Marketing Essay Example: Toyota Prius Overview and Analysis

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Carnegie Mellon University
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Brief Description of the Product (Toyota Prius)

Toyota Prius is a hybrid car developed and manufactured by Toyota Company. Since the production of the first model in 1997, it has evolved from a 4-door sedan to a 5-door hatchback in 2003, to incorporate advanced technology and artificial intelligence in the 2017 model. According to the United States Environmental Protection Agency (EPA), Prius is among the cleanest and environmentally friendly car sold in the United States. In fact, the 2016 model is ranked as the all-time most fuel-efficient automotive car in the US (xxxxxxx). Due to its desirable features, the model has gained popularity in the past decade as shown by its global cumulative sales which surpassed 6.1 million units in January 2017 since 1997.

Toyota has in the recent past expanded the Prius model to include the Prius v (hatchback wagon), Prius c (subcompact hatchback), Prius Plug-in Hybrid released in 2012, and the Prius Prime released in 2016. Of the four versions, Prius Prime is rated by EPA to have the highest fuel efficiency by achieving the most top miles per gallon equivalent rating in all-electric cars (xxxxxx). The design of the Prius Plug-in Hybrid is based on the typical 3rd generation (ZVW30) with a 4.4-kWh lithium-ion battery that enables the car to travel 23km on electric power only. Unveiled in 2011, the model had by December 2016 ranked as the 3rd world all-time selling plug-in hybrid. The Prius Prime which was released in 2015 has an all-electric distance of 40km, and an EPA rated fuel efficiency of 133mpg in an all-electric mode which is the highest MPG rating for any vehicle with an internal combustion system. Among the all-electric cars, it is ranked second after Hyundai Ionic Electric. The four versions Prius c, Prius v, Prius Prime, and Prius Plug-in Hybrid, have been successful recording global cumulative sales of 1.38 million, 671,200, 79,300, and 75,400 units respectively as of January 2017 (xxxxxx).

SWOT Analysis


Over the past decades, Toyota has established a considerable presence in the Asian car market through the production and sale of multi-utility vehicles (Innova and Qualis) and sedans (Allion and Corolla). Thus, the company has developed an efficient distribution and after-sales network in the region. Importantly, Toyota has gained a deeper understanding of the Asian market and enhanced its ability to liaison with the administrations. Importantly, Toyotas products have a good reputation for durability, quality, reliability, environmental safety, and value for money.

Another factor in favor of Prius is that Honda Civic Hybrid is the only competitor in the region and has proven unsuccessful since inception. This gives Prius an upper hand in the market considering it is the best-selling hybrid automotive globally. In addition, the availability of highly skilled and educated young workforce in the region is a key strength. Countries such as China, India, Vietnam, and Hongkong have dynamic and skilled workforce needed for automotive production (xxxxx).

With increased globalization, multinationals have shifted their attention to developing countries in Asia. Many of these countries GDP per capita is rising sharply indicating an amplification of the car market. Importantly, the ease of doing business in the region has been increasing over the past decade. Also, Asia is rich in natural resources making it easy to obtain raw materials for manufacturing.


Just like many multinationals, Toyota was adversely affected by the 2008 financial crisis. The company reported a loss for the first time in seventy years. Since 2009, Toyota has recalled numerous cars and had at one point stopped manufacturing and selling new cars. Resultantly, Toyota has come under heavy criticism globally. This has dented the companys reputation and might transmit a ripple effect to the Asian market.

Apart from this, Toyota, being a foreign company and domestic company in Japan only, it faces the challenge of heavy import taxes in countries like India and China. The heavy import tariffs are put in place by the governments to protect the interests of local manufacturers and promote the sale and production of local products.


The most outstanding opportunity available in the Asian market is the increased income of the middle-class category, which constitutes the most significant proportion of Prius target market. The fastest growing economies such as India and China are increasingly recording increased GDP per capita translating to more disposable income for the target market (xxxxx). Being an environmentally friendly car, Prius would benefit from substantial government subsidies and tax exemptions.


The most severe threats include competition, rising competitive pressures, and forceful marketing campaigns. With the expanding opportunities in the Asian car market, many Asian and foreign manufacturers have increased their aggression in tapping the niche market of hybrid autos. Thus, Prius faces a serious threat of new market entrants and stiff competition.

PESTEL Analysis

Legal and Political

Several political issues create opportunities or threats for the Asian car industry. For instance, the legal policies and framework in India and China are decided by the political class. Thus, the Chinese government and the Government of India enact laws on issues like health and safety at work, price controls, import-export tariffs, licensing guidelines, entry of foreign multinationals, and wages. Also, the administrations lay down the rules of competition as well as the regulations governing trademark rights. For instance, the Auto Policy developed by the Government of India encompasses the following:

Research and development in the car industry for continued upgrade of technology and competitiveness

Emphasis on car technologies with less emission

Promotion of Alternative Fuel Vehicles like hybrids (xxxxxx).


