Marketing Analysis of Hybrid Car

1         Background and introduction

The objective of this study is to conduct a critical analysis of an individual product as part of the marketing course at the University of Sheffield. This analysis is focused on a full hybrid car, the IS300h, from car manufacturer Lexus. The marketing analysis is based on the country Belgium and is covered by four different elements. First, the consumer behaviour of a typical customer. Secondly, the marketing mix analysis. Thirdly, the STP analysis and finally a recommendation to improve the marketing mix strategy.

Lexus, the luxurious subsidiary of the Japanese Toyota Motor Corporation, was founded in 1989 and debuted in Europe in 1990 (Lexus, 2018a). The company launched their first hybrid car in 2005 and has since sold more than 1 million hybrid cars worldwide (Lexus, 2014). The IS, on the other hand, was first launched in 1999 and originally sold by Toyota. In 2005 the second generation, of the model, became a part of the Lexus line. The IS300h is currently in its third generation in which the car got a facelift (Lexus, 2017).

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 Consumer Behaviour analysis

Today the automotive industry is undergoing many changes. Globally, there is a shift in the industry towards hybrid cars, electrified vehicles and a shared economy of vehicles in the future (Gao et al., 2016). We can say that the changing interest of consumers and stricter emissions regulations are drivers for these shifts.

In Belgium, consumers are increasingly becoming mindful of their ecological footprint. A study by the Flemish Department of Environment shows that 44% are considering buying an environmentally-friendly car for their next purchase (Vlaanderen, 2017; Belga, 2018). Experts consider the hybrid car as the ideal transition technology as long as a fully electric car has a relatively higher purchase price (Vanacker, 2018). A specialized car blog, that based its findings on official government figures, indicated that this trend was clearly visible in sales figures. These figures doubled in 2017 compared to 2016 (E-gear, 2018). On the contrary, in the first quarter of 2018, the share of hybrids declined due to the stricter tax deductibility measure for so-called “fake hybrids”(Graph 1). The self-loading hybrids of Toyota/Lexus have not been affected by this measure. In fact, Lexus’ market-share even rose (Vanacker, 2018).