MR
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model_.docRunning head: Marketing Research
Marketing Research 2
Economic Benefits of Toyota Avalon in Burma
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Executive Summary
This marketing report was commissioned to investigate whether the adoption of Toyota Avalon Model by the Burma citizens will improve the county’s economy by reducing fuel consumption and the number of road accidents prevalent in the country. This research lays its emphasis on the fact that Toyota Avalon has an overall rating of over 8.4, comfort and convenience rating of 8.6 and value rating of 8.5 according to the KBB classifieds. Toyota Avalon has a Manufacturer’s suggested price (MSRP) of about $35,000, which is affordable for most people in Myanmar anticipating to own cars. The model has a lavish and sleek design making it appropriate for a luxury drive. Further investigations indicate that Toyota Avalon has its steering wheels located to the left, which conforms to driving guidelines in Burma that requires drivers to drive on the right hand side of the road. The car model features a star safety system fitted traction and stability controls, anti-lock brakes, 10 airbags, pre-collision system and back cross-traffic alert system. Moreover, Toyota Avalon ensures fuel economy by featuring a four-cylinder engine with 2.5 litres Atkinson-cycle coupled with a pack of nickel-metal hydride battery and an electric motor.
Adoption of Toyota Avalon will stabilize Burma’s economy and improve its citizens Gross Domestic Product. The report analyses this allegation and concludes that Toyota Avalon costs about $35,000, which relatively less than other models of the same quality and features. Further analysis reveals that the model consumes less fuel and has safety electronic aids, which will eliminate the losses incurred in accidents. The report recommends that Burma should waive import duties imposed on Toyota Avalon to ensure easier acquisition and ownership of the model. Toyota leaderships in the country should also improve customer awareness of the economic benefits of Toyota Avalon to facilitate its acceptance by the citizens.
Table of Contents
4Introduction/ Background
6 Information needed by the DM
7 Analytical framework and models
9 Results
13 Conclusions and Recommendations
14 References
Introduction/ Background
Majority of people in Burma mainly rely on road transport as a means of moving from one place to another. Compared to air and sea, road transport is cheap, flexible and efficient over shorter distances. However, most of the country’s population own different car models from various manufacturers, which are expensive and consume more fuel. Continued importation and use of such cars without energy star certification will lower the country’s economy by increasing costs of transport. There has also been a public outcry that some of the cars currently in use in Burma do meet the required safety standards thus get involved in road accidents some of which car owners could have prevented. Following the above shortcomings exhibited by the cars currently in use in the country, we conducted a marketing research study to investigate the economic benefits associated with the adoption and use of Toyota Avalon in Myanmar (Burma) (Crittenden, 2010).
Problem Definition
Fuel Economy and Safety: Cars currently in use in Burma are less economical, unaffordable and gets involved in reckless accidents.
Management-decision problem
The research seeks to determine whether Burma can improve fuel efficiency and improve its economy by adopting and importing Toyota Avalon Cars.
Marketing research problem
The research wants to find out how the acceptance of Toyota Avalon will benefit the citizens of Burma and improve the country’s economy.
Problem Audit
History of The Problem
According to WHO, road accidents are the top twenty causes death in Burma with position 18 in the rank. In 2012 alone, road accidents in Burma accounted for about 7,281 deaths, which was 1.183% of the total deaths reported in the country (WHO, 2012). Burma records about 13.73 deaths per 10, 000 motor vehicles to the 1.5 and 2.0 per 10,000 in U.K and Us respectfully (Elvik, Vaa, Erke, & Sorensen, 2009). NHTSA attributes most of these accidents to various car manufacturers who design the cars inappropriately. For instance, Myanmar imports about 80% of its cars from Thailand and Japan, which have their steering wheels located on the right. The design has increased the number of car crashes in Burma since the driving in the country is on the right. Consequently, these car crashes along with the associated injuries, fatalities, property damage and permanent disabilities consumes Burma’s GDP by about 3% annually. Although prestigious, other car models including Mercedes, Toyota Prado and BMWs used by some of the citizens are costly and fuel inefficiency hence uneconomical (Magee, 2007).
Alternative courses of action available to the DM (decision maker)
Burma should encourage advice and its citizens who are anticipating owning cars to consider adopting the use of Toyota Avalon cars. To accomplish this, the country will reduce the customs and import duty imposed on the importation of Toyota Avalon cars besides offering other incentives to entice and motivate buyers to purchase the cars. Toyota dealerships across Myanmar should also take course to improve Toyota Avalon’s market share by selling the models at discounted prices (Baker, 2000).
Criteria for evaluation of alternative courses of action
Burma through its ministry of energy will evaluate the fuel demanded a quarter yearly to gauge Toyota Avalon’s fuel efficiency. Besides, Burma’s Road Transport Administration Department will regularly analyze accident statistics upon the implementation of the courses of action to assess the cars’ safety standards (Baker, 2000).
