Since 2003, Toyota has taken over to become the world's number two carmaker and they are not very far behind GMC, the number on US carmaker. With their consistency in innovating designs and over a billion dollars spent in advertisement a year, Toyota has become an attraction in the eyes of many auto consumers worldwide. Toyota has built its reputation not only by producing high quality vehicles at affordable prices, but the brand and marketing skills they use through tactful pricing strategies. Toyota has differentiated their prices from the traditional pricing set up of many of the other automobile makers. However, it is their effectiveness in targeting consumers' needs and wants that has pushed them to the top.
Toyota believes the role of purchasing is through long term and stable production of quality products at the lowest price in a fast and timely manner. (Toyota Co. sustainability report 2006). The main objective of administering prices within any company in the automobile industry is profitability and to consistently increase efficiency in their product line. The traditional pricing strategy is formulated into the cost + profit = selling price. When auto companies make changes and improvements , cost of production increases causing the selling prices to go higher. Companies normally do not want to cut their targeted return and therefore the costs are passed on to the consumer to maintain their profit margin. Toyota takes on slightly different approach with a sales - oriented objective. Although the variables are the same, the formula is adjusted strategically into the selling price - cost = profit. Toyota firmly believes that its markets and consumers is what determine the selling price. Waste elimination is given top priority which reduces cost and by continuously reducing these types of costs, it will result in persevering the company's profit growth.
It was in 1929 that Kiichiro Toyoda, founder of Toyota, began traveling and... [continues]
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