The following contains both a marketing and a media plan for the Toyota Prius. Althoughboth of these projects were totally independent of each other, I have decided to join bothof them into one book to make it easier to look at.

Because they were joined into one book, there may be some duplication of informationand/or some information that could possibly conflict with each other. Please keep this inmind while reviewing this document.

-Steve Vogt

Media PlanToyota Prius

Prepared for Dave Zemunski byZeljka Paul

Djurdjica SelendicSteve Vogt

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Executive Summary

The media plan will focus on reach as well as frequency at roughly the same levels. Thetarget audience is not very familiar with the Toyota Prius brand so an adequate level ofreach will generate awareness of the Toyota Prius brand among the target audience.

Reach goal:To reach 85% of men, age 24-54, in the months of January-December.

Average frequency goal:To reach 85% of men, age 24-54, at least 3 times every month from January-December.

The recommended effective frequency is 3.9. The recommended effective reach goal is65% of the target audience from the months of January-December.

The media plan will use a combination of spot and national advertising.

The recommended media classes are magazines, spot television and spot cable television.

Radio, Internet, newspapers, outdoor advertising, direct mail and transit media are notrecommended as a part of the media plan for Toyota Prius. Newspapers are a very costlymedium with low pass-along readership and no segmentation of the target audience.

The recommended media vehicles for magazines are Discover, Time, Sports Illustrated,Popular Mechanics, and U.S. News and World Report.

The dayparts relevant to media plan for Toyota Prius are between 5:00 pm and 10:00 pm.The dayparts this media plan will implement are early news, prime access and primetime.

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Introduction

Toyota introduced the Toyota Prius to the Japan market in 1997 as the world’s first mass-produced gas/electric hybrid vehicle. Toyota Prius combines two types of power: electricand gas to provide maximum fuel efficiency and promote a clean environment. Priuswent on sale in the United States in August 2000 and has since then sold close to 40,000units. There are two main competitors of the Toyota Prius in the U.S. market: HondaInsight and the Honda Civic hybrid.

Target Market and Target Audience

The target market for the Toyota Prius is composed mostly of men who areenvironmentally conscious and live in urban areas. The target market considers othernon-hybrid cars before considering a Toyota Prius, meaning that the market for hybridvehicles is expanding to buyers who might not be as concerned with the environment butwho are more concerned with gas mileage, comfort, and space. 38.6% of Toyota Priusbuyers are between ages 30-49 and buyers choose Prius mainly because of the fueleconomy and handling. The new target market consists of seven urban areas: Denver,CO, Kansas City, KS/MO, Chicago, IL, St. Louis, MO, Oklahoma City, OK,Minneapolis-St.Paul, MN, Salt Lake City, UT. The target market size has a totalpopulation of 6,124,729; 3,004,979 of that number being men.

A target audience is the desired or intended audience for advertising, as described ordetermined by the advertiser. The target audience is usually defined in terms of specificdemographics such as age, sex and income. The target audience for Toyota Prius is men,30-50 years old, who are married, earn at least $30,000, and are college educated. Referto the chart below for raw audience numbers. The total number of men and womenbetween the ages of 24-54 in the seven metropolitan areas is 2,753,934. The splitbetween men and women in these areas is roughly 50%. Therefore, the approximatenumber of men in the target audience is about 1,376,967.

Target AudienceDistribution

DenverKansas

City Chicago St. LouisOklahoma

City Minneapolis-St.PaulSalt Lake

City Total

Population 554,636 554,636 2,896,016 348,189 506,132 669,769 595,351 6,124,729

Male 280,207 280,207 1,405,107 163,567 247,313 331,095 297,483 3,004,979

Female 274,429 274,429 1,490,909 184,622 258,819 338,674 297,913 3,119,795

25-54 271,096 271,096 1,296,974 148,799 222,483 311,880 231,606 2,753,934Married-couplefamily 83,016 83,016 372,970 38,470 93,647 87,573 106,481 865,173With ownchildren under18 years 35,890 35,890 179,408 15,947 41,319 40,785 57,383 406,622

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Geographical Areas

The marketing plan calls for expanding of the Toyota Prius niche to include seven moreurban areas. These areas are new markets for the Toyota Prius because the hybrid carniche hasn’t been tapped there yet. The media plan will be executed in seven majorinland metropolitan areas: Kansas City, MO/KS, Denver, CO, Minneapolis-St. Paul, MN,St. Louis, MO and Chicago, IL, Oklahoma City, OK, and Salt Lake City, UT (areasincluding Salt Lake City are included). The hybrid car market has already penetrated theurban areas of the East and West coast, while the inland urban areas of the United Stateshave been virtually untouched. Therefore, the objective is to force distribution to thesenon-hybrid areas and create demand for Toyota Prius through advertising.

Geographic market weighing is the practice of giving extra consideration to one or moremarkets that have more varying sales potential-because of location or demographics orother reasons-than other markets. The seven metropolitan areas being targeted vary inpopulation size, so different amounts of advertising and advertising dollars will bedisseminated in those markets:

City Dollar Amount AllocatedChicago, IL $8 millionKansas City, KS/MO $4 millionMinneapolis-St.Paul, MN $4 millionDenver, CO $4 millionSalt Lake City, UT $4 millionOklahoma City, OK $4 millionSt. Louis, MO $2 million

According to this distribution, Chicago, IL will receive the most advertising dollars andin turn more advertising. Chicago has far more population than any of the other cities.The total population of Chicago is 2,896,016, while all the other cities have populationsof less than a million people. Therefore, Chicago will receive double the amount ofalmost all the other cities being targeted.

Time Frame

The media plan will use pulsing, which is a media scheduling technique in which periodsof heavy activity alternate with lower-activity periods. Sales of cars generally go up inthe summer months so advertising is also increased. The media plan will accommodatemore advertising in the spring months of March, April, and May and summer months ofJune, July, and August while still maintaining a regular pulsing schedule during all theother months of the year. The pulsing schedule allows Toyota Prius to stay in consumerminds even when car sales are down in the winter and fall months.

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Message

The message of the advertising campaign will emphasize that Toyota Prius is a roomy 4-door car with very high gas mileage and that the consumer doesn’t have to sacrificecomfort and space to do something good for the environment. The message will alsoexplain the technology behind the Toyota Prius car. This is necessary because thedistribution strategy calls for the penetration of new markets in the Midwest.

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Media Objectives

Reach and Frequency Goals

Reach is the number of different persons or homes exposed to a specific media vehicle orschedule at least once. Reach is usually measured over a specific period of time (e.g.four weeks). Frequency is the average number of times an audience member is exposedto a commercial. The media plan will focus on reach as well as frequency at roughly thesame levels. The target audience has had very little exposure to hybrid technology andwill need explanation of the technology and reassurance that these cars are top-of-the-linematerial. For this reason, a high level of frequency is required since the advertisingmessage is quite complex. The target audience is not very familiar with the Toyota Priusbrand so an adequate level of reach will generate awareness of the Toyota Prius brandamong the target audience.