Basic potential outcomes
According to the KBB rating, Toyota Avalon has an overall rating of 8.4 and design rating of 8.1. The car is affordable and economizes on fuel consumption hence it will reduce fuel demand thereby improving the country’s economy (Chen, & Ren, 2010). Furthermore, adoption of Toyota Avalon will reduce the number of accidents as it has its steering wheel located on the left, which conforms to the Burma’s left side driving regulations.
Information needed by the DM
Some Toyota Avalon car owners from some countries including U.S and United Kingdom have reported to NHTSA and safety authorities in their countries that their cars accelerated unexpectedly on some scenarios. Thus, this information on sudden unintended acceleration of Toyota Avalon is vital for Myanmar decision makers to ascertain their safety despite Toyota Motors’ claim that they corrected the defect.
Research Approach
This marketing research involved qualitative research to gather and document the findings. The approach is a qualitative research in the sense that it is inductive and seeks to develop a theory connecting Burma’s economy, driver satisfaction/ comfort and road safety to the citizens’ adoption of Toyota Avalon. The research will base on the data collected and the findings to generalize the link between the country’s econmic growth and Toyota Avalon cars. However, the research also incorporated some elements of quantitative approach by collecting and analyzing numerical data from secondary sources (Blythe, 2001).
Approach components
Analytical framework and models
Being qualitative type of research, the analytical framework used to evaluate the findings of the research was the value chain (firm level) market analysis approach. The model provides a way of evaluating Toyota Avalon’s affordability, fuel efficiency, safety and overall economic impact.
Figure 1: Analytical framework for Toyota Avalon (Crittenden, 2010) (see attached .ppt file)
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Research questions
The research used the following structured questions to collect data from Toyota Motors, which is the producer of Toyota Avalon, Car owners and the Road Transport Administration Department.
1. What safety measures did you take into place when designing and assembling Toyota Avalon?
2. How have you ensured driver’s safety when parking his car or in reverse mode?
3. Does the car have a brake override system installed to stop the car when the accelerator pedal fails?
4. How many customers have raised concerns over unintended acceleration of Toyota Avalon models?
5. What is the average price of Toyota Avalon model?
6. What is the car’s average fuel consumption for every one kilometer travelled?
7. Does the car cost equally compared to other models of the same quality and design from other manufacturers?
8. What have been the effects of prevalent car accidents on the Burma’s overall GDP?
9. Will the government reduce or waive the import duty to facilitate the adoption of Toyota Avalon?
10. What has been your experience with driving Toyota Avalon car?
Research Design
The research design used in this marketing research was descriptive studies since the research sought to investigate without experimental the benefits of Myanmar importing Toyota Avalon to both its economy and road safety. The study also involved establishing the relationship between the cars currently used in the Myanmar and the prevalence of accidents, which has caused at least a 3% drop in the country’s GDP (Wenzel & Ross, 2005). Owing to the nature of the research study, the type of data used in this study was majorly qualitative. However, quantitative data was also apparent since the research had to quantify some data including Toyota Avalon market rating and performance for convenience.
Data collection & Analysis
Being a majorly qualitative study, the research collected its data using interviews, questionares and observation methods of data collection. The interviews involved face-to-face interrogation with owners of other car models concerning the challenges they face as drivers. We also interviewed officials of the Myanmar Police Force and Road Transport Administration Department to obtain data on the reported accidents in the country. Additionally, we emailed structured questionares to Toyota Motors dealerships based in in U.S, Japan and United Kingdom with a request to send back once dully filled. We sent other questionares to Toyota Avalon owners asking them about their experience with the cars. Data collection by observation was almost impossible since we could hardly individuals who own Toyota Avalon cars in the country. However, we observed the right-hand positioning of steering wheels in most cars around the city yet driving in Burma is on the right side of the road (Covello, 2002).
Results
According to Road Transport Administration Department most of the cars currently in Myanmar have their steering wheels located on the right hand side. This has increased the number of car crushes in the country since drivers in Myanmar should drive on the right-hand side of the road and consequent fatalities of 13.5 for every 10,000 cars. According to WHO (2012), in 2012 alone, road accidents in Burma accounted for about 7,281 deaths, which was 1.183% of the total deaths reported in the country. As a result, these car crashes cause injuries, fatalities, property damage and physical disabilities causing about 3% drop in Burma’s annual (Chen & Ren, 2010).
