FOR BABER MAKAYLA

10

Running Head: Promotion and Advertisement

Toyota and Tata

BUS508 Week 9 Promotional and Advertisement Strategies

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Promotion and advertisement are very important for any business company. The main goal of any business company is to make people buy their products or services. If the companies can’t make people know about their products or their services, it won’t be possible for them to make people buy their products. Promotion and advertisements make people aware of the products or the services of a particular company. Most of the great business companies of the world have reached the highest peak of success because of effective promotion and advertisements. Actually, promotion and advertisement is mainly important for a company in the early stages of their business. It can be seen that the products of the reputed companies don’t need a lot of promotions and advertisements for increasing the amount of sales. As they have a great reputation already, their products are bought by people. In this paper two companies and their promotion and advertisement strategies will be compared. One company is a very reputed one and the other one is an emerging one which is getting a good reputation gradually. Both of these companies are automobile companies. The reputed company is Toyota and the other company is Tata. (Tatamotors.com, 2014)

Promotional Strategies

Well, it can easily be understood that the promotion strategies of Toyota and Tata won’t be the same as these two companies don’t have the same customer base. Still there are some similarities between promotion and advertisement strategies. Toyota has a worldwide business. On the other hand Tata mainly runs their business basing on the south Asian region.

As Toyota is a worldwide company and has a worldwide customer base, they have to arrange their promotional plans accordingly. Toyota has customers in America, Europe and also in Asia. The financial structures of all these continents are not the same. So, Toyota has to take different promotion plans for different countries. The people of the Asian countries don’t have great economic structure like the European or the American countries. They can’t purchase cars in great prices. So, for the Asian countries Toyota needs to provide such promotion strategies which help people to purchase the products in an easier way. Toyota does this exactly. They provide such promotional packages which enables people to purchase cars in installments and cheaper prices. People can purchase cars by taking time to pay the full amount of money. They may have to pay some interest for having this service, but still it becomes easier for them. There is another thing which is done by Toyota. The old fashioned cars and the reconditioned cars from Toyota are sold in way cheaper rates than the actual prices. On the other hand, Toyota gives the fuel efficient and better quality cars to the people of the developed countries in special offers and packages. On the other hand Tata has a customer base which is limited among the middle class people mainly. Tata provides cheaper cars and small trucks mainly.

Tata knows their customer base very well. They know about the financial abilities of their customers and arrange the promotional plans accordingly. Tata is an Indian company and their customers are mainly Indian or from the countries around India. They even have trucks or cars which are priced at $5000. Moreover, very often they provide many discount offers for their customers. Actually Toyota follows that too. Right now Toyota is giving discount up to $1000 on 30th anniversary of the 4Runner. These promotion plans play a vital role in making people purchase the products from Toyota. Tata tries to follow the footsteps of Toyota as well. But the problem is, Tata isn’t as big as Toyota and they can’t provide big discounts anytime like Toyota. (Toyota.com, 2014)

Apart from the promotional offers and discounts, the advertisements play a vital role in sales increase as well. Advertisements of Tata and Toyota are different from each other. Toyota takes such an approach in their advertisement which shows that their products are fuel efficient and good in quality. On the other hand, Tata mainly highlights that their products are more affordable and easy for people to buy. They try to use the patriot mentality of people in the advertisements as well. They want to increase the sales mostly inside their country. That’s why they want to tell people that Tata is their own product and people should purchase Tata before the foreign companies in order to keep the money at their own country. So far, they are quite successful in making a good business in their own country. Though they are quite an old company, they are gaining success in the recent times because of taking better advertisement and promotional strategies. In some cases Tata is doing even better than Toyota inside India because of well-planned promotion and advertisement strategies. (Ailawadi & Gedenk et al., 2013)

Recommendations for Using Marketing Information

The big companies of the world use the marketing information in various ways. Before implementing a certain marketing strategy, it is important for the companies to take a look at the marketing information. Marketing information can be used in different ways for differentiate a company in the market and make that company a unique one. Here are two recommendations.

· First of all, the companies should take a look at the marketing approach of their main competitors. For example, Toyota can examine the marketing approach of Tata in south Asia so that they can have an advantage over Tata in the south Asian market. This advantage can take a company a long way. If a company can realize the marketing strategies of the rival company, it will become easier for that company to take certain steps which will help them to beat the rival. In India, Toyota failed to do that in some aspects. As a result they were beaten by Tata in those aspects and the amount of sales of Toyota was decreased in India.

· New technologies are always something which can help a company to have a great advantage over their rivals. From the marketing information, a company can determine the use of which new technology will help them to differentiate their own company. There is a good example of that. Though that example isn’t related to automobiles, still this example can be used to learn a lesson for the automobile companies as well. When Android, a new mobile operating system was invented, Nokia refused to use that in their products. On the contrary Samsung examined the marketing information properly and realized that Android may become a great success in the future. They accepted the Android operating system quite warmly. Right now most of the Samsung mobiles and tablet computers run on the Android operating system. It is now the most famous mobile operating system of the world. Samsung has become the leading mobile company because of it as well. Before the arrival of Android Nokia was the dominant company. After they have rejected Android, time started to go bad for Nokia and they couldn’t compete against those rivals who had implemented android in their mobiles. As a result, Nokia lost their place in the market and many other companies snatched away the mobile phone customers from Nokia. Nokia started to give huge losses and their business started to collapse. Finally their business was ruined in most of the market and they were forced to sell the company to Microsoft at last. This example will make the other companies, even from other business fields to realize about the importance and significance of using the marketing information to ensure the use of the right technology at the right time. If the rival companies use the right technologies at the right time, they may get a huge advantage and thus the market of the company will be ruined and the business will collapse. (Buil & De Chernatony et al., 2013)

