Global Marketing efforts of Toyota Motors

INTRODUCTION

Global marketing is the act of marketing products or services across national, political or cultural boundaries in a bid to maximize sales, diversify, achieve economies of scale, and explore new territories (Keller, 2003). Marketing on a global scale has been born primarily due to globalization and international expansion. Multinational companies need to expand beyond their home markets, and this involves investing in new territories, often with differing cultures and socio-cultural norms. Hofstede (2011) notes that the most significant hurdle in global marketing has been over the past decade with an increasing number of multinational corporations seeking to gain substantial market share in China, and other developing countries (such as Brazil, India and Russia), as these countries have relatively low market penetration, high demand, but very different cultures to western countries.

According to Schneider and Barsoux (1997), cultures around the world are increasingly converging, and these have resulted in the ability of multinationals to leverage their international reputation and successfully sell one product across multiple regions. Murphy and Lacziniak (2006) have also stated that the influence of technology, economic, socio-cultural and political forces makes it easier to create a marketing strategy with a mix suitable for a variety of regions and catering for different cultures. However, in as much as converging cultures may have unified demand, this does not necessarily translate to similar consumer perception or expectations across all markets. Culture affects consumer behavior by influencing consumption decisions, hence creating desires and driving the consumer to select products or brands that fulfill specific needs. As a result, organizations need to understand how cultural norms may affect their marketing strategies within respective regions in order to create a marketing strategy that can successfully penetrate new market environments (Usunier et al, 2005). This paper focuses on the global marketing efforts of Toyota Motors, and how various cultural dimensions may have an affect on its marketing activities in international markets.

Cultural Analysis

Toyota is the third largest automobile manufacturing company in the world, employs over 300,000 staff, and operates globally (Whoriskey, 2012). Its extensive global operations make the company an ideal case study for cultural analysis.

Scholars have conducted extensive research on cultural dimensions across different regions, and the most notable of these are of Hofstede (2011), who developed a model hierarchy of the world based on an analysis of IBM managers in several countries. His model identified four main components that define cultural dimensions and these are: power distance, uncertainty avoidance, masculinity / femininity, and individualism / collectivism. According to Hofstede (2011), several regions differ in their cultural dimensions, and these could have a significant impact on the marketing activities of international firms such as Toyota operating extensively within different cultural regions.

Power Distance

High power distance cultures are usually characterized by authoritarian societies and work environments, in which subordinates are highly dependent on their bosses in decision-making and welfare. Such societies are highly authoritative and are usually characterized by high amounts of income and gender inequality (Mooji and Hofstede, 2010). Hofstede (2011) found power distance to be high in Latin American and Arab countries, and much lower in Europe and the US. According to Hocklin (1998), high power distance cultures are usually characterized by chauffeur driven cars, while Dash et al (2009) found that countries with low power distance usually expect highly responsive and quality service; while those high on power distance attach a greater importance to tangible service attributes.

These attributes relevant to the automobile industry could be prestige, reliability, exclusivity, luxury, type and cost. Therefore an emphasis of branding, in such a way that it communicates to the buyer that it would improve their prestige, reputation, and it is exclusive, would be effective in high power distance cultures. However, in low power distance cultures, an emphasis on service delivery such as roadside assistance, extended warranties, reliability and servicing could be equally effective.

Power distance is also prevalent in youth consumption. In the US, a low power distance economy, about 49% of 17-year olds had driver’s licenses in 2008 (Neff, 2010). This translates to the fact that more young people are able to buy cars. However, when compared to a high power distance country like China, much less numbers of youth are able to afford automobiles, due to the high-income disparity between the rich youths and the rest of the population (Lee, 2010).

Individualism / Collectivism

As the title suggest, collectivism suggests a collectivist society in which a greater emphasis is placed on family values, community and team in the work place (Mooij and Hofstede, 2010), as opposed to individualism whereby it is mostly about an individual’s accomplishment and self-actualization. Dash et al (2009) found that consumers high on individualism expect lower empathy and assurance, while Murphy and Lacziniak (2006) noted that consumers high on individualism are more focused on personal preferences than family or team preferences. Regarding Toyota’s products, cultures with high individualism may see higher sales in two door sports cars and luxury vehicles, as opposed to collectivist cultures where sedans and family cars could sell higher. Furthermore, with respect to advertising and marketing, Mooij and Hofstede (2010 advocate denoting a brand in a more collective light within collectivist cultures. So for a car manufacturer like Toyota, branding efforts could center on family road trips or team based activities; or a happy couple driving their brand new jeep with a baby in the back. However, for an individualistic culture, it may focus more on a sense of self-achievement or fulfillment.

Uncertainty Avoidance

This refers to the extent to which people feel threatened by unknown situations (Hoecklin 1998). Cultures that are strong in uncertainty avoidance are aggressive, active, compulsive and intolerant while those weak in uncertainty avoidance are less aggressive; more relaxed, contemplative and relatively tolerant (Hoecklin 1998). Markets with high uncertainty avoidance are also characterized by much lower consumer credit (Mooij and Hofstede, 2010), as consumers usually desist from financial items such as consumer loans, credit cards, mortgages or car loans. This may likely lead to a lower amount of cars being sold.

Mooij and Hofstede (2010) also notes that innovativeness and a wish for change are low in high uncertainty regions, so the emphasis would center on more of the same. The same trusted brands, driving standards, and an emphasis on Toyota’s core values could be marketed. While marketing to cultures with high uncertainty avoidance, Toyota could also emphasize on the safety of its motor vehicles, the value of its brand, and its reputation; as these would most likely promote the sense of a predictability and safety.