Table 1: Road Crashes in Burma (Ministry of Construction (road) Myanmar, 2013)
|
Year |
Road Crashes |
Injuries |
Fatalities |
|
2010 |
7985 |
14130 |
7264 |
|
2011 |
8568 |
15316 |
2495 |
|
2012 |
9339 |
15720 |
2653 |
Toyota Avalon car model has a sleek design, efficient, dependable and has a lavish interior design that suits luxury buyers (HybridCars, 2012). The car has a reasonable pricing of between $35,000 to 40,000 suggested MSRP, which is affordable to most car buyers who value quality. According to Toyota Motors, the Toyota Avalon Hybrid costs slightly higher with an MSRP of between $ 37,000 and 42,500. The prices however get as low as $29,069 - $30,285 in some countries. From KBB experts suggests the car has an excellent rating with an overall score of 8.4 (Rechtin, 2009)
Figure 2: Toyota Avalon’s user rating (KBB rating, 2015)
Concerning Toyota Avalon’s safety standards, Toyota Motors have included a star safety system having anti-lock brakes, traction and controls, Whiplash-Injury Lessening front seats and 10 airbags. To improve the car’s safety, other additional features include pre-collision system, blind-spot monitoring and cross-traffic alert system at the rear. According to EPA, Toyota Avalon also economizes on fuel consumption. For instance, the V6 Avalon has a fuel economy rating of 32 mpg highway and 21 mpg town yielding to a combine fuel economy of 24 mpg, which the experts say is appropriate for the car’s large engine. Toyota Motors has improved Toyota Avalon’s fuel economy-further by designing the Avalon Hybrid that has Atkinson-cycle 2.5-litres four-cylinder engine and CVT coupled with an electric motor and a pack of nickel-metal hydride. As a result, the car achieves a 200 horsepower, which is capable of accelerating it from zero to 60 mph within 10 seconds (Rechtin, and Mark, 2009).
Table 3: 5-year ownership cost for Toyota Avalon (Haywood, 2001)
|
Cost |
1st Year |
2nd Year |
3rd Year |
4th Year |
5th Year |
Total |
|
Financing |
$832 |
$659 |
$480 |
$295 |
$105 |
$2,505 |
|
Fees and Taxes |
$2,047 |
$120 |
$122 |
$106 |
$109 |
$2,205 |
|
Depreciation |
$10,591 |
$3,750 |
3,250$ |
$2,550 |
$2,025 |
$22,166 |
|
Insurance |
$1,183 |
$1,170 |
$1,157 |
$1,143 |
$1,130 |
$5,782 |
|
Fuel |
$1,492 |
$1,545 |
$1,600 |
$1,657 |
$1,716 |
$8,010 |
|
Maintenance |
$82 |
$344 |
$2,310 |
$710 |
$338 |
$3,783 |
|
Opportunity Cost |
$43 |
$59 |
$82 |
$100 |
$116 |
$401 |
|
Repairs |
$0 |
$0 |
$210 |
$433 |
$537 |
$1,179 |
|
Totals |
$16,271 |
$7,646 |
$9,211 |
$6,995 |
$6,076 |
$46,198 |
Limitations of the study
Being a majorly qualitative research, the research based its findings on the descriptions and data provided by respondents, which we could not validate experimentally. The research could not also determine the safety rating of Toyota Avalon Model. Some findings if this study including user ratings provided by KBB may be subject to bias since they are Avalon Toyota owners’ personal views and opinions. Finally, Toyota Avalon has other sub-models including Avalon Hybrid and V6 that hindered the research from determining its exact cost (Haywood, 2001).
Conclusions and Recommendations
Myanmar (Burma) has experienced a considerable decline on its economy GDP due to a higher number of accidents caused by vehicles that do not meet the required safety standards. Some of the cars imported from Thailand and Japan have their steering wheels positioned on the car’s right-hand side, which contradicts with Burma’s driving guidelines that requires drivers to maintain right-hand side while driving. In addition to its affordable price, sleek to design and fuel-economy, Toyota Avalon sedan will reduce the number of road accidents due its improved safety features and promote Burma’s overall economy.
Recommendations.
In a bid to encourage adoption of Toyota Avalon, Myanmar should waive import duty on the car models to encourage importation of the sedans. Toyota leaderships Burma should launch a comprehensive advertisement of Toyota Avalon in both broadcast media and billboards to sensitize locals of its existence and economic benefits. However, there is need for further research to determine the safety rating of Toyota Avalon in spite of the safety standards that the car exhibits.
References
Baker, M. (2000) Marketing Management and Strategy, 3rd edition, Macmillan Business
Crittenden, V. L. (2010). Brand Growth Strategy. Wiley International Encyclopedia of Marketing.
Haywood, C. F. (1999). A report on the significance of Toyota Motor Manufacturing Kentucky, Inc. on the Kentucky economy. Economic Development Review, 16(3), 37.
Haywood, C. F. (2001). Toyota Motor Manufacturing. Japan in the Bluegrass, 155.
Magee, D. (2007). How Toyota became# 1: leadership lessons from the world's greatest car company. Penguin.
Chen, C., & Ren, Y. (2010). Exploring the relationship between vehicle safety and fuel efficiency in automotive design. Transportation research part D: transport and environment, 15(2), 112-116.
“Rechtin, Mark (1999-10-04).”Redesigned Avalon is smoother, quieter”. Automotive News. Retrieved 2014-07-04
“Paukert (2012-06-26).”Toyota Avalon gets 40-MPG hybrid model for 2013”. Retrieved 2012- 08-16.
“Prices And Specs Announced For Toyota Avalon Hybrid”. HybridCars.com. Retrieved 2012- 11-02.
Wenzel, T. P., & Ross, M. (2005). The effects of vehicle model and driver behavior on risk. Accident Analysis & Prevention, 37(3), 479-494.
Elvik, R., Vaa, T., Erke, A., & Sorensen, M. (Eds.). (2009). The handbook of road safety measures. Emerald Group Publishing.
