DA511: The Context of New Product Development

Students: Maarten Geraets

Joep Wijnands
Jordy Wubbels

Assignor: Drs. Jeroen Schepers

Date: 11-12-2007
Table of Contents
Executive summary ......................................................................................................................... 2
Introduction ..................................................................................................................................... 3
Means-End Chain Theory: ............................................................................................................... 4
Deriving Means-End Chains:........................................................................................................ 4
Means end Chain applied on Toyota Prius: ................................................................................. 5
Consumers point of view: ........................................................................................................ 5
Toyota’s point of view: ............................................................................................................ 7
Conclusion: .............................................................................................................................. 7
Boston consultancy group matrix [BCG matrix] .............................................................................. 8
Use of the matrix ......................................................................................................................... 8
Advantages of the BCG matrix .................................................................................................... 9
Disadvantages of the BCG matrix ................................................................................................ 9
Evolving the BCG matrix ............................................................................................................ 10
The BCG Matrix applied to the Toyota Prius ............................................................................. 10
Market growth of the Toyota Prius ........................................................................................... 11
Market Share of the Toyota Prius ............................................................................................. 12
Conclusions:............................................................................................................................... 13
Recommendations: ................................................................................................................... 13
Positioning: Perceptual mapping .................................................................................................. 14
Conclusion: ................................................................................................................................ 16
Apply positioning-method on the Toyota Prius: ....................................................................... 16
Competitors ........................................................................................................................... 16
Conclusion: ................................................................................................................................ 19
Final Conclusion............................................................................................................................. 20
Sources & references: ................................................................................................................... 21

1
Executive summary
In this report we will analyze why the Toyota Prius has become a successful car. In our
investigation we made use of 3 different marketing tools to analyze the Prius.

The first tool we used is the means-end-chain; we chose this tool as a reference to analyze why
the consumer buys the Toyota Prius and to find out how Toyota communicates their product,
and how they want their product to be seen. The second tool we used is the Boston Consultancy
Group matrix; The BCG is a tool in which business units can be put into the market. With this
tool we wanted to see where the Prius is in the market compared with the competition. The last
tool we used is positioning: perceptual mapping; the tool enables us to compare the Prius to
competitors at certain product properties.

The report starts off with an explanation of the means end chain, followed by explanations of
both the BCG matrix and the Perceptual mapping. The tools are then in the same order applied
to our topic of the Toyota Prius. Finally we will conclude why the Prius has become a success.

2
Introduction
The Toyota Prius is a hybrid car, which means the Prius has two engines. The Prius’ hybrid drive
makes use of a regular petrol engine and an electrical engine. The Toyota Prius is the first car
built as a hybrid car solely. Other hybrid cars are based on existing models which are converted
to hybrid drive. The thoughts behind the dual system Is that a petrol engine is very economical
at constant high speed. An electrical engine works opposite; it is efficient at changing speeds,
and inefficient at long distances. Toyota combined both these engines in a car, and designed the
car to be as economical as possible. The first model of the Prius was launched in 1997 in Japan
only and became worldwide available since 2000. The first model Prius was produced until 2003
and was replaced by the Prius 2 in February 2004. The Prius 2 made even better use of the
hybrid system and was better looking than Prius 1. The year 2005 was a good year for the Prius,
because it was voted “Car of the year 2005” in Europe and “Car of the year” in the U.S. Total
sales of the Toyota Prius exceeds more than 700,000 cars.

In this report we investigated the question “Why is the Toyota Prius a success?” In our
investigation we made use of 3 different marketing tools to analyze the Prius. The first tool we
used is the means-end-chain; we chose this tool as a reference to analyze why the consumer
buys the Toyota Prius and to find out how Toyota communicates their product, and how they
want their product to be seen.

The second tool we used is the Boston Consultancy Group matrix; The BCG is a tool in which
business units can be put into the market. With this tool we wanted to see where the Prius is in
the market compared with the competition. The last tool we used is positioning: perceptual
mapping; the tool enables us to compare the Prius to competitors at certain product properties.

The report starts off with an explanation of the means end chain, followed by explanations of
both the BCG matrix and the Perceptual mapping. The tools are then in the same order applied
to the Toyota Prius.

