Hybrid Cars - Toyota - Assignment Example

Hybrid Cars - Toyota s Submitted by s: Executive summary A hybrid car uses two or more distinctive sources of power to move the vehicle and the term usually used to refer to hybrid electric vehicles that combine a normal internal combustion engine and a number of electric motors (Hantula and Voege, 2010, p. 19). This cars also incorporate other mechanisms that are used in the capture and use of energy. The hybrid cars blend the benefits of gasoline engines and the electric motors and can be designed in such a way that they obtain different objectives like enhanced fuel economy, increased power or more power for the devices in the car. Various advanced technologies that are utilized by hybrids include regenerative braking which is characterised by the electric motor applying resistance to the drivetrain consequently forcing the wheels to slow down (Fuhs, 2009, p. 73). In response, the energy form the wheels will turn the motor that acts as a generator which converts energy that usually goes to waste during braking into electricity and battery is used for storing the electricity until when it will be required by the motor (Lagunoff, 2008, p. 156). Another technology that is used by the hybrid vehicles is the electric motor assist where the electric motor avails more power to help the engine during acceleration, overtaking or going up a hill. Therefore, a smaller and more efficient engine can be used while in some of the cars, only the motor avails power needed for driving in low speed conditions where internal combustion engines are not very effective. They also employ automatic start and shut off that shuts of the engine spontaneously when the car pulls to a halt and starts it again it when the motorist presses on the accelerator. The automatic start and shut off is important in preventing wastage of energy from idling. Description of the company Toyota is a leading corporation in manufacturing, assembling as well as supply of cars all over the globe. One of the key reasons for the company’s good performance is the efficient management system that it employs (Czinkota and Ronkainen, 2013, p. 535). There are several other striking attributes that have enabled the company to achieve its place as a market leader. The type of market structure that the company functions in cannot be defined clearly and in some cases, it is considered to be a monopoly. The dominance of the company in the market is what makes the company to be seen as operating a monopoly. The company’s differentiation approach has enabled it to have a monopolistic existence particularly in the emerging nations. Conversely, the market structure can be perceived to be an oligopoly since there are other key players such as general motors that can be considered to be peer competitors. Toyota keenly follows what the competitors are doing so that it can be able to respond to these actions in a manner that will enable it to maintain its market leadership. Toyota hybrid cars According Toyota, their hybrid cars are simple, quiet and enjoyable such that anybody driving them will have fun doing it since they will be conserving the environment in one way or another. The cars do not need any sockets, or cables and owner does not have to wait for long hours for them to charge since all one has to do is to jump behind the wheel and drive away. In the event that the batteries run low, the petrol engine that is incorporated charges them back up again. Pressing the brakes also allows for recycling of energy that is used to charge the batteries too. The cars is filled with petrol the same way a regular car is filled and it switches automatically between the electric and petrol engines (Kang, 2007, p. 10). Toyota states that it has already been able to save more than thirty four million tonnes of carbon dioxide through the their hybrid vehicles and when the Prius reaches ninety three thousand miles, its carbon dioxide emissions will be thirty-seven percent less when compared to diesel cars. This is the case in the urban centres since the Stop and Start system that was developed by Toyota conserves energy by switching off the engine when the car stops. Therefore, the engine will not be running for approximately forty percent of the time in a normal journey which mean less fuel will be consumed. The hybrid engine in the Toyota cars switches effortlessly between the petrol and electric power that provides fuel efficient driving and the performance that every driver yearns for. The hybrid performs well no matter the distance or terrain since the battery is charged while the car is moving. Since 1997, Toyota has been able to produce more than six million hybrid cars that have gone to the road and approximately, eighty percent of the hybrid cars globally were made by Toyota. According to Toyota, more than ninety percent of all the hybrid cars they have built are still on the road since they are reliable and built to last. Since the cars have fewer parts, servicing them is simpler and is almost the same as servicing the regular Toyota cars at the Toyota dealerships. The easiest way to make sure that a hybrid is performing well is to conduct a yearly health check which is part of a Toyota service. Target market, segments and position The recognition of consumer demand for improved fuel economy as well as decreased emissions was the driving force behind Toyota’s decision to introduce hybrid vehicles such as the Prius. The original marketing approach for the cars was focussed on visionaries and the early adopters of innovative machineries. The 2000 “Prius” promotion had its focus on Toyota developing cars that were environmental friendly as well as using online universe to appeal to the people who are intrigued by the innovation (Hoyer and MacInnis, 2010, p. 44). The company developed an exceptional website concerning the building of the Prius that allowed clients who had interest to follow the progress more than twenty-four months before it was introduced for sale. Through target groups and clinics, the company found out that customers valued technology, affordable pricing, emission free operation and quality as well as convenient design. The broadcast and print advertisements by Toyota stressed on the changing attributes of hybrid innovation as well as independence from reliance on oil(McConnell and Turrentine, 2010, p. 2). Online brochures were also created and sent to more than forty four thousand people. Furthermore, Toyota was able to benefit from the support of a number of celebrities which helped in attracting attention to the Prius. To accelerate purchases in the targeted customers who asked for material concerning the Prius, Toyota gave the clients a chance to pre-order the vehicles and this was finalised through their dealerships. 