History:

Toyota abbreviated as TMC, is a multinational corporation headquartered in Japan. TMC is the

world's largest automobile manufacturer by sales and production. The company was founded by
Kiichiro Toyoda in 1937 as a spinoff from his father's company Toyota Industries to create
automobiles. Three years earlier, in 1934, while still a department of Toyota Industries, it created
its first product, the Type A engine, and, in 1936, its first passenger car, the Toyota AA. Toyota
Motor Corporation group companies are Toyota (including the Scion brand), Lexus, Daihatsu
and Hino Motors, along with several "non-automotive" companies. TMC is part of the Toyota
Group, one of the largest conglomerates in the world.

Toyota Motor Corporation is headquartered in Toyota City, Aichi and in Tokyo. In addition to
manufacturing automobiles, Toyota provides financial services through its Toyota Financial
Services division and also builds robots.

Replica of the Toyota Model AA, the first production model of Toyota in 1936

The story of Toyota Motor Corporation began in September 1933 when Toyoda Automatic
Loom created a new division devoted to the production of automobiles. Quickly thereafter, the
division produced its first Type A Engine in 1934, which in turn was used for the production of
the first Model A1 passenger in May 1935 and the G1 truck in August 1935. Production of the
model AA passenger started in 1936.
Branding and Logo:

Toyota Motor Co. was established as an independent company in 1937. Although the founding
family name is Toyoda, the company name was changed to:

 Signify the separation of the founders' work life from life

 Simplify the pronunciation, and
 Give the company an auspicious beginning. Toyota is considered luckier than Toyoda in
Japan, where eight-stroke count in the Japanese language was associated with wealth and
good fortune.

The original logo no longer is found on its vehicles but remains the corporate emblem used in
Japan. Still, there were no guidelines for the use of the brand name, "TOYOTA", which was used
throughout most of the world, which led to inconsistencies in its worldwide marketing
campaigns. To remedy this, Toyota introduced a new worldwide logo in 1989 in conjunction
with and to differentiate it from the newly released luxury Lexus brand. There are three ovals in
the new logo that combine to form the letter "T", which stands for Toyota. The overlapping of
the two perpendicular ovals inside the larger oval represent the mutually beneficial relationship
and trust that is placed between the customer and the company while the larger oval that
surrounds both of these inner ovals represent the "global expansion of Toyota's technology and
unlimited potential for the future."

During the Pacific War the company was dedicated to truck production for the Imperial Army. Because
of severe shortages in Japan, military trucks were kept as simple as possible. For example, the trucks had
only one headlight on the center of the hood.

Fortunately for Toyota, the war ended shortly before a scheduled allied bombing run on the Toyota
factories in Aichi.

Start of Commercial Production 1947-

Commercial passenger production started in 1947 with the model SA. In 1950 a separate sales company
Toyota Motor Sales Co. was established (which lasted until July 1982). In April 1956 the Toyopet dealer
chain was established.
Today Toyota is one of the top manufacturers with large market shares in both the US and Europe. It has
a small division, selling under the Daihatsu brand as well as a heavy vehicle division, selling under the
Hino brand.

Toyota is Japan's biggest company and the second largest in the world (the larger being General
Motors). The company is immensely profitable, and its massive reserves dwarf those of many countries.
Toyota's vehicles are generally highly regarded for their quality, proficient engineering, and value; but
their designs are often viewed as visually bland and lacking the flair seen in cars from certain smaller
manufacturers.

Toyota offers one of the largest ranges of vehicles of any manufacturer and amongst its more
predictable high-volume models produces a number of exciting sports cars: the Celica, the MR2, and the
Supra, the latter which was discontinued in 1998 for export and in 2002 in Japan altogether.

Worldwide Presence

The headquarter of Toyota in Toyota City, Japan:

Toyota has factories all over the world, manufacturing or assembling vehicles for local markets,
including its most popular model, the Corolla. Toyota has manufacturing or assembly plants in the
United States, Australia, Canada, Indonesia, Poland, South Africa, Turkey, the United Kingdom and
France. Cars from these plants are often exported to other countries. For example, the South African-
built Toyota Corolla is exported to Australia, while the Australian-built Camry is exported (in left hand
drive) to countries in the Middle East. Between 1997 and 2000, the number one selling in the U.S. was
the Toyota Camry. It was dethroned in 2001 by the Honda Accord, only to regain its place in 2002, with
the introduction of a redesigned model.

Toyota India is one of the largest subsidiaries of Toyota. They currently produce three cars, including the
Camry, Corolla, and the Sequoia (Land Cruiser Prado in other countries). Toyota also produces a range of
SUVs. Indeed, one of its first export markets was exporting its Landcruiser model to Australia in the late
1950s.

Toyota also contributes a great amount of research to cleaner-burning vehicles.

 In 2002, Toyota successfully road-tested a new version of the RAV4 which ran on a Hydrogen
Fuel Cell.
 Scientific American made the company its Leader of the Year in 2003 for commercializing an
affordable hybrid car.
  In 2004, Toyota showed that it had made its Highlander into the world's first mass-market
seven-passenger hybrid SUV.

To gain a higher share in the U.S. domestic luxury market, Toyota introduced a separate brand called
Lexus in 1989, following Honda's (with its Acura division) example. The brand was introduced with two
models: the ES 250, based on Toyota Camry, and the LS 400, which was released simultaneously as the
Toyota Celsior in Japan. Since then, the lineup has been expanded with other models based on Japanese
Toyotas, and the marque has been successful, receiving many industry awards. Now that it has become
the number one selling luxury brand in the U.S., Toyota is introducing it to Japan in 2005, thus
completing a cycle of sorts.

In 2003, Toyota brought two of their popular cars from Japan (including the bB) to America, and created
a new badge, called Scion, meaning a descendant or heir. These cars are targeted towards the young,
and young-at-heart. Both models, the xA (known in Japan as the Toyota ist) and xB (known in Japan as
the Toyota bB) are powered by a 1.5L DOHC I4 engine taken right out of the Toyota Echo (known in
Japan as the Toyota Platz), a derivative work of the Toyota Tercel. A third model, the Scion tC, was
introduced in 2004. Instead of importing an existing model from Japan as was done with the xA and xB,
the tC was designed specifically for the North American market, using a platform shared with the
Avensis, a Toyota model not sold in North America.

Toyota has also been successful in racing, especially in Rally with the Toyota Celica as well as the Toyota
Corolla. In 2002 Toyota started racing in Formula One with the Toyota Team Europe (TTE) and is based in
Cologne (Germany).

Toyota is also famous in industry for its manufacturing philosophy, called the Toyota Production System.
This system is copied worldwide by many manufacturing companies.

Introduction
Toyota Production System

After Second World War, Eiji Toyoda and Taiichi Ohno at the Toyota motor company in Japan pioneered
the concept of Toyota Production System. The rise of Japan to its current economic pre-eminence
quickly followed, as other companies and industries copied this remarkable system. Manufacturers
around the world are now trying to embrace this innovative system, but they are finding the going
rough. The companies that first mastered this system were all head-quartered in one country-Japan.
However, many Western companies now understand Toyota Production System, and at least one is well
along the path of introducing it. Superimposing this method on the existing mass-production systems
causes great pain and dislocation.
The global adaptation, as it inevitably spreads beyond the auto industry, will change everything in
almost every industry-choices of customers, the nature of work, the fortune of companies, and,
ultimately, the fate of nations.

What is Toyota Production System? Perhaps the best way to describe this innovative production system
is to contrast it with craft production and mass production, the two other methods humans have
devised to make things.

Production methods

The craft producer uses highly skilled workers and simple but flexible tools to make exactly what the
customer asks for one item at a time. Few exotic sports cars provide current day examples. We all love
the idea of craft production, but the problem with it is obvious: Goods produced by the craft method—
as automobiles once were exclusively—cost too much for most of us to afford. So mass production was
developed at the beginning of the twentieth century as an alternative.

The mass-producer uses narrowly skilled professionals to design products made by unskilled or
semiskilled workers tending expensive, single-purpose machines. These churn out standardised
products in very high volume. Because the machinery costs so much and is so intolerant of disruption,
the mass-producer keeps standard designs in production for as long as possible. The result: The
customer gets lower costs but at the expense of variety and by means of work methods that most
employees find boring and dispiriting.

The Toyota motor corporation, by contrast, combines the advantages of craft and mass production,
while avoiding the high cost of the former and the rigidity of the latter. Toward this end, they employ
teams of multi-skilled workers at all levels of the organisation and use highly flexible and increasingly
automated machines to produce volumes of products in enormous variety.

The Toyota Production System is also defined as Lean Production because it uses less of everything
compared with mass production—half the human effort in the factory, half the manufacturing space,
half the investment in tools, half the engineering hours to develop a new product in half the time. Also it
requires keeping far less than half the needed inventory on site, results in many fewer defects, and
produces a greater and ever growing variety of products.

Perhaps the most striking difference between mass and Toyota production system lies in their ultimate
objectives. Mass-producers set a limited goal for themselves— "good enough," which translates into an
acceptable number of defects, a maximum acceptable level of inventories, a narrow range of
standardised products. Lean producers on the other hand, set their sights explicitly on perfection.

Recent company developments

2007–2010 financial crisis

On May 8, 2009, Toyota reported a record annual net loss of US$4.2 billion, making it the latest
automobile maker to be severely affected by the 2007–2010 financial crisis.
2009–2010 vehicle recalls

From November 2009 through the first quarter of 2010, Toyota recalled more than 8 million
(accounts differ) cars and trucks worldwide in several recall campaigns, and briefly halted
production and sales. The US Sales Chief, James Lentz, was questioned by the United States
Congress committees on Oversight and Investigations on February 23, 2010, as a result of recent
recalls. On February 24, 2010, Toyota CEO Akio Toyoda testified before the House Committee
on Oversight and Government Reform. On 6 April 2010, The US government sought a record
penalty of US$16.375 million from Toyota for its delayed response in notifying the National
Highway Traffic Safety Administration regarding the defective accelerator pedals On 18 May
2010, Toyota paid the fine without an admission of wrongdoing. The record fine and the high
profile hearings caused accusations of conflict of interest. The US government is regulatory body
and part owner of two major competitors, General Motors and Chrysler. Senior managing
director Takahiko Ijichi said that recall-related costs in the financial year that ended March 2010
totaled US$1.93 billion (¥180 billion).

