Toyota

Toyota: Driving the Mainstream Market to Purchase Hybrids
	Author:Jeff Saperstein, Jennifer Nelson

	Intro/Situation Toyota’s goal: 1) become the largest worldwide automaker 2) grow by nearly half during next decade 3) be the leader in the hybrid market 4) make all of its vehicles with a hybrid option by 2012 Situation: consumers are becoming more environmentally conscious; gas engines will not meet future regulations; government providing tax incentives and passing laws to encourage/require cleaner vehicles. Advantages: past success in producing hybrids, superior fast production systems; predicted HEV growth high

	Issues/Decisions to be made
		Should Toyota continue to focus on cars (as its Prius was successful and the Rav was not), or should they compete against American automakers in trucks and SUVs as well?
		How can they move hybrids from a niche to a mainstream product?
		How can they overcome consumer misperceptions?
		How much should they sacrifice short-term profits for future gains?

	Questions not answered in case
		Does all of the car require special service, or only the engine?
		Are all automakers under intense short-term shareholder pressure like Honda?
		Do consumers perceive hybrids as being as safe and reliable?
		When are tax incentives that encourage ownership of heavy trucks for business use going to be phased out?

	Recommendations
		Attain leadership by having highest quality hybrids – build on already established quality superiority. Emphasize in communications that hybrids are built to Toyota standards and need infrequent service.
		Increase production of SUVs and also minivans for the American market. Large vehicles rule those roads.
		Offer free or low-cost training to mechanics. Provide a service station locator on their web site. Offer coupons, in conjunction with mechanics, for consumers who might have to drive some distance for service.
		Divide advertising into four segments and tailor messages accordingly: 1) Environmentalists (current messaging) 2) People seeking to be on the cutting edge (feature-oriented messages) 3) parents (“Leave your children a greener planet.” or “Set a good example.” or “Spend less time at the pump. More with them.”) 4) Mainstream audiences in more progressive geographies (variation of ad on page 26 – “Save time. Save money. Save the world.”) As people rank environmental friendliness low of their list of priorities in choosing a vehicle emphasize cost savings and time savings in the mainstream messages. Emphasizing time and money savings and putting less emphasis on environmentalism will attract more mainstream consumers, who may not want to be perceived as “tree huggers.”
		Advertise the “true cost” with time and gas savings factored in.
		Advertise the cars as being able to do more “go more miles between fillips” with less (gas) and emphasize that performance, reliability, etc. is on par.
		Mediate the risk of hybrids not taking off by continuing to design cars to have an option of traditional or hybrid engine.
		up billboards along roads thanking hybrid owners for their choice (and maybe making other drivers feel a little guilty). Send drivers cards from Mother Earth thanking them (like Saturn sends owners Christmas cards). Create a sense of duty and belonging.

	Source:http://harvardbusinessonline.hbsp.harvard.edu/b02/en/common/item_detail.jhtml?id=904A03