SC 4013 - Media & Markets
toyota prius media plan
Members: Jack Calvert Gil Marom Stevan Rodriguez Anna Tran
Table of Contents 3 4 6 8 9 9 10 11
Company Analysis Situational Analysis
-Macro Environmental Considerations -Consumer and Market Analysis
SWOT Analysis Problem Statement Advertising Objective Overall Media Budget Regionality Seasonality
-Product and Brand Analysis -Competitive Analysis
12 13 15 17 18 20 21
Target Audience Coverage Media Mix Table Recommended Vehicles Year at a Glance Media Flowchart Executive Summary Bibliography
Company Analysis Toyota Motor Corporation is an automotive manufacturer based in Japan. It is a parent company to Lexus and Scion (History of Toyota). According to the company’s website, its mission is “to attract and attain customers with high-valued products and services and the most satisfying ownership experience in America.” Although the company is headquartered in Japan, nine of its models are built in one of 10 plants in the U.S. Toyota has produced almost 1.3 million vehicles in its 57 years operating in the U.S. (History of Toyota). The company took a hit in late 2009 to early 2010 when it recalled millions of vehicles when problems involving the vehicles’ brake system arose (Valdes-Dapena, 2010). A research analyst from Polk View stated Toyota’s response to the problem and communication strategy kept customer loyalty after the crisis so the hit was short lived (Zdanowicz, 2010) The Prius was first introduced in late 1997 and became the first mass produced hybrid vehicle in the world (History of Toyota). In an online brochure Toyota has on its website, the Prius has outsold more than any other hybrid models. Also, out of all the Priuses sold in the past 10 years, 95 percent are still on the road (Prius 2015 [Brochure]). 3
Situational Analysis
Macro environmental considerations
The Prius was the first mass-produced hybrid vehicle, and can be considered a leader in the hybrid or gasoline-electric category. Many factors affect the buying minds and behaviors of consumers, including affordability, fuel-efficiency and a superior safety rating. The Toyota Prius is a midsized, hybrid vehicle that combines numerous luxury features into an affordable, safe and fuel-efficient vehicle, with ample room for storage. According the U.S. News and World Report, the average price a consumer paid for a new Toyota Prius is between $23,773$29,282, which falls below the national average of a new car estimated at $32,086, according to Kelley Blue Book. The United Services Automobile Association lists the Toyota Prius as the Best Value in the small sedan category. On the best cars section of the U.S. News and World Report, the Toyota Prius ranks 12th in the affordable, midsized cars category, and 6th in the hybrid cars category. The Toyota Prius gets an estimated 51mpg in the city and 48mpg on the highway, according to Toyota.com. The 2014 Toyota Prius is considered a Top Safety Pick+, receiving the highest rating in four of the five categories, according to the Insurance Institute for Highway Safety.
Product/Brand Analysis
In 1890, Sakichi Toyoda invented the wooden Toyoda handloom. A couple of decades later, he made that loom automatic. During this time, Toyoda’s son, Kiichiro Toyoda began traveling around the world to investigate the automobile industry. By 1933, an automobile department was added to Toyoda Automatic Loom Works. About three years later, in 1937, Toyota Motor Company was established. Between then and now, Toyota became the parent company to Lexus and Scion and achieved many years as highest sales for a brand (History of Toyota). The Toyota Prius is made for people who are interested in reducing their carbon footprint and who would sacrifice practicality in their vehicle. It’s a fuel-efficient car with a little more power that is reliable. Most Prius vehicles from when it was first produced are still on the road (Prius 2015 [Brochure]). In comparison with direct competitors, Toyota Prius only spent $47,030,000, which is roughly one-fourth of the Ford C-Max, the brand the spent the most on advertising, according to CMR data.
