The Pros And Cons Of Penetration Pricing

Thirdly, option is to strategically adjust the prices of their products because consumers are often very price sensitive. By doing so the company can either create more value that defines the quality and quantity of the product.

However Toyota also has cons, for example a con with their marketing techniques: not all of the information they provide customers with is 100% true. Toyota have a certain amount of merchandise which they need to sell to consumers, and if they do not manage to, then they lower the price and discount it in order to entice customers. However, when it is put into perspective that they have even cheaper cars, there are still others that are much cheaper, with similar specification. E.g. Ford have brought out a new innovative car with clever modern technology, and is more economical than a Toyota discounted car. In addition Toyota also had to reduce the price of their cars recently as customers were refusing to but their products for the full price. For example, they had to discount £500 off of a car, if bought within a certain amount of time. This shows that some of their

Will implement price penetration to gain the market share. Price penetration is where a business sets the price low with the goals of attracting customers and gaining market share. The price is raised once the market share is gained.

penetration pricing strategy. All indications are that sales will continue to grow. In response to a

Toyota is a leading company, and for over 70 years. It has been expanding business all over the world and

Since the demand for the brand has traditionally outstripped supply, the company can easily and without loss charge a premium from its customers. As mentioned the company sells its products at a 100% markup and which in turn translate into increased revenues.

Toyota motor products include; Hybrid, Plug-in Hybrid, Cars, MPVS/Vans, SUVs, Fuel Cell and Commercials. The strategy Toyota uses for marketing is mostly to showcase its different range of vehicles to the market as they also get inspired through the same to manufacture better vehicles. With this method both the clientele and the company benefit from each other.

Toyota is a key player in global automotive market. Its structure constitutes if various production plants in different locations and a very strong branding which helps it capture a major market share. Like other enterprises, Toyota has several strengths and weakness which makes it what it is now. Toyota heavily invests in Research and development which helps it come up reputable product line which is spread out throughout the world because of its strengthening global distribution network however its recent product recalling, loose grip in key geographic areas and wrong allocation of resources shows that even a strong brand like Toyota has its weaknesses.

Price, which is one of the most important elements of the marketing mix, can be difficult to get right. Pricing too high, or low, can negatively impact on customer satisfaction and revenue. Adopting a pricing strategy is necessary to achieve desired sales objectives (Chan & Wong 2005).

* Toyota is best known for environmentally safe, quality, reliability, durability and value for money.

The lower the price, the more the product is used thus increasing profit and customer satisfaction.

Toyota Motor Corporation is a Japanese multinational corporation, which is famous for manufacturing affordable quality automobiles. Toyota entered to the U.S. market in 1957. It took Toyota more than 40 years to take 10% share of U.S. market. Almost 50 year after entering the U.S. market, Toyota surpassed Ford and Chrysler in 2007 to become the second most popular automotive brand in the United States(Rajasekera, 2013).

Toyota Motor Corporation is a Japanese automotive manufacturer, founded in 1937 as an extension of Toyoda Automatic Loom Works. A competitor in the motor vehicle industry. Noted in February 2016, as the 13th-largest company in the world by revenue. The largest automobile manufacture in 2012 (by production) which was ahead of General Motors (GM) and Volkswagen (Wikipedia, 2016). According to OICA 2012, Toyota is the world’s 1st automobile manufacturer to produce over 10 million vehicles per year. Worth 397 billion yen (equivalent to 3.27 billion US dollars, employing over 344k and has global sales of 9.147 million vehicles per year (Toyota Company Profile, 2015). Throughout the years that Toyota Motor Corporation has been in operation, it has prided itself on a well-established brand that is known for manufacturing high quality vehicles that leads in reliability, functionality and resilience.

Toyota company has been able to create an image in the market. They have been successful because of high-quality service to its customers. Whenever there was a problem related to the product, the organization never tried to hide the issues. They always addressed to the people even though that impact its image. Another important factor that made the Toyota company successful is the quality. Though it is expensive compared to other automobiles, it is very reliable and dependable. Customers are always loyal to this brand as they have a high reselling value.

Price interacts with all other elements of the marketing mix to determine the effectiveness of each and of the whole. The objectives that guide pricing strategy should be a subset of the objectives that guide overall marketing strategy. Thus, it is probably wrong to view price as an independent element of marketing strategy or to assert that price, by itself, is a central element in the marketing mix.” (Webster, 1979)