CHAPTER # 3

MARKETING ASSIGNMENT # 2

Submitted to:
Mr. Hammad Tahir

By:
Syed Asif Raza Kazmi
ID: BME-1138

PRIUS: LEADING A WAVE OF HYBRIDS

Q1: What micro environmental factors affected the introduction and

re-launch of the Toyota Prius? How well has Toyota dealt with
these factors?

Ans: Firstly, the company has spent a lot of money on the re-launch of the new
and improved Pirus model which is over 40 million dollars. On the
same note it was also able to generate a profit represented by a 120%
rise in the sales after some time of the re-launch. Starting off with the
main objectives of the company to provide a new and techno product to
the target market it was able to cover its operating and marketing costs
and also make build a profitable customer relationship.

Secondly, the agents helped promote the new brand of hybrid. Since
the company did not want to take any chance for interpretation of the
features of Pirus, they did not offer online purchase facility to
customers. Thus, Toyota hired agents and provided professional
training to them to provide maximum customer satisfaction.

Thirdly, the company’s main target was those customers who were
‘techies’ and were ready to buy the product at its launch. The company
made sure that their focused customers were well informed before the
products launch i.e. 2 years before. Then, the company’s marketing
strategies also included taglines with emotions which were very
effective in its promotion. In summer 2004, the gasoline prices rose so
the demand for Prius increased and so did the waiting lists. Toyota
tried its best to cover the entire demand but still left some customers
unsatisfied. Later on, it overcame this problem by a 33% and then a
100% rise in the monthly production.

Moreover, the major competitor of Toyota was Honda in the hybrid

market. But the extensive and large scale advertising campaigns and
 strong, overall marketing strategies helped Toyota to gain the
competitive edge over them as well as the rest of the smaller rivals.

Then, the incentive provided by the government of tax deduction also

helped but the increase in the speed limit was a hindrance for Toyota
which was also covered by the heavy marketing strategies.

Q2: Outline the major macro-environmental factors-demographic,

economic, natural, technological, political, and cultural-that
affected the introduction and re-launch of the Toyota Prius. How
well has Toyota dealt with each of these factors?

Ans: The main customer focus of the company was those people who were
youngsters i.e. belonging to generation Y. so the main focus of the
entire promotional activities were the ‘techies’ due to which a major
portion of their profits was contributed by them.

With respect to the economic factors, the case shows that the
customers had enough income to spend on this luxury. This is shown
by the fact that the company was able to sell 1800 cars in immediately
and also had to raise the monthly production level by 33% and then
even by 100% to meet the demand.

Toyota is an “environmentally concerned” company since it had greater

fuel efficiency and lower emissions. It also took advantage from the
environmental appeal by sending out green seed cars shaped like
Toyota’s logo to prospective buyers on Earth Day.

The technological factor is explained by the many factors including

adding cruise control by some wiring, dashboard display screen,
playing video games, installing sniffer, 7-inch energy monitor, a CD
player holding 6 discs at a time and many more. Since the customers
favored technological products and had enough knowledge Toyota was
able to maintain customer loyalty.

Politically, the company received support from the government in the

form of tax deductions which helped efficient production but on the
same note the speed limit factor acted as a hindrance but was covered
by extensive marketing campaigns.

Q3: Evaluate Toyota’s marketing strategy so far. What has Toyota

done well? How might it improve its strategy?

Ans: The marketing strategy consists of 4 Ps which are product, price, place
and promotion. The product that was re-launched had far better and
attractive features as compared to its previous version, which included
its outer appearance as well as the inner characteristics.
 Secondly, the price maintained was also competitive and helped the
company to maintain an edge over the rivals as well as retain its
customers profitably.

The product was well received by the market in the sense that it was
available easily in the showrooms as well as on the internet. The
customers were able to make well- informed decisions because of the
detailed website and the personal assistance provided by the trained
agents. They were also able to share their experience through chat
rooms such as www.priusenvy.com

Extensive marketing campaigns and heavy promotional activities

through TV (Discovery channel, MSNBC, History and Learning
Channel etc), billboards, auto magazines (Newsweek, Vanity far),
newspapers, leaflets along with emotional taglines and environmental
appeals helped Toyota set itself as the market leader.

Finally, the betterments may include higher quality for the inner
features so as to improve the actual driving experience of the customer
i.e. it is not a ‘muscle car’ and doesn’t even provide very high speed.
This factor should be considered since their main focus is on
youngsters.

Then it should use below the line advertising strategies and maintain
direct and personal contact with the existing as well as the new
focused customers.

Q4: GM’s marketing director for new ventures, Ken Stewart, says “If
you want to get a lot of Hybrids on the road, you put them in
vehicles that people are buying now”. This tends to summarize
the U.S automakers approach to hybrids. Would you agree with
Mr. Stewart? Why or why not?

Ans: I disagree with point because the customer might not get the correct
idea about the company’s product and might go for the other vehicle on
which the advertising is being done. Moreover, the company already
has various marketing strategies to retain existing customers as well as
attract new ones, so according to me the company will do well even if it
doesn’t use this strategy