1. Launch a new product: As more and more people accepted the new Hybrid vehicles, Toyota decided to enlarge the market, from the market of techies and adopters to a wider market. In order to reach this purpose, Toyota launched a new Prius. The new Prius improved styling, performance and gas efficiency. It is a sleek, Asian-inspired design including seven colors. Inside the Prius, there is a stubby switch to engage reverse or drive and a push button that turns everything on. A 7-inch energy monitor touch screen displays fuel consumption, outside temperature, and battery charge level. It also explains whether you’re running on gas, electricity, regenerated energy, or a combination of these. There are also screens to show how much electricity you have stored and to arrange your air conditioning, audio, and satellite navigation system. The interior is roomy and practical, with plenty of rear legroom. There are many storage space cubbyholes and shelves in the front, as well as a deep dashboard which leaves ample space for maps, books, and even your lunch. The CD player holders six discs.
2. Large promotion: To launch the new Pirus, Toyota spent more than $40 million dollars spread over media in more consumer-oriented magazines and TV. The promotion is successful, as Prius sales are up 120 percent and have reached 28000 units in 2004.
3. Relatively moderate price: Because of the “environmentally friendly” aspects of the car, there are government breaks on the car. The federal government gives a $1500 tax deduction, and some states allow single-occupant hybrids in HOV (High Occupancy Vehicle) lanes. Although the federal deduction will be phased out in the near future, other bills are pending to extend the tax break based on greater fuel efficiency and lower emissions from vehicles. So compared SUV cars there is a relative low cost because of the tax relief, and the price is moderate.
4. Increased production from external incentives: Because of the rising gasoline prices, the demand for Priuses increased. Sales of full-sized SUVs such as the Ford Excursion and Expedition and the Lincoln Navigator suffered a sharp drop. The increased demand can be seem from the long for 6 months or more waiting lists. Spots on dealers’ waiting lists were even being auctioned on E-bay for $500. Toyota increased monthly production of Prius from 7500 to 15000, but just alleviated the shortages. During this time, the reputation of Prius increased and the sales increased a lot. However, though the excess demand for Prius, Toyota had no plans at that time to start production at a second plant, perhaps because he couldn’t predict how long this high demand would last. The new Prius made Hybrid familiar to the common consumers, the target of enlarging the market has reached. However, as the excess benefit exists in this market, there must be competitors coming in, and because of the internal learning curve. What strategies will Toyota make to offend these competitors?
5. Bring Hybrid to a luxury car level After Toyota’s success in Hybrid car, many competitors came up. Honda is another Japanese automaker. Ford began production of a hybrid model of the Escape SUV, giving consumers a choice of a hybrid or regular model. To promote the hybrid, Ford began an environmental print campaign built around mileage, emissions and other environmental concerns. GM is following the similar strategy, putting hybrid technology in vehicles that use the most gas. It has also developed a hybrid model of its Silverado truck.
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