Reach goal:To reach 85% of men, age 24-54, in the months of January-December.

Average frequency goal:To reach 85% of men, age 24-54, at least 3 times every month from January-December.

Effective frequency level recommendation

Effective frequency is the amount of frequency (or repetition) the planner judges to benecessary for advertisements to be effective in communicating.

The recommended effective frequency is 3.9. Please refer to the table below to see thefactors used in figuring out the effective frequency level. Ostrow’s model was used todetermine the factors that influenced the brand’s needed frequency levels. Depending onthe importance, a point value was assigned to each factor. The factors were thensummarized to come up with .9. This number was added to the base number of 3 times tocome up with an effective frequency of 3.9.

Figure 3 - Factors that AffectEffective Frequency for ToyotaPrius Brand

New brand 0.2Low market share 0.2Low brand loyalty 0.2

Long purchase cycle -0.2Product used daily -0.2

Complex copy 0.1New copy campaign 0.2

Image type copy 0.1More different kinds of messages 0.2

High ad clutter 0.2Compatible editorial environment -0.1

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Flighted advertising 0.2Few media used -0.1

Opportunities for media repetition -0.1Total 0.9plus 3

equals 3.9

Effective reach goalEffective reach is the percent of the target audience exposed at the frequency level that iseffective in the planner’s judgment.

The recommended effective reach goal is 65% of the target audience from the months ofJanuary-December.

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Media Strategies

This section of the media plan deals with choosing appropriate media classes for ToyotaPrius. The media classes that are commonly used in advertising are newspapers,magazines, television, cable television, radio, Internet, direct mail, telemarketing,outdoors advertising and transit media. The non-traditional media (e.g. airport displays,bathroom advertising, ads in dorm elevators, etc.) will not be recommended in the mediaplan because of the inability to measure their effectiveness and relative success indelivering the message.

Most automobile advertising is done in magazines, television, Internet and outdooradvertising. Toyota has used these classes in the past as their advertising tools. In theprocess of deciding the right media classes, intermedia comparisons are done. Thecomparisons based on the data, however, are not valid in most cases. That is why otherfactors, such as features, advantages and limitations for individual media classes need tobe considered.

List of Media Classes

This list deals with features of each traditional media class relevant to this media plan andthe product:

1. Newspapers make it easy to achieve a sense of immediacy, high local emphasis,and geographical flexibility. The reach is very high and easily attainable withnewspapers. The newspapers fail in terms of the lack of target audienceselectivity, the ads can be expensive and the there is variation in ROP colorquality.

2. Magazines have a high number of pass-along audience, long life of the individualissues, fine color representation and greater ability to reach a specific kind ofaudience. Disadvantages of magazines are early closing dates that affectadvertisers by losing the advantage of timeliness of the ads, there is no immediacypresent (readers take time to look at magazines) and reach has a tendency to buildvery slow.

3. Television is a medium that achieves a multi-sensual experience using sight,sound and motion that works in the advantage of the advertiser. That makes thismedium useful in terms of dynamic selling and representation of the features ofthe product. Television is useful in terms of the flexibility of the medium - if thetarget audience is highly segmented, it is good to use television as a media class.And it is very cost efficient. The downfalls of television are the high cost of asingle commercial, low attention span of the audience, the messages are shortlived and there is high clutter with the competitors and other products.

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4. Cable television is wired in about 70 percent of the U.S. households (Sissors andBaron, p. 234). The advantages of the cable television are high penetration to anational audience, added reach and frequency, relatively low cost, especiallywhen compared to local television, segmented and defined target audiences,reduced total and average spending costs. There are not that many limitations: theonly one relevant to our media plan is the difficulty buying spot cable, because ofthe multiplicity of the cable operators serving each market.

5. Radio has high frequency, because of the repetition abilities. Other advantagesare low cost and good reach of the special target markets (this makes radio a greatsupporting medium), high summer exposure and high traveling/mobile rates, greatgeographical flexibility and local coverage ability. Some of the limitations are nocatalogue value, low attentiveness and many stations in one market.

6. Internet is an active participation medium, which means that the user is involvedin the process of accessing the information. Therefore, it makes it a medium thatis under the control of the customer and that is easily researchable. That alsomeans that supporting product information is published on the Internet and isaccessible to the consumer. Some of the limitations are high cost, limited creativepossibility, and inability to use the medium for actually purchasing the product(automobiles can be bought on web sites such as www.e-bay.com, but not on thelicensed automobile websites). That is where a lot of immediacy and accessibilityof the medium are lost.

7. Outdoor advertising has a wide coverage of local markets, high frequency,largest print available, high geographic flexibility, around-the-clock exposure andsimple copy-package identification. The limitations are the fact that advertising islimited to simple messages, no guarantee of high recall regardless of the highreach, high cost and the limited availability of best locations.

8. Direct mail is used more for the direct response marketing, it has a long life andit may be cheap to execute and send out with other packages. The limitations ofdirect mail are high cost (if it is sent out on its own), inaccurate and incompletelistings, clutter and consumer resistance.

9. Transit media allows high frequency, geographical flexibility and opportunity toposition messages to consumers on the way to their points of purchase. Thelimitations are heavy competition from other media and personal activities,limited message space and frequent inspection.

Recommended media classes

The recommended media classes are magazines, spot television and spot cable television.

Magazines are recommended because of the high quality printed ads that show all thefeatures of the automobile. The ads in magazines also have a longer life and a high

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number of pass-along audiences. Using magazines offers a greater variety of possibilitieslike double truck ads, folds and inserts.

Local television is recommended because it allows the presentation of the multi-featuredToyota Prius in a fast, dynamic environment. Most automobile advertisers use televisionto advertise their products. It is easier to picture its quality and features if it is seen onvideo. In the terms of the reaching the audience, less segmentation of the audience isallowed but it compensates if cable television is used in combination with the localtelevision. It is also useful in reaching specific markets as proposed in the media plan.

Cable television is recommended as well because it can easily reach much moresegmented special interest audiences, such as environmentally conscious people. It ischeaper when compared to local television.

Media classes that are not recommended

Radio, Internet, newspapers, outdoor advertising, direct mail and transit media are notrecommended as a part of the media plan for Toyota Prius. These could be included, butthey all have specific features that do not respond to the media plan.

Newspapers are a very costly medium with low pass-along readership and nosegmentation of the target audience. The quality of paper is not comparable tomagazines, so print ads lose quality and are hard to read.

