Consumers are the end-users of a product or service. Before consumers buy any product they are bound to make decisions regarding that particular purchase. This psychological process that end-users of products and services go through in an attempt to identify their needs, identify ways of solving them, and eventually make purchasing decisions is called consumer behavior. Marketers utilize this behavior in coming up with better marketing strategies that will give them high revenues and also brand loyalty. This paper briefly describes the consumer behavior used by Toyota to serve its clients in a better way.
The world has different kinds of people who display just as many and different purchasing patterns. These different patterns in the buying behavior of consumers should be understood very clearly by those who are tasked with carrying out market research, the creation of products, and the overall strategy. Marketing of products and services involves carrying out market research, selling products and services to consumers, and coming up with ways of promoting products or services to increase sales. Proper marketing enables companies to put in place rigid customer relationships and also create product value for their customers and themselves. Marketing professionals usually look into the things that compel end users into buying a product or a service and incorporate them into their company’s marketing strategy (Yankelovich & Meer 1).
Adjustment of the purchasing behavior is largely determined by the needs of individuals. Research has also found out that, decisions to purchase a product or service are influenced by personal emotions, aims, and the prevailing social situations. According to Maslow, Hoyer & Macinnis, individuals usually buy to satisfy all types of needs, which they identified as “Physical or biological, for safety or security, for love and affiliation, for prestige or esteem, or self-fulfillment” (51). People concerned with status will go for prestigious products. Prestigious products work better for the marketer because they sell better when highly-priced. In some cases people associate their needs with products in a certain class; for example, those who want to achieve in life will be seen performing hard tasks that need skills and talent. People with a nurturing or loving character will be seen buying products associated with parenthood. Marketing professionals also use personality traits to predict trends in the satisfaction of consumer needs. Those who are seen to be pragmatic will be expected to buy products that are useful or practical; they, therefore, go for quality and durability but not quantity or physical appearance. Those who like aesthetics will go for things that bring out beauty (Maslow, Hoyer & Macinnis 51).
Intellectually oriented consumers will be expected to be more critical in the selection of their products. They will on most occasions make comparisons between similar products before deciding on which to buy. Those who are associated with power in the social ladders will buy products that exhibit that power and social position. Consumers who are seen to be more social should be given products that appeal to their character, those that depict empathy and humility. Consumer needs will also vary depending on how they choose whose need is to be satisfied during the purchasing process. The choice will be different if an individual is satisfying his own needs, it will be different if the said individual depends on other people’s opinion to choose what to buy. This presents cases where individuals will buy products just because they are new in the market but not because it is what they want. Such situations also affect the way marketers market their products and this is why catchphrases are used to capture customers who just buy for the sake of it (Mason 1).
The success of some products in certain markets is also determined by the prevailing social and cultural factors. If in a certain market, emphasis is placed on the aspects such as materialism, hard work, then people in such a market will most likely go for products that represent these values. This means that companies wishing to supply such a market need to put these factors into their marketing strategy to sell their products. The social values of a community also play a vital role in determining consumer behavior. People who value romance will most likely buy the product from manufacturers who promise them that the product will make them more romantic (Mason 1).
Toyota’s Marketing Strategy
In the following paragraphs, we will look at how Toyota incorporated the above consumer behaviors into its marketing strategy as seen from the given case study. We see from the case study that Toyota started humbly and became one of the leading automakers in the US market and the whole world. It achieved this due to its strategy of offering high-quality cars at low prices. The company became the third-largest automaker company in the US in 2004. This success was attributed to its diverse field of brands with Camry as its top-selling brand, but the highest-selling vehicles were the hybrids. Competition from other automakers became a threat to its survival. Other companies had already made plans to tap into the emerging market of young consumers that are referred to as Gen Y in this case study. To win new customers from this Gen Y pool, Toyota came up with a team to oversee the marketing strategy which was called Genesis. The team came up with three new brands, “Celica, Echo, and MR2 spyder roadster”. The strategy failed because these brands did not capture the interests of Gen Y (Case study 3).
This case shows that Gen Y were youngsters who were style-conscious, not loyal to the local brands, it was a group that was after vehicles with features that offered fun. They see vehicles as symbols of fashion and therefore want cars that will match their lifestyles and personalities. In short, this is a group that prefers luxury. To tap into this market Toyota had to come up with new marketing strategies that will factor in the needs of this group. It did this by coming up with a new brand that was appealing to the needs of Gen Y. A new design was created by Tetsuya Tada who was Toyota’s chief engineer. The design was called Black Box (bB). This brand’s unique look together with style had made it popular among the youth in Japan and therefore was perfect for the American youth. Toyota first took a few bB cars to the US and strategically parked them at popular clubs. This yielded positive results as many people were fascinated by their features. This then was the basis on which Toyota introduced this model to the US but under a new brand name, Scion. Scion xB was introduced as the US model of the Japanese Bb. Other automakers lowered the price of their cars to counter Toyota’s newfound popularity among the youth. Toyota countered this by also offering its Scion Models at low prices (Case study 4).
