Leading Automotive Company in the Industry due to Customer Satisfaction and Quality Products: The Case of Toyota
Abstract
The proposal is on the automotive industry, and the case of Toyota has been taken. The company is a leading player in the industry because it ensures product quality through innovation and customer service. Quality for Product and service is central to customer satisfaction, loyalty, and retention. The research is based on secondary data to be gathered from the official website of Toyota, website of the Australian Bureau of Statistics and other business websites like Forbes. The relationship between customer satisfaction and product quality has been proposed to study. The role of product innovation for ensuring retention of customers and increasing productivity has also been proposed to study.
1.0 Introduction
Product quality is critically essential for the creation of customer satisfaction leading to loyalty to a company. It is the reason why every organization prioritizes offering quality products and services for customers to make them satisfied and retained with the company. Quality also ensures sustainable growth of profitability and revenue generation for the organization. Innovation and building a new model for achieving this objective is essential for any business. The introduction of an electric compressor by Toyota is one such innovation for the satisfaction of customers. The compressor can ensure safety and fuel consumption (Mendes & Machado, 2015). In this proposal, this way of innovation by Toyota has central importance. The value of the brand and revenue of Toyota would study in the proposed research. The value of the brand increases with innovative features like an electric compressor. The relationship between the variables of brand value and Toyota revenue would be studied in connection with satisfaction of customers. The secondary data has been used in this proposal from different sources like Forbes, Toyota’s official website, and ABS. The proposal would use appropriate research methods to come up with the aims and objectives of the current research.
2.0 Aims and Research Questions for the Proposed Research
The following research aim and research questions guide the research.
2.1 Research Aim:
The central research aim is to find out the effect of quality product manufacturing so that brand gets recognition leading to satisfied customers. The study would also explore the relationship between brand value and company revenue of Toyota. It would compare the same variables with other automobile companies, including Ford and Honda. The research would comment on the popularity and fame of Toyota in the industry due to these variables.
2.2 Research Question for the Research:
- What is the link present in revenue and brand value for Toyota in comparison with other automobile companies, i.e., Ford and Honda for customer satisfaction through quality products?
3.0 Literature Review
3.1 Customer Satisfaction in the Chosen Industry (Automotive Industry):
Research has found that a strategy in the automotive industry at mass level enables customers to have plenty of options and choices in the industry. Customers have central importance in conducting business, and loyalty programs aim at increasing their loyalty to the organization resulting in their satisfaction. Long term and sustainable loyalty of customers, the target market, and an increase in lifetime value is significant for customer satisfaction (Yuen, Thai, & Wong, 2016). As is the case with Toyota, a satisfied customer is valuable for a company because of its positive impact on the lifetime value for the corporation. The high lifetime value of a customer is linked with an increase in the satisfaction of clients from the products of the company. The lifetime value of a customer may calculate customer satisfaction. If there is no repetitive purchase by the customer and reluctance exists among customers in the purchase of the same products of previously chosen company, then lifetime value goes down (Yang & Yang, 2013).
3.2 Quality Products leads towards the Satisfaction of Customers:
Researchers share their view that many people have attracted to the automotive sector in any activity of its supply chain. The industry has witnessed dynamic changes that have resulted in a shift in the preferences of customers. Variations and product choices are prominent among the preferences of customers (Maru, 2015). Product quality includes attributes like repair, convenience in operation, reliability, durability, and presence of accuracy. Customers’ tendency to take a test drive before purchase indicates their preferences for quality. Chiarini & Vagnoni (2015) noted that customers are getting educated as a result of different agencies like NCAP, ICAR, assessment programs for new cars, and others. Quality is the only attribute that lets customers prefer one product over the other (Chiarini & Vagnoni, 2015).
3.3 Theories of customer satisfaction and its Relationship with quality:
There are three theories of customer satisfaction that foster the need for quality, which is presented in the following.
Contrast Theory: According to it, it explains an alternate view of customers as a result of the process after evaluating the product. It brings the surface to light those customers like to give importance to discrepancies found in light of their views and the personality as part of their opinion statements (De Bruyn & Prokopec, 2017).
Assimilation: This theory is about the view that customers compare products on a cognitive basis by comparing the performance of products and their perceived quality through driving the car before purchase. It also covers the heightening expectations as a result of promotional activities (Crul, 2016).
Cognitive dissonance theory: The theory is about an unusual feeling of customers as a result of two different ideas or reactions. The theory states that customers attract rationalization with a natural inclination for a reduction in dissonance. Customers change attitudes, beliefs, and behaviors to act rationally (Hinojosa, Gardner, Walker, Cogliser, & Gullifor, 2017).
