Marketing Analysis Report- Toyota Prius

MARK 301

May 21, 2020

Final Word Count: 1478

Introduction
 Toyota Motor Corporation (TM) is the world’s largest automaker by volume. The

Japanese auto industry pioneer was established in 1937 ("Overview: All You Need to Know

About Toyota Motor Corporation", 2016). Toyota created the hybrid car segment in 1997 with

the debut of the original Prius. Over the last two decades, incremental changes and competitors

unable to reach the same kind of mass adoption have meant the original hybrid car is still the best

one. Even today, the Toyota Prius has more rivals than ever before, but it remains the model to

beat (Hall-Geisler, 2020).

Toyota’s practices socially responsible behaviour through its commitment to

environmental stewardship and community involvement. Three areas Toyota deem to be most

important are environment, education and safety. Toyota exercises these areas as they grow by

partnering with like-minded organizations to help to make things better in the areas of

environment, education and safety ("Corporate Social Responsibility").

The main focus is on the environmental aspect, which also impacts society in the greatest

and most beneficial way. The company is an environmental leader and produces innovative

products, with low fuel consumption, which fulfil the current environmental trends (Toyota

2010). In creating fewer polluting vehicles, society is benefited greatly especially with the

dangers of global warming and carbon dioxide emissions.

Environmental Scan

Social Forces:

Eco-consciousness is one of Toyota's biggest strengths, specifically with the Prius. As

consumers become more eco-conscious, more people are looking for non-polluting options,

however, an electric car may be far too expensive, but the hybrid is a good mean price between a
regular car and a fully electric car. The rise in eco-consciousness is extremely beneficial to

Toyota because it creates more demand for the Prius (being the best hybrid vehicle on the

market) and people are far more willing to pay a higher price to help the environment.

The Prius was made in response to this increasing trend, and by emphasizing eco-friendliness

in its marketing activities; Toyota will be able to reach out to its target demographic. Also, to

show its customers that the brand follows this concept of being eco-friendly, the company

updates regular environmental reviews on the website and environment reports (Toyota 2010).

Also, Toyota’s marketing campaign focuses significantly on the environmental aspect, showing

that the company is making major efforts not to pollute the environment.

Technological Forces:

Toyota focuses on research and investment on innovation, as seen on their website

(Toyota 2010), they rely on the innovative aspect and use it for marketing purposes as well.

According to Jim Lentz, president and chief operating officer of Toyota Motor Sales, U.S.A., the

company’s main headquarter is in Japan because it gives its researchers the chance to review all

technologies (Taylor 2010). The growing demand for portable, renewable energy sources is filled

in the automotive industry by the Toyota Prius. This increase in demand will lead to new

customers for the company. The marketing activities will be increased because growth in sales

means more word of mouth marketing amongst consumers.

To account for the increased demand, the company is producing more Prius’ every year

and meeting consumer demand. Toyota needs to invest in new technologies to have a

competitive edge over its rivalling companies.

Competitive Forces:
 The alternative companies that can provide hybrids to satisfy the market’s needs don’t

have the existing consumer base and the low-price points that Toyota provides to its buyers.

Other automobile companies are just entering the hybrid vehicle market, so Toyota can

change their marketing activities to reflect the increased experience that they offer. This will

bring more buyers to the company and keep their sales increasing.

The biggest threat in relation to competitive forces is the entrance of fully electric

vehicles to the market, for example, Tesla. In order to set themselves apart Toyota needs a

competitive advantage, which in this case is the price difference.

Consumer Behaviour

Psychological factors:

A few major psychological factors that influence Prius buyers are motivation, values,

beliefs, attitudes, and lifestyle. The majority of people who buy the Prius are eco-conscious

consumers who are motivated to do their part in helping the environment. They have a green

lifestyle with deep values, beliefs and attitudes that compel them to spend more money on the

initial purchase of a vehicle if it will help the earth and society.

Socio-cultural factors:

The socio-cultural influences which affect consumers include personal influence,

reference groups, culture and subculture. This factor has a significant influence on the company

and its marketing strategy. Specifically, all Toyota’s marketing campaigns focus on the brand’s

commitment to quality and it uses soft selling to create a strong connection between the brand

and the audience watching the advertisements (such as My Toyota – Youtube 2010). While some
buy the car to do their part in saving the environment, others buy the car for what is being called

"Conspicuous Conservation:” letting all know that they are environmentally astute.