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Competitive Analysis Consumer Analysis
Toyota Prius users are primarily white or Asian married adults age 25-54. Within this demographic, males do have higher numbers that indicate that they are more likely to purchase the Prius. According to the MRI data provided from mriplus.com, the average income of the individual who purchases the Prius is greater than $60,000, with a large market for those making over $150,000. The education level of the owners varies from college graduate to post graduates. Owners have careers in fields such as management, business and financial operations along with other professional occupations. Customers have high involvement in newspaper reading, both heavy and light, with high activity in television and internet usage. Prius users have high viewership in BBC America, CLOO, CNN, Golf Channel, and Ovation. They have magazine subscriptions to AARP Magazine, Bloomberg Businessweek, Delta Sky Magazine and The Economist. Internet use shows high activity in IMDb. com, Tripadvisor.com, Google Maps, and Cheaptickets.com. The Toyota Prius owner is diverse in its sources of entertainment and information but they are visually inclined with high viewership in television and internet sources. This makes ads on television and the internet useful, but also magazines cannot be a forgotten market. Speed, efficiency, and streamlined innovation are major things that are sought out by Prius owners. They are individuals with families and disposable income.
Consumer/ Market Analysis Asian 6,754,000 175,000 2.6 8.1 284 White 178,289,000 1,888.000 1.1 87.1 116 Adults 25-54 125,605,000 1,078,000 0.9 50.0 94 Newspaper I (heavy) 47,117,000 607,000 1.3 28.2 141 New York Times (Sunday) 3,934,000 63,000 1.6 2.9 176
Toyota Prius Toyota Prius is the lowest ranking competitor with a share of voice of 6.3%. The company spent most of its money on television and interior display and barely put any of its efforts toward magazines. The vehicle is equipped with a 1.8L hybrid engine, has 134 horsepower and 51/48 est. mpg. The car ranges from $24,200 to $30,005 and its target audience are men and women ages 25-54. Volkswagen Jetta Volkswagen Jetta has a share of voice of 13.7%. Volkswagen put most of its money toward television, very little on interior display and invested no money toward magazines. The vehicle is equipped with a 1.4L hybrid engine, 170 horsepower and has 42/48 mpg. The product is targeted for men and women ages 18-34 and costs about $27,645. Chevrolet Volt Chevrolet Volt’s share of voice is 36% against its competitors. The company spent most of its money toward magazine advertisements and interior displays and less money toward television. The vehicle is equipped with a 1.4L hybrid engine, 149 horsepower and has 35/34 mpg. The product is targeted for men and women ages 25-54 and costs $34,345. Ford C-Max Ford C-Max is the leading competitor with a share of voice of 44%. The company put most of its money toward television ads and some of its budget went toward magazines and interior displays. The vehicle is equipped with a 2.0L hybrid engine, 188 horsepower and has 42/37 mpg. The product is targeted for men and women ages 25-54 and costs $27,170.
Share of Voice
[$74,780,200] Toyota Prius - 6.3% Volkswagen Jetta - 13.7% Chevrolet Volt - 36% Ford C-Max - 44%
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Strengths • • • • •
Toyota was the first motor vehicle company to generate hybrid vehicles and has 14 years of experience with hybrid products. Over 95 percent of Prius vehicles continue to drive on the road for the past 10 years, making Prius a reliable product. Prius is environmentally-friendly attracting environmentally-conscious consumers The vehicle is fuel efficient, making the product cost-effective. Strong brand reputation and advertising
Weaknesses • • • 6
More than 9 million vehicles have been recalled in 2009-2010 and more than 7 million cars in 2012. This hurts the company though financial means and negatively affects the brand’s image. Low presence in growing markets causes a missed opportunity to grow and expand the market. High maintenance costs make the product less appealing to the consumer
Opportunities • • •
Raise in “going green” awareness provides an opportunity for the product to stand out in the market. Increase in fuel cost will make hybrid vehicles an appealing alternative to consumers Running consumer surveys and understanding consumer needs will help generate innovative features.
Threats • • • •
Gas prices might drop due to the usage of shale gas, making hybrid vehicles less appealing to cost-conscious costumers. Competitors might offer up-to-date features at a lower cost. New aggressive competition entering the market Increase in raw material cost may affect the price of the product, as raw metals are the main components of the vehicle. 7
Problem Statement The major issue that selling the Ford Focus would present is the idea that people have in their heads about hybrid cars. Although they are cost effective and can have a positive impact on the environment in comparison to other cars, they have a stigma of being unstylish and second rate when it comes to the visual value of the vehicle. Also, the general public is not completely sold on a hybrid cars cost as compared to its usefulness. Those who understand its usefulness are usually educated and are middle-aged. This presents an issue in getting people to not just like the idea of buying the car but to actually market the purchase.