3
Means-End Chain Theory:
The Means-End Chain analysis technique was created by Gutman in 1982. The Means-End Chain
(or MEC) technique is about understanding why consumers make certain buying decisions. The
means-end chain is a very handy tool that can be used if you want to determine the right kind of
communication to your customers. According to the MEC every characteristic of a product has a
consequence for the consumer; these characteristics are also called attributes. The
consequences of these attributes causes the consumer to attach a certain value to a product.
According to the MEC Products are purchased for these end values/meanings that they deliver
to their consumer, not for the product itself or its characteristics. See also the figure below. By
using the MEC technique and its attributes, consequences and values we want to find out how
Toyota wants their Prius to be seen and communicated and how the consumer thinks about it?

MEC’s can be different for different consumers, not everybody experiences the same
consequences from attributes and the value people give to these consequences might also
defer. Therefore, as a company, you want to find out which MEC’s are the most important and
most commonly present amongst your consumers. If you advertise your product with the right
product attributes, you can connect the product to the value that consumers are looking for,
making the consumer wanting to buy your product. [3, 4, 6, 7, 8]

Deriving Means-End Chains:

Unfortunately it’s not very easy to unravel these MEC’s, because it’s in the head of the
consumers and consumers are not really aware of the decisions they make when buying
products and why they make these decisions. There are of course reasons for their buying
behavior but they are not capable themselves to tell out of the blue why they are behaving this
way.

An in-depth quantitative interviewing technique called laddering is needed to find out how
consumers actually see products and to find out what products attributes cause consequences
that result in desired end values. During the laddering interview consumers are asked through
simple questions to reflect on their purchase decisions. Why is a certain attribute, consequence
or value important for them? It is the task of the interviewer to keep asking for a higher reason
for each consequence mentioned by the consumer to find out with the really abstract end-
value/reason is. By answering these questions it is revealed what product attributes mean to the
consumer related to consequences and values and so called ‘ladders’ are created for each
consumer.

Through the interview technique companies can determine the connections that lead to the use
of products, but also the barriers that prevent the use of products. This knowledge can then be
used to improve the positioning of existing products or to create suitable communication
strategies towards consumers. [3, 5, 6]

What we want to do next is find out what MEC’s are important for Prius consumers, why are
people buying this car? What are the most important consequences and end values for the
consumer and by which attributes are they caused. Finally we want to determine if Toyota is
actually communicating their Prius in de right way to their consumers, do they advertise with
the right attributes to communicate with the wanted consequences and end values of their
consumer? Or could changes be made in order to sell more cars?

4
Means end Chain applied on Toyota Prius:
Consumers point of view:
If you go through different sources you will find that there are various reasons why people buy
the Toyota Prius. Some people buy it because it’s technologically advanced, others buy it for its
looks or its price, but overall people seem to buy the Prius because of its low CO2 emission and
high fuel efficiency. See Figure below.

WINNAARS PER KLASSE

CO2- Gem.
Klasse Schoonste Prijs
uitstoot verbruik

Kleine auto’s benzine Daihatsu Cuore 109 g/km 1 op 21,7 € 6999

Kleine middenklasse
Daihatsu Sirion 118 g/km 1 op 20 € 9999
benzine

Kleine middenklasse Volkswagen Polo

102 g/km 1 op 25,6 €18.300
diesel TDI

Middenklasse benzine Toyota Prius 104 g/km 1 op 23,3 €25.990

Middenklasse diesel Citroën C4 125 g/km 1 op 21,3 €25.040

Grote middenklasse
Skoda Octavia 158 g/km 1 op 15,2 €19.030
benzine

Grote middenklasse
Volvo S40 129 g/km 1 op 20,4 €29.970
diesel

[1,2]

But why do they buy the Prius, that’s a question often asked, because the Prius is not the only
hybrid car out there and there are diesel cars that are more fuel efficient and have lower
emissions. Even if its fuel efficiency and emission are better compared to competitors, then the
polluting production process and batteries used are an often discussed topic.

A lot of Prius owners actually want to make a statement and show others that they care about
the environment. And sure most of them do really care about the environment but the thing
with the Prius is that it’s so recognizable, it was designed as a hybrid car from the beginning and
that makes it different. A lot of other hybrid cars don’t really differ from their petrol ‘brothers’
except for a shiny label at the back of the car. With the Prius they can really carry it out and let
everybody know how they care about the environment.

