Business Plan: Global Marketing Strategy of Toyota in the United Kingdom

Global Marketing Strategy of Toyota in the United Kingdom

Company Overview

The Toyota Motor Corporation is a multinational company that has its headquarters in Toyota City, Japan. It is a corporation that is in the automotive business as an industry leader with quite remarkable statistics in revenues, production, and employee turnover. The company is considered the twelfth largest worldwide in terms of revenues. In 2012, the company was ranked first in the automobile industry in production overtaking the likes of General Motors and the Volkswagen Group. The corporation boasts of hiring more than 300,000 employees worldwide and is renowned for producing approximately 10 million vehicles annually (Imranul Hoque 2). In Japan, the company is the largest in terms of market capitalization and revenues almost doubling the performance of the second largest company in that country. Toyota Motor Company has grown and developed due to strategic global management and organizational culture that is client-oriented.

The founder of Toyota Motor Corporation is Kiichiro Toyoda, who founded the company in 1937. He established the company as a sequel of Toyota Company, a manufacturing establishment that belonged to his father. The company has five brands that it produces, which are Toyota, Scion, Hino, Lexus, and Ranz. The company seeks to create a more prosperous society by ensuring they have efficient automotive manufacturing. In accordance with this mission, the company is focused towards achieving a stable and long-term growth that is synchronized with individual factors. These factors are the global economy, service to local communities, and sustainable stakeholder returns. The corporation has set goals that are tailor made towards offering of hybrid alternatives for each model that is sold in the market. With such an initiative, the company is aiming at producing at least a total sale of 1 million hybrid vehicles on an annual basis.

Toyota Company has also had tremendous improvements done on its Environmental Action Plan that is committed on six different fonts. These are environmental management, changes in energy and climate, quality air, recycling, resource utilization, and cooperation within the society. It is keen on reducing carbon dioxide emission by taking combined actions that are observant of stated fuel economic values thereby observing fuel economy standards. The corporation wants to achieve a more sustainable economy by ensuring that it has a stable global market. It has developed a well-equipped network expertise that researches and develops global aspects that can sustain the performance of the corporation. In a bid to increase its global presence, the Toyota Corporation is focused on ensuring it has a proper marketing strategy in Great Britain to boost its revenues and ensure that its strategic goals can be met.

Business Environment in the United Kingdom

The United Kingdom (UK) is found in the northwest part of Europe, and it covers an area of approximately 244,000 kilometer squared. The UK consists of four countries which are England, Wales, Northern Ireland, and Scotland. The borderland shared with Europe is within Ireland, but other countries are located in Islands surrounded by large water masses like the Irish Sea, Atlantic Ocean, and the North Sea. The capital city and largest city in the UK is London since it is an influential center in culture, world politics, and finance. The countries population is estimated at over 63 million with London being placed as the city that is most populated. The UK is among the few countries that have been able to maintain a monarchical government successfully with the Queen being credited to be the leader of the nation. However, the Prime Minister heads the political wing of the government and is often elected by the majority of office. The country offers a robust environment for business with a stable government that supports investment and business in the region.

In the UK, the populace utilizes two official languages, which are Welsh and English. English is the dominant language in the country with almost 90% of the population speaking it. Welsh is predominantly spoken in Wales and can rarely be found in other countries within the UK. The country is predominantly religious with two religious affiliations commanding a huge following that is Christianity and Islam. The country observes Greenwich Mean Time in winter months and the British Summer Time from March to October that accommodates Daylight Saving Time in its calibrations (Passport to Trade 2.0 1). The four seasons are experienced in the country, and since the country is predominantly an Island, it experiences a high rate of rainfall for most parts of the year. Such geographical and climate features have to be considered before an organization decides to expand the business into particular country.

The UK is a multicultural country with low rates of xenophobia. People in the UK welcome foreigners, and they recognize their significance in business and economic ventures. However, the British are quite conservative and do not like situations that might cause any embarrassment. When it comes to conversing with foreigners, they are strategic and often let the other party speak first to establish the appropriate tone and language to take. Citizens value their privacy and relationships can, therefore, take the time to build and establish. They also appreciate politeness and respect of the other party. It is uncommon to find the British openly criticizing someone or complaining about something in the public arena. Courtesy is of paramount significance and can play a huge role in determining whether partnerships are created or not.  If an individual wants to develop a proper business relationship with the British, they need to respect their values for being polite and private and take a long-term approach towards it.

