Keywords: mercedes target market, mercedes marketing plan
Toyota Company and Mercedes Benz Company are two major car brands which are common in all elements of the world. These are among the very best automakers globally and they directly employ thousands of employees worldwide. These organizations have thrived for many years because of their reputation of developing high quality and useful automobiles. However, they use different strategies to achieve long term success since both develop vehicles which cater for the needs of different market sections. Mercedes may produce cars which appeal to the high end market while Toyota is known for growing cheap energy efficient autos modeled for the center and low category people. However, Toyota also caters for the top quality market through creation of some luxury automobile brands.
This newspaper evaluates different facets of both Toyota and Mercedes Benz in order to reveal strategies employed by both multinationals to determine a global existence and achieve profitability. Both firms are seen to use similar ways of motivate employees through non-monetary and financial motivation forms. There is also similar organizational cultures which encourage technology and effective management. Differences between the two firms include the target market segments and mother nature of products developed by both firms. Toyota aims at producing cheap gas efficient automobiles for the middle and lower course mounting brackets while Mercedes strives to produce luxurious and safe automobiles for the upper end market. It's important for both businesses to improve their strategies to reflect the market demand especially regarding safeness, environmental conservation and gas efficiency.
Introduction
The auto industry is one of the major industries in the world. This industry builds up, designs, manufactures, markets and market segments different automobiles around the world. The automobile industry is one of the very most effective revenue earners, with development of motor vehicles projected to be over 70 million in 2007. However, these cash flow dropped in subsequent years due mainly to the effects of the global financial crunch. Development of motor vehicles in 2009 2009 fell to 60 million, that was a more than 13% decrease. However, this industry still plays a major role in many countries' economies, because of its large revenue earning capacity. You will discover over 800 million vehicles in streets all over the world, and much more than 200 million of these are found in america. These vehicles require maintenance, energy and service, as the owners need to pay insurance for the coffee lover. This translates to a very large income stream, which contains governments, insurance businesses, the motor repair industry and other companies which indirectly or immediately get earnings from the automobile industry.
Toyota and Mercedes Benz are two of the largest automakers in the world. They may have both experienced existence for a number of decades and they are within all elements of the entire world (Georgano, 2000). Both automakers can be said to have achieved success in the years they may have operated which is important to assess strategies that have led to their market progress and profitability. This can permit us understand strategies which contribute to the success of multinationals. This newspaper aims at inspecting the variations in development and marketing strategies which are being used by both Toyota and Mercedes Benz. Both of these companies are relevant circumstance studies being that they are both multinationals with a market presence in various parts of the world, yet their parent or guardian companies are in Asia and Europe respectively. The discussed issues will be summarized at the end.
Toyota
Profile
Toyota is the major vehicle manufacturer in the world and it has its headquarters in Japan. It is also one of the major multinationals in the world, and it employs over 300, 000 employees internationally (Toyota Website, 2010). The company began functioning in 1937 after Toyoda its founder acquired the business from his daddy. In addition to vehicle processing, the company also grows robots and provides financial services. The company ventured into creation of small vehicles from late 1930s and it eventually started out producing SUVs and vehicles. During the 1980s, import tariffs required Toyota to develop manufacturing vegetation in US in order to tap into the American market and reduce development costs. It subsequently entered into ventures with companies such as Basic Motors and these helped the organization fortify its capital basic. By the later 1990s, the organization was on the list of global leaders in automobile production and it commenced producing hybrids scheduled to demand for environmentally-friendly cars (Halberstam, 2005). It later setup plants in the UK and was stated in the London and NY Stock Exchange in 1999. By 2005, the company was recognized as the leading automaker by Forbes journal.
Although Toyota is the most significant automaker, and has savored comparative success, it faces numerous issues stemming from the global financial crisis as well as difficulties in production lines. In 2009 2009, the firm recorded losses amounting to more than $4 billion and we were holding related to the global financial crunch. Through the end of the same year, the firm faced vehicle recalls in america and more than 5 million cars were recalled credited to production defects relating to the braking system. The company was subsequently fined more than $16 million consequently of delays in publicizing the defect.
