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Toyota's Prius Case Study

3915 words - 16 pages

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Abstract
The unpredictable success of Toyota in introducing its Hybrid car, PRIUS, made it
a good example and a very important case to study by marketers and managements. In
this paper we try to spot a light on all, micro and macro, environmental factors surround
the introduction of the PRIUS in U.S market. We try to analyze the marketing strategies
taken by Toyota's marketing managers to lead the market of Hybrids in the U.S and to
dominate Hybrids market share.
Introduction
In 2001, Toyota decided to enter the US market with a brand new technology
used in vehicles, the Hybrids. Toyota was not the first company decided to enter the U.S
market, Honda preceded Toyota in 1999 and introduced its Hybrid car to the U.S
market. Considering the behavior and the expectations of American consumers, Toyotas
executives were not motivated to introduce such a technology to U.S market, and
described it as a risky adventure to take.
After the successful introduction of Honda's Hybrid vehicle, Toyota decided to
introduce the 2001 PRIUS to the market. The PRIUS combines two engines, gas and
electrical in order to strengthen fuel and power efficiency. It runs on only the electrical
engine at start up until it reach specific speeds it turned to the gas engine. The first
generation of PRIUS with a 2001 model introduced in 2000, same model produced in
Japan, with a total 114 HP was a boring Asian design as seen by American consumers.
Toyota enhanced the new generations of PRIUS in interior design, power, luxury touches
and fuel efficiency to meet demands. After all enhancement Toyota inserted in PRIUS,
consumers started to like the new improvements, and according to that, PRIUS sales
peaked to a significant numbers starting with moderate sales of 15,000 units of the first
design reaching 107,000 units sold in 2005 making the PRIUS Toyota's third-best-selling
car.
Toyotas marketing and targeting strategies, economic, political and natural
environmental factors affected the success of introducing PRIUS in U.S market. All
mentioned factors played an important role in increasing demands on PRIUS. Micro and
macro environmental factors that affected the launching of PRIUS and how Toyota deals
with each of these factors will be discussed later in this case study paper.
Hybrid technology started to be more attractive and a new trend adopted by
other car-manufacturing corporations. Competitors for PRIUS started to rise after the
successful introduction of Toyota PRIUS and Honda Insight to US market. Moreover, the
American customer started to like the idea of green products for green world, and as

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result of that, the demands on Hybrids started to increase and became greater than
supply in U.S market. Consequently, every automotive brand name want a piece of that
new trend (Hybrid technology) pie. Even with all activities and tries of automotive
brands to dominate the market of Hybrids, the PRIUS succeeded to lead and dominate
the market of Hybrids in U.S with over 50% of...

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