Strategic Marketing

Toyota lately has embraced a particular strategic marketing action – tying up and forging mutual agreements with competitors for product development and other efforts which is generally a concerted effort to bring Toyota closer and closer to more and more customers and clients. Analysts have already started poking Toyota over such moves, but the other important strategic move that Toyota is making is how it uses its re-alignment towards a more earth-friendly automotive manufacturing firm as another strategic marketing effort.

The question now is this – does anyone actually experience making a double take at Toyota now that they are ‘greener’ than ever? Sure, some of the Toyota products are currently considered as leaders in its particular field, like the Toyota forklift. Toyota reports at the start of the year 2008 about how the previous year have been record breaking, sales wise, bannered by the continued domination of Lexus as the ‘best selling luxury brand’ in the United States eight years in a row.

While Camry and the Corolla weren’t as dominating in the market as the Camry, the end of the 2007 showed how the sales of the two cars improved, as well as Rav4 and Tundra. More importantly, the sales of the cars which banner Toyota’s ‘green’ line up – the hybrids (like the Prius, the one which Welch (2005) considers as the Toyota product that gave the company the ‘bragging rights as a clean, green, and tech-savvy company’) have improved by more than 50 percent compared to the company’s sales marks in 2006.

But more importantly is the answer to this question: are these strategies a move that Toyota can expect newfound customer enthusiasm over what they are offering to the market and what they are set to sell them in the very near future? How stable is the competitor alliance and green marketing and how well does it benefits the company, serve the customer and put at bay the competitors all at the same time? Toyota cannot deny it.

While they may not be green with envy with other automotive companies that beat them to the green marketing approach or to the company that beat them black and blue by taking away their key executives even with the existing mutual partnerships and alliances, their products and how they operate are obviously shifting towards a more earth-friendly and earth-sensitive means; what’s more noticeable is that they are making the world know about it.

Come to think of think of it, some of Toyota’s competitor-partnership strategies may even actually be under the banner of its earth –friendly marketing strategy since the reason why it partnered with Ford and GM in the first place is to share technologies and develop ways and means on how their hybrid automobiles which now posts decent selling marks can adhere to the fast changing standards of what is earth-friendly and practical to own and drive a the same time. But Welch (2005) intimated how a Toyota executive three years ago confessed about Toyota and how the company is not pursuing a green image.

If that is the case until now, is this a case of a very fortunate happenstance? If this is so, then Toyota can altogether fire all of its remaining marketing employees (those which haven’t followed the steps of Farley and haven’t bolted out Toyota yet) and just depend in the string of luck and coincidence to provide it with strategic marketing actions. Many specialists have already discussed about the potentials of using the green marketing strategy as a potent marketing tactic.

Kelly (2007) mentioned in her article how companies are taking the green path and in the process reap rewards in many different ways and forms. Kelly explains how going green does not only translate to improved profit and better production cost management (since there are green-shifting moves that has the tendency to shift the cost of production and operation costs lower); becoming earth-friendly is another potential marketing strategy since companies which are now eco-friendly generally considers the move to becoming ‘green’ as something that ‘help attract and retain customers’ (Kelly, 2007).

Just think of the number of people who are preferring earth-friendly brands and how these numbers grow everyday and how much of these are included in the company’s target market; Toyota do not need a calculator to do that, it just needs to take a good look at Honda, named by Fortune magazine as the most fuel-efficient car company in the US and how this accolade translates to improved sales and patronage by both its earth-friendly and its not-so-earth-friendly cars, for Toyota to have a glimpse of what it may have been missing as a marketing option with consideration to improved profit and the retaining of customers.

Kelly stressed that the idea of ‘green marketing’ which means hinging marketing strategies behind the power of being environment-friendly to attract more customers and clients can be one of the most influential marketing movements in 2008, a claim that is supported by 32 percent of the 1,700 marketing specialists who were asked about the possible strength and role of using a company’s earth-friendly feature as a possible marketing campaign linchpin.

Some companies did not wait until 2008 as many television ads, print ads and Internet advertisements from companies placed these groups as an entity which is now working alongside everyone else to help save Mother Earth and slow down the deterioration of the planet.

