MMGP: Research Paper
Group 2

Abstract This paper will provide an in-depth analysis of the Toyota Prius from a Marketing viewpoint. The research provides background information, market analysis, branding, services/ pricing and promotional information regarding the Toyota Prius. This paper provides the decision making and analytical processes necessary to implement a successful marketing program for the Toyota Prius.

Description The Toyota Prius is considered a full size hybrid electric mid-size hatchback. The Prius design offers comfortable seating for five and has impressive cargo space, something lacking with its competitors. The Prius has an estimated fuel-efficiency rating of 50 mpg, when using the U.S. EPA combined cycle. This car is on the top of the list for the most fuel efficient cars on the market. With rising gas prices, this fuel efficient car is the most popular hybrid available to consumers today. The overall design of the Prius is characterized by a streamlined nose and curved roofline. This vehicle carries an impressive base price of about $19,000.00.
The Prius has several models and trim packages to choose from allowing the customer more options in the current hybrid market. They have a standard model with a hatchback, a compact version and a new station wagon called the Prius V. “According to Hybrid Car Review (2012), “Toyota’s Hybrid Synergy Drive System allows the Prius V to travel at “in town” speeds on electric power alone. Sensors decide when to employ gasoline engine power or a combination of gas and electric propulsion; the goal is to efficiently balance fuel economy and acceleration”.
History
Toyota first designed the Prius hybrid model in 1997 and has re-designed it to meet the current market demands. Not only have they improved the exterior design, they have increased the interior seating area and provided more cargo space. The new, third generation designs boast a more attractive exterior model design. Toyota has and will continue to be a leader in the hybrid industry.
The Old Four P’s
The “the old four p’s" of product, price, promotion and place were introduced to the marketing world by E. Jerome McCarthy (Kotler & Keller, 2012, p.25). In order to examine the Toyota Prius’s marketing campaign using the old marketing mix the first part to consider is the actual product. The next “p” to consider is price. The cars are priced according to the selected options; each model gets the same mileage per gallon. A comparison of the Prius to the Honda Civic Hybrid, which is a competitor, reveals it is priced appropriately for the market; with better fuel economy and more standard safety features. The Prius comes in around $200 less than the Civic Hybrid (Toyota Motor Sales, U.S.A., Inc., 2008-2012). The last of the old “p’s” is place. Place looks at inventory, assortments, and location (Kotler & Keller, 2012, p.25). In order sell a product it must be present when and where the consumer needs and wants it to be.
The New Four P’s
People, processes, programs and performance are collectively known as Modern Marketing Management (Marketing, 2012, p.25). Beginning with people, Toyota starts to market itself to prospective customers from the second their website is launched. Values, environment, philanthropy and diversity are among the menu headers. Workplace inclusion and organizational support of philanthropic initiatives creates goodwill among employees.
Demographics
With the ever-changing times and the emergence of new technology come many new innovations and upgrades. These innovations are most definitely seen within the car industry. The new fad seems to be electric-hybrid cars. With these new fads, also come new demographic developments. In terms of marketing, demographics are often seen as simply population (Kotler & Keller, 2012, pp.75). According to accounts by car companies and experts, age and income seem to be the major portion of demographics that apply to hybrid-electric cars.
Age
Firstly, Scarborough Research has found that hybrid owners are 23 percent more likely to be older than 50 years of age (Rosmarin, 2007). These studies show that the demographics surrounding hybrid-electric cars are moving toward older-aged individuals instead of younger crowds that often seem to have an instant crave for new and innovative items.
Income
The income for hybrid owners is relatively high. There have been many research projects that have proven this demographic fact. For example, in 2004, J.D. Power and Associates reported that hybrid owners’ incomes are about $100,000 a year in contrast to the $85,000 a year that the average car owner earns (Hybrid Cars, 2012). These research results support the fact that the wealthy takes up a high percentage of hybrid car owners, and thus should be a marketing focus.
Economic Trends Gas prices started hitting all-time highs in 2007, causing people to start trading in their “muscle” cars for hybrid vehicles, because hybrids were more fuel efficient and practical in today’s economy and market (Toyota, 2012). The current economy is focused on the safety of vehicles and fuel efficiency due to gas price increases. The fuel efficiency of these vehicles as well as the overall impact of hybrids on the economy makes them increasingly more popular, despite the higher cost of the vehicle. “Major new technologies stimulate the economy’s growth rate” (Kotler & Keller, 2012).
Technological Changes
As in the verse Nehemiah 2:18, “And I told them of the hand of my God that had been upon me for good, and also of the words that the king had spoken to me. And they said, ‘Let us rise up and build.’ So they strengthened their hands for the good work”. Toyota took the new technology and started to build something new.
In 2000, the Prius was introduced in the United States. Since its introduction, more than a million hybrids have been sold. However, in 2001, the Cato Institute's Patrick Michaels declared the Prius would "never" deliver a profit for Toyota. Then in 2004, a Fox News guest declared that "Americans don't want hybrids". But today the Prius is the world's third best-selling car (Theel, S., 2012). It would seem that the Prius brand is making a hybrid market all of its own. Toyota’s Prius seems to have set the standard for hybrid cars and has been dominant in U.S. hybrid car sales.
