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Current market and company situational analysis

Discuss about the Marketing Plan For Toyota Prius.

Toyota is ranked as the third largest manufacturer, when it comes to automobiles. This is the largest Japanese organization that produced more than 4.5 million vehicles annually. The organization manufactures vehicles of all preferences and sizes, ranging from sports cars, pickups, and trucks (Belz & Peattie, 2012). Toyota Prius boasts of being the first to take up the production of the gasoline-electric hybrid car, which involved joining two types of power sources. Toyota Prius made use of the combination of the electric motor and the petrol engine. The car has for some time, undergone certain modifications according to the driving conditions and consumer preferences. Toyota Prius is focused on entering international market platforms such as the Indian market, hence is aimed at attracting upper middle-income earners, based on the business standard. The primary market for the vehicle includes doctors, top executives and industrialists, between the age of 35 and 50 years (Desanctis & Monge, 2009). India, which is used as an example to represent other international market platforms, will serve as an attractive market for the Toyota Prius owing to numerous factors. This includes; the inclination of the different global populations towards eco-friendly materials, and the increased propensity of consumers to consume commodities from the automobile sector. Based on such facts, the primary purpose of this paper is to come up with a well-designed marketing plan for Toyota Prius.

Competition: Porter’s Five Model

The porters five model represents five forces which affect competition in the automotive industry, with the specific focus being on the Toyota Prius.

  1. The threat of new entrants

The automotive industry has a set of industry entry barriers (Desanctis & Monge, 2009). Examples include substantial capital requirements and excessive distribution channels. There are also extensive economies of scale which most companies enjoy, especially the current automobile brands which make it extremely difficult for the upcoming participants. In the case of Toyota to be precise, the organization has a massive market presence, as well as the global scope of operations (Desanctis & Monge, 2009). The organization also benefits from the economies of scale, and reduced costs of production. The vehicles are also sold at lower prices, which make it remain highly competitive. Moreover, when it comes to product differentiation, manufacturers are expected to retaliate. Regulatory barriers also reduce industry entry by other firms.

  1. Bargaining power of suppliers

The bargaining power of the suppliers in the vehicle manufacturing industry is insignificant. This is brought about by the fact that suppliers in various part of the world are numerous. Supplier switching cost varies and is affected by the nature of commodity delivered, and the type of the supplier the organization deals with. In the case of Toyota Prius, suppliers tend to be located very close to the manufacturing units. The organization also relies a lot on lean manufacturing and just in time supply chain systems in management (Dessein, 2012). This, in turn, makes supplying units have greater bargaining power in the market. 

  1. Rivalry among existing firms in the industry

Competition: Porter’s Five Model

Toyota Prius faces a lot of competition in the automobile industry. The global marketplace is highly competitive, and the brand competes with other industry giants such as the general motors, the Daimler, the BMW Group and the Volkswagen among others. However, Toyota Prius maintains an exemplary leadership position in the market in Oman, regarding sales and revenue levels. The organization has a significant market share in Oman, which is not likely to change any time soon.

  1. Threat of substitutes

The threat of substitutes in the industry operated by Toyota Company is moderate. There are several substitutes for products manufactured by the organization, such as the Toyota Prius. This includes the vehicles made by other brands, and the public means of transportation which might as well be embraced by different market participants (Eisenberg et al. 2013). The switching costs are also relatively low, and in some areas, such as the market in Oman, most individuals tend to find it more convenient to make use of the substitute commodities.  For the middle-income earners and the lower middle class, the consumers end up preferring public transportation. With this in mind, the organization has released models associated with low fuel consumption such as the Toyota Prius, good for the environment, and smaller family cars which are regarded to be more affordable in Oman (Enderwick, 2009). These factors are meant to counter the moderate threat of substitutes in the market, but only to a little extent.

  1. Bargaining power of consumers

The vehicle industry is characterized by very high consumer bargaining power. Consumers have a lot of options, especially when it comes to the use of other commodities. The switching costs are also minimal. The presence of competing commodities in the industry at similar or even lower prices as compared to the Toyota Prius is also a contributing factor to the high bargaining power of consumers (Greenberg & Baron, 2013). Every consumer is highly informed and has a chance to make personal decisions on what to purchase in the market, hence find the most suitable option for them. All these factors affect the buyers of the consumers in the market. The bargaining strength that the organization holds may only be technological and design innovation. The entity and the commodity, Toyota Prius, have also acquired impressive levels of consumer loyalty in the industry.

The decision to purchase for the consumers in Oman is profoundly affected by a change in lifestyle, economic concerns and the environmental concerns. Most of the consumers look forward to the environmentally friendly commodities. Consumers also seek complete information and comparisons to both internal and competitive brands in the market. Most consumers research online, before making a purchase. Consumers are also keen to evaluate their alternatives, based on the finances, availability, vehicle specifications and the emotional aspect. Consumers make a choice based on the functional considerations and the reviews of other consumers on the same commodity (Griffin, 2016). Finally, most consumers decide on where and what to purchase, and whether they would recommend it to others.