Production strategy
Toyota production strategy involves the utilization of two major strategies that are "Just In Time Production" and "Low fat Manufacturing". Lean developing is a theory which only recognizes the use of resources when they involve creation of value to consumers (Liker, 2004). Techniques which consume resources but do not accomplish that objective are taken out as they are seen as wasteful. Just In Time is a rule which only allows movement of inventory or resources when they are about to be utilized in a process, and this is performed to reduce transport costs (Fogg, 2000). In conditions of market segmentation, Toyota produces cheap cars which can be petrol efficient and it focuses on the middle category segment of culture. This is an important section which is generally dismissed by many automakers. Because of an increase in fuel costs, these vehicles have proved to be extremely popular with consumers across the world. Gleam market-driven demand to create environmentally-friendly automobiles and Toyota has used good thing about this to develop different hybrid automobiles.
Organizational culture
Toyota Company heavily relies in teamwork when commencing functions within its various production plants. Employees are encouraged to work in team to allow them to be innovative. Also, they are given independence when carrying out tasks and this also helps these to be innovative (Mugisho, 2007). In Toyota, employees are encouraged to enhance the current systems and operations through increasing efficiency and employees are not fined for making problems when experimenting on functions. In addition, its management is usually present in assembly and processing plants, and managers use employees as equals. This motivates employees to perform better. In addition to this, employees are encouraged through different non-monetary and monetary motivation varieties which lead to a rise in their end result.
Marketing strategy
Toyota targets both top quality and low end market when marketing. After that it advances brands which cater for the needs of both market segments. For the low end market, it generates fuel efficient automobiles that happen to be cheap and easy to keep up. The company makes certain that spare parts are often accessible, which raises their demand. For the high end market, it develops luxurious cars including the Lexus which appeal to the exquisite preferences of individuals in the forex market segment. Furthermore, Toyota changes its models to cater for current market styles and a good example is the development of hybrid autos to cater for environmentally conscious consumers. Toyota undertakes marketing in different locations and it mostly uses electronic, print out and Internet media to market its products. Its website is also very beneficial and it provides insightful information in regards to a variety of products. However, the company generally relies on its popular brand name to catch the attention of customers to its products.
Mercedes Benz
Profile
Mercedes Benz is another multinational which manufacturers instructors, buses, cars and trucks. It offers its head quarters in Germany and its parent or guardian company is Daimler-Benz (Mercedes Benz Website, 2010). Mercedes created the first car which ran on petrol in 1886 and the first model which was launched in to the market was launched in 1901, rendering it the oldest vehicle producer currently. The business joined into a partnership with Studebaker-Packard Company in 1958 which was done to accomplish circulation. Studebaker later experienced losses and was pressured to close, leaving Mercedes Benz with usage of its US network. Throughout the years, the company has grown anticipated to a solid reputation which involves durability and quality of products it produces. In 2007, the brand was a market leader in conditions of quality, surpassing even Toyota. Mercedes is famous on the market by having many basic safety and technological innovations installed in its models. However, its challenges include developing energy efficient motor vehicles and cutting down the carbon dioxide emissions by its automobiles.
Production strategy
Mercedes Benz has many assemblage or manufacturing plants in different elements of the planet. It uses a similar creation system compared to that of Japan, however the difference is the fact that emphasis is placed on protection and technologies when developing models. In addition, it can be applied the "one man one engine" principle, which ensures that engines produced are very strong and effective (Peng, 2008). Mercedes Benz caters for clients who choose luxury automobiles and who need four by fours, SUVs, coupes and athletics vehicles. However, Mercedes Benz faces challenges in developing fuel efficient vehicles since almost all of its cars are petrol guzzlers. In addition, the majority of its products aren't environmentally friendly given that they release relatively high carbon dioxide emissions to the atmosphere.
Organizational culture
Mercedes Benz intensely relies on technology and machines to perform many production operations. Since the company relies on security and technological features to get consumers to its products, machines are frequently used to develop and mount such features in various. Although Mercedes has fewer employees, it motivates its employees through generous compensations and benefits as well as opportunities to improve the employment opportunities of employees. Furthermore, efficient leadership means that managers in various parts of the planet make decisions which can be regular with the targets of Mercedes and its own parent or guardian company (Bratton et. al. , 2004).