Consumer Oriented Promotions

Consumer oriented promotions are always the best type of promotion. We all know that customers are the heart of a company. The companies which have a strong customer base, is able to perform great in the market. On the other hand the companies which don’t have good enough strategies or promotion plans to attract the customers, will surely fail to make a good business. The number of customer oriented promotions is quite big. All sorts of customer oriented promotions don’t work well for all the companies. Still there are some promotion plans which will work well for most of the companies. Here are two customer oriented promotions which will help a company a lot:

· The companies need to launch their new products from time to time. The new products are unknown to people. People don’t know about the quality and the other features of the new products. It can be tough for the company to make people purchase their new products. So, the company can follow a good customer oriented promotional plan. They can give such an offer to the customers that a certain amount of first customers will get good discounts on purchasing the new product. This will surely attract the customers to purchase the new products. The offer should be for a limited amount of time. After that time being over, the regular prices will be available for the customers. This strategy may result in making fewer amounts of profits at the initial stages. In the long run this will be a lot good for the company. The reputation of the products of that company will increase and in future that product may bring huge success for the company.

· Sometimes, it is seen that a company fails to fulfill the sales objectives of a certain product. It happens because that particular product fails to fulfill the expectations of the customers, or the alternative products beats that product in the market. In those cases the stock of those products remains unsold in the market. If that stock remains unsold, the company will have to face huge losses. On that case, the company should give discount on products from that stock. When the prices of the product will decrease, people will think again whether they will purchase that particular product or not. There are a lot of examples of getting success by implementing this promotional strategy. This mainly happens to the technology companies. It is seen that they are not being able to sell their products at initial prices. Then they decrease the price of the products and then sell the full stock. It brings some profit for the company. There is a saying that, “Something is better than nothing.” That saying seems true in business. If the companies don’t give discounts on their products which don’t have a good market, they won’t be able to make any profit. If they give discounts, maybe they will not make expected amount of profit, but some profit will surely be made. For immediate assistance, this customer oriented promotion will work well.

Pricing Decisions

The business companies take their pricing decisions basing on four objectives. These four objectives are survival, profit, sales and status Quo. The leading Automobile company, Toyota makes their pricing decisions mainly depending on profit and sales objectives. They their profits and sales mainly indicate their capital. When they see that their sales have been decreased, they reduce the prices and when their sales increase, the price of the demandable products goes higher. (Leiss, 2013)

Here are two actions which can be taken by the companies of same product in order to get advantage on in the market.

· Giving the same quality product in cheaper prices in initial stage is a very effective action. It will be a good action for the future of the company. They will gradually increase their customer base and the company will become reputed as well. In the first stage this won’t help the company to make a lot of profit. But in the future the prices can be increased when demand is on the high.

· The companies which already have a good reputation in the market can implement another pricing strategy. They can bring their new products in little higher prices at the first stage. It is expected that many people won’t purchase that product if the prices is a little higher in the first. Then the price will be gradually decreased and thus people will be encouraged to purchase that particular product.

Advertising Medium

For the selected product category, the best advertising medium is satellite channels without any doubt. Actually, satellite channel is the best advertising medium for the most of the products. There are many reasons behind this. Satellite channels are such mediums which can reach everywhere. People from all over the world have access to different satellite channels. If the companies give advertisements in the satellite channels, it will reach most number of people. Giving advertisements in satellite channels is not very cheap. But considering the effectiveness, the companies should give the advertisements in satellite channels. There are a lot of examples of effectiveness of this medium of advertisement. Automobile companies such as Vox Wagen, Honda, Mitsubishi and many more have become successful in drawing the attention of the customers and because of advertisement in satellite channels they have increased their sales a lot. (Babu & Vuram, 2013)

Conclusion

In modern business world, no company can become successful without proper advertisement and promotion plans. At present the market is competitive than ever. No matter what the business sector is, all the companies have to face a lot of competition. The key to survive in this great competition is to create a strong customer base and make the customers to purchase the products. So, promotion and advertisement are such things which can make or break a company. If the advertisements are good, the customers will like the products and if the promotions and advertisements are bad they will reject the products. (Schudson, 2013)

Reference

Tatamotors.com. (2014). Tata motors limited - largest indian automobile manufacturer. [online]

Toyota.com. (2014). Toyota cars, trucks, suvs & hybrids | toyota

Ailawadi, K. L., Gedenk, K., Langer, T., Ma, Y. & Neslin, S. A. (2013). Consumer response to uncertain promotions: an empirical analysis of conditional rebates. International Journal Of Research In Marketing.

Babu, K. R. & Vuram, I. R. (2013). Impact of advertisements on customer preferences (an empirical study on multiple product categories). Asian Journal Of Research In Business Economics And Management, 3 (10), pp. 47--56.

Buil, I., De Chernatony, L. & Mart\'\Inez, E. (2013). Examining the role of advertising and sales promotions in brand equity creation. Journal Of Business Research, 66 (1), pp. 115--122.

Leiss, W. (2013). Social communication in advertising. Hoboken: Taylor And Francis.

Schudson, M. (2013). Advertising the uneasy persuasion. Taylor & Francis.