TOYOTA'S SECRET:
If you enter the lobby of Toyota's headquarters in Japan, you will see two small portraits and one big
one hanging there. The two small ones show the founder and the current chairman of the company. The
large portrait shows an American. It is Dr. Edward Deming. Who is Edward Deming you might ask? And
indeed who is he? But it's a long story and one cannot explain who Edward Demings is without involving
characters like the Japanese, the Americans and the Toyota Company. So here goes…

Long Ago and Far Away…

World War II had barely ended, the Japanese were left with a devastated country, ruins that were
previously houses and a battered economy. But there was something left that helped them overcome all
this destruction. They did not sit and lament their fates but began thinking…where do we go from here
and to get there what do we need to do? Factories began production again firstly to supply all the basic
necessities and after around 15 years when everyone had the basic goods they needed, they turned
their energies towards overcoming the surplus of imports. Japan needed to offer something more in
their goods if they had to succeed on foreign shores....

The Japanese car manufacturers namely Toyota wanted to start operations in America. That was all very
well. But how could they make the Americans buy their cars rather than local ones. Enter Dr. Edward
Demings and hey presto! They had the secret recipe! The man who according to his biographer
Rafeel Agumayo(1) is the American who taught Japan what quality management is. Dr. Edwards Deming
was a physicist specialized in the field of statistics and worked in United States Bureau of Census. His
greatest contribution on the evaluation of statistical methods for ensuring the quality of census
assessment established him as a leader in the field of Total Quality Management. In fact he is considered
as the "Guru" of Total Quality Management. Deming also enunciated 14 principles for quality
management which include innovation, the philosophy of quality to be inculcated in all individuals,
appropriate and complete supervision, absence of fear and openness, ensuring quality from design
through to maintenance, work standards in production, training of every worker in statistical methods,
retraining people to new skills and so on.

The world saw Toyota take over America by storm, they offered better, faster, more comfortable
and more efficient cars and Americans came to buy cars from them in droves. But America was not the
only stop, in fact Toyota quickly became the largest car Manufacturer in the world. And there has been
no looking back since.

How Toyota Does It—Everyday

Fewer man-hours. Less inventory. The highest quality cars with the fewest defects of any
competing manufacturer. In factories around the globe, Toyota consistently raises the bar for
manufacturing, product development, and process excellence. The result is an amazing business success
story: steadily taking market share from price-cutting competitors, earning far more profit than any
other automaker, and winning the praise of business leaders worldwide. How do they do it?

One of their secrets that gives them an edge over other car Manufacturers is the ‘Toyota
production System'. Toyota had discovered earlier on that the key to their success was Total Quality
Management (TQM) . To make sure that they incorporated TQM in every stage from designing to car
manufacturing to after sales service they developed the Toyota Production System (TPS). Initially
developed in Japan, TPS or the Toyota Production System, was transplanted to the United States nearly
two decades ago, when Toyota launched a joint venture with General Motors Corp., called New United
Motor Manufacturing, Inc., or NUMMI, based in Fremont, Calif.

One of the aspects of the Toyota Production System (TPS) that tends to be overlooked--or is at least
not mentioned as frequently as subjects such as kanban or kaizen--is the fact that there are people
involved. Instead, TPS is discussed almost as though the practices are what's essential.

But when you talk to a key practitioner of TPS, such as Mike DaPrile, vice president-Manufacturing,
Toyota Motor Manufacturing-Kentucky, people come first. As in, "One of the things that we do for
efficiency and lean manufacturing is putting responsibility in worker's hands. I know that sounds naive,
but it is not."

He adds, "I really believe in giving people responsibility. Efficiency comes from improving processes--
from people kaizening their own processes." Of course, there is something else that must be taken into
account: "There is little concern here about being laid off." Should a person improve him- or herself out
of a position, they stay on their team for six months, then transition over to a kaizen team.

According to DaPrile, there are several keys to lean manufacturing, all of which relate to the people who
are actually doing the work. For example, there is never a situation where a machine is in control of a
person; a person always controls the machine. The andon system--the cord that the worker can pull to
stop the line--is an example of a person being in charge of an assembly line. (Contrast this to places
where the speed of the line paces the worker, where it is up to the worker to keep up with the machine,
where the machine keeps going regardless of the quality being produced. "The andon system allows the
person to stop the line to incorporate good quality in the product.")

Safe & Engaged. Further, DaPrile states with emphasis, "We feel strongly that safety is a top
priority." And by creating a safe workplace, there is improvement in

morale. And as morale rises, there are gains in both quality and productivity. This is not the proverbial
double win (management and workers), but actually a triple win, in that the customer receives a better
product (which explains, in large part, why the Camry is continuing a run on the top of the best-selling
car in America list).

To keep the people engaged in their work, they do a number of things at the Toyota plant in
Georgetown, KY. For example, they level the production. This is a means by which there is assurance
that people can get their jobs done in the amount of time available without having them waiting around.
"People don't like to wait," DaPrile says. "It's tiresome and boring."

Also: "We also eliminate the muda"--the waste--"of conveyance and walking." Parts are delivered to line
side; people don't have to travel far to do their jobs. And because there is a recognition that doing the
same thing over and over and over again can be stultifying (which would have a deleterious effect on
quality), they have people rotate to a different task within the processes every two hours.

Everything has to be where it is needed when it is needed because part of TPS is just-in-time inventory,
which means that are isn't a fleet of forklifts rolling through cavernous warehouses (and let's face it:
Toyota Industrial Equipment builds forklifts, which they'd undoubtedly provide to its sister company at a
discount, so a fleet would probably be comparatively economical).

The Difference

Here's a key difference between Toyota and others that says a lot about the importance of TPS: "We
do the same amount of work as everyone else, but we do more added value by eliminating waste."

Looked at another way: building a car is building a car, whether it is a Camry or something else--the
same operations are required. How those operations are performed makes all the difference in terms of
quality and efficiency.

And the how has a whole lot to do with what the people who work in the plant do. "They set up their
own processes--not engineers," he says. There isn't a situation where the people just load and unload
equipment. The 8,000 people (all of whom are at least high school graduates) are given the opportunity
to think. There is an actual measure of how much the people think: last year, DaPrile points out, there
were more than 98,000 suggestions made to improve things--99% of which paid out (considering only
one plant).Plenty of operations are driven by results, by the ends, not the means."We are very process
oriented here," DaPrile says, "not results oriented. The results will come." Have good processes and
then reap the rewards, attain the results.
DaPrile talks about the importance of having enthusiasm. He thinks that it is essential. "One of the
things we do to help keep the people enthused"--this in addition to ceremonies and the like--"is to keep
them challenged. You can get bored, lackadaisical, and take things for granted if you do the same things
over and over. We change things here." Sure, they use the Toyota Production System, but system
doesn't mean that you create a rut and stay in it: It is a process that allows you to change things.

"We haven't been stable here for 13 years: We've had new products, growth, and new ideas," DaPrile
says, adding, "Every day is a new day here." And the improvements are, well, continuous. Total Quality
Management all they way….

The Secret that Spells Success

With a market capitalization greater than the value of General Motors, Ford, and Chrysler
combined, Toyota is also, (by far), the world's most profitable automaker. Another of Toyota's secret
weapon is Lean production--the revolutionary approach to business processes that it invented in the
1950's and has spent decades perfecting. Today businesses around the world are implementing Toyota's
radical system for speeding up processes, reducing waste, and improving quality.

Toyota integrated TQM into lean production in 1960. Developed by Taichi Ohno, lean production
aims to eliminate seven wastes or things that can go wrong, of which quality is one. Others include
overproduction, waiting of any kind, and unnecessary motion of a worker.Lean production applies TQM
to all seven wastes at the same time rather than tackling each problem individually, saving not only time
but money and energy.

Jeffrey K. Liker in his book, "The Toyota Way", explains Toyota's unique approach to Lean
Manufacturing--the 14 management principles and philosophy that drive Toyota's quality and efficiency-
obsessed culture. Professor Jeffrey Liker who has been studying Toyota for twenty years, and was given
unprecedented access to Toyota executives, employees and factories, both in Japan and the United
States, for this landmark work. The book is full of examples of the 14 fundamental principles at work in
the Toyota culture, and how these principles create a culture of continuous learning and improvement.
You'll discover how the right combination of long-term philosophy, process, people, and problem solving
has transformed Toyota Motor Corp. into a Lean, learning enterprise.

(Alessandro Volta concept)

One market that Toyota is just now getting back into is the sports car arena. Toyota has electrified
automotive history with the first high-performance hybrid, called the Alessandro Volta. According to
Toyota.com, the Giugiaro-designed carbon-fiber body seats three people abreast and features "drive-by-
wire" controls, allowing you to position the steering wheel and pedals in front of any one of them. And
the Volta's 408-hp Hybrid Synergy Drive® (a 3.3-liter V6 with an electric motor for each axle) not only
delivers 435 miles on a 13.7-gallon tank, but 0-60 acceleration in a mere four seconds. This concept car
will surely turn heads as well as push Toyota even closer to taking over General Motors for the number 1
automaker in the world. It has the power and looks to make any car enthusiast drool at the mere
mention of its name!

Expanding to New Markets

To become number one in its industry, must always look for new markets. The company must
be able to spot these markets and do what it can to gain dominance over them. The automobile
industry is a very interesting market. The world is in a time when it can see how automobile companies,
like Toyota, are expanding their business into these new emerging markets. Two major markets that
Toyota is expanding into are the Chinese and Indian economies. These are the two top growing
economies and all automobile manufacturers are trying gain a significant share of these markets.
Another growing market is the hybrid market. With rising oil prices and growing concerns about the
environment, the hybrid market is key for Toyota to become the number one automaker.