Major cities in the UK have an integrated transport system that combines both the metro system and rail network. The rural areas are served by bus services with the frequencies on the road being determined by profitability issues. The country can also be traversed by planes since it has a number of international airports thereby ensuring that business operations in the country are quite useful. The government has ensured that infrastructure in the country is quite effective in ensuring all activities can be undertaken smoothly. In addition, the government plays other roles that ensure businesses are run well and sustained economic growth can be maintained. Its aim is to ensure that there is higher economic growth each year with lower unemployment rates and prices in the nation. The British government has a significant impact on global business within the country since it can pass laws that can lower or increase taxes, restrict business expansion, and protect consumer and employee rights. The principal taxes in the country are income tax, corporation tax; value added tax, local government rates, and national insurance. Such a robust environment for business has attracted much interest from multinational automotive businesses with companies like General Motors and Volkswagen Corporation having a huge market share in the automotive industry in the United Kingdom.

Entry Mode Selection

The Toyota Corporation has various alternatives that it could utilize as it endeavors to be successful in the UK automotive industry. Entry modes can be classified into two, the first classification is the equity modes and the second is the non-equity modes. Equity modes are further divided into wholly owned subsidiaries and joint ventures while non-equity modes can just be broken down into exports and contractual agreements.

  1. Exports are the most basic method where a corporation can decide that it produces at the parent company and sales the complete product to foreign countries. The difference between direct exports and indirect exports is that in direct the producer has control of its products in the country of sale while for indirect the country does not. The main advantage is that the company gets to utilize its resources efficiently in production and save through economies of scale. The disadvantage is that without the proper feedback from customers, the management does not get to consider consumer feedback in a bid to improve the product (Armstrong 56).
  2. A contractual agreement is a licensing accord that allows a foreign a company to produce the product of another for a particular period. The rights issues often come in the form of trademarks and patents. The main advantages of this are that extra income can be obtained for technical knowledge, and quick investment can be achieved without much risk of loss in capital investment. The disadvantage is that lower incomes will be made and there is a risk of the trademark being ruined due to poor services.
  3. Wholly owned subsidiaries can take the form of Greenfield investment or acquisition strategy. Greenfield means that the corporation establishes a new wholly owned subsidiary in the country while, in acquisition, the corporation buys off a competitor and sets forth its mandate through it thereby receiving a greater market power. In Toyota’s case, Greenfield investment is preferred because the process of production is capital intensive, and full control of the firm is warranted. The main disadvantage is that the process is high risk and will often demand strategic analysis of the market before implementation. This is the best entry mode that Toyota should take as it gains entry into the UK automotive industry.
  4. Joint venture is two corporations coming together in a partnership so as to produce a particular commodity. They both invest equally and bring in vital expertise that is necessary for the production of the product. They share in profits and losses equally or depending on a percentage that both have agreed on. The main advantage of this is that both corporations can minimize on the cost of production due to economies of scale and have more market power in the industry. The disadvantage is that it is difficult to find a suitable partner, and there might be a risk of losing control of the business.

Target Market

The products from Toyota are designed in a certain way that can meet consumer needs in automotive motors. The company has structures its market by age to develop vehicles that are well suited to their taste and requirements. The design criteria that is utilized by the corporation ranges from vehicles that can achieve top speed, to those that can have a larger capacities but lower speeds. For instance, the company has two-seat models that are relatively small for younger, single and adventurous people. They also have the five to seven-seat models for family setups. In addition, the Corporation focuses on building vehicles that can traverse the road network in the UK. It has 2-wheel salon vehicle for typical urban dwellers who have good road networks and do not necessarily go off-road. Four-wheel drives are also available for those in rural areas who sometimes have to go off road and juggle the rough terrain.

Toyota has received complaints from various markets that they have operated in that they lack flair in design as compared to GM, Mercedes and even Ford. The corporation values customer feedback and with this knowledge it has been able to come up with products that will be better suited for customers. The V8 pickup is one such example that has an elegant design and can penetrate the UK market effectively. The hybrid models are examples of designs that are quite exquisite and expected to take the UK market by a storm.

Marketing Objectives

Toyota Corporation is a multinational company that is found in over 150 countries. The expertise and knowledge of operations within these locations give it an advantage point to set up a proper business operation in the UK and meet the industry growth rate in the country. The number of clients who need vehicles is steadily increasing thus creating a larger market for the company (Imranul Hoque 5). There is a perceived importance of owning a car specifically to meet daily traveling needs. The enormous size of the company will enable the company to meet the needs of the growing population who need vehicles on a consistent basis.

