A Market Research Approach to Toyota’s New Electric Vehicle
Group 2
Metropolitan College, Boston University
METAD 859: Market and Economic Research and Analysis
Dr. Suela Papagelis
October 13, 2024
Table of contents
1 Executive Summary...............................................................................................................................................
2 Management Decision Problem (MDP)...............................................................................................................
3 Market Research Problem (MRP).......................................................................................................................
4 Market Environment.............................................................................................................................................
5 Competitors............................................................................................................................................................
6 Toyota's Brand Values..........................................................................................................................................
7 Theoretical Model..................................................................................................................................................
8 Market research design.........................................................................................................................................
9 Data Collection.................................................................................................................................................
9.1 Primary Data Collection: Questionnaire Survey...........................................................................................
9.2 Objectives of the Survey.................................................................................................................................
9.3 Structure of the Questionnaire........................................................................................................................
9.4 Secondary Data Collection............................................................................................................................
10 Data analysis........................................................................................................................................................
10 Reporting..............................................................................................................................................................
11 Conclusion -Kexin Wu........................................................................................................................................
1 Executive Summary
This managerial report aims to explore the market entry challenges and opportunities for
Toyota as it prepares to launch a new electric vehicle (EV) in a highly competitive automotive
market. While the global demand for EVs is growing, driven by environmental concerns, stricter
emission regulations, and a shift towards sustainability, a segment of the market remains hesitant
to fully embrace EVs. These consumers are concerned about factors such as range anxiety,
charging infrastructure, battery longevity, and overall costs. Toyota’s strategy must, therefore,
not only appeal to environmentally conscious buyers but also address the reservations of those
who remain cautious about switching to EV technology (Johnson, 2023).
The key Management Decision Problem (MDP) is how Toyota can position and market
its new EV to gain a competitive edge while maintaining its brand values of reliability,
performance, and affordability. Toyota’s existing customer base values dependability and
affordability, so convincing them that its EVs offer the same attributes is crucial.
Simultaneously, Toyota must attract new, tech-savvy buyers who prioritize sustainability
(Ghahtarani, 2021).
This report outlines a four-step approach to solving the market research problem (MRP).
First, exploratory research which will focus on the Qualitative analysis part through in-depth
interviews and focus groups to identify key factors influencing consumer decisions. (Saunders,
M., Lewis, P., & Thornhill, A. (2016)). Next, descriptive research which will focus on
Quantitative research by conducting consumer surveys and conjoint/trade-off analysis to quantify
preferences for EV features and pricing, helping Toyota align its product specifications with
consumer demand (Mertens, D. M. (2014)). In the causal research phase, we aim to conduct
prototype testing and pricing experiments to refine the product offering. Finally, competitive
benchmarking will assess how competitors like Tesla, Nissan, and Hyundai have successfully
positioned their EVs, providing Toyota with insights into effective pricing strategies, marketing
etc.
The expected outcomes of the market research will be comprehensive insight into
consumer preferences, allowing Toyota to tailor its EV to meet the needs of diverse market
segments. This research will also inform the development of a pricing strategy that balances
market penetration with profit margins. Also it will help in development of an effective
marketing and communication plan to position Toyota’s EV as both technologically advanced
and consistent with the brand’s reputation of reliability and value.
The research aims to provide insight into consumer preferences, enabling Toyota to
develop a pricing strategy and marketing plan that balances technological advancement with
brand consistency. These findings will guide Toyota in developing a competitive EV that appeals
to both traditional and new consumers, strengthening its position as a leader in sustainable
transportation.
2 Management Decision Problem (MDP)
How can Toyota effectively position and market its new electric vehicle (EV) to gain a
competitive advantage in the growing EV market while maintaining its brand repute of
reliability, performance, and affordability?
The Management Decision Problem (MDP) for Toyota centers on the strategic challenge
of entering the competitive EV market while maintaining its reputation of reliability and
affordability. With the EV market expanding rapidly and dominated by established players like
Tesla, Nissan, Hyundai etc. Toyota must carefully decide how to introduce its new EV model in
a way that appeals to both environmentally conscious consumers and those seeking performance
and value. (Johnson, P. (2023, September 14).
Key considerations for the MDP include:
● Identifying target market segments, including eco-conscious consumers and traditional
car buyers who want to transition/upgrade to EVs.
● Providing cutting-edge technology and sustainability while keeping true to Toyota’s
reputation for reliability and affordability.
● Competing with leading and established EV manufacturers in terms of features like
range, rapid charging infrastructure, and autonomous driving features.
● Determining the optimal pricing strategy to ensure market penetration yet profitability.
(Ghahtarani, A. (2021))
3 Market Research Problem (MRP)
What are the key consumer preferences, product features, and pricing strategies that will drive
adoption of Toyota’s new electric vehicle in the already competitive EV market?
Based on the identified MDP, the Market Research Problem (MRP) focuses on
understanding the key factors that influence consumer purchasing decisions in the EV market
and identifying product features and pricing strategies that will help Toyota’s new EV offering to
succeed.
The MRP aims to answer the following key questions:
● What features (e.g. battery range, charging time, autonomous driving capabilities, and
design) are most important to consumers when purchasing an EV?