Consumer’s Taste and Preference With its intelligent and easy to use navigation system, the Prius provided one of the first installed GPS systems that made driving easy and fun. Secondly, the biggest selling point for the Toyota Prius was being the first four door hybrid sedan in the US market. With more cargo capacity than the first hybrid to hit the market (Honda Insight), it quickly became the number one-selling hybrid.
However, even though consumers prefer the alternative to the high gas prices and low emissions factor, only 35% of hybrid buyers purchased another hybrid vehicle across the entire market. The design of the Prius sacrifices driving enjoyment for fuel economy. It does not have the sleek, stylish look that traditional cars have. Although the Toyota Prius is expanding their family and providing over 50 MPG, consumers are looking at other models of hybrids and conventional vehicles because of the pricing and body style.
Social and Cultural Factors Ever since there has been a push for environmental concerns in the auto industry, there have been increasing social factors and cultural factors that affect the Toyota Prius. These two factors have been changing the way Toyota markets the Prius, because it has opened the door to an entirely new market. For example, from the start of hybrid vehicles there has been a heightened competition of other hybrids in the industry. Other automakers gave consumers the enjoyment and enthusiasm that comes with driving their favorite cars in hybrid models. Cultural factors have impacted the Prius market in many ways as well. Toyota has targeted a market that is growing profoundly in the U.S. and the Prius is the product to meet that target markets need. Many environmental groups have pushed for tougher regulations because of the damage that high producing CO2 vehicles do to our environment. As a result of the Prius meeting its target market’s needs, it has also come to attract those looking for fuel efficiency as well.
Cultural Factors
Although there are a lot of factors that go into buying a vehicle like style, color, interior, technology, and brand name, there are really only two factors that influence the consumers of the Toyota Prius. These factors include fuel and environmental efficiency. Consumers have certain core values that cannot be changed; keeping the environment clean and intact are examples of these core values. The text states that “environmental regulations hit certain industries hard” (Kotler & Keller, 2012), where some companies, such as Toyota, accommodated these regulations by making hybrid vehicles, like the Prius. With the increase of gas prices, many consumers have enjoyed the savings on fuel cost. They were willing to give up some of the style and pleasure of driving a vehicle that the Prius has not always offered.
Social Factors
As mentioned in the Marketing Management textbook, a person may be inclined to make a purchase to attain group membership (Kotler & Keller, 2012, p.153). A social factor that seems to guide the marketing of the Toyota Prius is “harmony.” The notion that the Prius exists in harmony with nature was introduced in the 2010 marketing campaign that was built around “…harmony between man, nature and machine…” (ToyotaUSA, 2009). This campaign likely appealed to the evironmentally consciuos and those who aspire to be more environmentally conscious. Purchasing the Prius is like purchasing membership into an “environmentally sound group.” This targeted approach is likely to be quite effective for the young adult children of families who are Prius loyalists since family has the biggest impact on buying (Kotler & Keller, 2012).
Personal Factors There are many factors that people take into consideration when making a major purchase such as a car. The needs of their family based on its size, their financial situation and their individual taste will influence their decision as to which car to purchase. The Toyota Prius has been designed and marketed to satisfy the needs of many consumers. There are various personal characteristics that not only influence a buyer, but have an impact on marketing the product to the consumer.
Age and Stage of Life Toyota has done an excellent job with the three models in the Prius family to target a range of consumers. It seems this hot car is bought by 25 year olds and as much as 50 year olds. The original Prius, the Prius c, and the Prius v all have something different to offer that will satisfy the needs and wants of many people. This mass appeal has certainly boosted the image of the Toyota Prius and makes it one of the most sought after hybrids available today.
Personality and Self Concept Personalities are on display every day with what people wear, what people drive, maybe even what people eat. The Prius says these consumers are interested in the environment and are also interested in fuel efficiency. In 2012, Toyota decided to launch a new marketing scheme that made it a game to buy a Prius. In this case, the Hasbro’s game of Life. According to Adage (2012), “While some may associate board games like Life with an older generation, Toyota finds it a good fit with digital-savvy millennials. Toyota’s research showed that the target group of ages 25 to 35 views life as a game…not fun and frivolous, but purposeful”. In this case, the marketing efforts were aimed at the personality of its consumers. It wanted to appeal the ‘fun’ side of their buyers.
Psychological Factors There are many things that influence our perceptions such as culture, gender, and many other things. Perception “is the process by which we select, organize, and interpret information inputs to create a meaningful picture of the world.” (Kotler & Keller 2012, pg 162) Sigmund Freud has become associated with psychoanalysis. One of the things Freud is famous for is creating what is known as Subliminal Perception. Many advertisers take advantage of embedded messages that they place in ads that they believe affect our behavior (Kotler & Keller 2012, pg 162). This can be seen in all forms of advertising today including Toyota and their main competitor, Honda. The demand for hybrid cars is increasing rapidly because it consumes less petroleum than conventional cars. These are the most environmental-friendly cars in the market. Hybrid cars are here to stay, and the demand will continue to rise as consumers become less and less interested in being dependent on foreign oil. Consumers believe that they are improving the environment at the same time fulfilling a need. These factors and others play a major psychological role in the consumers demand for hybrid vehicles.