3.4 Developing quality products to Achieve Satisfaction from Customers
Effective product management is one such challenge in designing quality products to achieve customer satisfaction. Research has found that effective products are the result of product progress structure that is ideally developed (Yang & Yang, 2013). As a result, quality in the product ensures. It may become a challenge for the automotive industry because of a lack of information. During 2010-12, GM could deliver a product as per the expectations of customers.
Identification of customer preferences for quality is another challenge, as it has been highlighted by researchers (Maru, 2015). The researcher found that automotive companies have difficulties in assessing and knowing customer preferences to ensure quality, reparability, reliability, and ratings. In 2007, Honda faced this challenge by not identifying customer preferences.
Product architecture is another challenge that refers to essential components of idea generation, implementation, design, competitive strategy formulation, and cost requirements. These elements are difficult to be gathered in the automotive industry. For instance, Ford could not rule out a new design during the recessionary phase in 2006 as a result of the pressure of customer preferences (De Bruyn & Prokopec, 2017).
3.5 Customer Service and Quality:
Researchers have found that customer service and customer quality go side by side because the automotive industry is eager to ensure quality customer services. Toyota prioritizes customers, and its customer-first strategy is based on excellent customer service and product category exploration. Great attention to customers leads to purchase and repurchase by customers (Budianto, 2019). The company enjoys word of mouth by offering high customer value and loyalty. Customers are essential members of stakeholders, and their satisfaction results in long-term and sustainable business operations. Factory dealerships of the company see revisits from customers. It is all because of high customer service and quality (Kaura, Prasad, & Sharma, 2015).
4.0 Steps within the Research Process
4.1 Methods for Data Collection:
The data are taken as secondary data for the proposed research because it can obtain reliable and authentic information for the study. The technique can attain valuable information on Toyota and its ability to launch innovative products and ensure presence in the international market. Secondary sources for proposed research include Forbes, Toyota Company’s official website, Australian Bureau of Statistics. Information regarding brand recognition and product innovation strategies of the company is essential and useful for the research (Johnston, 2017).
How would the Proposed Study employ Data Collection?
The research question for the proposed research includes comparison of other automobile companies like Ford Honda. In order to have a clear picture of Toyota in terms of revenue and brand value, the comparison is a fundamental requirement. For this purpose, the proposed study would collect data on revenue from financial statements and other sources about companies. Revenue comparison of the other two companies with Toyota can simply reflect the difference in terms of revenue while the difference in terms of brand recognition may be rather difficult. The comparison of companies in terms of brand recognition and customer satisfaction would be made using theories on these themes. Data collection would be done through three means, i.e. comments of users on social media accounts of these companies, experts’ opinions about brand value and revenue of these companies, and responses taken from respondents through survey on social media.
| Data Collection Methods | What would be collected? |
| Social Media Accounts on Twitter and Facebook of Toyota, Ford, and GM | Themes would be generated by reading comments of users in light of variables of brand value, revenues, customer satisfaction, and quality of products. |
| Experts’ Opinions on various reports | Annual reports and other independent reports have plenty of information. Opinions of experts in these reports and/or over these reports can give information on brand value, revenues, customer satisfaction, and quality of products. |
| Social Media Survey (Twitter, Facebook) | A survey on variables of brand value, revenues, customer satisfaction, and quality of products would be held on social media to know respondents’ opinion. |
Moreover, secondary research would give particular importance to information on the new electric compressor introduced by the company for fuel consumption. The proposed study would also gather information about theories of brand recognition and customer satisfaction. These theories are helpful in comparison of companies based on these constructs. Credible books and peer-reviewed journal articles would be a trustworthy source for this purpose.
4.2 Data Analysis:
The proposed research would draw themes from the collected secondary information and themes would be analyzed and interpreted to bring findings. Smith (2015) has suggested that themes should follow the criteria of the dependent variable and independent variable chosen for the topic. Indeed, themes would comprise of the topic so that the topic can explain the phenomenon under investigation. Notable themes are product quality, activities for brand recognition, and elements of satisfaction for customers, the process of product innovation. The analysis of themes would be possible through statistical data collected from secondary sources.
Themes for the proposed research are revenue, brand value, customer satisfaction, and quality. Data gathering would be through social media comments on respective social media accounts, analytical arguments of experts about revenues and brand value, and responses from users of these automobile brands. A priori method would be suitable for taking themes and comparing them with all three automobile companies.
