2.0 Macroenvironments Political Factors

2.
0 Macroenvironments
Political factors
Malaysia’s politic has been unstable since decades ago. What is more, Malaysia is still
politically corrupted. Locals are expected to pay fees which is also known as “sweetener” to
have special access to hospital services, schools, and courts. The media including printing
and television is not secure form government control either. Government agency has the
rights to instruct radio and television stations to broadcast news and advertisement
selectively. Therefore, it could be onerous when Toyota has the intention to introduce new
model into Malaysia market as we have no idea how much amount of “sweetener” must be
given to the government. Besides, there could be a lot of hurdles when Toyota wants to
advertise its new car model on television or radio. If the biggest competitors of Toyota pays
more “sweetener” to the government, Toyota could lose its opportunity to build its position.
(Frue, 2020)
Economic factors
It can be onerous for Toyota to hire local labor at a relatively low cost compared to Malaysia.
Again, as a developing country, Malaysia can always offer labor with extremely low wages
requirement. In April of 2022, Malaysia’s unemployment rate hit 3.9% while Japan’s
unemployment rate is only 2.6%. Hence, it is recommended for Toyota to set up its
manufacturing and assembly plant in Malaysia. Malaysians have a relatively modest income
compared to people in developed countries. The buying power of Malaysians are not as high
as Japan. According to statistic, Malaysians average monthly income is around RM3,800
while Japanese income is around RM9,500 after conversion. The same car model with same
price introduced in both countries will have different response. Therefore, is in Toyota best
interest to introduce more economy cars to Malaysian.(Shaw, 2018)
Social cultural factors
One of the social cultural factors in Malaysia. Toyota should take advantage on driving
trend. The customer market still has the fascination to own the latest model of the car. The
internal desire motivates them to buy one or more vehicles for themselves. Once Toyota
identified the shopping trends, it can target the customers accordingly.
Technological factors
Safety is always the priority of Malaysians, automotive manufacturers have been working on
safety measures such as airbags, seatbelt, breaks to make transport safe and secure. Toyota
could focus on improving its safety precaution on its vehicles to better penetrate the market.
Malaysia currently is still considered as a developing country. Any latest technology
introduced to the market will be demanding in Malaysia. For instance, currently Malaysia
still does not have autonomous driving vehicle and any companies could earn a huge profit if
they bring this technology into Malaysia. Toyota comes from a developed country which is
known a pioneer in technology field. Therefore, it is undoubtedly a great chance for them to
skim profits in developing countries such as Malaysia.
Legal factors
Malaysia government has been providing assistance to car manufacturer. Malaysia will
provide subsidies or tax exemption for locals to stimulate economic growth and drive the
development momentum of the automotive sector In 2022, the Finance Minister of Malaysia
stated that Malaysia will be providing tax incentives for locally made or imported
car(Malaysia, n.d.). Under Budget 2022, the car sales tax exemption remains the same as
100% on locally assembled passenger cars. For foreign assembled passenger vehicles like
Toyota, a sales tax exemption of 50% is given. This policy would increase Malaysian’s
buying power and stimulate local demand on automobiles. Besides that, Malaysia has
subsided 357,530 employers with more than an amount of RM 20 billion through Wage
Subsidy Programme (PSU). There is no need for Toyota to be worried about Malaysian’s
economic condition after the COVID-19 pandemic as Malaysia government has been
providing subsidies to locals.
Environment factors
Malaysia has the same environmental issues as other countries, air pollution and carbon
emission. The biggest challenge for automotive industry is to overcome this issue as this
issue would have a direct and indirect impact to people in terms of low-quality air to breathe
in. Also, Governments have noticed the growing environmental concern of the public. They
are now exploiting the opportunity by introducing new carbon emission environmental
regulation to address the public concern. Therefore, Toyota has come up with some solutions
and introduce its own model called “Prius”, a half electronic vehicle the consume lesser
patrol and it can help to provide a healthier environment to people. It is a great chance for
Toyota to expand its expertise on manufacturing environmentally friendly automobile, hybrid
car.
2.1 Marketing strategies
Segmentation
Geographic
Geographic segmentation means that Toyota segments its customer market based on their
location. By using this segmentation, Toyota divided its customer market according to
different geographical boundary such as continents, counties, countries, regions or
neighborhoods. Toyota operates many geographical areas and pays attention to their needs
and wants. Toyota uses plants in Thailand, Indonesia, Argentina and South Africa to produce
IMV model and export as a base supply to Asia, Europe, Africa, etc. Besides, Toyota
introduce different models according to the climate. For instance, Toyota SUV cars are
customized for running on snow covered area or on a desert. (Bahsin, 2018)
Demographic
Demographic segmentation is the means that Toyota used to divide its customer market based
on age,, income, occupation, family size and generation. For example, Toyota has a segment
that focused on middle high-income people and introduce them with Camry, Parado Land
Cruiser. Besides, the offer high income segment people with Toyota Fortuner and the Toyota
Altis Sport Model. Toyota also introduce Toyota vellfire to address the need of family with
more family members.
Psychographic
Psychographic segmentation refers to a strategy divides the consumer market according to