2004 saw the introduction of the second generation of the Prius that targeted the early majority of consumers who seek dependable, reasonably priced products as opposed to the early adopters that were targeted in the previous campaign (Hatch, 2012, p. 591). Toyota also introduced a larger mid-sized Prius whose price was the same as the first generation car as a result of some efficiencies that were achieved in the process of production. Television advertising was used to underscore the size and power together with the environmental benefits of the second generation hybrid car with the aim of convincing the early majority of how it was a performance car that was environmentally friendly. Micro and Macro environmental forces affecting Toyota All the companies regardless of the kind of business they conduct, are affected by various factors that influence change in the company as well as decision making of the firm. It is important for companies to make sure that they are updated on these factors since they significantly influence the approach and plans of the company and this has an impact on the firms overall position. Since Toyota is a company that has international presence, it has faced various challenges and has been open to various forces which have affected plans, approaches as well as decisions of the company while also affecting the entire motor industry. The company has presence globally and supplies vehicles to most of the world’s companies. Toyota is forced to contend with increased competition because the global car industry is very viable making the company face competition in its markets. Factors that influence the competition include the quality of the products, innovation, the cost, consistency, as well as financial terms among others. Toyota has always been a leader as far as class products are concerned and the vehicles built by Toyota have always had a leading edge over the competitors and the company earned the global automobile sales award in 2010 as because this. Being the best car maker in the world, Toyota had a turnover of more that seventeen billion dollars in 2008 but was heavily affected by the economic crisis that began in autumn 2008. The key reason why the company was affected was the decrease in consumer spending during the crisis. Toyota’s global presence as well as its financial services and biotechnology divisions were integral to the survival of the company during the downturn. The company was forced to cut down its temporary and some of the permanent staff while also reducing car production as a reaction to the crisis. Regardless of the issues that the company has had to deal with, Toyota has maintained its focus on dealing with these issues and serving their clients in the best way. As a result of oversupply in the global car market, Toyota needs to appreciate the demand the customers have in a specific country based on the demographics and preferences of the people in that country so that it can increase the market base. This is because overall opinion about vehicles depends on a small number of specific attributes (Jeeninga, van Arkel and Volkers, 2002, p. 31). Even though the company has a strong presence, it mainly concentrates on marketing its products in the Unites States and Japan making both the economic and political environments in these nations affect the plans of the company significantly. The company should maintain their focus in these markets while at the same time improving the marketing of their products in other developing economies. The vehicles manufactured by Toyota are eco-friendly and have less emissions which assist in conserving the environment. The environmental friendly vehicles built by Toyota are founded on the advanced technology that was developed by the company (Pride, Hughes and Kapoor, 2013, p. 35). The increase in the prices of oil and campaigns to protect the environment from pollution has increased the sale of hybrid vehicles. With the creation of models and designs for the environmental friendly vehicles that are more advanced, the company reserves the opportunity of setting the standards for hybrid cars. Consumer perceptions and behaviour The company has diverse consumers who range from the low income earning people to the ultra-rich and come from all over the world. Toyota has considered all the car needs that may come up for any person with its wide range of motor vehicles which include small sports cars to the larger family cars as well as trucks and vans. The customers are different people of varying ages, income, as well as economic and social attributes. Customers usually seek products from Toyota so that they can satisfy their various wants and needs. The people who earn a low income are given a basic mode of transportation that is efficient while remaining within their economic reach. The clients that prefer more elegant and classy products are also catered for. Customers may purchase the products developed by the company on an individual basis depending on what they want to use them for. Organizations and companies also purchase cars from Toyota for use by their employees and staff so that in this kind of situation, the buyer of the car will not necessarily be the user of the car. When individuals buy products from Toyota, the company’s exposure increases to other products that are associated with Toyota. Product awareness is increased by the use of advertisements, online information on their website, newsletters as well as other sources