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Except from carrying out a statement, people also like the fact that it’s fuel efficient in relation
to money. Because it’s fuel efficient it’s less expensive to drive and according to (CNW research)
this seems to be of greater importance than the fact that fuel efficiency and its low emission are
better for the environment. The Prius is also a relatively cheap car to drive because a lot of
governments subsidize the car. [28,29,30,31]

[31]

Means-End Chains that could be formed from the above text are:

Attributes Consequences Values

Distinctive looks clearly a hybrid making a statement

Hybrid system fuel efficient cheaper to drive

Low emissions better for environment feeling ‘green’

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Toyota’s point of view:
If you look at how Toyota profiles not only its Prius but its whole company then it’s all about
things like, ‘we’re committed to the environment’, ‘we’re making history’, ‘we’re building
cleaner greener cars’ and ‘this is just the beginning’. They seem to be really proud of the fact
that they are producing hybrid cars and that they are thinking about the environment and they
adapted they’re whole vision to fit this image, they really carry this out to their customers. Even
though they are one of the biggest car producers and also cause a lot of pollution (like every car
manufacturer). They carry out their message/vision with for example lots of green landscapes
and nature on their website, especially in the part where their vision is explained. To put it
generally it advertises itself as a company that makes green cars and is conscious about the
environment. [26 27]

In this way you can say that they communicate with their customers in the right way in more
than one way. Because Toyota carries out this message of being green it creates a general image
of Toyota amongst the public. This statement from Toyota itself helps Toyota (Prius) drivers
even more with making their statement towards other people. It communicated with one of
their wanted end values. Besides this statement Toyota also advertises its Prius with the right
attributes that deliver the consequences and end values that its customers are looking for.
These attributes are for example fuel efficiency, cheaper to drive and technologically advanced.

Conclusion:
We can conclude that the most important consequences and end values for the Prius-consumer
are:

- Carrying out a ‘I’m an environmentally conscious driver’ statement

- Fuel efficiency
- Cheap to drive
- New technology

If we then look at Toyota we can say that it’s doing a good job with its Prius considering
advertisement and communication with its customer. Their generally on the same level, hitting
the most important thing, which is carrying out they care about the environment, but also the
list of important points that come after this, like fuel efficiency, low cost and the use of new
technology’s. They are communicating in the right way with their customer which is for a part a
reason for their success with the Prius.

7
Boston consultancy group matrix [BCG matrix]
The BCG matrix is a chart created in 1970 by Peter Henderson working for the Boston
Consultancy Group. The matrix is designed to help corporations with their business units and
product lines, and helps them to allocate resources. The matrix is also used as an analytical tool
in brand marketing, product management, strategic management and portfolio analysis [11]. The
tool is based on/derived from the product life cycle theory and enables corporations to
determine where to put priorities in the product portfolio’s of business units. To make sure a
creation that has long-tem value, a corporation should have a portfolio that contains low-
growth products that generate cash and high-growth that need investment/cash [12,15].

Use of the matrix

The matrix comes with 2 axis, relative market share & market growth rate. On the horizontal x-
axis is relative market share. This is the share of market segment relative to largest competitor
[10]
. The vertical y-axis states the market growth rate, the annual increase in product sales or
population within a given market [9]. As to be seen in figure 1[13], the matrix is further divided in 4
sections: stars, cash cows, dogs and question marks.

_ Stars [high growth and a high market share

- Stars use a great amount of cash, because
of the high market growth rate
- They generate a lot of cash because of the
relative big market share.
- Often roughly in balance concerning cash
flow, however great investment is needed
to maintain market share.
- If held market share, it can eventually turn
in a cash cow.[12,15]

_ Cash cows
- Profit and cash generation are high
- Due to low market growth little
investment costs.
- Foundations of most companies. [12,15]

_ Dogs
- Avoid dogs, and minimize number of dogs in a corporation.
- Low market share and therefore often low or no profit.
- Maintain if providing profit, otherwise liquidate. [12,15]

_ Question marks
- Due to low market share and high market growth financially worst characteristics of
all 4
- Purpose to increase market share and turn in a star [and layer possibly a cash cow]
- If greater market share is not obtained it will absorb a lot of cash and turn into a
dog.
-
Invest heavily [turn intro star] or invest nothing to generate whatever possible
profit. [12,15]

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A business can make strategic choices according to this matrix. There are a couple of different
options here.

