Toyota Pruis; marketing communication plan

Case study
MKTG 526 spring 2011

By Ahmed Coucha

THE COVERAGE OF THE PRIUS TARGET MARKET

THE PROFILE OF THE TARGET MARKETS The Toyota Prius target market is divided into two segments, private buyers (consumers) and the business customers (B2B) that includes car dealers and corporate. For consumers the buying behavior is more shorter than the B2B, it starts with recognizing the need for a car, then they start gathering information and analyzing alternatives and finally coming up with the buying decision. While in the B2B the process extends, it takes a longer time and it involves the participation of number of people especially for new buying task. In the B2B, need identification is elicited by derived demands from the market, they have to set specifications for the product that will satisfy this demand and involves vendors identification, evaluation and selection and purchasing negotiation before closing the deal. Off course this tough buying process is more flexible with car dealers as they have contract obligations with Toyota manufacturing company to show its products but for corporate , the buying process is tough. Selling the same product to both segments (B2B and B2C) is known as Dual channel marketing. Although the selling process for the business sector is much tougher and longer due to corporate policies restrictions , involvement of a lot of company representatives , lengthy buying process and because the B2B usually works through long term contracts which doesn t give them the flexibility to buy any new product once it appears in the market, it takes a lot of negotiation and preparations for signing a deal, also the B2B are more conservative as they buy in bulk so they think of other supporting services like the maintenance, the spare parts availability, compatibility with their existing facilities, yet for Toyota Prius the business sector is a very important sector. When a product is sold in the business sector it is sold in bulk which lowers the selling costs and increases their margins, also it becomes easier afterward for the Toyota Prius to be adopted in the private market. partly because workers are private consumers for the Toyota Prius, so the positive experience they develop from using Toyota Prius at work will encourage them to buy it for their personal use; spin-off sale. Also individuals will see the Toyota Prius on the streets of London and rent them from car rent companies which a sort of publicity for the Toyota Prius which encourage them to buy

That is way Toyota Prius is studying the profile of both segments, in term of their demograohic and psychographic characters. FOR THE B2B SEGMENT. Their demographic characteristics are easily obtained as their numbers are limited and Toyota has most of it on its records CRM. These data should include information about the buying center in each company in terms of who are the users of the Toyota Prius car, who gives orders for buying, who implement these orders, who are the key opinion leader influencing this buying process; and who are deciders and gatekeepers. Also they should estimate the size of operation for each company to estimate its potentiality. An important thing that affect the buying decision for corporate is their mission, visions and core values. For each account these info should be available for Toyota. The Toyota Prius is an environmentally friendly with an innovative technology car, these matches with rising trend of CSR initiatives and the innovative, and green centered missions of a lot of organizations. This can facilitate the selling process for such companies. An analogy to this is the Loran hospital case. The benefit Toyota Toyota Prius is offering to the business sector is its low operating costs which will be reflected in increased profit margins for this segment. FOR THE PRIVATE SECTOR For the private sector Toyota Prius defined the demographic profile of its customer to be between 30 and 50 years old (mid-life). They are likely to be married (Full nest or Empty Nest) and with family responsibilities. They are affluent and well-informed and educated adults, classed in the AB socioeconomic segment. Therefore they are in higher managerial, administrative or professional occupations and of upper middle class. Hence, they are not only prepared to purchase environmentally-friendly but also able to pay more for it (higher disposable income). They are either their own property owner or rent privately. They are most likely to already own a lower medium car or similar. They are either British or living in Britain and of no specific ethnic or religious background. These demographic profile is not enough to give insights of their mind sets and doesn t explain why would they buy the Toyota Prius and what appeal that can click with them. Toyota Prius is being positioned using the Attributes positioning strategy, offering consumer the following attributes: An efficient,

environmentally friendly car with innovative technology (Hybrid), under Toyota brand name..Based on these attributes Toyota Prius could classify its consumers according to their interest into: Early Adopters/ Technology pioneers - Those who are interested in the latest technology/ innovation, and must be first on the block to own this technology and embrace it. Environmentally Friendly - Those who are recognizing the environmental impact of motoring and would to do something about it. Value Conscious - Those who are looking for the ideal combination of high fuel economy and maintenance cost in long run at an affordable price. For each segment the defined the appropriate marketing channels to reach the most appropriate appeal for each.

