Marketing Research

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The case provides an excellent opportunity to compare Toyota's marketing of the introductory and follow-up models—very different campaigns, well thought out and implemented. At introduction, Toyota used the Internet very heavily but later shifted to a strategy using more mass-market media. This case ends with an examination of the competition and the emerging hybrid market. Q1

The Company: The Company has expended plenty of money on R&D and marketing of the Pries. Why? Toyota expects the Prius to set the standard for the entry of a line of hybrids from minicompacts to luxury vehicles. Thus, the car is an important component of company strategy. To successfully introduce the Prius and build this new line of vehicles will require coordination within the company. The second generation of Prius has already caused problems within the company. Production was increased at one plant necessitating a cut in production for other lines. 

Suppliers: With the successful introduction of the Prius, companies such as Panasonic may invest more in R&D to develop cheaper batteries. If they can do so, this will result in lower prices that, in turn, may further stimulate demand. Thus, it is to Toyota's advantage to work with suppliers to encourage this R&D.

Marketing Intermediaries: The most important marketing intermediaries here would be dealers. Toyota had to prepare materials for dealers and their salespeople so that they could sell the Prius. Now, they have to "teach" purchasers how to drive the cars to get maximum fuel efficiency. A shortage of cars for the second generation of Prius is causing problems with dealers who want more and could sell the additional cars. In turn, dealers marking up the cars can negatively injure relationships with the company, who does not want to see the price of the cars inflated. There is also a major issue of why more cars were allocated to Japan when the United States is the bigger market. 

Customers: The case indicates that Toyota carefully studied the consumer market and adapted its marketing accordingly. It thought innovators and adapters who are likely to be techies would be the purchasers, and the evidence indicates that the company was right. With this market in mind, Toyota pushed the technology of the car, used the Internet, and promoted environmental aspects of the vehicle. Techies are highly interested in the net and may be pro-environmental. They are certainly interested in technology given the description of owners modifying their Prius described in the case. 

For the second generation, Toyota broadened its market focus to include less-technical types (are these the customers who don't know how to drive the car?). They also redesigned the car to have more mass-market appeal, introduced more features and improved the performance—all aspects of the car that would be more important to a less technical market. 

(Jumping ahead to adoption theory, this is a good example of marketing to the techies as innovators with targeted promotion and then marketing to early adopters with more mainstream media. The techies have gotten the car on the road and in the view of early adopters.) 

Competitors: A major aspect of Toyota's strategy was to get a jump on competitors who will have to enter the market later. Again correctly guessing that American companies would be slow to introduce hybrids, Toyota and Honda entered first and that may help them in marketing hybrids in the future. They were the first may lead to they were the best. Toyota seems to have been more willing to enter this market and establish a technological lead, although American companies appear to begrudgingly plan on entering the market. 

American companies are following a different strategy as they believe that gas savings are greatest on vehicles that use the most gas. Rather than small cars, they aim to introduce hybrids on bigger cars. They also point out that savings are much greater when hybrids are used...
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