Toyota Prius

Contents:

Executive Summary 3

Introduction 3

The Automobile Market 4

Competition 4

Leading Suppliers of Cars 4

Current Offerings 5

Prius Target Market/ Segmentation Criteria 5

Demographic 6

Psychographic 6

Geographic 6

Toyota 7

SWOT Analysis 7

Marketing Communication

8

Major Trends 8

Marketing Strategy 8

Communication Mix 9

Marketing Campaign 10

Media Strategy 11

Post Campaign Testing 11

Summary 11

Current Future Environment 12

Appendix

Attitudes of Consumers Towards Green Cars (% of respondents), 13

Hybrid Owner Survey 14

Media Advantages and Disadvatages 15

Bibliography & References 16

Executive Summary

Objective

In our marketing plan we will be analyzing the many different aspects of the current marketing environment of the Toyota Prius, a sedan that is currently in the lead of the relatively new hybrid market, what we will attempt to do is to educate possible investors and the general public about the current marketing situation and various issues, that the Toyota company has to tackle to continue to have a strong hold in the hybrid market, and the sedan market in general. We feel that there has to be a focus on a propagation of information to the public on the benefits of the hybrid vehicles. We will show that through mass media saturation and greater communications of the benefits of owning a hybrid, Toyota could capture a larger target market. Toyota also has to make an effort to limit the myths that have been surrounding hybrid vehicles, such as that it needs to be plugged in to be charged.

Changing Ideas

Ever since the advent of the internal combustion engine there has been an ever-growing need for fossil fuels. As automobiles have gotten faster, larger and more gas dependent we have seen depletion in the worlds fuel supply. The automobile industry has had to look to new and better ways of utilizing the ever-shortening supply of natural gas. One solution that has emerged is the electric powered automobile, which is totally independent of the thirst for natural fuel. The problems with electric cars are that they are heavy. They are bulky, they have a limited capacity, and a typical lead-acid battery pack might hold 12 to 15 kilowatt-hours of electricity, giving a car a range of only 50 miles or so. They are slow to charge, typical recharge times for a lead-acid pack range between four to 10 hours for full charge, depending on the battery technology and the charger. They have a short life, three to four years, perhaps 200 full charge/discharge cycles. The many problems have kept the leading car manufacturers from delving into the electric car market.

The Compromise: Hybrid Vehicles

In the late 90's the car market received a new addition, this was the hybrid vehicle, which took an idea that had been in locomotives since the dawn of the diesel engine and decided to incorporate it into the automobile world. The Hybrid vehicle was the compromise between the totally fuel dependent vehicle and the ultra expensive fully electric powered vehicle. The Prius was the first major hybrid vehicle to hit the car market in 1997 it first hit markets in Asia and in the end of 1999 it arrived in the United States. What separates the Prius from other hybrids such as the Honda Insight is that improves emissions in urban driving. The Prius does this by utilizing a parallel hybrid powertrain, this is known as the Toyota Hybrid System.

Breaking Into the US market

Toyota must focus on increasing the exposure and market potential of the Prius in the ever growing U.S market. Even though the Prius has done well in the U.S markets, almost doublings its profits every year since 2001, there are still issues that the Prius has had in the U.S car market. One of the problems that have plagued the Toyota Prius according to Car and Driver and Motor Trend magazine is the fact that the Toyota Prius has an unconventional shape. When the Prius arrived in 1997 the Prius was a sight to behold with its round look it seemed unconventional to say the least, but this is something that Toyota has been able to work on, with the introduction of the 2005 Prius which has a nicer sleeker look, Toyota has also tackled the acceleration problem by cutting off 1.7 seconds in its 0-60 acceleration to give the Prius an 11.6 acceleration which according to Car and Driver magazine gives the Prius a lead over the fully gasoline powered Subaru Legacy. What has given the Prius continued growth has been the ever growing trend of higher gas prices that has led many gas guzzling Americans to take a second look at the Toyota Prius, this is evident by recent trend in increase in the U.S. Prius sales in which there were 15,556 in 2001. They increased to 20,119 in 2002, from 2003 to 2004 the Prius saw a 110% increase in sales.

We Got Company: Competition

Toyota has been able to prove that the Hybrid vehicle is not the vehicle equivalent of the pet rock. Creating this opening for the hybrid market has given Toyota a lot of competition. The Prius's closest competitor came from Toyota's chief rival Honda, which a year after the introduction of the Prius saw the arrival of the Honda Insight in the Asian markets. The Insight provides consumers with a more fuel economic vehicle at 61 / 70 mpg, which are at about the same price, with a 10-mpg advantage in city miles over the Prius and a 25-mpg advantage in highway travel. What the Insight does not have is the Space, the Honda Insight has an overall space of 155.1 inches while the Prius has an additional twenty inches of space,