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2003

Toyota Matrix IMC Campaign

Brent Lassere

Executive Summary

Purpose

Media Placement
Televesion, print and outdoor media will be used in harmony to create the desired impact without going over-budget. Billboards will feature teaser ads and provide support to TV & print. Mewdia planning focuses on reaching the right audience through optimum utilization of available funds

Launch a national campaign to increase brand awareness and improve brand image for the Toyota Matrix. This campaign will reposition the Matrix and help Toyota achieve its sales goal

Campaign Focus

The campaign will focus on the youth market and present the Matrix as an Urban Utility Vehicle - combining style and functionality at an affordable price. The campagin will be in tune with Toyotas imagemakeover efforts and is based upon research supoorted strategy

Integrated Marketing Communications


Promotions and events are targeted at the youngest group in the target audience and will take place at University Campuses. Public relations will use a two pronged approach working with Matrix owners and insurance companies.

Creative Emphasis

Matrix advertising will speak to the young in their own language. Product benefits will be conveyed using unique words that attract and describe at the same time. These tag words with high recall value will be the heart of all creative executions

Results
Results will be tracked to guage the success of the campain in achieving its stated purpose. Executions will be pre-tested and posttested regularly. The campaign will respond to feedback and be flexible in making any necessary changes

Introduction

Subcompact Market Share

Spectra PT Cruiser

Echo

Corolla

Matrix Neon

The Toyota Matrix is classified as a subcompact cross-over utility vehicle (CUV). It was launched in February, 2002. It combines unique styling, practicality and affordability in one package. The Matrix is produced in three different versions: Matrix, Matrix XR, and the Matrix XRS. The projected volume to be produced is 70,000 units. The subcompact vehicle market is the second largest of all vehicle classes. New car sales amount to two million a year in this segment. The recent growth of the new subcompact body styles has sparked new interest in the segment. The CUV has features of different classes of vehicles melded into one. Here are some basic features you may find in any CUV.
Beetle Golf Lancer

Civic

Elantra Sentra


Accent

A traction oriented system for 4WD Higher stance Enclosed cargo carrying capacity Significant towing capacity Sporty styling Stable rugged platform

Protg Vibe Sunbird Escort

Cavalier Saturn Sedan

The market is in the very beginning of its growth stage, sales are expected to increase quickly for brands in this category. Toyota has a weak position in the youth segment of the consumer market. Therefore, it wishes to target its latest CUV offering toward 20-30 year old consumers. As of now, awareness about the Matrix is low in the desired market. The advertising challenge is to change the scenario in favor of Toyota by creating a youth oriented image and presenting the consumer benefits in an innovative campaign. The first step in this process is to understand the target audience from a product perspective.

Focus

Market Research

According to the American Demographics, Inc. (ADI) the majority of Gen X buyers (born between 1965 - 1976) are 27 to 36 years old and the Gen Y buyers (born between 1977-1994) are 26 years old or less. This has been a common and useful marketing segmentation. The age-wise division, presumably, is not rigid and only indicative. As such, the given target market for Toyota Matrix (20-30yr olds) overlaps two segments - Gen X & Gen Y. Even if we disregard this popular demographic classification, the socio-economic differences between a 20year old and 30year old are apparent. While 20-24 year olds are likely to be in college, 25-30year olds are likely to be equipped with college diplomas, starting a career and a family. In essence, we are dealing with two different sets of buyers here. Now let's review their profiles one by one.

In 2002, Gen Y population was considered to be 75 million by Newsweek. Though this segment is twice the size of Gen X, half of this cohort is too young to evento drive, let alone buy a car. The spending power of this group is estimated to be $ 275 billion a year. About 70% of this group have had exposure to college. As per JD Power's reported research, Gen Y households will exceed Gen X households in a decade.By 2020, Gen Y is expected to own half the cars in the U.S. Concluding in terms of profitability, Gen X is the present and Gen Y is the future. Neither can be ignored. Thus it makes sense to target both groups. In order to do so, we must understand their different preferences and integrate them in a marketing approach which appeals to both.. In an effort to understand Gen X & Gen Y as consumers, the following insights may be helpful. Gen X - Buyers in this market are described as "pragmatists" by Kiplinger Business Forecasts. "Irony" along with "objective information" seems to work with them as per ADI sources. However, they don't mind "fun and variety" according to Toyota's reported research. They are receptive to marketing via traditional media.

In 2001, Gen X buyers controlled an estimated spending power of $730 billion according to ADI reports. As per Chrysler's reported analysis, their population is about 38 million. The average income of this group is close to $50,000 today.Their average annual expenditures are estimated to be $ 40,000 approximately. They are also likely to be home owners. Almost half of them pay mortgage. More than half of this segment is married and has at least one child. About 62% of them have had college experience. No wonder, Gen X is an alluring segment for marketers.

Gen Y- Buyers in this market are more "style conscious" according to JD Power. They are associated with a "zealous individuality" reports the New York Times and liketo flaunt their personal style. According to Adweek sources, this "crowd is skeptical". This segment is resistant to traditional media marketing.

buyers despite their appeal to this demographic segment. A price tag of $15,000-20,000 is out of the reach of most youngsters. The higher insurance costs add to the economic barriers. Second, Toyota already has a vehicle (Scion) targeted at the youngest car buyer segment. Additionally, Toyota Matrix's closest competitor, the Pontiac Vibe is going exclusively after Gen Y. Both vehicles are practically identical a result of collaboration between GM and Toyota. A wider target range along with brand image will help in differentiation which is important for the "fraternal twins".