Consumer Behavior With any product and industry, there are always certain factors that influence consumers’ buying behaviors. As stated by Kotler & Keller , “Consumer behavior consists with the study of how consumers select, buy, use, and dispose of goods, services, ideas, or experiences to satisfy their needs and wants” (p.151). Furthermore the aspects of consumer behavior that should be emphasized within the marketing plan are of a cultural, social, or personal nature.
Cultural
Firstly, cultural factors are believed to be the fundamental building blocks for what consumers need and want (Kotler & Keller, 2012, pp.151). Nationalities, religion, racial groups, and geographic regions are some of the cultural factors that influence consumer buying behaviors (2012, pp. 153). Specifically, the geographical aspect of culture would need to be especially pinpointed in terms of marketing management for the hybrid-electric car.
Social
Next, some of the social factors that influence buying behaviors are considered to be family, social roles, and social statuses (Kotler & Keller, 2012, pp.153). To pinpoint, social status is especially important within the hybrid-electric car industry. Naturally, hybrid cars are expensive in nature, thus, it has been found that individuals who make a substantial amount of money, with a high professional status, or with an elite rank within society is typically interested in a lavish vehicle (Beliveau, et al., 2010, pp.28). The purchase of a car such as a hybrid-electric is believed to be a representation of the accomplishments made or the position upheld by someone with an elite social status (2010, pp.28). When thinking in terms of marketing management for hybrid-electric cars, individuals within the elite social class should be among the main focal points within the marketing plan; and should also be an intricate component of the niche market.
Personal
Finally, some of the personal factors that influence consumer buying behaviors are considered to be lifestyle, age, and personality (Kotler & Keller, 2012, pp.155). To pinpoint, personality is a high-focus area of personal factors that influence consumer buying behaviors within the hybrid-electric car industry.
Variables Used in Segmentation
Toyota used a more traditional form of marketing to include broadcast and print advertising to position the new Prius in the marketplace in 2000. Toyota has faced negative criticism in regards to its hybrid vehicles and was no different with the recent release of the Toyota Prius Plug-In. In an article from the Wall Street Journal, Mr. Welsh discusses whether the additional cost, which is about $10,000.00 over the ‘normal’ care cost, is worth the conversion to electric power (Welsh, J., 2012). Toyota does not respond in a negative way to these attacks, instead they continue with their positive marketing campaign of the Prius product. 1 Peter 3:10 reminds us “For the person who wants to love life and see good days must keep his tongue from evil and his lips from speaking deceit”. It is clear that Toyota has succeeded by marketing the Prius on multiple factors. These factors would include the potential for gas savings and an appeal for the consumer looking for the latest technology. In marketing the Prius, Toyota crossed over multiple market segments to keep the car practical, attractive, functional and fun to drive. If they had just focused on one aspect, such as the impact on the environment, they would have failed (Dunn, M., 2010).
Target Markets A target market is the part of the available market that the company focuses on pursuing (Kotler & Keller, 2012). Hybrid vehicles, especially the Toyota Prius, have a target market that is mainly focused around environment and fuel efficiency; however, age, gender, income, and ethnicity, also play a part in establishing a marketing strategy to promote sales. With both the environment friendly and fuel efficiency of hybrid vehicles, Toyota and Hybrid vehicles have become more popular in the United States as well as other countries. Having a better understanding of the target market for the Toyota Prius will allow for an increase in sales. The middle age classes of people who range from 35 to 54 years of age make up over 39% of all hybrid sales (MRI, 2008). Gender did not appear to be a big influence for hybrid marketing analysts because equal distribution was found between males and females that bought hybrid vehicles (Solomon, 2008). Income and ethnicity are demographic variables that might also affect the target markets for the industry of hybrid vehicles. Consumers that bought hybrid vehicles, specifically Toyota Prius’ made up most of $75,000 dollars a year (MRI, 2008). Finally, over 76% of hybrid consumers claim to be Caucasian.
Positioning Statement The car industry has been one of the largest manufacturing industries in the United States for decades. The marketing toward consumers has been equally monumental and extremely competitive. There are many factors that people take into consideration when making a major purchase such as a car. There are a variety of personal characteristics that not only influence a buyer, but have a significant impact on marketing the product to the consumer. Toyota has been a leader in the automotive industry and has a solid following of customers. As stated by Kotler & Keller (2012), “Positioning is the act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market” (p. 276). The Prius says these consumers are interested in the environment and are also interested in fuel efficiency. The positioning statement for the Toyota Prius would be: The Toyota Prius offers stellar fuel economy packaged with more space and it is the best-selling hybrid car in America.
Market Position Market position is an extremely important component of success for any product or service within any type of industry. It is believed that establishing a position in the marketplace requires that consumers understand what the product offers and what makes the product a superior competitive choice (Kotler & Keller, 2012, pp.286). Hybrid-electric cars have a strong competitive position in the automobile industry. This position is achieved and based upon value, protecting the environment, and quality.
Value
First, value is one dimension that gives hybrid-electric cars a strong competitive position in the automobile industry. Initially, hybrid-electric cars cost more than the average non-hybrid car, but the long-term value of hybrid-electric cars far exceeds that of non-hybrid cars. For example, research studies have proven that all hybrid vehicles have a better total cost of ownership over the course of five years or 70,000 miles than that of non-hybrid vehicles (Harmsen, 2007). These research results prove that even though hybrid cars have a higher price ticket than non-hybrid cars, approximately $2,500 to $3,000 more, the initial costs will eventually turn into substantial savings.
