This research proposal is to investigate the reason of what motivate customer to choose Toyota car whether is it the price, brand, safety innovation and technology that make the purchasing power of customer towards Toyota. These factors are used as independent variables to determine the main points of customer when purchasing Toyota car.
Objective
To determine whether the safety is the main concern for customer in doing decision making for purchasing Toyota car.
To determine whether total quality management is the main concern for customer to buy Toyota car.
To determine whether the brand is, price and design that make customer to purchase Toyota car.
Research question
What are the factors that make customer choose Toyota car?
3.0 Introduction
Toyota Motor Co. Ltd was first established in 1937. The company are well-known in manufacturing and producing vehicle such as cars, vans and it operates in 27 countries worldwide. The worldwide production was 9.5 million in 2007 and their sales are keeping increasing until they become the second world automaker in United States. They gain as the number 1 carmaker in the world in 2008, passing General Motors which had been leader since 1931 (The New York Times, 2010).
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Toyota organizations are the first to build the Toyota Production Systems (TPS) and implemented the lean manufacturing in their systems. Lean manufacturing was included in the TPS to eliminate waste, prevent the most optimum flow and assembly of material, from raw material to finished goods (Perrin, 2006). There were 7 principles that have been installed in Toyota’s production system which are reduced setup time, small-lot production, employee involvement and empowerment (Kaizen), quality at source (Jidoka), equipment maintenance, pull production (Just-in-Time Production) and suppliers production (Toyota Motor Corporation 2003). After the Toyota recalled accident in early 2010, the company was worried about the future sales of the company (Booth & Teather, 2010). But they already taking the precaution steps on overcome the issues and now to gaining back the customer trusts worldwide. Therefore, Toyota wants to identify any feedbacks on customer’s perception when they are purchasing Toyota car so that Toyota are able to understands and focus more in this information and fulfil their customers’ needs and wants.
4.0 Significance of study
This proposal is to study out what factors that drive customer to purchase Toyota car. Toyota is able to find out what are the customer’s necessities for a car such as the price, quality, technology and safety innovation affects the purchase consideration. This information was helpful to Toyota as they have the competitive advantages in drag up their sales and profit because Toyota can improve their product to suit customer’s needs worldwide.
5.0 Literature review
The first steam powered car was built by the French military engineer, Nicole Cugnot in 1769. It is not easy to become the first people to invent the vehicle because it surely needs a lot refinement to do. Hence, after several troubleshoot and analysis, he improved the car that he creates such as the steering and braking system in the car (Mametz, 2007). Over the year, car rapidly evolved from using steam power to petrol as their main power to move the car. After the crude oil increasing few years ago, hybrid car become more and more reliable among the car users as it save cost in term of petrol and also good for the environment (Reuters, 2010).
5.1 Safety
According to the Maslow Hierarchy of needs, car can be categorising in the security level. This security or safety issue are very important to the customer in purchasing a car. In this level, people tend to be more complex as they want to control and order their lives for survives from any harms such as against incident and injury (Venkat, 2008). For the recent survey, most of the customer is more focus on the safety of the car rather than fuel consumption of the car. Customer are try to understand the additional attributes in the car’s security before they buying it. Customer will like to test drive the vehicle to understand more about the handling, stability of the car and how the anti-lock brakes work. Customer’s act is necessarily so that they are well-known about their car security capabilities and comfortable to drive on the road (Holmes, 2010). The table below show the most important factors for customer to buy a car.
As for Toyota, their cars are well-known worldwide and one of their model Prius, have won the Car of the Year awards not only in Japan itself but also in the United States (US) and Europe. It has been given five starts for its safety from the European New Car Assessment Programme or EuroNCAP (Husain, 2004). From this perception, customer has more confident towards Toyota car and the sales of the Prius are the top rank in Japan for the June market (AP, 2010). Other than this, the safety of the car also become main concern for customer nowadays said Narith which is the managing director of Naritat Motorcare Cambodia Co Ltd (Anon, 2010).
5.2 Quality
The quality of car in Toyota is undeniable. Even thou they have encounter serious problem to recall back certain model of their cars such as Toyota Avalon and Highlander, Lexus GS300 and Lexus IS250 to replace the brake master cylinder seal that cause the dimness of the brake warning lamp rather than keep silently about the error in their product (TMS, 2010).
