Customer Management: MARK3014 Answered Customer Relationship Management at Toyota Motor Corporation

Customer Relationship Management at Toyota Motor Corporation


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Table of Contents

Introduction. 3

Customer Acquisition, Retention, and Development Strategies. 3

Prospecting Strategy. 3

Merchandising Strategy. 4

Event Based Marketing. 4

Customer Engagement Approach. 5

Tri-Variate CPM and Data Mining Strategies. 5

Sustainable customer management 6

The CRM Value Chain Model 6

IDIC Methodology. 7

Conclusion. 8

References. 9





According to Stone (2000) any business operating in the highly competitive business environment today needs to develop effective strategies to enable it to acquire, retain, and develop its customers in an effective manner. This essay seeks to evaluate the various strategies that Toyota can use as well as how it can go about establishing a sustainable customer management strategy. The company operates in the manufacture and sale of motor vehicles and made revenues of USD272,031.1 Million. Toyota sells motor vehicles in both the B2B and the B2C customer segments and mainly competes with players such as Ford Motor Company, General Motors, Nissan, etc. The company has adapted the use of social media in its marketing so as to reach customers across the globe.

Customer Acquisition, Retention, and Development Strategies

Modern companies like Toyota need to manage the customer journey in an effective manner where the journey has various stages including acquisition, retention, and development of the customer. Literature such as Payne and Frow (2013) (2013) reveals that companies usually develop such strategies to ensure they move the customers through the three stages in an effective manner and this is in most cases aided by the use of CRM technologies and practices. According to Shwadhin et al. (2016), the use of these strategies crucial due to the fact that they enable companies like Toyota to identify and nurture new customers, ensure they increase their value to the business, and thus retain them as loyal customers in the long term.

Prospecting Strategy

One of the popular customer acquisition strategies available for Toyota especially in the BB market segment is prospecting. In the B2B environment, Wilson et al. (2016) marketers are expected to generate leads and follow up on them to ensure they acquire customers. This strategy involves the search for business leads from various sources such as customer referrals, company websites, search engines etc. after the qualification of the leads, the marketing team at Toyota should then come up with the most appropriate way of making contact with the target business. According to Yang and Smith (2009) this can be done through direct to customer channels such as using sales people and indirect methods such as using intermediaries or using bought space in the media to advertise.

Merchandising Strategy

In the B2C customer segment, Smith and Yang (2004) posit that customer acquisition may involve various other efforts such as advertising, promotions, social media, as well as the use of merchandising. These are important in that they seek to create customer interest in the product and trust to ensure they make purchase of the company product. In the case of Toyota for example, Groeger and Buttle (2014) suggests that the company can employ the merchandising strategy in its stores which involves any activity or behaviour that stimulates the need to make purchase except the use of personal selling which is usually carried out at the retail outlets. Toyota has established various retail outlets for its vehicles in different countries, and it can engage in merchandising such as in the form of special displays of its new models of favourite car types, use of window displays, etc. in order to influence the behaviour of the customers in the stores.

Event Based Marketing

In addition, Ahmad and Buttle (2002) posit that the company can also engage in event based marketing as a strategy for customer acquisition. This strategy is considered useful due to the fact that it provides customers with an opportunity to approach prospective customers at a time when there is a higher possibility of making a sale. For example, the company can engage in marketing during motoring events such as the 4*4 challenge in different countries to market its SUVs such as the Prado and the Land Cruiser and mid-sized SUVs such as the RAV4. In this regard, the fans of such events have a higher likelihood of making a purchase since they are already fans of such types of vehicles.

Customer Engagement Approach

In the case of customer retention, Guido et al. (2011) add that it is a concept that is described as the effort by a company to maintain a continuous relationship with its customers over the long-term. It is considered to be an important aspect since it increases the purchases of products since customers get to know their suppliers and thus develop trust in them if they are satisfied with the products. Further, Sackmann et al. (2010) posit that high retention rates lead to lower costs of managing customers over time, leads to increased customer referrals, and also makes it possible for the company to charge premium prices.

Toyota can adopt the customer engagement approach as a retention strategy. According to Guido et al. (2011), his is commonly done where the marketing team creates compelling content with a focus on how to make the driving experience of their customers better. Such a strategy ensures that the company is also able to collect feedback from customers on how to make the engagement better. Toyota can do this through the use of social media by engaging with their customers in different countries based on the car model through fan clubs. Ahmad and Buttle (2002) add that communication from the company can be personalized to the owners of each specific car model by Toyota, thus instilling pride and ensuring that the communication is relevant and valuable to customers.

