Marketing Management (MKT300)Professor Richard TrutzSummer 2012

Chanchai Rukkhawattanakul (Wee)

Cyrus AttarseidiGuo Dong Guo (Gordon)

Piyanuch Kangwankijwanich (Tu) Vasatha Smitthimadhindra (Vicky)

Agenda

•Toyota EV Prius Introduction•Market Demands •SWOT Analysis•Sales Objectives•Marketing Objective and Strategies•Marketing Tactics•Marketing Communications

•TVC 60 sec•Financial support•Conclusion

Toyota EV Prius Introduction

•Sedan electric car•Good quality at affordable price ($36,850) •Eco-friendly and cost effective ($0.6 VS $3.8)•Easy to maintain, no oil change•Better after sale service (Certified used cars policy)•Coming in Q4 of 2012

Market Demand

Domestic Policy Goals• Reduce dependence on foreign oil• Reduce export of dollars, particularly to unstable regions

Global Impact• Minimize climate change in Europe • Balance pollutions in China • Allocate funds for clean technology by governments around the world

Climate Change• Transportation accounts for 15% of CO2 emissions• United Nations’ Framework Convention on Climate Change (UNFCCC)

Gas Price• Increase gas price• High fuel price countries

SWOT Analysis

Strengths•The world’s reliable brand •High-quality cars at a reasonable price•High reputation of eco-car

Weaknesses•Less dealers (only 1,200 VS 5,000 of Ford)•Indifferent car features from Ford and Nissan

Opportunities•Increasing awareness of environmental concerns•High cost of fuel•Government’s subsidiary ($7,500 rebate & no oil tax)

Threats•Expensive electric components•High initial price•Nissan Leaf, a brand leader

Sales Objectives

The sales volume will be 75,000 cars between August and

December 2012 (15,000 cars per month)

Toyota should have market share of EV cars at 1% in 20124% in 20137% in 2014

(Increase 3% each year)

Time (Months)

Sale volume

Introduction

Growth Maturity Decline

30

Growth Phase

Low Price

High Price

Standard Quality

High Quality

Value Pricing

Introduction PhaseHigh Price

Low Price

Standard Quality

High Quality

Competitor-base Pricing

Toyota

Nissan

Marketing Objectives and Strategies

Superior Value Proposition

Categories Nissan Ford Toyota

Price $35,200 $39,995 $36,850

Just Noticeable Difference

Feature Max. Speed 150 km/hr 135 km/hr 140 km/hr

Charging battery time

7hr. 3.5 hr. 3.5 hr.

Km. per full charge

105 km 136 km 110 km

Dealerships in US

1,100 5,000 1,200 + online services

After sales services

Free maintenance 30,000 km

24/7 onsite car service- Lockout protection - Flat tire changes - Jump starts - Fluid delivery - Towing for the unexpected

Charge Charge Free (within 3 years)

Certified used cars policy No No Yes

Spare component available Hard Easy Easy

Marketing Tactics

Marketing Communication

Target Audience:Generation Y or Millennial: the U.S. largest population,

nature and social media lovers

Toyota Prius: Fun, Sincere, Clean, and Colorful

Nissan Leaf:Funny but in serious Mood and tone Example: Gas powered everything campaign

Be differentiate to generate interest and desire

Big Idea: “Prius. Hero by Choice.”

Execution: CartoonMood and tone: Funny

Marketing Communication

60 SEC TVC

Scene: Busy cityVoice over: In the big city where pollution is everywhere Sound: Honk, Construction

Scene: Smoke and Godzilla was born Sound: Scary music

Scene: It start destroying buildings and bridgesSound: Scream, Car crash, Honk,Ambulance

Scene: Hero appearsSound: Tan ta da da !

Scene; Crowded peopleVoice over: Here he come! Electric manSound: Clapping, Hooray !

60 SEC TVC

Scene: He is jumping close to Godzilla and it fearsVoice of Godzilla: Don’t kill me. I’m sorry…(funny crying)

Scene: He jumped into the Toyota EV PriusSound: Start engine

Scene: Godzilla and people are stunnedVoice over: What is he doing?!Sound: Cricket

Scene: Hero talks to cameraVoice over: We have to solve the problem at its origin, pollution

Scene: Godzilla is shirkingVoice of Godzilla: Oh-O

60 SEC TVC

Scene: People jumped into the Toyota EV Prius and driving.Sound: Happy song

Prius EV Hero by Choice

Effect: Fade in Effect: Fade in

Energy Costs Per Mile for Electric & Gasoline Vehicles

Average Energy Costs Saving ($/Year)

Nissan Leaf Ford Focus

Electric Prius EV

MSRP $35,200 $39,200 $36,850

Competition Price (MSRP) Comparison

•There is an additional $7,500 Federal Tax Credit for Electric vehicles (EVs) purchased in or after 2010.

•Our total production for this campaign is 2,500 units.

Cost, Budget, Revenue, and Profit Margin

• The maximum total sales forecast for this campaign is

92,125,000 USD ($36,850 x 2,500 units).

• In regard to the fix cost we consider 100% financing of our

required initial investment.

• Our “fixed cost per year” is based on our “capital cost per

year” and Time Value of Money (TVM).

Fix and Variable Costs

• Our fix cost is about 55% of our COGS and the rest is our

variable cost at %45 of COGS.

• Our total cost of goods sold (COGS) is at 40% of our sales

price including various costs during this campaign.

• Our profit margin is 60% of our sales price since we have a

direct sales approach during this campaign. The profit

margin would decrease to 35% when we go back to our

normal supply chain method.

Sales Forecast (Production Unit)

• We expect to see a rapid increase in sales of electric car in

general considering the enormous amount of investment by

federal and local governments as well as privet sectors in

infrastructure.

• Our sale forecast would be 2,500 units during this campaign,

and for the 2nd year we predict 20,000 units sales and for the

3rd year we expect to sell around 70,000 units.

Expense Forecast (Costs)

• We expect to have a steady decrease in our total cost of

goods sold (COGS) in the future considering:

• Economies of Scale

• Suppliers spare parts price decline

• Learning Effect

Conclusion and Recommendations

• We believe we have a great product to offer since:

• Toyota Prius is the world's first mass-produced green car.

• Toyota Prius is in the market since 1997 for almost 15

years. (Very high brand awareness)

• In 2011 Toyota Prius family was the 3rd Best-Selling

Vehicle Line in the World in term of number of vehicle

sold.

Conclusion and Recommendations

• Huge saving in Energy Costs per Mile gasoline-

powered vehicles $0.12 vs. $0.025 BEV (One Fifth)

• Federal Tax Credit $7,500

• 0-60 mph in just 7 seconds

• Zero Emissions Vehicle

REFERRENCES

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