Plug-in hybrid Essay Example for Free

Plug-in hybrid Essay This is an analytical and comprehensive approach for preparing marketing plan for Toyota Prius, the hybrid car, consists of formulating strategies and implementing them, with suggestions for recommended changes and implementing the plan. Toyota is well known for its innovative and excellent quality cars all over the world. Toyota has started the hybrid project in about 1991 and launched its first concept in 1997. It is Toyota that made this revolution of hybrid cars a success story. The Global, 21st century known as G-21 team worked on the Prius. It aims in focussing the target market in Australia, in main cities like Sydney, Melbourne, Adelaide, Perth, Canberra, Brisbane, etc. the main focus is on the two kinds of buyers in the market, i. e. the private buyers and the corporate and fleet buyers. The distribution is done through the strong network of 211 dealers in Australia. There is proper training to the dealer about the car and its features as its technology is new in the market. This also helps to solve customers’ objections and their queries. The promotion is done through Medias like television shows, advertisement with celebrity, news paper and magazine. Also through the personnel marketing where the dealer meet and communicate with customers personally. Internet is the modern means of marketing and advertisement. The costing of the car is issue at present movement. But it could be solved with help of government policy and the company’s discount. As the technology improves the cars will be cheaper and can be affordable by lower income segment. Table of content TopicPage No. 1. Introduction4 2. Mission Statement4 3. Situation Analysis4 3. 1. Internal environment4 3. 1. 1. Products4 3. 1. 2. Financial and non-financial situation5 3. 1. 3. Channels5 3. 2. External Environment6 3. 2. 1. Markets6. 3. 2. 2. Competitive environment6 3. 2. 3. Economic environment7 3. 2. 4. Demographic environment7 3. 2. 5. Social and cultural environment7 3. 2. 6. Political and legal environment7 3. 2. 7. Technological environment8 3. 3. SWOT analysis8 3. 4. Critical issues9 4. Marketing Objectives10 5. Marketing Strategies10 5. 1. Target markets10 5. 2. Product strategies11 5. 3. Pricing strategies11 5. 4. Promotion strategies11 5. 5. Distribution strategies12 6. Recommendations for change12 7. Implementation plan13 8. References A. Appendices14 14 1. Introduction: Toyota Motor Corporation is Japanese company and one of the world’s largest automaker. Toyota has created philosophies and techniques which are now implemented commonly in every organisation in the world which is called as the Toyota-style management and manufacturing technique. Toyota is well known for designing and manufacturing of concepts and future cars. Toyota was the first company to manufacture powerful and high quality hybrid car in the year 1997 (Chambers, 2008). Toyota used combination of fossil fuel and electricity for power and manufactured its well known car called ‘Prius’, which gained popularity all over the world within short time. Toyota launched hybrid Prius in Australia in 2001. We will be discussing about the marketing plan of Prius in Australian market and revolution it would create in automotive market. 2. Mission Statement: Toyota’s mission is to deliver outstanding automotive product and to provide service to their customers. It also aims in enriching our community, partners, and environment. Toyota’s four core values are customer first priority, respect for the people, international focus, continuous improvement and innovation . 3. Situation Analysis: It is the analysis of the vast amount of information regarding the organisation, product and the situation they are facing (Cohen, 2005). It consists of various environmental factors and experts call it as process of environmental scanning. 3. 1. Internal Environment: It consists of the situation inside the organisation and its internal working. It can be regarding the product, channels, and financial situation. 3. 1. 1. Product: Toyota has launched wide range of products in Australia which is divided in four segments passenger, four wheel drive and sports utility vehicles, commercial vehicles and Toyota racing development (TRD). Prius comes in the passenger segment of cars. It began in the year 1992; Toyota announced its plans to develop a car with lowest possible emission. It created committee called G-21, G known as global and 21 is twenty-first century. In 1994 the concept car named â€Å"Prius† was developed. Prius is a hybrid car which is combination of fossil fuel and electricity. It used patented Hybrid Synergy Drive system which enables car to give a whooping mileage of 100 kilometres in 4. 4litres of fuel. 3. 1. 2. Financial and non-financial situation: Toyota has large manufacturing facility at Altona, and since 2004 Toyota has invested 800 million in Australian manufacturing plant. Toyota has generated sales revenue of $9. 284 billion and has total assets of $2. 478 billion as of December, 2007. Total exports for 2007 were $1. 