1. The first generation Prius was small, cramped, and not very attractive. It was the first of the hybrid model and launched in 2001 in the United States. However, the second generation Prius was introduced three years later, which was much more pleasing to certain players of the microenvironment. First of all, the first generation Prius greatly affected the company. Toyota wants to promise its customers a car that will save them money and be environmentally friendly. They cannot promise it until their manufactures can create a car that can do those things, like run on an electric motor and be much more efficient with gas.
The company has to get on board with the top management, finance, R&D, purchasing, operations, and accounting before they can work on the new Prius model. They all have to “think consumer” while performing these functions within the company. Toyota also has to be in good relationships with its suppliers, those who provide resources needed for the company to produce its goods and services. Without the suppliers, Toyota would not be able to produce the first or second generation Prius. The United States, without marketing intermediaries, would not have to privilege to sell the Prius.
Since they are Japanese cars, they usually are not bought directly from Japan, which means Toyota would need resellers in the U. S. They sell the cars in the states to help the company find customers and make sales. The first generation did not have any competitors because at the time it was the only hybrid. However the second generation Prius started to face its competitors such as the Civic. Although the Honda Accord, Mercury Mariner and Ford Escape were competitors as well, they still were not near as successful since they were less efficient and more expensive hybrids.
Other cars of the Toyota family, such as the Camry are more competitive with the Prius than models outside of Toyota. However, there is continual growing competition with the hybrids outside of Toyota, like GM models, Lexus, Subaru, Hyundai. While other models, in different markets, like Audi and BMW are working on their own hybrids. The public aspect of the microenvironment includes the general public. The company has to be concerned with the attitude the general public has towards their product.
The Prius is widely accepted in the general public because it is environmentally friendly, cost efficient, and designed in different ways for different people. Last but not least are the customers in the microenvironment. Customer markets, Business markets, international markets, and reseller markets are what make the customers capable of buying the Prius. The second generation Prius was much more consumer friendly. They were made in 7 different colors, much more spacious, with more storage and much more practical.
Also, to make the customers even happier, the second generation Prius had expensive touches like many cars in the more expensive market had. These touches include a monitor touch screen that portrayed the gas consumption, battery charge level and outside temperature. The second generation Prius also could tell you when the car was running on fuel or battery. Last, the second generation Prius was checking in at 48 miles per gallon, whereas the first generation was at 42 miles per gallon. 2. Demographics are a major factor in the macroenvironment because it kind of is the base of it.
I say that because demographics are made up of people. A company cannot operate without people and there would be no markets without people. Demographics cover a large span of categories including age, gender, race, family, and many other trends. The demographic aspect of the macroenvironment helps Toyota target certain markets. With demographics, the Prius was able to target “techies” or people who were impressed with the new technology of the hybrid car. Then with the second generation Prius, Toyota was able to create more colors of the car, make it more spacious and more practical for families or whatever the circumstance may be.
Next is the economic factor, which is huge for the Prius. The economic aspect is mainly why the Prius, as to my knowledge, was created. It helps people save money! The Prius delivers the right combination of quality and service at a very reasonable price. The Prius, with its battery power and electric motor, is made to save people money on gas. As we all know gas can be very pricey and the Prius was designed for people sick of paying so much for gas and looking for a much more efficient car for the price of gas. The natural factor is also a major “seller” of this specific car.
The Prius does not need as much gas as a normal vehicle, and gas is a natural resource that could possibly become rare in many decades from now. Also, the Prius with its half battery operated half gas operated system; it reduces the pollution caused by all the other cars out there, which emit tons of fuel causing pollution. There is a big “green” movement spreading nationwide and the Prius is definitely a great example of a step in the right direction. The government was giving tax breaks, while other cities in the United States were offering free parking for hybrid drivers.
Not to mention, the popularity of the Prius and its eco-friendly nature, other companies such as Google, Timberland, and Hyperion Solutions were providing employees with money to purchase hybrids. The technological aspect of the Prius is what keeps the car popular. As we saw earlier, the first generation Prius was not very attractive. But because of the growing technology, the second generation Prius was even better. The second generation Prius had its expensive touches like any other up-scale model would have.
The second generation Prius would now have a touch screen, updating you on gas consumption, battery level, temperature, audio and many other accessories. The Prius, just like any other car or item in the market needs to keep up with technology, otherwise it will be out of date and not something people would want to buy. The political aspect of the macroenvironment is just as important because if it was not approved by the government it would never be a part of the market. The car would have to government safety tests and “live up” to certain standards. Last is the cultural facet of the macroenvironment.
Certain people have different cultural values. Some people believe that family, working, and being happy are the most important things in life. While others may feel that nature is the most important thing. People all have very different beliefs about themselves, society, nature, and others. The Prius can benefit almost all types of people. Those who love nature and want to keep it beautiful can find many perks with the Prius. The working woman or man may like the Prius because it is so efficient and a money saver. The cultural aspect expands to great lengths that can target all sorts of markets.
Everyone has different preferences, beliefs, and values which makes up a “culture. ” Furthermore, I do not see any disadvantages of owning a Prius because it does not endure any damaging effects to the environment where most cars do. 3. Toyota’s marketing strategy is to develop a car that is far beyond all the others. They want to show the world that the Prius is perfect for today’s society. It is not only environmentally friendly but it is very cost efficient. Since it is half battery powered half gas powered, people are able to save a lot of money on gas.
As we all know gas can get very pricey and people are getting extremely fed up with it. When Toyota designed the first generation Prius, and saw that it did well, they were able to create the second generation Prius. Only this time, the Prius would be more attractive and even more reliable. Toyota designed the Prius for people who were not part of the Mercedes Benz market, but included similar luxurious accessories in their model. I believe one way to improve their strategy is to design other hybrids that are a different model. Some people may want a bigger car that does the same things.