Consumer behaviour

Political

Oman has a very peaceful political situation, and this makes it an extremely conducive platform for business operations. The stability of the country makes it an ideal place for the Toyota Company.

Economical

The economic situation in Oman is exemplary considering the presence of natural oil reserves that generate more than $78 billion for the country (Grunig &Dozier, 2013). The population has the best quality of life, and the buying power is significantly high.

Social

The social situation in Oman is peaceful. Most of the citizens are of Islam origin, with most expatriates residing in Oman for the sake of employment. Oman has ranked 45th among the most peacekeeping countries. 

Technological

Research and development have made it possible for increased evolution in technology in the country (Koike & Toyota Motor Corp, 2012). This trend is beneficial to Toyota as an organization, which thrives on technological development. The Toyota Company continues to work with a mission to make the best available vehicles in the market, based on the technical strength, experience and immense expertise.

Market Segmentation

Initially, most models focused on the preferred idea of the electric model. The generation of the Toyota Prius has made the organisation shift its focus to the population above the age of 40. The model developed implies comfort and design which is also considered to be prestigious (Lungfield & Greenwood, 2010). The target market includes all consumers above the age of 40 years. This category is more focused on reducing the damage to the environment, and oil dependency rates.

Marketing Plan Objectives

  1. Increase the overall awareness of the Toyota Prius by more than 50% in the next three years, while targeting new markets especially in developing economies.
  2. Increase the general total sales of Toyota Prius by more than 40% by the end of the year 2018.
  3. Invest more substantially in hybrid positioning with the distinctive Hybrid synergy drive (HSD), with the aim of projecting lower noise and negligible fuel consumption through the brand of the organization, the Toyota Prius.
  4. To start enhancing the positioning of Toyota Prius as an environmentally friendly commodity and a family car.

Strong consumer responses are evident based on the performance of the Toyota Prius in the market. Consumer acceptance level for the brand is hugely satisfactory, and this is a positive step for the organization (Morgan & Liker, 2016). The high brand image, performance and the technology used to focus on update appearance have made the Toyota Prius to be highly appreciated in the market. To compete in the modern world, there is a need for the company to enrich its position, and be more deliberate in its operations. This is bound to help more consumers find their brands, and desired preferences in the market. Consumers evidently, don’t doubt when making purchases of the Toyota Prius owing to the level of reassurance by the marketing team. The reliability of the brand and availability needs to be focused on, and a more visible image created through consistent market research (Morgan & Liker, 2016). Consumers in Oman have a positive behaviour towards the purchase and use of the Toyota Prius. Recommendations to further boost the brand include;

  1. The reduction in import taxes for the Toyota cars, and more so the Toyota Prius.
  2. Availability of the car parts needs to be high for consumer convenience.
  3. The resale value should be increased.
  4. Better advertisement and branding should be done (Terpstra, 2012).
  5. The market needs to convince the consumer further to buy other brands, as compared to Toyota brands such as the Toyota Prius only.
  1. Product

PEST analysis

Toyota Prius has become a preferred model, especially in the automotive industry. The 2010 Toyota Prius has been manufactured in a way that the model gets an estimated mileage of 50 miles per gallon, with a capacity of 11.9 gallons (Morgan & Liker, 2016). Based on the estimate, the car has a range of 590 miles which is convenient for most of its users. The Toyota Prius has been masterfully redesigned, and the Toyota Prius is now more stylish as compared to its predecessors. The organization has added accessories which have also changed the entire auto industry such as the powered moon roof of the car.  With all these new properties, the model has helped boost sale in the organization to significant levels (Morgan & Liker, 2016). The target market, in Oman, has also been reasonably satisfied with an environmentally friendly image, economic model, comfortable and stylish product. 

  1. Price

The penetration pricing strategy would work significantly well for the organization, instead of relying on the skim pricing strategy for the promotion of Toyota Prius. This is based on the fact that the demand for most hybrid cars is highly elastic, and the price of cars bought is bound to decline. With the strong balance sheet of Toyota as an organization, the organization can also take up competition through competitive financing, and embrace lease rate throughout all its channels of distribution in Oman alone (Morgan & Liker, 2016).

  1. Promotion

The Toyota Prius has for quite some time, been promoted in numerous ways. This has been done through advertisements, personal selling and sales promotions. The Toyota Prius for instance, as featured in dozens of commercials, movies and television shows. Hollywood stars have also been spotted raving in the Toyota Prius which has since been an influence regarding the branding and building a reputation and appeal to prospective consumers in Oman. 

  1. Place

Currently, Toyota has control of more than 16% of the automotive market in Oman. The organization makes significant sales as compared to most of its competitors (Osterwalder & Pigneur, 2010). Toyota Prius controls more than 75% of the market share in Oman, with executives and high-income earners in the forefront of purchasing the model. Marketing, sales and distribution in Oman have been significantly handled, and numerous consumers have increased access to the brand.

