2017 Toyota 4Runner TRD Pro

Prepared by: Abby Jaskowski

Table of Contents

Executive Summary . . . . . . . . 1

Product Description . . . . . . . . . 2Other Products by Company . . . . . . . 2

Mission Statements, Goals and Objectives . . . . . . 3Mission Statement . . . . . . . . 3Goals . . . . . . . . . . 3Objectives . . . . . . . . . 4

Environmental Analysis . . . . . . . . 4Competitor Environment . . . . . . . 5

Brand Competitors . . . . . . . 5Product Competitors . . . . . . . 5Generic Competitors . . . . . . . 5Budgetary Competitors . . . . . . 6

Economic Environment . . . . . . . 6Political Environment . . . . . . . . 6Legal Environment . . . . . . . . 7

SWOT Analysis . . . . . . . . . . 7Strengths . . . . . . . . . 7Weakness . . . . . . . . . 8Opportunities . . . . . . . . . 9Threats . . . . . . . . 9

Target Markets . . . . . . . . . 10Primary Target Market . . . . . . . 10Product Positioning . . . . . . . . 11

Marketing Mix . . . . . . . . . 11Product . . . . . . . . . . 12Price . . . . . . . . . . 13Place . . . . . . . . . . 14Promotion . . . . . . . . . 14

FAB. Value, and Satisfaction . . . . . . . . 15FAB . . . . . . . . . . 15Values . . . . . . . . . . 17Satisfaction . . . . . . . . . 18

Considerations . . . . . . . . . 18Social Considerations . . . . . . . . 18Special Considerations . . . . . . . 21

References . . . . . . . . . . 23

1

Executive Summary

This marketing plan covers the 2017 Toyota 4Runner TRD Pro which is

manufactured by Toyota Motor Corporation. The primary target market of the TRD Pro

consists of middle class males residing in the United States. The TRD Pro satisfies the needs

of adventuresome individuals who desire extreme off-road capabilities in a durable and

dependable vehicle.

Toyota Motor Corp. has held the title of world’s largest automaker for seven of the

last eight years, only recently in 2016 relinquishing the coveted position to Volkswagen.

(21) The auto manufacturer has a reputation for old-fashioned durability and

dependability; the TRD Pro is one of the last SUVs to be manufactured using the body-on-

frame style. The first 4Runner manufactured in 1985 was simply a truck paired with a

fiberglass top for the cargo area. The vehicle was originally intended solely for versatility

and utility. It has now combined those features with improved overall quality for a driving

experience which ranks among the highest overall customer satisfaction in the automotive

industry. (19, Toyota 4Runner)

2

Product Description

This section will include a brief description of the product and will list a few of the

other products manufactured by the company.

Product Description

The 2017 Toyota 4Runner TRD Pro

(TRD Pro) is a sport utility vehicle known for

its extreme off-road capability and heavy-duty

exterior and interior. Similar to the standard

model, the 4Runner SR5, this vehicle ascends

to the next level, with advanced features such

as: traction control, four-wheel drive, skid plates,

all-weather floor mats, a roof rack, Bilstein® suspension, alloy wheels, and all-terrain tires.

The interior and exterior appearances are modified from the SR5 in order to differentiate

the SUV, as well as to have the necessary accessories which enable this vehicle to be so

durable. Toyota has dubbed the TRD Pro their “toughest vehicle yet.” (27, E Brochure) The

TRD Pro can be seen above in the photograph in the upper right hand corner.

Other Products by Company

The 4Runner TRD Pro is part of the TRD Pro Series, which includes two other

vehicle models: the Tacoma TRD Pro and the Tundra TRD Pro. TRD is Toyota Racing

Development, a department of Toyota which has been helping, “enthusiasts get more

performance from their vehicles, while maintaining factory levels of quality and reliability.”

(27, E Brochure) Toyota manufactures a variety of other vehicles, such as the Camry,

(27, E Brochure)

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Avalon, Corolla, Sienna, and Yaris. Toyota Motor Company also owns Lexus and Scion car

brands. (5)

Mission Statement, Goals, Objectives

The following section will discuss the mission statement, goals, and objectives of

both Toyota Motor Corp. as well as the TRD Pro.