Targeting and Positioning

An analysis of the Prius demographics shows that the average Prius buyer is highly

educated, and considers themselves to be a savvy shopper, willing to pay a premium on a quality

product. An important demographic characteristic that Prius uses to reach out to its customers is

the level of income and education. In particular, the product mainly targets the middle-class

population who can afford to raise approximately $24000 to $30000 to buy the motor vehicle

(Toyota, 2017). Prius buyers have a higher income than average at approximately $100,000

("2017 Toyota Prius Review"). The typical Prius owner is predominantly male and is a few years

older than the average driver, with the average driving age being 65 ("2017 Toyota Prius

Review").

The typical Prius owner is conscience about the environment and feels that they have a

personal and social responsibility to do something about the problems facing our environment

and are willing to pay a little extra to do their part. This targeted group is considered influencers

in that they are more educated, more affluent, and older, which helps shape car-buying criteria

and decision making for the rest of the world.

From a lifestyle perspective, some consumers like to purchase state-of-the-art

technologies. These are especially true for innovators or car fanatics, who are heavy consumers

of the latest products and technologies (Toyota, 2017).

Eco-consciousness is becoming a worldwide phenomenon. The geographic segmentation

strategy that Toyota Prius uses is in line with the overall geographic segmentation model that
 they use because Prius is sold in numerous store outlets all around the world. Environmental

consciousness rising creates more demand for the Prius, this is particularly true for regions that

have high levels of greenhouse gas emissions and facing the task of cutting carbon emissions

brought by fossil fuel-dependent motor vehicles (Toyota, 2017). This includes areas such as Asia

and America which is the largest market for the Prius. This trend should continue as gas prices

continue to grow.

Perceptual Map:
Affordability

High

Environmental
Friendliness
Weak
Strong

Low

Conclusion

Toyota is one of the leading motor vehicle manufacturing companies in the world. The

company has several established operations all around the world and they have focused their

marketing strategies to be based on consumer values and needs by implementing product

diversification. The Toyota Prius creates value for customers along with benefitting the
environment and society. This product presents the largest opportunity for Toyota, as many

regions are currently affected by tough regulations on carbon emissions. The Prius is growing

steadily in sales, with more people getting interested and familiar with the green movement. The

Prius is continuously growing in terms of its product life, and the objective at this point for

Toyota should be to make as large of a profit as possible.

Recommendations:

- Toyota should actively support and encourage public awareness campaigns to encourage

the continued and increased awareness for eco-consciousness and going green for the earth.

This will increase community engagement and show consumers where their priorities lie (in

creating products that have personal value and are beneficial to society).

- Toyota should invest in improvements in technology such as in the battery, charging,

metering, and high-performance solar components to allow for electricity generation and

capture while cars are operated and parked mid-day. Adopting these technological

improvements will serve to create competitive advantages.

References

Overview: All You Need to Know about Toyota Motor Corporation. (2016, May 27). Retrieved

from https://marketrealist.com/2016/05/overview-need-know-toyota-motor-corporation/

Hall-Geisler, K. (2020, May 7). The best hybrid cars save on fuel without sacrificing fun.

Retrieved from https://www.digitaltrends.com/cars/best-hybrid-cars/

Corporate Social Responsibility. (n.d.). Retrieved from

https://media.toyota.ca/categories/corporate-social-responsibility

Toyota Motor Corporation: Company Information. (n.d.). Hoovers.

ation.a12418ae0c087cb3.html

Taylor, A. (2006). The birth of the Prius. Fortune, 153(4), 65-72.

Crane, F. G. (2011). Marketing (8th Canadian ed.). Toronto: McGraw-Hill Ryerson.

2017 Toyota Prius Review. (n.d.). Retrieved from https://www.jdpower.com/cars/expert-

reviews/powersteering-2017-toyota-prius-review

Toyota. (2017). Toyota Prius product information. Retrieved from

http://toyotanews.pressroom.toyota.com/releases/2017-toyota-prius-product

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