7 billion inclusive of parts. Toyota has 4720 employees and about 11,300 dealer employees. It produces about 148,931 vehicles and 112,415 engines. It has domestic sales of 236,647 and exports of 97,688 units to 23 countries. http://www. toyota. com. au/about/key-facts . 3. 1. 3. Channels: â€Å"Distribution channels are set of interdependent organisations involved in the process of making a product or service available for use or consumption by the consumer or industrial user† (Kotler and Armstrong, 2004 p). Toyota is known for its â€Å"just-in-time† production system. It produces car when there is demand from customers. There is direct network between manufacturer of components and Toyota, so that it does not have to maintain inventory. Toyota has wide network of 211 dealers in Australia. Toyota fulfils its consumers demand by its dealer network where approximately 11,300 employees serve. http://www. toyota. com. au/about/key-facts . 3. 2. External Environment: The company’s macro-environment, now known as external factors are uncontrollable forces that the company must watch and also respond to (Kotler and Armstrong, 19871). Fig. 1. (Source: Kotler, et. al [2006], pg: 169) 3. 2. 1. Markets: â€Å"A market is the set of actual and potential buyers of a product† (Kotler and Armstrong, 2004 pg7). The potential buyers of hybrid car are from higher income group and they stay in metropolitan cities. Hybrid car market can be developed in developed countries and advanced cities. Hybrid car owners are educated and have concern towards environmental factors. Hybrid car owners are few years older than average car buyers . 3. 2. 2. Competitive environment: Toyota was the first develop hybrid passenger car called Prius. The biggest competitor of Toyota is Honda. Honda has its hybrid model Insight which poses competition to Prius. Recently ford has also launched hybrid version of its popular SUV Escape. Ethanol blended fuel car also pose competition to hybrid cars, as they have low emission and good mileage. Also non-hybrid cars are not much costly as compared to hybrid cars. 3. 2. 3. Economic environment: â€Å"Factors that affect consumer buying power and spending patterns† (Kotler and Armstrong, 2004 p71). Considering the positive side, many companies gives special offers and incentives to encourage purchasing of hybrid vehicle. There are also Government rebates to encourage buying of hybrid vehicles. Considering the negative side customer has to pay around five to seven thousand dollars more for hybrid vehicle against non-hybrid vehicles. The battery and electric motor replacement are costly parts. Repairs and maintenance facilities are limited to dealerships only. 3. 2. 4. Demographic environment: Demographic environment is very much interest to the marketers. As demography involve people and it is the people who make the market for any product. The private market is an important market, where the consumer is either male or female and in the age group of 30 to 50 years old. The consumers are from wealthy class, they are educated, well informed and they are from AB socio-economic segment. Hence the consumer can be in profession like administrative, or higher managerial or professional occupation who are ready to purchase environmental-friendly car and also pay more for its exceptional features. 3. 2. 5. Social and cultural environment This environment represents the effect of religion, fashion, population trends; social issues like equality and social movements such as environmentalism (Dann, 2004). The customers are from higher income group. Customers have higher level of education, who is concerned about environmental crises. Prius focuses on the customers with age group few years older than the average car buyers, and mostly women prefer for this car. It is preferred by customers who drive fewer miles and ready to pay more for their car. 3. 2. 6. Political and legal environment Australia is quite receptive towards foreign firms to invest in country. Government attract foreign investment by giving various incentives. Australia is politically stable country and has democratic government. So there are less risk for change of policy, increase of duty, blocking company’s property and currency and takeover of company’s property. Government bureaucracy is also important factor which help companies with good market information, efficient custom handling (Kotler and Armstrong, 2004). 3. 2. 7. Technological environment Toyota was first company to successfully launch a hybrid commercial vehicle. High level of research and development and after a long experiment Toyota launched Prius in late 1997. It has developed patented hybrid system called Hybrid Synergy Drive. It provides a combination of electric power and fossil fuel which gives an eye-catching mileage of about 100 kilometres in 4. 4liter of fuel. This technology gives high power output and greater performance as it is combination of fuel and electricity. Due to this combination the car goes for more kilometres in less fuel. This car has fewer emissions and pollutants problem. We can say that hybrid technology gives us clean, powerful and efficient car. 3. 