Kiichiro Toyoda, son of Sakichi Toyoda, founded Toyota Motor Company in 1937. Sakichi Toyoda had initially invented the world’s first automatic loom, which improved fabric quality and efficiency by halting production when defects occurred. The British company Platt Brothers bought the production rights in 1929, and Sakichi used the proceeds to support his son’s venture into automotive technology.
Kiichiro Toyoda leveraged this funding to develop automotive technology, leading to the launch of Toyota’s first passenger car in 1936 and the establishment of Toyota Motor Company in 1937.
Toyota has grown into one of the largest automakers in the world and the largest company in Japan. A report stated that Toyota is the leader in developing and selling more fuel-efficient hybrid electric vehicles, starting with the introduction of the Toyota Prius in 1997. The company now sells more than 40 hybrid vehicle models around the world.
Toyota’s success is attributed to its focus on continuous improvement and respect for customers. Their research and production processes emphasize precision and customer satisfaction, with a dedicated research center to gather consumer feedback.
This case study will explore how Toyota’s CRM business process flow has contributed to its growth and success.
“Everyone says Toyota is the best company in the world, but the customer doesn’t care about the world. They care if we are the best in town, or not. That’s what I want to be.”
– Akio Toyoda
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Toyota Timeline
The birth of Toyota Motor Co., Ltd.
Steel Production Department separates and becomes Toyota Steel Works, Ltd. (now Aichi Steel Corporation).
Obu Plant is a designated production plant for foundry parts for automotive parts.
Production of press die for automobiles starts.
Kyowa Plant starts operations, producing engines and assembling automobiles.
Vehicle Division set up.
Plant devoted to lift trucks completed at Kyowa Plant.
J-type diesel engine production starts.
Friction welding machine production starts.
Dump truck production starts.
It is recognized by the Ministry of International Trade and Industry as the first company contributing to export.
Takahama Plant starts operations, producing industrial vehicles.
Lift truck with built-in head guard production starts.
Industrial vehicle monthly output reaches 3,000 units.
6P (6-cylinder swash plate) compressor production starts.
Starlet (automobile) production starts.
FBE model Narrow Ace, a three-wheeled electric counterbalanced lift truck introduced, a first among domestic manufacturers
Hekinan Plant started operations, producing automobile diesel engines.
Production starts on C-type diesel engines for small passenger cars.
Engine Division separates from Vehicle Division.
Lift truck production reaches 500,000 units.
10PA17 compressor
The company received the 1990 PM Excellent Plant Award.
Engine production reaches 5 million units.
The Good Corporate Behavior Committee was established.
Toyota Industry (Kunshan) Co., Ltd. (TIK) was established in China as a joint venture with Toyota Tsusho Corporation and Lioho Machine Works, Ltd.
Toyota Industrial Equipment, S.A. (TIESA)(now Toyota Material Handling Manufacturing France SAS) was established in France as a joint venture with Toyota Motor Corporation and Manitou B.F.
Lift truck production reaches 1 million units.
Kirloskar Toyota Textile Machinery Pvt. Ltd. (KTTM) was established in India as a joint venture with the Kirloskar Group.
The company takes over the water jet loom business from Nissan Texsys Co., Ltd.
The company acquired B.T. Industries AB of Sweden (now Toyota Material Handling Europe AB), a world-leading warehouse equipment manufacturer.
AZ gasoline engine production starts.
Toyota Material Handling (Shanghai) Co., Ltd. was established to sell lift trucks in China.
Aichi Corporation, a manufacturer and seller of truck-mounted aerial work platforms, becomes a subsidiary of Toyota Industries.
T Industries Trading & Logistics (China) Co., Ltd. (TTLC)(now Toyota Industries Management (China) Co., Ltd.) was established.
Anjo Plant starts operations, producing electronic equipment.
P.T. T.D. Automotive Compressor Indonesia was established in Indonesia to produce car air-conditioning compressors.
The company acquires Uster Technologies AG, which produces and sells yarn quality measurement and cotton classing instruments.
Yantai Shougang TD Automotive Compressor Co., Ltd. was established in China to produce car air-conditioning compressors.
The company established Toyota Industries Global Commercial Finance, Inc., a global sales finance management company headquartered in the U.S., and Toyota Industries Commercial Finance, Inc., a U.S. sales finance subsidiary of Toyota Industries Global Commercial Finance, to strengthen Toyota Industries' industrial vehicle operations.
The sixth Environmental Action Plan was launched.