Radio is too unrepresentative in the terms of showing the features of the car andpresenting it dynamically, especially with a product that hasn’t been introduced into themarket yet.

Internet could be used but in this specific case, to actually sell the product it could becounterproductive. The only way Internet could be used is in terms of back upinformation presented on the Toyota web site. Spending resources on any other kind ofadvertising in geographically determined markets would not be profitable.

Outdoor advertising is an in between category as well because it offers some goodfeatures such as wide coverage of local markets, high frequency and high geographicflexibility. However, it is impossible to assume high recall will happen depending on thehigh reach and in this case, the cost of the ads (For a 100 showing in top 50 markets thecost is more than $6 million dollars) could not be matched with the actual response of thecustomers (Sissors and Baron, p. 247).

Direct mail is not recommended because it usually calls upon immediate response and thedecision making process for an item such as an automobile can last longer than directmail requires. It would not be a great tool to advertise a car.

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Transit media is also questionable in terms of no real evaluation of the reach orfrequency. It also limits the representation of the features so it may not be a good mediaclass to use in Toyota Prius campaign.

Recommended timing/continuity for each

The pattern of timing of the advertising schedule is very important because it reflects thepurchasing patterns of the consumer, it reflects distribution of the product (if it followsthe advertising) and it needs to be adjusted to the different markets. There are three waysthe schedule can be set up: continuous, flighting and pulsing.

1. The continuous scheduling pattern constitutes an equal amount of advertisingthroughout the entire year. It is good for repetition of advertising, it enables themedia buyer to get discounts when a large amount of advertising is purchased andit assures the advertiser that most of the customers are reached.

2. Flighting is an intermittent pattern with gaps of time when no advertising is done.The patterns are irregular, with heavy advertising at different intervals. Flightingis more strategic if compared to continuous advertising because it takes differentelements into account: competitors, consumer needs (e.g. higher demand forChristmas trees in winter months may influence an advertiser to concentrate allthe advertising in those months annually) and budget limitations. There are twomain drawbacks in using flighting: too much advertising at one time period maycontribute to the lack of effectiveness at the time and the public may forget aboutthe original message if too much time elapses.

3. Pulsing is the third category of the timing schedule and it is the one recommendedto be used in this media plan. It is the best of both techniques because it combinesthe features of both continuous scheduling and flighting. The Toyota Prius is thetype of product that needs a continuous advertising all year round yet it will beheavily introduced in spring and summer months.

Spot vs. national

The media plan will use a combination of spot and national advertising. Magazines are apredominantly a national medium. Spot TV and spot cable will be used in the sevenmetropolitan areas. Spot media is related to specific DMAs that watch the individual TVchannel or station in that DMA. The term “national” refers to the entire nation thatwatches the same television channel or program. In this case the introduction of the newproduct to a new market depends on spot television.

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Media Analysis

In evaluation and selection process for media vehicles, different parameters work fordifferent media classes. Toyota Prius media classes considered are: television andmagazines.

For television vehicles, the media plan specifies which dayparts are to be used, but thefactors that determine the final decision are rating size and the quality and relevance ofthe target audience for each vehicle. The planned GRPs play the most important role inchoosing the right vehicle within this medium.

GRPs or gross rating points are used to show a sum of ratings for more than one vehicle.The numbers are calculated by adding ratings for a specific vehicle. The difficulty withGRPs is that they often represent duplicated audiences. In calculating GRPs for entiremedia schedule, individual GRPs are multiplied by the number of the commercials in thespecific program. GRPs are also used in other media, such as magazines only they equalto the percentage of market coverage of a target audience times the number of adinsertions.

The vehicles in the magazine media class have an important factor to consider: the abilityof the vehicle to reach the target audience at a cost-efficient price. The selection needs tolook at quantitative and qualitative factors in choosing the most appropriate vehicle.

There are two types of objective criteria in terms of a quantitative (or measurable)method in selecting a vehicle. The primary objective criteria that this media plan will usein the promotion of Toyota Prius are: composition and coverage, delivery of demographictargets, cost efficiency of delivered targets and delivery of product-class user targets. Thestrategic targets and psychographic targets are covered in choosing more selectiveaudience magazines such as Discover, Car & Driver and Automobile.

The secondary objective criteria that this media plan will use in determining theappropriate vehicles are: editorial features or other content related to a brand’s image.This is possible in science and automobile magazines with a highly segmented audiencethat corresponds to the decided target audience for the media plan and color reproductionpossibilities.

Media Vehicles

TIME is described as trusted and engaging, which elaborates on the point of qualitativevehicle parameters: it is a trusted magazine with a long tradition, which could be a greattool for introduction of a relatively new product (www.mriplus.com).

The main quality of U.S. News is its reputation for usefulness, agenda setting informationand journalism style. They focus on developments in education, health, technology andfinance which helps attract readers that have a special interest in those areas and could bepotential buyers (www.mriplus.com).

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Sports Illustrated is intended for mainly a male audience. It features great photography,and it is a definitive journal in the world of sports. That is why it is a great tool to reachmen in any age group (www.mriplus.com).

Popular Mechanics is a magazine about technology, consumer electronics, cars, science,computers, sports and cultural events. This vehicle is great for reaching onepsychographical feature of our target audience: men interested in science andimprovement (www.mriplus.com).

FHM is a magazine definitely targeted toward men, with articles that relate to careers,fashion, travel and computer purchases. The magazine itself is informative andentertaining and it is recommended because of its unique features in approaching themale audience (www.mriplus.com).

ESPN Magazine is a sports magazine directly connected with the ESPN channel. It isdirected toward men as well, featuring sports and entertainment.

Playboy - this magazine belongs to a category of a marketing tool that reaches a widevariety of audience and in the same time it is engrained in North American culture as avehicle with high quality journalism and media. “It defines men's attitudes. More thanjust beautiful women, Playboy's award-winning editorial features today's most sought-after celebrities, writers and authors. The ultimate lifestyle perspective of "the good life"coupled with unmatched brand equity, make Playboy the media favorite that it is today”(www.mriplus.com).

Popular Science is known for following the newest and the best in science andtechnology. It is positioned as “The Lifestyle Publication of the New Millennium with aredesign that gives it a fresher, cleaner, more cutting-edge, modern look, with a newenergy that was designed with input from our own readers to make their favoritemagazine even better” (www.mriplus.com).

Maxim targets the youngest segment of our target audience (men in their late twentiesand early thirties). It delivers entertainment and interesting editorial columns(www.mriplus.com).

Car & Driver is a magazine that deals with innovations, evaluations and research in thefield of automobile technology. It would be an appropriate vehicle to advertise ToyotaPrius in because it attracts readers interested in innovation in cars and cars in general(www.mriplus.com).

