Posted: September 3rd, 2013
Microeconomic Factors Affecting Prius
Microeconomic factors are those that are internal to the company, those that the company can be able to influence and change. The issues of marketing that affect the company in serving its customers. Some of these factors include customers, employees, competitors, suppliers, and among other stakeholders. However, for our case study, there are only two factors affecting the introduction and re-launching of prius, which are consumers and the competitors.
The consumers were feeling the pressure of increasing gas prizes that made traveling quite expensive than usual. Many of them probably sought other means of transport such as public transport. Toyota, realizing this problem, sought and found the answer in the hybrid vehicle, Prius, which would use both electric and a fuel engine, giving the consumers a fuel-efficient vehicle that would reduce their cost of using gas, but still give them good service. More so, the second generation, or the re-launched Prius included more features such as advanced technology and more fuel-efficiency, further attracting more consumers. The other factor came in as competitors, where other vehicle manufacturers such as Honda, also wanted to capture the new growing market of hybrid cars. Honda had launched their hybrid vehicle even before Toyota. Others included ford, which also developed their hybrid vehicle to capture the market However, Toyota responded through continued advancement of their hybrid vehicle that people had already liked, ensuring that they continued to give them more and more value for their money, to fight of competitors. The second generation came with more fuel efficiency and interior space.
Macro Environmental Factors Affecting Prius
On the other hand, where there are micro economic factors, there are also macro economic factors that affect a product. These factors deal with larger factors within the society that affect even the micro factors. These factors are demographic, economic, natural, technological, political or legal, and finally, the social-cultural factors. The company cannot influence this factor, but they influence organizations in a big way. Therefore, it is up to the company to adapt to them.
The natural factors that affected the introduction of Prius are environmental hazards of emitting too much carbon in the air. During its introduction, there were so many environmental concerns of carbon emission by vehicles, which made the hybrid become a major hit. Many people, aware of the hazards caused by emitting carbon n the air were welcome to the idea of having a less carbon-emitting vehicle. The legal/political issues that affected the introduction and re-launching of the hybrid vehicle were the strong favors by the government in use of environmental friendly vehicles. The government reduces taxes on the hybrid vehicle by a big margin, which made it quite easy for consumers to acquire one at reduced prices. This further influenced the consumers as well as he company itself to sell more at the reduced prices, making the vehicle a hit. More so, there was a provision of free parking for the hybrid vehicles in some of the cities, with some states allowing the hybrid to use the High Occupancy Vehicle lanes, which were not used by other vehicles, further influencing more consumers to buy the hybrid. The economic factors that influenced the introduction and re-launching of the vehicle are cost reduction through reduced fuel consumption. In addition, fuel prices were going up, which influenced its sales further. Toyota dealt with these factors through adapting to what the macro environmental factors demanded, which was reduced costs, and emissions. The company continued to give incentives for the hybrid to attract more consumers.
Toyota’s Marketing Strategy
Toyota has been very proactive in its marketing strategy for the Prius hybrid vehicle, which has seen its sales improve year after year. One of the marketing strategies that Toyota used is ensuring to satisfy customers need to save money on traveling. From the case, it is stated that only the Prius allowed consumers to save costs of commuting. Toyota was very keen in the beginning to start by targeting the techies, or innovators, who are usually the first people to buy new products, with advanced technology. The technology of the car attracted many innovator and early adopters. The next generation was more targeted for the early adopters, and Toyota did this through adding more features and sportier design to the vehicles, which attracted many people. In addition, Toyota invested a whole $40 million on advertising the second generation Prius through the media, magazines and fortuneteller. The company used strong advertising such as features that allowed the consumers to save traveling costs through fuel-efficient vehicles. Another strategy that Toyota has used in marketing the hybrid vehicle is the differentiation of the vehicle into different standards where there is a standard one with others coming in at lower standards for lower prices, while others are at higher standards for those who want more features’ to go with. This attracts different consumers to buy the vehicle since there is one for all of them depending on their economic status as well as preferences.
GM’S Hybrid Strategy
According to Ken Stewart, to get more hybrid vehicles on the road, or selling, one will need to put them in cars that people are buying. Summarizing their strategy in hybrid issue, I feel that he is quite right. Hybrid vehicles, due to current technology can be fitted in many models of vehicles since it is adding an electric engine that reduces fuel consumption. Considering that many people especially in America love the big spacious vehicles and sports utility vehicles, consumers would be much interested in seeing vehicles that they love being fitted with a hybrid engine. For instance, if a certain sports utility vehicle is very popular and loved by many, if fitted with a hybrid vehicle, the lovers of this vehicle will be happy to save fuel using the same model and design that they love, rather than having to opt for another one.
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