Economic factors such as inflation rates, consumer spending power, interest rates, credit availability, unemployment rates, and GDP directly affect the Asian car sector. According to xxxx, the performance of the automobile industry is related to the performance of a countrys economy which relies on infrastructure development, availability of money in the market to stimulate the consumers disposable income, and the growth of GDP. Also, fuel prices play a crucial role in driving the vehicle industry. Fluctuations in oil prices globally directly affect the fuel companies thus translating the effect to the automotive sector.

Social and Environment

The social factors that affect a market include the attitudes and way of life of the people in the social setting, which is influenced by the demographics. Similar to other factors, social factors are dynamic and undergo continuous change. As the beliefs and way of life change, so does the demand for cars fluctuate. The primary drivers of the social market include growth in urbanization, increased disposable income, easy availability of capital at low-interest rates.


These factors encompass the opportunities and threats that need to be considered when developing a marketing plan. In the contemporary market, there is a rapid upgrade in technology and inventions of car modifications that have now dominated the automotive sector. Some of the technological factors affecting the car industry include increased research and development centers, governments promotion of fuel-efficient technologies, and the emergence of world-renowned IT skills with a specialty in vehicles.

Prius Features and Benefits

One of Prius key features is its efficiency in fuel consumption and high gas mileage. In addition, its regenerative braking system increases the cars efficiency by converting the braking energy into electrical energy (xxxxxx). While on average the car provides 43mpg, some people have noted better results.

The 2017 Prius V is easy to drive. The car starts upon pressing the power button with no noise production. The use of the hybrid system enables automation, and the driver just needs to slot the gear lever in Drive and enjoy the seamless magnificence.

Reliability is another key benefit of using Prius. The car uses batteries that do not need to be plugged in for charging hence the drivers do not need to worry how far they have traveled without recharging. The user only needs to fill the gas just like in a conventional car (xxxxxx). When the battery runs low, the hybrid system automatically recharges it.

Perhaps the most outstanding benefit of Prius is its friendliness to the environment and the pocket. Low fuel consumption translates to low emissions and less spending. In fact, Prius boasts as one of the hybrids with the lowest carbon dioxide emissions, unlike conventional cars that emit high levels of nitrogen oxides and greenhouse gasses.

Marketing Plan using SMART Goals


After carrying out market audit and environmental analysis through PESTEL and SWOT analysis, it is essential to explore the specific, measurable, achievable, realistic and timed objectives. These objectives are aimed at helping Toyota company manage its marketing plan and to ensure consistent focus for all functions of the company. The goals have been set at two levels including the corporate objectives and marketing objectives. The corporate objectives focus on the organization as a whole while marketing objectives focus on specific marketing activities.

Marketing Strategy

The marketing plan appropriate for Prius to penetrate the Asian car market will be anchored on segmenting the market. Segmenting will be done on the basis of age income, consumer adaptation to technology, location, positioning, and targeting.

Age. Based on age, the market will be grouped into young professionals (20-30 years), middle age (30-50years), and senior professionals aged above 50 years.

Customers adaptation to technology. In this segment, there will be innovators, early majority, early adopters, laggards, and late majority. Innovators refer to a group of customers who are quick enough to adopt a new technology like that of Prius and derive happiness in exploring it. Early adaptors apply to those who buy new products early in the lifecycle and use their intuition to adopt a new technology. Early majority wait for proven technology while the late majority wait for a more extended period for the latest technology to be widely accepted before buying it themselves. Laggards refer to those who refuse to buy the technology.

Geographic location. Based on this segment, the market is divided into the urban market and rural market.

Targeting. The target market for the product will comprise of medium and high-income individuals who are of middle ages professionals such as industrialists and doctors. Out of these, innovators and early adopters need to be targeted at the beginning, and after maturity of the market, early majority and the late majority can be targeted. It is imperative to focus more on the urban population which is highly likely to welcome the product.

Positioning. In order to capture the Asian hybrid market, the product needs to be positioned in such a way that it appeals to the consumers more than the already existing Honda Civic Hybrid in terms of value, quality, and style. Specifically, Prius should be positioned as environmentally friendly and an economical vehicle.

Media Plan

Identification of the Target Market

The most important market segment is aged between 30 and 50 years. Whether male or female, they are highly likely to be married with kids. This population can either be middle class or upper middle class with high income. Hence, they are likely to welcome the idea of purchasing an eco-friendly vehicle. Importantly, they are willing to pay more for the car.

Apart from demographics, psychographics is an essential aspect...

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