They also should introduce the hybrid in their other popular models, like the Camry and the Corolla. 4. I agree with GM marketing director Ken Stewart when he says “If you want to get a lot of hybrids on the road, you put them in vehicles that people are buying now. ” I saw that because if families are used to driving mini-vans, then that is what they would like to buy because it makes more sense to them. If they were to buy a smaller, compact car hybrid, it would not be beneficial or big enough to lug around a family. If someone is always buying a BMW, they probably will not “downgrade” to a car like the Prius just because it is a hybrid.
People will buy the car that they want and is most beneficial to them. Therefore, the best idea is to create hybrids out of cars that people prefer. Introduction This case was about the Prius and all of Toyota’s success in developing the hybrid car. We find out about how it first came about and how the car works. Then, we learn how it competed with other models in its market. General Information on the Company Toyota is a Japanese motor company. It is a public company, with over 200,000 employees. Background/History Toyota started with a man named Kiichiro Toyoda.
In 1934, Toyota created their first product, the Type A engine. Today Toyota Motor Corporation is headquartered in Toyota City, Aichi, Japan. The Japanese motor industry significantly suffered during World War II and many of its industrial facilities were wrecked. However, once the war ended, they began to recover. The main concern was that Japan was too far behind American and European car manufacturers with their technology and economic position. American car manufacturers were making medium to big sized vehicles, so Toyota began to focus on smaller sized cars.
Even though the smaller sized car was successful, for many decades, Toyota lagged behind American manufacturers until 2008, when Toyota’s sales surpassed General Motors, which made Toyota number one in the world. Toyota became international in the late 1950s, but by 1967 Toyota was well established in the United States. In 1969, the first Corolla was imported to the United States, which became America’s favorite small car. Toyota continues to be successful worldwide, especially with the Prius. The Prius was the first hybrid created. It first sold in the United States in 2001.
SWOT Analysis Toyota has much strength. They were the underdog car company for most of the 1900s but finally rose to the top by the early 2000s. They beat out number three Ford in 2003 and then beat out GM to become number one. Toyota is very good at targeting markets with its various products. They use marketing techniques to identify and satisfy customer needs. Toyota is known for making quality vehicles and staying up to date with technology and competing well with other car manufacturers. They are committed to keeping their customers as well as their employees happy.
Weaknesses would be the recalls they have faced over the last few years with certain models. Also, Toyota mainly concentrates on the U. S. and Japan. It should be focused on expanding it to other economies such as the Chinese. For example, the recession in the U. S. greatly affected Toyota and they lost billions of dollars during the financial crisis. Opportunities that Toyota and Lexus would be found in R&D. They have developed a reputation for developing environmentally friendly cars and the high prices of gas have increased sales of hybrids.
Also, the technology that Toyota has been selling is quite popular and companies like Ford have bought into it. Therefore, they can continue their investing and interest in the research and development of hybrids. Threats, just like weaknesses would include the recalls. Also, another threat would be competition. The prices of raw materials that continue to rise affect Toyota, like rubber, steel, and oil. Last, the recessions of economies have a major affect on Toyota and can be potential threats to the company. Financial Analysis In the latest 12 months, according to Forbes, the inventory turnover was 11. 0.
The return on invested capital is 3. 0%. Toyota’s total debt was 1. 18. Description of Product or Service Toyota is a car manufacturing company, but the specific product that is being discussed is the Prius, which is one of the many models that Toyota has. The Prius is a hybrid vehicle, which means it is run on a combination of a gas engine and an electric motor. The electric motor runs only when the car is being start up and when the car is moving 15 mph or under. When it is higher than that, the gas engine kicks in. This means that the car uses that battery at low speeds, but when acceleration is heavier, it uses both.
Usually, in a regular car, when the brakes are being used energy is being wasted. In the Prius, the car is designed to save that energy and send it back into the battery. When the car is stopped, the gas engine shuts off, saving gas and not releasing pollutions in the air. Marketing Objective The Prius is designed to keep consumers happy, whether it is saving them money or saving the earth, it is more beneficial rather than not. Pricing Strategy The Prius is a low-end car. Different models of the Prius range from $21,000 to $27,000. However, many believe that an even cheaper version is in the works. Marketing Strategy
Since more people are concerned about fuel efficient cars, Toyota’s strategy is to come up with something that will be exactly what people are looking for. In order to analyze a target market, I believe Toyota focuses on the present customers they have a potential customers. They meet the needs of the consumers by selling cheaper cars that are eye-catching in more than one way. Target Market The target market that the Prius has been affecting greatly is the younger “Generation Y. ” Toyota believes it is a generation of youthful, independent people who are concerned about their environment and into this stylish, efficient design.
Promotion The Prius is promoted constantly. Whether it is through commercials, billboards, advertising, sales promotion, and personal selling, you will find out about the Prius no matter what. It is also found in many movies and TV shows such as CSI Miami, Weeds, Evan Almighty, and Superbad. Their strategy is well designed because they have come up with a way to communicate the product to its target market. Analysis of Major Competitors Ford, General Motors, and Chrysler are Toyota’s major competitors. However, the Toyota company has become more popular in the United States over these other American manufacturers.
However, the Prius itself finds itself competing with cars like the Mercury Mariner and the Ford Escape, even though those were not near as efficient hybrids. Now there are hybrids like the Saturn Aura, Mercury Milan, Chevy Malibu and many others, however the Prius still has better fuel economy with 51 miles per gallon. Recommendations The only thing that I can recommend is that Toyota continues to establish these types of vehicles. I would recommend that they make more models and more SUV-like hybrids. Also, like I said earlier, they should expand their products in China, which would be beneficial.