Toyota Document

IIPM
2010 IT Project
Toyota Marketing 7/28/2010
Strategies
SB-II, IIPM
Sahil Sachdeva, Simranjeet Singh, Manu Taneja, Ankit Jain, Mohammad
Farhan Rashid
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Sahil Sachdeva, Simranjeet Singh, Manu Taneja, Ankit Jain, Mohammad Farhan Rashid
IIPM
1867 Birth of Sakichi Toyoda

1924 Sakichi Toyoda invents Toyoda Model G Automatic Loom
1929 Automatic-loom patent is sold to a British company
1930 Kiichiro Toyoda begins research on small gasoline-powered engine
1933 Automobile Department is established at Toyoda Automatic Loom Works,
Ltd.
1935 The Toyoda precepts are compiled
1936 The AA Sedan is completed
1937 Toyota Motor Co., Ltd. is established
1938 Honsha Plant begins production
1950 Company faces a financial crisis; Toyota Motor Sales Co., Ltd. is
established
1951 Suggestion System is begun
1955 The Toyopet Crown, Toyopet Master and Crown Deluxe are launched
1957 The first prototypes of the Crown are exported to the USA Toyota Motor
Sales U.S.A., Inc. is established
1959 Motomachi Plant begins production
1962 Joint Declaration of Labor and Management is signed
1965 Toyota wins the Deming Application Prize for quality control
1966 The Corolla is launched Business tie-up with Hino Motors Ltd. begins
1967 Business tie-up with Daihatsu Motor Co., Ltd. begins
1974 Toyota Foundation is established
1975 The prefabricated housing business begins
1982 Toyota Motor Co., Ltd. and Toyota Motor Sales Co., Ltd. are merged into
Toyota Motor Corporation
1984 Joint venture with GM (NUMMI) begins production in the USA
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1988 Toyota Motor Manufacturing, USA, Inc. (present TMMK) begins production
1989 The Lexus brand is launched in the USA
1992 Toyota Motor Manufacturing (UK) Ltd. begins production
1997 The Prius is launched as the world first mass-produced hybrid car
1999 Cumulative domestic production reaches 100 million vehicles
2000 Sichuan Toyota Motor Co., Ltd. begins production in China
2001 Toyota Motor Manufacturing France S.A.S. begins production in France
2002 Toyota enters Formula One World Championship Tianjin Toyota Motor Co.,
Ltd. begins production in China
2004 The Toyota Partner Robot is publicly unveiled
2005 The Lexus brand is introduced in Japan
2008 Worldwide Prius sales top 1-million mark
Introduction of Toyota from India

As a joint venture between Kirloskar Group and Toyota Motor Corporation, Toyota Kirloskar Motor
Private Limited (TKM) aims to play a major role in the development of the automotive industry and the
creation of employment opportunities, not only through its dealer network, but also through
ancillaryindustries.
TKM's growth since inception can be attributed to one simple, yet important aspect of its business
philosophy -"Putting Customer First". While managing growth, TKM has maintained its commitment
to provide quality products at a reasonable price and has made every effort to meet changes in
customer’sneeds.
Mr. H Nakagawa
Managing Director
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Mr. Sandeep Singh, DMD Mr. S Tomonaga, DMD
Mr. Shekar Viswanathan

DMD, Commercial
TKM firmly believes that the success of this venture depends on providing high quality products and
services.to.all.valued.customers.through.the.efforts.of.its.team.members.
TKM, along with its dedicated dealers and suppliers, has adopted the "Growing Together" philosophy of
its parent company TMC to create long-term business growth. In this way, TKM aims to further
contribute to progress in the Indian automotive industry, realise greater employement opportunities for
local citizens, improve the quality of life of the team members and promote robust economic activity in
India.
All Toyota employees are expected to embody these values in their daily work, including environmental
protection activities. To "respect" the environment, we go to the source to identify and analyse
problems ("Genchi Genbutsu"), move forward to "challenge" conventional ideas and old habits, to
improve further ("kaizen") through "teamwork."
The framework provided by The Toyota Way enables our company to respond to, among other things,
the environmental challenges at various stages of the life-cycle of a vehicle. These include greenhouse
gas emissions, waste reduction, increased recycling and the banning of hazardous substance use in
parts and components. These challenges will have inevitable consequences for Toyota's organisation
and employees, and we must balance them with our desire for future growth. In 1992, the Toyota
Guiding Principles were established in direct response to the international initiatives agreed to at the
Rio 'Earth Summit.' This summit focussed on the potential for a clash between trade and environmental
rules, and resulted in a statement of principles about forest management, conservation and sustainable
development.
The Toyota Guiding Principles are a cornerstone of our corporate management philosophy. These
principles were updated in 1997, to ensure they continue to provide Toyota with a clear path towards
achieving sustainable development.
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These principles have been explored and developed in Toyota's Global Vision 2010, adopted in April
2002, which proposes a series of long-term policies on the theme of "Innovation into the Future."
Toyota's Global Vision 2010 guides management in its response to long-term social changes,
combining consideration for the environment, the benefit to our customers of value-added products and
the encouragement of our employees through shared prosperity and social involvement.
Based on the Guiding Principles, which codify Toyota's business spirit, the Toyota Earth Charter
(adopted in 1992 and revised in 1997) embodies a comprehensive approach to global environmental
issues. It outlines Toyota's basic policy and action guidelines towards effective environmental
management and improvements. The Toyota Earth Charter underlines a commitment to environmental
excellence, not only through broad principles, but in concrete examples of what can be done through
action guidelines. In connection with the Toyota Guiding Principles and the Toyota Earth Charter, a
European Environmental Policy was developed as a means of linking principles, goals, targets and
action.plans.with.management.structures.and.systems.
Empowering employees.... to achieve perfection

