Toyota Prius What Microenvironment Factors

Toyota Prius

What microenvironment factors affected the introduction and re-launch of the Toyota Prius? How well has Toyota dealt with these factors?

The first model of the Toyota Prius was released in Japan in 1997 and in the U.S. In 2001 (Laumer, 2005). In Japan, it was released to comply with more stringent government emissions standards. In America, the soaring price of gasoline, the fears of an overdependence upon foreign oil in hostile Middle Eastern and Latin American nations increased American interest in hybrid technology. There was a sudden "obsession" with getting better gas mileage (Laumer, 2005). The average U.S. household paid $2,277 for gasoline in 2006, up 78% from 2001 (Hagenbaugh, 2007). Toyota has made use of these microeconomic developments in its marketing strategy quite well. One of its billboards promoting the current Prius in America proclaimed "106, 186, 606 gallons saved" and a subtle print advertisement simply showed a picture of a wealthy sheik (Reddell, Tran & Zittle, 2006).

Outline the major macro environmental factors -- demographic, economic, natural, technological, political and cultural -- that affected the introduction and re-launch of the Toyota Prius. How well did Toyota deal with each of these factors?

Demographically, longer commutes to work and smaller families make the use of small, hybrid cars like the Prius more attractive and feasible for American drivers and families. Economically, fuel prices are rising, and with this spike input costs the prices of other basic necessities are passed onto consumers. Fuel is a non-renewable natural resource. Technologically, hybrid cars are more powerful than they used to be and drive more like 'regular cars.' Politically, many states are rewarding hybrid owners with tax breaks or the ability to use car pooling lanes, which enable workers to travel more quickly to work, and many insurance companies offer discounts to hybrid-driving consumers (Reddell, Tran & Zittle, 2006).

Toyota has made less effective use of these factors, except for the technological aspect, as it now is incorporating hybrid technology into more powerful and larger vehicles. However, it has, early on in its marketing deployed the increased cultural concern about environmental issues, such as global warming and air pollution into its marketing campaign (Laumer, 2005).

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

Toyota's strategy has proved both witty and eye-catching. It has made effective use of American's desire to save money on gas and avoid depending on foreign fuel, although it has given little attention to the additional time savings provided by the ability to drive in commuter lanes and tax and insurance savings provided to hybrid owners. It has perhaps shown perhaps insufficient consideration for American's obsession with power, speed, and acceleration, which drivers rated (surprisingly) even more highly than fuel economy in a recent survey when asked what motivates them to buy a particular brand of car (Reddell, Tran, & Zittle, 2006). Currently, Toyota is marketing the Prius with a stress on its lowered price tag: "Prius: Easy on Gas. And now Easy on the Wallet" ("Toyota Prius," 2007, Toyota Website). It continues to strike a balance between capitalizing upon consumer self-interest and interest in the environment, but Toyota could try to make the car itself seem sexier, perhaps with additional customization features, that might overcome the American obsession with power.