4.3 Gantt Chart for the Research
Before the feasibility of the study, it is better to highlight some strong points of Toyota. This information about Toyota helps understand the innovation taking place in the company. For instance, the company has produced an innovative component, that is an electric car air-conditioning compressor. It is the first electric compressor that has been produced at mass level (Toyota Industries Corporation, 2019). The innovation of Toyota has benefited in terms of market capitalization that is more than combined market capitalization of General Motors, Honda, and Ford (Team, 2016). The market share in Australia is the largest for Toyota where it tops the list of passenger vehicles, and this position is for 14th consecutive year. Indicators for the company are favorable in Australia. There is increase in motor vehicles in Australia as 1.7 percent increase happened from 2018 to 2019 (Australian Bureau of Statistics, 2019).
5.0 Research Feasibility and Timeframe
The proposed research is feasible in terms of the time frame associated with each activity. The first month would consist of activities to choose an authentic and viable topic that is attractive for a large number of readers. A few months after, it would be devoted to collecting information on the topic, and it is secondary research. Therefore, it would take time collecting and making a plan for it. The issue of the proposed study is broader and broader, which is possible to be completed in time. The next few months I will be assigned to methodology selection for the research on the selected topic. The innovation through the new electric compressor introduced by Toyota is one topic related to innovation. It requires a collection of information to have an opinion on the order. One chapter is there for the conclusion. Deduction of the concluding statement is not straightforward because lots of data have to be read and studied. It may be a time-consuming activity that needs one month to complete. Theme selection from literature is also required to end the assignment. The study on the dependent variable and independent variable is necessary to have the concluding statement.
6.0 Recommendation and Conclusion
The proposed research would be useful and purposeful for academic and empirical fields of study. It would highlight the importance of manufacturing products with quality to achieve a higher level of brand recognition and satisfaction from customers. Moreover, the management of an automotive company and industry workers would get insight through this research. They would know the importance of innovation and quality products. Customer satisfaction and customer retention are valuable themes answered through this research. Offering examples and the use of secondary research would provide ample information on the variables, and as a result, the industry and business field would benefit many benefits.
7.0 References
Australian Bureau of Statistics. (2019, July 29). Motor Vehicle Census, Australia, 31 Jan 2019. Retrieved from https://www.abs.gov.au/ausstats/abs@.nsf/mf/9309.0
Budianto, A. (2019). Customer Loyalty: Quality of Service. Journal of Management Review, 3(1), 299-305.
Chiarini, A., & Vagnoni, E. (2015). World-class manufacturing by Fiat. Comparison with Toyota production system from a strategic management, management accounting, operations management and performance measurement dimension. International Journal of Production Research, 53(2), 590-606.
Crul, M. (2016). Super-diversity vs. assimilation: how complex diversity in majority–minority cities challenges the assumptions of assimilation. Journal of Ethnic and Migration Studies, 42(1), 54-68.
De Bruyn, A., & Prokopec, S. (2017). Assimilation-contrast theory in action: Operationalization and managerial impact in a fundraising context. International Journal of Research in Marketing, 34(2), 367-381.
Hinojosa, A. S., Gardner, W. L., Walker, H. J., Cogliser, C., & Gullifor, D. (2017). A review of cognitive dissonance theory in management research: Opportunities for further development. Journal of Management, 43(1), 170-199.
Kaura, V., Prasad, C. S., & Sharma, S. (2015). Service quality, service convenience, price and fairness, customer loyalty, and the mediating role of customer satisfaction. International Journal of Bank Marketing, 33(4), 404-422.
Maru, A. A. (2015). Lean Construction In Civil Engineering And Project Management: Case Study Analysis Of Ut Arlington College Par. American Journal Of Civil Engineering, 3(3), 70-74.
Mendes, L., & Machado, J. (2015). Employees’ skills, manufacturing flexibility and performance: a structural equation modelling applied to the automotive industry. International Journal of Production Research, 53(13), 4087-4101.
Team, T. (2016, May 31). Why Toyota Is More Valuable Than GM, Ford & Honda Combined — Part 1. Retrieved from https://www.forbes.com/sites/greatspeculations/2016/05/31/why-toyota-is-more-valuable-than-gm-ford-honda-combined-part-1/#25c1e53c6ae7
Toyota Industries Corporation. (2019). Development of the World’s First Mass-Produced Electric Car Air-Conditioning Compressor—ES18. Retrieved from https://www.toyota-industries.com/innovation/today/technology_1/index.html
Yang, C. C., & Yang, K. J. (2013). An integrated model of the Toyota production system with total quality management and people factors. Human Factors and Ergonomics in Manufacturing & Service Industries, 23(5), 450-461.
Yuen, K. F., Thai, V. V., & Wong, Y. D. (2016). The effect of continuous improvement capacity on the relationship between of corporate social performance and business performance in maritime transport in Singapore. Transportation Research Part E: Logistics and Transportation Review, 95, 62-75.
