Market strategies of Toyota and Mercedes Benz

Toyota Company and Mercedes Benz Company are two major auto trade names which are common in all parts of the universe. These are among the top car manufacturers globally and they straight employ 1000s of employees worldwide. These houses have thrived for decennaries due to their repute of developing high quality and efficient motor vehicles. However, they use different schemes to accomplish long term profitableness since both develop vehicles which cater for the demands of different market sections. Mercedes is known to bring forth autos which cater for the high terminal market while Toyota is known for developing inexpensive fuel efficient autos modeled for the in-between and low category citizens. However, Toyota besides caters for the high terminal market through production of some luxury motor vehicle trade names.

This paper evaluates different facets of both Toyota and Mercedes Benz in order to uncover schemes used by both multinationals to set up a planetary presence and achieve profitableness. Both houses are seen to utilize similar schemes to actuate employees through non-monetary and pecuniary motive signifiers. They besides have similar organisational civilizations which encourage invention and effectual leading. Differences between the two houses include the mark market sections and nature of merchandises developed by both houses. Toyota aims at bring forthing inexpensive fuel efficient autos for the center and lower category brackets while Mercedes strives to bring forth epicurean and safe autos for the upper terminal market. It is of import for both houses to change their schemes to reflect the market demand particularly sing safety, environmental preservation and fuel efficiency.

Introduction

The car industry is one of the largest industries in the universe. This industry develops, designs, industries, sells and markets different cars across the universe. The car industry is one of the most effectual gross earners, with production of motor vehicles estimated to be over 70 million in 2007. However, these net incomes dropped in subsequent old ages chiefly due to the effects of the planetary fiscal crunch. Production of motor vehicles in 2009 fell to 60 million, which was a more than 13 % lessening. However, this industry still plays a major function in many states ‘ economic systems, due to its big gross gaining capacity. There are over 800 million vehicles in roads all over the universe, and more than 200 million of these are found in the US. These vehicles require care, fuel and service, while the proprietors have to pay insurance for them. This translates to a really big gross watercourse, which incorporates authoritiess, insurance houses, the motor fix industry and other houses which indirectly or straight acquire gross from the car industry.

Toyota and Mercedes Benz are two of the largest car manufacturers in the universe. They have both been in being for several decennaries and they are present in all parts of the universe ( Georgano, 2000 ) . Both car manufacturers can be said to hold achieved success in the old ages they have operated and it is of import to measure schemes which have resulted in their market growing and profitableness. This will enable us understand schemes which contribute to the success of multinationals. This paper aims at analysing the differences in production and selling schemes which are used by both Toyota and Mercedes Benz. These two companies are relevant instance surveies since they are both multinationals with a market presence in different parts of the Earth, yet their parent companies are in Asia and Europe severally. The discussed issues will be summarized at the terminal.

Toyota

Profile

Toyota is the largest vehicle maker in the universe and it has its central offices in Japan. It is besides one of the largest multinationals in the universe, and it employs over 300,000 employees globally ( Toyota Website, 2010 ) . The company began runing in 1937 after Toyoda its laminitis acquired the company from his male parent. In add-on to vehicle fabrication, the house besides develops automatons and provides fiscal services. The house ventured into production of little autos from late 1930s and it later began bring forthing SUVs and trucks. During the 1980s, import duties forced Toyota to construct fabrication workss in US in order to tap into the American market and cut down production costs. It later entered into ventures with companies such as General Motors and these helped the house strengthen its capital base. By the late 1990s, the house was among the planetary leaders in car production and it began bring forthing loanblends due to demand for environmentally-friendly autos ( Halberstam, 2005 ) . It subsequently set up workss in the UK and was listed in the London and New York Stock Exchange in 1999. By 2005, the company was recognized as the taking car manufacturer by Forbes magazine.

Although Toyota is the largest car manufacturer, and has enjoyed comparative success, it faces legion challenges stemming from the planetary fiscal crisis every bit good as challenges in production lines. In 2009, the house recorded losingss amounting to more than $ 4 billion and these were attributed to the planetary fiscal crunch. During the terminal of the same twelvemonth, the house faced vehicle callbacks in the US and more than 5 million autos were recalled due to production defects affecting the braking system. The house was later fined more than $ 16 million as a consequence of holds in publicising the defect.

