota Motors, 2009). Company's strategy has been two fold: Efficient marketing strategy Product differentiation. In 1947, started passenger car production. In 1958,sold their first cars in the U.S.
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Established: 1995
Sales of imported vehicles: Land Cruiser, Hilux, Yaris, Land Cruiser Prado
Capacity: 30,000 cars/year Employees: More than 1,500 people (including seasonal workers)
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Strong international position Large size of management High financial strength team caused slow in decision Strong brand image making. Industry leader Limited workforce and in manufacturing and production. materials may slow down Excellent penetration in key markets companys growth. 2008 Financial crisis, 2011 Japan disaster
Innovation-first to develop mass-produced hybrid. Expand more aggressively into new segments of the market. To produce more efficiency cars. Continued global expansion.
Increasing competitive pressures. Shifts in the exchange rates. Predictions of a downturn. Changing demographics. Governments encouraging alternative forms of transport. Rising oil prices and the costs of maintaining cars.
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Company Analysis
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Product Strategy
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Toyota manufactures tangible goods 3 levels of product:
Product Strategy
Warranty within 36 months AUGMENTED Customer service support After-sales service: free PRODUCT Inspection Program
Product Classification
A car ACTUAL Test drive PRODUCT Buy and collect and own
Convenience and safe CORE Speed-> Travel around PRODUCT Quality product
Quester, et al 2007
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Product Classification
Toyota manufactures tangible goods
3 levels of product
Product Strategy
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Product Strategy
WIDTH
Trucks
DEPTH
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Product Strategy
Vios
Toyota 86
Hiace
Innova
WIDTH
Fortuner
Trucks
Hilux
DEPTH
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Product Life Cycle
Product Strategy
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Product Adoption Process
Product Strategy
Event and Sponsorship to display new products . (Introduce Scion at Music event) Advertising and promotion
Trial
Adoption
Product Differentiation
Product quality Product design and feature Product supporting service
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Product quality
Innovation of the TOTAL QUALITY CONTROL (TQC) Improve quality Improve component product Competitive position
Product Differentiation
Source: http://www.thetruthaboutcars.com
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Product quality
CAR SPEC Price Horsepower Torque City MPG Highway MPG Range Trunk Volume Interior Volume Curb Weight Power-ToWeight 2013 2012 2012 Chevrolet 2012 Ford Honda Hyundai Malibu Fusion S Accord LX Sonata GLS Eco 1SA $25,995 $22,495 $23,070 $21,670 182 171 25 37 577 13.2 100.3 3595 19.8 175 172 22 32 560 16.5 100.3 3403 18.8 177 161 23 34 629 14.7 106 3216 18.2 198 184 24 35 647 16.4 103.8 3199 16.2
Product Differentiation
2013 Nissan Altima S $23,280 182 180 27 38 684 15.4 101.9 3108 17.1 2012 Toyota Camry L $22,900 178 170 25 35 595 15.4 102.7 3190 17.9
Not only high quality desire the success of Toyota Product focus on market creation
Source: http://www.goodcarbadcar.net
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Product quality
Product Differentiation
Development of a wide range of technologies and products with focus on market creation
<Technology development>
Leading edge technologies
Nanotechnology Material technology
<Marketing>
Biotechnology
Energy technology
Engine
Body
Electronics
Transmission
Environment
Chassis
Safety
IT
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Product feature and design
Product Differentiation
Design
Features
Both
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Product feature and design
Product Differentiation
Target in niche market Provide more than 100 options for customer to tune
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Product feature and design
Product Differentiation
Expanding product line in both depth and wide side to satisfy all different demand of customers.
Sedan
Truck
SUV
New innovation of Green car Hybrid for the new trend of environment protecting. Social Marketing Concept
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Product feature and design
Product Differentiation
Developing in segment of Luxury and sport car with engine technology ,design and safety features Ex: 380 degree safety
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Product Differentiation
Product supporting service Using IT technology to support customer costuming their new cars through the internet. Buy old Toyota and resell for customers Entune technology that help customer to connect with their car through internet at anywhere, anytime as well as provide some application for entertainment, or personal purpose
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Question WHY
hybrid models as has not introduced and young brand as
in
?
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What are hybrid vehicles?
Question
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Question
Target customers
New tech
Technology pioneers
Low emission
Environmental Friendly
Eco-friendly Value Conscious
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Fuel saving
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Scion? I havent heard about it!
Question
Introduced by Toyota in 2002 for the North American market. Target 16-21 year-old: value personal image and difference, with notso-high income. Great customization (150 accessories) with Low starting cost (monospec) Tuning!