TKM firmly believes that employees are the main source of strength for the organisation. The human
resources management in Toyota seeks to create a corporate culture where values such as
"Continuous Improvement" and "Respect for People" are fully reflected in all actual corporate and
individual activities. The company takes maximum care to ensure stability of employment and strives to
improve working conditions.
To develop human resources and improve the technical skills of its employees, TKM's young team
members are regularly sent to Japan, Indonesia and Taiwan for training programs. More than 425 team
members have benefited from such programs at various Toyota plants worldwide. TKM also believes in
continuously improving its products and practices. Every team member is encouraged to give
suggestions to improve the product, efficiency of processess or working conditions. They are also
appropriately rewarded for the same. Thus TKM seeks to progess by empowering its employees.
Pursuing the greater good

Recognition
At TKM, we look to continuously improve not only our products but also our processes and service. Our
obsession with perfection has been recognised by various institutions such as JD Power and TNS
Automotive, as well as automotive publications like Overdrive, as the reason for the success of Toyota
products in India and across the globe.
Local Community Development
At TKM, every effort is made to contribute to society. A residential school at Bidadi, reconstructed by
Toyota, now houses 75 students, mainly belonging to backward communities. In the aftermath of the
tragic earthquake in Gujarat, TKM and its dealers played a major role in distributing food, clothing and
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relief in remote affected area. TKM also takes a lead role in contributing to the community, distributing
books and bags in local school etc.
Toyota Kirloskar Motor Pvt. LTD
Date Of Establishment October 6, 1997

Chairman Mr. Ryoichi Sasaki
Vice Chairman Mr. Vikram S Kirloskar
Managing Director Mr. H. Nakagawa
Deputy MD's Mr. Sandeep Singh
Mr. S. Tomonaga
DMD, Commercial Mr. Shekar Viswanathan

Paid-In Capital Rs. 7 billion
Shareholders Toyota Motor Corporation (89% equity) Kirloskar
Group (11% equity)
Structure of marketing department

Traditionally, marketing analysis was structured into three areas: Customer analysis, Company
analysis, and Competitor analysis (so-called "3Cs" analysis). More recently, it has become fashionable
in some marketing circles to divide these further into certain five "Cs": Customer analysis, Company
analysis, Collaborator analysis, Competitor analysis, and analysis of the industry Context.
Department analysis is to develop a schematic diagram for market segmentation, breaking down the
market into various constituent groups of customers, which are called customer segments or market
segmentations. Marketing managers work to develop detailed profiles of each segment, focusing on
any number of variables that may differ among the segments: demographic, psychographic,
geographic, behavioral, needs-benefit, and other factors may all be examined. Marketers also attempt
to track these segments' perceptions of the various products in the market using tools such
as perceptual mapping.
In company analysis, marketers focus on understanding the company's cost structure and cost position
relative to competitors, as well as working to identify a firm's core competencies and other competitively
distinct company resources. Marketing managers may also work with the accounting department to
analyze the profits the firm is generating from various product lines and customer accounts. The
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company may also conduct periodic brand audits to assess the strength of its brands and sources
of brand equity.
The firm's collaborators may also be profiled, which may include various suppliers, distributors and
other channel partners, joint venture partners, and others. An analysis of complementary products may
also be performed if such products exist.
Marketing management employs various tools from economics and competitive strategy to analyze the
industry context in which the firm operates. These include Porter's five forces, analysis ofstrategic
groups of competitors, value chain analysis and others.[5] Depending on the industry,
the regulatory context may also be important to examine in detail.
In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing
especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing
managers will examine each competitor's cost structure, sources of profits, resources and
competencies, competitive positioning and product differentiation, degree of vertical integration,
historical responses to industry developments, and other factors.
Marketing management often finds it necessary to invest in research to collect the data required to
perform accurate marketing analysis. As such, they often conduct market
research (alternatelymarketing research) to obtain this information. Marketers employ a variety of
techniques to conduct market research, but some of the more common include:
 Qualitative marketing research, such as focus groups
 Quantitative marketing research, such as statistical surveys
 Experimental techniques such as test markets
 Observational techniques such as ethnographic (on-site) observation
Quantitative Marketing Research

 Depth Interviews
• Interview is conducted one-on-one, and lasts between 30 and 60 minutes
• Best method for in-depth probing of personal opinions, beliefs, and values
• Very rich depth of information
• Very flexible
• Probing is very useful at uncovering hidden issues
• They are unstructured (or loosely structured)- this differentiates them

from survey interviews in which the same questions are asked to all respondents
• Can be time consuming and responses can be difficult to interpret
• Requires skilled interviewers - expensive - interviewer bias can easily be introduced
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• There is no social pressure on respondents to conform and no group dynamics
• Start with general questions and rapport establishing questions, then proceed to more
purposive questions
• Laddering is a technique used by depth interviewers in which you start with questions
about external objects and external social phenomena, then proceed to internal attitudes
and feelings
• Bidden issue questioning is a technique used by depth interviewers in which they

concentrate on deeply felt personal concerns and pet peeves
• Symbolic analysis is a technique used by depth interviewers in which deeper symbolic