3. SWOT analysis: SWOT analysis is the overall evaluation of company’s strengths, weakness, opportunities, and threat. Strengths: ?Toyota is one of the world’s largest car manufacturers having reliable and high quality image. ?A hybrid car cuts emission by 25% to 30% ?‘Just-In-Time’ production ?It has greater fuel economy typically around 100 kilometres in 4. 4litres ? Government gives incentives on hybrid cars. ?It has the â€Å"green† image for car. ?It is â€Å"new† and successful technology. Weakness: ?There is high cost involved in research and development and technology is costly. ?The car is much pricier than non-hybrid cars. ?Fuel saving is limited, and only if the car is driven within the limit. ?It has low speed? Customers has limited choice ?The maintenance can be costly as lot of electronics and computer are involved Opportunities: ?Targeting the people who are environmentally conscious. ?It can be used to lower the global warming concerns ?As technology becomes more and more affordable, car can introduced in lower income segment ? There is also scope for future government policy for transition to hybrid technology. Threats: ?In non-hybrid cars with gasoline and ethanol blend, gives good mileage and have lower emission problem ? Diesel technology also gives good mileage, but has emission problems ? There are threats from small cars like Honda Civic or Mazda 3 which are fuel efficient and less costly than hybrid cars. ?To pay four to six thousand dollars more to get twenty five percent improvement can be a tough decision to make. 3. 4. Critical Issues: ?Will the cost of hybrid cars Prius be reduce? ?Can lower economic segment of society be able to buy Prius? ?Can the maintenance of car and parts become cheaper? ?Will customers have a variety of hybrid models to choose from? ?Can Prius become more fuel efficient? ?Can the emission be reducing to almost negligible? ?Should Toyota focus its research on other type of hybrid vehicles? 4. Marketing Objectives: ?Customers and consumers should be made aware of new product i. e. Toyota Prius. ?Increasing shareholders wealth which is achieved by higher profits and increased sales. ?As this is new product and having new technology, the objective is to educate consumers and explain its working and advantage of this. ?Prius should me made marketed so as to make it valid alternative to traditional cars. ?Customers should be communicated through website, brochures, visiting local dealer and ordering test drive to know about Prius. ?Communication should lead to purchase, and also number of visits to dealer should be turned into sales. 5. Marketing Strategy: Marketing strategy also known as ‘the game plan’ is used to fulfil the plan’s objective. It consist of strategy for target markets, product strategy, pricing strategy, promotion and distribution strategy (Kotler et. al, 2006). 5. 1. Target markets: Target market consists of a set of buyers who share common needs or characteristics that the company has decided to serve (Kotler et. al, 2007). Toyota is the first mass produced hybrid car. Hybrid car market is new and having light competitive. Prius belong to the lower to medium passenger car segment. Toyota has competition from Honda’s Insight, which is the two-seat sports car. But it is not offering the features like Prius. Prius focuses on providing comfort to passenger segment i. e. C, so there is strong competition in this segment . The target market for Prius concentrate on two major categories: the customers and consumer. Customers are corporate buyers and fleet. Customers buy cars either for corporate hire / rental or for company fleets. Toyota can make tie-ups with corporate and provide special offers to them. They can be reached through business press and media. Since Prius is low in operating cost and its environmental friendly features makes it interesting for business buyers. In consumer market, Prius focuses on consumer who is few years older than average car buyers. It focuses especially females with higher income group. Consumers who are eco friendly and educated are also targeted . 5. 2. Product strategies: â€Å"It is the total benefit that the seller offers through its product features to its customers† (Dann and Dann, 2004 p20). Toyota Prius is a product which requires high involvement and it’s having unique features, which require personal selling. Personal selling can be achieved through the dealer network, which will be given special training about the car, its advantages and also trained to overcome objections form customers. Personal training is also useful to target corporate customers and fleet buying customers, who buy fleet of cars for rental or corporate use, by convincing them about the environmental factors and efficiency in long term use. Dealers should also personally visit the potential buyer group, like environmental friendly and higher income group. 5. 3. Pricing strategies: â€Å"Pricing strategy is a cost to the customer incurred by acquiring and using the products† (Dann and Dann, 2004 p20). As Prius is new technology and new product in market it is some-what costly than other traditional cars. To make people buy Prius, company should implement sales promotion and there should be incentives to buy Prius. This helps product to be accepted in market at its early stage of life-cycle. There should be tie-ups with government to encourage the sale of hybrid and clean cars. Government should give incentives to buy low emission and hybrid cars. Currently Prius is available between ranges of $37,400 to $46,900. This price tag is quite high as compared to other cars of the same segment. 