Henry Phish

So now we come to Toyota.

When it comes to socially ineffective, Toyota is not the first company that comes to mind. Quite the opposite in fact. With cars such as the number one selling Toyota Prius that runs predominantly on electricity and gets a gas mileage of 48 MPG city and 45 MPG highway, Toyota is paving the way in social conscienceness.

Even their less prestigious models such as the workhorse Toyota Corolla have excellent gas mileage and continue to have a high resale value even after five years of ownership. It’s this commitment to excellence that makes Toyota a great company and a major indicator of things happening in the global market.

From their initial creation and implementation of the Toyota Production System, a precursor to the Six Sigma concept, Toyota blew the lid off of the competition by making the workers own experiences the focal point of their company. The workers know what works, and they know what doesn’t, and each employee is given the power to make their own mark on the company and deliver the best possible quality product. Everyone from the line workers to management are accountable for the end result, and if one of the line workers sees an issue crop up with one of the cars, they have the power to stop the entire line operation with the push of a button until the issue is fixed. This kind of empowerment gives workers the ability to control outcomes, it also allows for a greater sense of satisfaction, and in turn better workforce engagement. With Prius leading the charge as the number one alternative fuel vehicle and the company positioned as the number one company in worldwide sales, Toyota is the best at what it does.

GM and Toyota — Who will be Number One?

This trend toward quality over quantity has been growing in the last few years. Companies like Toyota and Honda are recognizing the need to grow their brand, and to do so they’ve emphasized giving the people what they want, affordability, comfort, craftsmanship, and ultimately resale value.

As stated in one article by Jeff Zygmont:

“Recognizing the allure of low depreciation, Honda pursues a strategy aimed at maintaining high resale rates.

The pillars of that program include striving for high quality and durability so its models will remain desirable even after they rack up lots of miles. Honda avoids building more cars than it can sell and adjusts its factory output to match consumer demand, Naughton says. It also avoids selling to car-rental and commercial fleets. Both strategies prevent over-supplying the market, which depresses used-car prices. Balancing supply with demand also negates the need for sales incentives, which reduce used-car values by reducing new-car values.”

This method of marketing appeals to both new car buyers and used car buyers alike in that it is much less wasteful than many current marketing strategies. The cars themselves maintain a significantly higher value than many other automobiles, and this translates to higher values for used car dealers at the time of trade in as well. Further, you maintain brand loyalty for their next car, as well as a built in sales pitch for an up sell later on in life. A person buying a Toyota will most likely buy there again when shopping for the family sedan or SUV. Likewise, you may even be able to interest them in an Avalon or Lexus if luxury is more their style. But ultimately, the key idea to take away here is that customer demands have driven the market, and what the consumer wants is something that fits their lifestyle.

Other companies have joined this Solid State marketing revolution as well. Solid State meaning: giving consumers a product with a high sex appeal and less breakage. Apple Inc, for instance, maintains it’s prices by limiting operation issues and creating computers, phones, Ipods, etc that last longer and perform better than their competition. Resale on Apple products is far superior to its comparable PC counterparts. Another example is Pixar, now a division of Disney. Their production quality, always phenomenal, continues to bring audiences to the theater year after year. Likewise, Disney has had similar success in marketing the videos releases of these films, inflating the market by limiting the quantity; videos are released only every few years to high demand. Consumers continue to use the product until it’s eventual demise, and often pass these movies on to their children, continuing the consumer cycle. The high sentimental value of the brand lends itself to open other avenues of revenue as well, in the sale of toys, books, and games.

This method of selling Solid State appeals to a wide variety of customers and raises the bar for other companies in their respective industries as well. Customers get a better product, and while they may pay more up front, they can hold on to the product longer. Unlike the disposable culture of the early 2000’s, where E-Machines were completely un-upgradeable, the Windows platform experienced the blue screen of death, and everyones favorite cell phone always seemed to fail at the most inappropriate of times, technology has advanced to the point where these items must work better than their predecessors and must have a consumer life cycle that assumes that the product can be reused or recycled; consumers demand it.

The moderate to low end solutions will always have a place in the market, but it’s the high end of technology that continues to advance the industry and paves the way to better, and less wasteful, consumerism.