Protecting the Environment Next, protecting the environment is another important dimension that gives hybrid-electric cars a strong competitive position in the automobile industry. One common trend seen today is the desire to produce “green” products, those which are environmentally friendly. It is no secret that the automobile industry is responsible for creating many products which send pollutants into our ozone. The creation of hybrid-electric vehicles serves not only to provide a product which is attractive to the newly growing target market, but to also display corporate responsibility by contributing efforts to protecting the environment (Harmsen, 2007).
Quality
Another key component that gives hybrid-electric cars a strong competitive industry stance is competitive quality. It has been proven that hybrid-electric automobiles exist without compromising quality and safety. These vehicles are just as practical and safe as any other non-hybrid vehicles and their performance has met or exceeded competition.
Market Leader
Toyota is the market leader for the industry. Through the past decades, Toyota has made a name for themselves by developing dependable, affordable, and hybrid models. The SWOT analysis prepared for Toyota, explains the strengths and weaknesses for the company (Zier, 2008). Toyota Corporation is one of the biggest vehicle manufactures in the world. Toyota sells products to more than 170 countries around the world, including Japan, Asia, Europe, and North America (Marketing, 2012). The strengths of Toyota include new investment opportunities in the United States and China that have increased net profit 0.8% and overall sales by 7.3 % (Howes, 2011). Toyota also has a much focused segmentation. Toyota uses targeting and positioning to increase sales and overall profit in a number of countries.
Large companies such as Toyota can have many potential weaknesses related to the supply and demand of their products. The current economy maintains that vehicle manufactures ensure they only have enough products to meet the demands of their consumers, ensuring losses are minimized. Operational efficiency and competition are also potential weaknesses for Toyota. Opportunities and threats also impact Toyota. When Toyota introduced the Hybrid model vehicles as well as the launch of the Aygo, they broadened target markets to environmentally-friendly and “urban youth”. According to Marketing (2012), “The narrow segment is notorious for its narrow margins and difficulties for branding”. Potential opportunities also have potential threats, including competition with technology and sales among other car manufacturers. There are several strengths and weaknesses that have given Toyota the name and reputation it has today, making Toyota the number two car manufacturer in the world and the market leader in the hybrid industry.
Brand Elements In the hybrid vehicle community, the Prius is sweeping the competition compared to its long rival, the Honda Insight. Toyota has sold over 2.5 million Prius models since 2001 and has proven that it comes from a well known and reputable brand. Toyota is known for its reliability, quality, and efficiency. It has become a brand name of pure dependability. Given this kind of reputation, the marketplace has had high expectations for the Toyota Prius. However, the success of the Prius comes from two criterions of brand elements explained in the text.
An element of branding that made the Prius so successful in the industry is transferable. The word Prius comes from the Latin word “to go before” and according to Insideline.com, “Toyota said it was using the name because it was a predictor of cars to come”. Since its beginning in 2001, the Toyota Prius has grown to become a family of four, making it the most successful hybrid in the market. Toyota has put the Prius in a wonderful situation against its competition. As stated in the text, the memorable aspect of Toyota has set the stage for the Prius; building a name for itself before it even hit the market. In addition to its “brand building”, the transferable name of Prius has come before any other mass produced hybrid on the market to meet customers’ expectations. The Toyota Prius has kept its brand promise by being the most dependable hybrid in today’s market.
Brand Promise Toyota strives for constant improvement in everything they do. Toyota has a word to describe it: Kaizen. It means continuous improvement, and it is the key principle that guides the company in their commitment to deliver more to customers. The Prius is the combination of research, testing and refinement. It promises a unique design in a custom-designed body that was designed for the ultimate in form and function. Toyota strives for true sustainability. Toyota was the first to market a hybrid, and have now sold over 3 million Toyota hybrid cars worldwide (Toyota, 2012). Toyota is always striving to build safer cars. They collect information from actual vehicle accidents to analyze the cause as well as the extent and nature of the injuries sustained. Toyota calls this process the "pursuit of real safety". The vehicle has an Anti-skid Braking System, Brake Assist, seven SRS Airbags, Vehicle Stability Control, and Traction Control. The Honda Civic, the Prius’ competition, has a Hybrid model with an ECON button. The engine and other power-saving systems will then go into super-efficient mode to maximize your mileage with the push of a button. In addition, the Hybrid model makes the most of fuel efficiency by giving the consumer a handy Eco Guide to help them along the way. By using the guide the driver can tabulate their Eco Score at the end of each drive.
Competition
In reviewing the side-by-side comparisons for the Toyota Prius and Honda Civic Hybrid, it is easy to see the two vehicles are similar in the areas reviewed. The brand promise that they offer to consumers is almost identical. However, it is important to note that even though the Hybrid vehicle can and will save money, this is all based on how the vehicle is used. More savings can be realized with city miles are opposed to highway miles and more importantly, it could take years before the savings can be realized (Honda, 2012).
