Toyota Prius: The Power of Excellence in Product Innovation and Marketing
1. In what stage of the product life cycle is the Toyota Prius? Explain. The Toyota Prius was in the market introduction stage then it matured into the market growth stage. In the Product life cycle there are four different phases. There is market introduction, market growth, market maturity, and sales decline. The Toyota Prius as explained by the book was a new experimental technology that Toyota wanted to test and introduce to the market to see how it would react.
Toyota was at a point in their business where they wanted to innovate something new. Some of the ideas that Toyota was considering prior to the Prius were injection diesel engines, electric motors, hydrogen-powered fuel cells, and solar powered vehicles. This alone allows us to infer that Toyota had no prior market for these types of vehicles. This would automatically eliminate the three latter phases of the product life cycle.
In a market introduction stage sales are typically low. Low sales are caused by limited quantity available and also market size for the product. With Toyota, they were trying to implement a new product to a new market so one could expect sales to be low because the market is not looking for the new product. Toyota was very careful about manufacturing the Prius. The first prototype Prius was introduced in 1995, and in December of 1997, the first production Prius’ rolled out of Toyota’s factory. Toyota manufactured only a limited amount of these vehicles as a test to see if the Prius would latch on to consumers or flop.
2. Describe the marketing strategies being followed by Toyota for the Prius The marketing strategy specifies the target market that the producer is trying to target for their product and also a related marketing mix.
When Toyota was designing the Prius its ideal market to target were leading edge buyers of the technological generation. To add to the edge buyers Toyota also targeted other groups such as the government, the media, and environmental groups. Toyota was able to recruit help from celebrity endorsers such as Cameron Diaz to give the Prius a new alternative to the celebrity limo. Toyota first engaged the Japanese market with 12,000 units and once they seen that there was a bit of a market for their product, they continued production with an additional 17,000 units for the US market.
Once the market introduction stage was over for the Prius, other car manufacturers started exploring the hybrid market. These manufacturers consisted of Ford and General Motors. While they were new to the market Honda, an already existing competitor, was coming out with more hybrid models offering one of their best sellers the Civic in a hybrid model. Once this happened Toyota had to take a difference approach for the Prius, now that there was more competition, Toyota needed to distinguish the Prius. Positioning is considered to be what consumers think about your proposed or current products in the market.
Toyota needed to come out with a new marketing strategy to distinguish them, in a now crowded market. Toyota decided to present their Hybrid Synergy Drive to the market in 2003. The Hybrid Synergy Drive powertrain was capable of operating on either gas or electric and also both together to give optimum performance and power to the hybrid model. The Toyota Prius earned s few accolades consisting of best-in-class fuel economy and best-in-market fuel emissions performance. Toyota also lowered the costs of their hybrids making it more affordable to consumers. With the marketing strategy already in to play, it positioned Toyota to offer a superior hybrid car for a superior price as well to consumers.
After a couple of years of new models and innovative ideas that were integrated to the Prius, I would say it matured into the market growth stage. The reason why I believe this is because after the Japanese market was a success, then the US market being a success, Toyota went on to produce a second model of the Prius. The Toyota Prius was a success from sales and awards that Toyota wanted to market their second generation Prius to a broader market. It was largely more powerful, superior styling and aerodynamics, high tech options such as Smart Entry/Smart Start and also a navigation panel. The Toyota Prius was successfully introduced and marketed.
3. Do you think Toyota should convert all of its cars to hybrids? Why? Why not? No, Toyota should not make all of its cars to hybrids. Although the Prius was successful, there is still a market for gas powered vehicles than hybrid model cars. Being able to diversify yourself as well is a huge positive in competing with other auto manufacturers.
Unless Toyota only wants to compete in the hybrid market which is still relatively new, then I would suggest that Toyota does not convert their entire automobile models to hybrid models. The hybrid market is a growing market, and eventually I could see it taking over, but not in the near future. Hybrid vehicles offer many advantages such as more miles to the gallon, they are environmentally friendly and they offer sleek technology and design. I would not be opposed for Toyota to make the gas and hybrid models available, but as to switching all of their products line, I would not suggest such strategy.