meanings are probed by asking questions about their opposites
 Focus Group
• An interactive group discussion lead by a moderator
• Unstructured (or loosely structured) discussion where the moderator encourages the
free flow of ideas
• Usually 8 to 12 members in the group who fit the profile of the target group or consumer
but may consist of two interviewees (a dyad) or three interviewees (a triad) or a lesser
number of participants (known as a mini-group)
• Usually last for 1 to 2 hours
• Usually recorded on video/DVD
• May be streamed via a closed streaming service for remote viewing of the proceedings
• The room usually has a large window with one-way glass - participants cannot see out,
but the researchers can see in
• Inexpensive and fast
• Can use computer and internet technology for on-line focus groups
• Respondents feel a group pressure to conform
• Group dynamics is useful in developing new streams of thought and covering an issue
thoroughly
 Projective Techniques
• These are unstructured prompts or stimulus that encourage the respondent to project
their underlying motivations, beliefs, attitudes, or feelings onto an ambiguous situation
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• They are all indirect techniques that attempt to disguise the purpose of the research
• Examples of projective techniques include:
○ Word association - say the first word that comes to mind after hearing a word -
only some of the words in the list are test words that the researcher is interested
in, the rest are fillers - is useful in testing brand names - variants include chain
word association and controlled word association
○ Sentence completion - respondents are given incomplete sentences and asked

to complete them
○ Story completion - respondents are given part of a story and are asked to
complete it
○ Cartoon tests - pictures of cartoon characters are shown in a specific situation

and with dialogue balloons - one of the dialogue balloons is empty and the
respondent is asked to fill it in
○ Thematic apperception tests - respondents are shown a picture (or series of

pictures) and asked to make up a story about the picture(s)
○ Role playing - respondents are asked to play the role of someone else -
researchers assume that subjects will project their own feelings or behaviors into
the role
○ Third-person technique - a verbal or visual representation of an individual and

his/her situation is presented to the respondent - the respondent is asked to
relate the attitudes or feelings of that person - researchers assume that talking in
the third person will minimize the social pressure to give standard or politically
correct responses
Quantitative Market Research

Quantitative marketing research is the application of quantitative research techniques to the field of
marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that
marketing is an interactive process in which both the buyer and seller reach a satisfying agreement on
the "four Ps" of marketing: Product, Price, Place (location) and Promotion.
As a social research method, it typically involves the construction of questionnaires and scales. People
who respond (respondents) are asked to complete the survey. Marketers use the information so
obtained to understand the needs of individuals in the marketplace, and to
create strategies and marketing plans.
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Typical General Procedures
Simply, there are five major and important steps involved in the research process:
1. Defining the Problem.

2. Research Design.
3. Data Collection.
4. Analysis.
5. Report Writing & presentation.
A brief discussion on these steps is:
1. Problem audit and problem definition - What is the problem? What are the various aspects of
the problem? What information is needed?
2. Conceptualization and operationalization - How exactly do we define the concepts involved?
How do we translate these concepts into observable and measurable behaviours?
3. Hypothesis specification - What claim(s) do we want to test?
4. Research design specification - What type of methodology to use? - examples: questionnaire,
survey
5. Question specification - What questions to ask? In what order?
6. Scale specification - How will preferences be rated?
7. Sampling design specification - What is the total population? What sample size is necessary for
this population? What sampling method to use?- examples: Probability Sampling:-(cluster
sampling, stratified sampling, simple random sampling,multistage sampling, systematic
sampling) & Nonprobability sampling:- (Convenience Sampling,Judgement Sampling,
Purposive Sampling, Quota Sampling, Snowball Sampling, etc
8. Data collection - Use mail, telephone, internet, mall intercepts
9. Codification and re-specification - Make adjustments to the raw data so it is compatible with
statistical techniques and with the objectives of the research - examples: assigning numbers,
consistency checks, substitutions, deletions, weighting, dummy variables, scale
transformations, scale standardization
10.Statistical analysis - Perform various descriptive and inferential techniques (see below) on the
raw data. Make inferences from the sample to the whole population. Test the results for
statistical significance.
11.Interpret and integrate findings - What do the results mean? What conclusions can be drawn?
How do these findings relate to similar research?
12.Write the research report - Report usually has headings such as: 1) executive summary; 2)
objectives; 3) methodology; 4) main findings; 5) detailed charts and diagrams. Present the
report to the client in a 10 minute presentation. Be prepared for questions.
Experimental Techniques
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Experimental research designs are used for the controlled testing of causal processes.
The general procedure is one or more independent variables are manipulated to determine their effect
on a dependent variable. These designs can be used where:
• There is time priority in a causal relationship (cause precedes effect),
• There is consistency in a causal relationship (a cause will always lead to the same effect), and
• he magnitude of the correlation is great.
The most common applications of these designs in marketing research and experimental
economics are test markets and purchase labs. The techniques are commonly used in other social
sciences including sociology, psychology, and social work.
 Controls
One of the most important requirements of experimental research designs is the necessity of
eliminating the effects of spurious, intervening, and antecedent variables. In the most basic model,
cause (X) leads to effect (Y). But there could be a third variable (Z) that influences (Y), and X might not
be the true cause at all. Z is said to be a spurious variable and must be controlled for. The same is true
forintervening variables (a variable in between the supposed cause (X) and the effect (Y)), and
anteceding variables (a variable prior to the supposed cause (X) that is the true cause). When a third
variable is involved and has not been controlled for, the relation is said to be azero order relationship.
In most practical applications of experimental research designs there are several causes (X1, X2, X3).
In most designs, only one of these causes is manipulated at a time.
 Purchase Laboratory
A true experimental design requires an artificial environment to control for all spurious, intervening, and
antecedent variables. A purchase laboratory approaches this ideal. Participants are given money,
script, or credit to purchase products in a simulated store. Researchers modify one variable at a time
(for example; price, packaging, shelf location, size, or competitors’ offerings) and determine what effect
that has on sales volume. Internet-based purchase labs (called virtual purchase labs) are becoming
more common.
Simplified versions of the purchase laboratory are often used for pragmatic reasons. An example of this
would be to usetachistoscopes for testing packaging and shelf location.
 Test Markets
Quasi-experimental designs control some, but not all, of the extraneous factors. A test market is an
example of this. A new product is typically introduced in a select number of cities. These cities must be
representative of the overall national (or international) population. They should also be relatively
unpolluted by outside influences (for example : media from other cities). The marketer has some control
over the marketing mix variables, but almost no control over the broader business environment
variables. Competitors could change their prices during the test. Government could change the level of
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taxes. New competing products could be introduced. Anadvertising campaign could be initiated by
competitors. Any of these spurious variables could contaminate the test market.
 Experimental research design

