Toyota diversification strategy

Toyota Prius Marketing Plan

Introduction

Toyota Motor Corporation is one of the leading motor vehicle manufacturing firms in the world. The company is involved in the development, sale, and distribution of motor vehicles. Headquartered in Toyota City, Japan, the organization has expanded its operations across different parts of the world, including Asia-Pacific, Middle East, Europe, North America, Africa, and Latin America (Toyota Corporation, 2017). Currently, the company is one of the most expanding geographically, having established its subsidiaries and outlets in over one hundred and ninety countries scattered across the planet. Toyota is not only one of the leading motor vehicle firms, but it also tops the list of companies that have the most diversified vehicles. Toyota has developed three business segments through which it sells and distributes its products. They include: Automotive, Financial Services, and All Others. Out of these products, Toyota Prius is one of the most fuel-efficient vehicles manufactured by the company. Toyota Prius is increasingly gaining popularity as a car for the middle class population in the United States and other parts of the world (Toyota Corporation, 2017). The development of this new vehicle was driven by the desire to offer value to customers who not only seek eco-friendly vehicles, but they also need to cut costs associated with the skyrocketing gas prices and met their desire for state of the art technologies.

Market Segmentation of the Product

Market segmentation can be described as the process of subcategorizing the total market for a specific product or service into smaller units that have the same needs, such that each group is most likely to respond favorably to a particular marketing strategy (Longnecker et al. 2010). Toyota Prius mainly uses three segmentation strategies to reach out to its target audiences: geographic, psychographic, and demographic segmentation. Demographic segmentation subdivides markets into components that are based on their demographic factors such as age, gender, level of income, level of education, as well as occupation (Ferrell & Hartline, 2012). From a demographic sense, Toyota Prius seeks to reach out to both males and female customers who are aged 16 years and beyond. Another important demographic characteristic that Prius uses to reach out to its customers is level of income and education. In particular, the product mainly targets middle class population who can afford to raise approximately $24000 to $30000 to buy the motor vehicle (Toyota, 2017). This vehicle is ideal for the middle class population that is grappling with a lot of bills since it is cost saving. The vehicle is cheaper than the average by approximately $1200 (Toyota, 2017). Its eco-friendly and fuel-efficient nature also makes it ideal for middle-income populations that are affected by the constantly rising fuel prices.

Toyota Prius also employs geographic segmentation as a tool to serve consumers in different specific areas. From a geographical sense, the product that employed a wide geographical segment approach to marketing. In almost all parts of the world, the question of developing a sustainable environment is increasingly gaining relevance in local and international discourses. This is particularly true to regions such as the Indian subcontinent, which has one of the highest levels of green house gases emissions in the world. Other areas that have the potential to purchase this product include China and the United States, which are currently facing the uphill task of cutting carbon emissions brought by fossil fuel-dependent motor vehicles (Toyota, 2017). The geographic segmentation strategy that Toyota Prius employs is also in line with the overall geographic segmentation model that Toyota Company employs. For instance, Prius is sold in almost all store outlets that Toyota vehicles have in all parts of the world. These include Japan, North America, Europe, Asia, and Africa. (for my class, we discuss Synchographics instead of geographical segmentation. Synchographics means life event based (birth, teenager, graduation, household formation, marriage, childbirth, retirement, death)

Further, psychographic segmentation can be defined as a segmentation strategy that deals with the state-of-mind issues such as motives, perceptions, attitudes, views, values, lifestyles, interests and customers’ personality traits (Ferrell & Hartline, 2012). While these psychographic variables may be hard to measure, there some that are relevant to Prius’s marketing agenda. They include opinions, interests, and values. For instance, some customers’ values are related to their need to be socially responsible in terms of protecting the environment. These customers are most likely to be attracted to Toyota Prius as their ideal motor vehicle in line with their environmental value and principles. From lifestyles perspective, some consumers like to purchase state-of-the art technologies. These are especially true for innovators, who are heavy consumers of latest products and technologies (Toyota, 2017). They are often sophisticated in nature and have a taste for upscale and innovative products and services. Innovators can enjoy Toyota Prius because they are concerned about their personal image as an expression of the self, but not as an expression of status or power. Some of the features found in this vehicle that can attract innovators include smart-flow climate control systems with pollen filtration, and an integrated backup camera.

Marketing Mix