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Toyota Scion New

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Toyota Scion New Beachhead Market
Market Dynamics
Toyota Scion had initially targeted the youth. This market is mainly composed of people who
were born from the 1990s. Usually, these individuals’ desire unique and tech-savvy products.
Unfortunately, Toyota was unable to appropriately target this market using the Scion brand,
which eventually led to its discontinuation. Except for the initial unique design, the car model
did not have any significant differences from the other small cars in the market (Buss). Since
most modern vehicles have unique features and designs, design and small size alone were not
enough incentives to attract customers. Additionally, the lack of a fuel-efficient engine, such as a
hybrid engine, made most potential buyers shun away from the Scion due to the skyrocketing
fuel prices.
To overcome the challenges that the Scion brand had initially faced, I would re-brand the
vehicle into a tech-savvy premium small car. I would then target tech-savvy individuals. Most
tech-savvy individuals are highly educated and possess at least a college degree. Due to their
educational background and knowledge of the detrimental effects of pollution in the
environment, most of them have an interest in using fuel-efficient vehicles. In addition, their
experience in engineering and technological devices makes them interested in having cars that
are equipped with the latest technology. For example, most of them love cars that have anti-
collision and anti-roll systems. They also like cars that have a modern infotainment system.
Currently, individuals working in technological-related industries are among the most paid in the
country. Accordingly, most of them prefer to enjoy facilities and equipment that match their
income status. As such, they also lover cars that have premium and luxurious interior. Although
they are composed of both men and women, the former are the majority. Regarding geographical
locations, most of these people live in urban centers since they are near their places of work. In
these areas, roads are tarmacked, and hence sports cars and small vehicles can easily navigate.
Further, these places experience heavy traffic during rush hours, and it is therefore common for
people to use alternative transports such as the train or bicycles to commute. Others also opt for
shared cars, such as Uber, to avoid the hustles of looking for a parking lot. Given the
characteristics of the tech-savvy individuals, a luxurious, fuel-efficient, and technologically
advanced vehicle can be accepted by persons in this market, which they can occasionally use
when going to work.
Under the new brand, the car would have the potential of rivaling the luxury Lexus brand
and also the Audi A3 and Acura ILX (Halvorson). Most individuals in the technology industry,
prefer premium cars that have sophisticated technologies. Additionally, they are concerned about
the fuel efficiency of their vehicles, and would, therefore, like to buy small but technological
advanced cars. Another interesting factor for the re-branding is that most individuals in
technology-related industries are young (less than 30 years), and also have high incomes. In this
regard, they would be more willing to buy the new re-branded vehicle due to its ‘youthful’ shape,
and also its technological features. Their high incomes would also make them more willing and
able to purchase the car at a high cost, which would make the model highly profitable for
Toyota.

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Total Addressable Market (TAM), Serviceable Available Market (SAM), Serviceable
Obtainable Market (SOM)
In 2016, millennials purchased 29 percent of the vehicles manufactured in the United States, and
these figures are projected to increase to 40 percent in the year 2020 (Kurylko). At this rate, the
millennials may purchase about 35 percent of the vehicles that will be manufactured in the year
2018. Mintel establishes that 41 percent of millennials are interested in having the latest
technologies in their car. Statista also notes that 17.5 million vehicles were sold in the United
States in the year 2017. Given the projected increase in the demand for cars in the United States,
the demand for new cars in the year 2018 may increase to 18.46 million units (Mintel). The
Toyota share of the U.S. car market in the year 2016 was 15.2 percent (Statista). This proportion
is expected to only increase to 15.5 percent in the year 2018. As the new flagship car brand for
Toyota in fuel efficiency and technological equipment, the re-branded Scion model will control
40 percent of Toyota’s cars in this segment when it fully accepted in the market. Finally, the
rebranded Scion model will cost an average of $30,000.
Calculations of the Rebranded Scion’s TAM
The demand for cars by millennials in 2018
35%* 18.46million= 6.461 Million
Millennials willing to have the latest technology in their vehicles
41%* 6.461 million= 2.64901 million
Total Addressable Market (TAM)
Assumes Toyota is the only seller
TAM: 2.64901 million *$30,000= $79,470.3 million
Calculation of SAM
Toyota share of small fuel efficient and technological advanced cars
15.5% * 2.64901 million= 0.41059655 million
Share ownership of the Scion (40%)
40% * 0.41059655 = 0.16423862 million cars.
The average price of the new Scion will be $ 30,000
Total revenue from Scion brand
$30,000* 0.16423862 million cars= $4,927.1486 million.
Calculation of SOM
As a new re-branded product, the Scion will start with market ownership of 15% of the Toyota
fuel-efficient and technologically advanced vehicles.
Toyota share of small fuel efficient and technological advanced cars
15.5% * 2.64901 million= 0.41059655 million
Share ownership of the Scion (15%)
15% * 0.41059655 million = 0.061589482 million
Total revenue of Scion
$30,000* 0.061589482 million= $1,847.684475 million

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Surname 1 Surname Tutor Course Date Toyota Scion New Beachhead Market Market Dynamics Toyota Scion had initially targeted the youth. This market is mainly composed of people who were born from the 1990s. Usually, these individuals’ desire unique and tech-savvy products. Unfortunately, Toyota was unable to appropriately target this market using the Scion brand, which eventually led to its discontinuation. Except for the initial unique design, the car model did not have any significant differences from the other small cars in the market (Buss). Since most modern vehicles have unique features and designs, design and small size alone were not enough incentives to attract customers. Additionally, the lack of a fuel-efficient engine, such as a hybrid engine, made most potential buyers shun away from the Scion due to the skyrocketing fuel prices. To overcome the challenges that the Scion brand had initially faced, I would re-brand the vehicle into a tech-savvy premium small car. I would then target tech-savvy individuals. Most tech-savvy individuals are highly educated and possess at least a college degree. Due to their educational background and knowledge of the detrimental effects of pollution in the environment, most of them have an interest in using fuel-efficient vehicles. In addition, their experience in engineering and technological devices makes them interested in having cars that are equipped with the latest technology. For example, most of them love cars that have antico ...
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