Attributes and Benefits Some of the primary attributes and benefits of the Prius family is that it is environmentally friendly, high mileage, safe, dependable, low emission and stylish. Each of the four models; 3rd Gen, Prius c, Plug-in Hybrid and the Prius v have an overlapping target market that creates a broad marketing segment based on demographics that include income, buying power, age and generation (Kotler & Keller, 2012). The broad segment is broken into smaller target groups based on the unique attributes and benefits of each vehicle model. The first in the Prius family is the 3rd Gen which the more traditional and environmentally sound was the vehicle they were hoping to reach with consumers with a mass marketing approach. The Prius c is the newest member of the Prius family that boldly boasts that it was created with affordability and style in mind and targets Gen Y and those who are like minded (Toyota 2008-2012). The Prius plug-in is pushing the hybrid envelope, attempting to lead the pack as the original Prius did. Toyota seems to have even further refined the market with this model by launching it in March 2012 to only 15 carefully selected states (Toyota.com, 2008-2012). Toyota’s mass marketing approach of its hybrid vehicles based on collective attributes along with its targeted approach based on the unique features of each model has made it very challenging for competitors to impact Toyota’s hybrid market share and it is expected that Toyota will remain out front for years to come (Trefis Team, 2012).
Packaging and Labeling The Toyota Prius has taken the practicability and combined it with great packaging to create one of the top selling Hybrid cars in the world. The packaging of a product is often the first thing that attracts consumer’s attention. “When the firm is considering a particular packaging scheme, the packaging should identify the brand, convey descriptive and persuasive information, and facilitate product transportation and protection, and aide in product use”(Kotler, 2012 p. 346). The newer Prius has a sportier, more aggressive stance as compared to the 2010 Prius. The new shape has a distinct space-age shape with large, diamond-cut headlamps and snub-nose front-end. The angled hood seamlessly flows into the windshield, then to a flowing roofline that is sleek and low (SCRIBD 2012). Toyota has also offered a moon roof to the new Prius. The changes to the appearance, is a direct attempt market through packaging. Brand and packaging should really tap into a consumer’s emotions. The Toyota Company does a great job creating emotional appeal for consumers. Many male products seek a more strong type packaging. The new designs of the Prius serve as a tool to stimulate the interest from a visual point of view. Many consumers are impulse buyers, and they often buy what they like. The Toyota Company does a masterful job of creating a brand that blends art and science. The company’s website creates visual stimulation in the beauty of its product. The Toyota Company has remained faithful in its commitment to producing unparalleled fuel efficient, yet stylish cars. The Toyota Prius creates a perception of great experiences based on its rich legacy of quality, creative content and stylish look.
Support Services The service mix offered by Toyota is a tangible good with accompanying services (Kotler & Keller, 2012, p. 356). The tangible good is the automobile, the accompanying services are ToyotaCare and a website designed specifically to engage Toyota owners. The after sale support and services offer distinctive service qualities, adds to the brand experience while keeping the most sought after customer service dimensions in mind (Kotler & Keller, 2012).
The purchase of every Toyota vehicle includes a maintenance plan and roadside assistance at no additional cost, ToyotaCare (Toyota Motor Sales, U.S.A., Inc.). This program supports Toyota’s position as market leader in safety and vehicle dependency. ToyotaCare and the the owners website communicates to automobile owners that Toyota is attempting to and likely meeting the dimensions of service that are being demanded by Toyota owners. Some the dimensions being served include quick access to information, a desire to meet owners needs, a trusted brand, fair treatment, relevant personalized service and treatment as valued customer (Kotler & Keller, 2012, p. 372).
Support Services-Competitor Toyota is currently one of the top three car manufacturers in the world. Honda is the number one competitor for Toyota in reference to hybrid model vehicles. Honda differs from Toyota in several ways, including some of the support services offered to consumers. Services are essentially acts or performances that one party can offer to another party and support services are all components that “support” the services being rendered (Kotler & Keller, 2012).
The intangibility of a company describe the place, people, equipment, communication material, symbols, and price of the product. According to Stottler (2005), “Defects in intangibles such as problem solving, decision making or project management are much more difficult to spot and correct than defective raw materials or problems on the line”. Honda focuses on defining quality in their product, sustain quality attributes, supporting quality skills after training, as well as accessing the value of training by the overall treatment and support of the consumer. Honda excels in customer service and uses D-CSI surveys to better themselves for their consumers. Additional support services that Honda offers are maintenance stations which ensure that the hybrid vehicles have the required maintenance to run effective and efficient. Honda has also implemented the Honda C-card. According to Pollitt (2005), “combines a point-based cash rewards program, preferred service for members, a charitable donation program, and other benefits with basic credit card functionality.” This card offers a lot for the Honda consumers including all the references support service and maintenance reminders. There are several support services that are provided by Honda for its consumers to ensure that not only is their buying experience excellent but so is their care and support after the purchase. Support services include maintenance checks and a high level of training ensuring that Honda representatives are able to offer better support to their consumers. Throughout the entire purchasing experience Honda offers support services as listed above from financial and buying options to maintenance and post-purchase support for all the consumers vehicle needs. Through the years, Honda’s support service efforts have drastically improved, making Honda a major competitor for Toyota in production of hybrid model vehicles.
