Implications and Recommendations for the Business Problem

Implications and Recommendations for the Business Problem

From the investigation above, the effects of content, medium, and the strategy used to disseminate information about a product on people and with relevance to Toyota, indicates that the more a firm invests in the advertisement expenditure the better its chance to increase sales and profitability. Advertising is done so that marketing communication may not only increase consumers’ knowledge of a product but also cultivate ties that will last. Advertising may aid in correcting outdated or unfavorable perceptions of a business or its goods and services when appropriate. Advertising may aid a company’s attempts to become more well-known in its industry and to acquire partners who can contribute to its development. Indirectly, advertising may benefit a business by boosting the number of recommendations it gets from pleased customers. When promote a company, advertisements will get an increase in word-of-mouth marketing from the current customers proportional to the amounts of new customers acquired (Miller et al., 2021). It was established that advertising had a significant impact on both the quantity of units sold and the decisions made by consumers (Karray, Martín-Herrán, & Sigué, 2022). The advertiser is able to reach a vast and dispersed audience that the marketer or producer would not have been able to easily engage without advertising. It has an effect on the revenue, market share, profitability, high-quality goods, pleased consumers, and satisfied staff of the selected enterprises. In addition, marketing fosters brand loyalty among customers and helps distinguish items from one another. In addition, it encourages clients to make repeat purchases, which prevents them from falling behind competitors.

The more advertising that is done, the better the sales results will be, and the better the sales results are, the more money that will be in the bank. A company’s valuation, sales, profitability, and advertising expenses may all have a positive or negative impact on one another, depending on the nature of the interaction. It is difficult to produce sales that bring in money if you do not have strong advertising (Miller et al., 2021), yet not all advertisements are of high quality or a perfect return on investment (Dekimpe & Hanssens, 2018b). Effective advertising may produce a temporary decline in short-term profitability since the money for advertising comes straight from current sales. The consequences of investors’ answers to advertising go beyond the advantages that may be anticipated from them, such as a rise in sales and profits from those sales (Madoh, Alenazi, Alkhamees, & Panwar, 2019). For example, the impacts of investors’ responses to advertising include the following: Advertising also has an effect on the rise of sales of brand product categories, which ultimately leads to an increase in the profit that the product generates. There are two schools of thought when it comes to advertising. One school of thought focuses on how customers are educated about prices and quality through advertising, which enhances market rivalry and decreases profits as a result of consumers being educated about prices and quality (Itsuki, 2021). The opposing school of thought contends that advertising boosts revenues but is harmful to customers because it creates artificial obstacles to entry and misrepresents the degree to which items are unique. Both of these ways of thinking are incompatible with one another.

5. Outline Further Research Required

The Overall Research Design

For every profitable enterprise, advertising is done with the goal of either increasing sales or drawing more attention to the goods and services that a company is offering for sale. 1937 was the year that Toyota Motor Corporation was established (Nusran et al., 2018). Since that time, it has expanded from being a little enterprise based in a local community to being a significant global competitor in the automotive industry. At the moment, the organization has a presence in all of the significant local marketplaces. The company Toyota uses the marketing strategy known as the “four Ps” in order to interact with the individuals that make up its target market (Itsuki, 2021). When making decisions, Toyota, which is one of the most successful manufacturers in the world, takes into account a diverse group of consumers, both in terms of the specific wants and needs of each individual client and the trends that emerge in the local and regional markets. As a direct result of this, the firm has modified its marketing mix in order to take into account all of these different components. The continuous success of Toyota around the globe is evidence of how well the corporation developed and put its marketing mix into action (Madoh, Alenazi, Alkhamees, & Panwar, 2019). The firm has, during the course of its existence, implemented a number of different strategies, all of which have played a role in the company’s ongoing development and success. The present degree of success enjoyed by the firm may be credited to a variety of factors, such as a strong internal structure, a welcoming staff in human resources, outstanding connections with the company’s customers, and a positive reputation among the general public.

This research attempts to answer the business question of whether or not the amount of money spent on advertisements has an effect on the amount of money earned by Toyota Motor Corporation. Scholars such as Nusran et al. (2018) and Madoh et al. (2019) claim that Toyota’s advertising spending has little importance in the long run despite the company’s widespread success across the world. Others contend that the company should continue to use advertising as part of its marketing mix in order to effectively expand into new areas, win over new customers, and hold on to its existing clientele (Anand, Singhal, & Singh, 2020). The primary elements that must be considered in order to assess the aforementioned commercial issue are as follows: increases or reductions in advertising spending, movement on company sales based on advertisement expenditure, and movement on firm profits based on advertisement expenditure.

The research questions are as follows:

Does an increase in advertisement expenditure influence annual profits for Toyota?

Will a decrease in advertisement expenditure influence the annual sales for Toyota?

How does an increase in advertisement expenditure influence annual sales for Toyota?

What impact does a decrease in advertisement have on annual profits for Toyota?

Based on the literature analysis, this research will present the following model for evaluating the relationship between the amount of money a company spends on advertising, the amount of money the company produces through sales, and the amount of money the company makes after taxes. The majority of the time, a rise in marketing expenses will result in a rise in sales, which will subsequently result in an increase in cash flow. Despite the fact that it has no influence on elements such as product quality, distribution strategies, customer satisfaction, the marketing mix of competing enterprises, or the economic and political atmosphere of the country, this is nonetheless the case. The advertising budget for the next year is increased according to the level of sales achieved in the preceding year, and vice versa. As a consequence of this, there is a feedback loop between revenue, profit, and the cost of advertising, as well as between revenue and the cost of advertising. In this piece, the cost of advertising will be treated as a separate variable so that the effect it has on revenue and profit may be calculated. The approach of the research will be guided by two assumptions: the first is that there is a connection between the costs of advertising and the amount of money made, and the second is that there is a connection between the costs of advertising and the amount of money made.