Consumer Favorability for Hybrid Vehicles United States, 2013 Favorable - 34% Very Favorable - 33% Neutral - 21% Somewhat Unfavorable - 5% N/A - 4% Strongly Unfavorable 3%
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Budget
Advertising Objective The Toyota Prius has a reputation for being a vehicle primarily associated with the environmentally conscious and the older demographic. We would like to change the perception of the Toyota Prius from being just a “granola� vehicle to a car that appeals to a wider range of people, in which individuals do not have to compromise safety, storage space and power for a green and fuel-efficient vehicle. We plan on targeting men and women between the ages of 18-34, and increase awareness of the Toyota Prius by 75 percent within the same demographic.
In 2013, the Toyota Prius had a total media budget of $4,703,000. The Prius maintains good numbers in a market where it is not spending nearly as much as its competitors. Because the number of Toyota Priuses among our target audience is not where we want it to be, we would like to increase our total media budget by twice the current budget, which will add up to $9,406,200. Furthermore, we would add 10 percent of the total budget and set that aside for a contingency budget. We would increase spending in media vehicles that will reach our goal audience including: cable television, outdoor advertisements, magazines and the Internet.
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Regionality According to MRI data, index shows concentration of target audience in the West and Northeast regions of the United States. The West presents an index of 188 and Northeast presents an index of 89. The West region counts for 42.6 percent of sales and the Northeast counts for 16.1 percent of sales in the United States. With Los Angeles, San Francisco, Orange County, San Diego and Chico having highest Toyota Prius sales, California tops the charts with highest sales percentage in 2013, according The Atlantic magazine. Followed by California are Oregon, District of Columbia, Washington and Colorado. With these regions testing high in index, we decided to focus our local campaign on the West coast and Northeast regions and our national campaign will be distributed throughout the country with more emphasis on the Midwest and South. Because our target audience is adults 18-34, we will be promoting in large cities and college campuses around the regions that rank highest for Prius sales. Weights will differ throughout the country, as our campaign will have higher concentration on college towns with a population of above 24,000 students than large cities.
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Prius Index Level in United States West - 188 North East - 89 Midwest - 71 South - 69
Seasonality With our objective stating we would like to increase awareness of Toyota Prius by 75 percent, we decided to use both continuous and pulsing strategies to successfully promote and raise awareness of the Toyota Prius in our selected regions. While continuous advertising will appear throughout the 12-month period, we will use pulsing strategy through the months of March, May and August. We chose the following months based on numbers from the Federal Reserve. Data shows that automobile sales increase during the spring and summer months of March through August. Car sales rise during that time of year because of summer gas prices decreasing from the months of March through June, according to U.S. Energy Information Administration data. We believe using the pulsing tactic during the summer will be acceptable as we promote just in time for our target audience to celebrate their graduation from college. Even though data shows a decrease in sales during the wintertime, we decided to use a pulsing strategy during the months of October and December as they range higher during the winter season. Even though car sales decrease during that time of year, we want to showcase the Toyota Prius as a weather-durable car and promote just in time for the holidays, helping sales increase year-round.
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Target Audience Coverage Frequency
Based on the Ostrow Model, our campaign should average out to be about 2.89 exposures per person within our target audience. This was determined based on the many factors that affect frequency. This conclusion was reached because Toyota Prius is already a well-established and welcomed brand, making us a familiar face within the market. Prius is a dominant brand in a market where it also has a dominant market share. High brand loyalty and a long purchase cycle are common in cars, while vehicles are also used daily. As for the copy, it is simple and is an image based one. Additionally, our message is fairy focused and we plan to continue the old ad methods to a certain extent. There is a bit of ad clutter, because of our market share and the money that others are spending within the market. Based on these factors, we have found that this environment is perfect for Prius because of our marketing objectives and our solidified brand within the market. While our frequency is 2.89, we are ideally aiming for 3.0. As stated in part 1 of the campaign, our objective is to increase awareness by 75% among men and women from ages 18-24 while still maintaining our current audience.