When expanding to a new market, you need a good strategy that presents the best opportunity
to enter the market. For example, with their entry into the Chinese market, Toyota adopted a three
step plan. Chinadaily.com reported Toyota's three step plan was, "first to establish a local sales network
and launch brand promotions, then to build auto parts manufacturing bases, and, finally, to establish
joint ventures (JVs) with local players and produce automobiles." It seems that since the Chinese
market is young and a lot of buyers are first time buyers, brand promotion and developing a local sales
network is definitely a key step to nail. Being able to secure customers early will lead to future success
in the market and help in Toyota achieving its goal to be number one. In 2003, Toyota was importing
50,000 vehicles a year and had 57 joint ventures and wholly owned auto parts companies. The other
key step is production of its vehicles locally. This is important in keeping costs down and relationships
with local companies that will help Toyota in the long run. Mckinsey.com's study of the Chinese
automobile market listed five areas where companies need to build in order to have success in China.
These steps are: "A robust product/market strategy, a distinctive brand position, a high-quality
distribution network, strong local organizational capabilities, and advantageous alliances and
partnerships." These are all areas where Toyota has initially focused on and needs to continue build in
order to find success. Since Toyota's late entry into the Chinese market, the company has begun raising
production in China. By 2010, Toyota plans on building 300,000-400,000 vehicles in China. Their plant in
Tianjin plans on producing 30,000 Crown models from this year forward. Toyota's growth in China is
continuing to improve, and the company is beginning to see great results in their growth in China. They
project that their sales in 2005 are 50% higher than 2004. Of their projected 179,000 units sold, 150,000
were produced in China. Continuing its success in China will help Toyota in its goal to be the number
one automaker.

As with China, India is another emerging market that is key when vying to become the top
automaker. Toyota has a very positive view of India as an emerging market. In fact, India.com reports,
"Sources say Toyota expects India to become one of the largest Auto market in the next twenty years.
They even predict India may exceed China and parallel to some extent US market in that time frame."
With this kind of view on the Indian market, it is essential for Toyota to take advantage of this market
now. Currently, Toyota holds 5% of the Indian market share and plans on having a 10% market share by
2010 which would be around 200,000 vehicles. Toyota's view for India is to improve on its current
products and introduce new products to the market. They are also ready to move away from some of
its current products. Atsushi Toyoshima, managing director at Toyota Kirloskar Motor told the Economic
Times, "Times must change. What we are introducing to the market is the latest from our International
Motor Vehicle development platform around the world, and the Innova is the first child of that platform.
The Indian launch is one of the first launches, and hereby proves that what we give to the Indian market
is the latest and very best. The Innova utilizes a state-of-the-art common-rail D4-D diesel engine and a
very smooth VVT-I petrol engine, making it one of the most-advanced cars on the road today." The
introduction of the Innova is what he calls "the right product for the right country." The key to Toyota's
success is that it designs products that customers want instead of what they think the customer wants.
Other goals Toyota has for India is to have 60 dealers by the end of 2005. The company had 44 dealers
in March of this year. In terms of production, their target is 50,000, 38,000 of which are the Innova and
the Corolla making up the remainder, which is the highest selling car in its category. If Toyota continues
on its current path and meets its goal of 10% of India's market share by 2010, the company will be in
good standing to reach its ultimate goal of being number one.

Another market Toyota plans to secure is the hybrid market. With gas and oil prices continuing
to rise, the hybrid market is one of high importance to automakers. Also, the growing issue of air
pollution is leading to consumers looking for alternatives when it comes to their vehicles. Since they
were the first to come out with a hybrid vehicle, Toyota plans on continuing to be the leader in the
hybrid market. Currently, Toyota offers the Prius, the Highlander Hybrid, and is soon to launch the
Camry Hybrid. To feed this market, Toyota plans on selling 250,000 hybrids this year alone. Next year,
they plan on upping that number to 350,000-400,000. They are planning on the numbers to increase to
over a million vehicles a year starting in 2010. To cut costs and make the hybrid vehicles more
affordable, Toyota is planning on building a smaller version of its hybrid powertrain engine. The target
for this new engine is 2008. This is a huge opportunity for Toyota to really lower the cost of its hybrids
which already cost thousands of dollars more than regular gas vehicles. This will be big in attracting new
buyers. Lindsay Brooke, an auto analyst at forecasting firm CSM Worldwide, when asked to address the
effect which the high price of gas has on the sale of hybrids, said, "they would have to go over $3.50 a
gallon to really start to force people to make profound changes in their car purchases.(detnews.com)" If
gas prices don't rise that high, the way to sway buyers to hybrids will be to lower their costs. The hybrid
market is big because it allows Toyota to increase sales in already existing markets like the United States
and Europe. The increased sales in the hybrid market will help Toyota increase its 12.8% share of the US
market, considering hybrids currently make up only 1% of US light vehicle sales. Toyota is prepared for
the future in hybrids and will use that to help them become the number one automaker in the world.

Compare Auto Industry to Another Industry

 The automotive industry is comparable to the computer manufacturing industry. Both
industries produce one basic product which is upgradeable in numerous ways. Each of these industries
has a core of a few manufacturers that dominate the majority of the industries market share. Both of
these industries are in exciting times which are full of innovations. Even though the automotive industry
has been around for many more years than the computer industry the automotive industry is still be
able to learn something from the growth of the computer industry.

The following points will illustrate how the automotive industry is hesitant to change until they
are secured in both their previous specialty and their future area of expertise. By abiding by this
doctrine cars have been the same for the past fifty years. Not many innovations have been made in the
performance or efficiency overall. Although small changes have been made, such as a Toyota Camry
getting better gas mileage than a sixty-four Impala, but the same ideas are still being used to produce a
new product.

The computer industry on the other hand has been holding true to Moore's Law. Every eighteen
months the processor speed of a computer can be expected to more or less double. Of course this is not
feasible with internal combustion engines, but this does not prevent the research of other technologies.
As stated earlier in the paper, recently manufacturers are beginning to make great steps into the hybrid
technology.

The first comparative aspect of these industries is the use of new technologies. Generally, it is
easier for an industry which has top products that only cost five thousand dollars to institute innovations
than an industry in which economy products cost ten thousand dollars. However, the automotive
industry should become more proactive with instituting new technologies similar to the way that the
computer industry has. For example, when consumers started using MP3's to listen to and save music
on their computers the electronics industry and major corporations from the computer industry started
focusing major resources on portable players, which play MP3's. Even though this technology has been
around for at least five years, there has been no major push from automotive manufacturers to have a
digital storage device in a car. Different formats for listening to music is not the only example of where
car manufacturers can learn from the computer industry.

Another example of the automotive industry not expanding into already developed technologies
is the use of global positioning systems (GPS). If Toyota were to make a deal with Garmin, a very
popular and established GPS producer, the motor company could offer various GPS systems in any of
their vehicles. This software is in popular demand; Garmin even has links on their website for specific
models of cars. This would be one way to enhance Toyota's product for the customer.

This does not mean the automotive industry is sticking solely to the same model. Many new
technologies have been discussed which the automotive industry is actively pursuing. With these new
changes, such as hybrid technology, Toyota is in some ways surpassing the computer industry in their
ability to adapt to radical change.

Another example of car manufacturers adapting and even copying the computer industry is in
their advertising. Both industries still produce standard television ads and brochures, but also utilize the
internet for effective sales. Thousands of people per day reach Toyota through its company website,
which not only contains interactive ads and specifications of products. It follows the computer industry
into product customization.

Dell was the first major company to perfect this system of letting the customer ‘build' their
product on the internet, by choosing the parts they would like installed in their computer, and offering
the ability to complete the order and pay for the product over the internet. The automotive industry is
currently following in these footsteps by allowing the buyer to customize a car through their website,
eliminating wasted time at the dealership.

Overall, the automotive industry is at times still sluggish to adapt to change, but is coming to the
realization that what the consumer wants they need to produce. They are currently instituting new
technologies and techniques already used by the computer industry. By doing so they are saving money
and increasing productivity.

TOYOTA PRODUCTION SYSTEM:

Basic idea and Framework

The Toyota production system is a technology of comprehensive production management the Japanese
invented a hundred years after opening up to the modern world. The basic idea of this system is to
maintain a continuous flow of products in factories in order to flexibly adapt to demand changes. The
realisation of such production flow is called Just-in-time production, which means producing only
necessary units in a necessary quantity at a necessary time. As a result, the excess inventories and the
excess work-force will be naturally diminished, thereby achieving the purposes of increased productivity
and cost reduction.

The basic principle of Just-in-time production is rational; that is, the Toyota production system has been
developed by steadily pursuing the orthodox way of production management. With the realisation of
this concept, unnecessary intermediate and finished product inventories would be eliminated. However,
although cost reduction is the system's most important goal, it must achieve three other sub-goals in
order to achieve its primary objective. They include:

1. Quantity control, which enables the system to adapt to daily and monthly fluctuations in
demand in terms of quantities and variety;

2. Quality assurance, which assures that each process will supply only good units to the
subsequent processes;

3. Respect-for-humanity, which must be cultivated while the system utilises the human resource to
attain its cost objectives.
It should be emphasised here that these three goals cannot exist independently or be achieved
independently without influencing each other or the primary goal of cost reduction. All goals are output
of the same system; with productivity as the ultimate purpose and guiding concept, the Toyota
production system strives to realise each of the goals for which it has been designed. Before discussing
the contents of the Toyota production system in detail, an overview of this system is in order. The
outputs or result side as well as the inputs or constituent side of the production system are depicted.

A continuous flow of production, or adapting to demand changes in quantities and variety, is created by
achieving two key concepts: Just-in-time and Autonamation. These two concepts are the pillars of the
Toyota production system.

Just-in-time basically means to produce the necessary units in the necessary quantities at the necessary
time. Autonamation ("Jidoka" in Japanese) may be loosely interpreted as autonomous defects control. It
supports Just-in-time by never allowing defective units from the preceding process to flow into and
disrupt a subsequent process. Two concepts also key to the Toyota production system include Flexible
work force ("Shojinka" in Japanese) which means varying the number of workers to demand changes,
and Creative thinking or inventive ideas ("soikufu"), or capitalising on workers suggestions.

To realise these four concepts, Toyota has established the following systems and methods:

1. Kanban system to maintain Just-in-time production

2. Production smoothing method to adapt to demand changes

3. Shortening of set-up time for reducing the production lead time

4. Standardisation of operations to attain line balancing

5. Machine layout and the multi-function worker for flexible work force

6. Improvement activities by small groups and the suggestion system to reduce the work force and
increase the worker's morale.

