Marketing Interview with Toyota Pakistan Business Management: Methods in Business Research
Mr. Ibad Javed, Deputy Manager, Marketing
Marketing is one of the biggest strength of IMC. Customer Relations dept. is very effective; the warranty on cars (1 year or 20000 KM) is a good exercise. Diversity into related products, Toyota oils are being followed to add to the value chains.
The company has a strength in R & D because Toyota Motors (Japan) is a high technology firm and spends as much as 71% of its total revenue on R&D. Any advances made are easily transferred to IMC.
Vendor development is given essential importance. Product development dept. is responsible for developing, helping and maintaining vendors. The vendors are trained in quality procedures using Toyota Motors expertise. The vendors are free to sell parts to other manufacturers, which goes a long way in establishing a positive relationship because IMC itself cannot provide sufficient volumes.
The House of Habib (Backward Integration) owns many of the vendors. Similarly many of the imported parts come from companies that are port of the Toyota group e.g. Denso, Automate.
The dealer network is given a lot of importance at IMC and a lot of work goes into dealer development. There are 17 dealers throughout Pakistan who have all gone through the vigorous selection and maintenance procedures.
Establishing one dealer requires an outlay of around Rs. 100—150 million for the company. This includes suitable buildings, systems, and automatic equipments. IMC pioneered the 3 S system of dealership (Sales, Service and Spare parts), which goes a long way in meeting customer satisfaction and building brand equity. This system is now being adopted by others too.
Mr. Fawaz Shafiqi, Planning (Planning)
The planning process is very well established at IMC, and includes everybody from the dealers to the vendors. The dealers send in their monthly requirements for three months to marketing, who forward this to production who order from product development or foreign vendors according to their requirements. The dealers revise their order if necessary in the next month and cycle continues.
A major marketing problem is that the model of the company’s main product Toyota Corolla has not changes for the last six years. A related problem is that Corolla’s lower priced variety (XE) and upper priced variety (2.0 D) are indistinguishable on the basis of shape which limits the scope of status oriented purchases.
The Company’s main market for Hilux is Balouchistan and N.W.F.P but they are being pooled by reconditioned cars smuggled through Afghanistan. This is becoming a major threat. The coming threat for Hilux Includes Hyundai Shahzor which will be priced around 20% lower. Corolla’s Automatic variant is not picking up sales. This is mainly due to customer perception (not altogether wrong) that it consumes too much fuel and service which in non-available.
Mr. Saqib Ashraf, Assistant Manager, Planning (Daihatsu)
IMC is planning to enter the 800-cc market in May-June 2000 with Daihatsu Cuore. This car will have definite quality advantages over Alto but it will also be priced higher. IMC has been planning to launch this for a long time. Now following their deal, Dewan group, is entering the same market with Daewoo and Hyundai, both of which will be priced lower. Sindth Engineering is bringing out OKA (Russian made 660cc) in January 2000 priced much lower at around 200,000/.
The CNG can market offers huge potential as they are locally convertible and also Pakistan has ample natural gas resources. It offers great economy of fuel and the only thing it needs is government support, (there are only 45 pumps throughout Pakistan).
Mr. Kamran Jamil, Sales Executive, Toyota Eastern Motors
There is a strong relationship and identification with IMC. The company helps out as much as possible and offers maximum systems support and initial fixed expenditures. In the 3 S system, Sales, Service and Spare parts are all offered under one roof. This is very successful in creating customer satisfaction.
All parts sold are originals and are bought from the company. Orders and inventory control is never a problem because of IMC’s superior systems. The demand for corolla is high because of high resale value, which is in turn due to availability of spare parts and service and Toyota’s quality image,