The hold strategy, for stars.

The harvest strategy, for cash cows.
The divest strategy, for dogs.
The build strategy, for question marks.

Advantages of the BCG matrix

The BCG matrix is an aid for corporate to determine a strategy they want to pursue with their
product/business units. It also makes clear what changes of success are. The BCG is a tool that
gives insight in a simple way of how the business unit is doing, and makes it easy understand for
everyone. The BCG matrix makes it easy to compare business units as well, and that comes in
handy when a corporation has a lot business units. The biggest advantage is the simplicity of the
tool. [14,16]

Disadvantages of the BCG

matrix
The BCG is half based on the market
share, but market share is not the only
important factor. It is also definitely
not a guarantee for success. It is not
possible to predict the market with the
matrix. If a market collapses, a cash
cow could just disappear instantly. In a
market usually there are more
products, all influencing each other.
This movement is not taken in account
in the BCG matrix. It could be that the
matrix gives a too simplified image of the business. Also it is not really clear what actually
constitutes a market, and how the necessary data for the matrix is gathered. Another
disadvantage is best explained with an example; If there is a low number of
product/competitors in the market, lets take two, the smallest on will always be on the right off
the centre line. This would mean that it is either a question mark or a dog. But in real life this
could be a huge market with two large competitors, both making huge profits. Concluding is
best done by stating a quote of Steph Edwards Nutton about the BCG matrix: “The BCG matrix is
a useful way to analyze a product portfolio, but it is important to recognize its limitations and
not to follow its principle too rigidly.”[14,16]

9
Evolving the BCG matrix

The tool deriving from the BCG matrix is called the

MCC decision matrix. Evolving from the BCG, the MCC
matrix has also 4 parts. In contradiction to the BCG
matrix is the MCC matrix based on a corporate of
products mission, and core competencies. The four
quadrants of the matrix are: Drain, dilution, drive and
distraction. The MCC matrix does a better job
covering a full picture of a product, and not only the
product and the market as in the BCG matrix.

The three most important aspects of this matrix are:

1. The matrix looks at the status of the entire

organization by linking the mission and the
core competencies of an organization when making strategic decisions.
2. This matrix challenges and refines the definition of mission and core competencies.
3. It can be used by every organization or sub organization. The only requirement is that
the mission and the core competencies can be defined. [17]

The BCG Matrix applied to the Toyota Prius

The BCG matrix can be used to predict the start of a product in a market. In the BCG 2 factors
are the measures of successful products. Market growth and relative market share are set apart
in a diagram. The business units of corporate are placed in the matrix according to those 2
factors. With this tool an appropriate marketing strategy can be determined.

10
Market growth of the Toyota Prius
The Prius was launched in 1997 in Japan, and worldwide in 2001. At the end of 2003, when a
new model Prius was launched, it was sold nearly 160,000 times worldwide. At that time the
Prius was the only hybrid car available, and it made advantage of it. Nowadays Toyota has
broken the record of selling 1 million hybrid cars worldwide, and 700,000 of them were Prius’.

To emphasize the market growth of the Toyota Prius we use the monthly U.S sales figures from
2000 to 2007[32].
2000 2001 2002 2003 2004 2005 2006 2007
January 1,298 1,954 1,606 2,925 5,566 7,654 8,299
February 1,198 1,481 1,968 3,215 7,078 6,547 12,228
March 1,378 1,763 2,532 3,778 10,236 7,922 19,156
April 872 1,834 1,457 3,684 11,345 8,234 13,056
May 1,126 1,648 1,233 3,962 9,461 8,103 24,009
June 1,534 1,369 1,069 4,219 9,622 9,696 17,756
July 841 1,037 1,411 657 5,230 9,691 11,114 16,062
August 788 1,311 1,756 299 4,393 9,850 11,177 14,055
September 981 862 1,382 112 4,309 8,193 10,492 12,494
October 829 1,580 1,775 4,085 6,123 9,939 8,733 13,158
November 989 1,580 1,956 5,584 5,866 7,889 8,008 16,737
December 1,134 1,780 1,790 4,025 6,287 9,027 17,883

TOTAL 5,562 15,556 20,119 24,627 53,991 107,897 115,563 167,010

From this diagram, and especially form the “total” section we can see that the market for the
Toyota Prius has expanded. In their first year in the U.S. Toyota managed to sell 5,562 Prius’, in
2007, even without the month December, they already sold 167,010 Prius’. In 2007 they
managed to sell 30 times more cars then in their introduction years [33].