● How do consumers perceive Toyota’s brand in the context of electric vehicles and what
are their expectations from a Toyota EV?
● What price range will maximize sales without compromising on profitability?
● What marketing messages and channels will effectively target potential EV buyers?
(Muhammad, M. M. (2019))
4 Market Environment
The electric vehicle (EV) market is experiencing rapid growth which is driven by
increasing consumer awareness of sustainability practices, environmental issues, government
regulations, as well as advances in lithium ion battery technology. The global EV market is
expected to grow at an annual rate of over 6.63% from 2024-2029. Some countries are also
utilizing government incentives for EV purchases (Statista, 2023). In the U.S. alone, electric
vehicles accounted for 7.6% of the total automotive market in 2023 (Cox, 2024).
5 Competitors
Toyota's entry into the EV market means competing with long established companies in
the EV market such as Tesla, Nissan, and Hyundai. Tesla has a major stake in the EV market
because of its Model 3 and Model Y cars which offer long-range vehicles equipped with some of
the best technology as well as a well-established charging network (Lambert, 2024). Hyundai
and Nissan are also significant companies involved in the EV market. Hyundai has been adding
options to its EV lineup with models like the Ioniq 5 and Kona Electric which focus on
affordability, aesthetics, and range of each vehicle. Nissan, with its Leaf model, remains one of
the more affordable options in the market, offering a balance between price and features
(Lambert, 2024). Both companies have also taken advantage of government incentives and
aggressive pricing strategies to expand their EV market share. Toyota, while they have been a
leader in hybrid technology, has been slow to fully enter into the EV market. Hopefully in the
next couple years Toyota will aim to leverage its strong brand reputation and its global
manufacturing ability and size to compete directly with these competitors.
6 Toyota's Brand Values
Toyota's brand is built on the core values of reliability, durability, and affordability. For
several years, Toyota has been known as a leader in fuel-efficient and low-emission vehicles, and
has had lots of success with hybrid models like the Prius (Liker, 2020). While entering the EV
market, Toyota seeks to maintain these core values while also integrating this new technology.
Toyota has always had a commitment to sustainability and it is again reflected in its efforts to
reduce carbon emissions across its entire manufacturing and design processes.
7 Theoretical Model
As Toyota enters the EV market, understanding customer preferences is key to its
success. Toyota emphasizes that its customers recognize the need for improvements in its
products (Toyota, 2024). Its target audience spans various age groups and income levels,
focusing on environmentally conscious individuals who prefer different vehicle types and are
interested in transitioning from traditional cars to EVs. With Toyota City recognized for its low-
carbon initiatives, customers are increasingly aware of the company's eco-policy and look
forward to its next-generation EVs and plug-in hybrids (Ito, 2014). Environmental friendliness is
a core value for Toyota’s intended customers.
The theoretical model to plan for and implement Toyota’s marketing research and further
efforts suggests it primarily focuses on the U.S. market. The preliminary market research
confirms an optimistic outlook for Toyota to enter the American EV market. Market observers
found that the EV market in the United States showcases an impressive annual growth rate of
10.49 percent, with an estimated market volume of 156.3 billion dollars by 2029 (Statista, 2024).
Similarly, Michael Wayland (2024) insists that EV sales amounted to 1.2 million units in 2023
and occupied around 7.6 percent of the national vehicle market. The forecast for a booming EV
market in the United States justifies Toyota's choice to seek market entry and strengthen its
presence in the specific country. As the hype has been on a downtrend, many automakers
targeting American consumers, such as Ford, General Motors, and Volkswagen, can focus on
their unique selling points and cheer customer preferences. An overview of the American market
and local competitive landscape suggests entering the American market and strengthening its
market presence can help Toyota to sustain its business development.
Now is an greattime to launch Toyota’s marketing research and subsequent marketing
efforts. Toyota's entry into the EV market can be a critical milestone and a new impetus for
sustainable business development. While the hype of EVs has been dwindling in the United
States, Toyota can focus on American customers and address their needs or expectations
mentioned above. A preliminary market search provides a clear understanding of key
considerations of consumer insights, including who, what, where, and when to market Toyota
EVs.
8 Market research design
Since Toyota is set to undertake a competitive analysis market research study to kick-
start the promotion of the new electric vehicle, it is prudent to use a well-framed research
technique in collecting information. Purposely, primary data collection will be used to identify
accurate and timely data to guide Toyota's marketing mix strategies, price determination, and
product positioning in the EV market. As well, secondary data collection will enable Toyota to
understand the customer's and competitors' perceptions. This research will, as such, be a
combination of both qualitative and quantitative research in order to come up with a complete
picture of the market. Collectively, these methods will assist Toyota in gaining insights into the
consumers' behaviors, opinions, and preferences, as well as assess the value and consequences of
product and price features. This not only allows Toyota to gather the specific data that is required
for certain strategic decisions but also provides it with the context in which this data is generated.