Sample Requirements & Sampling Options

This research paper uses secondary data and is structured according to the approach for determining causal relationships. The goal of this study is to ascertain if there is a relationship between the amount of money that Toyota Motor spends on advertising, the amount that it makes from sales, and the amount that it makes from the goods that it produces and sells after taxes. The annual reports of the firms under scrutiny will serve as the main source of secondary data for this study. The difference between primary and secondary data goes beyond the kind of source used and the issue of whether the information in question has already been looked at. When deciding which kind of analysis should be performed, it is important to consider how these two different types of data might sometimes be quite different from one another. “Raw data” refers to the information gathered during primary research, and it may be arranged in a number of ways based on the goals of the study. Secondary data is often presented in a format that was intended for something different when it is first made accessible for study. This is because secondary data has frequently—and perhaps more than once—been sorted or processed in the past.

Comparatively speaking, the process of gathering secondary data for use in research is significantly faster and easier than the process of getting primary data. By skipping the stage of getting ready and going straight to the phase of assessing the data, this helps researchers to save time. Researchers are also able to keep their focus on the goals of the study since they are not obliged to seek and utilize original materials, which may be a lot of extra work. The strategy that will have the lowest total expenses will often be secondary research. The costs of building and maintaining a large number of sensors with the capacity to gather large amounts of data, as well as setting up focus groups and hiring people to speak with people of interest, may be quite high. However, secondary data may often be acquired at no cost at all. This is because all of the knowledge that may be useful has already been gathered and is accessible to the public in places like libraries that are open to the entire population. Even if these data are inadequate and you need to pay data providers or spend money to collect secondary data, this technique is still more affordable than getting information from a first-hand source. Before using secondary data for important reasons, it is customary to clean it up. This suggests that at least some of the criteria for the data’s quality have already been met. This can imply that all criteria have been satisfied. Primary data collection alone won’t be sufficient to address all of the problems with the data’s overall quality. The cleaning will thus need extra time and energy from the researchers. Additionally, secondary data is often organized in a preset way that, as was already said, does not meet the specific needs of the secondary research that is now being conducted. Despite this, it makes the information easier to read and understand, which ultimately contributes to time savings. In conclusion, just a little quantity of primary data may be collected by researchers before they are compelled to start doing the real analysis. Secondary data, however, are not subject to these limitations. There is more information available in secondary sources than any one person could ever expect to go through in their whole lifetimes while engaged in data analysis. As a result, there are a lot of places where researchers who use secondary data may get the information they want.

When it comes to sampling, secondary sampling designs will be employed after primary sampling designs have already been used to obtain some data or other information. In general, the objective of the secondary sample design is to enhance the quality of the model or selection in some manner that was not previously possible. For secondary designs, either model- or point-based designs are going to be employed (sample or spatial model). We are going to employ a technique that is known as “judgmental sampling.” The user has complete control over where the samples are placed thanks to this layout, which might be classified as either main or secondary. There are certain example objectives that are difficult to automate, and sometimes it is necessary to adhere firmly to the judgment of an expert. Because the abilities of the researcher are paramount, as well as the fact that there aren’t any additional complications, using this sampling approach makes it quite simple to choose a sample. Researchers will have the ability to have direct conversations with the individuals they are trying to reach, thanks to the design. When selecting a sample, the only thing that is taken into consideration is the preferences of the researcher. Because of this, the present study will be able to talk specifically to the individuals it aims to communicate with and get the outcomes it seeks.

References

Anand, A., Singhal, S., & Singh, O. (2020). Optimal advertising duration for profit maximization. Journal of Management Analytics, 7(3), 458-480.

Dekimpe, M. G., & Hanssens, D. M. (2018b). The persistence of marketing effects on sales. In LONG-TERM IMPACT OF MARKETING: A Compendium (pp. 107-142).

Itsuki, H. (2021). Evaluation on Changes of Strategy and Strategic Direction in Toyota Motor Company, Japan. Journal of Strategic Management, 5(1).

Karray, S., Martín-Herrán, G., & Sigué, S. P. (2022). Managing advertising investments in marketing channels. Journal of Retailing and Consumer Services, 65, 102852.

Madoh, A., Alenazi, J., Alkhamees, L., & Panwar, A. (2019). Case Study on Market Mix Strategies of Toyota Motor Corporation. Asia Pacific Journal of Management and Education (APJME), 2(3), 70-78.

Miller, C. J., Brannon, D. C., Salas, J., & Troncoza, M. (2021). Advertising, incentives, and the upsell: how advertising differentially moderates customer-vs. retailer-directed price incentives’ impact on consumers’ preferences for premium products. Journal of the Academy of Marketing Science, 49(6), 1043-1064.

Nusran, M., Basri, M., Ahmad, L., & Paris, A. Y. (2018, July). Analysis of marketing mix on the decision of the purchasing of Toyota Kijang Innova car using method of structural equation modeling (SEM). In IOP Conference Series: Earth and Environmental Science (Vol. 175, No. 1, p. 012016). IOP Publishing.