Production scheme

Toyota production scheme involves the usage of two major schemes which are “ Just In Time Production ” and “ Thin Fabrication ” . Thin fabrication is a rule which merely recognizes the usage of resources when they involve creative activity of value to consumers ( Liker, 2004 ) . Processes which consume resources but do non accomplish this aim are eliminated as they are seen as uneconomical. Merely In Time is a rule which merely allows motion of stock list or resources when they are about to be used in a procedure, and this is performed to cut down conveyance costs ( Fogg, 2000 ) . In footings of market cleavage, Toyota develops inexpensive autos which are fuel efficient and it targets the in-between category section of society. This is an of import section which is usually ignored by many car manufacturers. Due to an addition in fuel costs, these vehicles have proved to be really popular with consumers across the universe. There is besides a market-driven demand to fabricate environmentally-friendly autos and Toyota has taken advantage of this to develop different intercrossed cars.

Organizational civilization

Toyota Company to a great extent relies in teamwork when set abouting operations within its assorted fabrication workss. Employees are encouraged to work in squad in order for them to be advanced. They are besides given independency when transporting out undertakings and this besides helps them to be advanced ( Mugisho, 2007 ) . In Toyota, employees are encouraged to better the current systems and processes through increasing efficiency and employees are non fined for doing errors when experimenting on procedures. In add-on, its direction is normally present in assembly and fabrication workss, and directors work with employees as peers. This motivates employees to execute better. In add-on to this, employees are motivated through different non-monetary and pecuniary motive signifiers which lead to an addition in their end product.

Selling scheme

Toyota marks both the high terminal and low terminal market when selling. It so develops trade names which cater for the demands of both market sections. For the lower terminal market, it creates fuel efficient autos which are inexpensive and easy to keep. The company makes certain that trim parts are easy accessible, and this increases their demand. For the high terminal market, it develops epicurean autos such as the Lexus which cater for the keen gustatory sensations of people in this market section. In add-on, Toyota adjusts its theoretical accounts to provide for current market tendencies and an illustration is the development of intercrossed autos to provide for environmentally witting consumers. Toyota undertakes selling in different parts and it largely uses electronic, print and Internet media to publicize its merchandises. Its web site is besides really enlightening and it gives insightful information about a assortment of merchandises. However, the house by and large relies on its popular trade name name to pull clients to its merchandises.

Mercedes Benz

Profile

Mercedes Benz is another transnational which makers managers, coachs, cars and trucks. It has its caput quarters in Germany and its parent company is Daimler-Benz ( Mercedes Benz Website, 2010 ) . Mercedes created the first auto which ran on gasoline in 1886 and the first theoretical account which was launched into the market was launched in 1901, which makes it the oldest vehicle maker presently. The company entered into a partnership with Studebaker-Packard Corporation in 1958 and this was done to ease distribution. Studebaker subsequently experienced losingss and was forced to shut, go forthing Mercedes Benz with entree to its US web. Throughout the old ages, the house has grown due to a strong repute which involves lastingness and quality of merchandises it produces. In 2007, the trade name was a market leader in footings of quality, exceling even Toyota. Mercedes is celebrated in the market by holding many safety and technological inventions installed in its theoretical accounts. However, its challenges include developing fuel efficient motor vehicles and take downing the C dioxide emanations by its cars.

Production scheme

Mercedes Benz has many assembly or fabricating workss in different parts of the universe. It uses a similar production system to that of Japan, but the difference is that accent is placed on safety and technological inventions when developing theoretical accounts. It besides applies the “ one adult male one engine ” rule, which ensures that engines produced are really strong and efficient ( Peng, 2008 ) . Mercedes Benz caters for clients who prefer luxury autos and who need four by 4s, SUVs, coupes and athleticss autos. However, Mercedes Benz faces challenges in developing fuel efficient autos since most of its cars are fuel guzzlers. In add-on, most of its merchandises are non environmentally friendly since they release comparatively high C dioxide emanations to the ambiance.

Organizational civilization

Mercedes Benz to a great extent relies on engineering and machines to execute many production procedures. Since the house relies on safety and technological characteristics to pull consumers to its merchandises, machines are often used to develop and put in such characteristics in assorted. Although Mercedes has fewer employees, it motivates its employees through generous compensations and benefits every bit good as chances to progress the callings of employees. In add-on to this, efficient leading ensures that directors in different parts of the universe make determinations which are consistent with the aims of Mercedes and its parent company ( Bratton et. al. , 2004 ) .