5. 4. Promotion strategies: â€Å"Promotion strategy is the use of audio and visual communications, elements of marketing for the purpose of getting a message to the market place† (Dann and Dann, 2004 p20). The promotion of the Prius can be done through mass communication media. There should be continuous advertisement in news papers and magazines about the cars and its features. Television commercials are expensive, but they are very effective strategy in promotion. Other media is radio and hoardings which can influence customers to buy car. The brand image of the product can be made by sponsoring some sports events or similar kind of promotion, which will boosts sales of the car. One of the better ways to promote Prius is associate it with some celebrity from Hollywood or some sports or cricket personality. This will create a different image of car for the people. 5. 5. Distribution strategies Distribution strategy plays an important role in marketing. Toyota is having wide network of 211 dealers in Australia. The retail private buyer i. e. consumer will buy the car from the franchised dealer network. There should be special dealers for the fleet buyers, who buy cars in fleet for corporate or rental use, so as to demonstrate the benefits and advantage of hybrid car. This should be directly connected to company so that the cars can be customised according to the need of the corporate users. There should be strong supplier network. Distribution strategy should be set for the supplier network also so that it receives components and parts on just-in-time basis. 6. Recommendations for change: As Prius is new concept with new technology, there should be rigorous testing on the car so that product is placed at strong position in market. Testing with the customer and consumer makes their ideas clear about the car and encourage them to go for hybrid car. There should be campaigns and promotion activities for corporate and fleet buying customers. Company should carry out seminars and demonstration for customer, where they are explained the benefits of hybrid cars and its benefits in long term use. There should be personal promotion strategy used by the dealer. The existing customers of Toyota and the owners of expensive car should be contacted by mail and telephone to create awareness for the vehicle. Company should create awareness about environmental concern and rising fuel price. Government should participate in promotion activity to use hybrid cars by giving incentives or tax benefits for the hybrid car customers. There should be research and development to reduce the cost of the car. There should be specialised dealer network for specialised hybrid car like Prius. Television, print media, radios; hoardings are one of the best means for the promotion activity. 7. Implementation plan: The above recommended plan can be implemented by using various promotion activities. The dealer should make the car run on streets of city with promotional advertisement on the car. This creates direct impact on the people. The car should be promoted by television programs which deal with cars like the Top Gear on BBC, which can create a positive image of the car. Promotional activity can be carried out by the use of print media in business magazine like The Time, Fortune, etc. also in daily news papers and periodicals. Outdoor billboards should be placed in busy areas like station and in urban areas. Internet can be used to directly reach to people. There should be online brochures and facility to have detailed specification of car. Customers should be able to book car online and also test drive. Time line must be set and there should be target number of vehicles that must be sold within the time frame. There should be attractive price and attractive looks and features that will force people to buy the car. 8. References: CHAMBERS K [2008] â€Å"Toyota† Greenwood Press, Westport, Connecticut, London. DANN S and DANN S [2004] â€Å"Introduction to Marketing† John Wiley and Sons Australia, Ltd. KOTLER P and ARMSTRONG G [2007] â€Å"Marketing – an introduction† 3rd ed. Prentice Hall Englewood Cliffs, New Jersey. KOTLER P, BROWN L, ADAM S, BURTON S and ARMSTRONG G [2007] â€Å"Marketing† 7th ed. Pearson Prentice Hall, Australia. Website: [http://www. toyota.com. au/about/vision] accessed 2/03/2009, 0900hrs. [http://andidas. deviantart. net/projects/academic/MaketingCommunications_ToyotaPriusMarketingPlan. pdf] accessed 2/02/2009, 1000hrs. [http://www. toyota. co. jp/en/tech/environment/hsd/pdf/a_guide_to_hsd. pdf] accessed 1/02/2009, 1100hrs. [http://www. toyota. com. au/about/key-facts] accessed 1/02/2009, 1100hrs. [http://www. hybridcars. com/hybrid-drivers/profile-of-hybrid-drivers. html] accessed 2/02/2009, 1600hrs. A. Appendices: Figure 1. Major Force in organisation’s macro environment.