Automobile Magazine is, as described on www.mriplus.com, where “the sophisticatedenthusiast finds a well-rounded editorial mix including design, technology, automotiveart, vintage cars and industry trends.” This magazine would be a vehicle of choicebecause it attracts a variety of readers with different interests in automobiles.

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Wired is one more vehicle that could reach the segmented target audience: educated,technologically savvy and interested in science. It features articles on technologicalimprovements, which could add in editorial content supplementing the advertisement(www.mriplus.com).

Magazine Vehicle Ranker

PublicationMRI

Audience 4C Base Rate 4C Bleed RateAudience 4C

CPM Frequency

Automobile Magazine 3,999,000 $75,415 $75,415 $18.86 12x

Car and Driver 9,343,000 $142,235 $156,459 $15.22 12x

Discover 6,478,000 $50,185 $50,185 $7.75 12x

ESPN The Magazine 9,405,000 $115,000 $115,000 $12.23 26x

FHM 6,269,000 $74,220 $74,220 $11.84 11x

Macworld 1,617,000 $36,815 $36,815 $22.77 12x

Maxim 12,253,000 $167,000 $167,000 $13.63 12x

Playboy 10,299,000 $136,170 $149,787 $13.22 12x

Popular Mechanics 9,018,000 $93,860 $103,246 $10.41 12x

Popular Science 6,419,000 $85,430 $93,973 $13.31 12x

Sports Illustrated 21,186,000 $226,000 $259,900 $10.67 50x

TIME 23,897,000 $212,000 $243,800 $8.87 52x

U.S. News & World Report 12,242,000 $123,364 $139,401 $10.08 52x

Wired 2,067,000 $41,190 $47,369 $19.93 12x

This is the list of candidate magazines that are appropriate for the media plan. The datashows MRI audience, rate for full page four color and bleed ads and the cost perthousand. If CPM is looked at as the main qualifier for the preferred magazines, Discovermagazine and Time magazine have the highest cost efficiency. The difference betweenthe two is obvious in audience because Time reaches over 17 million more people thanDiscover magazine. This is why both of these are highly considered but more ads may berecommended to be placed in Time because higher MRI audience conditions highersecondary audience (pass-along readership) and the reach can be higher as well.

Discussion of magazine vehicle ranker on the basis of CPM

Discover has the lowest CPM of all the magazines. Also the MRI audience is not small aswell: 6.5 million. One full page four color ad is $56,230 which, if compared to TIME, isnot a lot. One full page four color ad in TIME is $212,000 but the MRI audience is23,897,000 million, which makes their CPM almost the same. U.S. News, SportsIllustrated and Popular Mechanics fall into the same range in terms of the CPM: $10.However, Sports Illustrated covers larger audience of 21,186,000 while PopularMechanics has 9,018,000 and U.S. News has 12,242,000 MRI audiences. FHM, ESPNMagazine, Playboy, Popular Science and Maxim fall into the $11 – $13 category and theyall have similar MRI audiences: FHM has 6,269,000; ESPN Magazine has 9,405,000;Playboy has 10,299,000; Popular Science has 6,419,000 and Maxim has 12,253,000 ofMRI audience. Car & Driver, Automobile magazine and Wired have higher CPM inrange from $15 to almost $20 for Wired. Car and Driver has the highest audience

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between the three: 9,343,000; Automobile magazine has 3,999,000 audiences and Wiredhas 1,617,000.

Audience 4C CPMAutomobile

Magazine, $18.86

Car and Driver, $15.22

Discover, $7.75

ESPN The Magazine, $12.23

FHM, $11.84

Macworld, $22.77

Maxim, $13.63 Playboy, $13.22

Popular Mechanics, $10.41

Popular Science, $13.31

Sports Illustrated, $10.67

TIME, $8.87

U.S. News & World Report,

$10.08

Wired, $19.93

Dayparts for TV

The dayparts for television are:

Mornings 6 am – 11 amDay Time 11 am – 3 pmEarly Fringe 3 pm – 5 pmEarly News 5 pm – 6:30 pmPrime Access 6:30 pm – 7 pmPrime 7 pm – 10 pm (M-S) 6-10 Sun.Late news 10 pm – 10:30 pmLate Fringe 10:30 pm – 1 amOvernights 1 am – 6 am (sports)

The dayparts relevant to media plan for Toyota Prius are between 5:00 pm and 10:00 pm.The reason for choosing these times is related directly to the target audience, becausefamilies tend to watch television between these times because of their work schedule. Thedayparts this media plan will implement are early news, prime access and prime time.

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Television Ranker

Because the schedule is highly segmented and the target audience in these DMAs shouldbe reached with as much as weight as possible, no dayparts should not be recommendedfrom the list given here. The dayparts before 5 pm: Morning, Day Time and Early Fringeand dayparts: Late News, Late Fringe and Overnights will not be used because the targetaudience is not watching television at those given times. The target audience for ToyotaPrius is men, 30-50 years old, who are married, earn at least $30,000, and are collegeeducated. It is safe to assume that the target audience works shifts from 8 to 5 and iswatching television in the evening hours. Because of the intense media schedule at thesethree dayparts, none of them should be excluded because of the relative higher cost.Chicago for example has very high cost for Prime programming ($1038 per point) yet itbelongs to one of the top ten markets in the United States and the media buys at thisdaypart should be highly effective, regardless of the price.

City Rank TV HH EN PA PRChicago 3 3,204,710 391 532 1038Minneapolis 15 1,481,050 210 260 410Denver 18 1,268,230 65 253 277St. Louis 21 1,114,370 95 139 202Kansas City 33 820,580 106 150 182Salt Lake City 36 720,860 95 113 181Oklahoma 45 600,240 48 64 103

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Media Recommendations

Recommended media vehicles

The recommended media vehicles for magazines are Discover, Time, Sports Illustrated,Popular Mechanics, and U.S. News and World Report.

PublicationMRI

Audience 4C Base Rate 4C Bleed RateAudience 4C

CPM Frequency

Discover 6,478,000 $50,185 $50,185 $7.75 12x

Popular Mechanics 9,018,000 $93,860 $103,246 $10.41 12x

Sports Illustrated 21,186,000 $226,000 $259,900 $10.67 50x

TIME 23,897,000 $212,000 $243,800 $8.87 52x

U.S. News & World Report 12,242,000 $123,364 $139,401 $10.08 52x

These magazines provide the most cost-efficient schedule while still maintaining highaudience numbers. The CPMs of Discover and TIME is very low and very cost efficient.Even though the Discover audience is the smallest of all the chosen vehicles, it is highlytargeted and it is safe to assume that it will reach a high proportion of the target audience.TIME is a magazine with a high audience number so the cost of the ad is relatively lowwhen compared. TIME will definitely reach the target audience, not just in the intendedmarkets, but nationally as well. Sports Illustrated will reach the younger portion of thetarget audience and Popular Mechanics is very much targeted towards the portion of thetarget audience who are technology enthusiasts.

