A Case Study On
A Case Study On Submitted ByAakansha Bajpai Abhishek
BoseAniruddh Tiwari Archana YadavArunava Saha Arvind SinghAshok
Kumar Amit Kumar Das
Prius Leading a wave of Hybrids
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An Overview The case throws a light on how Toyota marketed their
hybrid product Prius in a market which had a history of fast cars
and big SUVs. Prius has two drive trains :- A conventional gasoline
engine An Electric Motor When running in slow speeds( upto 15 mph)
the electric motor powers the Prius, and on speeds above 15mph the
gas engine provides the power to the car and charges the battery at
the same time. Although, being unpopular in the Test Drivers
Fraternity due to its sluggish behavior, the early sales of Prius
were quite impressive. Toyota targeted those buyers which are known
as early adopters and innovators & those who always love new
technology. Innovative marketing tactics were adopted in the print
media, on Television and on the Internet to create a hype about the
car. The case tells how Toyota identified the market and adopted
itself at various stages of product cycle and concentrated on its
Target Customers.
Analyzing The Micro Environment For The Launch Of First
Generation Prius
First Generation Prius
What Do We Mean By Micro Environmental Factors ? The Internal
factors which are close to the company and play an important role
in the companys strategy are known as Micro Environmental
factors.
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Lets Have A Look On Some Of The Crucial Micro Environmental
Factors :-
1) Customers:-Organisations survive on the basis of meeting the
needs, wants and providing benefits for their customers. Failure to
do so will result in a failed business strategy. We will see in the
coming up slides, how Toyota identified its market and targeted the
customers.
2) EmployeesEmploying the correct staff and keeping these staff
motivated is an essential part of the strategic planning process of
an organisation. Training and development plays an essential role
particular in service sector marketing in-order to gain a
competitive edge. Here Toyota Provided extensive knowledge about
the Product (Prius) to its employees, especially to the sales
force.
3 SuppliersIncrease in raw material prices will have a knock on
affect on the marketing mix strategy of an organisation. Prices may
be forced up as a result. Closer supplier relationships is one way
of ensuring competitive and quality products for an organisation.It
was just what Toyota did with its suppliers. Take for example the
micro controller chip of the car was procurred from Nippon
Electronic Corporation, Japan wchich are one of the best in
business.
4 MediaPositive or adverse media attention on an organisations
product or service can in some cases make or break an
organisation.. Consumer programmes with a wider and more direct
audience can also have a very powerful and positive impact, forcing
organisations to change their tactics. Well see Toyotas Marketing
tactics in the forthcoming slides.
5) CompetetorsThe name of the game in marketing is
differentiation. What benefit can the organisation offer which is
better then their competitors. Can they sustain this
differentiation over a period of time from their competitors?.
Competitor anlaysis and monitoring is crucial if an organisation is
to maintain its position within the market.By introducing Prius in
2000, Toyota pioneered & dominated the hybrid market untill the
hybrid version of Honda Civic was introduced in 2002.
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Toyotas Marketing Strategy Time Line 19982000200320032004First
Stage of MarketingSecond Stage of MarketingThird Stage of
Marketing
First Stage Marketing:- Toyota set a perfect stage to launch a
product which was ahead of its time in terms of technology. Their
Target Market was the group of those people who love new technology
and are adaptable to changing trends.
Although this segment comprises of only 2.5% 1 of the overall
market, but it is highly important as it sets the trend for a
particular product.
Their marketing campaign started two years before the launch of
the product so as to gather the attention of these techies. These
campaigns were in form of internet marketing. Even their initial
ads tried to trickle the minds of techies by innovative tag line
like : A car that some times runs on gas power, sometimes runs on
electric power, from a company that runs on Brain Power.
1Source : The PDMA Glossary for New Product Development. Product
Development & Management Association. 2004.
Second Stage Marketing:-
The bulk of the campaign was on television channels which had
highest number of viewership.
After the launch of Prius, to get hold of the segment, Toyota
started playing with the emotional aspect of the people by airing
ads like When it sees red It Charges. Due to the ambiguity of the
ad it impacted more and caused higher ad recall.
The online communities such as www.priusenvy.com also played
important role in increasing the popularity of the car. In these
communities people portrayed their customized Prius (like
connectivity to the ipods, cruise control etc.)
Second Generation Prius
Third Stage Marketing:- By 2004 the market Toyota was targeting
was saturated.
Therefore they changed their market strategy and shifted their
focus on the segment of market called Early Adopters.
Often the Early Adopter segment, an estimated 13.5% of the
market, is pursued inconjunction with the Innovators. Early
adopters, perceived as visionaries in the market,buy into new
products early in the life cycle, are imaginative thinkers who find
it easy toenvision and use new technology, rely on their own
intuition in purchasing, as opposed todepending on references from
others, and are more tolerant of bugs or glitches in newproducts
than the average consumer.
Toyota introduced a second generation Prius which had features
catering the needs of this segment like deep dashboard, lots cup
holders, a 6 CD Player, ample amount of legroom etc.
Toyota set a marketing budget of $40 million dollars. This
campaign was spread through out the media in more consumer oriented
magazines. And the sales result was an instant boost of 120%.
Toyotas Biggest Competitor :
Honda Civic Hybrid
By 2003 Honda dominated the Hybrid Car segment after the
introduction of the hybrid version of their most popular sedan The
Civic. The major reason of the dominance of Civic was that it
directly appealed to the mass market as compared to Toyotas concept
of serving a unique product.But this scenerio however changed in
the later years and the Prius again became in the market leader.
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We Thank You For Your Patience.