Mission Statement

The Toyota Motor Sales U.S.A., Inc. Mission Statement is as follows:

"To attract and attain customers with high-valued productsand services and the most satisfying ownership experience in America." (28)

The Toyota 4Runner TRD Pro’s Mission Statement is as follows:

“Keep it wilder than ever” (27, 4Runner)

Goals

The Toyota Motor Corporation Sales Goals, which the company refers to as Global Guiding

Principles, are as follows:

1. Honor the language and spirit of the law of every nation and undertake open and fair business activities to be a good corporate citizen of the world.2. Respect the culture and customs of every nation and contribute to economic and social development through corporate activities in their respective communities. 3. Dedicate our business to providing clean and safe products and to enhancing the quality of life everywhere through all of our activities.

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4. Create and develop advanced technologies and provide outstanding products and services that fulfill the needs of customers worldwide.5. Foster a corporate culture that enhances both individual creativity and the value of teamwork, while honoring mutual trust and respect between labor and management.6. Pursue growth through harmony with the global community via innovative management.7. Work with business partners in research and manufacture to achieve stable, long term growth and mutual benefits, while keeping ourselves open to new partnerships. (29, Corporate Philosophy)

Objectives

Toyota states a primary Objective, “Our Ultimate Goal: Zero Casualties from Traffic

Accident.” (29, Innovation) The company has also launched the Toyota Environmental

Challenge 2050, which mainly seeks, “to reduce vehicle CO2 emissions by 90 percent in

comparison with 2010 levels, by 2050.” (29, Sustainability) After searching multiple

sources and being unable to locate a specific list of Objectives, it appears Toyota has many

Goals it cites as Objectives, but are not measurable. The following is a list of sources

searched:

toyota.com

toyota-global.com

reference.com

toyota.custhelp.com

scribd.com

toyota-im.com

Environmental Analysis

The following section analyzes the TRD Pro’s external environment, broken down

into competitor, economic, political, and legal environments.

5

Competitor Environment

The TRD Pro’s competitive environment is broken down into the following four

categories: brand, product, generic, and budgetary competitors. The following section will

address each.

Brand Competitors

The 2017 Jeep Grand Cherokee ranks first in best off-road SUVs, according to U.S.

News Best Cars. Critics based their number 1 rating for the Grand Cherokee on its excellent

off-road capabilities as well as its upscale interior paired with comfortable drivetrain

performance for everyday handling. Close behind is the 2017 Land Rover Range Rover,

with a luxurious cabin and comfortability found both on and off the pavement. The main

reason for its second place ranking is due to the hefty priced attached to the vehicle. (30,

Best Off Road SUVs) The TRD Pro’s head-to-head competitor is the Nissan Pathfinder SV

FWD. In comparison to the TRD Pro, the vehicle is priced lower, gets better gas mileage,

enables for more seating capacity and a roomier cabin, and possesses a smoother ride. (27,

Compare)

Product Competitors

Product competition for the TRD Pro would be automobiles, particularly ones with

off road capabilities.

Generic Competitors

In terms of generic competition, the TRD Pro competes with all modes of

transportation. Airplanes, buses, subways, and bikes would all be categorized as

competitors.

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Budgetary Competitors

In today’s society, transportation is necessary for a majority of consumers. However,

it is not always necessary for consumers to purchase premium, fully loaded, four wheel

drive vehicles. Therefore, the TRD Pro could be considered both a necessity and a non-

necessity. (23, Car is a Necessity)

Economic Environment

The economic environment is capable of having either a positive impact or a

negative impact on the TRD Pro’s sales. Consumers, as a majority, find transportation to be

a necessity. (23, Car is a Necessity) When the economy is prosperous, interest rates are

lower and qualifying for a loan is easier. Gas prices are typically lower and consumers are

more susceptible to traveling by way of their own automobiles. The reverse is also true;

when the economy is not thriving, interest rates are higher, gas prices are higher, and there

is typically a surplus in new car inventories. (29, Investors) Other economic factors include

exchange rates, the growth of the United States’ economy, and developing countries’

economic growth. (22, PESTLE)