Media vehicles not recommended

The vehicles that are not recommended are: Automobile Magazine, Car and Driver,ESPN the Magazine, FHM, Macworld, Maxim, Playboy, Popular Science and Wired.The reasons for not recommending these vehicles are the higher CPM costs andpossibility of making an ineffective schedule that would not be cost-efficient and wouldnot reach the target audience. The most extreme example is Macworld that reaches1,617,000 people and has CPM of $22.77. Including vehicles with such a high CPMwould not be applicable to the schedule. Also, the magazines that were recommendedhave higher frequency (which means that three of them are published weekly) whataffects the frequency of the media plan and offers more ground for repeating ads in thetargeted areas.

Timing for each media vehicle

The magazines will all run at the same time as specified in the flowchart.

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Flowchart/Weight Levels/GPS

This media plan is divided into six parts that follow the examined consumer patterns: theheaviest buying months are in the spring and summer. The incline is in July and Augustand then the weight of plan drops again. The media plan starts in March with 150 GRPsin national area and 210 in spot area. This same pattern is followed until July, whenGRPs for the national area rise to 300 and spot advertising gets to 270 GRPs. In August,national GRPs stay the same but the spot area gets weight of 330 GRPs. The reason forhigher GRPs in the spot only area is that right before the car is brought to the market(September) the advertising is intensified. In September, GRPs drop about a half becausethe car is in the market and anticipation has been built up enough. In October, GRPs riseabout 30 points in the national area and spot GRPs drop 35 points because the weight ofthe media plan should not be lightened after the first month the product is introduced inthe new market. The customers want to feel good about the decision they have made.

More declines happen in November and December where a total of 110 GRPs are used inthe national area and 145 GRPs are used in the spot area. These months use lower GRPsto still keep the advertising going for the next possible season. The low trend continuestill January and February, where national GRPs drop to 75 and spot GRPs drop to 165.These are months when the least amount of car sales happens so advertising is muchlighter.

GRPs by Month

January and FebruaryIn the media plan, month of January will achieve predicted 75 GRPs in men’smagazines, 35 in Spot TV-Early Fringe/News, 70 in Spot TV-Prime, 40 Spot TV-LateFringe/News and 20 GRPs in Spot cable. Spot only area gets 165 GRPs and national onlyarea gets 75 GRPs. The spot advertising gets more GRPs in the entire media plan becauseseven particular DMAs were targeted and to reach them properly, the media planrecommends more GRPs in the spot markets. In analysis of spot market, it is also evidentthat Spot TV-Prime gets significantly more GRPs. Spot cable gets 20 GRPs compared toother classes because cable itself is only owned by 70% of the U.S. population so GRPsfor the cable television are on average between 50 and 70% of other GRPs.

March, April, May and JuneIn these four months different GRPs are used. National media gets 150 GRPs and spotmedia gets 210 GRPs. Here as well spot media gets significantly more GRPs because ofthe reasons cited in the paragraph above. The rundown of the GRPs for these four monthsis: 150 is spent on magazines, 50 on Spot TV-Early Fringe/News, 70 on Spot TV-Prime,60 Spot TV-Prime and 30 on the spot cable. The same reasoning is used for thesenumbers as in the previous paragraph: between television dayparts, the most GRPs goesto Spot TV-Prime.

July and August

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These two months are the most intense in the media plan. Number of GRPs is higher inboth spot and national areas. July’s national advertising classes get 300 GRPs and spotarea gets 270 GRPs. In spot classes, dayparts division is: Spot TV-Early Fringe/Newsgets 60 GRPs, 90 in Spot TV-Prime, 70 Spot TV-Late Fringe/News and 50 GRPs in Spotcable. The same pattern of GRPs is followed as in the previous paragraphs. Month ofAugust is the most intense in the terms of spot advertising: what was at 270 GRPs forJuly rises to 330 GRPs in August. The reason for this is that the target markets should behit heavily in the period right before Toyota Prius is brought to market.

SeptemberMonth of September is specific in terms of GRPs because they drop for about 30 pointsin the spot only area and they drop to 210 in the national area. The reason for this is thatthe distribution of the projects starts and the weight of advertising can be dropped tosome degree. The same patterns are followed here as well: magazines get 150 GRPs, SpotTV-Early Fringe/News gets 70 GRPs, Spot TV-Prime gets 80, Spot TV-LateFringe/News 50 and there are 30 GRPs in Spot cable.

OctoberMonth of October has also specific in terms of rising the weight of the media plan to keepthe new customers secure in the decision they have made the previous month. Nationalarea gets 180 GRPs and spot area follows the next division: Spot TV-Early Fringe/Newsgets 45 GRPs, Spot TV-Prime gets 70, Spot TV-Late Fringe/News 30 and there are 30GRPs in Spot cable.

November and DecemberIn months of November and December the GRPs drop even more. GRPs for the nationalarea are at 110. The distribution of GRPs for spot area is: Spot TV-Early Fringe/Newsgets 45 GRPs, Spot TV-Prime gets 50, Spot TV-Late Fringe/News 30 and there are 20GRPs in Spot cable.

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Discussion of Reach/Frequency and Effective Reach/EffectiveFrequency Delivery Compared to Objectives

Discussion of delivery compared to objectives

The media objectives are, as stated in media objectives:

Reach goal:To reach 85% of men, age 24-54, in the months of January-December.

Average frequency goal:To reach 85% of men, age 24-54, at least 3 times every month from January-December.

The delivery has resulted in higher reach than was originally anticipated by the mediaobjectives. The months of March-August have average of 90.6% reach and months ofSeptember-February have average of 85.5% reach. Also, the frequency that wasoriginally stated by media objectives has been preceded by average of 4.8 for the monthsof March-August and by average of 3.3 for the months of September-February.

Reach/frequency by month

March – The 75% reach that is proposed in the media objectives is reached and exceeded:it comes to 89.4% estimated reach. The frequency is 4, which is more than 3 times asproposed by the media objectives. The overall month of March has met the expectations.The same pattern is followed in months of April, May and June. The part of the mediaplan considering these months has exceeded the proposed reach and frequency.

July – The 75% reach from the media objectives is reached with 92.9%. The frequencyfrom the media objectives is 3 and the estimated frequency the media plan comes to is6.1. Consequently, the month of July has met the proposed objectives.