7. Visual control system to achieve the Autonamation concept

8. Functional Management system to promote company-wide quality control.

Just-in-time production

The idea of producing the necessary units in the necessary quantities at the necessary time is described
by the short term Just-in-time. Just-in-time means, for example, that in the process of assembling the
parts to build a car, the necessary kind of sub-assemblies of the preceding processes should arrive at the
product line at the time needed in the necessary quantities. If Just-in-time is realised in the entire firm,
then unnecessary inventories in the factory will be completely eliminated, making stores or warehouses
unnecessary. The inventory carrying costs will be diminished, and the ratio of capital turnover will be
increased.
However, to rely solely on the central planning approach which instructs the production schedules to all
processes simultaneously, it is very difficult to realise Just-in-time in all the processes for a product like
an automobile, which consists of thousands of parts. Therefore, in Toyota system, it is necessary to look
at the production flow conversely; in other words, the people of a certain process go to the preceding
process to withdraw the necessary units in the necessary quantities at the necessary time. Then what
the preceding process has to do is produce only enough quantities of units to replace those that have
been withdrawn.

Kanban system

Many people think the Toyota production system a Kanban system: this is incorrect. The Toyota
production system is a way to make products, whereas the Kanban system is the way to manage the
Just-in-time production method. In short, the kanban system is an information system to harmoniously
control the production quantities in every process. It is a tool to achieve just-in-time production. In this
system what kind of units and how many units needed are written on a tag-like card called Kanban. The
Kanban is sent to the people of the preceding process from the subsequent process. As a result, many
processes in a plant are connected with each other. This connecting of processes in a factory allows for
better control of necessary quantities for various products. The Kanban system is supported by the
following:

Smoothing of production

Reduction of set-up time design of machine layout

Standardisation of jobs

Improvement activities

Autonamation

Autonamation

In order to realise Just-in-time perfectly, 100 per cent good units must flow to the prior process, and this
flow must be rhythmic without interruption. Therefore, quality control is so important that it must
coexist with the Just-in-time operation throughout the Kanban system. Autonamation means to build in
a mechanism a means to prevent mass-production of defective work in machines or product lines.
Autonamation is not automation, but the autonomous check of abnormality in the process.

The autonomous machine is a machine to which an automatic stopping device is attached. In Toyota
factories, almost all the machines are autonomous, so that mass-production of defects can be prevented
and machine breakdowns are automatically checked. The idea of Autonamation is also expanded to the
product lines of manual work. If something abnormal happens in a product line, the worker pushes stop
button, thereby stopping his whole line. For the purpose of detecting troubles in each process, an
electric light board, called Andon, indicating a line stop, is hung so high in a factory that it can easily be
seen by everyone. The Andon in the Toyota system has an important role in helping this autonomous
check, and is a typical example of Toyota's "Visual Control System."

Global adaptation

Since Toyota production system has been created from actual practices in the factories of Toyota, it has
a strong feature of emphasising practical effects, and actual practice and implication over theoretical
analysis. This system can play a great role in the task of improving the constitutions of the companies
world-wide(especially those of the automobile industry.

Toyota Motor Corporation is a leading automobile company throughout the entire world. Toyota has a
strong commitment to diversity. It is an integral aspect of Toyota's success. The Toyota Motor
Corporation understands that to continue to be successful in this day and age they must take further
steps to diversify their company.

Toyota Motor Corporation is one of the world‘s leading automakers, offering a full range of models,
from mini vehicles to large trucks, and even new concept cars. Key competitors of Toyota include Nissan,
Diamler Chrysler, Chevrolet, General Motors, and GMC.

Although Toyota experiences worldwide successes, they are constantly looking for new ways to branch
out and reach minorities and ethnic groups. During the week of April 6,2005 Toyota launched a Spanish-
language digital game on the Spanish edition of their website. This is the first interactive game available
on the Spanish-language website. This new interactive activity is a good way for Toyota to enhance their
image as well as reach a younger Hispanic market. It also allows Toyota to keep a constant
communication process with consumers. This new game reaches those who are not effectively reached
by existing television and print ads. In addition this new game will not only offer a form of entertainment
but it will get more people to visit the Toyota site Toyota is promoting this new game by using banner
ads on high-traffic Spanish language outlets and web sites. The game is titled "El Invicto" and is an
interactive soccer game, where players defend their Corollas with one of three different goalkeepers. All
of the goalkeepers are of a Hispanic background.

Toyota is one of the more innovative companies targeting a Hispanic market using online entertainment.
This new game is an excellent source of support for the Corolla Hispanic TV and print executions using
the same theme "El amor por el Corolla puede lograr cosas increibles" (love for Corolla can make
incredible things happen.) According to data from auto researcher R.L. Polk and Co., the Corolla is the
best selling US passenger car among Hispanics. A lot of young Hispanics surf the net. More than 35% of
that demographic has a household income of more than $60,000. These are people that the Toyota
Motor company try to target effectively.

I think this new form of interactive media is an excellent idea from the people at Toyota. The internet is
being increasingly popular, especially among a younger population. This new form of advertising will
effectively reach the target market. It is a good way to allow current and prospective buyers to take a
closer look at Toyotas Spanish-language website.
Toyota Financial Services (TFS) recently undertook a major business transition programme to in-source
its back-office functions. This required that a large number of Toyota and Lexus retail finance contracts,
together with all their associated transaction data, be converted from an external IBM mainframe-based
system to an in-house system. The new system was based on the Lynx "Portfolio" software package
using Unix and Oracle technology. ATD consultants worked closely with TFS throughout the data
conversion project in the following roles:

• contributing to a feasibility study into the risks and benefits of undertaking a data conversion
from the outsourced external system, and presenting the findings of the study to the TFS management
board, which approved the data conversion project

• managing the data conversion project from the start, through to its successful conclusion 18
months later

• acting as the principal contacts with both the existing external system supplier (Black Horse) and
the suppliers of the new in-house system, for the resolution of technical and data-related issues

• support for the transition of the business to an in-house operation, particularly through the
provision of management information from the source data

• data analysis, data mapping, design of the migration procedures and development of migration
software

• unit and system testing of the data migration procedures and software, as well as support for
user acceptance testing

• development of procedures for both the financial and non-financial reconciliation of the data
conversion.

The director of the transition programme was Blair Pollock, TFS' General Manager, Business .

Toyota's Global Marketing Strategies

Americans loves big houses and big cars and that's why main players in car making industry (US based)
such as GM, Ford and Chrysler were manufacturing big cars with high fuel consumptions. On the other
hand the Japanese automakers are doing fine with the boosting market share in US as climbing oil prices
make fuel efficient models such as Toyota Corolla and Honda Civic increasingly attractive. With the lead
of Toyota, Japanese companies started to provide economy cars with basic needs of the driver in order
to reach firstly to middle class, because the middle class is the majority in the social hierarchy.

Today, Toyota is recognised not only from middle class, it has loyalty from every segments of the society
in all around the world. One of the reason is, Toyota is offering products to all types of market. Lexus for
luxury choice, Matrix for youngsters, Prius for family car, Trucks for mainly for US and 4 x 4 for
adventurers and many more. The main similarity of these cars is reliability. Toyota have built up great
loyalty with its customers by offering them moderate price cars with high tech developments such as
ABS brake systems, side-impact and head-curtain air bags, anti-skid control; shortly any technological
development that car manufacturers are offering also addition with fuel efficient motors. Toyota is likely
to continue to get a big lift from the growing global interest in fuel efficiency. The sale of hybrid version
of Camry is getting a lot of interest in US.

Briefly Toyota is aiming cost effective productions with JIT system, which has lately started in China and
all around the world. Additionally the products which are offered are high tech developed with high
reliability with moderate pricing than its counterparts.

JIT – Just In Time

Toyota is the benchmark in manufacturing and product development in automobile industry. The early
adoption of JIT principles by Toyota seemed to have helped the company to achieve significant success.
It helped the company respond quickly to changing customer needs and offer high quality products at
low costs, thus increasing customer satisfaction. JIT system is Toyota's greatest asset in global market
competition that other leading automakers like Mercedes-Benz, Honda and Chrysler excelled in
advanced engineering techniques, engine technology and styling, they did not match Toyota in
efficiency, productivity and quality.

JIT was used not only in manufacturing but also in product development, supplier relations and
distribution. Despite imitating Toyota's JIT for many years, no other automaker in the world had been
able to make their production systems and processes as efficient as Toyota had done.

The beginning of the system goes to late 30`s when Kiichiro Toyoda (the founder of Toyota) devised a
system wherein each process in the assembly line of production would produce only the number of
parts needed at the next step on the production line, which made logistics management easier as
material was procured according to consumption.

This system was referred to as Just-in-Time (JIT) within the Toyota Group. The JIT production was
defined as 'producing only necessary units in a necessary quantity at a necessary time resulting in
decreased excess inventories and excess workforce, thereby increasing productivity.'
Lean Production

The famous Lean production techniques were originally developed by Toyota as a route to cost-effective
mass-customisation. The key principles include cutting waste in all parts of the value chain and giving
every worker the right to stop the production line when he or she finds a mistake. Rather than
reworking individual cars, Toyota workers are allowed to stop production and work together to fix the
underlying problem. Toyota created a value chain of linked suppliers, all of whom have a clear stake in
making the company more successful and they all continue to enjoy the rewards of the greater
efficiencies brought about by Lean production system.

PR – PUBLIC RELATIONS

Go Green, Go Green

Toyota Motor Corporation, Japan's number one carmaker, has a driving ambition to become greener.
The company makes a hybrid-powered (gas and electric) sedan -- the Prius -- that is being snap up in US
and European markets. Its gas-powered cars, pickups, minivans, and SUVs include such models as
Camry, Corolla, 4Runner, Land Cruiser, Sienna, the luxury Lexus line, the new Scion brand, and a full-
sized pickup truck, the V-8 Tundra.

"Until we find another planet earth that seems like a pretty good solution"

This advertisement message released when Toyota first introduced its hybrid cars. Toyota significantly
aiming to attract their potential buyers by offering higher technology, the Prius hybrid-electric car, with
cleaner emissions, which results greener company. On the other hand there are some mixed images on
people mind. According to an article from Business Week (28.10.06) Toyota has increased its
investments on truck factory in US and Lexus, luxury model, sales has boost up. In other words, Toyota is
just as responsible in many ways as Ford, General Motors, and Chrysler when it comes to pollution and
burning up gasoline. Its total fuel-economy performance is still strong, but has dropped as the company
has sold more trucks. Toyota is not just building its new image to be environmentally friendly. The
company wants to market the hybrid models as powerful cars in the market share as its other models
that get fairly good mileage. With today's gas prices, the marketing strategy seems very smart but it can
not be accepted as it is a green company.
F1 Heats up

Toyota entered F1 in 2002 season with the first race in Australia in order to be more competitive against
its rival competitors on car manufacturing industry. Until that day Toyota was manufacturing some fast
cars but it was mostly known as economical car producer. The company signed its name as the fastest
car contender in the most elegant, respectful and followed car racing competition. Maybe there has not
been achieved so many success from the F1 Toyota team but the purpose of entering every race not
only wining the titles. It is also representing the name of Toyota in one of the most prestigious motor
racing event.