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Question
Customization
Personal image
Low
Starting Cost
Average income
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Developing new product
Question
Developing and Introducing new products is frequently expensive and risky. (Muthaly 2011)
NEW has more than 1 meaning/level: to the world, to the market, to the
producer or seller, or combined (McDaniel, Lamb, Hair 2007) New-product development process
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Idea Generation Idea Screening Concept Testing BUSINESS ANALYSIS
Question
Product Development
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Question
BUSINESS ANALYSIS
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Car sales of Vietnam and US (2007-2011)
18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0
Question
Vietnam US
Source: Vietnam Automobile Manufacturers Association 2012 and Auto Alliance 2012
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Estimated price of cheapest Prius 2012 in Vietnam
Item
Original price Import Tax SC tax* VAT
Question
Description
On website On original On (1+2) On (1+2+3)
Rate
Value (USD)
Note
1 2 3 4 5
24,000
83% 50% 10%
On (5)
15%
10,870
83,338
347%
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Estimated price of cheapest Scion in Vietnam
Question
Item
Original price Import Tax SC tax* VAT
Description
On website On original On (1+2) On (1+2+3)
Rate
Note
1 2 3 4 5
15%
5,888
45,142
301%
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What does it mean?
Question
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Meanwhile in US
Question
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Sales forecast of Prius
Year of existence US sales Prius sales Market share VN sales Forecast sales 1
17,400,000
Question
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17,200,000
3
16,800,000
4
16,500,000
5
16,900,000
5,600
16,000
20,300
24,900
55,900
0.03%
0.09%
0.12%
0.15%
0.33%
81,000
110,000
119,000
112,000
110,000
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144
169
364
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Sales forecast of Scion
Year of existence 1 2 3
Question
US
16,900,000
16,900,000
16,500,000
16,100,000
13,200,000
Scion
99,000
120,000
173,000
130,000
114,000
Market share VN
0.59% 81,000
0.71% 110,000
1.05% 119,000
0.81% 112,000
0.86% 110,000
Forecast sales
654
950
664
452
427
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Question
BUSINESS ANALYSIS
Problem with Vietnam?
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MOST IMPORTANT NON-PRICE FACTOR 10000
Question
Number of Votes
8000
NO ECOFRIENDLINESS
NO CUSTOMIZATION
2000
3312
1198 Interior 42
Source: http://dantri.com.vn/c111/s111-523477/yeu-to-nao-tac-dong-su-chon-lua-o-to-cua-
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Consumer Decision-making process
Need recognition
Question
Fuel saving
Information search
Evaluation of alternatives
PRICE, brand,
design,
Purchase
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Innovation
Quality
Product Differentiation Feature & Design Support Service Prius
Vietnam
Scion
Better design Outstanding car design Improve product life cycle stage Increase customer value through augmented level compete with competition (Hyundai): longer warranty to 1020 Years
Based on research, Vietnam is not ready for Scion and hybrid product line
If any current conditions changed, Toyota would need to reconsider Rebranding and re-segmenting Scion TC to Toyota match potential young middle income class in Vietnam
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References
Charles, W et al, 2011, Marketing for decision makers, 1st edition, Cengage Learning Australia Pty Limited, Australia Hybrid cars website, viewed on 5 July 2012, http://www.hybridcars.com/blogs/bloglist.php?thread_id=14&month=8&year=2005 McDaniel, C, Lamb, W & Hair, J, 2007, Marketing Essentials, 5th edition, Thomson South-Western, Canada Quester, P, Neal, C, Pettigrew, S, Grimmer, M, Davis, T, Hawkins, D 2007, Consumer Behaviour-Implications for marketing strategy, 5th edition, McGraw Hill, Australia Saatchi and Saatchi, Oasis Agencies Team up for Toyota Prius Ad Campaign, The auto Channel website, viewed on 05 July 2012, http://www.theautochannel.com/news/press/date/20000217/press008186.html SWOT analysis of Toyota, Businessteacher website, viewed on 12 July 2012, http://www.businessteacher.org.uk/business-resources/swot-analysis-database/toyota-swot-analysis/ Toyota History, Toyota website, viewed on 9 July 2012, http://www.toyoland.com/history.html Toyota Hybrid Synergy Drive, Toyota Kentucky website, viewed on 10 July 2012, http://www.toyotageorgetown.com/hybrid/ths6.asp Toyota Hybrids for sale future, Boston website, viewed on 5 July 2012,http://www.boston.com/business/articles/2005/08/03/toyota_looks_to_hybrids_for_sales_future/
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Q&A
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