1. Executive Summary
In 2003, Toyota Motor Corporation released their third division known as Scion.
Scion is a youth oriented company that produces stylish and affordable transportation that
meets the needs for the everyday Generation Y person. Generation Y is typically defined
as someone who is in their late teens to early twenties, and who tends to be informationrich, time-poor, and technologically-savvy. Scion keeps everything as simple as possible
in the car buying experience, from monospec vehicles to pure pricing.
One of the best factors helping Scion is that it is a division of Toyota Motor
Corporation, one of the leading automobile manufacturers in America. This division was
created in attempt to make up for the failure of Toyota’s “Project Genesis,” an earlier
attempt to gain the teenage buyer. The lesson Toyota learned from this failure was that
young people generally categorize the Toyota logo as an older person’s car. With this
knowledge in hand, Scion seemed to be a sure fire way to go.
With three vehicles currently in production, Scion has surprised many with having
over 150,000 units sold in 2005 alone. This number has toppled some of the veteran car
manufacturers of today. These numbers still continue to rise, with Scion showing a thirtyseven percent increase in sales from April to May of this year.
Scion sees direct competition from other small car manufacturers like Honda,
Mazda, and Kia. However with the introduction of the tC they are also seeing
competition from some of the bigger cars from Chevrolet and Ford.
Neither sales nor competition seem to be an issue for Scion, but we feel as if they
are missing their target market. The target market Scion has set is the average 16 to 24
year old student with a tight budget, but a will to be stylish. However demographics are
showing that the average Scion customer is somewhere in the age range of 30-31 years
old. With this in mind, we feel Scion needs to direct focus towards their target market.
This marketing plan outlines ways in which Scion should be able to lower the
average age of Scion buyers. Starting out with just a little more advertising, preferably by
means of television commercials, and eventually the release of new models, we feel
Scion can achieve this goal.
2. Description of Company
Scion, a division of Toyota Motor Sales, had its announced launch in March of
2002; debuting the sub-compact xA and the urban box known as the xB. Neither model
was released for sale until January of 2003, with the introduction of the third car,
conveniently named the tC in 2004.
The overall premise of Scion is to provide a trendy and affordable form of
transportation to the youth of America. Scion has introduced a concept of pure pricing
where the options almost do not exist with the side airbags as only exception. The
customer starts and finishes with three choices: transmission, color, and with two of the
models, wheel covers. This is to prevent the confusion of option-packages which other
car manufacturing companies utilize. However, this is not to say the Scion cars come
without equipment; they are significantly well equipped for the price. For $13,320 for the
xA and $14,570 for the xB, they both come standard with power windows, power door
locks with keyless entry, air conditioning, AM/FM/CD player, dual airbags, and Antilock Braking Systems (ABS). The tC at $16,940 includes all of the above, plus a
panoramic moonroof, cruise control, and 17-inch alloy wheels.
With sales reaching 156,485 for 2005 alone, Scion is obviously on the right track.
Overall, Scion seems to be another example of Toyota’s successful use of multibranding.
This marketing plan’s goal is to outline how to keep increasing sales to the target market,
which is the fashionable youth of America.
3.Strategic plan/focus
Mission/Vision
To satisfy a trend setting youthful buyer through distinctive products and an innovative,
consumer-driven process
Goals
Non-financial-Maintain or increase appeal to target audience (16 - 24 year olds)
-Increase sales with the new generation xB
-Increase awareness of current models
-Maintain/achieve top selling sub-compact status
-Maintain number one spot for Edmunds’ Top 10 Cars for Drivers Under 25
Financial-Maintain cost to consumers while increasing quality
-Assist Toyota in gaining the top automotive market share in America
-Attempt to increase ranking on Edmunds Top 10 Cheapest Cars List
Core Competency and Sustainable Competitive Advantage
The word scion by definition is a “descendant of” or “heir to,” which is a great
way to describe Scion’s connection to Toyota. Toyota originated back in 1867 with
Kiichiro Toyoda heading the company. With over 100 years of experience, Toyota
obviously knows what they are doing. This extensive Toyota support gives Scion a great
competitive advantage.