Tri-Variate CPM and Data Mining Strategies

In terms of customer management, the company can employ the use of the Tri-variate CPM model in the B2B segment which, according to Payne and Frow (2013), examines various dimensions of the relationship such as the cost to serve the customer, the net price to charge the customer, and the relationship value. This model and strategy is considered effective since it also focuses on the customer relationship aspect which looks at issues of whether the customer generates value and volumes to the company especially in the case of a B2B segment, whether the products are valuable to the customer, whether they would be challenging to replace, and whether they lead to cost savings. Shwadhin et al. (2019) argue that in the case of the B2C segment, the company should focus on data mining, ensure customer satisfaction, and loyalty, and thus develop a long term relationship with such customers.

Sustainable customer management

According to Ahmad and Buttle (2002) it is also important for the company to establish sustainable customer management strategies in order to ensure that it remains with loyal customers who drive its marketing efforts through referrals and through word of mouth marketing and who also contribute significantly to its sales volumes and profitability. This can be done by segmenting the customers in terms of their value to the company through the determination of strategically significant customers. According to Sackmann et al. (2010) Toyota can determine the high future lifetime value customers who are expected to contribute to its future profitability in a significant manner. In addition, the company can also determine the high value customers who help through economies of scale, the benchmark customers, those who inspire others, as well as door openers who allow the company to access new markets.

The CRM Value Chain Model

This model can be used by Toyota to design a sustainable customer management strategy for the purpose of sustainable long term customer relationships and company profitability. Piller et al. (2004) note that the model, just like the traditional value chain model, is made up of the primary activities and the supporting conditions. In the case of Toyota, the primary activities or stages should involve the customer portfolio analysis to determine the nature of the customer and the type or model of car they usually purchase and are interested in buying. Saarijärvi et al. (2013) note that this is followed by creating customer intimacy through establishing long term relationships with them and trust and commitment. This is then followed by network development where the company would seek to develop the customer network through referrals, followed by value proposition development. Toyota should seek to understand its various customer portfolios and thus determine the various ways in which it can offer value to them in terms of pricing or product quality. Lastly, Payne et al. (2008) add that the company should seek ways of managing the customer lifecycle by adopting appropriate retention strategies such as improved engagement and release of new models that are more advanced, and offered to loyal customers especially in the B2B segment through different types of offers.

Further, Saarijärvi et al. (2013) posit that the company should also focus on the supporting conditions especially data and information technology. The strategy should be based on the use of data mining practices to determine the business clients’ behaviour regarding the type of vehicles they buy and the duration they take to replace them. Such a process would play a vital role in ensuring that the company can maintain a fruitful relationship with the business customers. Further, Piller et al. (2004) notes that sending customers emails and brochures after the release of new models is also a part of the strategy to ensure continuous engagement.

The proposed strategy would help to develop a trusting relationship with the existing customers as well as potential one such that at the time of replacing the motor vehicles, they do not switch to competitors, but remain with Toyota. It would offer increased value to existing customers since it CRM also involves unique pricing models for each customer segments. In this regard, a sustainable customer management strategy based on the CRM value model would add value to customers in terms of lower pricing of new models for loyal customers.

IDIC Methodology

According to Payne et al. (2008), this is also another methodology that can be used by Toyota to develop an effective sustainable customer management strategy for the benefit of both the company and the customers. The first step in establishing a strategy using this model is to identify the target customer. Guido et al. (2011) posit that this can be done by the company engaging in data mining to determine those existing customers who have purchased their vehicles especially in the case of the B2B segment, and the analysing consumer data to determine those customers who would be interested in their different car models especially by analysing social media posts and behaviour. According to Groeger and Buttle (2014), the next step is to differentiate the customers based on their needs and preferences based on their consumption patterns. The company should determine both their current value and their future value to the company and thus design their marketing communications and strategies based on this value. The next step in the creation of the strategy is to interact with the customers such as through social media, emails, and various other forms of communication. Lastly, Payne and Frow (2013) posit that the strategy should involve customisation that usually involves tailoring of products where possible. In the case of Toyota for example customisation can be done based on geographical markets and regions. This would create further value to customers in terms of getting motor vehicles that are tailored to their specific needs and geographical and environmental conditions for increased usability and reliability. This is considered value adding to customers since they are confident that the motor vehicles they purchase on a continuous basis from their trusted company, Toyota, will constantly meet and surpass their expectations.



The strategies presented above are intended to ensure that Toyota Motor Corporation engages in effective customer acquisition, retention, and management, as well as sustainable customer management. These strategies are essential in ensuring that the organisation develops appropriate relationships with their customers for the long term, which are critical for sustainable profitability. This is important for the company to ensure it competes favourably with other players in the market such as Ford, General Motors, etc.




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