(( Word count: Please discuss the below questions in about 1100 words.
Referencing: Use full Harvard Style Referencing (in-text referencing plus list of references at the end).
Answering: Response to the question should take the form of a full essay format divided into a number of paragraphs with introduction and conclusion without subheadings and bullet points. Support arguments with case study examples, as well as external examples.
-You can use the material of the textbook: Consumer Behavior by Leon Schiffman and Leslie Kanuk, as a supporting and guiding source of information. ))
In a country where SUVs sell the most you wouldn?t expect a small, hybrid car
to sell well. Despite such expectations, Honda successfully introduced the Insight in 1999. Toyota closely followed Hondas lead bringing the 2001 model Prius one year later. Five years later the Prius is such a runaway success that sales president Jim Press has dubbed it ?the hottest car
we?ve ever had.?
The Prius combines a gas engine with an electric motor. The auto gets power from only the battery at low speed and from both the engine and the electric motor at high acceleration. When braking energy from the slowing wheels is sent back through the electric motor to charge the battery. At a stop the gas engine shut of saving fuel.
The original Prius was a small compact with a dull design it had a total of 114 horsepower it went from 0 to 60 in 14 seconds, but it got 42 miles per gallon. Although the second generation Prius introduced as the 2004 model benefited from modest power increase. But there where countless other improvements; the design was better looking with seven colors. The interior was roomy and practical, with plenty of storage space.
The new Prius also provided a seven inch energy monitor touch screen displayed fuel consumption, outside temperature, and battery charge level. Multiple screens within the monitor provided controls for air conditioning, audio, and satellite navigation system. But the most important improvement was the increase in fuel efficiency to 60 miles per gallon.
In its inaugural year Prius sold 15.000 cars
but in 2005 107.000 Priuses were sold on the US alone and in 2006 Prius sold 500.000 cars
worldwide. The rapid increase in demand for Prius had created a rare automotive phenomenon. During a time period when most automotive companies have offered substantial incentives in order to sell cars
, Toyota dealers were getting a premium of $5.000 over the sticker price for the Prius. Waiting list for the Prius stretched for six months.
There are many reasons for the success of the Prius starting from the targeting strategy of techies who were attracted by the car?s
advanced technology those buyers were able to hack the Prius computer and modify it by using the dashboard for watching TV and playing video games.
By 2004 Toyota had skimmed off the market of techies. Toyota anticipated that environmentally conscious as well as those desiring more fuel efficiency would be drawn to the vehicle. To launch the new Prius, Toyota spent more than $40 millions spread over media in consumer-oriented magazines and TV. In the summer of 2005 gas prices have skyrocketed to more than $3 per gallon; as a result buyers moved to small and hybrid cars
In addition to Toyota?s effective targeting techniques various external incentives have helped to spur Prius sales. For example some states allow single occupant hybrids
in HOV (high occupancy vehicle) lanes. Some cities like Los Angeles provide free parking for hybrids
. And currently the government gives a tax break incentives of $3.500 for hybrid car
Few private companies are also getting in the game; Timberland and Google contribute with $3.000 to each employee who intends to purchase a hybrid
like the Prius.
Although Honda was the first to market hybrid cars
in the US its sales have been minuscule compared to the Prius. The Prius commands over 50 percent of the hot hybrid
Whereas sales of ultra high mileage Prius and Civic have grown significantly, less efficient and more expensive hybrid
models such as Honda Accord and Ford Escape are facing declining sales because the customers are doing the math and realizing that they may not save money with that hybrid
Now every car
maker wants a piece of the growing pie ford has a goal of producing 250.000 hybrids
per year by 2010, it plans to put more money on advertising campaigns General Motors has also big plans to extend its Saturn hybrid
line and to introduce hybrids
to other divisions like SUV?s and trucks. Nissan, Hyundai, Audi, and BMW are all developing hybrid
vehicles of their own.
Even with all the activities of these auto makers Toyota is currently the clear leader in hybrid
sales and likely will remain for some time to come. And Toyota planned to offer hybrids
versions for all vehicle classes by 2012.
Please answer each question in an essay form.
Question 1: 250 words
All behavior is goal-oriented. What type of goals are Prius? customers seeking to achieve? Identify the types of goals and explain.
Question 2: 300 words
Identify and discuss the main segmentation base(s) Toyota is targeting and ought to target with Prius?
Question 3: 275 words
Discuss the concept of marketing mix? Supporting answer with examples from the case, discuss in more detail two of the marketing mix elements: Product and Price.
Question 4: 275 words
Evaluate Toyota?s marketing strategy so far. What has Toyota done well?
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