August – The proposed reach for August is 75% and the media plan reaches 93.5% reachfor month of August. The frequency proposed is 3 and media plan estimated frequency is6.7, so the frequency goals for month of August have been reached as well.

September – The proposed reach for month of September is 50% and the media planestimates 89.4%. The proposed frequency is 2 and media plan estimates 4 for September.The month of September is successful in attempt to reach goals of reach and frequency.

October – The proposed reach for month of September is 50% and the media plan is at88.7%. The proposed frequency for the month of October is 2 and media plan reaches 4.October is successful month as well.

November and December – Proposed reach for these two months is 50% and media planestimates reach of 84%. The frequency for these two months from the media objectives is

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2 and the media plan estimates frequency of 3. Also, November and December achievethe marketing objectives.

January and February – The last two months in the media plan achieve the lowest reachand frequency yet the objectives are met. The proposed 50% by the media objectives isestimated to be at 83.4% for these two months. The proposed reach of 3 is at 2.9 at thesetwo months. So, overall, these two months with the least weight in advertising meet themedia objectives.

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Marketing PlanToyota Prius

Advertising 480Spring Semester 2003

Prepared for Dave Zemunski byZeljka Paul

Djurdjica SelendicSteve Vogt

Amanda Davey

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Introduction

(prius: lat. to go before; suggesting it is a predecessor of cars to come)10

A hybrid vehicle is a vehicle with a hybrid engine that combines two types ofpower: electricity and gasoline. In early 2002, there were two main competitorsin the United States market: Toyota Prius and Honda Insight. They arrived toU.S. showrooms in 1999 and 2000 and have had a reasonable rise in sales since.The way they function is similar: neither one of them needs to be plugged in, likeprevious electric models did. It is a clever way to circulate gasoline andelectricity use during driving. The primary source of energy is gasoline for both,however, the engine switches to electricity under lighter loads using sensors thatare placed throughout the car to monitor speed and charge. The energy ofbraking, that is wasted in other cars is recycled and used in hybrid vehicles sobetter gas mileage in the city is achieved.

Marketing Objectives

Increase awareness of Toyota Prius by 50% in the next 3 years.Increase total sales of Toyota Prius by 35% in the next year.Position Toyota Prius as an environmentally friendly family car.Expand Toyota Prius hybrid car niche market by 15% in the next 3 years toinclude urban areas more towards the Midwest U.S. – Kansas City, St. Louis,Denver, Oklahoma City, and Salt Lake City.

Market ShareIn the period from January to November 2002, there were 1,178,844 car units soldin the United States. Toyota Division dealers sold 211,175 vehicles year-to-date,making it the top selling seller in the certified market (17.9%). Honda Divisionsold 147,590, which puts Toyota ahead of Honda by 63,585 units. From thelaunch of Toyota Prius in July 2000, Toyota has sold 39,447 Priuses in the U.S.Sales for the year to November 2002 are up 33% over a year earlier. In the largerpicture, Toyota Prius holds 90% of the entire world hybrid vehicle market with100,000 units sold in middle of 2002. However, Honda came to the United Statesmarket with very successful hybrid: Honda Civic Hybrid. Sales figures up to thatdate can be seen in the chart 1.1.

Chart 1.1 – number of hybrid car units sold in the United States up to December23, 20028

Insight Prius Civic Hybrid

Launch Date Dec-99 Jul-00 Mar-02

Price $19,540 $20,480 $20,010

Battery (volt) 144 273.6 144

Units Sold Since Launch 10,607 39,447 12,000

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Using Chart 1.1 it can be observed that Toyota Prius holds the majority of themarket in the United States for right now. However, it is evident that thepopularity of Honda Civic may threaten Toyota Prius in the future. In the fiscal2002, Toyota sold 18,000 Prius units in the United States12, compared to 2,216Honda Insights sold in 200212. Honda Insight sales dropped dramatically whenHonda Civic Hybrid was introduced in March 2002 and has already sold about13,500 units8. If these figures are used, it can be concluded that the total hybridcar units sold are approximately 33,716 and Toyota Prius holds about 53% of thehybrid market in the United States. If Honda Insight is compared to Toyota Prius,the Prius beats the Insight with 15,784 more units sold in 2002, which makesHonda Insight a weak competitor in the U.S. market.

History of product/marketToyota introduced the Toyota Prius to the Japan market in 1997 as the world’sfirst mass-produced gas/electric hybrid vehicle. Prius went on sale in the UnitedStates in August 2000 and has since then sold close to 40,000 units here.3

Compared to year 2001, sales went up 33% in 2002.

Target Market(s)Toyota Prius vehicles were introduced as a city vehicle to West and East Coasturban areas. The two main features of the target market, besides the fact that itmainly lives in urban coastal areas are that the buyers are environmentallyconscious and predominantly men. Toyota buyers, compared to Honda buyers,are more concerned with the environment and clean air than Honda buyers. Theanalysis of the target market claims that Toyota buyers, before considering aPrius, look at other non-hybrid cars.3 Because there is a relatively small numberof Priuses on the road, the audience consists out of well educated and well offpeople: engineers, scientists, teachers, doctors, technocrats and celebrities.

Surveys confirm that Prius drivers value cutting-edge technology as well as thegreen aspects of the car. 57.4% of Prius buyers are over 50 years old and 38.6%of Toyota Prius buyers are between 30-49. Only 4% of buyers are under age of30.3 Buyers opt for Prius mainly because of the fuel economy and handling.42.3% of the buyers are men and 36.5% are women.13

Main competitorThe Honda Insight target market differs by the fact that it is not a family car but atwo-seat sport vehicle. The vehicle is targeted at younger people, possibly just outof college and to families as an additional family vehicle used for commutingpurposes.11 Also, Honda Insight buyers may make a decision based on the brandloyalty or on the unusual look of the car that makes it stand out in the streets andmakes it easier to make a statement about being environmentally conscious.15

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Using research, it is clear that people younger than 30 decide to by Honda Insight.Both target markets include full-time employed individuals; the difference is thatmore people with lower income choose Honda. More people that are sole earnersin the family decide to buy a Honda, according to the research numbers. Also, theresearch offers data on the racial profile of the buyers who seem to bepredominantly white for both Prius and Honda. Single people decide to buy aHonda because of the size and convenience of the Insight. Married people are infavor of Toyota because it is a sedan and can seat two adults and two children.

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Product Strategy

Main features and benefits of product12

1. Toyota Hybrid System-Split Parallel System, which combines a gasengine with an electric motor to create an “environmentally advanced,fuel efficient, hybrid” vehicle. The Split Parallel System allows theplanetary gear-based continuously variable automatic transmission toallocate the most efficient mix of power output of the engine andmotor at all times. This allows the Toyota Prius to operate completelyin electric only mode from startup and at low speeds. The ToyotaPrius also features a regenerative braking system that recharges thebattery while the vehicle is coasting or the breaks are applied, so thePrius never has to be recharged.

