MARKETING STRATEGY

INTRODUCTION.......................................................................................................2
PART 1: Situation analysis:
Customer analysis and target market.............................................................2
Competitor analysis.........................................................................................4
Industry analysis..............................................................................................5
SWOT analysis................................................................................................8
Recommendation............................................................................................10
PART 2: Marketing plan:
Marketing objectives........................................................................................10
Marketing mix strategies.................................................................................11
Action programs - timeline..............................................................................12
CONCLUSION..........................................................................................................13
REFERENCES..........................................................................................................14
APPENDIX................................................................................................................16

MARKETING STRATEGY

Analysis and evaluation of Toyotas Marketing Strategy

Abstract
This report is made based on the Toyota Motor Vietnam Company, an
international company with many years of working in different countries. This report
aims to identify the strengths, weaknesses, opportunities and challenges faced by
Toyota Vietnam in business. Since then, the company can choose the marketing
strategy, media targeting the market segment in Vietnam. In addition, said the report
also explains the influence of cultural, social, political and economic with Toyota's
business activities and along with suggestions for improving and developing business
activities in Vietnam. The problem that managers face is always a hot topic in the
business of Toyota Vietnam.
Introduction
Today, Toyota's automotive industry is growing rapidly in many countries around
the world. Under the development, Toyota becomes one of the largest manufacturers in
the world. Only in July 2012, the company has produced 200 million vehicles. In
addition, Toyota's automotive industry in Vietnam has considerable achievements as
production capacity is 36,500 vehicles/year/2 working shifts, over 1,600 employees
This shows the remarkable development of Toyota in Vietnam. However, during the
world economic crisis, Toyota Vietnam is facing many problems need to be addressed.
The following report below will look at the factors affecting the company's business
activities. From there, make suggestions on marketing strategy to overcome, limiting the
impact of the world economic crisis for Toyota Vietnam.
Part 1: Situational analysis:
Customer analysis:
Demand trends:
For many countries in the world, the rate of car use in Vietnam is still low. However, with
the continuous development of economy and with a young population structure,
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Vietnam is considered the large consumer market in the future. In addition, the demand
of using automobiles in Vietnam is very diverse. The vehicles on the market today are
abundant with many different models and many different brands such as Mercedes,
Audi, BMW, Lifan, Chery... In January 2013, sales of Vietnam car market reached 8989,
up 50% compared to the same period last year. Information above shows that even
though the per capita income in Vietnam is still low compared to many countries in the
world but there is a high demand trends for personal automobile use.
Buying pattern:
For a majority of people, a car fit the economy is extremely important. A car with the
average selling price is always the center of attention of many people. These models
are not only affordable prices but also have advanced technology, low operating costs
and trendy. However, for those with high income, an expensive luxury car is what they
are looking for. Therefore, the cars in Vietnam is also divided into 2 different cars are
luxury cars and ordinary car.
Potential consumers:
In theory, per capita income in Vietnam is not high and this proves this is not the big car
market to can meet the expectations of automakers. Another cause of curbing the car
market in Vietnam that is by infrastructure and tax policy of the state. These are the
barriers created pressure on consumers. However, Vietnam is the country with a large
population and a young population structure. Most Vietnamese people want to have
their own car, especially those with middle-income and high-income. In the future, the
policy of the state to overcome the transport, infrastructure and policies to support the
automotive industry will help Vietnam become a major auto market. In other words,
potential consumers in Vietnam in the future are highly. This is also the main reason
why Toyota decided to invest in Vietnam market.
Segmentation Targeting & Positioning
Market Segmentation: At Vietnam market, the product of Toyota focusing on the
market segment of medium and high level, this market include those with middle income
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and high finance who want to get comfort in moving. The popular products of Toyota on
the market include Camry, Corolla, Inova, Fortuner, Hiace and Yaris. Each product of
Toyota carries a unique style and fit on the intended use of the consumer. At Vietnam,
Toyota focuses mainly on demographic segmentation.
Target Marketing: In this report, potential customers of Toyota are people with middle
income and high income. These people usually work in the field of business and often
move to work with their business partners. In addition, they are also having the trips with
family in the weekend. In Vietnam, to create own style and express themselves, they
are willing to spend a large sum of money to buy themselves a personal car.
Positioning Strategy: Toyota is one of the pioneers companies in the establishment of
car assembly facility in Vietnam. From past to now, Toyota always get high market share
in the cheap automotive industry in Vietnam. However, to further improve the market
share compared to other competitors, Toyota has stepped into the luxury car segment
with the brand Lenus. Initially, they will price their products cheaper than competitors to
participate in the market. Then, they create a difference by helping consumers can test
their products at the showroom. The positioning strategy of Toyota aimed at car
manufacturers of Mercedes and BMW, the line luxury car get high market share in
Vietnam.
Competitor analysis:
Vietnam market is a potential market for the automotive industry. This explains why
Vietnam has more car manufacturers in the world join to market. After Vietnam joined
the WTO, the competition is increasing in the market. Currently, Toyota has both direct
competitors in the domestic and foreign.
There are three big companies direct competitions with Toyota are:
Honda Motors Company
KIA Motors Company
Ford Motors Company