Masculinity / Feminity

According to Mooij and Hofstede (2010, “an important value of masculine cultures is achievement, and when combined with individualism, success can be shown”. Hofstede (2011) labeled those cultures that strive to differentiate the roles of men and women as masculine cultures while those that permitted more overlapping social roles for the sexes as feminine cultures. Japan ranks high among the more masculine countries while Netherlands ranks lows The UK and US, on the other hand, rank in the middle of this dimension though slightly more towards masculine cultures (Assael 1998).

Toyota promotes its luxury brands (Lexus) as a status symbol, while some of its other brands are off-road, strong, high capacity vehicles. With these, they have gained substantial market share in the US. Societies placing high value on feminism are less assertive, and focus more on quality of life, interpersonal relationships and a concern for the weak (Aaker & Alexander 1993). These societies tend to be less extravagant in consumption and their purchase decisions, are more modest, and seek low-end products.

Toyota Cultural Marketing

Based on the cultural dimensions analyzed, Power Distance seems to have the most significant impact on marketing, especially in high power distance cultures. This chapter would give recommendations on how Toyota could adjust its marketing mix to account for a culture with high power distance[1].

Firstly, Toyota should focus on differentiating the market into the upper 20% and the masses. The upper 20% would be targeted for their affinity for luxury goods, and their spending power. They would be capable of purchasing luxury cars and jeeps, which would appeal to their status within the society.
An emphasis should be placed on marketing service attributes such as prestige in owning the vehicle, it’s luxury, reliability and it’s status-enhancing power. Individuals should want to own new Toyota’s because it makes them feel better than their peers, and like they have achieved something.
In such a high power distance culture, it is likely that the youth population and the lesser earning individuals may not be able to afford luxury vehicles. However, the vehicles sold to them, no matter how cheap or small, should be packaged in such a way that it enhances their social standing, and offers a sense of achievement even in the smallest sense.

Conclusion

The analysis within this report has shown that cultural attributes within a region do have an impact on global marketing. Dimensions such as power distance, uncertainty avoidance and individualism affect consumer behavior due to its impact on culture. As a result, different marketing messages and tactics are likely to appeal to different audiences based on their cultural values. It is therefore in the best interest of multinational companies to ensure they understand their target markets, and develop appropriate methods of marketing their products in the most appealing way.

REFERENCES

Aaker D and Alexander, L.B. (1993) Brand Equity & Advertising’ Advertising’s role in building strong brands, Lawrence Erlbaum Associates, London.

Aaker, A. D. (1991) Managing Brand Equity, Capitalizing on the Value of a Brand Name, The Free Press, New York.

Assael, H., (1998) Consumer Behaviour and Marketing Action. 6th edition, International Thomson Publishing.

Dash, S., Bruning, E., and Acharya, M. (2009) The effect of power distance and individualism on service quality expectations in banking: A two-country individual- and national-cultural comparison”, International Journal of Bank Marketing, Vol. 27 (5), pp.336 – 358

Harner, S. (2011) Japan’s Automakers Face New Challenges (1): Toyota in China, www.forbes.com, [accessed: 12/03/2012]

Hoecklin, L., 1998. Managing Cultural Differences, Addison Wesley, ISBN 0-201-42770-2

Hofstede, G., 2011. “Geert Hofstede Cultural Dimensions”, {Viewed on 15th March 2012} from http://www.geerthofstede.com/

Keller, K.L., 2003. Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd Ed, Prentice hall, New Jersey.

Lee, K. (2010) Debunking Myths About China’s Youth Culture, www.forbes.com, [accessed: 12/03/2012]

Mooij, M, and Hofstede, G. (2010) The Hofstede model – Applications to global branding and advertising strategy and research, International Journal of Advertising, Vol. 29(1), pp85 – 110

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Schneider, S. C, & J.L Barsoux, 1997. Managing across cultures, 2nd Edn, Prentice Hall

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Whoriskey, P, (2012) GM once again leads the world in auto sales, www.washingtonpost.com, accessed: 12/03/2012

Zhang, Y., Winterich, K. P., and Mittal, V. (2010) Power Distance Belief and Impulsive Buying, Journal of Marketing Research, Vol. 47 (5)

References

Aaker, A. D., 1991. Managing Brand Equity, Capitalizing on the Value of a Brand Name, The Free Press, New York.

Aaker D & L.B. Alexander, 1993. Brand Equity & Advertising’ Advertising’s role in building strong brands. Lawrence Erlbaum Associates, London.

Assael, H., 1998. Consumer Behaviour and Marketing Action. 6th edition, International Thomson Publishing.

Hoecklin, L., 1998. Managing Cultural Differences, Addison Wesley, ISBN 0-201-42770-2

Howard, J.A., & J.N. Sheth, 1969. “The theory of buyer behavior”.

Hofstede, G., 2011. “Geert Hofstede Cultural Dimensions”, {Viewed on 15th March 2012} from http://www.geerthofstede.com/

Keller, K.L., 2003. Strategic Brand Management: Building, Measuring and Managing Brand Equity, 2nd Ed, Prentice hall, New Jersey.

Murphy,P.E. & G. R. Lacziniak, 2006. Marketing Ethics, Pearson Prentice Hall

Schneider, S. C, & J.L Barsoux, 1997. Managing across cultures, 2nd Edn, Prentice Hall

Usunier, Jean-Claude & J. Lee, 2005. Marketing Across Cultures, 5th Edn, FT Prentice Hall, ISBN: 0273685295

[1] Toyota is in virtually all developed, developing and under developed market so it was near impossible to find a new market where they could take an existing product. The best thing was to come up with a hypothetical new market and give recommendations.