Political Environment

According to a PESTEL analysis of Toyota, there are multiple political factors

affecting Toyota’s operations. There are three positive factors the analysis highlights:

stable political environments, free trade agreements, and benefits received from the

government for producing eco-friendly products. (22, PESTLE) Alternatively, President

Trump has recently begun to put pressure on the automotive industry to manufacture in

the United States; this is intended to create more jobs. President Trump has threatened to

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place heavy import taxes on automotive companies not willing to cooperate. (31, Auto

Makers in Hot Seat)

Legal Environment

Intellectual property rights have been consistently improving, presenting the

opportunity for Toyota and other auto manufacturers to be further protected from

copyright infringement. (22, PESTLE) There are also environmental laws governing vehicle

emissions and fuel economy. Other important laws specific to auto manufacturers are in

regard to vehicle safety. (29, Investors)

SWOT Analysis

SWOT analysis is utilized to determine a company’s strengths, weaknesses,

opportunities, and threats in order to formulate and implement a strategic plan of action.

The following section includes the results of a SWOT analysis for both Toyota Motor

Corporation and the TRD Pro through SWOT analysis.

Strengths

PRODUCT

1. Extreme off-road capabilities

2. Reputation for superior quality in long-term reliability

3. One of a few truck-based SUVs still produced

(30, 4Runner)

4. Second highest resale value in automotive market

(19, Toyota 4Runner)

COMPANY

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1. Most valuable brand in automotive industry worldwide

2. Toyota Production System eliminates waste, allowing for cost savings and

better quality vehicles

3. Invests heavily in Research and Development

(25)

4. Innovation encouraged through superior organizational culture with an

emphasis on teamwork and reward for new ideas

5. Global supply chain which reduces market risk as well as increases

productivity and profits

(22, SWOT)

Weaknesses

PRODUCT

1. No fuel-efficient option

2. One of the highest priced SUVs in the market

3. Focus heavily on off-road capability, leading to lack of focus on interior

refinement and overall handling

4. No active safety equipment

(30, 4Runner)

COMPANY

1. Narrow brand portfolio, only 4 brands versus competition’s 10 to 12

brands

2. Recent product recalls leading to negative public perception and inefficient

resource allocation

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3. Lack of expertise in autonomous vehicles

(25)

Opportunities

PRODUCT

1. Develop fuel-efficient model

2. Offer lower cost option

3. Develop autonomous vehicles with current technology and experience

4. Focus on refining interior and producing smoother handling for daily

commuting

5. Incorporate active safety equipment

(25)

COMPANY

1. Forecasted rising fuel prices driving demand for eco-friendly vehicles

(25)

2. Expansion into developing countries and their markets

(22, SWOT)

Threats

PRODUCT

1. Competition offering cheaper/fuel-efficient alternatives

2. Competition employing rapid innovation leading to constant updates and

new technology, such as pedestrian detection and Wi-Fi availability

3. Rising fuel prices leading to decrease in demand for trucks/SUVs

(30, 4Runner)

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4. Increased government regulations regarding emission levels, fuel

economy, noise, pollution

(25)

COMPANY

1. Continual increase in competition in global market

2. Rise in Japanese yen exchange rates

3. Government regulations in foreign markets impacting imports and exports

(25)

Target Markets

The following section addresses the TRD Pro’s primary target market, secondary

target markets, and the product’s position.

Primary Target Market

Toyota’s primary target market for the TRD Pro is described utilizing four different

dimensions: Demographic, Geographic, Psychographic, and Behavioral. The TRD Pro’s

primary target market consists of a niche of single, middle class American males from the

ages of 25 to 49. These consumers are still in the early stages of their life, yet have the

established income to purchase this advanced 4Runner model. (1) Geographically, the

primary market for the TRD Pro is in North America, with its main focus on the United

States. (29, Form 20-F) In regards to Psychographic segmentation, the TRD Pro is targeted

towards venturesome individuals with an outdoor enthusiast lifestyle. The automobile is

marketed heavily to those who enjoy going off road and camping, but still desire to have

amenities available in their vehicle. Behavioral dimensions of the TRD Pro’s primary target

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market includes those who are less price sensitive and more value sensitive; this vehicle is

one of the most expensive models Toyota offers, but is also of the highest quality. This

primary target market consists of heavy users of SUVs with the anticipation of driving the

