Toyota Hybrid Marketing Management

Toyota: Driving the Mainstream Market to Purchase Hybrids

Intro/Situation

Toyota's goal: 1) become the largest worldwide automaker 2) grow by nearly half during next decade 3) be the leader in the hybrid market 4) make all of its vehicles with a hybrid option by 2012

Situation: consumers are becoming more environmentally conscious; gas engines will not meet future regulations; government providing tax incentives and passing laws to encourage/require cleaner vehicles.

Advantages: past success in producing hybrids, superior fast production systems; predicted HEV growth high

Issues/Decisions to be made

* Should Toyota continue to focus on cars (as its Prius was successful and the Rav was not), or should they compete against American automakers in trucks and SUVs as well?

* How can they move hybrids from a niche to a mainstream product?

* How can they overcome consumer misperceptions?

* How much should they sacrifice short-term profits for future gains?

* How much should they invest in researching other technologies?

Questions not answered in case

* Does all of the car require special service, or only the engine?

* Are all automakers under intense short-term shareholder pressure like Honda?

* Do consumers perceive hybrids as being as safe and reliable?

* When are tax incentives that encourage ownership of heavy trucks for business use going to be phased out?

Recommendations

1. Attain leadership by having highest quality hybrids - build on already established quality superiority. Emphasize in communications that hybrids are built to Toyota standards and need infrequent service.

2. Increase production of SUVs and also minivans for the American market. Large vehicles rule those roads.

3. Offer free or low-cost training to mechanics. Provide a service station locator on their web site. Offer coupons, in conjunction with mechanics,