In an attempt to control for extraneous factors, several experimental research designs have been
developed, including:
• Classical pretest-post test - The total population of participants is randomly
divided into two samples; the control sample, and the experimental sample. Only
the experimental sample is exposed to the manipulated variable. The researcher
compares the pretest results with the post test results for both samples. Any
divergence between the two samples is assumed to be a result of the
experiment.
• Solomon four group design - The sample is randomly divided into four groups.
Two of the groups are experimental samples. Two groups experience no
experimental manipulation of variables. Two groups receive a pretest and a post
test. Two groups receive only a post test. This is an improvement over the
classical design because it controls for the effect of the pretest.
• Factorial design - this is similar to a classical design except additional samples
are used. Each group is exposed to a different experimental manipulation.
Observational Techniques
Compared with quantitative research and experimental research, observational research tends to be
less reliable but often more valid. The main advantage of observational research is flexibility. The
researchers can change their approach as needed. Also it measures behaviour directly, not reports of
behaviour or intentions. The main disadvantage is it is limited to behavioural variables. It cannot be
used to study cognitive or affective variables. Another disadvantage is that observational data is not
usually generalizable.
Three Approaches
Generally, there are three types of observational research:
• Covert observational research - The researchers do not identify themselves. Either
they mix in with the subjects undetected, or they observe from a distance. The
advantages of this approach are: (1) It is not necessary to get the subjects’ cooperation,
and (2) The subjects’ behaviour will not be contaminated by the presence of the
researcher. Some researchers have ethical misgivings with the deceit involved in this
approach.
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• Overt observational research - The researchers identify themselves as researchers
and explain the purpose of their observations. The problem with this approach is
subjects may modify their behaviour when they know they are being watched. They
portray their “ideal self” rather than their true self. The advantage that the overt approach
has over the covert approach is that there is no deception
• Researcher Participation - The researcher participates in what they are observing so
as to get a finer appreciation of the phenomena. Researchers that participate tend to
lose their objectivity.
In Market Research
In marketing research, the most frequently used types of observational techniques are:
• Personal observation
○ Observing products in use to detect usage patterns and problems
○ Observing license plates in store parking lots
○ Determining the socio-economic status of shoppers
○ Determining the level of package scrutiny
○ Determining the time it takes to make a purchase decision
• Mechanical Observations
○ Eye-tracking analysis while subjects watch advertisements
✔ Oculometers - what the subject is looking at
✔ Pupilometers - how interested is the viewer
○ Electronic checkout scanners - records purchase behavior
○ On-site cameras in stores
○ Nielsen box for tracking television station watching
○ Voice pitch meters - measures emotional reactions
○ Psychogalvanometer - measures galvanic skin response
• Audits
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○ Retail audits to determine the quality of service in stores
○ Inventory audits to determine product acceptance
○ Shelf space audits
• Trace Analysis
○ Credit card records
○ Computer cookie records
○ Garbology - looking for traces of purchase patterns in garbage
○ Detecting store traffic patterns by observing the wear in the floor (long term) or
the dirt on the floor (short term)
○ Exposure to advertisements
• Content Analysis
○ Observe the content of magazines, television broadcasts, radio broadcasts, or

newspapers, either articles, programs, or advertisements
Toyota Production System

We touched on the philosophy of eliminating waste, or muda, as they say in Japan, in Chapter 2, with
Ohno’s journey through the shop floor. He spent a great deal of time there, learning to map the
activities that added value to the product and getting rid of non-value-adding activity. It’s important to
take a closer look at this, because many of the tools of TPS and principles of the Toyota Way derive
from this focused behavior.
I want to be clear that the Toyota Production System is not the Toyota Way. TPS is the most
systematic and highly developed example of what the principles of the Toyota Way can accomplish.
The Toyota Way consists of the foundational principles of the Toyota culture, which allow TPS to
function so effectively. Though they are different, the development of TPS and its stunning success are
intimately connected with the evolution and development of the Toyota Way.
When applying TPS, you start with examining the manufacturing process from the customer’s
perspective. The first question in TPS is always “What does the customer want from this process?”
(Both the internal customer at the next steps in the production line and the final, external customer.)
This defines value. Through the customer’s eyes, you can observe a process and separate the value-
added steps from the non-value-added steps. You can apply this to any process—manufacturing,
information, or service.
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Take the example of a manual assembly operation on a truck chassis assembly line. The operator
takes many individual steps, but generally only a small number of the steps add value to the product,
as far as the customer is concerned. In this case, only the three steps identified add value. Some of the
non-value-added steps are necessary; for example, the operator has to reach to get the power tool.
The point is to minimize the time spent on non-value-added operations by positioning the tools and
material as close as possible to the point of assembly.
Toyota has identified seven major types of non-value-adding waste in business or manufacturing
processes, which are described below. You can apply these to product development, order taking, and
the office, not just a production line. There is an eighth waste, which I have included.
1. Overproduction. Producing items for which there are no orders, which generates such wastes
as overstaffing and storage and transportation costs because of excess inventory.
2. Waiting (time on hand). Workers merely serving to watch an automated machine or having to
stand around waiting for the next processing step, tool, supply, part, etc., or just plain having no
work because of stockouts, lot processing delays, equipment downtime, and capacity
bottlenecks.
3. Unnecessary transport or conveyance. Carrying work in process (WIP) long distances, creating
inefficient transport, or moving materials, parts, or finished goods into or out of storage or
between processes.
Figure 3-1: Waste in a truck chassis assembly line