2. Super Ultra Low Emissions Vehicle-a California originateddesignation that is the strictest in the United States for gasoline-powered vehicles. As an SULEV Prius is 90% cleaner for smog-forming gases.

3. Energy Efficient/Aerodynamic Design-Designed as a true Hybrid fromconception, the Toyota Prius enhances its fuel efficiency byconserving energy in all areas. Just a few of its energy-efficientinnovations include: Insulated roof and floor to reduce the a/c load,special tires and light-weight wheels to reduce resistance, two-layereda/c system which improves efficiency and reduces the burden on thea/c. The Toyota Prius also features an aerodynamic shape with a reardeck lid spoiler and flat underbelly lowering drag.

4. Four Door/ Five Passengers-The Toyota Prius is comparable in interiorvolume to other four door sedans. The Prius also features large sidedoors, which allow for easy vehicle exit/entry and a low liftover trunkheight for easy loading and unloading.

5. Comprehensive Warranty-The Prius has a proven track record ofdependability and comes with an extensive warranty and servicecontract. The Toyota Prius is covered by a comprehensive 8year/100,000 mile battery warranty, a 5 year/60,000 mile limitedpowertrain warranty, a 3 year/36,000 mile basic maintenance programand a 3 year/36,000 mile roadside assistance program.

6. 52/45/48 city/highway/combined EPA estimated gas mileage.

Main features and benefits of competitors7

1. Honda Integrated Motor Assist-composed of a gasoline engine and anelectric motor that provides additional power during acceleration. Theelectric engine also functions as a high-speed starter and as a generatorfor the charging system during regenerative breaking.

2. Idle Stop feature-The Honda Insight’s IMA system uses an “idle stop”feature that automatically turns the engine off when the car is notmoving to reduce unnecessary fuel consumption and emissions.

3. Ultra Low Emissions Vehilcle- a California originated designation thatis the strictest in the United States for gasoline-powered vehicles. As a

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ULEV the Honda Insight is cleaner for smog-forming gases, but not asmuch as Toyota Prius.

4. Energy Efficient/Aerodynamic Design-Featuring an aluminum bodyand chassis, the Honda Insight weighs only 124 pounds. The chassisuses aluminum pipes with internal ribs for strength at the front andrear. The Honda Insight also has a tapered body, rounded nose, rear-wheel skirts, low height, and a flat underbody created for anaerodynamic design.

5. Two door/two passenger coupe6. 61/70 city/highway EPA estimated gas mileage

Advantages and disadvantages compared to competitorsPrius is a four-door/five passenger sedan compared to the two door/ twopassenger Insight. Prius also has more storage space and more leg room. Thedisadvantage of Toyota Prius is that it is less fuel-efficient than the Honda Insight.

Unique Selling PropositionThe Toyota Prius is an environmentally friendly, four-door family sedan. Nowfamilies with four or five people can enjoy doing something good for theenvironment without sacrificing space and comfort.

Product positioningThe Toyota Pruis will be positioned as an environmentally friendly, four-doorfamily sedan. Unlike the Honda Insight, which is a two-door, two-passengercoupe, the Toyota Prius has room for up to five individuals and is comparable ininterior volume to other sedans making it more appealing to consumers withfamilies. In addition, the Toyota Prius also features other family friendly featuressuch as large side doors, which allow for easy vehicle exit/entry and a low liftovertrunk height for easy loading and unloading.

Recommended product strategy1. Four door/five passenger sedan with large side doors, which allow for

easy vehicle exit/entry and a low liftover trunk height for easy loadingand unloading.

2. SULEV3. Energy efficient/Aerodynamic Design4. 52/45/48 city/highway/combined EPA est. gas mileage

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Price Strategy

Product price compared to competitionToyota Prius – costs around $20,450, with a tax break of $2,750.Honda Insight – costs around $20,000, with a tax break of $1,500-$2,000.

Advantages and disadvantages in price compared to competitionOne disadvantage of the Prius is that it costs approximately $40,000 to producewhereas the customer is only paying around $20,000 for it. That is a $20,000 losson the part of the company. Another disadvantage is that it costs a little bit morethan the Honda Insight but the consumer gets much more in return. Theadvantages are that it is the number one car in its class, and it also includes a$2,750 one-time tax break, compared to the Insight’s $1,500-2,000 tax break. ThePrius gets close to 600 miles per tank1 (depending on conditions), which makesthis a very conservative vehicle and in turn saves the consumer money in the longrun by reducing spending on gasoline.

Price positioningThe company is losing around $20,000 with each car sold, but it is a greatdevelopmental product that is constantly being tested by the thousands that havepurchased it. So the loss is seen as an acceptable write off. It is also the leader inthe hybrid market niche. Toyota has acknowledged that exploring this niche hasgreat potential for high return on investment. Sales have gone up 33% from lastyear and are expected to keep rising. The difference between this car and astandard gas consuming type is about $3000, although Toyota Prius saves moreon gas so there is a considerable trade off on the part of the consumer. They canspend more on the Toyota Prius and spend less on gas in the long run, or they canspend less on a standard gas only vehicle and spend much more on gas in the longrun.

Recommended price strategyBased on the research, the price is right for the first time car buyer and no majorchanges in price should be sought. Another reason for this decision is that thiscurrent price will allow car buyers under 30 the chance to use this youngtechnology at its best. The reasons for this decision are as follows: Thepopularity of the Prius is continuing to grow, as is evident in the sales record andthe current one time tax break fluctuates the price to being close to what standardcars in the same class are.

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Distribution Strategy

Distribution processToyota Prius is manufactured in Motomachi Plant, Tokyo City, Japan. The carsare then shipped to the United States and other countries outside Japan where theyeither go to regional distributors or are delivered directly to Toyota car dealers.

Competition’s distribution processHonda Insight is manufactured in Japan. The cars are then shipped to the UnitedStates and other countries outside Japan where they either go to regionaldistributors or are delivered directly to Toyota car dealers.

Sales by distribution channelsThe chart below details the total number of Toyota Prius cars sold since itsintroduction in 1997 till August 2002. This is the latest information released byToyota Motor Corporation. According to these numbers, Toyota Prius startedselling outside of Japan in 2000. The biggest sales outside Japan were in NorthAmerica topping 18,456 cars sold in 2001, while sales in Europe were slowbecause of the predominant use of diesel cars. The total number of Toyota Priuscars sold from 2000 till August 2002 was 35,128 in North America. Toyota Priussold the most in Japan with 61,119 cars as of August 1, 2002 but that is becauseToyota has been selling Prius cars in Japan since 1997 and has already establisheda market niche there. The first year of sales in North America was very lowmainly because the product was just introduced and consumers havemisconceptions about hybrid cars. The ad campaign that Toyota ran helped boostsales and they practically doubled to 15,975 cars in 2001.

