Toyota Prius Case Study Analysis

Essay on Toyota Prius Case Study

929 WordsOct 13th, 20124 Pages

Jose Maya
October 5, 2012
Marketing 3301
Toyota Prius: The Power of Excellence in Product Innovation and Marketing 1. In what stage of the product life cycle is the Toyota Prius? Explain.
The Toyota Prius was in the market introduction stage then it matured into the market growth stage. In the Product life cycle there are four different phases. There is market introduction, market growth, market maturity, and sales decline. The Toyota Prius as explained by the book was a new experimental technology that Toyota wanted to test and introduce to the market to see how it would react. Toyota was at a point in their business where they wanted to innovate something new. Some of the ideas that Toyota was considering prior to the Prius were…show more content…

Toyota was able to recruit help from celebrity endorsers such as Cameron Diaz to give the Prius a new alternative to the celebrity limo. Toyota first engaged the Japanese market with 12,000 units and once they seen that there was a bit of a market for their product, they continued production with an additional 17,000 units for the US market. Once the market introduction stage was over for the Prius, other car manufacturers started exploring the hybrid market. These manufacturers consisted of Ford and General Motors. While they were new to the market Honda, an already existing competitor, was coming out with more hybrid models offering one of their best sellers the Civic in a hybrid model. Once this happened Toyota had to take a difference approach for the Prius, now that there was more competition, Toyota needed to distinguish the Prius. Positioning is considered to be what consumers think about your proposed or current products in the market. Toyota needed to come out with a new marketing strategy to distinguish them, in a now crowded market. Toyota decided to present their Hybrid Synergy Drive to the market in 2003. The Hybrid Synergy Drive powertrain was capable of operating on either gas or electric and also both together to give optimum performance and power to the hybrid model. The Toyota Prius earned s few accolades consisting of best-in-class fuel economy and best-in-market fuel emissions performance. Toyota also lowered the costs of their

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Toyota's Prius Case Study



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.


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


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...

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