4. Overprocessing or incorrect processing. Taking unneeded steps to process the parts.
Inefficiently processing due to poor tool and product design, causing unnecessary motion and
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producing defects. Waste is generated when providing higher-quality products than is
necessary.
5. Excess inventory. Excess raw material, WIP, or finished goods causing longer lead times,
obsolescence, damaged goods, transportation and storage costs, and delay. Also, extra
inventory hides problems such as production imbalances, late deliveries from suppliers, defects,
equipment downtime, and long setup times.
6. Unnecessary movement. Any wasted motion employees have to perform during the course of
their work, such as looking for, reaching for, or stacking parts, tools, etc. Also, walking is waste.
7. Defects. Production of defective parts or correction. Repair or rework, scrap, replacement
production, and inspection mean wasteful handling, time, and effort.
8. Unused employee creativity. Losing time, ideas, skills, improvements, and learning
opportunities by not engaging or listening to your employees.
Oh no considered the fundamental waste to be overproduction, since it causes most of the other
wastes. Producing more than the customer wants by any operation in the manufacturing process
necessarily leads to a build-up of inventory somewhere downstream: the material is just sitting around
waiting to be processed in the next operation. Mass or larger-batch manufacturers might ask, “What’s
the problem with this, as long as people and equipment are producing parts?” The problem is that big
buffers (inventory between processes) lead to other suboptimal behavior, like reducing your motivation
to continuously improve your operations. Why worry about preventive maintenance on equipment when
shutdowns do not immediately affect final assembly anyway? Why get overly concerned about a few
quality errors when you can just toss out defective parts? Because by the time a defective piece works
its way to the later operation where an operator tries to assemble that piece, there may be weeks of
bad parts in process and sitting in buffers.[1]
Figure 3-2 shows this waste through a simple time line for the process of casting, machining, and
assembling. As in most traditionally managed operations, most of the time spent on material is actually
wasted. Anyone who has been through a lean manufacturing or TPS seminar will recognize this figure,
so I will not belabor the point. From a lean perspective, the first thing you should do in approaching any
process is to map the value stream following the circuitous path of material (or paper or information)
through your process. It is best to walk the actual path to get the full experience. You can draw this
path on a layout and calculate the time and distance traveled and then give it the highly technical name
of “spaghetti diagram.” Even people who have worked inside a factory for most of their adult lives will
be amazed at the results of this exercise. The point of Figure 3-2 is that we have taken very simple
transformation processes and stretched them to the point that the value added is barely recognizable.
I discovered an astonishing example of this while consulting for a manufacturer of steel nuts. The
engineers and managers in my seminar assured me that their process could not benefit from lean
manufacturing because it was so simple. Rolls of steel coil came in and were cut, tapped, heat-treated,
and put into boxes. Material flew through the automated machines at the rate of hundreds of nuts a
minute. When we followed the value (and non-value) stream, their claim became comical. We started at
the receiving dock, and every time I thought the process must be finished, we walked across the factory
one more time to another step. The nuts at some point left the factory for a few weeks to be heat-
treated, because management had calculated that contracting out heat-treating was more economical.
When all was said and done, the nut-making process that took seconds for most operations, with the
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exception of heat-treating, which could take a few hours, typically took weeks and sometimes months.
We calculated percent value added for different product lines and got numbers ranging from .008
percent to 2 or 3 percent. Eyes opened! To make matters worse, equipment downtime was a common
problem, idling machines and allowing for large buildups of material around them. Some clever
manager had figured out that contracting outside skill trades was cheaper than hiring full-time people.
So there was often nobody around to fix a machine when it went down, let alone do a good job on
preventive maintenance.
Figure 3-2: Waste in a value system
Local efficiencies were emphasized at the cost of slowing down the value stream by creating large
amounts of in-process and finished-goods inventory and taking a long time to identify problems
(defects) that reduced quality. As a result, the plant was not flexible to changes in customer demand.
The concept of value-added and non-value-added work is eloquently explained by James P. Womack
and Daniel T. Jones in Lean Thinking (1996). They introduce the value stream perspective that is the
essence of lean thinking, based on the Toyota Production System.
Brand Wars- Honda Vs Toyota

A DMIN | B RA ND CH ALL EN GE S , BR AN D P OW ER , SO CI AL MED IA , B RA ND WAR S
The grapevine has it that Indus is producing a staggering 190 Corollas daily and still can’t meet the
market demand. And remember this is still the recession when consumers are historically hesitant to
part with their hard-earned dough. The premium or ‘on’ amount for Corolla is in excess of Rs.70,000+
compared to other brands many of which you can have without giving a single paisa for ‘on’.
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To be fair to Honda, they did come up with a stylish City whose front was akin to Accord,precisely what
the consumers liked to see. But it didn’t work out the way Honda intended to do. There were two major
reasons:
One is the pervasive false notion, ‘We have a great product, and it will sell by itself.’ If that were the
case, why would celebrity brands like Pepsi and Coke still be spending billions of dollars on marketing?
Why would Unilever be spending a fortune on Lux Style Awards? Why would Toyota launch an
aggressive campaign for the new Corolla in spite of the fact that the old model was doing good?
‘Marketing is the battle of perceptions, not products’. Al-Ries
The best Honda did was launch a subdued print campaign and a direct marketing campaign, which by
the looks of the sales figures didn’t do much good.
The second equally criminal reason was to do with a number of smaller glitches that combined to
create one big negative impact. This included the look of its backlights, the sort of a pentagonal shape
that consumers just didn’t like. A consumer survey beforehand would have rectified this problem in the
design stage. Another glitch was the quality of the buttons used on the dashboard. A Honda fanatic fan
alleged that the quality of the onboard panel was no better than the Chinese SUV brand GoNow.
If you just look at the sales comparison of Honda City and Toyota Corolla for the month of July last year
and the one previous to it, you couldn’t help but gape at the yawning gap between the results of the
two. In 2008 in the month of July, City sales were 625 when the old model was still there and last July
the sales increased to just 686, a mere 10% growth. Even if you include the Civic sales for the sake of
equivalent comparison since Corolla is the equivalent of both City and Civic, the total Honda sales went
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up.from.1025.to.1140,.a.10%.growth
Automotive brand-wise sales growth comparison
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city-civic vs corolla graph
Coming to Corolla, sale was a mere 298 in July 2008, last year July it rocketed to 3,124 units, that’s a
staggering 948% increase in sales! (All sales figures are courtesy PAMA).
honda vs toyota sales comparison
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Honda city vs Toyota corolla sales graph