the

like

low and

Geographically, the people in the highly polluted areas (south) and those who live in big cities and suffer from congestion are more willing to buy the Toyota Prius car. COMPETITOR ANALYSIS: The plan didn t include a competitor analysis part. Regarding the competition Toyota Prius has two type of competitors, direct and indirect. The direct competitors are the c segment class car. The plan should define the main competitors in the c segment and analyze what they are saying; the USP, and how are they saying it; creative strategy, and the channels they are using to communicate their message. Also they have to analyse what others are saying about the competitors, the perceived position of competitors in the mind of customers. The indirect competitors are public transportation means. ANALYSIS OF THE CURRENT CORPORATE/PRODUCT PROMOTION FUNCTION: As the Pruis car is not present in the U.K , it has no current situation to analyze yet they can spotlight on its situation in Japan and USA. Also they can highlight the current situation for Toyota in UK.

THE TOYOTA SWOT ANALYSIS

The swot analysis of the Toyota Company is a good one. Based on this analysis the Toyota is enjoying benefits of the economies of scale in providing low cost cars for the EU market in addition to the removal of quotas to EU markets which will help them to penetrate the UK market with more cars at low price to gain higher market shares than the 4%. Besides that, their just in time concept allows Toyota to reduce its operating cost and overheads and to respond to customer demand quicker. This efficient operation allows them to stand the tough competition against European companies. They have the biggest R&D expenditure among car manufacturers which give them the innovative image in the world together with the reliable and high quality image that allows them to face the prestigious image of European car manufacturers. This R&D that produced the Toyota Prius the world s first mass produced hybrid is part of the Toyota innovative and CSR image in the world. The developing on line activities can help them to overcome their weakness in the distribution network and the car dealer. In addition to this SWOT analysis of Toyota the car manufacturer I expected the report to do a SWOT analysis for the product of the IMC plan the Toyota Prius car.

THE CAMPAIGN /PLAN OBJECTIVES

Generally speaking any IMC plan has its objectives that go up from creating awareness, interest, and desire and ends up with action and the ultimate goal is action with intension. Any IMC plan can have only one level or it can have them all. These objectives are sequential and funneled upward like a pyramid so to achieve a 15% action you should have a 40% desire which comes from an 80% interest and 90% awareness from your target customers of your plan. The ultimate action of the Toyota Prius communication plan is to stimulate purchase of the car, as it is mentioned in the report, which is not always the action objectives in any IMC plan, actions can have different forms; visiting stores, call, logging in the website, and so many others. Each goal should be quantified and it should have a tool to measure it. Usually for non tangible goals like awareness, interest, desire, we measure achievements through quantitative surveys, while for the action part we can use sales figures, number of calls .etc.

Action /intension The different levels of the goal hierarchy is achieved through Desire specific techniques, for awareness we rely on high frequency and high exposure and long duration of a interest simple message to create awareness. Than in the interest Awarness phase we rely on informing and educating the customer to raise his interest and move him to the next level, desire where we use sales incentives to push him to visit the showroom and ask about the Toyota Prius, sales incentives can be discount coupons, gift items for those who will visit the showroom. And finally we reach the action part were we intensify the use of sales promotion like the 1000 refund to the first 200 buyers of the Prius cars. Intension is built over time through the good post sales services and maintenance activities that decreases buying dissonances and increase brand loyalty. As stated in the plan the ultimate goal of this communication plan is to stimulate purchases of around 1500 units in the first year followed by 2000 units in the second and 3000 units in the third one. Besides this there are other objectives that can be categorized according to the AIDA model as follows:

Awarness

Customer and Consumers have to be made aware of a new product and its brand name. Strengthening the relationship with the Toyota brand The target market should be reached as fully as possible

Interest

Target markets should be excited about the new Prius and spread buzz/ word of mouth. Being a new product with a new technology, a prime objective is to educate consumers and explain the working of the Prius and advantages of this. Increase the consideration of Toyota when planning a new car purchase. The Prius should be considered as a full and valid alternative to traditional cars.