The company purposes to make quality products that can meet all customer requirements without compromising on standards of production. It also intends to ensure it effectively utilizes its economies of scale appropriately in a way that will enable them charge an appropriate price for their products that is consumer friendly. Such a venture will ensure that everyone gets to have a chance at appreciating cultural values behind the company and support the company operations as it aspires to achieve more in the future.

The strategic marketing objective this year for Toyota in the UK is to increase sales by 10% through expanding the market and producing vehicles that exceed customer expectations. The brand objective is to create product awareness by revamping its advertisement so that customers in the UK are more aware of the benefits offered by its products. Furthermore, the company plans to achieve a larger market share in the UK, an increase of 5% by producing quality products at cheaper prices thereby creating brand loyalty.

Marketing Strategies

The marketing strategies encompasses the concept of a marketing mix, which is a set of tactical marketing tools that are controllable that the company blends in order to produce the response it needs from the market it has targeted. Through a proper and structured marketing mix, the corporation can be able to have an impact on the demand created for its products in the market. Four P’s are often represented in the marketing strategy, which are product strategies, pricing strategies, promotion strategies, and placement strategies. The four are thoroughly analyzed so as to establish an efficient mechanism for Toyota’s global business expansion into the UK.

  1. Product strategies

Toyota has a wide range of products that it could launch into the UK market. Examples of such products would be the Toyota Corolla, Yaris, Verso, RAV4, Lexus, Prius, and Avensis. These are some of the most respected brands of Toyota that have performed exceptionally in other markets all over the world. There is an upsurge of fuel prices the world over and consumers are continuously getting interested in the fuel consumption capacity of their vehicles. They are also aware of carbon dioxide emissions and are focused on purchasing vehicles that do less harm to the environment. Toyota has invested in much research and come up with a hybrid vehicle known as the Prius. It is among the pioneer vehicles in hybrid technology that works in a remarkable way as compared to the usual petrol-powered engine. The hybrid engine is dual powered by an electric motor and petrol. This results in a vehicle that consumes less fuel with zero emission thus a more robust environment. Such a product ensures Toyota can gain a competitive edge in the UK market while creating loyalty thus meeting its objectives.

  • Pricing strategies

The UK has a healthy economy with GDPs being high and positive economic growth being reported on an annual basis. This means that the buying capacity of the population is high since most individuals are recorded to be in the middle-income region. Toyota should set the prices of its commodities depending on the different income levels of the British. Price strategy should focus on two sets the first being car for low-income people and the second being car intended for people who want to be distinguished from the rest. The pricing could range from 6500 to 50000. However, the company needs to know that at this stage price is very sensitive since they are just penetrating the market. The price should be within the buying capacity of most citizens in the UK. The pricing of competitors needs to be considered so as not to set a price that is neither too low nor too high.

  • Promotion strategies

The Prius model is bound to give the corporation a competitive advantage in the automobile industry. Its promotion should focus on the brilliant adoption of technology in ensuring conservation of the environment. A unique website should be created that creates awareness about the production process and its contributions to a greener environment. Consumers in the UK value high technology, quality, and affordable pricing. Advertisement budget should focus on this critical areas and be able to avail to all television networks within the country. Endorsements and sponsorships essentially on key sports leagues in the country can also ensure that the company gets its products to most people in the nation.

  • Placement (Distribution) strategies 

The nature and segmentation of the market should be considered before launching the product in different locations in the UK. Some products might have a tremendous success in particular areas, but they might not be successful in other areas (Armstrong 85). The strategic location of Prius might not be valid in other countries but is bound to be successful in the UK since the population is more concerned about environmental issues

Final Recommendations

The global marketing strategy of Toyota is organized from an organizational orientation platform. The marketing mix considers the philosophy of the company and prioritizes the quality of products and customer friendly services. Toyota’s hybrid technology is bound to attract much investment and if properly implemented. The strategy should be implemented in order to replicate the company’s dominance in the global market into that of the UK.

Works Cited

Armstrong, G., & Kotler, P. Marketing: an introduction (International edition). New Jersey: Prentice Hall, 2002.

Imranul Hoque, Md. Omar Faruque , Ellina Mahbuba Shahid,Syed Habib Anwar Pasha, Syed Ohidur Rahman. “Analysis of Toyota’s Marketing Strategy.” European Journal of Business and Management 5.20 (2013).

Passport to Trade 2.0. British Business Culture. 2014. 23 April 2015. <>.