The next step is to plan and design a campaign which can please both these segments. Before doing so, two important questions should be asked. First, can the product support such a campaign? In this case, the answer is yes. Toyota Matrix combines the functionality of an SUV and the looks of a sports car at the price of a regular sedan. In other words, it offers both style (think Gen Y) and substance (think Gen X). The second question is - aren't we trying to serve two masters here? The answer, again, is yes. Therefore it is important to decide who comes first. While the youth market as a whole shares some similarities, it also possesses significant differences as seen from a Gen X and Gen Y perspective.

Research supports the treatment of the 25-30 year old group (close to/part of Gen X) as the primary audience and the 20-24 year old group (close to/part of Gen Y) as the secondary audience. There are two main reasons for this proposed approach. First, is market reality. Most of the younger buyers prefer used cars/trucks. According to Providata Automotive's reported research, new sports cars, sportutilities and activity vehicles are beyond the budget for most young

For all of the above reasons, it is advisable to view the 25-30 year olds as the primary audience and the 20-24 year olds as the secondary audience.

SWOT Representation
Strengths
New Product The Toyota Name Styling & Utility Competitive Base Price Optional Features (available 4WD & 17 wheels Entry timing Fuel Economy Toyotas Youth Oriented Image Makeover

Weaknesses
Price premium for optional features Weak position in the youth market Heterogeneous target audience Economic difficulty of the consumer in making new vehicle purchases

Opportunities
Growing Youth Segment Product ability to attact younger buyers Freedom in creating a desired image Trend toward small sport utility vehicles Rising fuel costs

Threats
Preference for more affordable used cars/trucks amoung younger buyers Launch of many new cross-over utility vehicles Differentiation issue with the Vibe Too much reliance on young buyers may hamper sales goal achievement

Furthermore, Toyota Matrix has a sales goal of 70,000 units annually. Considering that the Gen Y market is estimated at 700,000 units in terms of potential sales ( J.D. Power & Associates), a target of 10% seems reasonable. However, certain facts are worth being considered. Among the leaders in the Cross-over segment, Chrysler's PT Cruiser sells 87,000 units approximately. It may be argued that the PT Cruiser is not targeted at Gen Y in particular and thus the figures are not comparable. Among the top sellers in the Gen Y market, Toyota is conspicuous by its absence. While this suggests that Toyota should focus on this market, it also means a difficult penetration process. However, the sales goal disregards this reality and exceeds that of the Vibe (60,000 units) and surpasses the sales of Saturn (69,500 sedans approximately). It should be noted that Pontiac and Saturn are among the top five brand names in the Gen Y market according to research by J.D. Power and Associates. Focusing inward and reviewing Toyota's own figures does not help either. In 2002, about 31,500 Matrix were sold. It should be remembered that the Matrix was not introduced until February of 2002. Taking these facts into consideration, five months of sales were either not included because the product was not on the market or because sales had yet to be made. In the month of July 2002, about 6,400 units were sold. Based on the 2002 calendar figure and the figure from the month of July, Toyota should expect to sell an estimated 50,000 to 53,000 Matrix 2003 models. Given this scenario, a sales goal of 70,000 units may be unrealistic if it relies heavily on Gen Y buyers.

Marketing Strategy

Objectives
Penetrate Market Achieve sales goal of 70,000 units

Sales Force
Keep it on par with competition Review reward programs regularly

Target Market
Young buyers between 20-30 years of age Emphasis on older consumers in the group

Service
Maintain widely available and quick service Focus on customer satisfaction

Positioning
Youth Oriented Combination of style and substance at an affordable price

Advertising
Develop new a new advertising campaign that supports positioning strategy and appeals to the target market

Product Line
Focus on differentiation from the Vibe Continue innovating to improve value proposition

Sales Promotion
Implement innovative promotion programs Let promotion support overall campaign

Price
Review pricing in terms of optional features Maintain competitive pricing

Research and Development


Improve product component quality Keep costs at a minimum

Distribution Outlets
Plan attractive incentives for dealers to push product sales Consider tie-ups with private distributors

Marketing Research
Monitor consumer trends and satisfaction Track Competition

Advertising Strategy

Advertising Strategy

Objectives Increase awareness by 5% Create youth oriented brand image

Advertising will humorously and subtly communicate to urban young adults in the age group of 20-30yrs - single/newly wedded with or without children, equipped with/pursuing a college degree, starting a career/family who are savvy consumers with active lifestyles, in the process of establishing identity and receptive to new ideas that Toyota Matrix provides an unbeatable combination of style and substance

Support will be the fact that the Toyota Matrix is a cross-over utility vehicle offering the functionality of an SUV, the style, image and performance of a sports car and the affordability of subcompact sedan.

Tone will be conveying the novelty of the Toyota Matrix .

Brand Character is that the Toyota Matrix is an Urban-Utility Vehicle

Advertising Theme will reflect the creative corruptions of language used by young adults today; youthful and attention grabbing slang words specially coined for the Toyota Matrix will be used to convey product benefits; since the Matrix is like no car anyone has ever seen before, this campaign will describe it with words no one has ever heard before.

Creative Executions