TOYOTA PRIUS: A CASE STUDY IN NEW PRODUCT DEVELOPMENT

G.DEEPTHI ABHINAB KUMAR SAHOO

INTRODUCTION
Launched in December 1997. TOYOTA , Japanese market. TOYOTA Hybrid System (THS). Ultimate Eco Car. Safe Car.

TOYOTA PRIUS

FACTS AND FIGURES

Prius generated a lot of enthusiasm. Sold 100,000 units world wide by 2002. Best selling car in the world. Company introduced further refined models in 2000 & 2003. Entered US market in 2000.

AWARDS & APPRECIATIONS

2001 World s best engineered passenger car , by Automotive Engineering International. 2002 Being sold in various countries and continents ,

like North America , Japan , Europe , Hong Kong , Australia & Singapore.

PRIUS : AUTO SHOW

BACKGROUND
Toyota's history goes back to 1897, when Sakichi Toyoda (Sakichi) diversified into

the textile machinery business from his traditional family business of carpentry.
Invented a power loom in 1902. In 1926, Sakichi invented an automatic loom that stopped operating when a

thread broke.
In 1929, he traveled to the US and Europe to study the manufacturing processes

in car factories there.

In the early 1930s, Kiichiro convinced his father to launch an automobile

business and in 1933, Sakichi established an automobile department within TALW.

In 1936, Sakichi sold the patent rights of his automatic loom to a company in

England to raise money to set up a new automobile business.

HYBRID CARS
Ferdinand Porsche manufactured the first hybrid-electric car in 1898. In the 1960s a few attempts were made to manufacture hybrid cars by applying turbine engines to the production of the vehicles. The need for cleaner and more efficient vehicles led to the development of hybrid vehicles in the 1970s. In 1970, a program called the Federal Clean Car Incentive (FCCI) was started by the US government. The program was scrapped in 1976 by the Environmental Protection Agency (EPA) of the US. In 1993, another program called the Partnership for a New Generation of Vehicles (PNGV) was launched in the US.

KNOWLEDGE MANAGEMENT
Toyota's success in both the local and global markets was based on

its gaining a competitive advantage through implementation of innovative and path-breaking ideas on its production floors.
Toyota had focused on learning from the very beginning. Toyota, knowledge sharing was intertwined with its people-based

enterprise culture, referred to as the Toyota Way.

The five key principles that summed up the Toyota Way were:

Challenge , Kaizen (improvement), Genchi Genbutsu (go and see), Respect and Teamwork.

FIRST GENERATION : PRIUS

FIRST GENERATION : PRIUS

In 2000, Toyota introduced its first generation model of the Prius

in the US, Europe and other markets. This model was also called Prius NHW11 or Prius Classic.
Toyota, marketing the first generation Prius in the US was a

challenge. Commenting on the launch of Prius in the US market.

The key was to convince consumers in the U.S. that hybrid

technology was more than a science project.

SECOND GENERATION : PRIUS

SECOND GENERATION : PRIUS

Toyota began evaluating the popularity of its first generation Prius

in the market soon after it was launched.

The evaluation was based on the price, performance and social

aspects of the product as seen by buyers and potential customers.

The most important feature of the new Prius was its enhanced

safety.

SWOT ANALYSIS
STRENGTH: New investment by Toyota in factories in the US and China saw 2005 profits rise, against the worldwide motor industry trend. Net profits rose 0.8% to 1.17 trillion yen ($11bn; 5.85bn), while sales were 7.3% higher at 18.55 trillion yen. Very focused segmentation, targeting and positioning in a number of countries. The company also maximizes profit through efficient manufacturing approaches (e.g. Total Quality Management).

SWOT ANALYSIS
WEAKNESS: Being big has its own problems. Toyota markets most of its products in the US and in Japan. Therefore it is exposed to fluctuating economic and political conditions those markets. OPPORTUNITIES: Lexus and Toyota now have a reputation for manufacturing environmentally friendly vehicles. Toyota is to target the 'urban youth' market. Conducting social responsibility programme . Focus on youth.

SWOT ANALYSIS
THREATS:
Product recalls are always a problem for vehicle manufacturers. In 2005 the company had to recall 880,00 sports utility vehicles and

pick up trucks due to faulty front suspension systems.

Toyota faces tremendous competitive rivalry in the car market. Economic factors are potential threats for Toyota.

DEFINITION
New product development (NPD) is the term used to describe the complete process of bringing a new product or service to market.

REASONS
 New products become necessary for meeting changes in consumer needs.  New products become necessary for making new profit.  New products become necessary for combating environmental threats.

CATEGORIES
 New to world.  New to product line.  Addition to the existing product line.  Improvements and revisions of existing products.  Re-postioning.  Cost reduction.

NPD STAGES

Idea genera tion

Idea screen ing

Concept develop ment and test marketin g

Business analysis

Product develop ment

Market testing

commerc ialization

ADVANTAGES
 Providing goods and services of best quality.  Helps in providing maximum customer satisfaction.  Helps in expanding the market of the products of enterprise.  Helps in achieving stability in product demand.

FINDINGS
 Factors-better mileage, less green house emissions.  Success- regenerative braking technology  Advertisement-internet, print media, T.V, radio, celebrity endorsement.