TRD Pro multiple times a day, every day. Some of the benefits consumers seek from this

product are sportiness, image enhancement, and excitement. Consumers in the TRD Pro’s

primary target market desire to be identified with the thrilling, adventurous image the

automobile provides. (7)

Other target markets for the TRD Pro are families consisting of five members or less

who enjoy the outdoors and single females between the ages of 25 and 49. (1)

Product Position

When the Toyota brand comes to mind, consumers automatically know they are

buying a quality vehicle at a reasonable price. The TRD Pro is regarded as rugged, capable,

and reliable. With its extreme off-road capabilities, consumers understand they are

receiving premium reliability when navigating their vehicle onto difficult landscape. The

4Runner has established itself as a long lasting vehicle, while retaining off road reliability.

(7)

Marketing Mix

The following section utilizes the marketing mix, which is the management of the

product, how the product is priced, how the product is placed and distributed, and the

promotional tools involved in marketing the product.

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Product

The TRD Pro is classified as both a consumer product as well as a business product.

The more frequent buyers of the vehicle are purchasing for personal use; however,

businesses also purchase the TRD Pro for company use. Toyota sells four models within the

SUV product line other than the 4Runner: the Highlander, the RAV4, the Sequoia, and the

Land Cruiser. The TRD Pro is also included in a product line consisting not only of the

4Runner TRD Pro, but also the Tundra TRD Pro and the Tacoma TRD Pro. Toyota has many

different product mixes, such as mid-size sedans, trucks, and fuel efficient vehicles.

Regarding product life cycle, the TRD Pro is in the late growth and early maturity

stage. Though just recently introduced in 2014, consumers are growing more concerned

with comfort and advanced safety features than they are with off road capabilities. (19, Top

10 Models)

Toyota has high brand recognition as well as high brand loyalty, as does the

4Runner. In 2016, the Toyota brand was number one on a list of most valuable automotive

brands, valued at 29.5 billion U.S. dollars. This was nearly 3 billion more than the second

most valuable auto brand, BMW. (26)

Because the TRD Pro is manufactured by Toyota, it is both a family brand as well as

an individual brand; Toyota is a family brand and the TRD Pro is an individual brand.

The TRD Pro comes with specific packaging: the authorized Toyota dealership lot,

the window sticker stating the price of the TRD Pro, the information packet placed inside

one of the windows of the vehicle listing the gas mileage, interest rates, and several other

useful facts, a license plate with the logo of the Toyota dealership, and a driver’s manual.

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The product is ready to be driven upon purchase. (24) Pictured in Figures 1 and 2 is the

exterior and interior of the TRD Pro.

Figure 1 Figure 2

Price

The 2017 Toyota 4Runner TRD Pro ‘s retail market price is $42,400. Regarding the

SUV market for 2017, the TRD Pro is above the market price, which is around $25,000. (19,

Top 10 Models) The vehicle competes within a buyer’s market; often car dealerships have

an excess in inventory or have quotas which must be met, allowing buyers to negotiate the

final price. Substitutions exist and demand is elastic, depending on the growth or decline of

the economy.

The pricing objectives for the TRD Pro have multiple facets, however competition-

oriented pricing and prestige pricing are the main focus. Consumers in America often

associate higher quality with a higher price. The TRD Pro’s price is one of the higher prices

in the market, but is far from the most expensive - making it a competition-oriented price

as well. The TRD Pro is also sold with negotiated pricing, according to the discretion of each

individual dealership authorized to sell the automobile. Seasonal pricing may also be used,

(14, Photo Gallery)

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due to fluctuations in consumer demand during warm weather or a lowering of the price

towards the end of the year when a newer model will become available. (30, 4Runner)

Place

The distribution channel of the TRD Pro is indirect; the automobile is manufactured

at Toyota’s Tahara plant in Tahara, Japan. (28) Once assembled, the vehicles are

transported by water on ships to the United States, then further transported by land

through the use of trailers. The exposure for the automobile is exclusive; consumers must

visit an authorized Toyota dealership to purchase the vehicle.