Desire

Communications should motivate consumers to find out more about the Prius; visit the website, order brochures, visit a local dealer, order a test drive.

Action

Ultimately communications should lead to a purchase, a higher percentage of showroom visitsshould be turned into sales

The plan should quantify each objective outcome and should propose how to measure the achievement of each objective. A-ccording to the nature of the product, Toyota Prius car, which is a high involvement product this means that the customer spends a lot of time of the buying process in searching for information mainly externally followed by alternative analysis, this search will be mainly from external sources: specialized magazines, websites, visiting showrooms, asking other people. This implies that the interest objective is the most critical step for the success of this plan which requires allocating a big portion of the effort to achieve this objective and it should be assigned a high achievement percentage; 80% among its customers, emerging from 90% awareness among customers. Information about the Toyota Prius should be available, reachable and understandable for customers. These levels can Awareness result into 40% desire and 25% action. Knowledge

Cognitive strategy

THE CREATIVE STRATEGY

THE MESSAGE STRATEGY As we mentioned previously that the Toyota Prius car is a high involvement product category, the consumer spends a long time in collecting information about it. According to the hierarchy of effects model, consumer moves through 6 steps to reach the purchasing decision. It starts with being aware of the

Affective strategy

Liking

Prefernce Conviction
Conative strategy

Actual purchase

product (Awareness) than he starts to gather information (knowledge), than he likes the product after that he develops preference for the product and finally he gets convinced with the product which is then converted to an actual purchase. These different phases requires different message strategies that suits for each of these buying process. Accordingly, Toyota Prius message is changing over time.
FIGURE 1: HIERARCHY OF EFFECTS

It starts with a cognitive message strategy, using a unique selling preposition highlighting that Toyota Prius is the only mass hybrid car produced, stressing on that Prius does not need any external recharging (confusion with traditional electric vehicles) and offers the same convenience as a normal car. The target of this message strategy is to have an impact on the awareness and education

aspects of consumers. Later on the message strategy changes to use an effective strategy that invokes feelings and emotions and enhances likeability and preferences for the product. Finally they can use conative strategy to call for an action through promoting sales promotions, discounts coupons, 1000 fuel refund mechanism to elicit the action of buying the car. THE APPEAL They are using an emotional appeal that links emotions like innovative, imaginative, bold, intelligent, revolutionary and pioneering to their Toyota Prius. Emotional appeals are a good approach as it captures attention of consumers and fosters brand association. By looking at the ads at the back of the paper, it is clear that they are personifying the Toyota Prius as a the hero who is modern, intelligent and humorous that is why we see an ad showing the interior of the car stressing on the innovative technology and other add with the car moving through a garden to emphasize the modern design and the environmentally friendly concept. Also showing the car in the ad highlight its convenience as a c segment car Vs the 2 seat hybrid Honda. THE EXECUTIONAL FRAMEWORK The execution framework differs according the customer they target; they could have different versions of the ad targeting different customers. For private segment we may use a mix of informative and testimonials and a mix of slice of life and dramatization. For B2B segment they can use an informative and testimonials framework: Informative: presenting information about fuel consumption cost of operations and staff like this. Testimonials: having testimonies from big corporate customers eg: Toyota Prius is used by Hilton .. They can Stress on the success of the car in Japan and USA in their ads. The tone of voice they are using personifies the car as a modern, intelligent and witty one.

THE COMMUNICATION MIX

The marketing communication mix is divided according to two aspects the degree of control on the message and the audiences of the communication tool into above the line below the line and on the line.