According to Kelly (2007) among the by-products of the green marketing include the attracting of new customers, improved visibility for the company among new customers, the generation of media coverage that ultimately results to positive brand recognition for the company and employee recruitment and employee retention (internal marketing, an area which Toyota seemed to have suffered a great deal in the last few years particularly when they lost top executives Jim Press and Jim Farley to the competition; in what can be considered as a cruel twist of fate, Farley used to be Toyota’s main marketing man before he made the change and became Ford’s new main marketing man).

But if going green is an active and conscious marketing effort for Toyota, then it is also important to see if it is doing them any good by knowing if it reaches its customers and how it reaches them, and if the campaign is any better or any worse than the competitors’ green-tinted strategic marketing attack. Strategic ‘green’ marketing for Toyota, after all, can be measured through its impact on the 3Cs model – company, customer and competitor. So far, Toyota is looking good, image-wise (almost every company that went green got the stamp of approval from at least a section of its target market as well as from other groups, lobbyists and opinion and agenda setting-entities ).

If all of this just happens by chance, then Toyota should realize that they should put their marketing team in full gear to see how the company’s effort to help the environment can be used as a marketing tool in the age when everyone goes for those with a green thumb and a green heart. If what is happening now in Toyota is not a course plotted using ‘green marketing’, then the company is undergoing what Beisser (1970) calls as the Paradoxical Theory of Change. In this theory, Frederick Perls explains that someone (or something) changes naturally when it moves towards what it truly is. If Toyota is genuinely geared towards a more environment friendly orientation, then as a company they are becoming green naturally and people will notice that even if they do not market themselves as such.

The good point in this transition is that contrary to other forms of internal changes, the shift towards being green is actually something that can help Toyota in its marketing its products. All the company needs to do now is embrace the concept of changing marketing landscape and make full use of the advantage provided by the fact that they are going the way consumers prefer their manufacturers to go. And since change is not always the harbinger of betterment, the next question now is how this green marketing strategy and green branding affected Toyota and its sales and more importantly, how it helped Toyota maintain its original mission as a company?

Two things: first, many may not believe that Toyota was not actively ‘green marketing’ and that the act of showing the world that they are going ‘green’ is just for the sake of letting the world know is not just naive to be even be considered as real and factual as in the case of Toyota, but is also a total misleading of the company’s true marketing strategy. Second, not only does people believe about Toyota’s true green marketing strategy to be in play all this time, they also believe that Toyota is not ‘green’ at all. Business Week reporter Welch (2005) defended Toyota in an article he wrote after environmental groups are putting forward a challenge to Toyota and to its true ‘green’ nature after the group Bluewater Network put forward evidences that claim Toyota as not as environment friendly as people think it is, or how the company promotes itself as.

Toyota was a indeed a wolf with its aggressive movement in sales to protect its territories and ensure survival; but to say that it is a wolf in sheep’s clothing pertaining to Toyota’s alleged misleading the customers about the true level of its being environment friendly company is considered by Welch very harsh because of many reasons, including the continued significance of Toyota in the improving sales of hybrid cars. Having people question a company’s objectives and a company’s credibility are two important things that Toyota needs to face and straighten out; if not, the green strategic marketing avenue promises to be another area of failure for Toyota’s marketing scheme; just like what happen to the marketing strategy that allows Toyota to partner with rivals who wooed and stole Toyota’s main men at the same time.

When Toyota was marketing its RX400h and GS Hybrids, Bluewater and Welch himself considers this particular green marketing approach with contempt, saying that ‘Bluewater is right that Toyota isn’t just doing this to be environmentally friendly. The company wants to market the RX 400h and GS hybrids as powerful cars that get fairly good mileage. With today’s gas prices, that’s smart — but it’s not green’ (2005). Indeed, the green marketing strategy can be a danger waiting to happen for Toyota because many people who know cars and auto business knows how much Toyota is dependent on the good sales of its trucks which is generally gasoline guzzlers, in effect contributors to the worsening air pollution inside the planet.

If this is the case, green marketing maybe considered as a move which is not generally wrong, marketing wise, just not fine-tuned enough to fit Toyota snugly. The power of green marketing is slowly proving itself, what is now left to be decided is whether or not Toyota can make the necessary adjustments in its personality and profile if it wants the green marketing to be successful over all for the company. This creates a very discomfiting situation since it may mean the toning down of one of its steady arms in sales in exchange for the hope that a new brand or product line is set to take over whatever sales void the trucks may leave behind if and when it would experience drastic cuts in all fronts.