4. Situation Analysis
SWOT Analysis
The following tables show internal and external factors affecting the market
opportunities for Scion.
Internal Factors
Management
Offerings
Marketing
Personnel
Finance
Manufacturing
R&D
External Factors
Social
Competitive
Technological
Strengths
Shares managers with experienced
Toyota managers
Weaknesses
Scion is still developing,
therefore the experience
overall is lacking
High quality, low-cost alternative
Lacks options most other cars
give
Toyota’s financial backing for
Taking risk of dramatic
marketing exploits
styling and limited target
market
Required training to sell Scion, but Personnel outside of the target
still located within Toyota
audience lack appeal to target
dealership
audience
Full Toyota backing, excellent
Minimal profit due to pure
growth since introduction
pricing
Delay in US model allows time for All Scions are produced in
debugging
Japan
Efforts to maintain price while
Minimal US feedback for
keeping vehicles in style and
R&D on new models
retaining quality
Opportunities
Currently appeals to the youth
Distinct name still associated with
Toyota/Numerous public relations
events
Better standard audio features than
competitors/unique accessories
Economic
Special financing for students
Regulatory
Numerous Edmunds’ Top 10 Lists
Threats
Constant change in trends
New and upcoming Subcompacts
Competition is finding
cheaper replacement for
accessories
Decrease in overall vehicle
purchases due to higher gas
prices
Cooperation between
competitors to develop
alternative products
Scion’s internal strengths include the ability to provide high quality products that
are low cost alternatives to competitors’ products. A major strength is full Toyota
backing. Scion’s internal weaknesses include its lack of U.S. feedback on new models,
minimal profit due to pure pricing, and the fact that Scion is still developing, and
consequently, the internal experience is lacking.
Scion’s external opportunities include its appeal to youth, special financing for
students, and better standard audio features compared to its competitors. There are some
major external threats to Scion. The constant change in trend, new and upcoming subcompact vehicles from competitors, and strategic alliances between competitors to
develop alternative products are only a few examples of threats.
Industry Analysis
Scion’s market share is directly incorporated into Toyota’s overall market share.
Toyota currently leads the market with 12.2%. Chevrolet was a close second with 11.4%.
Chevrolet, Honda, and Mazda are Scion’s main competitors.
Company
Toyota
Chevrolet
Honda
Mazda
Market Share
12.2%
11.4%
8.0%
2.5%
Competitors
The Scion xA/xB has its main competition from the new Honda Fit, which is also
targeted towards the fashionable youth. Other competition for the xA/xB is the Chevrolet
Aveo, the Hyundai Accent, and the Kia Rio. The Aveo, Accent, and Rio have a
competitive advantage of being cheaper priced cars, with less quality. The tC with its
slightly larger size sees its competition from the Honda Civic, Mazda3, and Ford Focus.
The Civic, Mazda3, and Focus also center on being cheaper alternatives for the tC. More
recently the Chevy Cobalt has been introduced as a hip alternative for the tC.
Company Analysis
Scion has many strong points supporting the company; with the largest being its
connection with Toyota. Toyota supports Scion in all of its endeavors. Scion also
provides convenience when shopping for a new car; primarily through Pure Pricing and
the elimination of options-packages.
Customer Analysis
The customer analysis will break down the typical Scion purchaser as well as the
environmental and technological concerns involved.
The typical Scion customer is expected to be part of the maturing Generation Y.
Generation Y typically describes teenagers and individuals in their early to mid 20’s.
They tend to be technologically savvy, on the cutting edge of fashion, and are financially
motivated.
Scion customers are also motivated by environmental and technological factors.
With continually rising gas prices and numerous government regulations, the desire for a
fuel efficient vehicle has been on the rise. Scion answers this call with two cars having
fuel ratings over 30 miles per gallon, and the third having 23 miles per gallon. Both the
xA and xB were listed on Edmund’s Top 10 Most Fuel Efficient Cars for 2005.