It's a Goooooooooool

Toyota also signed its name on one of the great football stadium in Japan, which has finished in 2001.
Though its capacity, at 45,000, is slightly less than some of the other grounds in Japan, which were used
for the World Cup 2002. It was a misfortune that this facility lost out its chance to host matches because
of a smaller capacity. Again sponsoring in a football stadium aimed to create an image of supporting
sports, healthy life and with its design it is reflecting an image of high tech car company can also build a
high tech stadium as a monument for Japanese nation. The upsetting side is if they have designed for
couple thousand seats more, they might also reach other nations minds during the World cup series.

New Marketing Tools

"Some marketers have worked to make their brand messages so enjoyable that consumers might see
them as entertainment instead of an intrusion." (Global Brands 2005) For instance, Toyota is not
spending its budget for dull and bulk advertisements on TV in order to persuade its target market, it is
trying to create a strong brand image by doing reality show "The Contender" rather than just lending
support during commercial breaks. According to Global Brands 2005, Toyota, "whose brand value rose
10%, paid $16 million to have its vehicles be part of the storyline on NBC reality show The Contender,
about small-time boxers competing for a nationally televised bout, The grand prize: a million dollars and
a Toyota truck." On the other hand rival Nissan has increased its sales up 13% by parking Titan pickups in
front of houses in hit ABC show Desperate Housewives. These approaches have seen in the past, which
have worked for its purpose. Aston Martin and Omega in James Bond, Coca Cola and Mc Donald's in
World Cup football competitions and many more appeared in special events or occasions in order to
increase public awareness about their products.

Growing Negative PR

Every story is not supporting Toyota's success. Toyota is facing a sexual harassment lawsuit in the U.S.
filed against Hidetaka Otaka, who has since stepped down as the president and chief executive of
Toyota's U.S. unit. In May, the company's U.S. chief Hideaki Otaka became front-page news after his
former executive assistant Sayaka Kobayashi launched a $196 million sexual harassment lawsuit against
him. (BusinessWeek.com, 20/07/06, Troubles Can't Stop Toyota's Growth) Hideaki Otaka denies the
allegations.

Then, in June 2006 Toyota has faced its own troubles, including increasing numbers of recalls partially
due to its efforts to cut costs by using the same parts across different models. Toyota announced it was
recalling 986,000 cars, including 170,000 Prius hybrids sold in the U.S. due to a faulty steering
component (Business Week 19.07.2006, The Most Recalled Cars 2006). Afterwards just after Nissan and
Renault began seeking alliance talks with GM, police in Japan filed a complaint against three Toyota
executives, accusing them of delaying the recall of faulty Hilux SUV models for eight years after
discovering a problem with defective relay rods in 1996. Also Japanese authorities have launched a
criminal investigation into three Toyota officials suspected of failing to do anything about a faulty
steering part, which may have caused a 2004 head-on accident that injured five people.

Despite public relations setbacks Toyota is controlling majority of the market in the U.S., Toyota's
relentless grabbing of the Big Three's market share, if anything, is intensifying. In the first half of 2006,
Toyota sales were up 9.8% compared to a year ago. That compares to declines of 12% at GM, 3.9% at
Ford, and 5.7% at Nissan. (Business Week – 19.07.06)
TOYOTA AS A BRAND:

The positioning of a brand is done keeping in mind where the company wants the people to see the
brand and where exactly do they want the brand to go. The positioning is an important part of the
Global Vision of the company.

Toyota’s Brand Communication talks about “Moving Forward”

This tagline embodies the spirit of constant innovation on the part of Toyota. It lends the associations of
quality and technological capability to the brand.

In India Toyota has a tagline “Quality Revolution” which signifies unmatched quality.

Toyota Brand Positioning:

• Majestic

• Quality

• Commitment to improving society

• Innovation in Technology

Toyota Brand Image:

People associate Toyota with:

• Quality

• Value for money

• Ecofriendly

The reasons for its success could be attributed to the following factors:

• Successful brand - Toyota has developed a trusted brand based on quality, good performance and
for being environmentally friendly.

• Innovation - Toyota is at the forefront of car manufacturing innovation. It was the first car
manufacturer to embrace lean manufacturing (known as Toyota Production System) which is a faster,
more efficient process which leads to less waste compared to the traditional batch and queue method
of manufacturing. It also applied JIT (Just in Time manufacturing) and smart automation. Toyota has
moved to a global manufacturing model. It successfully localizes the production to cut costs.

• Product Development - Key to the success in the car market is new models, which stimulate
demand and loyalty to the Toyota brand. Toyota has reputation for producing cars that are greener,
more fuel efficient, and of good performance. Toyota has sought to meet government requirements (for
reducing the impact on the environment), economic changes (as prices of fuel - oil continues to rise)
through the development of hybrid fuels. Toyota was the first car manufacturer to market hybrid (gas
and electric) fuel, with the launch of Prius model, ahead of competitors.

• Market Focused Strategy - Toyota has different strategies for different markets Eg: In the
developing Asian markets, it relies on affordable cars and Multi Utility vehicles. Whereas, in a market
like North America, new product launches have been key as innovation is a motivating factor for people
to buy products and for the company to stay ahead of its competition. The European Market, on the
other hand is heavily dependent on Integrated Manufacturing and Marketing.

• It successfully created iconic independent brands such as the Corolla, Camry and Land Cruiser; and
innovated them in order to maintain their brand equity.

• It has also created successful brand extensions such as Lexus in order to widen its portfolio

Toyota’s Brand positioning of quality is reinforced by the long list of brand surveys and quality awards it
has received the world over:

The J.D Power and Associates Quality Survey 2009:

The results showed Toyota’s dominance, with 10 autos rated as the best in 18 different vehicle
categories of the survey. Toyota had the least problems per hundred vehicles and ranked higher than
GM and Ford.

TOYOTA BRAND PORFOLIO ANALYSIS

Toyota’s Product Portfolio: India

  Toyota Corolla
 Toyota Camry
 Toyota Innova

Toyota’s Product Portfolio: International

 Toyota Prius
 Toyota Land Cruiser
 Toyota Yaris
 Toyota Hilux

We will be focusing on the Indian brand portfolio of Toyota.

SEGMENTATION http://www.pakwheels.com/new-cars/pricelist

SEGMENT TOYOTA COMPETITORS

Segment1 ( Rs. 3-5 lakhs) No offering Maruti Alto
Entry level small car Tata Indica

Segment 2 (Rs 5-7 lakhs) No offering Maruti Swift

Premium hatchbacks Skoda Fabia

Segment 3 (Rs 7-10 lakhs) Toyota Corolla Honda Civic

Compact sedans Chevrolet Optra

Segment 4(Rs 15-20 lakhs) Toyota Camry Honda Accord

Executive sedans Ford Mondeo

Segment 5(Rs 5-7 lakhs) Toyota Innova Chevrolet Tavera

Multi Purpose Vehicle Mahindra Scorpio

Segment 6(Rs 20 lakhs plus): No offering Mitsubishi Pajero

SUV/ Pick up truck Mercedes M class

From the above table, it is clear that Toyota does not have any offering in the small car either in
segment 1 or 2 as these are the fastest growing segments in the Indian market. That is where the
growth and volumes would come from. Also, it should avoid introducing high end luxury models in India
under brand Toyota, as Toyota is worldwide known for value-for-money and not ultra luxury.
BRAND ARCHITECTURE:

Brand architecture is the structure of brands within an organizational entity. It is the way in which the
brands within a company’s portfolio are related to, and differentiated from, one another. The
architecture should define the different leagues of branding within the organization; how the corporate
brand and sub-brands relate to and support each other; and how the sub-brands reflect or reinforce the
core purpose of the corporate brand to which they belong.

TOYOTA COROLLA

Toyota Corolla follows Endorser Brand Architecture; here by looking at the rear view of the vehicle,
Mother Brand is on level with Daughter Brand i.e. Corolla. Now it can be easily communicated that
Toyota wishes to endorse this Brand as its reputation gets transferred to Brand Corolla. Toyota is known
for quality and has established this reputation all across globe. Hence, Endorsement Brand Strategy is
best suitable for Corolla.

TOYOTA CAMRY

Individual branding, also called individual product branding or multi-branding, is the marketing strategy
of giving each product in a portfolio its own unique brand name. This contrasts with branding,
corporate, and umbrella branding in which the products in a product line are given a single overarching
brand name. The advantage of individual branding is that each product has an image and identity that is
unique. This facilitates the positioning of each product, by allowing a firm to position its brands
differently.

Toyota Camry is having Individual Product Branding as we see the rear side of the vehicle, we will find
Camry written on the left hand side, where as the mother brand Toyota is not there, Camry comes under
Luxury Brand and having its own brand Identity. Hence, Individual Product Branding is best in case of
Camry.

TOYOTA INNOVA

Toyota Innova follows endorsement Brand strategy, where in Mother Brand is written on the side and
daughter brand is written at the rear end of the vehicle.
Now it can be easily communicated that Toyota wishes to endorse this Brand as its reputation gets
transferred to Brand Corolla. Toyota is known for quality and has established this reputation all across
globe. Hence, Endorsement Brand Strategy is best suitable for Innova.

BRAND POSITIONING AND IMAGE

TOYOTA COROLLA

The Corolla is a line of compact/ sub compact cars manufactured by Toyota. For the Pakistani market, it
is positioned in the B+/ C segment. It has become very popular throughout the world since the
nameplate was first introduced in 1966. In 1997, the Corolla became the best selling nameplate in the
world, with over 35 million sold as of 2007. Over the past 40 years, one Corolla car has been sold on
average every 40 seconds. The series has undergone several major redesigns. The Corolla is currently in
its 10th generation.

BRAND PERSONALITY:

The key behavioral traits that define the Corolla’s personality are:

• Safe

• Dependable

• Elegant

BRAND POSITIONING:

The Corolla is positioned as the best compact sedan. In the Indian market, it is positioned as a safe,
advanced and spacious car with a superior driving experience.