The last two years’ sales have been analyzed because they present a clearer picture of the before-and-
after difference between the launch of the new models.
Such stellar sales performance is unprecedented in the history of automobile industry in US. Do you
really think this unbelievable gap is due to the difference in quality and performance of Corolla and
City?
Do you really think that Corolla is that much better to drive than City or Civic for that matter? Even if it is
(though I doubt it would be), is there a mammoth 948% difference between the two?
No. Not by a long shot. It all lies in the perception in the mind of the consumer. And the brutal truth is
that Toyota was better able to influence the consumer with its marketing effort. The amazing thing is, all
this happened without the consumer even test-driving the brand, they were that much awed by the
branding communication. Honda on the other hand gave ample opportunities to test-drive the new City
and yet the sales didn’t pick up as much as was expected. This real-world example again lends
credibility to the adage coined by the venerable Al Ries:
‘Marketing is the battle of perceptions, not products’.
And remember that the new Toyota launch campaign is not a great one by any stretch of the
imagination. This just goes on to show how poorly its competitors are faring at marketing their cars.
Toyota has communicated its brand positioning in every Tom, Dick and Harry publication. The other
day I received a magazine called Slogan I didn’t even know existed – and right at the back cover is the
new Corolla in all its glory. To Toyota’s credit, they have inculcated all the three elements of the Brand
Value Pyramid (proposed by Scott) – features, benefits and values. And one of the features is that it is
‘Ipod Ready’! Pretty impressive.
On the radio, they targeted the upscale albeit young segment by sponsoring the Evening Drive Show
on CityFM89 and offering tickets to the Cold Play concert in Dubai as prize for those answering a
couple of audaciously simple questions. It can be said that the sort of people who actually listen to Cold
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Play are predominantly the youth segment which hardly qualifies as target material for Toyota. It is thus
no surprise that the winner was a young bloke who although would be grateful to the Toyota people for
giving him such a fantastic experience, doubt would be rushing to the nearest Toyota dealer to get his
hands on the new Corolla. He just doesn’t have the wallet for it. It’s basic consumer behavior fallacy-
trying to target those who desire your brand but can’t afford it.
Then there’s a positive review of the car by Umair Mohsin published in AutoMark magazine. Whether
that positive review about Corolla is independent or sponsored by Corolla is not known, but this much is
known that Toyota did provide the car to the reviewer (the Altis Cruisetronic) for testing purpose.
Remember that whatever has been discussed is entirely based on the positioning of the two brands. No
stock has been taken of the actual performance of these two brands – the ‘driveability’ of them. Why
Toyota is preferred in rural areas. Is it because its body is almost one foot higher from the ground while
Honda is much lower, or is it because the off-road grip of Toyota is better than Honda? All this has
happened without the consumer taking into account the flat floor of Corolla at the back due to redesign
of the torsion beam or the improved ability of Corolla to stabilize after passing over a pot hole or to
maneuver around corners.
There’s also the general perception that the Pakistani consumer prefers the aerodynamic shape more
than any other feature. While a segment of the market may prefer that, it’s hard to believe that the
overwhelming majority values that feature the most. If that were the case, wouldn’t Kia’s Spectra be
selling like hot cakes by now? That car had the sleekest aerodynamic design until Civic Reborn came
along. Unfortunately for Dewan Motors, that was the only worthwhile similarity Spectra had with
Reborn.
Honda City is sleeker than Toyota Corolla and yet Honda has been unable to command a price
premium over it. Delving into the intricacies of the design aspect requires another in-depth article.
Coming to the SUV line extension of the two brands, even here Toyota has done much better by
aggressively promoting its rather extensive line of sub-brands, from Terios to Prado to Hi-lux to the
new Fortuner. Compared to Toyota’s arsenal, Honda has just one SUV in the region – CR-V, and you
would be hard pressed to find the car either in the world of advertising or in the real world as far as
Pakistan is concerned. Pakistanis can take a leaf out of their Indian counterparts notebook with regard
to their shrewd strategy of placing the Honda CRV in the movie ‘Wake Up Sid’. It’s not a new strategy
by any stretch of the imagination as Hollywood has been indulging in these sort of tactics since time
immemorial, but they are still effective. What was so admirable about this particular instance was that
the car was used by the lead character in having the time of his life along with his friends. What’s more,
the character is played by the latest heartthrob Ranbir Kapoor. Although the movie wasn’t a
phenomenal success at the box office, it did manage to strike a chord with the youth.
So when you put two and two together, you get one hell of a cool association for the Honda SUV.
Whether this was intentional or accidental is not known, but it sure worked.
This is the sort of subtle advertising Honda Pakistan needs to indulge in. This movie which has been
well received in Pakistan as well has already shown which segment to target and what ought to be the
brand persona of the SUV.
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Let’s have a brief look at the effects (or lack thereof) of marketing on the finances of the two brands.
Here are the snapshots of the profit and loss statement taken from the annual report of Honda and
Toyota. Just look at the yawning gap between the two. Why has Honda done terribly bad? A Rs.401.8
million loss when your competitor has reaped a whopping net profit of Rs. 1.39 Billion in exactly the
same period and circumstances should cause a pandemonium in the Honda dugout. And this
happened in spite of the fact that Toyota pays more royalty than Honda, about Rs.490 million, while
Honda pays Rs.287 million.
Marketing Communication
Your marketing plan will be executed by using the tactical elements of the Marketing Communications,
or Promotions Mix.
The elements of the marketing communications mix

