Toyota Vs General Motors Promotional Strategies

A Contrast of Promotional Strategies as Used by Toyota and General Motors

There is a global struggle between Toyota and General Motors for global supremacy. The Toyota Company has outmuscled General Motors (GM) as a global leading brand in the automobile industry, thanks to its well designed promotional mix. Toyota in its marketing planning has shown a consideration of global expansion and customers. The company trains its employees in a way that they drive the company on a continuous growth and expansion outside their boundaries.

Pricing forms the core marketing mix of Toyota Company, (Chambers, 2008). In contrast to GM, Toyota Company has an eminent strategy of pricing. The company has set is pricing strategy in way that it is affordable to all its customers. Toyota has segmented its market according to the customer needs. Some customers are environmentally sensitive and for that matter, the company produces products that produce fewer emissions to the atmosphere. The Toyota Prius is a good example of product that targets specific customers who are pro environmentalists. The model is efficient with a capacity of 11.9 gallons and drives at one gallon per mile. Many consumers who view it as an efficient fuel consumer in addition to the fact that it is environmentally friendly have readily accepted this car.

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Since the demand for hybrid cars in the market is elastic, Toyota Company has employed the use of penetration pricing in its market penetration strategy, other than price skimming strategy. The quantity of its cars bought will increase as prices fall and this adds another factor that the cars will gain market appeal even faster. This unique strategy in addition to the company’s healthy balance sheet has seen it surpass GM as world’s leading automaker. In addition, the company is able to compete with GM by offering competitive financing and lease rates throughout all its 1200 distributors in the US market. Even under immense competition, the company has maintained its pricing at reasonable level and has not yielded to competitive pressure to raise its prices. This has provided the company with a competitive advantage over GM.

Product is the core element of Toyota Company marketing strategy. The company is well known for its variety and quality products. It produces a range of cars including vans, cars, trucks, sport cars and hybrid cars. The company has tailored other features that include happy driving, fuel efficiency and durability that have made it the market leader in auto sales. The company provides products that employ modern grounded technology making them advanced and more appealing to its customers.

Toyota Company has tailored its place mix so that it delivers its products in the designated areas in time by spreading all its stores in the areas where its customers can reach. The company has an efficient supply chain system where customer deliveries are accurately made to the right places in time. The company has a growth strategy where it tends to build on sales and it is for this reason that the company elated to form trade alliances and ventures in the developed markets in order to market its products.

The Toyota company analysis shows an array of promotional strategies by the company. Through its official website portal, accurate information about specific products can be found. As part of its promotional strategies, the company conducts demos and marketing campaigns for its products. In addition, the company conducts market surveys for its products in addition to its low interest rates and flexible installments for its customers. The company has also made use of celebrities in its marketing promotion. The case of its hybrid cars, Prius, is a good example. Prius has been used by Hollywood stars such as Will Ferrell and has featured I a dozen of movies.

GM in its promotional mix has also positioned itself in the market in order to compete with the leading automakers. In its product manufacture, GM displays an eye for quality and segmentation, (BOONE, 2012). The company has produced high quality vehicles that have been tailored to specific market needs of its consumers. The vehicles are efficient fuel consumers in addition to its high quality. For instance, the company produces Chevrolet Silverado 1500 that is ranked 8 out of ten and is specifically suited for farmers, small business owners and construction workers. This car is a two-mode car that has been designed primarily with better fuel economy than that of its competitor Toyota Tundra.

The choice is place forms a very important factor for product manufacture. This should bring into consideration sales maximization, channel motivation, service levels and market coverage. GM produced Silverado that hit the markets in the US because of the car utility by its users. The frequency of the use of the car by the small businesses and farmers has allowed GM to market the product through these channels.

GM has designed its marketing strategy in a way that its takes into consideration the ability of its consumers, how much they are willing to pay and not forgetting to take into consideration the price that its rivals charge for the same product makes in the market. Competition in pricing is an old strategy and customers tend to go where the price is valuable and the financing is friendly. The company has designed its product price based on the features and load capacities of its cars. This enables the company to meet all its customer needs. However, the company has shown little financing incentives and allowances for its customers in the market, unlike its rival Toyota.