Honda Support Services & Sales With any business within any industry, having a strong support services system will help aid in the company’s overall success, as well as boost or maintain the company’s profits. Honda, Toyota’s main competitor, support services efforts obviously gives them a boost in sales. They have been able to maintain a strong stance in the hybrid-electric car industry. Honda’s customer service survey (D-CSI) and after-sale customer services are two main support service efforts that help boost sales.
Customer Service Survey (D-CSI) Honda’ s customer service survey, also known as D-CSI, aims to measure customer satisfaction after 10 and 21 months of ownership. Furthermore, the survey helps aid Honda in increasing the quality of service provided to customers by looking at things from the customer's point of view (Honda Motor Company, 2012). The three points of contact Honda focuses on are premises/process, people, and product.
After-Sale Customer Service
Honda sales teams know that the purchase of a new or pre-owned vehicle is only the first step in making sure that customers are fully satisfied (Evolio, 2012). Thus, Honda’s after-sales service guarantees that their new vehicles will remain in perfect working condition thanks to their experienced staff and the excellence and speed of our repair and maintenance work. To add, it has been proven that customers cannot judge the quality of certain products and services until after they have received them (Kotler & Keller, 2012, pp. 357).
Post-Sale Service Toyota feels that confidence in the quality and reliability of their products is a key factor on the consumers mind when deciding to purchase a vehicle. It is Toyota’s belief that the consumer is receiving the best possible service for their vehicle when it is performed at a Toyota dealership. The idea behind offering the warranty on the vehicle is simple. It keeps Toyota competitive with other brands. Their warranty is almost identical to the warranty offered by the competition. It tells the consumer that their purchase will be protected and Toyota hopes that this along with their product will result in competitive advantage (Kotler & Keller, 2012, p.377).
It is Toyota’s goal and they are dedicated to serving their customers full and complete automotive needs. They offer a complete post-sale package to offer what they feel is the fastest response to consumers concerns. If a situation should arise after the purchase of a Toyota vehicle the customer should discuss the situation with the dealership manager, service manager or customer relations manager depending on the dealership. In most situations a solution can be resolved at this step. If the customer still feels as though the matter has not been addressed they can take the matter to the final step which is to process the concern through the Dispute Settlement Program. Toyota wants to be a leader. Not only a leader in automobile innovation and sales but also in customer service. They want to differentiate their brand from their competitors and add value to their product. The key is to stay a step ahead of the competition to remain a leader in the industry (Kotler & Keller, 2012, pp. 368-370).
Repair and Service Efforts Customer service is the key to a company’s overall success. Every firm has to study its’ industry and the customer relation process to analyze areas needing improvement. The Toyota brand is well known around the world as one of the most reliable cars on the market. In addition, the Toyota Prius hybrid has become one of the most popular hybrids on the market. Over the years they have built a substantial consumer base with a following of very loyal customers. As stated by Kotler and Keller (2012), “Product-support service is becoming a major battleground for competitive advantage”.
The Toyota customer base has proven to be incredibly loyal over the years. Toyota has built up decades of goodwill and the proper customer care relations will continue to affect their continued success. According to the Associated Press (2012), “Toyota raised its sales target for this year to a record 9.76 million vehicles and reported a strong recovery in quarterly profit Friday, underlining its bounce back from a disaster plagued 2011”.
Training and development programs for employees are the most important factor to improving customer service. Quality customer service includes both pre-sale services and post-sale services. Most companies recognize this and develop initiatives to ensure that all of their employees become customer service oriented. This in turn will establish and create a loyal customer base and will keep Toyota a leader in the automotive industry.
Price Adaptations
Pricing is difficult to measure; companies need to make sure to have the right plan in order to see the results they want. If done incorrectly companies can lose money, but with the right strategies and techniques, companies will experience the profits and customer loyalty that come with success. Several strategies for pricing adaptation apply to products like the Toyota Prius. Some strategies would include ways of adjusting the products price discounts and allowances or promotional pricing because of the dynamics of car sales. Since the Prius competes in an unpredictable market, Toyota offers several discounts and allowances that attract consumers. They offer military discounts or trade-in allowances, clearance sale to make way for last year’s models or even an $800 discount on each vehicle (NYTimes.com). This kind of discounting strategy has hurt the Prius’ competitors. The Honda Insight has struggled to compete with the Prius because of the Prius’ pricing and success even though the Insight was the first Hybrid to hit the market. Along with price discounts and allowances, promotional pricing can entice consumers when they least expect it. Cash rebates are usually the best way for Toyota to market the Prius. These rebates usually come through dealerships. Another way Toyota offers promotional pricing is its low interest financing program. According to Toyota, a customer can purchase a Prius with 0% APR for 36 months as opposed to financing through a bank or credit union (Toyota.com). Toyota has some attractive offers, but none of them really sets them apart from other manufacturers. It seems that Toyota is relying on the brand name to compete with other hybrids in the market and not focusing on its pricing.
Pricing
Pricing is one of the most important aspects of selling any product. There are many factors that contribute to the price of any item and the Toyota Prius is no exception. The Toyota Prius is priced in a very competitive range, and the sales of the Prius are among the top selling hybrid cars in the world. The first step is to develop a pricing team and take advantage of market trends. Then the marketing team would focus on the market and constantly monitor which direction pricing needs to go. Next Toyota should the direction in regards to pricing, to ensure they are meeting financial goals and needs. There are 5 major objectives to consider when determining pricing; they are survival, maximum current profit, maximum market share, maximum market skimming, and product-quality leadership. (Kotler, 2012, p 389) The direction for pricing would be to implement the maximum market share strategy. The Toyota Prius is competitively priced now but would be more competitive if the price were dropped 6.4 percent. The best price is now is around $18,950 dollars, according to www.toyota.com (Toyota 2012).