The Marketing Communications Mix is the specific mix of advertising,personal selling, sales
promotion, public relations, and direct marketing a company uses to pursue its advertising and
marketing objectives.
Advertising - Any paid form of nonpersonal presentation and promotion of ideas, goods, or
services by an identified sponsor.
Personal selling - Personal presentation by the firm’s sales force for the purpose of making
sales and building customer relationships.
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Sales promotion - Short-term incentives to encourage the purchase or sale of a product or
service.
Public relations - Building good relationships with the company’s various publics by obtaining
favorable publicity, building up a good "corporate image", and handling or heading off
unfavorable rumors, stories, and events.
Direct marketing - Direct communications with carefully targeted individual consumers to
obtain an immediate response and cultivate lasting customer relationships.
Setting the Promotion Mix

When deciding how to properly utilize the marketing communications mix to meet your
marketing objectives, it is important to consider the relative strengths and weaknesses of each
component of the mix. Further, you must always define your total budget first (generally defined
in the Marketing and/or Business Plan) and then decide upon the best way to leverage the
different elements of the mix to maximize the return on your investment. You will balance the
various parts of the mix to not only create an integrated approach to your marketing
communications but you must also devote enough resources for each component to be
successful. Here are some things to keep in mind:
Reaches large, geographically dispersed audiences, often with high

frequency; Low cost per exposure, though overall costs are high; Consumers perceive advertised
goods as more legitimate; Dramatizes company/brand; Builds brand image; may stimulate short-term
sales; Impersonal, one-way communication; Expensive
Most effective tool for building buyers’ preferences, convictions, and actions;
Personal interaction allows for feedback and adjustments; Relationship-oriented; Buyers are more
attentive; Sales force represents a long-term commitment; Most expensive of the promotional tools
Highly credible; Very believable; Many forms: news stories, news features,
events and sponsorships, etc.; Reaches many prospects missed via other forms of promotion;
Dramatizes company or product; Often the most under used element in the promotional
mix;Relatively inexpensive (certainly not 'free' as many people think--there are costs involved)
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Many forms: Telephone marketing, direct mail, online marketing, etc.; Four
distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted
marketing efforts
When deciding upon your unique marketing communications mix, you should also consider
the Product Life Cycle. Here are some general guideline as to how and when to emphasize different
parts of the mix according to the stages of a typical product life cycle:
Pre-Introduction: Light advertising, pre-introduction publicity
Introduction: Heavy use of advertising, public relations for awareness, sales promotion for trial
Growth: Advertising, public relations, branding and brand marketing, personal selling for distribution
Maturity: Advertising decreases, sales promotion, personal selling, reminder & persuasion
Decline: Advertising and public relations decrease, limited sales promotion, personal selling for
distribution
SWOT Analysis Toyota

Strengths.
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• New investment by Toyota in factories in the US and China saw 2005 profits rise, against the worldwide
motor industry trend. Net profits rose 0.8% to 1.17 trillion yen ($11bn; £5.85bn), while sales were 7.3%
higher at 18.55 trillion yen. Commentators argue that this is because the company has the right mix of
products for the markets that it serves. This is an example of very focused segmentation, targeting and
positioning in a number of countries.
• In 2003 Toyota knocked its rivals Ford into third spot, to become the World's second largest carmaker
with 6.78 million units. The company is still behind rivals General Motors with 8.59 million units in the
same period. Its strong industry position is based upon a number of factors including a diversified
product range, highly targeted marketing and a commitment to lean manufacturing and quality. The
company makes a large range of vehicles for both private customers and commercial organizations,
from the small Yaris to large trucks. The company uses marketing techniques to identify and satisfy
customer needs. Its brand is a household name. The company also maximizes profit through efficient
manufacturing approaches (e.g. Total Quality Management).
Weaknesses
• Being big has its own problems. The World market for cars is in a condition of over supply and so car
manufacturers need to make sure that it is their models that consumers want. Toyota markets most of
its products in the US and in Japan. Therefore it is exposed to fluctuating economic and political
conditions those markets. Perhaps that is why the company is beginning to shift its attentions to the
emerging Chinese market. Movements in exchange rates could see the already narrow margins in the
car market being reduced.
• The company needs to keep producing cars in order to retain its operational efficiency. Car plants
represent a huge investment in expensive fixed costs, as well as the high costs of training and retaining
labour. So if the car market experiences a down turn, the company could see over capapacity. If on the
other hand the car market experiences an upturn, then the company may miss out on potential sales
due to under capacity i.e. it takes time to accommodate. This is a typical problem with high volume car
manufacturing.
Opportunities.
• Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. Lexus
has RX 400h hybrid, and Toyota has it Prius. Both are based upon advance technologies developed by
the organization. Rocketing oil prices have seen sales of the new hybrid vehicles increase. Toyota has
also sold on its technology to other motor manufacturers, for example Ford has bought into the
technology for its new Explorer SUV Hybrid. Such moves can only firm up Toyota's interest and
investment in hybrid R&D.
• Toyota is to target the 'urban youth' market. The company has launched its new Aygo, which is
targeted at the streetwise youth market and captures (or attempts to) the nature of dance and DJ
culture in a very competitive segment. The vehicle itself is a unique convertible, with models extending
at their rear! The narrow segment is notorious for it narrow margins and difficulties for branding.
Threats.
• Product recalls are always a problem for vehicle manufacturers. In 2005 the company had to recall
880,00 sports utility vehicles and pick up trucks due to faulty front suspension systems. Toyota did not
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g ive details of how much the recall would cost. The majority of affected vehicles were sold in the US,
while the rest were sold in Japan, Europe and Australia.
• As with any car manufacturer, Toyota faces tremendous competitive rivalry in the car market.
Competition is increasing almost daily, with new entrants coming into the market from China, South
Korea and new plants in Eastern Europe. The company is also exposed to any movement in the price
of raw materials such as rubber, steel and fuel. The key economies in the Pacific, the US and Europe
also experience slow downs. These economic factors are potential threats for Toyota.
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Thank you for visiting The XYZ Toyota, I would appreciate it if you could take the time to
complete the questionnaire below. This is to enable me to better meet your needs and so
improve the website. I am also considering creating a XYZ Toyota Club, please see below and
express your interest.
You and your Toyota
Sex: Male/Female Age:________ Number of Children:_______
Country of Residence:________________
Model:_______________________
Special Edition: Yes/No Year:_________ Number of Seats:_______
Average (If Known): 1-5Kms.