BRAND IMAGE:

In the dipstick study that we conducted, its brand image was found to be:

• A very reliable car that is an all rounder

• A low maintainance and it for a hassle free owner experience

• A value for money with its sufficient power and decent looks

• It is image is that of being a bit unexciting and plain

TOYOTA CAMRY

Toyota Camry as a brand has been around for more than 28 years and has undergone six generation
changes. It has grown from a basic family car into a more sporty, powerful and luxurious one over the
generations. It is the largest selling sedan in the US and it retains its unique proposition of technological
innovation along with affordable luxury.

BRAND PERSONALITY:

The key behavioral traits that define the Camry’s personality are:

• Stylish

• Powerful

• Sophisticated

• Plush

BRAND POSITIONING:

The Toyota Camry as a brand has been around for more than 28 years and had undergone 6 generation
changes. It is positioned as a technologically advanced, powerful and stylish luxury sedan in the Pakistani
market. It’s positioning in the luxury segment has a good value proposition wherein it is priced much
below competitors like Mercedes and BMW in the same segment and on par with models from Honda
and Ford.

BRAND IMAGE:

In the dipstick study that we conducted, its brand image was found to be:

• Performance Luxury sedan

• Style statement

• Technology packed

Here, we see that the brand positioning and image match to a great extent.

TOYOTA INNOVA
Toyota Innova is a Multi utility vehicle (MUV) manufactured by Toyota for the Asian market. It was
launched in India in March 2005 as a replacement for Toyota Qualis. INNOVA is one of 5-IMV models
that have been designed as part of the IMV (Innovative International Multi-purpose Vehicle) project.
Toyota Innova sales account for around 43% of the total MPV vehicles sold in June 2005

BRAND PERSONALITY:

The key behavioural traits that define the Camry’s personality are:

• Versatile

• Sturdy –Go Anywhere

• Trendy

BRAND POSITIONING:

The basic positioning of Innova is as a getaway vehicle that is spacious, trendy and up market. It is
positioned as a vehicle for all purposes. Amir Khan has been roped in to endorse this brand and this is a
good move as the car talks about different roles to play and being good in every role, which is Amir
Khan’s forte as an actor. The brand uses the tagline “All you desire” and the ads are also catchy. Innova
has tried to distance itself from the Qualis, its successful predecessor which was popular as a Taxi by
playing the refinement card.

BRAND IMAGE:

In the dipstick study that we conducted, its brand image was found to be:

• Spacious and sturdy vehicle

• Car level comfort and refinement

• Multi purpose family vehicle

• Tourist vehicle / Taxi

Here we see that the brand image matches the positioning in three aspects. The only mismatch is that
because of its seating capacity and value for money, it’s use as a taxi is rising which is changing brand
image a bit.

• COMPITITORS ANALYSIS
Toyota’s main competitors in India are General Motors, Honda and Ford. There are a large number of
offerings in every segment in which Toyota has a presence. At a time when the domestic car market was
growing at an average of 14 per cent per annum, the Indian subsidiary of the world’s largest car maker
had been consistently losing market share — from 4.5 per cent in 2004 to 3.6 per cent in 2007 and 3.4
per cent in 2008. Toyota has set a target of capturing 10% of the Indian market share by 2015. Honda,
General Motors (GM) and Volkswagen have also set their target in the Indian market at 10 per cent.
Whether Toyota ever gets there will actually depend on how smartly it can avoid repeating the mistakes
it made in the decade when it was learning about the market.

Both the Corolla Altis and the Innova, being value cars in South Asian markets, are selling at a premium
here because only 56 per cent of the manufacturing cost of these cars is met by local supplies. But that
is a specious argument since rival Honda has similar local content. Toyota in India experimented so
heavily with its price positioning that it lost track of its objectives. Somewhere along the way, the
world’s most trusted value-for-money brand in cars repositioned itself as a premium brand in India —
and failed.

FOLLOWING IS A LIST OF BRANDS AVAILABLE IN INDIA AT VARIOUS PRICE RANGES.

Under Rs. 3 Lakhs

• Maruti 800, Maruti Alto, Omni

• Reva

• Tata Nano

Rs. 3-5 Lakhs

• Ambassador

• Chevrolet Aveo U-VA, Chevrolet Spark, Chevrolet Opel Corsa

• Fiat Palio

• Ford Fiesta, Ford Icon

• Hyundai Santro, Hyundai i10, Hyundai Getz

• Maruti Zen, Maruti Wagon R, Maruti Versa, Maruti Esteem, Maruti Gypsy, Maruti Suzuki A-Star,
Maruti Suzuki Zen Estilo, Maruti Suzuki Swift, Maruti Suzuki Ritz New, Mahindra Logan

• Tata Indigo XL, Indigo Marina

• Tata Indica, Tata Indigo CS

Rs. 5-10 Lakhs

• Chevrolet Swing, Chevrolet Aveo, Chevrolet Tavera, Chevrolet Optra Magnum

• Fiat Linea, Fiat Adventure, Fiat Grande Punto, Ford Fusion

• Hyundai Accent, Hyundai Elantra, Hyundai i20, Hyundai Verna, Hyundai Sonata Embera

• Honda City ZX, Honda Jazz New

• Maruti Baleno, Maruti Suzuki Sx4, Maruti Suzuki Swift Dzire

• Mahindra Scorpio, Mahindra Bolero, Mahindra Xylo

• Mitsubishi Lancer, Mitsubishi Cedia

• Toyota Innova

• Tata Sumo Victa, Tata Sumo Grande, Tata Safari

• Skoda Fabia

Rs. 10-15 Lakhs

• Chevrolet Forester

• Ford Mondeo, Ford Endeavour, Ford Focus

• Honda Civic

• Skoda Octavia & Combi

• Toyota Corolla, Toyota Corolla Altis

• Tata Indicruz New

• Volkswagen Jetta

Rs. 15-30 Lakh

• Audi A4

• Chevrolet Captiva

• Honda CR-V, Honda CRV 2008, Honda Civic Hybrid, Honda Accord, Hyundai Santa Fe New

• Maruti Suzuki Grand Vitara, Mitsubishi Pajero, Mercedes C Class

• New Skoda Superb New, Skoda Laura

• Opel Vectra

• Toyota Camry, Toyota Fortuner New

• Ford Endeavour Thunder Plus, Terracan & Tucson

• Volkswagen Passat , Volkswagen Jetta

Rs. 30-90 Lakhs

• Audi A6, A8 & Audi TT, AUDI Q7

• BMW X5, 5 Series & 7 Series

• Mitsubishi Montero, Mercedes Benz S-Class, Mercedes E Class, S Class, SLK, SL & CLS-Class

• Porsche Boxster, Cayenne, 911 Carrera & Cayman S

• Toyota Prado

• Volvo Xc90, Volvo S80

Above Rs. 1 Crore

• AUDI R8

• Bentley Arnage, Bentley Continental GT & Flying Spur, Bentley Azure

• Maybach

• Rolls Royce Phantom

Currently, Toyota does not have any offering in the small car segment. It needs to now focus on the
small car segment (under Rs. 5 lakh) as this is the segment which is the fastest growing in the Indian
market. That is where the growth and volumes would come from. Also, it should avoid introducing high
end luxury models in India under brand Toyota, as Toyota is worldwide known for value-for-money and
not ultra luxury.

MAIN COMPETITORS FOR THREE OF TOYOTA’S OFFERINGS IN INDIA ARE:

Toyota Innova Corolla Camry

Tata Sumo/Safari

Mahindra Xylo/Scorpio

General Motors Chevrolet Tavera Chevrolet Optra

Skoda Octavia

Honda Civic Accord

VW Jetta Passat

Ford Focus (planned)Mondeo

Hyundai Sonata

Even as Toyota is expanding its capacity at the Bidadi facility from 77,000 units per annum to 147,000
units by 2011 to accommodate a small car, rivals Suzuki and Hyundai have already built capacities of
800,000 and 300,000 and created a strong foothold in India. Although it is banking heavily on the small
car, Toyota’s offering may hit the market after Honda, GM, Volkswagen and Ford — all of whom have
advanced considerably in their launch plans.

COMPETITOR POSITIONING

Toyota Brands Competitor Brands Competitor Positioning

Innova Tata Sumo Grande The low cost yet stylish, family utility vehicle.

Tata Safari The premium off-road SUV for people longing to break free from the frustrating
trappings of the rat race, to reclaim their lives. Big as a beast, 4 wheel drive to take on any terrain, no
sedan with its elegant contours, no small car with its tall boy design can credibly claim such an edgy
positioning.

Mahindra Scorpio/Xylo An MUV/SUV but positioned as a stylish family car

Chevrolet Tavera An MUV positioned as a comfortable family car, but mainly used as a
commercial vehicle.

Corolla Honda Civic A rolling showcase for Honda innovation and engineering expertise. It constantly
raises the bar that others have tried to achieve and consistently shows up on "Car of the Year," "Best of"
and "Top 10" lists. It is positioned as a luxury executive car.

Chevrolet OptraA powerful luxury car for the young, successful, upwardly mobile Indian professionals

Skoda Octavia The strongly built, powerful, driver’s car, positioned in the luxury segment.
Camry Honda Accord Grand size, sleek styling, combined with Honda’s engineering excellence; Accord
is counted as one of the most reliable cars. This makes it a tough competitor in the mid-size luxury
segment.

Hyundai Sonata Positioned as a premium sedan with luxurious features, but failed to make a mark as, in
India, Hyundai is still perceived as a low cost small car maker.

VW Passat Internationally VW is a mass market brand, but in India, it is positioned as a premium

brand, and Passat belongs to the prestigious luxury car segment dominated by BMW and Mercedes.

Ford Mondeo Ford, which uses a Source Branding formula, portrays Mondeo as a powerful, fun to
drive, sporty luxury car with superb handling.

• PRODUCT LIFE CYCLE

Toyota Innova and Prius are in Growth phase. Hence they require Investment and growth opportunities
are high for both of them, by looking at the position of Innova and Prius, it can be concluded that Prius
already started to move towards Cash Cow and hence its growth rate will be stagnant.

Where as in case of Innova , it requires investment and still time for it to move to become Cash Cow.

If we talk about Corolla and Camry, they themselves are established brand in the market and hence
require no expense for its sales. Even the Growth opportunities for both the brands are Limited. They
are in stagnant phase of the life cycle and thus generating Revenue for Toyota.