Integrating Marketing Communications
There are different modes of marketing communications; Toyota understands the importance of properly utilizing these modes of communications to successfully market the Toyota Prius. Marketing Communication includes advertising, sales promotion, public relations and publicity, events and experience, direct and interactive marketing, “word of mouth” marketing and personal selling (Kotler & Keller, 2009). Integrating these various methods, allows for a prosperous company, such as Toyota.
A few of the methods that Toyota successfully uses are advertising, personal selling, and word-of-mouth marketing. Target markets must be researched and products must appeal directly to each target market and individual’s needs (Belch, George, and Belch, Michael, 2009). Promotion is the Marketing “P” that covers every method of essential communication. With the great success of the Prius, it proves Toyota not only understands the communication mix but is also an expert in using them. Direct and Interactive marketing are used within Toyota when anything is mailed and faxed, emailed, get voicemails, control company blogs, websites, etc. Toyota uses Direct and Indirect Marketing on a daily basis. Both marketing mixes are critical to Toyota’s success. Consumers can find the Prius in either a magazine, on the internet, or in a commercial, and can see Toyota’s slogan “Moving Forward” (Toyota.com). This recurring theme teaches consumers that the Prius is a technological, fuel efficient, and very spacious vehicle. Toyota also uses social networks to connect with consumers. Networks like twitter, FaceBook, YouTube, Google plus, and other social networks answer questions, concerns, and entertain comments instantly for their customers which allows the Prius to move forward. Secondly, as much as consumers are irritated by salesman, it is still the best mode of personal interaction. Toyota uses a mix of marketing communication methods and integrates those methods into production, sales, and support. These techniques have been making Toyota a leader in hybrid vehicle manufacturing and sales. Consumers can physically see Toyota “Moving Forward”. It also gives consumers the interaction with the Prius that they only “see” online, in magazines, or on television. Personal sales mode is where Toyota comes alive with its customers. Lastly, word-of-mouth seals the deal for consumers. Toyota uses a mix of marketing communication methods and integrates those methods into production, sales, and support. These techniques have been making Toyota a leader in hybrid vehicle manufacturing and sales. There are many loyal Toyota customers that offer great advice and provide strong opinions to friends and family. Word-of-mouth has made the Toyota symbol a symbol of quality. For example, no matter what country a customer may be in, when they see the Toyota symbol they see quality and reliability. Integrating the necessary marketing communication methods for Toyota has proven to be very successful.
Internet Marketing Possibilities
Interactive marketing typically includes all marketing achieved by way of the internet. Toyota embraces interactive marketing primarily using the communication options of search ads via search engine optimization, websites and mobile marketing. Toyota has secured ad space to be at the top of the page when the keyword “Toyota” is entered using major search engines that include Google, Bing, Ask and Safari. Toyota’s primary and sub-sites meet the qualifications of an effective website as discussed in Marketing Management (Kotler & Keller, 2012, pgs. 541-542).
Toyota’s primary interactive marketing tool is the website Toyota.com which includes the Prius family sub-site. The Prius sub-site seems to be effective when reviewed in relation to the seven design elements of an effective website that include context, content, community, customization, communication, connection and commerce (Kotler & Keller, 2012, p. 542) . Each Prius vehicle has its own page that allows users to experience customization based on the product of interest. The site is connected to other sites in order to enhance the user experience and to further display the value of the product.
Toyota seems to be fully aware of the opportunities and advantages that are presented by interactive marketing. The company is using the many marketing options successfully while developing even more effective methods of customizing individual user experiences and offering different methods for consumers to receive the product information.
Social Media in Marketing
The use of the internet and social media has become a powerful tool for Marketers and Consumers alike. Marketers experience a vast amount of free advertising given the right kind of exposure. Consumers are given access to a variety of research allowing them to make better purchasing decisions. According to Kotler and Keller (2012), “There are three main platforms for social media: 1-online communities and forums, 2-bloggers, and 3-social networks like Facebook, Twitter and YouTube” (p 546). Social Media promotes the power of word of mouth advertising. These social groups include family, friends and co-workers. In an article by Guyer (2005), Jim Lentz, group VP of marketing at the Toyota Division stated, “We’ll play marketing by ear until production volume increases and we continue to rely on word-of-mouth and Web site visitors”.
Indeed, the use of social media by marketers and consumers is very effective and the popularity is growing at a rapid pace. The Toyota marketing executives expect the Prius sales to be very successful. In addition, they expect the word-of-mouth advertising to also work very well. Online forums, bloggers and social media networks make up a large portion of the Toyota’s current and future marketing and advertising campaigns.
Value
The value that businesses provide is expected to go beyond interactions with customers and employees (Kotler & Keller, 2012, p. 629). Socially responsible businesses add value to the organization and society by meeting customer demands that include how the business contributes to people as a whole, the planet and making this information easily accessible. The added value that Toyota’s brings to North America is reflected in the “About” section of the Toyota.com site (2008-2012).
