The Toyota Prius

The microenvironment consists of actors close to the company that affect its ability to serve its customers- the company, suppliers, marketing, intermediaries, customer markets, competitors, and publics. During the introduction and sale of the Toyota Prius, four major sectors of the microenvironment attributed to its success:

The company, suppliers, marketing intermediaries, and publics. Toyota’s customer driven marketing strategy is largely responsible for its success in the hybrid car market. Forward thinking and focus on the societal and marketing concepts allowed for the company to deliver superior customer value to its customers.

Management’s focus on the world’s dependence on gasoline and perceived customer value proved to be useful tools in understanding the more environmentally conscious and non-affluent mindsets of consumers. Sleek Asian- inspired design, a roomy interior, and expensive interior options and features usually only found in luxury vehicles, provided customers with the superior value of luxury at a desirable price.

Toyota’s value delivery network is also crucial to daily operations. The timely delivery of cars to manufactures helped to avoid bottlenecks and supply shortages which are often seen with products gaining rapid market share. Delays, labor strikes, and loss of suppliers can seriously disrupt the supply chain, cost sales in the short run and damage customer satisfaction in the long run.

Working closely with its suppliers, Toyota is able to strengthen relationships to insure it receives the lowest costs; thus, providing more customer value for its customers. Marketing intermediaries such as media publics, government publics, and the general public play a pivotal role in Toyota’s Prius sales. Due to the economic and environmental forces facing the world today, media publics depict the company as doing a good service for the world, gaining governmental support and enticing the general public to purchase the Prius with the sense that they are doing their part to reduce the world’s dependence on fossil fuels and preserving the environment.

In 2007 Toyota sold 181,000 Priuses in the US alone, a 70 percent increase over 2006 sales with little promotional effort. This implies that media, government and the general public played a large role in creating customer awareness, and Toyota’s dedication to its customer driven marketing strategy and value supply chain provided its customers with the best value.

Which technical and economic forces affect the marketing of the Toyota Prius? The economic environment consists of factors that affect the consumer’s purchasing power and spending patterns. Marketers must pay close attention to major trends and consumer patterns in domestic and global markets. One economic force facing the entire world is our dependence on gasoline and the price that it costs.

For Toyota, the release of the Prius was designed to gain market share by doing exactly that: saving the consumer money on gasoline purchases. While the national average per car in 2001 was 25 miles per US gallon (9.4 l/100 km) in the United States, the Prius boasted as staggering 42 miles per gallon. With the current strain on North American consumers, high unemployment, companies downsizing due to technological advances, recessions, and price inflation, it is not hard to see why consumers would favor a car that saves you money at the pump.

Not to mention, the price of gasoline was a record $4.12 in 2008 and during that time the financial meltdown had left many consumers out of work and looking for ways to make ends meet. Gasoline is a finite commodity, and it is prone to drastic swings dependent on the global macroeconomic picture and supply chain distributions. Toyota understands that customers don’t like to be held sway to these forces and it will continue to imply this strategy in its marking to insure future sales.

Technical advances also played a very important role in Toyota’s success. The Prius’ combination of power sources, a rechargeable battery, and low gas consumption made it instantly appealing to consumers. Without the technological advances in hybrid systems and lithium batteries, the Prius would be much less effective and would not have gained market share so quickly. Advancements in LED screens, GPS, touch screen displays and other high tech gadgets made them more affordable, giving the Prius the interior of a luxury car at an appealing price.

Though as technology advances and once luxury items become more common place and affordable, new advancements in technology might pose a threat to the company in the future. Toyota must reinvest in research and development in hybrid technology to maintain its current market share.

A value network is defined as the network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system.

A value network for a company as big as Toyota plays a critical role in delivering customer satisfaction. The Toyota Prius value delivery network begins with the company Toyota itself. Strong management, design, and marketing must all coalesce to ensure that the Prius is designed and marketed properly. Internal research, development and innovation are crucial in maintaining market share and increasing share of the customer in such a competitive industry.

Day to day operations must run smoothly at Toyota in order for it to focus on new product ideas and promotional efforts. However, many companies must look beyond their own value chain and focus on external factors facing the company.

Once Toyota is ready to proceed with the construction of the Prius, it must work closely with suppliers. Relationship management is crucial in receiving external parts such as LCD screens, dashboard displays, sound systems, and other features of the luxurious interior of the Prius at lost cost. This is crucial in maintaining an attractive cost to consumers. Timely delivery of these parts is also of extreme importance as faulty products could cause costly recalls and delays of product deliveries could set Toyota’s production behind schedule, delaying distribution, and ultimately damaging the reputation of the company and hurting sales.

The companies that Toyota chooses to affiliate itself with, is also of extreme importance. New technological advances in R&D design could help give Toyota an advantage over its competition and faulty equipment could cause costly recalls. Toyota must continually strive to improve its product and actively manage its business portfolio to achieve its goals and increase its long term share of the marketplace. With a total of 2.8 million Priuses having been sold worldwide as of October 2012, Toyota knows that distribution is a huge part of its success. C

ustomers flock to showrooms and car dealership to get their hands on Priuses. Toyota knows that its customers must be able to purchase their products easily and that waiting lists and other delays could hurt the relationship with its customers. With strong competition from other electric car manufactures such as the Chevy Volt and the Tesla Roadster, proper manufacturing, timely and cost effective deliveries of products to Toyota, and global distribution of its products is the key to generating customer satisfaction and ultimately increasing market share.

What is the market orientation of the Prius?The Prius shares characteristics of three of the five major market orientations: the product concept, the marketing concept, and the societal concept. Toyota shows that it is deeply dedicated to improving product quality, performance, and innovation. In the competitive world of the electric car, innovation is extremely important. Toyota has displayed this with the improved gas conservation and better battery power of the newer models of the Prius.

The company also knows the needs and wants of its customers more so than its competitors. This dedication to the marketing orientation is a big reason why the Prius is one of the best selling cars in the world. The marketing orientation that stands out for the Prius is its dedication the societal concept.

Toyota knows that gasoline is a finite commodity and that the days of the gas guzzling SUV’s are coming to an end. Toyota’s dedication to long term societal and environmental effects is one of the key points of the marketing strategy for the Prius. Its saves the consumer money, but it is also better for the environment. Forward thinking, such as environmentally stable, eco-friendly green cars is clearly the wave of the future for the automobile industry. Toyota’s dedication to the societal orientation will insure that the company stays focused on the long term effects of its products and will be better prepared for future challenges.

A company’s “value proposition” is the set of benefits of values it promises to deliver to customers to satisfy their needs. Toyota’s Prius has differentiated itself by offering a solution to consumers who are uncomfortable with the current price of gasoline. By focusing on cleaner, greener energy, the Toyota Prius has captured market share from many of its competitors in the automotive industry, and left many companies wondering how they can reduce their carbon footprint and improve their image.

The value to owning a Prius doesn’t stop at the pump. The Prius is stylish, roomy, and packed with luxury options in the interior creating a strong sense of satisfaction for customers. Toyota is selling a vehicle, but it is also selling an experience. It ultimately lies in the satisfaction customers get from driving the product and the feeling that is created knowing that you are doing your part to save the environment. Why buy a Prius? It’s simple. In a world as congested and polluted as the world we live in today, why not do your part to save our environment and reduce global warming? The answer to many consumers questions is: the Prius.

Works CitedKotler,Armstrong,Cunningham,Thrifts: Principles of Marketing 8th Canadian Edition, Pearson Canada, 2010. Print.

Fuel economy, January 29th,2013

Patrick Dehaan, Jason Toews, Feburary 2013 <>

Toyota Prius sales, February 7th, 2013