personality, values, and lifestyle. Toyota segmented people into different social class as
different social class group has different needs. Different models have their own target
market such as higher class, Upper middle and middle class.
Positioning
From two slogans of Toyota which are “moving forward” and “Pursuit of perfection”, we can
tell Toyota positioned itself as a quality car manufacturer and automotive service provider
and its car model is always up to trend. Besides, Toyota also positioned its fuel-efficient
hybrid car as a high tech solution to the energy shortage as its slogan is “How far would u go
to save the planet”. It has built a great position in consumer mind and lead them to pay more
attention on green environment.
Targeting strategy
Implementation of differentiated targeting strategy has received a great result by Toyota.

Toyota approach a broader customer market by using differentiated targeting strategies. It has
assisted Toyota to identify and focus on various segments of consumer market. Why is
Toyota using this targeting strategy but not others? We can see automobiles market is
becoming a sea of “me-too competitors”, industry competitors are almost offering the same
product to the consumer market. Today, Toyota offers different models of vehicles based on
different needs of customer and address the needs accordingly. On the other hand, Toyota
would not get very far or enjoy such mass appeal if it simply manufactures a single model.
Currently, Toyota has the ‘supra’ model to fit the needs of customer who loves motorsports,
also ‘vellfire’ for large family size. If there are new demands appear in the market, Toyota
will make a quick response and come up with a new car model, as it is how a differentiated
targeting strategy works. (Bahsin, 2018)
REFFERENCES
Bahsin, H. (2018). No Title. https://www.marketing91.com/marketing-strategy-toyota/
Frue, K. (2020). No Title. https://pestleanalysis.com/malaysia-pestel-analysis/
Malaysia, M. of F. (n.d.). No Title. Ministry of Finance Malaysia.

https://www.mof.gov.my/portal/en/news/press-citations/four-more-months-to-enjoy-
car-sales-tax-exemption-incentive-tengku-zafrul
Shaw, A. A. (2018). No Title. https://www.marketingtutor.net/pestle-analysis-of-malaysia/

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2.

Social cultural factors

2.1 Marketing strategies

Psychographic segmentation refers to a strategy divides the consumer market according to

Implementation of differentiated targeting strategy has received a great result by Toyota.

Bahsin, H. (2018). No Title. https://www.marketing91.com/marketing-strategy-toyota/

Frue, K. (2020). No Title. https://pestleanalysis.com/malaysia-pestel-analysis/

Malaysia, M. of F. (n.d.). No Title. Ministry of Finance Malaysia.

Shaw, A. A. (2018). No Title. https://www.marketingtutor.net/pestle-analysis-of-malaysia/

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