The “About” sections includes a bevy of options under each heading. Two headings that stand out in terms of value are “Environment and Philanthropy.” The Environment section explains how the Prius has less of an impact on the environment. The company is working on “Greener Operations and Manufacturing” in addition to partnerships that have been established with existing environmental organizations, businesses and governments. Toyota’s community involvement is evident across the United States via the large number of community organizations that are supported by the company (Toyota.com, 2011).
This is just a fraction of the many ways that Toyota is delivering value. Each initiative and idea is supported and based on substantive research that is also accessible from the website. The level of commitment Toyota has in the community shows that they are delivering value to customers that purchase their vehicles.
Socially Responsible Marketing Molson Coors Canada has been able to take advantage of social media. In addition, they invest more in responsible drinking education than on alcohol-centered events. The Molson team uses internet sites to start community generosity projects (Lasica, J.D.). With all companies, but especially for a company selling an alcoholic beverage, Molson Coors has to be confident they are practicing social responsibility through their legal, ethical, and social words and actions (Kotler& Keller, 2012, p.648). Tyson Foods is another organization that displays social responsible marketing and ensures that the efforts can be seen its core mission. The brand and main effort of Tyson is to foster awareness and attempt to ultimately end childhood hunger. Tyson has started to integrate social media into its hunger relief efforts during the last few years (Lasica, J.D.). In on promotion, stated that for every comment posted on its blog, they would donate 100 pounds of chicken. The donations went to the Capital Area Food Bank of Texas. As a result, they received 658 comments in two hours. This example of cause related marketing can help Tyson link their social responsibility to their consumer marketing programs. This campaign was successful for Tyson in many ways, it helped to improve “social welfare, create differentiated brand positioning, build strong consumer bonds, enhance the company’s public image, create a reservoir of goodwill, boost internal morale and galvanize employees, drive sales, and increase the firm’s market value” (Kotler, P., & Keller, K.,2012,p.635) Haagen-Dazs decided to do something when it heard that Honeybees were disappearing at an alarming rate. The effect of the reduction in Honeybees has an effect on the global food chain. Choosing the right goal or objective for a social marketing program is critical. So, Haagen-Dazs had taken social awareness in their cognitive campaign and have been able to tie it back to the company’s core mission. Greenopolis is an organization that helps people recycle, save on natural resources, and educate on conservation (Greenopolis). Greenopolis can be found on several social media sites and they offer a daily look at some interesting facts as it relates to recycling, locations of recycling kiosks, repurposing, and articles related to these topics. They have utilized action and cognitive campaigns to motivate people to reduce, reuse, and recycle while educating the public (Lasica, J.D.).
Social Responsibility
Socially responsible marketing is important for all firms within any type of industry. It is believed that effective marketing must be matched by a strong sense of ethics, values, and social responsibility (Kotler & Keller, 2012, pp. 629). Specifically for this hybrid firm, there are suggestions that can be made in order to help the firm be more socially responsible. There are many suggestions that can help the firm, but two of these suggestions include supporting social causes and integrating environmentally friendly business practices.
Social Causes
Firstly, supporting social causes should be an intricate component of this firm’s social responsibility goals. One way this goal can be achieved is by supporting charitable organizations. For example, a couple percent of total sales can be donated to a different nonprofit organization each month (Khera Communications, 2011). The overall goal is to go beyond sponsoring events and be active in the community.
Integrating Environmentally Friendly Business Practices
Next, integrating environmentally friendly business practices is a great suggestion. Since, the firm already produces an environmentally friendly product, it would be only logical for the firm to be environmentally friendly much farther than just the product. Recycling paper that is used in the office and purchasing only paper that has been recycled are just two ways in which this concept of becoming environmentally friendly can be incorporated into everyday business practices (Khera Communications, 2011). Encouraging the use digital information sharing should also be implemented. Also, to save fuel, employees should be encouraged to carpool; or if possible, providing company transportation for employees to commute to the office is also an environmentally friendly option (2011).
Social Responsibility
The idea of Corporate Social Responsibility is considered supporting a company's activities with the social, economic, and environmental expectations of its stakeholders. Reaching Corporate Social Responsibility is important to a company’s image. Toyota has revolutionized the idea of social responsibility through the concept of Creating Shared Value, which is an approach to Corporate Social Responsibility based on the idea that corporate success and social welfare are interdependent.
Many times social responsibilities end up pitting businesses against society. In 1997 Toyota launched the Prius, their hybrid vehicle that help revolutionize the automobile industry. Toyota's Prius had not only revolutionized the automobile industry but it has also helped revolutionize the concept of Corporate Social Responsibility. As a leader in any business, there should always be ideas and thoughts that can possibly enhance a company’s position.
The first suggestion would be to take social responsibility head on. One important suggestion would be to measure effects of the business and not the efforts. A socially responsible business should think less about giving back and more about doing honest and meaningful business every day.
Conclusion and Recommendation Based on this report it is clear to see that Toyota has maximized its market potential. A review of the market analysis revealed that Toyota has positioned themselves in the minds of the target market utilizing Direct and Interactive marketing. It would be recommended that Toyota attempt to distinguish their brand from the competition it regards to price and service. Overall, it is clear that Toyota is a market leader in the industry.

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