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The Secret behind Toyota’s Customer-centricity and Market Dominance

The Secret behind Toyota’s Customer-centricity and Market Dominance

53,000 Miles of Market Research - The True Story of Toyota Engineer

In 2004, Yuji Yokoya, a Toyota engineer, did a dramatic marketing exercise that raised the eyebrows of everyone.

Yuji was given charge of launching a new generation of the Toyota Sienna minivan for the North American market.

He had never designed the car for the North American Market. So, he was desperate to understand the customers.

Rather than falling back on conventional market research methods like focus groups and surveys, Yuji did something phenomenal.

To understand the ground reality and customers' preferences, He drove the old Sienna and competitors' minivans 53,000 miles through every state in the U.S., every province in Canada and every state in Mexico.

While passing the Mississippi River by a bridge, he noted that Sienna's crosswind stability demanded improvement.

He spotted excessive steering drift while traversing gravel roads in Alaska.

Driving through the Glacier National Park, he reasoned the handling needed to be crisper.

Finally, he concluded that the new Sienna would have to be a minivan that families, and especially kids, could live in for extended periods.

This resulted in upgrading the seat quality and introducing “kid-friendly” features such as a roll-down window for second-row passengers, an optional DVD entertainment centre and a conversation mirror so that parents could observe what their kids are doing in the back seat.

Journey to California to understand the luxury car market

Similarly, in the 1980s, when Toyota aspired to produce a luxury car for the U.S market, its team did not crouch in their office in Tokyo to arrive at a perfect car design. Nor did they administer traditional surveys to read the car market.

Instead, Toyota sent its designers directly to California to understand the target customer - an American male, high-income executive -- to find out what they wanted in a luxury car.

This on-ground customer knowledge, coupled with its undisputable engineering excellence, ended in a completely new luxury car market for Toyota in the United States.

Yes, I am talking about Lexus - the most successful luxury brand.

Engaging the customers in real-time and listening to them is part of Toyota's Production System and is called Genchi Genbutsu meaning 'going to the place of action to learn the facts.'

Instead of accepting the borrowed information that usually understates reality and provides a false sense of confidence, Toyota’s decision making believes that the genuine way to recognise a problem is to see it on the shop floor and see the full magnitude and depth of knowledge to make the right decision.

The practice of on-the-spot problem solving is so inherent in Toyota's culture.

I always urge my consulting clients, primarily the CEOs and business owners, to interact with their core users and also observe their behaviour in real-time.

We cannot just rely on opinions to understand the unmet needs of the customers.

About the Author

Rajesh Srinivasan is the Chief Marketing Officer, Author and Keynote Speaker, he works closely with the CEOs/Founders and devises a robust growth and brand strategy that helps them to stay relevant. Recently he authored a book called – Growth Nuggets, he distilled 135 small bites of thought from his professional experience as a Marketing Strategy Consultant.