In the next diagram we have the hybrid car sales in the U.S. of October 2007[33]:
Model Units vs. 9/07 vs. 10/06
Altima 927 22.6% n/a
Prius 13,158 5.3% 50.7%
Civic 2,286 9.3% -0.1%
Accord 243 6.1% -15.3%
Camry 3,511 -16.3% 25.1%
Highlander 596 208.8% -63.7%
RX400h 1,392 42.2% 12.3%
GS450h 71 -1.4% -59.9%
LS600hL 175 -10.7% n/a
Escape 1,817 34.8% 35.3%
Mariner 267 -12.2% 3.1%
Vue 10 -80.4% n/a
Aura 45 -28.6% n/a

All hybrids 24,498 6.6% 30.4%

All vehicles 1,232,080 -6.3% 1.2%

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In this diagram we can see that the Toyota Prius was the best selling hybrid in the U.S. in the
month October with almost 10,000 more sold cars then the runner up. We also can see that
although Toyota has just 5.3% more sales then September 2007, it has 50.7% more sales then
October the year before.

We also can see that the hybrid market has grown 30% in the last year, meaning it is a fast
growing market and all business units in that market will be above the horizontal centre line.

Market Share of the Toyota Prius

In the monthly sales

diagram of hybrid cars in
the U.S [above], the Prius
has the biggest market
share. Toyota has sold
more then 3 times more
Prius’ then the runner-up.
The Prius has 53.7 %
market share in total
hybrid car sales that
month. That makes the
Toyota Prius market
leader, and puts it on the
left of the vertical
centreline in the BCG
diagram.
But that data is one month
only, and sales may differ
from month to month.
Diagram 1 is a diagram of
total hybrid sales in the
U.S. from 1999 to 2006[32],
with a forecast of 2007
Diagram 1 [32]
since December remains
unknown yet. In this diagram we can
see that the Prius was the first to go on sale, and has the most sales per individual hybrid car. On
a total of 333.000 sold cars of 5 different types, the Prius sold approximately 190.000.
Calculations show that it is a market share of 57.0%, and that proves that the Prius is market
leader on yearly basis as well.

12
Conclusions:
In the BCG matrix the Toyota Prius should be displayed as a star. It has a high relative market
share [market leader] and the market of hybrid cars is a fast growing market. This makes it a
successful product with a lot more potential for the future. In the BCG the Prius would be placed
top left with a high relative market share in a fast growing market, and therefore a successful
product.
Toyota can use this information to set up a business plan and the investment they make in the
product could turn it into a cash cow eventually.

Recommendations:
The BCG matrix is a tool that can be easily used by all sorts of corporations and business units.
The marketing concept is very global, and can be applied to entire corporations or just one
business unit. For one product it might not be specific enough, and is probably better for an
entire business. In this case the “competitors” of the Prius are other cars of Toyota, or cars they
sell under another brand. The Prius is market leader in the market of hybrid cars, but Toyota is
as car manufacturer even a bigger market leader in hybrid cars [Because they own Lexus as
well].

To be more accurate there are a lot of factors to take into account. But in its simplicity the BCG
is a good tool for corporations to give a clear picture of hoe business is doing and how it can be
improved. The 2 ranges make the BCG matrix applicable to every business or corporation all
over the world on a range of different products.