Carrying costs in the distribution channel involve the need for specialized trailers to

transport multiple TRD Pro’s simultaneously by way of semi-trucks. There are also fees

involved with damage protection and security in making sure the vehicles arrive in

premium condition at the privately-owned Toyota dealerships. These dealerships are the

center of distribution to the end consumer. (27, Operations)

Promotion

Toyota markets the TRD Pro through a combination of the three types of

communication: mass selling, personal selling, and sales promotion. The TRD Pro is

promoted by mass selling through multiple media: social, online, billboards, and television.

The vehicle is also promoted through local media, such as local radio stations and

privately-owned dealership commercials. (27, Operations)

The vehicle is also sold through personal selling. When consumers wish to purchase

a TRD Pro through a certified Toyota dealership, they will do so through a salesperson.

Toyota strives to produce a streamlined marketing and sales process, so customers are

given the best experience at all Toyota dealerships. Globally, Toyota has implemented “The

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Toyota Way,” a method of customer service which allows employees to thoroughly provide

consumers with a wholly satisfying buying experience. “The Toyota Way” is promoted to

consumers, guaranteeing them all their needs will be fulfilled throughout their car buying

experience, as well as throughout the life of their vehicle. This is implemented in hopes

customers will continue to return to Toyota for their maintenance needs, as well as when

they find themselves in need of a new vehicle. (27, Operations)

Toyota engages in sales promotions for the TRD Pro, such as low APR financing of

0.9% for 36 months or leasing for 36 months. Dealerships will often have tent sales as well,

in which the employees temporarily move a large amount of their inventory to a different

location, in the hopes of attracting new traffic. These promotional tools are targeted at

consumers and vary by dealership. (27, Local Specials)

FAB, Value, Satisfaction

The following sections will include multiple FAB (features, advantages, benefits)

items of the TRD Pro, the value of the vehicle, and an assessment of customer satisfaction

with the product.

FAB

FAB 1

Feature: TRD Suspension System

Advantage: Only SUV with TRD Bilstein 2.5-inch coil-over-shock front shocks

paired with rear 2-inch shocks specially engineered by Toyota Racing Development

Benefit: Extreme control and handling when traveling over rough terrain as well as

a 1-inch lift in ride height

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(27, E Brochure)

FAB 2

Feature: Power rear liftgate window

Advantage: Only vehicle on the market with this unique feature

Benefit: Convenience when needing to access the rear storage space

(27, E Brochure)

FAB 3

Feature: Multi-terrain select with Active Traction Control (A-TRAC) and Crawl

Control switches

Advantage: One of few in market to offer all three in one vehicle

Benefit: Safer because the braking system applies power to the wheel(s) with

traction and applies slight braking to the wheel(s) lacking traction in order for

driver to easily navigate adverse terrain

(27, E Brochure)

FAB 4

Feature: ToyotaCare

Advantage: Only offered to consumers who purchase Toyota vehicles

Benefit: Convenience, saves money, worry-free maintenance because automatically

included with the purchase of a TRD Pro, consumer has no need to worry about any

malfunctions pertaining to their vehicle, due to no cost maintenance for the first 2

years or 25,000 miles, along with 24-hour roadside assistance

(27, 4Runner Features)

FAB 5

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Feature: Reinforced body-on-frame construction

Advantage: One of the last SUVs to be manufactured in this manner

Benefit: Durability

(27, 4Runner Features)

FAB 6

Feature: Entune App Suite

Advantage: Only offered through Toyota

Benefit: Convenience and state-of-the-art technology, drivers are conveniently able

to use mobile applications and data through the center dash 6.1-inch high-

resolution touchscreen display

(27, 4Runner Features)

Value

Perceived value is determined by the ratio of benefits divided by costs (20, pg. 301).

As listed in the FAB section, the TRD Pro has multiple benefits. However, there are costs

associated with each benefit. The TRD Pro is built with the intent of being driven over

unforgiving terrain, and this incurs wear and tear on the vehicle. Consumers are warned

the life of the wheels and tires which come standard with the TRD Pro might not be

functional for as long as producers claim. Therefore, this would increase the cost of

operation and maintenance for the vehicle. (27, E Brochure) However, the warranties

offered with the purchase of each new vehicle decrease the product life cycle costs, which

are costs constantly factored in over the life of the product. (20, pg. 303) The TRD Pro is not

an eco-friendly product, only getting 20 mpg on the highway. (27, E Brochure) This, as well

as any maintenance costs not included in the warranty, add to the operating costs.