This success did not come that easily, before the models were launched, research on the market situation was done to determine what Gen Y looks for in a car before buying it. In the research, it was established that Gen Y was interested in a new brand, one that is entirely different from others. To reach the target consumers, most of who were aged 22 years, Toyota knew that it needed a good management team to work with. This was provided by a management group called Attik based in the United Kingdom. The group utilized the age factor in its marketing strategy by hiring college students who volunteered to market Scion models, especially at sports events. This strategy picked up slowly but eventually improved. It used guerrilla marketing methods as it targeted the urban youth with its Scion products. Attik used its US subsidiary to launch a serious campaign by publishing messages and putting in strategic places where youth frequented. It employed the use of phrases such as “No cloning zone”, “stop repetition”, and many others to attract the attention of the Young consumers (Case study 5).
This was not the only strategy; Attik also participated in event sponsorship where activities like documentaries where Toyota cars were featured, music and art where music CDs carrying Toyota models were distributed. Scion also formed a partnership with youth magazines to advertise its products. This made sure that all the youth had access to information on its brands. Consumer drive programs were another great boost to its marketing where the targeted consumers were given a chance to participate in test drives. Cars for the test drives were placed at places where youth gathered. Scion did not ignore the impact that the traditional market can have on consumers; it, therefore, combined both mass media and guerrilla marketing. To top it up, Toyota came up with a magazine to provide information about Scion models as well as other information that ranged from footwear to sound system. The magazine was named “Scion: Sight, Sound, and Motion”. Due to the positive response from its customers, Toyota launched the tC coupe, a model of Scion that was based on the European model Avensis to satisfy them more (Case study 6).
Toyota also exploited the behavior of its consumers by using the internet through the website, scion.com. It allowed customers to use the internet to come up with the car of their choice, to give their opinions and research on the type of new cars they wish to be launched. In this case study, Toyota used the opinions from the target consumers, Gen Y, to establish special sales centers at the showrooms of its dealers to provide the youngsters with a place where they can pass time as they browsed for important information about its brands. It strategically partitioned the Scion showrooms into three segments. The first segment was installed with plasma screens that highlighted the features of cars to the interested customers. This was called the product segment. The second segment was installed with self-service kiosks through which customers would access the Scion website. This was named the discovery zone. The third segment was made especially for staff members who offered assistance to customers by guiding and clarifying whenever customers are in doubt. This was the consultation area. To facilitate the interaction of customers with its agents, Scion provided live chats on its website and email addresses for customers (Case study 7)
This strategy paid off because many customers started showing interest in the facility. In its survey, Scion found out that more than 60% of its buyers, bought its products with help from the brand’s website. It also found out that many of the buyers were aged below 35 years and mostly male. Toyota started by giving its customers Scion products with standard features such as “Color, transmission, air conditioning, power windows, anti-lock brakes, and stereo system” (Case study 7). Toyota knew that young buyers are fascinated by accessorizing their cars, it, therefore, gave them a range of accessories to pick from, and this helped it to customize its products. This was necessitated by entering into a partnership with SEMA, an association that offers after-market products to customers to make the vehicles more attractive. With all these facilities in place, there was no doubt that Toyota would attract Gen Y to its products (Case study 7).
The introduction of Scion served as a big advantage to Toyota over its competitors because estimates showed that Gen Y would become the largest automobile consumer in the future making its future bright. Based on this success, Toyota added another Scion model, the fourth one called “Fuse” in 2006. To make sure that the interests of its customers are sustained, scion decided to sell just a limited number of its products but with improvements in terms of the addition of accessories. This is what Toyota did and is still doing to serve its large customer base. It tapped into their purchasing behavior and as the case study shows, it achieved its goals. According to a survey carried out, it was ascertained that the average age of Scion consumers is 35 years. The survey also showed that this strategy helped Scion to gain new customers whereby it was established that more than 75% of the customers who bought Scion products had bought Toyota products for the first time. With this in place, Toyota expects that the loyalty exhibited by Scion customers will be exhibited in the rest of its products such as the luxury Lexus when the age and income of Gen Y increases (Case study 8).
We have seen that many consumers adjust their buying behavior based on their needs as individuals and also on interpersonal issues. Companies and businesses that do better in their marketing strategy usually study these consumer behaviors and utilize them to their advantage. This case study has shown that Toyota Company knew that to survive, it had to increase its sales. It did this by studying the consumer of Gen Y, and after knowing the consumer behavior of Gen Y, it went ahead and made products that would suit their behavior. This strategy helped it to succeed in serving its customers better.
Case study. Toyota’s “Scion” (Guerrilla) Brand in US. The market positioning Strategies.
Maslow Abraham, Hoyer Wayne & Macinnis Deborah. Consumer Behavior. New York: Cengage Learning, 2009. Print.
Mason, Wendy. Consumer Behavior. Encyclopedia for Business, n.d. Web. 2011.
Yankelovich, Daniel & Meer David. Harvard Business Review: Rediscovering Market Segmentation. View Point Learning, 2006. Web.