Above the line usually involves the media advertising and publicity. In above the line activities, your are communicating with masses, you can t control effectively that only your target audience will receive your message. Media advertising include TV, radio, printed magazines ads and outdoors ads. Publicity is a type of above the line advertizing that you are communicating with mass but you don t have control over either the message or the audience. You can initiate publicity by doing other promotional activities like the PR activities, CSR initiatives .etc. Below the line promotional activities is divided into PR activities and Personnel selling and sales incentives. In below the line you are communicating with limited selected audience with a high degree of message control. PR activities involve sponsorships programs for big events through which you use personel selling and initiate word of mouth. Sales incentives are any incentive given to your customer to encourage him to buy ranging from informative flyers, small posters, free sampling, coupon redemptions, and free driving tests. On the line are any interaction done through the internet. An effective IMC should use a mix of these different communicational elements in an integrated pattern to ensure the highest reach; that its message is reaching the maximum number of its target audiences, and the highest frequency; that is the number of times within a time interval a target audience is exposed to the message. To do so it is better to use a blend of all these elements to ensure that the target audience will be exposed to the message in different times and through different media. This weighted mix differs according to the stage in the product life cycle and the type of product. Toyota Prius is a very special case, it is a high involvement product that involves a new technology and it is in the introductory state. So the availability of information and knowledge and informing and educating the customers about the product features are very critical. Accordingly Toyota Prius is using a promotion mix that depends on heavy advertising in TV and Radio to create awareness of the brand and raises the interest and to inform about the USP of the Toyota Prius. In addition they use personnel selling techniques to educate private customers about the new technology of the Toyota Prius and also the personnel selling technique will be useful in approaching the business segment. In addition they are sponsoring a lot of PR activities and they have press releases about the launch of the Toyota Prius all that creates buzz in the market and initiate a good publicity for the car. Being in the introductory phase they should use sales incentives to stimulate customer desire and initiate purchasing action. They are using

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monetary incentives to encourage buy in the form of 1000 refund mechanism to the first 200 buyers of the Prius given by Powershift, a government backed agency, charged with encouraging cleaner fuels which in addition stresses on the environmentally friendly image of the Toyota Prius by associating it to Powershift the cleaner fuel company. The marketing communication elements are not confined to the previously mentioned elements only, but also the showrooms and exhibitions also sends and communicate messages so the showrooms and the presentation of Toyota Prius should always stress on the innovation and green ,like putting it in the middle of a garden to emphasize environmentally friendly. They are using direct marketing activities by sendin mails to their customer base giving them the opportunity to either preorder the car or request a test drive at local dealer. They are using the online activities through direct mailing services and the Toyota Prius microsite that offers all information about the new car. This plan is for 3 years through theses years the Toyota Prius will move from the introductory phase to the growth phase and maturity (in auto industries new models are being introduced at higher frequency these days) so the mix will change. In the growth stage the aim is to sustain growth , Toyota Prius will continue to spend heavily on advertising and PR to build and maintain brand loyalty, sales promotion declines in importance with more emphasis on trade promotion for dealers. In the maturity stage, advertising declines and sales promotion for both traders and consumers increases. In all phases personnel selling remains important.

THE MEDIA STRATEGY:

The media strategy is the process of analyzing and selecting media for advertizing and promotions campaign. The strategy of Toyota Prius in media selection is to achieve high reach and high frequency and to use a mix of different marketing elements that ensures that the target customer is exposed to their advertising message through the day through different execution framework. This is to increase the impact of their message on their target customers, an effect called the media multiplier effect.