Selling scheme

Mercedes relies on production of epicurean theoretical accounts for the upper societal categories. This is a market section which is cognizant of its demands and prefers cars to be tailored to accommodate their alone demands. Normally, epicurean merchandises are non sharply marketed due to the features of population sections which consume them. However, Mercedes Benz ensures that the market is cognizant of any new theoretical accounts through advertisement either electronically, through the Internet or utilizing print media particularly automobile magazines. In 2010, the company altered its selling scheme and emphasized more on safety as opposed to environmental preservation or luxury. These safety characteristics included attending aids, lane aids, dark position aid and blind topographic point sensing characteristics among others.

Similarities and differences between marketing schemes of Toyota and Mercedes Benz

There are assorted similarities between Toyota and Mercedes Benz companies ‘ schemes since both are automobile makers. However, there are besides differences between the two companies since both mark different market sections. These similarities and differences will be briefly analyzed below ;

Similarities

One similarity in Mercedes and Toyota production is that both focal point on employee motive since they have realized the function motive plays in increasing productiveness. Both houses motivate employees through a assortment of non-monetary and pecuniary motive signifiers. Another similarity is that both houses use similar advertisement schemes which include print, electronic and Internet media to make their markets. Finally, both multinationals have a strong influence from the parent office although state directors are allowed to do certain determinations which relate to their single markets.

Differences

There are besides differences between Toyota and Mercedes Benz production. The first is that the former marks the in-between and low terminal market while the latter marks the high terminal market. As a consequence, Toyota markets its merchandises more sharply than the Mercedes Benz since the latter is a luxury good with a defined market. Another difference is that Toyota focuses on bring forthing cars which are inexpensive, efficient and which are fuel efficient while Mercedes Benz produces cars which have strong safety characteristics and technological inventions. Toyota besides focuses on developing environmentally friendly autos while Mercedes prefers bring forthing autos with higher safety evaluations.

Theories applicable

Comparative advantage theory

This theory explains the ability of houses or persons to bring forth similar goods ay lower chance costs than rivals. In order to bask absolute advantage, houses should hold entree to resources necessary to bring forth comparative advantage ( Gielens & A ; Dekimpe, 2001 ) . Toyota has recognized this scheme and it uses cheaper labour which is available in Asia for its labour intensive operations. Many fabrication and assembly workss are in Asia since labour is comparatively inexpensive, and this ensures that production costs are reduced. This in bend makes it possible for Toyota to keep the production and sale of low-cost autos.

Product distinction theory

This theory is portion of the Porter Five forces and it involves doing alone merchandises which the market identifies with in order to hike demand and gross revenues ( Bolton & A ; Myers 2003 ) . Toyota and Mercedes Benz both make unique merchandises which appeal to their different mark market sections. Mercedes entreaties to the upper categories due to its epicurean nature and safety record while Toyota entreaties to the center and lower category market due to its low-cost monetary value and fuel efficiency. This singularity has enabled consumers to associate to these merchandises depending on their penchants and gustatory sensations, and this has led to long term profitableness by both Mercedes and Toyota ( Goetsch & A ; Davis, 2000 ) .

Motivation theory

This theory applies to human resource direction in organisations. It explains that for employees to be extremely motivated, both non-financial and fiscal motive signifiers should be used. It farther explains that one time employees are sufficiently motivated, their end product will lift and the organisation will execute better ( Beach, 2007 ) . Toyota and Mercedes Benz have already recognized the function played by employee motive and it has been discussed that they use assorted ways to accomplish this. This is one of the grounds that both houses have been executing really good, particularly sing that employees are the most utile resource in a house.

Summary and decision

The assorted production and selling schemes which are used by Mercedes Benz and Toyota have been discussed in item. It is clear that both car makers are multinationals with a strong planetary presence although their mark markets are different. Toyota targets the in-between and low income market while Mercedes Benz targets the high terminal market. However, they implement similar schemes to actuate their human resource and these include non-monetary and pecuniary signifiers of motive. In footings of selling, both houses use print, electronic and Internet media for advertisement. They besides rely on their trade name names for pulling clients and keeping client trueness. Mercedes is known by the market for bring forthing safe autos which have the latest engineering while Toyota is known for fabricating inexpensive autos which are fuel efficient. Toyota is besides celebrated for fabricating environmentally friendly autos.

The motive, merchandise distinction and comparative advantage theories have explained the schemes and grounds for success for both Toyota and Mercedes. It is of import for both car manufacturers to encompass new market tendencies in order to guarantee that they both enjoy profitableness in the long tally. Mercedes should fabricate cost friendly and environmentally friendly autos while Toyota should fabricate autos with higher safety evaluations. This will guarantee that the demands of all market sections are addressed by both car manufacturers.

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