9 Data Collection
9.1 Primary Data Collection: Questionnaire Survey
Among the primary data collection techniques, the most effective will be a questionnaire
survey to obtain information from actual users of Toyota automobiles and potential EV
customers. Survey questions will be directed towards certain sections thought to be most
important in the analysis of consumers in the EV market.
9.2 Objectives of the Survey
1. To learn more about what options consumers may find most important in an electric
vehicle, including battery range and time required for electric driving features.
2. To measure consumers’ perception of Toyota as a brand in the e-vehicle market.
3. The primary reason is to establish the price elasticity of demand as well as the
willingness of consumers for extra service features.
4. In order to uncover the most significant concerns being raised by consumers and existing
EV owners, the survey includes questions on charging options and battery longevity.
9.3 Structure of the Questionnaire
a. Demographic Questions: Demographic data including, but not limited to; age, sex,
income and geographical region.
b. Attitudinal Questions: Inquiry set up with purpose of getting customer’s perception on
usage of EVs, their views towards environmental issues, and their association with
Toyota certainly.
c. Feature Preferences: Comparing or evaluating different EV features including; the range,
technology, design and wholesale price.
d. Conjoint/Trade-off Analysis: The surveys are designed to pose questions to respondents
between different features to serve to know the options in an EV that respondents value
most.
e. Price Sensitivity: Such questions could include how low is too low and how high is too
high a price range consumer is willing to pay for an EV and for the premium features
they would consider adding to the vehicle.
The survey would be conducted online, sharing the link on the Toyota webpage and
social accounts, and use email to reach as many possible customers.
9.4 Secondary Data Collection
Besides, secondary data from different reliable sources will be needed to augment the
findings obtained from the questionnaire survey. These secondary sources will also comprise
industry reports and market trends analysis by Bloomberg, NEF, McKinsey, and JD Power.
These reports will enable Toyota to know the current and future market demand rate,
competition, and developments in the electric vehicle market. Data on key competitors such as
Tesla, Nissan, Hyundai, and other emerging EV players will also be analyzed with the objective
of conducting a competitor analysis. This benchmarking will help Toyota compare the current
value of the EVs it has, in relation to price and features, to what others have to offer in the same
market segment to help Toyota distinguish its value.
Furthermore, policies and regulations based on academic and government research will
be considered concerning electric vehicle policies, regulations, and incentives. It will enable
Toyota to discern the impact that various government policies that involve the electric vehicle
business and environmental standards will have on EV demand. Information from multiple
databases open for public usage, including Statista, IBIS World, and Euromonitor, will be used
to acquire further information on consumers, their buying behavior, and the new markets that are
emerging for electric vehicles. This research will fill the gap through the integration of both
primary and secondary data to give Toyota an insight into the EV market as well as identify
Market segments to target, product and price strategies to adopt and improve Toyota’s chances
of a successful EV market entry given the highly competitive nature of the market.
10 Data analysis
When analyzing the data, the study will employ both qualitative and quantitative
techniques in order to gain understanding from the data gathered from different sources. In order
to make the survey results clearer, statistical tables can be made to visualize the data. The key
steps in the data analysis shall be:
1. Qualitative Analysis: Focus interviews and focus group discussions will help to
determine consumer beliefs and behaviors regarding electric vehicles and Toyota. The
method of analyzing this qualitative data will be thematic analysis with coding of major
and emergent themes for this study, including consumers’ perception of EV technology
and the extent to which they trust a brand. In doing so, these insights will help Toyota
fine-tune the features of EVs to suit customers’ tastes.
2. Quantitative Analysis: The survey data will be analyzed using statistical methods
throughout all surveys enumerated in the study. R will be used to perform statistical and
conjoint or trade-off analyses. From these analyses, Toyota will identify consumers'
attributes, such as range, price, and technology, among the most influential indicators.
Further, regression analysis shall be employed to examine the impact of consumers on the
price they are willing to pay for extra features on Toyota.
3. Competitive Benchmarking: The secondary collected data about the competitors, like
pricing policies, product characteristics, and positioning, will be compared during the
comparative analysis. This will help Toyota see what it lacks in the market and where it
can provide a unique solution. For example, comparing the high-performance-oriented
approach of Tesla or the low-price approach of Hyundai will give Toyota a basis for
targeting the optimal range between luxury and efficient production.
10 Reporting
This final stage involves compiling and presenting the key findings derived from the data
analysis. The report will summarize conclusions regarding consumer preferences, brand
perception, pricing strategies, and the competitive landscape in the electric vehicle (EV) market.
Specifically, the report will explore which EV features, such as battery range and autonomy, are
most important to consumers, and how they perceive Toyota within the EV market. It will also
provide insights into suitable pricing strategies based on the price sensitivity analysis.
The report will feature both quantitative data, such as graphs, charts, and statistical
breakdowns, as well as qualitative insights through summaries, quotes, and identified themes.
These insights will help Toyota understand how competitors occupy the market and where
Toyota can carve out its own niche.
The combined analysis will culminate in actionable recommendations that Toyota can
implement to enhance its EV product lineup, pricing, and marketing strategies. These
recommendations will be designed to align Toyota’s offerings with consumer expectations and
prevailing market conditions.
11 Conclusion -Kexin Wu
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