In its promotional strategy, GM has been more effective than Toyota Company. The company uses various promotional strategies that include advertising, public relations, sales promotion and the media in its bid to reach its potential customers worldwide. Promotion plays an effective and important role in the market in making sure the product meets the expected target sales and improvement as well as reaching massive hits within the target market. GM has achieved an effective promotional strategy, as it has been able to convince its customers that its product together with the company internal motives has been experiencing great improvements.

GM’s Chevrolet together with leading UK Company, Bacofoil has formed a team to promote the product in the market by embracing the idea of spending good quality time as one family. This campaign has been termed as “Family Sundays” where the customers of Bacofoil are given ideas and the opportunities to spend their time as a family, a fact that is not available within the Toyota company promotional strategy. In the promotional campaign, those customers who bought Chevrolet Bacofoil had a chance to enter into a draw where they could end up winning Chevrolet Captiva LT with seven seats in Poly Silver.

Recommendations on How GM can use Promotional Strategies to Differentiate Itself in the Market and Gain Competitive Advantage over Toyota

  • The GM should broaden its market coverage and employ low cost pricing strategy.

Using Toyota as a market benchmark in automobile manufacture and sales, I recommend that GM should manufacture low-cost automobiles in order to beat off competition and broaden its market reach. The idea of low cost pricing is intended to ensure that that the automobiles from GM cover all types of customers in the market. The company shows less price considerations when producing its automobiles. The generic products provide a good opportunity for the company to produce low cost automobiles that are of high quality and at the same time covering all types of its customers. This will create a differentiation of its products in the market and boost its sales growth. In order to achieve low cost, the company needs to adopt Porter’s generic strategies for strategic development, (Guruau, 2007). The company should align its products in market through lean production, careful control and choice of its suppliers, low servicing costs and efficient distribution channels. All these lead to reduced product cost and creation of a competitive advantage in the market leading to its market differentiation.

  • The other recommendation rests with product redevelopment

GM currently has over 89 brands of vehicles in the market. This makes it one of the market leaders in production of a variety of vehicles in the automobile industry. I recommend that the company should carry out changes in their product mix by reducing the high number of overlapping automobile brands in the market. This rationale is because different brands should be directed at not taking away the customers from one brand but should rather target at beating market competition. This is not the case in GM currently, since most of its brands are competing against themselves. It is therefore time that the company consolidate its brands and direct them towards its competitors in the market, (Inkpen, 2006).

For instance, the GM passenger van and Cargo van should be removed since the same products are available within its Chevrolet brands having only two small differences. Secondly, a decrease in SUV sales should see GM reduce the number of Envoy models from five to three and Yukon models from four to two. This is in line with lean manufacturing strategy indented at removing low selling brands in order to concentrate on brands that bring considerable returns in the market. Finally, the out of date Montana vans should see Pontiac remove them from its product lines. These vans are no longer profitable like other GM brands and embrace an out of date design that bring less customer appeal.

GM was inclined at producing a number of assortments of products within the same brands. However, the company has recently decided to reduce its product portfolio through merger and concentration on profitable Chevrolet and Cadillac brands. The company is faced with two dilemmas, elimination or reinvention. Elimination is expensive and costly, therefore the company needs to reinvent its underperforming brands of Buick and Pontiac.

Two Promotions-Oriented Strategies That Could Help GM in the Short-term and Long-term

  • Coupons

GM should embrace use of coupons in its marketing mix in order to increase its market share. Coupons are essential especially when it comes to opening of new locations for products, (Belch, & Belch, 2012). If the company employs this strategy, it will ensure it covers even more territories by opening up new markets for its products.

  • Use of Billboards

No one can deny that Toyota has a number of billboards all over the world that it uses to create product market awareness of its products. GM should embrace the same strategy in the market in order to create its product awareness, increase its product sales, and market share.

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