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Positioning: Perceptual mapping
Perceptual mapping, also called position mapping[18] or Positioning Map, is a marketing method.
This method makes it possible to define the position of your product or company in the market,
compared with the competitors. Also visualizing the position of your product line or brand is
possible. This method becomes handy when you’re deciding to introduce a new product or to
find opportunities the market. In other words, it is used to help the organization identify a
positioning strategy.
Perceptual mapping is a graphical technique used by a lot of marketers. This strategic
management tool is being used for about thirty year’s now[19]. Usually the perceptual mapping
method is based on two dimensions. But sometimes more dimensions are used for more
complex mappings. The dimensions are based on consumer perceptions concerning the product.
These criteria are used by consumers when they purchase your product.
Down here you can see a simple example of a perceptual map. This map gives a nice overview
the UK chocolate market. Within this method it’s possible to identify the chocolate-brands,
based on their price and quality. Belgium chocolates are plotted as high quality and high price.
Furthermore, Twix is plotted as a low quality and low price brand. There are also some mid-
range products mapped. [19,21,22,33,24,25]

Diagram: Perceptual Map UK Confectionery Brands; Source: learnmarketing.net[20]

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When all the products are placed in the perceptual map, it could help an organization to identify
where to launch a new brand. In the example I have chosen it is perhaps a possibility to launch a
product at the medium price and quality range. As you can see on the map, there is not much
competition within that particular area.

In this example above, the products were visualized as dots. But some perceptual maps use
other indications. For instance different circles sizes or areas to indicate the sales volume or
markets share of the various competition products. A nice example can be seen down here:

Diagram: Perceptual map of competing products

Source: Outsource 2 India[19]

In the diagram above, you can see a more overlapping example. As you can see brand A and B
share a few attributes, but brand A is a little classier and less sporty compared with brand B.
Moreover you can conclude that Your Brand shares no attributes with any other brand. Your
Brand is very exclusive (by scoring high on practical use and classy). That’s make Your Brand
unique.

Moreover this method can be used to display the ideal points of the consumers. Than it looks a
little bit like the segmentation-technique. The points on the perceptual map show the ideal
combinations of the consumers individually. Areas with a lot of ideal points can indicate a
market segment, what are potential for companies. Areas with a low density can better be
avoided.

Unless this method might be very useful for marketers, this method is based on the perception
of the marketer. Perceptual maps are not always result of a detailed study, with an objective
point of view. For instance: A product can be quite classy for somebody out of the middle class,
but for somebody of the upper class it could be very conservative. [19,21,22,33,24,25]

15
Conclusion:
Perceptual maps for positioning are very to define the position of your product or company in
the market, compared with the competitors. This method becomes handy when you’re deciding
to introduce a new product or to find new opportunities the market. In other words, it is used to
help the organization identify a positioning strategy. The result is usually very clear and easy to
understand. Nevertheless perceptual maps are based on someone’s perception. It’s hard to get
an objective result, because the product quality is relative to a person’s opinion.

Apply positioning-method on the Toyota Prius:

To apply the positioning-method on the Toyota Prius, we have to define the competitors. We
decided to keep the competitors within the hybrid-market. Down here you can see a complete
overview of the most successful hybrid participants:

Competitors
Car BUILD-YEAR
Toyota Prius 1997
Honda Insight 2000
Honda Civic Hybrid 2003
Lexus GS 450h 2006
Lexus LS600hL 2007
Nissan Altima Hybrid 2007
Ford Escape Hybrid 2005
Venturi Fetish 2002
Tesla Roadster 2007
Source: Wikipedia[34] , Autoweek[35]

16
 After revealing this list, I decided to apply the positioning method on to these models. For the
first perceptual map, I placed the price of the hybrid-car on the x-axis. Cheap cars to purchase
are on the left side. More expensive cars are placed on the right. On the y-axis I placed the
practical use of the car. With practical is meant how the car will fulfill the needs of the user, like
size and capacity of the car. The most practical cars are placed in the upper area. For this
perceptual map, we placed the cars from an average middle class person point of view. You can
see the result over here:

Prius
Honda Civic hybrid Practical

Nissan altima hybrid

Lexus GS 450H
Ford Escape Hybrid
Honda Insight

Lexus LS600H

Conservative Classy

Venturi Fetish

Tesla Roadster

Sporty

As you can see, the positioning of the Toyota Prius is extremely good. There is almost no hybrid
car produced that is very practical in use and very cheap at the same time. Compared to the
closed competitors, the Nissan altima hybrid and Honda civic hybrid, the Prius is cheaper and
more practical.