Kameyama Proving Ground starts operations.
Overseas production starts on electric compressors
Ishihama Plant starts operations, producing on-board batteries
Toyota's Best CRM Strategies
1. Having a Research Institute
Customer satisfaction is at the top of the priorities for Toyota, so they went the extra mile of having a research center dedicated to gathering and analyzing data from consumer expectations toward Toyota. Then, they applied the knowledge of the data to their production and marketing process.
On 15th February 2023, Toyota Research Institute (TRI) in California opened its doors for the first time to members of the media to showcase the high-risk, high-reward approaches to meet the needs of their customers and build strong relationships with them: 1) aging society, 2) climate change, and 3) human understanding.
2. Toyota Dealership strategy
Toyota used this strategy to determine the venues(high-traffic areas) where consumers can easily view and access the products. Toyota organizes suppliers into different tiers. The first level of suppliers can work with a product development team. The second-tier suppliers are in charge of making individual parts. This minimizes the supply chain costs and maintains a good service level and high-quality products.
In 2015, Toyota’s network had 180 dealerships with nearly 4,700 sales and service outlets inside Japan. Of these, only 15 dealerships are owned by the company; the rest are independent.
3. Toyota Differentiation strategy
With this strategy’s help, Toyota could produce products different from its competitors. Toyota manufactures products to sell globally according to the needs of a particular country or region. Toyota provides specific automobiles to suit customers in a country with unique weather conditions, such as Saudi Arabia. Unlike Ford, which produces one type of car at a time and makes it to the global market,
Ford’s strategy to sell the same product globally led to failure in 2012 since it generated losses.
4. Toyota Partnership Strategy
Toyota and Isuzu Motors Limited: The partnership between Toyota and Isuzu was established in 2006 and led to the development of emission-control technologies by replacing diesel engines.
Toyota and Mazda: Toyota partnered with Mazda to license its hybrid technologies to Mazda. The manufacturing of compressed cars for Toyota at the production plant of Mazda in Mexico was also a part of this very partnership.
Toyota, Yazaki, Alongside 8 Other Companies: This collaboration led to improvements in different areas and established pre-processing quality prerequisites for dismantling firms. As a result of this collaboration, the first automatic sorting technique was developed by Toyota to prevent pollution from diminutive impurities in 2011.
5. Toyota Pricing Strategy
Toyota considers competition, segment, geography, and demand before fixing prices.
Their products are priced competitively, with a focus on providing high-quality vehicles at an affordable price. Toyota also offers different financing options and incentives to make its products more accessible to customers.
6. Toyota Promotional Strategy
Toyota has launched different marketing campaigns to promote its products and meet customers’ needs. They initiated
The “Start Your Impossible” campaign in 2017 shares Toyota’s commitment to sustainability and social responsibility. This campaign featured the real-life stories of athletes who overcame challenges and achieved their goals with the help of Toyota’s technology and support. They demonstrated the values of humility, hard work, and never giving up till they achieve their goals.
Toyota also initiated the Camry Effect 2011 to invite all Camry owners nationwide to join their interactive website, where they can share their stories about their experiences driving one of the most reliable cars. This creates a sense of community and loyalty among Camry owners. Here, the Camry owners can invite friends and even make more friends.
“Let’s Go Places” is another campaign launched in 2012 by Toyota that featured T.V. commercials and digital content that showed their commitment to producing vehicles that are exciting to drive, vehicles that cater to different lifestyles and preferences.
7. Emotional Strategy
Toyota’s emotional strategy featured inspiring stories and heartwarming moments that resonated with consumers personally. An example of their emotional campaign is “Swagger Wagon.”
This campaign featured videos and T.V. commercials showcasing the Toyota Sienna minivan as a stylish and practical vehicle catering to families’ needs.
“Creating emotional connections with consumers through storytelling is our goal with advertising in general, and for this campaign, specifically, we saw an opportunity to lean into that even more, given the current consumer sentiment,” Lisa Materazzo, group vice president of Toyota division marketing at Toyota Motor North America, told Automotive News.
Conclusion
To build a scalable business, it’s best to emulate the strategies used by top companies like Toyota. Customer relationship management is the primary factor considered by significant companies.
Toyota creates inspiring stories and heartwarming moments that resonate with consumers personally. They understand that all fingers are not equal, so they went the extra mile to manage waste in the production process to reduce the cost of the vehicles after production.
Finally, remember that Toyota does not manufacture what the company needs. Instead, their result is always exactly what their customers want.
