What microenvironmental factors affected both the first generation and second generation models of the Toyota Prius? How well has Toyota dealt with these factors? When the Prius was introduced in the US, it was quite shocking that it became such a big hit. The US auto market had been dominated by SUV’s for quite some time, and it seemed that a car that was small, slow and lacked power wouldn’t be attractive to American consumers. The advanced technology was very attractive to the “early adopters” and the consumers were willing to pay over the asking price to get a Prius.
When gas prices soared so did the demand for the Prius. Toyota has dealt with these factors well. Successfully introducing a small hybrid into a market dominated by SUV’s is no small feat. Toyota’s success with the Prius is mainly due to their targeting strategy. By targeting the perfect group of consumers, sales and demand grew exponentially, and pricing has and continues to be at a premium. 2.Outline the major macroenvironmental factors – demographic, economic, natural, technological, political, and cultural – that have affected Prius sales. How well has Toyota dealt with each of these factors?
Prius sales benefited from a number of macroenvironmental factors. When the Prius was first introduced, Toyota targeted the “early adopters,” a group of consumers that were interested in the advanced technology of the vehicle. Many of these owners found creative ways to modify and hack the computer system and chatted about it online. Another group of consumers that Toyota targeted were the environmentally conscious and/or consumers that desired more fuel efficiency. Both groups showed high demand for the Prius and were willing to pay premium pricing for the vehicle.
Prius sales also benefited from factors such as monetary incentives offered by the federal and/or state governments in the form of tax breaks. Some states started issuing permits to hybrid owners to drive in the High Occupancy Vehicle lanes (even if there was only one person in the car), or even free parking. Furthermore, some environmentally friendly companies offered employees money towards the purchase of hybrid vehicles. In 2007-2008 gas prices skyrocketed to 3 dollars per gallon and in some states above 4 dollars per gallon which only made the demand for the Prius greater.
Studies about the various hybrid vehicles on the market were published and the Prius was at the top of the list for value. Studies indicated the Prius along with the Civic were the only hybrid vehicles that allowed consumers to recover the initial investment and actually save money after five years and 75,000 miles.
Overall, Toyota has dealt with these macroenvironmetal factors very well. It is evident that targeting the right demographics has really paid off. All of these macroenvironmental factors were to Toyota’s benefit. All increased the sales and demand for the Prius. The only problem Toyota was facing was keeping up with the demand.
3.Evaluate Toyota’s marketing strategy so far. What has Toyota done well? How might it improve its strategy?
Toyota’s marketing strategy has been focused on forward thinking and targeting the right consumer groups. The first consumer group targeted was “early adopters” or techies that found interest in the advanced technology of the car. This was a good strategy for the introduction of the vehicle. This group showed high demand for the Prius and spread the word through online sources. The second consumer group was the environmentally conscious, and those who wanted better fuel efficiency. Toyota predicted that gas prices would increase, and when they went through the roof, sales and demand increased.
I believe that Toyota has done very well with this strategy. The truth is in their sales and demand for the Prius. An improvement that Toyota could make is better production planning. It seems that so far, this has been the biggest challenge. Though Prius sales are very strong, sales would only increase with more production as long as the demand stays consistently high.
4.GM’s marketing director for new ventures, Ken Stewart, says “If you want to get a lot of hybrids on the road, you put them in vehicles that people are buying now.” This seems to summarize the U.S. automaker’s approach to hybrids. Would you agree with Mr. Stewart? Why or why not?
I agree somewhat with Mr. Stewart. I think that putting hybrids into popular cars and small SUV’s would work, but it would not work with sports cars and trucks. Sports cars and trucks are generally purchased for their power, speed, and towing ability, not their fuel efficiency. The current hybrid technology would diminish the performance of sports cars and trucks, and would eliminate most of the benefits of owning either type of vehicle.
On the other hand, introducing the hybrid technology in popular cars and small SUV’s would work well if the option was available at an attractive price. Improved fuel efficiency is desirable when purchasing a car as the average price per gallon of gasoline is only rising. In my opinion, they hybrid technology would be an attractive offer. Not only would it be practical, but it would save the consumer a lot of money in the long run, assuming that they keep the car for five or more years