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Consumers must also ensure the vehicle, which tends to be fairly high for a new vehicle.

There are also nonmonetary costs to be considered, such as time and effort employed in

acquiring the product. (20, pg. 303) Warranties, such as ToyotaCare, serve to reduce risk

from the consumer’s viewpoint; this is an additional decrease in nonmonetary costs. Based

on the previous evaluation of individual FABs as well as costs associated with the product,

the benefits of the TRD Pro outweigh the costs, and thus the product is a good value.

Satisfaction

In addition to the TRD Pro being a good value, consumers are reported to be

satisfied with their purchase. The Toyota brand is known for its long-lasting quality, and

therefore both the corporation and the 4Runner entail highly loyal customers. (12, Toyota

History) According to Edmunds.com, consumers rated the vehicle 4.6 out of 5 stars on

overall satisfaction. (12, Consumer Reviews) Kelley Blue Book consumer ratings on overall

satisfaction awarded the vehicle 8.9 out of 10 stars. (19, 2016 Toyota 4Runner) The market

has signaled an overall trend towards the preference for SUVs, and this is mirrored in the

continued increase in sales for the 4Runner. (4)

Considerations

The following section will address social considerations as well as other special

considerations which are pertinent to Toyota Motor Corporation and the TRD Pro.

Social Considerations

Toyota Motor Corporation has established a Corporate Social Responsibility (CSR)

policy. The preamble of the CSR policy is as follows:

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“We, Toyota Motor Corporation and our subsidiaries, take initiative to contribute to harmonious and sustainable development of society and the earth through all business

activities that we carry out in each country and region, based on our Guiding Principles. We comply with local, national and international laws and regulations as well as the spirit

thereof and we conduct our business operations with honesty and integrity. In order to contribute to sustainable development, we believe that management interacting with its stakeholders as described below is of considerable importance, and we will endeavor to

build and maintain sound relationships with our stakeholders through open and fair communication. We expect our business partners to support this initiative and act in

accordance with it.” (29, CSR)

This preamble details Toyota’s initiative in participating and sustaining economical, legal,

ethical, and philanthropic responsibility. However, there are several areas for

improvement, which will be addressed in the following paragraphs.

Toyota Motor Corp. is economically responsible through increased overall profits

and consistent reinvestment in research and development (R&D). Though Toyota suffered

a decrease in overall profit for the year 2016, this was mainly due to fluctuating exchange

rates. The company reported sales actually rose in each market. (2) Toyota strives to

increase shareholder value, such as its dividend policy, which states the company intends

to produce consistent payments of dividends at a payout ratio of 30%. (29, Dividends)

Toyota was ranked seventh globally in dollar amount spent on R&D, with $9.1 billion spent

in 2013 alone. (15)

Legally, Toyota has faced several major recall issues in the last several years. Most

recently was the debacle with defective Takata airbags in 2016. The defective airbags

forced Toyota to recall roughly 5.8 million vehicles. This major error was costly to Toyota’s

profits as well as to their brand image; however, there were 17 other auto manufacturers

facing the same recalls for Takata airbags in their vehicles. (8) In 2010, Toyota also faced

an intense recall situation with issues regarding their vehicles’ gas pedals and unintended

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acceleration malfunctions, costing the company $1.2 billion. (10) However, despite these

recall issues, Toyota ranks seventh in lowest recall rate in the automotive industry, with a

recall rate of 0.80. This rate signifies for every 1 vehicle sold, 0.80 vehicles are recalled.