MARKETING STRATEGY
Honda has been present in Vietnam for over 10 years and has constantly strive to get
great trust from consumers Vietnam. For the motorcycle in Vietnam, Honda makes up
90% in major cities. In March 2005, Honda officially established automobile factory in
Vietnam, the plant has a capacity of 10,000 / year. The current cars of Honda on the
market include Civic, CR-V and Accord.
(http://www.honda.com.vn)
KIA Motors Company was founded in 1944, is the first automobile manufacturer at
Korea. KIA is a member of the Hyundai-Kia, Hyundai ranked fifth in the world in the
number of vehicles sold in the market in 2008. Kia is one of the car manufacturers have
the world's fastest growth rate. KIA has 13 manufacturing factory and assembly of
automobiles in 8 different countries including Vietnam with an annual capacity of up to
1.5 million vehicles. Some of the popular products of KIA in the world are Cerato, Rio,
Carens, Sportage, Morning, Sorento, Carnival.
(http://www.truonghaiauto.com.vn)
Ford Vietnam was founded in 1995 and opened assembly plants at the Hai Duong
province. Two years later in the month 11/1997, the plant capacity has been achieved
14,000 cars per year with six product lines are Transit, Ranger, Escape, Mondeo,
Everest and Focus. With over 100 years of operating on the international market and 10
years in the Vietnam market. Ford Vietnam has grown continuously from the 7th
position on the market when company started operations in Vietnam in 1997, Ford
Vietnam has rapidly developed and at the end of 2004, Ford Vietnam was ranked
second in the market with 14% of market share.
(http://www.ford.com.vn)
Industrial analysis:
PESTLE:
PESTEL is a method of analyzing the elements of the business environment. This is an
essential tool for operating and strategic planning for the Toyota Company.
Political - Legal Factors:
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In the context of the economic crisis in many countries around the world include
Vietnam. Each countrys government has carried out policies to recovery, protecting and
stimulating the important industry including automotive industry. Toyota has influenced
and has trouble in the global financial crisis. Because of this, they had to ask for a loan
of about $2 billion dollars from the Japanese government. Loans from government
policies can support the car companies survive in difficult times of financial crisis. In
addition, with the export policies, Toyota will get more incentives from the Japanese
government.
About political, diplomatic relations between Japan and Vietnam is very good.
This relationship is the basis for the success of all the business in Vietnam has FDI of
Japanese such as Toyota. In addition, tax policy also supports Toyota development in
Vietnam. For example: According Law on Domestic Investment Promotion (1995),
corporate income tax exemption or reduction in some years after its establishment
company in Vietnam. Import duty on cars components for the domestic automotive
assembly much lower with import duty on automobiles. Government supports
infrastructure, land for foreign businesses investing in Vietnam. Government has
establishment of funds to support and encourage investment in Vietnam in the medium
and long term.
Toyota has captured these advantages to become the first car company to invest
in Vietnam.
In addition, the nations of the world in general and Vietnam in particular also
have legal policies to protect the interests of domestic automobile companies.
At Vietnam, protection policy is the policy brings many benefits for Toyota. One of
the most obvious manifestations of the policy is the customs barriers against with
imported automobiles. For example: Before January 1/1999, imported cars are taxed
155% (55% import duty, 100% excise tax), after this time shall be banned from import,
taxable in 2004 up to 180% (excluding value added tax). As a result, competition in the
Vietnam market is very weak. The price of cars assembled in Vietnam will not be
affected by the relationship between supply and demand. In such environment, Toyota
has possible long-term investment in Vietnam.