Marketing strategy
Mercedes depends on production of luxurious models for the top social classes. This is a market segment which is aware of its needs and prefers cars to be tailored to suit their particular needs. Usually, luxurious products are not aggressively marketed because of the characteristics of people segments which take in them. However, Mercedes Benz means that the market is aware of any new models through advertising either electronically, through the Internet or using print out mass media especially automobile magazines. In 2010 2010, the business altered its marketing strategy and emphasized more on safe practices instead of environmental conservation or luxury. These safe practices features included attention aids, lane assists, nighttime view assist and blind spot detection features among others.
Similarities and distinctions between marketing strategies of Toyota and Mercedes Benz
There are various similarities between Toyota and Mercedes Benz companies' strategies since both are automobile manufacturers. However, there are also differences between the two companies since both goal different market segments. These similarities and dissimilarities will be briefly examined below;
Similarities
One similarity in Mercedes and Toyota development is that both concentrate on employee motivation since they have became aware the role motivation works in increasing output. Both firms inspire employees through a variety of non-monetary and economic motivation forms. Another similarity is the fact both companies use similar advertising strategies which include print, electric and Internet press to attain their marketplaces. Finally, both multinationals have a solid affect from the father or mother office although country managers are permitted to make certain decisions which relate to their individual markets.
Differences
There are also dissimilarities between Toyota and Mercedes Benz production. The first is that the former targets the center and low end market as the latter focuses on the high end market. Because of this, Toyota markets its products more aggressively than the Mercedes Benz because the latter is an extravagance good with a precise market. Another difference is that Toyota focuses on producing automobiles that happen to be cheap, effective and which are gas efficient while Mercedes Benz produces cars which have strong security features and technological innovations. Toyota also focuses on developing environmentally friendly automobiles while Mercedes prefers producing autos with higher safe practices ratings.
Theories applicable
Comparative advantages theory
This theory talks about the ability of businesses or individuals to produce similar goods ay lower opportunity costs than opponents. To be able to enjoy absolute benefit, firms needs to have access to resources necessary to produce comparative edge (Gielens & Dekimpe, 2001). Toyota has known this strategy and it uses cheaper labor which is available in Asia because of its labor intensive operations. Many processing and assembly vegetation are in Asia since labor is relatively cheaper, which ensures that development costs are reduced. Therefore allows for Toyota to keep the development and deal of affordable autos.
Product differentiation theory
This theory is area of the Porter Five forces and it consists of making unique products which the market identifies with to be able to boost demand and sales (Bolton & Myers 2003). Toyota and Mercedes Benz both make unique products which appeal with their different marketplace segments. Mercedes attracts the upper classes due to its luxurious nature and safe practices record while Toyota appeals to the center and lower category market due to its affordable price and gas efficiency. This uniqueness has empowered consumers to relate to the products depending on their preferences and tastes, and this has led to long term profitability by both Mercedes and Toyota (Goetsch & Davis, 2000).
Motivation theory
This theory pertains to human resource management in organizations. It points out that for employees to be highly determined, both non-financial and financial inspiration forms should be used. It further points out that once employees are sufficiently encouraged, their result will climb and the business will perform better (Beach, 2007). Toyota and Mercedes Benz have already accepted the role performed by employee desire and it has been talked about that they use other ways to achieve this. That is one of the reason why that both businesses have been performing very well, especially considering that employees are the most useful tool in a firm.
Summary and conclusion
The various creation and marketing strategies which are used by Mercedes Benz and Toyota have been discussed in detail. It is clear that both car manufacturers are multinationals with a solid global existence although their focus on markets are different. Toyota targets the center and low income market while Mercedes Benz focuses on the top quality market. However, they execute similar ways of motivate their individuals resource and these include non-monetary and monetary forms of motivation. In conditions of marketing, both businesses use print, electronic digital and Internet advertising for advertising. In addition they rely on their brand names for appealing to customers and maintaining customer devotion. Mercedes is known by the marketplace for producing safe cars which have the latest technology while Toyota is known for developing cheap cars which can be gas efficient. Toyota is also famous for manufacturing green cars.
The determination, product differentiation and comparative advantages theories have described the strategies and reasons for success for both Toyota and Mercedes. It's important for both automakers to embrace new market trends to be able to ensure that they both enjoy success over time. Mercedes should make cost friendly and environmentally friendly vehicles while Toyota should produce cars with higher protection ratings. This can ensure that the needs of most market sections are dealt with by both automakers.