Toyota has spent years building a reputation for outstanding CSR, but its reputation has

faltered over the last several years and needs further improvement. (9)

Ethisphere has produced a list annually of the World’s Most Ethical Companies

(WMEC) since 2007; Toyota has failed to appear on this list since 2009. (13) It is argued

Toyota has suffered a decline in quality over the last few years. This could be due to the

company’s focus on sustaining a competitive advantage over other major auto

manufacturers, rather than focusing on maintaining high quality. (3) Toyota has also had

disputes with the U.S. Environmental Protection Agency as well as the Natural Resources

Defense Council, when siding with other auto manufacturers in protesting more rigorous

fuel economy standards. However, the company pleased many environmentalists with the

introduction of its hybrid vehicle, the Prius. Toyota’s ethics have been questioned in the

last several years, forcing the company to appease the public and dedicate further to

maintaining a highly ethical reputation. (10) In 1998, Toyota adopted the Toyota Code of

Conduct; this code is recorded in booklets and distributed to all employees to ensure

ethical guidelines are in place. (29, Compliance)

Toyota pursues philanthropic responsibility through multiple outlets. In the United

States alone, Toyota has donated over 40,000 child car seats to Buckle Up for Life,

contributed over $700 million to nonprofits, and given $15 million for disaster relief since

2001. (27, Community) The company has also promoted social equity, shared helpful

manufacturing processes with institutions such as local food banks, and become involved

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with improving education for young children. Toyota is constantly partnering with other

companies and institutions, such as: Michigan Science Center, Horizon Educational Group,

Net Impact, Tom Joyner Foundation, United Way, National Trust for Historic Preservation,

and the Department of Veteran Affairs. (27, Philanthropy News Releases)

Regarding social trends, Millennials, those born after 1980, have become an

exceedingly prevalent group in the United States. Millennials are the most diverse group

yet, and are reported to have a large amount of student debt. This could affect their car

buying ability and preferences. Women are playing a larger part than ever in the

workforce; 40% of households with children recorded the mother as being the primary

source of income. Blended family rates are on the rise, as well as those who have never

been married. Middle income household percentages are becoming smaller, with more

entering into either upper class or lower class. This is a concern for the TRD Pro as well as

Toyota Motor Corp. due to many of their vehicles’ primary target market containing middle

income males. Both the national and global population is expected to grow at a much

slower rate than in years past. (23, Demographic Trends) This signifies a shrinking market

overall. Toyota’s Managing Officer Otake stated the company is expecting a decline of 2%

for the overall U.S. automotive market. (2)

Special Considerations

The global economy has significant impact on Toyota Motor Corp. and its sales.

Because the Japanese yen has recently appreciated against foreign currencies, Toyota’s

profit margin has declined significantly. In addition, Toyota is waiting to see what will

come of President Trump’s threats for tariffs placed on automobiles imported from Mexico

or for taxes on automobiles transported from overseas. This is imperative to Toyota’s

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strategy, with over 50% of the autos Toyota sells in America being imported to the United

States. The company also currently has operations in Mexico, with the intention of building

additional plants in the country. (2)

In addition to these considerations, government regulations are rapidly growing

stricter for the automotive industry. This has a negative effect on R&D, with such extreme

technological advances are being made with no way for regulators to monitor properly, as

they cannot be fully aware of the impact these innovations will have. This forces

manufacturers to go to great lengths, such as developing custom and tedious processes

which require a great deal of time and money, in order to “future-proof” their most recent

advances. Auto manufacturers are also facing difficulties with the amount of data being

collected and transmitted from technology embedded in the vehicles. Understanding the

data and ensuring the data is kept private will be a major challenge for manufacturers in

the coming years. (17)

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References

1. www.adage.com; Toyota 4Runner Gets $45M Push article, retrieved 2-19-2017.

2. www.autonew.com; Toyota Operating Profit Declines article, retrieved 3-28-2017.

3. www.businessethics.com; Toyota Recall page, retrieved 3-28-2017.

4. www.businesswire.com; Toyota Reports May 2016 Sales page, retrieved 3-11-2017.

5. www.consumerreports.org; Who Own That article, retrieved 1-22-2017.

6. www.car-brands.axlegeeks.com; Nissan and Toyota Compare page, retrieved 2-5-2017.

7. www.car-buying-strategies.com; Toyota 4Runner page, retrieved 2-19-2017.

8. www.cbsnews.com; Toyota Recalls page, retrieved 3-28-2017.

9. www.cheatsheet.com; 10 Car Makers Boasting Lowest Recall Rates article, retrieved 3-28-2017.

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