The case throws a light on how Toyota marketed their hybrid product ‘Prius’ in USA. It is a market which had a history of fast cars and big SUVs. The presentation was co-developed by : Aakansha Bajpai, Abhishek Bose, Amit Kumar Das, Arvind Singh, Arunava Saha, Archana Yadav (MSRIM Bangalore) By:- Aniruddh Tiwari Linkedin :- http://in.linkedin.com/in/aniruddhtiwari

1. A Case Study On
Prius – Leading a wave of Hybrids
Submitted By
Aakansha Bajpai Abhishek Bose
Aniruddh Tiwari Archana Yadav
Arunava Saha Arvind Singh
Ashok Kumar Amit Kumar Das

2. An Overview
• The case throws a light on how Toyota marketed their hybrid product ‘Prius’ in a
market which had a history of fast cars and big SUVs.
• Prius has two drive trains :-
• A conventional gasoline engine
• An Electric Motor
• When running in slow speeds( upto 15 mph) the electric motor powers the Prius,
and on speeds above 15mph the gas engine provides the power to the car and
charges the battery at the same time.
• Although, being unpopular in the ‘Test Drivers’ Fraternity due to its sluggish
behavior, the early sales of Prius were quite impressive.
•Toyota targeted those buyers which are known as early adopters and innovators &
those who always love new technology.
• Innovative marketing tactics were adopted in the print media, on Television and on
the Internet to create a hype about the car.
• The case tells how Toyota identified the market and adopted itself at various stages
of product cycle and concentrated on its Target Customers.

3. Analyzing The Micro Environment For
The Launch Of First Generation Prius

5. What Do We Mean By Micro
Environmental Factors ?
The Internal factors which are close to the company and play
an important role in the company’s strategy are known as
Micro Environmental factors.

6. Lets Have A Look On Some Of The Crucial Micro
Environmental Factors :-

7. Toyota’s Marketing Strategy Time Line
First Stage of Marketing Second Stage of Marketing
1998 2000 2003
Third Stage of Marketing
2003 2004

8. First Stage Marketing:-
• Toyota set a perfect stage to launch a product which was ahead of its time in terms of
technology.
• Their Target Market was the group of those people who love new technology and are
adaptable to changing trends.
• Although this segment comprises of only 2.5% 1 of the overall market, but it is highly
important as it sets the trend for a particular product.
• Their marketing campaign started two years before the launch of the product so as to
gather the attention of these ‘techies’. These campaigns were in form of internet marketing.
Even their initial ads tried to trickle the minds of techies by innovative tag line like : “A car
that some times runs on gas power, sometimes runs on electric power, from a company that
runs on Brain Power.
1Source : The PDMA Glossary for New Product Development. Product Development &
Management Association. 2004.

9. Second Stage Marketing:-
• The bulk of the campaign was on television channels which had highest number of
viewership.
• After the launch of Prius, to get hold of the segment, Toyota started playing with the
emotional aspect of the people by airing ads like ‘When it sees red – It Charges’. Due to
the ambiguity of the ad it impacted more and caused higher ad recall.
•The online communities such as www.priusenvy.com also played important role in
increasing the popularity of the car. In these communities people portrayed their
customized Prius (like connectivity to the ipods, cruise control etc.)

11. Third Stage Marketing:-
• By 2004 the market Toyota was targeting was saturated.
•Therefore they changed their market strategy and shifted their focus on the segment of market
called ‘Early Adopters’.
• Often the Early Adopter segment, an estimated 13.5% of the market, is pursued in
conjunction with the Innovators. Early adopters, perceived as ‘visionaries’ in the market,
buy into new products early in the life cycle, are imaginative thinkers who find it easy to
envision and use new technology, rely on their own intuition in purchasing, as opposed to
depending on references from others, and are more tolerant of bugs or glitches in new
products than the average consumer.
• Toyota introduced a second generation Prius which had features catering the needs of this
segment like deep dashboard, lots cup holders, a 6 CD Player, ample amount of legroom etc.
•Toyota set a marketing budget of $40 million dollars. This campaign was spread through out the
media in more consumer oriented magazines. And the sales result was an instant boost of 120%.

13. Toyota’s Biggest Competitor :
Honda Civic Hybrid

15. We Thank You For Your
Patience.