Reach We have decided on a reach of 80% that would best fit into our calculations for frequency as stated from the math of the Ostrow Model above. During the beginning period of our campaign, starting in early April to late June, we plan to reach 80% of our target audience with a frequency of 2.89 exposures per person within our target audience. This will be possible by our strategic ad placement and taking advantage of various media within our media mix. We plan to reach them through television (both cable and spot), internet, magazines, and outdoor. By taking advantage of these media we will be able to accomplish our goal. Cable television will dominate most of our advertisement on a national level and outdoor will be dominating our advertising for local. We also have a large percentage, as can be seen in our media mix table, allocated toward internet and spot TV. Throughout the remainder of our advertising campaign, we plan to keep the reach and frequency steady and plan for it to continue to meet the reach and frequency goals.
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Ostrow Model: Toyota Prius
Media Mix Table National Campaign Spending Cable Television Internet Magazines Outdoor
After analyzing data from both MRI and CMR, we were able to determine which media to use and how much money to allocate to each. We decided on a budget of $9,406,200, which is double the original spending found on CMR. Because Toyota Prius sales are distributed throughout the country, we allocated two-thirds of the budget toward the national campaign and one-third of the budget toward the local campaign. On MRI Plus, we analyzed the Quintile rankings of each separate medium and determined that television, Internet, magazines and outdoor would be the best media to use in order to effectively reach our target audience. We considered Quintile rankings and data from CMR and MRI to make our final decision. Outdoor media had the highest Quintile I and Quintile II rankings, with an index of 125 in the first Quintile and an index of 140 in the second Quintile. We allocated zero dollars to outdoor media for the national campaign because outdoor advertisements are only used for spot campaigns. However, for the spot campaign, we allocated 47 percent of the budget for outdoor media. We decided outdoor was the best media for our spot campaign because of its high first and second Quintiles, and it would be an easy and effective way to reach our target audience on a more geographically specific level.
Spot Campaign Spending Spot Television Internet Local Magazines Outdoor
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TV, Internet and magazines had much lower Quintile rankings compared to outdoor. However, we decided to continue to focus on TV, Internet and magazines because each of the media and vehicles within has large audiences, which enables us to increase our reach. For instance, TV’s first Quintile is only 43, followed by 112 in the second Quintile. According to CMR in 2013, Toyota Prius spent roughly 52 percent of its total spending on cable TV alone. Because the Toyota Prius is still considered a leader in the market, cable TV appears to be effective in reaching a large audience even though it has low Quintile rankings. To the side is a chart of each of the media we are using, including the Quintiles and indexes for each one. Our advertising objective will be met by using a combination of media including cable TV, spot TV, Internet, national magazines, local magazines and outdoor advisements. We are using the Internet and specifically taking advantage of social media to create top of mind awareness of the Toyota Prius among our target demographic. We believe the Internet is a great way to quickly reach more people on a larger scale. We have a reach goal of 80 percent and frequency goal of 2.89. We hope by using cable TV for our national campaign and spot TV for our local campaign will help us achieve these goals because of television’s high viewership. Television is unique in that it also allows us to incorporate audio into our advertisements, which is not possible in outdoor and magazine advertisements. Outdoor media will be helpful in our spot campaign to effectively meet our reach and frequency goals. Billboards will be strategically placed across the country in the markets we want to focus on. The great thing about outdoor media is that it can be displayed 24 hours a day for a select period of time, therefore individuals frequently passing by have multiple chances to view the advertisement. Magazines are a large focus of our national campaign because of the multitude of national magazines, covering a wide variety of topics and subjects. Magazines allow us to reach a more specific audience with creative and fun advertisements that create a lasting impression. Also, magazines have large pass along readership rates.
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Recommended Vehicles Cable Television According to CMR and MRI data, we, like Toyota, do not feel it is necessary to apportion funds to network TV. Instead, we kept our cable television budget similar to theirs from Fall 2013, but we created a budget for spot TV to cater our regions with high indexes. Through our research using MRI data, we found two types of cable television with high viewership and indexes: news channels and sports channels. Because our main audience consists of educated adults, particularly men, ages 24-54, we suggest a large portion of advertisements be allotted to – with their index - the Golf Channel (155), ESPN (108), Fox Business (105), MSNBC (105), CNN (114) and other cable channels like these. To aim toward our target audience of young adults ages 18-34, we suggest running ads during cable television networks like MTV(58) and E! (115). This will help if we want to advertise on their website, too.
Spot Television This media vehicle is not one used previously by Toyota Prius, but we recommend it because it will help scope our regions that index high, specifically the West and Northeast. We suggest running advertisements during local morning and night news broadcasts. Since a minimal amount of funds are set aside for spot TV, this is more of a trial, but we strongly feel that it will be effective.
