Toyota Prius Market Analysis Report Sample Assignment

Toyota Prius Market Analysis Report


The Toyota Motor Company designs and manufactures a varied product line-up that spans from sub-compacts to luxury and sports vehicles to SUVs, trucks, minivans, and busses; making them one of the world’s largest automotive manufacturers by auto sales. The vehicles they produce are made with either combustion or hybrid engines, like the Prius. The Toyota Prius, first produced in 1997, is the first mass produced hybrid vehicle that, since its introduction, has become the best selling hybrid vehicle in the world.  

Toyota’s practices socially responsible behavior through its community involvement, and is dedicated to supporting those who work on behalf of Environment, Education and Safety. These three areas are important to Toyota, as they have grown out of their corporate philosophy of quality, safety and sustainability.

Environmental Scan

Social Forces: Increased eco consciousness is beneficial to Toyota, because it makes people more willing to pay a higher price in order to help the environment. The Prius was made in response to this increasing trend, and by emphasizing eco friendliness in its marketing activities; Toyota will be able to reach out to their target demographic.

Economic Forces: The shift to a global economy creates new markets for Toyota to launch the Prius into. At this point, Toyota sells the Prius in 80 countries and regions, and is looking to expand into new markets as the demand for hybrid vehicles increases in the population. A new market means increased marketing activities, with making campaigns suitable to the market that the company is trying to penetrate.

Technological Forces: The growing demand for portable, renewable energy sources is filled in the automotive industry by the Toyota Prius. This increase in demand will lead to new customers for the company. The marketing activities will be increased because a growth in sales means more word of mouth marketing amongst consumers. To account for the increased demand, the company is producing more Prius’ every year, and meeting the consumer demand. Toyota needs to invest in new technologies in order to have the competitive edge over its rivaling companies.

Competitive Forces: The alternative companies that can provide hybrids to satisfy the market’s needs don’t have the existing consumer base and the low price points that Toyota provides to its buyers. Other automobile companies are just entering the hybrid vehicle market, so Toyota can change its marketing activities to reflect the increased experience that they offer. This will bring more buyers into the company, and keep their sales increasing.

Regulatory Forces: New laws are attempting to decrease the level of pollution by offering incentives such as rebates to those who buy hybrid vehicles. The Prius will gain popularity with these laws, because those looking to buy a brand new car will receive monetary compensation, as well as savings in gas spending. The marketing activities should shift to make more consumers aware of these benefits, which will lead to more sales for the company.

Consumer Behaviour

Major psychological factors that influence Prius buyers are motivation, personality, values, beliefs and attitudes, and lifestyle. Most people who buy the Prius are those who are motivated to do their part in helping the environment, and being green is part of their personality. They have a green lifestyle with deep values, beliefs and attitudes that compel them to spend more money on the initial purchase of a vehicle if it will help the world.

The sociocultural influences include personal influence, reference groups, culture and subculture. While some buy the car to do their part in saving the environment, others buy the car for what is being called "Conspicuous Conservation:” letting all know that they are environmentally astute.

Target Market/Segmentation

An analysis of the Prius demographics shows that the average Prius buyer is highly educated, and considers themself to be a savvy shopper, willing to pay a premium on a quality product. They have a higher income than average at approximately $100,000. The typical Prius owner is predominantly female, and is a few years older then the average driver, with the average driving age being 40. They drive fewer miles then the average driver, and they also plan to keep their vehicle a lot longer than average. The typical Prius owner also is conscience about the environment and feels that they have a personal responsibility to do something about the problems facing our environment, and are willing to pay a little extra to do their part. This targeted group is considered influencers in that they are more educated, more affluent, and older, which helps shape the car buying decision of the rest of the world. The Prius has done well in Asia, and with sales reaching new heights in 2013; America is the largest market for the Prius. Analysts see this trend to continue with the ever-growing gas prices, the Prius should dominate the medium size hybrid market for the foreseeable future.

The problem that Toyota faces is that the Europeans are not as receptive to the Prius as their American counterparts, because in Europe, diesel has been the dominant fuel-efficient vehicle, with a virtual monopoly as the source of energy for automobiles. The Prius continues to try to penetrate the Diesel dominant geographic areas, but the major problem is the fact that diesel based engine vehicles are almost $2000 less then hybrid vehicles, and European nations don’t have a shortage of diesel stations. 


The Prius is growing steadily in sales, with more people getting interested in the green movement. Environmental factors are in favour of the product, and everything is set in place to increase sales and create a large consumer base. The Prius is in the growth stage of its product life, and the objective at this point is to make as large of a profit as possible.


  • Toyota can create information packages instructing consumers about the details of and the steps to apply for hybrid tax credits and employer subsidies.
  • Toyota should actively support lobbying groups to encourage the continued lobbying of tax credits, to encourage the public awareness campaigns, and to encourage the creation of a community of right thinking hybrid owners.
  • Toyota should invest in improvements in battery, charging, and metering technologies. Patenting these technological improvements will serve to create competitive advantages.
  • Toyota should invest in high performance solar components to allow for electricity generation and capture while cars are operated and parked mid-day.


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