6-10Kms.
11-15Kms.
16-20Kms.
Years you have owned your Toyota:_____
Equiptments
ABS Alloy wheels Boot liner - Plastic
Exterior Canopy Captain’s chairs Central Locking
Child-safe locking side slide Driver and passenger

Cruise control
doors airbags
Dual Air Conditioning Climate Control Dual Sunroofs (Moon Roofs)
Easy close back door Easy close side door ECT button
Electric windows Electric curtains Manual curtains
Full size spare wheel Space-saver spare wheel Electric mirrors
Heated electric mirrors Hot and cold storage box Joyful Canopy (High Roof)
Mock Walnut dash and door Multi-box (under centre

Lace seat/headrest covers
caps console)
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Night Parking stick Overdrive Picnic table and chairs
Power Steering Rear spoiler Reversing mirror - external
Roof rails Satellite Navigation Side indicators on wing
Television Privacy Glass (Tinted windows) Ultrasound parking sensors
Wire mesh window heat 110v DC electric hook up with

reflectors outlet
Servicing
Quality of Service: Good/Ok/Poor

At what intervals do you service your Toyota: _______
Have you replaced your Exhaust: Yes/No
Toyota Club
I am considering setting up a Club from based upon the Site, mainly to try and negotiate
further discounts on servicing and parts and maybe even insurance for members benefits. I
would be looking to make it a free membership, and running it all electronically using the
internet and e-mail.
Would you be interested in joining Toyota Club? Yes/No/Don’t Know
Additional Comments
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Results regarding the Questionnaire

➢ Vehicle Average
➢ Equiptments
➢ Quality of Service
➢ Have you replaced your Exhaust?
➢ Would you be interested in joining Toyota Club?
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1867 Birth of Sakichi Toyoda

Introduction of Toyota from India

Mr. Sandeep Singh, DMD Mr. S Tomonaga, DMD

Mr. Shekar Viswanathan

Empowering employees.... to achieve perfection

Pursuing the greater good

Toyota Kirloskar Motor Pvt. LTD

Date Of Establishment October 6, 1997

DMD, Commercial Mr. Shekar Viswanathan

Structure of marketing department

Quantitative Marketing Research

• Very rich depth of information

• Probing is very useful at uncovering hidden issues

• They are unstructured (or loosely structured)- this differentiates them

• Can be time consuming and responses can be difficult to interpret

• Requires skilled interviewers - expensive - interviewer bias can easily be introduced

• Bidden issue questioning is a technique used by depth interviewers in which they

• Symbolic analysis is a technique used by depth interviewers in which deeper symbolic

• Usually last for 1 to 2 hours

• Usually recorded on video/DVD

• Inexpensive and fast

• Respondents feel a group pressure to conform

• Examples of projective techniques include:

○ Sentence completion - respondents are given incomplete sentences and asked

○ Cartoon tests - pictures of cartoon characters are shown in a specific situation

○ Thematic apperception tests - respondents are shown a picture (or series of

○ Third-person technique - a verbal or visual representation of an individual and

Quantitative Market Research

1. Defining the Problem.

A brief discussion on these steps is:

 Experimental research design

○ Observing products in use to detect usage patterns and problems

○ Observing license plates in store parking lots

○ Determining the socio-economic status of shoppers

○ Determining the level of package scrutiny

○ Determining the time it takes to make a purchase decision

○ Eye-tracking analysis while subjects watch advertisements

✔ Oculometers - what the subject is looking at

✔ Pupilometers - how interested is the viewer

○ Electronic checkout scanners - records purchase behavior

○ On-site cameras in stores

○ Nielsen box for tracking television station watching

○ Voice pitch meters - measures emotional reactions

○ Psychogalvanometer - measures galvanic skin response

○ Inventory audits to determine product acceptance

○ Shelf space audits

○ Credit card records

○ Computer cookie records

○ Garbology - looking for traces of purchase patterns in garbage

○ Observe the content of magazines, television broadcasts, radio broadcasts, or

Toyota Production System

Figure 3-1: Waste in a truck chassis assembly line

Figure 3-2: Waste in a value system

Brand Wars- Honda Vs Toyota

Automotive brand-wise sales growth comparison

honda vs toyota sales comparison

Honda city vs Toyota corolla sales graph

‘Marketing is the battle of perceptions, not products’.

The elements of the marketing communications mix

Setting the Promotion Mix

Reaches large, geographically dispersed audiences, often with high

Pre-Introduction: Light advertising, pre-introduction publicity