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Internet With the ever-growing Web, we feel the need to expand our prominence on the Internet, especially to cater to our younger adults. Email providers and travel websites are high trafficked and boast high indexes. Most adults of all ages have an email address, so investing in email providers like AOL Mail (165), Gmail (131) and Yahoo (112) will be highly effective. Because travel websites are usually linked to rental car companies, our audience can rent and then, hopefully want to buy a Prius. These websites include: Expedia.com (231), Travelocity (301) and Orbitz (230). For our younger audience, who are the highest users of the Web, we suggest placing ads on websites like, Hulu, Spotify, YouTube and iTunes. According to MRI data, Toyota Prius has yet to make their presence known on social media websites. We strongly urge advertisement placements on Twitter, Facebook and other outlets. Also, because of location settings, we can strategically purchase space in specific regions.
Magazines For our targeted audience of adults ages 18-34, we decided not to concentrate our efforts on them for this specific media vehicle because most adults this age do not read hard copies of magazines anymore. Instead, we think our older audience are more likely to purchase and read magazines. We suggest the following magazines, along with their indexes, to purchase ads in: AARP The Magazine (130), Golf Magazine (165) and a variety of airline magazines, (204). These outlets were chosen for their high readership and indexes. We chose airline magazines because of their partnership with rental car companies.
Outdoor After looking at MRI data, we saw Toyota not allocating funds to outdoor advertisements. We do not see this as a problem because the Toyota Prius is still at the top of their category, but we think it would be worthwhile to do so. For national outdoor advertisements, to keep consistent with some our magazine and Internet audience, we would partner up with travel websites and airlines and advertise through their billboards. Because of the limited funds we set aside for national outdoor advertisements, we would only ask for our logo or a picture to be featured. As for local outdoor advertisements, we decided to go with the same focus as our spot TV ads. Billboards would be placed strategically throughout the nation but mostly in regions with high indexes like the West and Northeast. This strategy helps us achieve our goal of maintaining our current audience of educate adults ages 25-54, while reaching out to our new younger audience of adults ages 18-34 who are also on the road.
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Year at a Glance
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Flow Chart
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Flow Chart Cont.
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Executive Summary
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The Toyota Prius is and has been the leader in hybrid cards even though they only represent 6 percent of the total share of voice. Their total media budget in 2013 was $4,703,000. Although the Toyota Prius is maintaining good numbers with its low budget, we want to increase their media budget by twice as much. We also want to add 10 percent and set that aside for contingency budget. In total, the budget accumulates to $10,346,820. We believe that this amount will increase awareness and reach our target audience while still reaching our current audience. Our current audience is educated adults, mostly older men, ages 24 to 54 who are environmentally conscious. We still want to keep this current audience, but we want to expand and target younger adults ages 18 to 34. Although the Toyota Prius is more successful than its competitor, the car has a stigma of not being a durable car and only good for fuel efficiency. By changing vehicle perception, we want our audiences to know that the Prius is a reliable, durable and affordable car. According to MRI data, we determined the West and Northeast regions would the best areas to advertise the Toyota Prius. With that information in mind, we used the Ostrow Model to calculate our average frequency, which came out to about 2.89 exposures per person in our target audience. Our intended reach was 80 percent. We analyzed the quintile rankings on MRI and used to CMR data to determine which media to use for our national and spot campaigns. We chose to distribute our media budget between outdoor, cable TV, spot TV, national and local newspapers and the Internet. Roughly two thirds of our budget was allocated toward our national campaign, and the remaining one third was allocated toward our spot campaign. Applying these plans and goals into the Media Flight Plan software, it became clear that we had underestimated the funds that would be needed in our media campaign. Each month we went over by a little under a million dollars. This was alarming because of how little money had been used by the Toyota Prius previously, while they still remained a market leader. However, we found that we were close to our reach and frequency expectations. With frequency being the more important of the two, we were pleased to find that our frequency during the national continuous campaign was 3.0, which exceeded our intended goal of 2.9. Also, during the local campaigns in the spring and the winter months, our frequency was 4.0. Concerning reach, however, we fell to 75 and were not able to reach our lofty goal of 80 reach. Reevaluation of funds would be necessary, as well as more focused markets.
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