Why is the Prius so practical for an average person? In our person because it’s spacey for 5
persons and middle-class sized, so easy to drive in the city. Moreover there is enough space left
for luggage. But maybe the most important reason is because of its fuel-efficiency. Because the
Prius uses less fuel, it also means that you will make fewer visits to the gas-station.

It’s also nice to see that Lexus (daughter company of Toyota), has also a good chosen marketing
position. There are almost no hybrids that are classy as well as practical at the same time,
except for the Lexus.

17
The Toyota Prius is extremely conservative and practical, compared with his competitors. Toyota
is one of the leaders concerning hybrid-technology. This can make the production-costs of a
hybrid car very low. Moreover the Prius-model is very practical in use, for the middle class
person. These two factors can declare the success of the Prius. In addition, these two factors will
attract the minority of the people.

Afterwards I decided to apply the same positioning method again, but this time with some other
dimensions on the axes.

According to the magazine Autovisie 2008, the Toyota Prius’s average fuel-consumption is about
4,3L gasoline for 100km. That means you can drive for about 23,3km on 1L. A low fuel-
consumption means also that the car will emit less CO2 from the exhaustion. Especially with the
current fuel-prizes and environmental issues these are important matters for the consumers.
According the Autovisie 2008, the quite low fuel-consumption of the Toyota Prius leads to about
104g CO2 per driven kilometer. Let’s compare this with other hybrids.

Low fuel-consumption
Prius Honda Civic hybrid
Honda Insight

Nissan altima hybrid

Ford Escape Hybrid

Low CO2- High CO2-

emission Lexus GS 450H emission
Lexus LS600H

Venturi Fetish

Tesla Roadster
High fuel-consumption

18
To apply the cars the second perceptual map, we have to find the fuel-consumption and CO2-
emission of every car. Down here you can see the results:

Car average fuel-consumption CO2-emission (Ton/year)

(km/l)

2007 Toyota Prius 20 4,0

2006 Honda Insight 19 3,9
2007 Honda Civic Hybrid 18 4,4
2007 Nissan Altima Hybrid 14,2 5,4
2007 Ford Escape Hybrid 13,5 6,0
FWD
2007 Original Car 13,4 7,1
According to fueleconomy.gov[36]

Conclusion:
As you can see, the Toyota Prius is again the most interesting for the consumer, concerning fuel-
consumption and CO2-emission. The Prius has two very close (hybrid-) competitors: the Honda
Insight and Honda Civic. Compared with an original gasoline car, the Prius is extremely economic
and clean.

Fuel-consumption and CO2-emission are very important issues to take care of nowadays.
Because the Prius scores very high concerning these issues, it is a very popular car. Also in the
future, the Prius will become more interesting for consumers, because the tax- and fuel-prices
will increase extremely.

19
Final Conclusion

After applying our 3 chosen tools, Means-End Chain, BCG matrix & Positioning: Perceptual
mapping to the Toyota Prius we can now perform a final conclusion.

At first the conclusions of the Means-End Chain. We can conclude that the most important
consequences and end values for the Prius are: carrying out an ‘I’m an environmentally
conscious driver’ statement, fuel efficiency, cheap to drive and new technology. Also Toyota is
doing well considering communication with its customer and advertising. The message they
spread is similar to the end values of the Prius customer.
Second, the conclusions from the BCG matrix: The Toyota Prius has a high relative market share
and the market they operate is fast growing. That makes the Toyota Prius a star right now. With
further investment when the market growth stalls it can turn into a cash cow.
As third conclusions from the Positioning. The Prius is superior to competitors on several fronts.
The Prius seems more practical and affordable compared to its competitors. Moreover it has the
lowest fuel consumption and CO2-emission, especially compared to ordinary petrol powered
cars.

Finally, the answer to the question “Why is the Toyota Prius a success?” It is a success because
Toyota managed to communicate their product similarly to the end values of the customers.
Also they are market leader in the market segment their in. In the BCG matrix it is only a star
because of the market growth, otherwise it would be a cash cow. If we look at how Toyota
positioned the Prius into the market they did a good job. In multiple aspects they have put the
Prius in a niche of the market, and often superior to its competitors.