The Toyota mission: Is it accomplished through strategic marketing? It is important to take a very good look at Toyota every time they embark on corporate ‘missions’ so that it can be ascertained whether or not this particular type of strategic marketing – the alliance-building and networking of both non-competitors rival and competitor companies in its ranks and the presence of ‘green marketing’ – have been a sufficient or even useful tool in guaranteeing that Toyota missions are always accomplished and if this approach has been something that was embraced by the different arms of the company, as well as the analysis of the impact of Toyota’s other strategic marketing actions and the how much it cost Toyota, literally and figuratively.

At the Toyota Industrial Equipment front, the mission that every one is enjoined in undertaking is the mission which is mentioned in its corporate website, that says that the company should sustain profitable growth by providing the best customer experience and dealer support’. But since trucks and heavy equipment parts and supplies does not respond actively to extensive marketing since the target market is relatively smaller compared to cars and motorcycles, Toyota evidently placed a strategic marketing campaign to its industrial equipment which is smaller compared to its cars and motorcycles. In this part of the operation, there are hardly any partnerships with competitors like the one that happened between Toyota and Ford, Toyota and GM and Toyota and Yamaha.

And it seems that it hardly has any need for partnerships and alliances to bolster its marketing strength as the capability alone of its equipment, particularly the Toyota forklift – is enough to let prospective buyers and the rest of its target market what brand to pick. Another possible reason why strategic marketing actions used on Toyota cars and motorcycles are not as actively used in its heavy equipment lines is because the competition in this particular area is not as intense and overly crowded as the automobile section. The most important reason why Toyota’s forklifts are the world’s number one from 2002 is not hinged on its strategic marketing, but, as it website puts it plainly –‘Toyota remains popular due to its quality, reliability and durability’.

At least in this point, Toyota was able to hold on to its mission – the company continuously experiences profit growth and the customers are all but satisfied with the Toyota products. Toyota’s objectives: Are they achieved through the strategic marketing in place? – The answer to that question will be a yes and a no. Yes, the objectives of the company have been achieved since Toyota today – green or not, partnered or not – is arguably one of the best and top auto parts maker in the world. People still buy Toyota and mathematically, at least one of the millions of Toyota buyers felt satisfied with what he or she bought (isn’t it the objective of the company? If not, then what? ). But Toyota also definitely missed many important areas.

For one, they missed becoming truly earth friendly because what they sell and promote appeared to be in contrast with what being earth-friendly actually means. They did this even when green marketing was not yet officially active, at least for their part, and some other marketing strategy is in use, particularly the involvement of target market through clinics and focus groups, opening of website that informs techies of the development of Prius, TV and print ad and other advertising efforts (Rodriguez, Page 2004). Some of its tie-ups and partnerships were mere paper works that placed the company’s name in the banner of events that no one might be looking at in the first place, making such ventures a waste of money and logistical resources.

Environmental analysis and Toyota’s strategic marketing: what affects Toyota’s strategic marketing efforts? – Obviously, there are more factors that have become significant for Toyota regarding their choice of strategic marketing actions. The 3Cs model of Ohmae has covered the basic areas that any company would consider when it comes to laying out and executing strategic marketing tasks. But aside from the company, the customer and the competitor factors, there is another C present in the business and marketing environment that should be greatly considered when analyzing Toyota and its marketing strategies, and that competition and complications.

The traditional competition framework puts companies that are all pursuing the same target market and the movements of these competing companies are always parallel with each other, pursuing the customer at the far end of the equation. But modern day competition is not focused anymore on this 500 meter dash model. Competition today forces companies to take a look around and see everything as an asset – including and especially competitors – everything in a perfect given opportune time. Toyota’s marketing strategies does not always put them in a position to go on a neck and neck race with GM or Ford, sometimes, they want to see if they can hitch a ride to other companies or see if either GM or Ford is willing to split the gas money so that the two can go at the same direction with costs cut in half.

As for complexities, it is clearly illustrated in Toyota’s dilemma that along with the consideration that the company should make when making strategic marketing decisions is to know firsthand the possible complications of actions brought about by the ripple effect the marketing effort will create in the different echelons where it will be felt. The strong indication that Toyota’s strategic marketing is currently working favorably for them is the figures released early 2007 about the performance of the company for the third quarter of the year 2006. According to a statement from the company, the 120. 0 billion yen in the 170 billion yen earned through positive contributions to operating income came from marketing efforts.

References

http://www.gestalt.org/arnie.htm