MARKETING STRATEGY
Economic Factors:
Toyota joined Vietnam with the aim of looking for new markets. According to a
report Finnish advisory group Global Intelligence Alliance (GIA), Vietnam ranked 3rd in
top non-BRIC emerging markets - for the 2012 2017 periods.
Vietnam has a total GDP about US$ 135.411 billion (2011 estimate), surpassed
the per capita income of low-income groups of countries. Vietnam is among the
countries with the domestic market leading growth in the world, an economy with high
growth in world trade transactions with total exports is US$72.03 billion f.o.b. (2010
estimate) and total imports is US$79.37 billion f.o.b. (2008 estimate).
In addition, Vietnam has the trust of many countries in the world. This is reflected
by the amount of funding (ODA pledges 7.905 billion USD for Vietnam in 2011) in world
economic crisis. These criteria and the numbers above is a reasonable basis to Toyota
to invest in Vietnam.
Social Factors:
Vietnam has a population of over 85 million people has always been the country
to attract foreign investment. Along with a large consumer market, high social needs,
this is also a young market with abundant human resources. Social Vietnam tends to
learn new things, improving education. From that, labor quality has improved and
development. Low cost of human resources explains the increase of FDI in Vietnam
automotive industry. Toyota has always regarded the market as a factor affecting the
characteristics of the product. A multi-national company such as Toyota always needs
the product diversity and prices to suit the culture and society of each place.
Technology Factors:
Toyota also benefited from the policy of research and technological development
of the Japanese. Furthermore, the technological research cooperation between
government and the business was always supported. Thus, environmental science and
technology research in the country have created favorable conditions for development
of Toyota.

MARKETING STRATEGY
The world's automotive industry in general and Vietnam in particular are always
strongly affected by technology. This forced Toyota Vietnam to constantly self-study and
application of modern technologies in the production. The development and change
constantly help Toyota get leading position in Vietnam and have trust from consumers.
Environmental Factors:
Environmental factors include weather, geography, tsunamis, earthquakes,
volcanoes and all the natural conditions in the territory of each country. If Toyota
interested in the environment in production activities and create environmentally friendly
products will bring trust and support from consumers.
For example: According Toyota's Initiatives on the Environment:
-

Establishing a low-carbon society

Establishing a recycling-based society
Environmental protection and establishing a society in harmony with nature

Analyzing the external environment (PESTLE) helped identify advantages and

difficulties from Political, Legal, Social, Technology and Environmental around Toyota
Company at Vietnam. Since then, applying the strengths, opportunities to grow and
avoid the risks and threats from external environment. External environmental factors
impact to business operations of Toyota. Toyota Vietnam should to regularly update,
change and planning long-term strategies to overcome and minimize the impact from
the external environmental. This helps Toyota Vietnam can maintain market share in the
market and increase development in the future.

SWOT
Corporate appraisal (SWOT) is a methodology to identifying the strengths,
weaknesses, opportunities and threats in the automotive industry. Since then, Toyota
can make decisions and develop marketing strategies. Based on the SWOT analysis,
Toyota can develop their strengths, looking for opportunities as well as overcome the
weaknesses and avoid threats.
STRENGTHS

WEAKNESSES
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MARKETING STRATEGY
Toyota Vietnam is the first company

The law at Vietnam applicable to the industry

implementation of the localization process in

has many loopholes cause difficulties for

Vietnam.

automotive businesses in general and Toyota

Prestigious brand image and high quality

in particular.

Toyota Vietnam at the forefront of the

Toyota Vietnam has not yet established the

opening of the first automobile assembly plant

channels of information systems needed to

in Vietnam.

support internal systems within the company

Strengths of Toyota is producing high-quality

as well as with customers and dealers.

cars and affordable.

Some issues about the quality of products

The system distribution network product all

cause loss in consumer confidence as motor

over the country.

vehicle rust, unpleasant smell when motor get

Consumers can easily search for the spare

high speed.

parts of Toyota at Vietnam.

The government not yet provides consistent

policy and encourage automobile industry

OPPORTUNITIES
Market competition in Vietnam is very weak

development at Vietnam.
THREATS
Toyota under pressure from other brands

by protectionist policies.

and the imported cars when Vietnam joined

According to the plan, by 2020, the

the WTO. Toyota's market share in Vietnam

automobile industry in Vietnam will become an

market will also divide to other brands and the

important sector of the country

imported cars.

Toyota quickly develop environmentally

friendly cars. This is in accordance with social

confidence in Vietnam. In 2012, Toyota recalls

needs.

5,300 cars to fix power window problem.

Vietnam joined the WTO is a positive sign

Vietnam consumers tend to use the products

signaling a market development and more

and models from other brands instead of

opportunities in Vietnam.

Toyota.