20
Sources & references:

http://www.ad.nl/autowereld/article1203335.ece

(E. Kouwenhoven 2007)

http://www.anwb.nl/published/anwbcms/content/binaire-bestanden/pdfs/auto/milieu/top10-
zuinige-autos-1013935.pdf

(2007)

3
http://books.google.com/books?hl=en&lr=&id=m6S_11vA3RsC&oi=fnd&pg=PA25&dq=means+e
nd+chain&ots=Kzo_RSfEFJ&sig=izvc955jxqokSmEognjgJE61QAk#PPA120,M1

(J.C. Olson; T.J. Reynolds)

http://www.skymax-dg.com/mecanalyst/chain.html

(Reynolds; Gutman 1988)

http://www.skymax-dg.com/mecanalyst/ladeng.html

(Reynolds; Gutman 1988)

http://www.skim.nl/frames/analytical/SOAP.pdf

(Year and author unknown)

21
7

http://www.otb.tudelft.nl/live/binaries/2e2a5b07-3f77-4d71-b1d1-
33a897e794aa/doc/Conference%20paper%20Meesters.pdf

(J. Meesters)

8:

https://doc.telin.nl/dsweb/Services/Document-19326/

(De Heer J.; Van Houten Y.; Iacob S.; Van Vliet H. 2002)

9
http://www.answers.com/topic/market-growth-rate?cat=biz-fin
(Year and author unknown)

10
http://en.mimi.hu/marketingweb/relative_market_share.html
(Year and author unknown)

11
http://en.wikipedia.org/wiki/Growth-share_matrix
(Year and author unknown)

12
http://www.valuebasedmanagement.net/methods_bcgmatrix.html
(Year and author unknown)

13
http://www.quickmba.com/strategy/matrix/bcg/
(Year and author unknown)

14
http://www.netmba.com/strategy/matrix/bcg/
(Year and author unknown)

22
15

Strategic Attributes and Performance in the BCG Matrix – A PIMS-Based Analysis of Industrial

Product Businesses

(D.C. Hambrick; I.C. MacMillan; D.L. Day 1982)

16

Management Acounting – Business strategy

(S.E. Nutton 2006-2007)

17

The MCC decision matrix: a tool for applying strategic logic to everyday activity

After the death of the BCG portfolio matrix the search in on for a new strategic theory

(J. Nicholls 1995)

18
British Edexcel 2007 GCSE Business Studies pilot specification
(2007)

19
(http://www.outsource2india.com/kpo/perceptual-mapping.asp)
(Author and year unknown)

20
(www.learnmarketing.net)
(Author and year unknown)

21
(http://en.wikipedia.org/wiki/Perceptual_mapping)
(Author and year unknown)

22
(http://www.populus.com/files/Perceptual%20Mapping_f_1.pdf)
(Author and year unknown)

23
A perceptual mapping procedure for analysis of proximity data to determine common and
unique product-market structures
(A. Chaturvedi; J.D. Carroll 1998)

23
24
Perceptual mapping of multiple variable batteries by plotting supplementary variables in
correspondence analysis of rating data.
(A. Torres; M. van de Velden 2005)

25
Journal of Marketing Research Vol. XVI
(J.R. Hauser; F.S. Koppelman 1979)

26

http://www.toyota.com/prius/index.html

(2007)

27

http://www.toyota.com/about/our_values/index.html

(2007)

28

http://www.soultek.com/clean_energy/hybrid_cars/lazy_media_the_hybrid_buyer_stereotype_
why_people_buy_hybrid_vehicles.htm

(2007)

29

http://www.npr.org/templates/story/story.php?storyId=12523027

(W. Kaufman 2007)

30

http://www.john2211.nl/Hybride_Waardering6.htm

(2004 – 2005)

24
31

http://www.nytimes.com/2007/07/04/business/04hybrid.html?_r=2&oref=slogin&oref=slogin

(M. Maynard 2007)

32

http://www.hybridcars.com/market-dashboard/oct07-us-sales.html

(Author and year unknown)

33

http://en.wikipedia.org/wiki/Toyota_Prius#Sales

(Author and year unknown)

34
Wikipedia (http://en.wikipedia.org/wiki/List_of_hybrid_vehicles)
(Author and year unknown)

35
Autoweek (www.autoweek.nl)
(Author and year unknown)

36
Fueleconomy.gov (www.fueleconomy.gov)
(Author and year unknown)

25