Marketing

Hybrids Battle for Green Case Study

Situation

In May of 2009, the Japanese automaker Toyota was looking to revamp its marketing efforts on the once successful hybrid vehicle the Prius. After a previous successful launch of the Prius (in which it became the most popular hybrid on the road), the market seemed less promising during spring 2009. Moreover, Honda, a major competitor also wanted to enter the market with their hybrid, the Insight. Both automakers were on the verge of creating expensive marketing campaigns for both the Prius and the Insight and both faced the dilemma of spending money on advertising for what seemed a failing market.

Issues

Toyota and Honda should address problems and opportunities need to address before they spend millions of dollars on the marketing campaigns. The issues that both companies face are the current economy, perception of the hybrids, and materials for manufacturing the cars.

The economy of early 2009 may pose a major issue concerning the sales of hybrid vehicles. Because economic times were (and still are) tough, the idea of a hybrid car contradicts what the average consumer may be wanting. This customer is likely cost-conscious and may disregard the potential savings a hybrid offers, instead focusing on the overall higher price: hybrid vehicles are often thousands of dollars higher compared the gas version of the vehicle, making it hard for the car buyer to justify the purchase of a hybrid vehicle, and according to Million Dollar Journey the average price difference is of $5000.

Furthermore, many consumers view hybrid vehicles as less powerful and consumers are also concerned about service as well. One reason for being viewed as a weak vehicle is due to the smaller engine size compared to the standard gasoline engine, and many consumers believe that this may decrease performance. In addition, service of the hybrid is another problem for consumers, as the hybrid technology is still relatively new. Many people...