Car

faulty

cause

loss

of

consumer

Recommendations:
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MARKETING STRATEGY
Toyota should focus on the study of the market, frequently offering new products to
attract and meet the consumers needs.
Toyota needs to improve product quality, fix errors in the production process. In
addition, staff and sales service system also should be improved to enhance reputation
with consumers.
Toyota also should pay attention to the environment, to promote the development of
environmentally friendly products. In addition, Toyota will also need join participate in
social activities at Vietnam. This is a solid direction for future of Toyota Motor Vietnam.
Part 2: Marketing plan
Marketing objectives:
The objectives of Toyota in the next 12 months are based on SMART objectives
(Specific, Measurable, Achievable or Agreed, Realistic and Time-related). According to
the situational analysis of Toyota Vietnam, there are three objectives need to
achievement.
Objective 1: Increase brand awareness among 90% of potential customers of
Toyota in the first 6 months.
Objective 2: Increase retail sale in Vietnam market up to 20% within next 6
months.
Objective 3: Increase the market share added 10% by the end of year.
The objectives above are clear, specific and measurable. In addition, these goals
are realistic objectives because Toyota is a big company and the oldest at Vietnam in
the automotive industry. They are eligible and resources to achieve these objectives.
With the growing economic situation in Vietnam and with Toyota Company resources,
these goals can fully completed within one year. However, Toyota needs the specific
scheduling to monitor and ensure the implementation of the plan. An effective strategy
will help Toyota achieve these objectives.

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Marketing mix for Toyota:
An effective strategy is often built on the basis of the marketing mix: Product, Price,
Place, and Promotion.
Product: Toyota in Vietnam is known as a low-cost car. The products of Toyota
also are diverse and rich in variety and style. However, to develop and improve market
share in Vietnam, Toyota should have a plan to develop the product line to use clean
fuel (Butanol fuel, Ethanol fuel) for middle-income and high-income. It means that the
current products instead of using petrol and polluting the environment, Toyota will
develop the product line to use clean fuel and do not pollute the environment, create a
new trend in the market.
Price: Pricing strategy is an important strategy when Toyota wants to implement
marketing plans. With new products and environmentally friendly, Toyota should offer a
reasonable price and in accordance with the consumer. This price should not be set too
high, a low price will help the product quickly participate to the market and take back
market share. This will help to Toyota customers have a good look with the company,
the high quality products but prices are consistent with the consumer.
Place: In Vietnam, along with the retail branch of Toyota, Toyota also needs to set
up the showroom so that the consumer can directly test the company's products. This
helps shorten the distance between the consumer and the company, create shopping
habits of customers in Vietnam when come to Toyota. In addition, company can display
their products at major trade center at Vietnam such as Vincom, Nowzone, Diamond...
The diversity of distribution channels will help products easily exposed with consumers.
Promotion: Toyota should regularly hold exhibition and display products. In
addition, the company can invite a number of celebrities to promote new products for
company such as Cristiano Ronaldo and Messi come to Vietnam. Product images
associated with these famous people will help the company to quickly dominate the
market. In addition, the campaign marketing on mass media such as television, internet,
newspapers... will also bring high efficiency. Finally, Toyota needs to set up the channels
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of information systems, the service to support consumers and show the company's
warranty program. This will help build customer loyalty with Toyota.
Action programs
To achieve the objectives set out, company should perform the following steps:
1) Improve the quality of current production systems plant
2) Improving the quality of human resources
3) Expand product distribution channels

Conclusion
At Vietnam market, Toyota has still always been a great brand and get high market
share in the automotive industry. But now, due to government policies and developing
economies has make appeared many competitors in the market. So Toyota is facing
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many difficulties in developing. This report includes a number of proposals in the
marketing strategy to help Toyota increase market share in Vietnam and confirmed their
place in the future.

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References
Malcolm Flynn (2012) Toyota: 77 Years, 200 Million Vehicles [online]. Available from:
<http://www.themotorreport.com.au/54659/toyota-77-years-200-million-vehicles>
[Accessed 25 March 2013]
Autonet (2013) Car market 01/2013 increased 50% compared to 01/2012 [online].
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<http://www.honda.com.vn/vn/gioi-thieu/gioi-thieu-chung/> [Accessed 25 March 2013]
Truonghai Auto (n.d.) KIA Motors Company [online]. Available from:
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2013]
Ford.com.vn (n.d.) Company History [online]. Available from:
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Jonathan Soble (2009) Toyota seeks $2bn crisis loan [online]. Available from:
<http://www.ft.com/intl/cms/s/0/e442c606-07bb-11de-8a33-0000779fd2ac.html>
[Accessed 26 March 2013]
Lanta brand (2006) Automobile industry Vietnam [online]. Available from:
<http://www.lantabrand.com/cat1news2274.html> [Accessed 27 March 2013]

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The Library of Congress Country Studies; CIA World Factbook (1994) Japan Export
Policies [online]. Available from:
<http://www.photius.com/countries/japan/economy/japan_economy_export_policies.html
> [Accessed 27 March 2013]
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March 2013]
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Vietnam Plus (2010) VN gets nearly 8 billion USD in 2011 ODA pledges [online].
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<http://www.toyota-global.com/sustainability/environmental_responsibility/> [Accessed
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Thanh Nien News (2012) Toyota recalls 5,300 cars to fix power window problem
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APPENDIX:

Marketing mix (4P)

17