of information. There is also a significant opportunity for the company to generate income from other complimentary products such as seminars. Majority of the cars that the company builds are sold via retail distributors with locations all over the globe. Buyers can also buy the vehicles directly from the factory in case of the limited edition models. As a result of the growth electronic commerce, most of the advertising material can be accessed fully over the internet. Through online publication, the company is able to reduce paper waste while providing direct availability of the vehicles to the interested clients. Customers can then be able to order a vehicle in stores using a toll free number directly from the company and this allows customers all over the globe to have an access to the products sold by the company. Clients can buy vehicles from the company anytime they wish to no matter the time of the year since Toyota sells its cars throughout the year except for the limited editions which have to be bought directly from Toyota’s factories. The new users every so often buy vehicles after obtaining a driver’s license in the case of some nations when they are enrolling to college. Others may purchase new vehicles when the one they were using breaks down or when they wish to acquire a newer one or the latest model. Customers will usually chose Toyota cars over the cars built by other manufacturers largely because of their broad yet specialized nature. The company sells a wide variety of cars that caters for all the wishes of its various customers. The company focusses in developing and preserving high standards as far as its products are concerned. They provide alternatives that are cheaper to the customers for the same products that are sold at a relatively higher price by the other manufacturers. Safety of the cars that are built by Toyota is also an integral part of the manufacturing process. The development of the hybrid cars by the company is also a retort to calls by the clienteles for car builders to go green. As can be seen in most of the large firms, the market that is targeted by Toyota defines a broader population than the reflection of their customer base. There are many emerging car manufacturers who have flooded the motor industry with a myriad of products. Most of these products resemble one another with very small dissimilarities in one or two features that have varying significance. Therefore, for the customer to buy a particular product, preference will have to prevail. Class and social status also plays a key role and since Toyota vehicles do not always imply a high social status, a client may buy a vehicle form a competitor simply because of this even if the cars are the same. Marketing Mix The economic crisis made car sales in the world become sluggish and car manufacturers in the United States almost went bankrupt. Toyota has been able to strategically market its vehicles to its target market better than its competitors especially in the case of the Toyota Prius (Saee, 2011, p. 39). The company’s hybrid market has been segmented based on the behaviour of the buyers who care more for the environment. Customers have readily accepted the car and most of the buyers consider it to be eco-friendly and efficient. The company has utilised the penetrating price approach as opposed to the skim pricing approach since the demand for hybrid cars is variable and the amount of cars bought increases as the prices reduce. Toyota’s robust balance sheet also enables it to compete with other manufacturers through competitive financing via it distributors all over the world. Toyota commands a huge market share and has a number of assembly plants which support its distribution network. Toyota’s hybrid vehicles are promoted in various different ways especially through advertising, promotion and sales and the vehicles especially the Prius have been featured in several movies and television shows. The company has also used a number of Hollywood stars to market the product and advertise its stylish redesign that is considered better than its predecessors. The hybrid vehicles are also priced competitively that are used by the company to attract the customers more. It is vital to note the manner in which the company has been able to respond to Robert Lauterbon’s four C’s of marketing. The hybrid vehicles were developed as the solution to the prevailing escalation in gas prices and the lack of alternative fuels to improve petrol mileage and decrease emissions. The pricing of the hybrid cars responds to the issues of cost and with numerous distributors, the company is located conveniently near its target market while having an articulate promotional strategy that will communicate the car to the target market. Conclusion and recommendation Economic activities affect popularity as well as productivity of hybrid cars globally. Hybrid cars also have the ability to affect the people socially as a result of its benefits that include reduction of pollution and a decrease in the cost of fuel consumption thus indirectly reducing the cost of living. The technology factor will also be of importance to Toyota when developing vehicles that consume less fuel due to the engine that has double sources. The eco-friendly characteristic of the hybrid cars assists the company gain more market share as the customers continue to prefer these kind of vehicles. Bibliography Czinkota, M. and Ronkainen, I. 2013, International marketing, 1st ed. South-Western Cengage Learning, Mason, OH. Fuhs, A. 2009, Hybrid vehicles and the future of personal transportation, 1st ed. CRC Press, Boca Raton. Hantula, R. and Voege, D. 2010, How do hybrid cars work?, 1st ed. Chelsea Clubhouse, New York. Hatch, S, 2012, Computerized engine controls, 1st ed. Delmar, Cengage Learning, Clifton Park, NY. Hoyer, W. and MacInnis, D. 2010, Consumer behaviour, 1st ed. South-Western Cengage Learning, Australia. Jeeninga, H., van Arkel, W. and Volkers, C. 2002. Performance and Acceptance of Electric and Hybrid Vehicles. Municipality of Rotterdam, Rotterdam, The Netherlands. 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