Brand equity is considered a key indicator of the state of health of a brand, and its monitoring is
believed to be an essential step in effective brand management (Aaker, 1991, 1992). Both researchers
(e.g. Shocker et al., 1994) and practitioners (e.g. Biel, 1992) have argued for the importance of
understanding the concept of brand equity. Country of origin is another important variable influencing
consumer perceptions of brands (Hulland, 1999) and brand images (Ahmed et al., 2002). In the present
study, consistent with the definition offered by Thakor and Katsanis (1997, pp. 79-80), country of origin
is defined as “the country in which the product is made”[1]. The impact of country of origin on
consumer perceptions or evaluations of products is called the “country of origin effect” (Samiee, 1994).
Researchers have suggested that country of origin effects may impact the equity of certain brands (e.g.
Thakor and Katsanis, 1997). For example, Aaker (1991) and Keller (1993) both argued that country of
origin could affect a brand's equity by generating secondary associations for the brand. Indeed, even a
foreign-sounding name is known to affect a brand's equity (Leclerc et al., 1994).

Increasingly, and for a variety of reasons, brands from one country are being made available to
consumers in other countries (Shocker et al., 1994). In such instances, international marketers need to
understand the sources of the equity of their brands. Some researchers have realized this and advocate
extending the international consumer research scope to include brand equity (Wang, 1996). For
example, measurement of brand equity across international boundaries is essential if brand managers
are “to manage and control brand equity effectively” (Shocker et al., 1994, p. 156).

There is prolific research in both the areas of country of origin effects and brand equity. However, brand
equity remains a complex phenomenon in the international context (Onkvisit and Shaw, 1989). Brand
equity has been conceptualized as a multidimensional construct (e.g. Aaker, 1991), and the impact of
country of origin on some of its components (e.g. perceived quality) has been widely researched in the
marketing literature (see Chao, 1998). However, no empirical research to date has evaluated how
country of origin may affect brand equity. This paper aims to fill this gap in the international context.
More specifically, this research aims to develop a better understanding of the effect of country of origin
on brand equity.

Background and justification for the present research

A better understanding of the linkages between brand equity and country of origin is important for a
number of reasons. For example, researchers have advocated that managers need to maintain the “core
essence of a brand” in their international branding decisions (de Chernatony et al., 1995). “The ‘essence’
of the brand is a single simple value, easily understood and valued by consumer” (Arnold, 1992, p. 17).
When brands are competing in the international arena, marketing managers should understand how to
maintain the core essence of their brand across international boundaries. Examining how country of
origin impacts brand equity and its associated dimensions (e.g. perceived quality, brand associations)
should reveal the means to protect or enhance the core essence of a brand.

The country of origin of a product is an important marketing element known to influence consumer
perceptions as well as behavior. An improved understanding of how country of origin information
influences brand equity is also valuable to marketing practitioners, for whom “quantification of brand
equity” and “identification of elements that are likely to impact changes in consumer behavior and lead
to changes in brand equity” are two important issues (Biel, 1993, p. 77).

The literature does not provide a satisfactory explanation for the factors influencing brand equity in the
international context. Despite exhaustive research on brand equity over the past few decades, the
marketing literature does not fully explain how a change in the country of origin of a brand would affect
its consumer-based equity. Neither is it clear whether the impact of country of origin on the consumer-
based equity of a brand would be product-category specific. The goal of this paper, therefore, is to
examine and elucidate the potential relationships between country of origin and consumer-based brand
equity. More specifically, the main objective of the present study is to identify empirically possible
differences in consumer-based brand equity, according to the country where the product is made.

Key variables and constructs

Consumer-based brand equity

In this paper, we conceptualize brand equity in accordance with Aaker (1991) and Keller (1993), using a
consumer (or marketing) perspective (as opposed to a financial one). Brand equity is therefore referred
to as consumer-based brand equity and defined as “the value consumers associate with a brand, as
reflected in the dimensions of brand awareness, brand associations, perceived quality and brand
loyalty”. This definition was adapted from Aaker (1991, p. 15). Aaker defined brand equity as a set of
assets (or liabilities), and found brand awareness, brand associations, perceived quality and brand
loyalty to be its four most important dimensions from a consumer perspective. Some empirical evidence
supports the notion that these four are distinct dimensions of consumer-based brand equity. As per
Aaker, we define brand awareness as “the ability of a potential buyer to recognize or recall that a brand
is a member of a certain product category. A link between product class and brand is involved” (p. 61).
We define a brand association as “anything linked to the memory of a brand” (Aaker, 1991, p. 109).
Perceived quality is defined as the “customer's perception of the overall quality or superiority of a
product or service with respect to its intended purpose relative to alternatives” in this study, as per
Aaker (1991, p. 85). According to Aaker, perceived quality is not just another brand association but an
association that is elevated to the status of a separate dimension of brand equity. However, whereas
Aaker treated brand loyalty as a behavioral dimension, we conceptualize it as an attitudinal dimension
and define it as “the tendency to be loyal to a focal brand, which is demonstrated by the intention to
buy the brand as a primary choice” (Yoo and Donthu, 2001, p. 3).

“Product category-country” associations

Consumers have associations toward entities such as products, places, brands and countries of origin.
These associations can have direction and strength. For example, Farquhar and Herr (1993) argued that
product category-brand associations can be bi-directional. That is, consumers may recall a product
category when they think of a brand name and they may recall a brand name when they think of a
product category. Product category-country associations, which refer to consumers' ability to evoke a
country when the product category is mentioned, are of interest when examining the relationships
between country of origin and consumer-based brand equity. Since consumers are known to associate
countries with certain product categories and vice versa (Terpstra and Sarathy, 2000), consumers'
“product category-country” associations appear to be bi-directional.

Conceptual development and hypotheses

In this study, country of origin and product category are the independent variables of interest.
Consumer-based brand equity is hypothesized as a four-dimensional construct, as shown in the large
rectangle in Figure 1. Each of the consumer-based brand equity dimensions is a dependent variable in
the framework expected to be affected by country of origin. Since the proposed model is being tested
for two product categories, product category is also included as an independent variable in the design so
that the effect of the country of origin variable could be teased out. Moreover, consumers' product
category-country associations are believed to moderate the effect of the country of origin on consumer-
based brand equity dimensions, as indicated by the dotted line in Figure 1.

Country of origin and consumer-based brand equity

The associative network memory model (Anderson, 1993) provides a good basis for explaining the
relationships between country-of-origin and consumer-based brand equity. Both Aaker (1991) and Keller
(1993) used the associative network memory model to explain consumers' brand associations and the
notion of brand equity.

The country of origin of a product is an extrinsic cue (Thorelli et al., 1989), which, similar to brand name,
is known to influence consumers' perceptions and to lead consumers to cognitive elaboration (Hong and
Wyer, 1989). Country of origin is known to lead to associations in the minds of consumers (Aaker, 1991;
Keller, 1993). For example, consumers might associate the countries France and Spain with the
intangible attributes “reliability” and “durability”, to a different degree. These country of origin
associations of consumers could therefore influence the consumer-based equity dimensions of a brand
from a specific country.

Researchers have argued that country of origin effects may be part of the brand equity of certain names
(Shocker et al., 1994, p. 150). For brands offered in the international arena, such as Japanese brands
available to consumers in Australia, consumer-based equity should be influenced by the very fact that
the brand's country of origin is Japan. Consumer perceptions of Japanese brands have improved over
the years (Kamins and Nagashima, 1995). Furthermore, brand names such as Sony or Toyota clearly
signal their country of origin to consumers. Such origin cues are similarly entrenched within many well-
known brand names (Phau and Prendergast, 1999).

Conversely, an inferior country of origin could tarnish a brand name (Thakor and Katsanis, 1997). That is,
if the country of origin of a brand were to change from a country towards which consumers have
favorable associations (e.g. the USA), to a country towards which consumers have less favorable
associations (e.g. Mexico), the brand names in question could be tarnished and the consumer-based
equity of these brands erodes. For example, Johansson and Nebenzahl (1986) found that Japanese
brands of automobiles (Honda/Mazda) made in Korea/Mexico/The Philippines lost their attractiveness
compared to when they were made in Japan. Similarly, Nebenzahl and Jaffe (1996) found that Sony (in
the product category VCRs) suffered erosion in its brand image when made in countries such as the
former USSR/Poland/Hungary. This discussion leads to the following general hypothesis:H1. In a given
product category, the consumer-based equity of a brand varies significantly according to the country of
origin of the brand. Given that consumer-based brand equity is conceptualized as a four-dimensional
construct, this general hypothesis can be subdivided into more micro-related predictions. However, no
hypothesis was made in the present study regarding the impact of the country of origin on the brand
awareness component of consumer-based brand equity, since it would be difficult to manipulate
experimentally consumers' mindset with respect to brand awareness. For example, asking consumers if
they were aware of the brand Honda (without providing the country of origin), to test for their brand
awareness level and then to respond to the hypothetical case of a product carrying the brand Honda but
made in the USA (or some other country) would create demand artefacts. In addition, consumers are
known to associate a brand with its home country even when the country of origin information is not
made available to them.