The quality of Toyota car are said to be proven because they have few principles that make the condition of the car assured. Firstly, Jidoka principle focus on the functional areas of manufacturing and production areas which Toyota concern the most about their quality and improving in their quality works. Jidoka, which are the principles about the quality must be ‘concern and be built in’ during the manufacturing process (Fred, 2000). Jidoka was a method to detect any defective production and stopped the working process from being continuous until they solved it down. When a quality or equipment problems occurred, the machine will detected itself and stopped. As a result, only goods products that are fulfilled the quality standards will be use in the next activity on the production line. This contributes to save cost of resources uses because the systems avoid defective product from being produce again and again (Liker, 2004).
For the following principles, Kaizen which in Japanese term meaning is ‘continuous improvement’ refer to the regularly process of cultivation for the better sake of the organization and their workers. Inside these principles, Kaizen was mainly focus on improvement of their workers whether made by small groups or individual workers (Liker and J.K, 2004). Training that provided by organization to the workers provide them to be more self alert, open their mindset, tackling the solution of the problems by themselves without counting on supervisors and discussion among members will contribute or lead them to the leadership’s perspective. For achieving higher Kaizen standards, it also needs them to accomplish greater standards and maintain their capability to meet those standards on continuing basis (Greg, 2009). Other than that, the workers are allowed to give viewpoint that can suggest to an important and remarkable idea about the quality improvements or working process improvements and most importantly in the decision making process.
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The last principles but not least was Just-in-Time (JIT). The concept of this principle was basically applying more to the customer care and demand. The organization only produced the car amount just when they have received from the customer orders. After receiving an orders, production instruction will issues to the production line as early as possible (Richard, n.d). The benefits of this were the work-in-progress of the workers become lesser and also the productivity of vehicle increasing because of reducing part-related delayed (TPS, 2010).
With all the principles applied, the quality of Toyota cars is dependable and high in quality. The table below is the proved that Toyota cars have the most merit in their car production (CU, 2010). Even Toyota faces more than 200 lawsuits in the US about the defective vehicle; they have tried to improve US sales market by doing promotions such as zero-percent financing and free maintenance (AP, 2010). From this aspect, customer will not think twice to buy the Toyota car as they have the best quality in car’s production system. Other than that, Toyota also concern about the customer’s care because they are willing to risk to recall back the defective car rather than closemouthed about the issues. This goes accordingly to Toyota philosophy which is accepting responsibilities for its own conduct (Toyota, 2010).
Brand
5.3 Brand, price and design
Toyota has come out with many models of car and all of the models such as Prius, Yaris, and Tacoma that are fulfilling the customer requirement such as environmental friendly, considerable in price and the design of the car was nice (Vasilash, 2004). The table above show the brand’s that likely to be purchase by customer. Toyota becomes the first rank in customer loyalty because Toyota’s brand was trusted worldwide. Furthermore, Toyota also customizes the car according to customer needs. Without this, Toyota is not able to develop brand image across the markets because it’s are not able to produce a car that fulfil the customer preferences and environment in major markets (Strumpf, 2010). This is because each nation has differences culture, geographical indication and others.
Under the factor of price, customer will begin to think whether to buy the car or not. It always happens to anyone when they want to purchase something. For example, customer start to think is it worth to buy the product such as Toyota car, can the customer himself afford to pay back the instalment loans that they borrow, depreciation of car over the year and many others. From the chart below, customer are willing to pay for the price around $20,000 to $30,000 for them to own a car. Toyota is more likely to be choosing because of their reasonable and affordable pricing that would attract customer to them (TMC, 2009). Toyota is being able to maintain the car price down because of the principles that they use to eliminate any waste resources (Fred, 2000). Being fully aware of their competitors such as General Motors, Honda and other make Toyota capable to come out with new innovation and strategy in the automotive market and maintain their competition prominent. Toyota sales were growth 40% as in March 2010 after its offer discounts about the recall. This also help Toyota gain back customer trust and loyalty as the company are willing to retrieve problems on their cars and giving a lot of incentive to retail customer.
Manufacturer
7.0 Primary data collection
Generally, this primary data collection is going to be done to help the objectives of this study. Primary data collection for this can be done by doing survey towards any customer that walk in the Toyota’s car showroom. A set of questionnaires comprising of 40 questions which involving multiple choices are given for ease the customer thinking and no bias. The set of question should contain ‘what is the main factor that you purchase a Toyota car’. You here are referring to the customer themselves. The multiple answers can be provide as follow for the question
Safety
Quality
Brand, price and design
This question was important because it show the main factors in customer to purchase Toyota car. By knowing this, Toyota Company will rely on this survey and develop more research to fulfil their customer needs and wants.
(2100 words)
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