Communication is the most critical factor in the marketing world. For most organizations, strategic marketing cannot be a success, without the application of communication tools. As for communicating the Toyota Prius to the Oman consumers, personal selling is the essential marketing tool (Osterwalder & Pigneur, 2010). This strategy can be applied by the local car dealers, as well as corporate dealers, that have extensive knowledge of the commodity and the market. The target, in this case, will be the corporate companies and the fleet purchasing segments in the market. Another marketing tool is the use of media, which is also a marketing strategy. The internet plays a significant role in the modern economy, and ought not to be shunned. Direct mails should be sent especially to potential buyers and will enable buyers of the Toyota Prius to have access to e-brochure and all related advertisements. Such tools should also be complemented by television, public relations, and print advertisements to reach more buyers in the automotive segment, which is highly competitive especially in the modern economy in the global perspective (Roberts et al. 2014). These recommendations are bound to boost the consumption of the Toyota Prius in Oman significantly. It will also make the market more significant for the brand, which is an added advantage for the organization. Considering that Toyota is already a leading brand, the goal is to make the position more constant. The organization and the Toyota Prius marketing team, therefore, should formulate further advertisements and more so, introduce partial benefits into the modern Oman market for increased competition. The market is incredibly dynamic, hence the need to enhance the success of the brand, through keeping pace with other car brands, and their acceptance level in the entire industry. 

Market Segmentation

Evaluation and Control

To maximize all relevant returns on the marketing plan, there is a need for the organization to put in place controls, which are meant to monitor the progression of the plan. Various performance indicators (KPIs), and control tools can be relied on in the case of the Toyota Prius.

Customer feedback

Toyota Company needs to extensively monitor all sorts of consumer feedback regarding the Toyota Prius. This can be done through surveys and polls (Osterwalder & Pigneur, 2010). The organization can reach out to consumers more directly, for instance through hosting polls on the internet and requesting consumer feedback. Surveys can consequently, be done through individual interviews and groups by phone or in person. 

Target sales

The sales from the Toyota Prius can be gauged by measuring the sold units of the commodity. Point of sale surveys can be made to establish these levels, or through inventory systems in the organization. For instance, if the target market consists of males aged 40-5o, the sales reports should be focused on this specific category of consumers in Oman which is the market of focus.

Budget

Budgeting requirements will consider, printing expenses, travel costs involved in market research, internal personnel costs at the organization and trade show expenses (Stone & Grønhaug, 2013). These costs need to be extensively monitored in the organization, for the sole purpose of minimizing spending and more so, maximization of profitability.

Product expenses

$400000

Place expenses

$300000

Promotion expenses

$500000

Pricing expenses

$200000

 

List of References

Belz, F.M. and Peattie, K., 2012. Sustainability marketing: A global perspective. New Yrk: John Wiley and sons

Desanctis, G. and Monge, P., 2009. Introduction to the special issue: Communication processes for virtual organizations. Organization science, 10(6), pp.693-703.

Dessein, W., 2012. Authority and communication in organizations. The Review of Economic Studies, 69(4), pp.811-838.

 Eisenberg, E.M., Goodall, H.L. and Trethewey, A., 2013. Organizational communication: Balancing creativity and constraint. New York: St. Martin's Press.

 Enderwick, P., 2009. Large emerging markets (LEMs) and international strategy. International Marketing Review, 26(1), pp.7-16.

Greenberg, J. and Baron, R.A., 2013. Behavior in organizations: Understanding and managing the human side of work. Pearson College Division.

Griffin, E.M., 2016. A first look at communication theory. New York: McGraw-Hill Publishers.

Grunig, J.E. and Dozier, D.M., 2013. Excellent public relations and effective organizations: A study of communication management in three countries. Routledge.

Koike, S., Toyota Motor Corp, 2012. Positional data utilizing inter-vehicle communication method and traveling control apparatus. U.S. Patent 6,445,308.

Langfield?Smith, K. and Greenwood, M.R., 2010. Developing Co?operative Buyer–Supplier Relationships: A Case Study of Toyota. Journal of Management Studies, 35(3), pp.331-353.

Morgan, J.M. and Liker, J.K., 2016. The Toyota product development system (Vol. 13533). New York: Productivity Press.

Osterwalder, A. and Pigneur, Y., 2010. Business model generation: a handbook for visionaries, game changers, and challengers. John Wiley & Sons.

Roberts, K.H. and O'Reilly III, C.A., 2014. Failures in upward communication in organizations: Three possible culprits. Academy of Management Journal, 17(2), pp.205-215.

Stone, R.N. and Grønhaug, K., 2013. Perceived risk: Further considerations for the marketing discipline. European Journal of marketing, 27(3), pp.39-50.

Terpstra, V., Foley, J. and Sarathy, R., 2012. International marketing. Naper Press.

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