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Analyzing the Marketing Environment
Case Study
Prius: Leading a Wave of Hybrids

Micro-environmental Factors | Factors | How Toyota dealt with these factors | Company | Toyota first generation of Prius was small compacts car with unattractive exterior. Therefore they had to coordinate with other departments within the company such as Research and Development and marketing to introduce a new generation of Prius that could be more attractive to buyers (Gen II). | Suppliers | Following the successful launch of the Prius. It was in Toyotas best interest to coordinate with their strategic partners like suppliers to introduce a type of batteries that could be cheaper and result in lower prices, and consequently increase the demand. | Marketing Intermeddlers | Toyota was facing a shortage of the Prius which led to issues with the dealers who wanted more cars to sell. Toyota had to prepare some materials for the dealers and their sales person in order to sell the Prius, They also had to educate buyers how to drive the cars to obtain maximum fuel efficiency. | Customer | The case study shows that Toyota thoroughly studied the market for consumer and adjusted its marketing according to it. Toyota predicted that the purchasers of their cars would be techies. It was very evident that Toyota was absolutely right in its prediction. For this reason Toyota emphasized on the technology of the car and used the internet, therefore, promoting the environmental part. As for the second generation of the Prius, Toyota expanded its concentration on less technical models. They redesigned the vehicle and came up with more features and enhanced the performance of the vehicle in a way that it would look more attractive to less technical segment. | Competitors | Toyota had a concern over competitors who might enter the market in a later stage; therefore it dedicated a major part of its strategy to overcome the competition. Toyota and Honda were the first to enter the market of Hybrid so they had an advantage to market in the future. Toyota has been more keen into technological aspect while American companies believes that fuel saving has more value when it is associated with cars that consumes more fuel. Instead of small cars, they plan to launch hybrids on bigger cars. | Public | Toyota did a very god job in managing the public. They build a good relationship with the environmental activist through their promotion “The Earth Day”. Obviously, the amount of focus shown on the car though the media will reflect positively on the public who will be attracted towards a company that cares about the environment by reducing emissions and reduce fuel mileage. All this will lead to very successful sales of the Prius which will lead to more dales of hybrids hence financial gain to the company. | Macro-environmental Factors | Factors | How Toyota dealt with these factors | Demographic | | Economic | | Natural | | Technological | | Political | | Cultural | |

Evaluate Toyota’s marketing strategy so far. What has Toyota done well? How might it improve its strategy?

GM's marketing director for new ventures, Ken Stewart, says, "If you want to get a lot of hybrids on the road, you put them in vehicles that people are buying now." This tends to summarize the U.S. automakers' approach to hybrids. Would you agree with Mr. Stewart? Why or why not?

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