1997/12 1998 1999 2000 2001 1/8/2002 97/12- 02/8

Japan 323 17,653 15,243 12,513 11,003 4,464 61,119

Outside Japan - - - 6,498 18,456 14,055 39,009

N. America - - - 5,788 15,975 13,365 35,128

Europe - - - 709 2,320 555 3,584

Others - - - 1 161 135 297

Total 323 17,653 15,243 19,011 29,459 18,519 100,208

Cumulative total 323 17,976 33,219 52,230 81,689 100,208 - (1) According to TMC calculations (2) In the Japanese 10-15 test cycle (3) Reproduced from www.toyota.co.jp

Geographic emphasisThe Toyota Prius has been distributed to mainly east and west coast urban areas.Because it is a city car, it makes sense to use this approach in distribution andintroducing the Toyota Prius into bigger cities in the Midwest could expand theniche.

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Seasonal emphasisPeople are more likely to buy cars in the summertime because the weather iswarm and more people go out. Therefore, people are more likely to go to cardealers because they can spend more time outside looking at cars.

Recommended distribution strategyExpand the distribution of the Toyota Prius to urban markets located in theMidwest.

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Promotion/Communications Strategy

Promotion/Communications strategies used in the pastToyota Prius ran an advertising campaign by the firm Oasis Advertising in 2000when the product was introduced in the United States. The advertising campaignwas comprised of print, broadcast, outdoor, and interactive ads.

Print: Toyota ran three print ads in mid-July 2000 under the theme.5 Prius/genius.The ads ran in magazines and newspapers under headings such asbusiness/finance, environmental, technology/computers, and sections inautomotive enthusiast publications. All of the advertisements presented ToyotaPrius as the car of pure genius. The copy stated that the Prius never needs to beplugged in and that’s it’s powered by the Toyota Hybrid System. The ad copyalso stated that the Prius recharges when a person brakes and that it reduces fuelemissions, produces less smog, and saves gas money.

Broadcast: Toyota ran: 30 and: 15 commercials beginning July 31, 2002. Thetheme of the TV ad was innovation in technology and the benefits of Toyota Priusfor the environment and the consumer. The copy of the TV ad says “There’s achange happening that begins with Prius, Toyota’s revolutionary hybrid vehicle,and continues with more vehicles rated most fuel efficient in their class, than anyother brand. Transportation is finally evolving. Get the feeling. Toyota.”

Outdoor: Seven outdoor postings began in August 2000 to support the broadcastand print campaign. The placements of the outdoor billboards were in LosAngeles, San Francisco, New York, New Jersey, and Chicago.

Interactive: Banner and button advertising began in August 2000 for the ToyotaPrius. The ads were placed in search engines and on automobile sites. Verticalads and sponsorships were placed on news/business, technology, finance, health,environmental, and women’s sites.

Toyota also ran a public relations campaign on Earth Day. The Toyota Prius carwas wrapped in a green covering and green “seed cards” were handed out shapedlike Toyota’s logo for hybrid and super low emission vehicles. Toyota also gaveaway two Prius cars at New York Earth Day events. Toyota also sent seed cardsto 40,000 U.S. owners of Prius and a card attached to a postcard with the headline“Grow.” This promotion attempted to draw parallels between the green car andorganic growth.4

Promotion/Communications strategies used by main competitor in the pastHonda Insight ran an advertising campaign by firm Rubin Poaster & Associatescomposed of print and TV ads. The print ad reads, “The Honda Insight.Recipient of the Sierra Club’s first-ever award for Excellence in EnvironmentalEngineering. Thinking.” The TV ad says, “You can express your opinion aboutthe environment on your car, or you can do it with your car. It’s America’s first

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gasoline-electric hybrid, the Insight from Honda. The most fuel-efficient car inthe world.

Main messages of both promotion strategies used in the pastThe main message for Toyota Prius is that it is a truly ingenious invention thatwill change the face of driving forever. They make sure to mention that the carnever has to be plugged in and that it saves money. Their emphases on cleanemissions and care for the environment runs through all of the ads and all thebrochures. The ads show that Toyota cares about the environment, thereforestrengthening their image in the marketplace as an environmentally friendlycompany.

The main message for Honda Insight seems to be excellence in innovation. Theymention that the Honda Insight got an award for excellence in environmentalengineering and the underlining “Thinking” strategy shows the consumer thatHonda is constantly evolving in the marketplace.

Recommended target audienceThe target audience for a new Toyota Prius campaign is men ages 34-50 that aremarried, earn $30,000 and over and are college educated. Over 30% of Priusbuyers are 30-49 years of age. This target audience has a lot of potential andhasn’t been tapped into as deeply as the 50 and over age group. According toDecember 2002 Automotive News, “Prius buyers want more validation for theirenvironmentally conscious purchase…Prius buyers also looked at an internal-combustion car compared with a couple years ago when Prius buyers werefocused on hybrids only.”3 This means that Prius buyers are expanding from theenvironment only niche into buyers that compare more across brands when theyare deciding to purchase a car. According to the April 2001 issue of AdvertisingAge, “Prius ‘is the only five-passenger hybrid product in the marketplace that’sSULEV rated, with great fuel economy and a strong focus on technology,’ says aToyota Motor Sales USA spokesman. ‘We believe there’s long-range potential forthe product.’”1

Recommended message for target audienceIt is recommended that Toyota Prius target an audience that is married becausethat will differentiate it from the Honda Insight. Toyota Prius can sit up to fivepeople and it has a lot of potential of becoming an environmentally friendlyfamily car. Therefore, the promotional strategy will tailor its messages to reachthe family segment of the market. The message will mention that Toyota Prius isa roomy car and that they don’t have to sacrifice comfort and space to dosomething good for the environment. Then the message could go more in depthby saying that the Prius is an SULEV car and that it is fuel-efficient.

Decision making period and seasonal factorsThe decision making period for a car is going to be a longer time because it is ahigh involvement product and consumers do a lot of research and compare

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between brands to make an informed choice. The decision making period islikely to be anywhere from three to six months. It is evident that most people buycars in the summer so running a campaign in the fall or winter would not be agood idea. Also, since Toyota Prius buyers are changing and comparing moreacross brands, the decision-making process will be much longer.

Advantages of promotional strategy compared to competitionThe fact that the Toyota Prius is a 4-door car is a great advantage because itallows marketing to families with children, which the Honda Insight clearly can’tdo since it’s a two-door car and has very little room for even two people, muchless four or five.

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