Introduction

Competitive edge and maximum profitability is the focus of the market operations. It fosters innovation in productivity and growth, which ultimately creates market brand and value. To remain competitive in market, companies always try and reinvent themselves at changing dynamics of the market (Teece, 2009). The case describes two companies Subaru and Toyota from the viewpoint of two consumers and their reasons for choosing them.

Subaru and Toyota- The necessity to launch different models over different time periods

Subaru, over the years have launched around 40-45 car models out of which the successful ones are 360, 1500, Baja, Leone, Sumo, Vivio and Libero. On the other hand, Toyota, has launched about 100 odd vehicles in the four-wheeler market, and around 70 vehicles in the car segment, the famous ones being Yaris, Camry, Corolla, etc. (Toyota, 2015). These car companies come up with different car models and brands periodically to stay fresh in the memories of the customers. Today generation gap is not about 15-20 years of void in thinking, it is more frequent these days. A new generation become legal every year for driving and they pursue various available options in the market. So, it is important for these automobile companies to keep re-inventing themselves by branding and launching new products every once in a while to avoid getting fade away from the minds of their loyal as well as the new customers (Pauwels et al., 2004; Eisenhardt & Zbaracki,1992). As given in the case, Jim stayed loyal to Subaru, but evolved according to the models launched by them periodically. Had Subaru stopped after launching few automobile options, Jim would have been forced to consider options from other companies (Subaru, 2015).

Market Segmentation by Subaru and Toyota

The market segments targeted by Subaru and Toyota are:

Geographic segmentation

It is an important basis of segmentation of the automobile sector, especially in large sized countries like USA and India, where the conditions in different regions. Luxury car makers would definitely target the metropolitan regions for the sale of their cars, whereas small car makers would also take into account developing cities and townships into account during the process of segmentation of their products (Gundlach et al, 2006).

Demographic segmentation

Demographic segmentation provides a base marketing of products according to the income, status, age, etc. (Goi, 2009). Manufactures of small cars primarily focus on the segment of the people belonging to the middle class and here comes lies the demographic segmentation. On the other hand, luxury car manufacturers would focus more on the high income segment. According to the age of the target market group, automobile manufacturers come up with different color variants, for instance bright and flashy colors for the young and vice versa.

Psychological segmentation

This segmentation has been largely seen in the case of cars, where companies generally come up with two or three variants of the same model, and it has been observed by industry analysts that the variant of the medium variant of the model sells the most. Manufacturers of luxury cars like Ferrari, Porsche, etc. target the section of the society with a large disposable income and high status, and this can be achieved by psychological segmentation.

Behavioral segmentation

As mentioned earlier, behavioral segmentation is done on the basis of the benefits sought, loyalty status, etc. (Kotler and Keller, 2009). This is another important means for segmentation in the automobile sector, and taking yet again the example of a car, Daimler, the manufacturer of luxury car Maybach, customizes the cars according to the needs and requirements of the products.

Market advantage the automobile companies get by participating in Racing and Rallying Competitions

Manufacturers run race teams for a variety of reasons. Including but not limited to advertising, competition, and testing. When a company’s car wins a race it can cause people to believe more on their product. And that eventually makes people want to buy their cars. Also, it gets their logo and name out to a wider variety of people. On the competitive side, companies like competition just like everyone else. Finally, testing is done. The races put the technology through a variety of situations and prove to be a good test of the durability considering the races longevity. Also, it helps in building fan loyalty. Jim, for example, became a loyal fan of Subaru after seeing their performances in the racing and rallying competitions.

Pricing and Promotional Strategies of Subaru Forester and Toyota Yaris

Pricing

Subaru Forester’s and Toyota Yaris’ prices are made variable, depending on the market. In the market-oriented pricing strategy, their goal is to set prices that are appropriate to market conditions, with consideration for competition, demand, consumer perception, and other variables. Toyota applies this pricing strategy for most of its products, such as sedans and trucks. On the other hand, it applies the premium pricing strategy to set higher prices for some of its products (Subaru, 2015; Toyota, 2015).

Promotional strategies

Both Subaru’s and Toyota’s television advertisements and online advertisements are prominent. They effectively applies all of the marketing communications tactics to promote its goods and services. To supplement its already high performance in the marketplace, these companies also communicate the queries and complains of its customers via social networking mediums like Facebook or Twitter. Further, if they can create a mobile platform based app for effective communication, they would eventually improve their feedback system and consumer problem solving (Dominici, 2009).

Product Quality Maintenance strategy of Subaru and Toyota

Product Quality strategy of these companies are much modernized when compared to their competitors.

Providing chain association

It is a very basic and too critical reason in any automobile company, because the customers of automobile are more distressed about the authorizing and when the industry is going to convey the vehicle. Subaru and Toyota healthy supply series combination which is in more than ten odd countries.

Product Transpiration

Subaru is dispensing the customer to alter the car and its demands. So they have accomplished a chance to inaugurate a fresh vehicle depended on the most of the consumer`s choice and inclinations. The Toyota vehicles production will also be affected depending on the customer alteration demands (Subaru, 2015; Toyota, 2015).

Conclusion

Subaru and Toyota have worked hard and smart to sustain the competitive advantage in the ever-changing market dynamics. Their customers contain both the loyal ones as well as the new car population who are looking out to buy their first vehicle, as mentioned in the case. There are numerous people like Jim and Kevin who encounter similar dilemma when they go out to buy. The cases of these companies essentially reasons customer satisfaction as one of the prime factors of their success.

 

References

Dominici, G. (2009). From marketing mix to e-marketing mix: a literature overview and classification. International Journal of Business and Management, 4(9), pp. 17-24.

Eisenhardt,  K. & Zbaracki, M. (1992). Strategic Decision Making.  Strategic Management Journal, 13, pp. 17-37.

Goi, C. L. (2009). A review of marketing mix: 4Ps or more?. International Journal of Marketing Studies, 1(1), pp. 2.

Gundlach, G. T., Bolumole, Y. A., Eltantawy, R. A., & Frankel, R. (2006). The changing landscape of supply chain management, marketing channels of distribution, logistics and purchasing. Journal of Business & Industrial Marketing, pp.428-438.

Kotler, P., & Keller, K (2009). Marketing Management. 13th ed. US: Prentice Hall. pp. 11–20.

Pauwels, K.; Silva-Risso, J.; Srinivasan, S. and Hanssen, D.M (2004). New Products, Sales Promotions and Firm Value, With Application to the Automobile Industry. Journal of Marketing, September, pp. 1-55.

Onditi, A.A. (2012), An evaluation of promotional elements influencing sales of an organization: A case study of sales of Agricultural and Non-Agricultural products among women groups. International Journal of Business and Social Science, 3(5).

Subaru, (2015). Subaru Cars, Sedans, SUVs, Crossovers, Wagons | Subaru of America. Retrieved from: http://www.subaru.com/ on 14 Nov, 2015].

Teece, D. J. (2009). Business Models, Business Strategy and Innovation. Long Range Planning, 43, pp. 172-194.

Toyota, (2015). New Cars, Trucks, SUVs & Hybrids | Toyota Official Site. Retrieved from: http://www.toyota.com/  on 14 Nov, 2015].