On the other hand, a brand could generate and leverage secondary associations from an array of
entities. For example, people, places and events could be linked to a brand (Keller, 1993) and generate
secondary associations. According to Aaker (1991), country of origin associations are one such type of
consumers' brand associations. Similarly, Keller (1993) argued that consumers' country of origin
associations serve as secondary associations to their brand associations. Brand associations are
supposed to contribute to brand equity when consumers are aware of the brand and hold “strong,
favorable and unique brand associations” in their minds (Keller, 1999, p. 2). Rossiter and Percy (1987)
suggested that secondary associations should be emphasized in marketing communications based upon
consumers' awareness, beliefs and attitudes of the concerned people, places or events. The inference is
that favorable secondary associations are beneficial to the brands. Keller (1993) also argued that
favorable associations contribute to the equity of a brand. If consumers' country of origin associations
serve as secondary associations, they should influence brand associations, and therefore brand equity,
leading to the following hypothesis:H1a. In a given product category, brand associations vary
significantly according to the country of origin of the brand. A number of researchers have established
that country of origin influences perception of quality of products (e.g. Heslop et al., 1987; Kaynak and
Cavusgil, 1983). Perceived quality (Zeithaml, 1988) is a key dimension of brand equity (Aaker, 1991),
believed to enhance the value of the brand by providing consumers with a reason to buy. We
hypothesize that country of origin information affects the perceived quality of products. That is,
consumers are likely to hold favorable perceptions of the quality of a brand when the brand is known to
originate from countries with a strong association with the product category compared to when the
brand is known to originate from countries with weaker association with the product category. We
expect that the perceived quality levels of a brand will vary by the country of origin of the brand. That is,
the perceived quality level of Ericsson made in Sweden is likely to be higher than the perceived quality
level of Ericsson made in Mexico or Hungary, for the product category “mobile phones”. Furthermore,
consumers' perception of the quality of products is known to be product-category specific (Kaynak and
Cavusgil, 1983). Hence, our third hypothesis can be stated as follows:H1b. In a given product category,
perceived quality varies significantly according to the country of origin of the brand. The extant
literature does not provide much insight into the relationship between country of origin and brand
loyalty. However, we argue that country of origin could affect the brand loyalty component of a brand's
equity. Brand loyalty in the present study is defined as consumers' intention to buy a brand as a primary
choice. Consumers may prefer a brand based partly on its country of origin. This might be because
consumers have experienced, or are convinced about, either the features or attributes or benefits
offered by the brand (e.g. Nike) originating from the particular country (USA). Therefore, it can be
argued that, similar to brand loyalty, consumers may exhibit country loyalty. Moreover, country of origin
effects in one product category are known to transfer to new product categories offered from the same
country (Agarwal and Sikri, 1996). It is hypothesized, therefore, that country of origin affects consumers'
loyalty towards a brand.H1c. In a given product category, brand loyalty varies significantly according to
the country of origin of the brand. Furthermore, consumers' product category-country associations are
believed to moderate the effect of the country of origin on consumer-based brand equity dimensions.
For example, the consumer-based equity of a brand made in a country with strong product category-
country associations (e.g. car/Germany) is likely to be substantially higher than that for the same brand
made in a country with weaker product category-country associations (e.g. car/Mexico), in cases where
consumers perceive substantive differences between the two countries in terms of their product
category-country associations. The empirical study designed to examine the proposed model is
described in the next section of this paper.

Method

Research design and procedures

A cross-sectional mall intercept survey was used to collect the data. A total of 672 responses was
collected through systematic sampling from a busy shopping mall in an Australian state capital city. The
questionnaire used as the data collection instrument included an experimental design. A doubly
multivariate design was employed for examining the differences in consumer-based brand equity across
three different countries of origin. The model was tested using two product categories: cars and
televisions. That is, country of origin (three levels) and product category (two levels) were the two
between-subjects factors and brand name (three levels) was the within-subjects factor: the three levels
were nested within each product category (i.e. Toyota, Mitsubishi and Suzuki were nested within cars;
Sony, Toshiba and Hitachi were nested within televisions). The unit of analysis was the individual
consumer.

Since country-of-origin perceptions are known to vary by consumers' home country, we needed
respondents who were born in Australia or who had lived in Australia for a considerable period of time.
The population was defined as “people in the age group of 18 to 70 who were born in Australia or who
have stayed in Australia for more than one year and have used products in the relevant category
(televisions or cars)”. All respondents had used products in the category they were exposed to
(televisions or cars). The majority of the sample (92.5 percent) had lived in Australia for five or more
years and met this condition, with more than 82 percent of the sample living in Australia for 15 or more
years.

Of the 672 completed questionnaires obtained, 75 were found to be incomplete and consequently
discarded. Of the remaining 597 questionnaires, a further 58 were from respondents not born in
Australia or who had not lived in Australia for at least one year. These respondents were also eliminated
from the analysis, yielding a final sample of 539.

Data collection instrument and measures

The survey questionnaire included three sections. Section one of the questionnaire comprised two
questions, aimed at capturing respondents' product category-country associations. Respondents were
asked to list the names of (a maximum of six) countries that came to their mind when they thought of a
given product category (cars or televisions). Respondents had the option to say that no countries came
to their mind when thinking of the given product category. The order in which the respondents listed
the countries was used as the basis for computing a product category-country association (PCCA) rating
for each of the countries mentioned by the respondents. The countries were then ranked, based on
their PCCA rating.

Section two of the questionnaire included items measuring various dimensions of consumer-based
brand equity, namely brand awareness, brand associations, perceived quality and brand loyalty (see the
Appendix). Measures for brand equity used in the present study were compiled from the literature (e.g.
Aaker, 1991, 1996, 1997; Yoo et al., 2000; Yoo and Donthu, 2001). For example, aided recall and unaided
recall were used as measures for brand awareness. Brand personality (e.g. sincerity and excitement) and
organizational associations (e.g. liking and trust) were used as the measures for brand associations. That
is, one of the questions required respondents to rate the statement “I trust brand X”, on a scale of 1 to
11. Measures for perceived quality were adapted from Aaker (1991). For example, respondents were
asked to rate the statement “Brand X is reliable”, on a scale of 1 to 11. Measures for attitudinal brand
loyalty were also adapted from the literature. For example, respondents were asked to rate the
statement “Brand X would be my first choice” on a scale of 1 to 11. These measures had been
empirically tested and employed in earlier studies (e.g. Cobb-Walgren et al., 1995; Yoo and Donthu,
2001). Each item had the verbal anchors “strongly disagree” and “strongly agree” for the 1 and 11 scale
points.

Demographic questions (e.g. respondent age, gender, country of birth and length of stay in Australia)
were included in section three of the questionnaire. To improve readability and understanding, the
questionnaire was pre-tested using a judgment sample of actual consumers, and was subsequently
revised. Three different versions of the questionnaire (one for each of the three countries) were
designed for each of the product categories included in the study. For a given product category,
questions in all sections were identical in each of the three versions of the questionnaire, except for the
section on brand equity. Each respondent completed only one version of the questionnaire.

Dependent variables

The four consumer-based brand equity dimensions served as the dependent variables. Confirmatory
factor analysis (CFA), used to establish the dimensionality of consumer-based brand equity, supported
the hypothesized four-dimensional model[2]. The multi-dimensional consumer-based brand equity
construct exhibited convergent, discriminant and construct validity. The parameter estimates of the
measurement model showed that all indicator variables loaded their hypothesized factors (e.g.
consumer-based brand equity dimensions) in a statistically significant manner .

CONCLUSION AND RECOMMENDATIONS

The era of building brands namely through mass media advertising is over. The predominant thinking of
the world's most successful brand builders these days is not so much the old game of reach (how many
consumers see my ad) and frequency (how often do they see it), but rather finding ways to get
consumers to invite brands into their lives. The mass media won't disappear as a tool. But smart
companies see the game today as making bold statements in design and wooing consumers by
integrating messages so closely into entertainment that the two are all but indistinguishable.

Non Automotive Activities:

Aerospace

Toyota is a minority shareholder in Mitsubishi Aircraft Corporation, having invested

US$67.2 million in the new venture which will produce the Mitsubishi Regional Jet, slated for
first deliveries in 2013. Toyota has also studied participation in the general aviation market and
contracted with Scaled Composites to produce a proof-of-concept aircraft, the TAA-1 in 2002.

Philanthropy

The Toyota Municipal Museum of Art in Aichi, sponsored by the manufacturer. Toyota is
supporter of the Toyota Family Literacy Program along with National Center for Family
Literacy, helping low-income community members for education, United Negro College Fund
(40 annual scholarships), National Underground Railroad Freedom Center (US$1 million)
among others. Toyota created the Toyota USA Foundation.

Higher education
Toyota established the Toyota Technological Institute in 1981, as Sakichi Toyoda had planned to
establish a university as soon as he and Toyota became successful. Toyota Technological
Institute founded the Toyota Technological Institute at Chicago in 2003. Toyota is supporter of
the "Toyota Driving Expectations Program," "Toyota Youth for Understanding Summer
Exchange Scholarship Program," "Toyota International Teacher Program," "Toyota
TAPESTRY," "Toyota Community Scholars" (scholarship for high school students), "United
States Hispanic Chamber of Commerce Internship Program," and "Toyota Funded Scholarship."
It has contributed to a number of local education and scholarship programs for the University of
Kentucky, Indiana, and others.

Robotics

In 2004, Toyota showcased its trumpet-playing robot. Toyota has been developing multitask
robots destined for elderly care, manufacturing, and entertainment. A specific example of
Toyota's involvement in robotics for the elderly is the Brain Machine Interface. Designed for use
with wheelchairs, it "allows a person to control an electric wheelchair accurately, almost in real-
time", with his mind. The thought controls allow the wheelchair to go left, right and forward with
a delay between thought and movement of just 125 milliseconds.

Finance

Toyota Financial Services Corporation provides financing to Toyota customers.

Agricultural biotechnology

Toyota invests in several small start-up businesses and partnerships in biotechnology, including:

 P.T. Toyota Bio Indonesia in Lampung, Indonesia

 Australian Afforestation Pty. Ltd. in Western Australia and Southern Australia
 Toyota Floritech Co., Ltd. in Rokkasho-Mura, Kamikita District, Aomori Prefecture
 Sichuan Toyota Nitan Development Co., Ltd. in Sichuan, China
 Toyota Roof Garden Corporation in Miyoshi-Cho, Aichi Prefecture
CSR INITIATIVES

Environment:

Information concerning activities related to the environment including the development of

environmentally considerate vehicles and environmental preservation activities to combat global
warming.

 Basic Stance on the Environment

 Global Warming Prevention Initiatives
 Environmentally Considerate Automobile Manufacturing
 "Sustainable Plant" Activities
 Automobile Recycling
 Environmental Conservation Initiatives

Triffic Safety:

Toyota’s comprehensive activities seeking the complete elimination of traffic casualties through
the development of even safer vehicles, education of drivers and pedestrians, and proposals for
the creation of safe traffic environments.

 Initiatives designed to educate people on traffic safety

 Pursuing a higher level of vehicle safety
 Participating in the creation of a safe traffic environment

Social Contribution:

Toyota conducts vigorous activities tailored to the needs of society using its resources, such as
the technology and expertise it possesses in the areas of the environment, traffic safety,
education, the arts, culture, and community care.

 Environment
 Traffic Safety
 Human Resources Development
 Arts and Culture
  Harmonious Society
 Volunteer Activities

FINANCIALS

Total Sales by Region:

Revenue ¥ 18.9 trillion (FY2010)

Operating income ¥ 147.5 billion (FY2010)

Net income ¥ 209.4 billion (FY2010)

Total assets ¥ 30.3 trillion (FY2010)

Total equity ¥ 10.3 trillion (FY2010)