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So they are using TV advertising, print advertising outdoors advertising in addition to PR activities which initiate positive publicity for their product, in addition to the direct mailing and the Toyota Prius online web site. The timing for the whole marketing communication activities is crucial for the success of the plan. Toyota Prius tends to start the online micro-site and some PR activities prior to the launch (pre launch) in addition to direct mailing. This will help them create the required Buzz in the market and people starts to talk about the new car which is a sort of positive publicity. The mass media advertising will start after the actual launch when Toyota Prius is available at about 80 car dealers across the UK; I think they should focus more on the south region and big cities as they suffer from pollution and congestion they will be interested in the car. During the second year of launch the frequency of the TV ads, printed ads and outdoor ads decreases as the product moves to the growth stage, PR activities continues while sales promotion to consumer is minimum. On the third year the intensity of the mass media advertising is further reduced and sales promotion to consumer returns once again to push sales and to increase market shares on the account of competitors. Trade promotion is a constant activity along the two years. Based on the automotive is: Magazines 11% 100 leading national advertisers, the advertising expenditure for

Newspaper 25.4%

Outdoor 1.7%

TV 50.4%

Radio 7.8%

internet 3.7%

THE POST CAMPAIGN TESTING:

Evaluation is a critical step in any IMC plan. IMC plan evaluation is divided into pretesting, conducted before the implementation of the plan and post testing which is carried on during and after the implementation of the plan. Pretesting evaluate the efficiency of the campaign in order to modify it before being launched. Pretesting includes two techniques: Concept testing: which examines the message content of the Ad and the impact it has on the target customers. It start with a qualitative testing for the concept through focus groups of the target customers, optimum size is 8-10. This focus group comes up with some comments and recommendations, then the message is modified accordingly and then this modified message is further tested

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through a qualitative survey for a bigger number of target customers to proof seal it. Copy testing: this test is done when the marketing piece is finished or almost finished to see the impact of the whole ad on customers. There are four copy testing techniques; Portfolio testing for printed ads, through showing a set of ads with your candidate ad among them and theatre testing by showing the candidate ads in theatres and cinemas with other ads. Other techniques involve: mall intercept technique by stopping shoppers and asking them to evaluate the MC element. Concept testing and copy testing will be conducted four months before the actual launch of the campaign which is an adequate timing to take any corrective measures. After the campaign is being launched we perform other set of tests; post testing, the aim of which is to evaluate the effectiveness of the campaign. Protesting involves testing the impact of the IMC campaign after being aired. post testing builds an accumulated experience which helps for the future development of other campaigns and helps in the media management of the current campaign, some ads are stopped after one day of airing as they proves to be a failure. Post testing involves the following: Recall testing: which involves asking individuals to recall an ad they have seen within a certain period of time. Items tested for recall can be: product name, product attributes company name .etc. Recall testing have different formats , an unaided recall test in which the individual is asked to recall the ad without being given any clues, other technique is the aided recalll test in which the respondent is helped by alternatives. Most of the recall tests are done one day after the ad is aired DAR, the recall test is a memory test, simply it sees if the individual remember the ad or not Recognition tests: the respondent is given different ads and is asked if they recognize it or have seen it before. On the contrary to the recall test, it is not a memory test, it goes deeper to test what raised person s interest in a particular ad In the recall we are testing the awareness component of the AIDA while in the recognition we measure the interest part. Attitude and opinion tests: which are tests that measure attitudinal components of the reaction to the ad. It deals with both the cognitive and affective reactions.

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These tests are used by Toyota Prius to evaluate the effectiveness of the campaign, to determine public s reaction to the communications, how the communication affected people s feelings and attitudes. All the previous tests measure the effectiveness of the message but they can also use other measures to evaluate the behavioral impact of the IMC. They can track the sales figures of the car along the implementation of the campaign. Also they can follow the number of consumers that book for a test drive in response to the direct mail. Toyota Prius can evaluate the effectiveness of its PR activities in raising positive publicity through counting the number of clippings which is number of times the brand name was listed in the media, another technique is to calculate impressions which is the number of subscribers, buyers or viewers of a print or broadcasted medium in which the Pruis name has been listed but the company here has to differentiate between positive and negative clippings. Another third technique is the Advertising equivalence technique where the company calculate the cost if these clippings were paid for and finally the company can evaluate if the objective of the PR activities were achieved through the publicity that it initiated.