These days none can travel or make a trip without owning a car. The decision which car suits right for each person individual is made by the points each person have. Our planet is dying cause of the ozone layer and the greenhouse effect so everyone wants to help protecting the environment as far as they can. One move that can make the trick is to put catalysts inside the evaporations of the cars or buy the new hybrid cars which are friendly to environment! Through the ages car companies tried to satisfy the needs of their customers and of them is the production of the hybrid cars which can be innovative, efficient, and friendly to the environment.

Toyota Company was first came out in America on 1957 and after a poor start with a car called the “Toyopet,” Toyota came back strong in 1965 with the popular 90-horsepower Corona sedan. Then there was the Corolla, Camry, Toyota trucks, the Lexus luxury brand, Scion, and the world’s first gas/electric hybrid Prius…a car who was builted for the 21st century. Along the way, Toyota has improved a lot and today is one of the top-selling brands in America and its cars are known all over the world.

On January 4, 2004, the Toyota Prius became the first Toyota vehicle to win the prestigious “North American Car of the Year award presented at the North American International Auto Show in Detroit.

At the 2004 Academy Awards a number of celebrities arrived at the ceremony in the all-new Prius. The arrivals’ generated 230 stories, and an estimated $1.8 million worth of media coverage.

Toyota introduced the Prius hybrid gas-electric vehicle in December 1997 at a press event in conjunction with the ESV-14 alternative fuel show the same month it went on sales in Japan as the world’s first mass-produced hybrid vehicle available to public. Before arriving in the United States in August 2000, the 2001 model year Prius was offered to dealership and made available for order via the internet. Between the start of the pre-sale and its arrival in dealerships, 1800 Priuses were sold with an MSRP of 19.995$.

Question 1

How do companies decide what price to charge for their products and how will they be attracted to the customers? Why some people are willing to pay more to buy a product than another person? That’s where microeconomics are taking place and giving answers to those questions.

Microeconomics focuses on the role consumers and businesses play in the economy, with specific attention paid to how these two groups make decisions. These decisions include when a consumer purchases a good and for how much, or how a business determines the price it will charge for its product.

Microeconomics as Ivancevich et. Al (1997) states that in its purest form, it is a philosophical inquiry into the process of resources allocation. The core of microeconomics though is the ability to predict and control which usually comes with understanding, microeconomics has a set of basic elements which are: goods and services or commodities, prices, markets, economic agents, rationality and methods of analysis.

Hal Varian (February 1999) on his book “Intermediate microeconomics” states that Economics proceeds by developing models of social phenomena. By a model he means a simplified representation of reality. The emphasis here is on the word “simple.” Think about how useless a map on a one-to-one scale would be. The same is true of an economic model that attempts to describe every aspect of reality. A model’s power stems from the elimination of irrelevant detail, which allows the economist to focus on the essential features of the economic reality he or she is attempting to understand.

Microeconomics has some basic elements which are: Price, Market, Rationality, Customer, Employees and method analysis.

1 Price

Price is a number which express the value of the product. The higher the price is the better the quality is also. Price is an abstract unit used in making brokering entries. If one unit of a commodity is sold, the account is credited with a certain number of units of account, if the commodity is bought, the same number of units it debited from the account.

2 Market

A market can be existed only if one or two individuals are ready to enter into an exchanged transaction without thinking the time or the place. That is a general definition how the market economics are working. A system where they allocate resources upon the interactions of market forces as the supply and the demand.

3 Rationality

Rationality refers to the success of goal attainment, whatever those goals may be.

4 Customer

Organizations survive on the basis of meeting the needs, wants and providing benefits for their customers. Failure to do so will result in a failed business strategy. Customer is the main force on a business. Its needs are evolving the products and everything is depending on his will.

5 Employees

Employing the correct staff and keeping these staff motivated is an essential part of the strategic planning process of an organization. Training and development plays an essential role particular in service sector marketing in-order to gain a competitive edge. To build products that suit the customers it has to be done by the customers themselves.

6 Method analysis

It’s the method which each person individual is using to identify a product or a need which it can be best suited for him. All the steps that are taking place to make a decision or a purchase are being identified by our action and the method we are using.

All those points are playing an important role to the introduction and sales of Prius. Its price along with all the comfortabilities it can provide makes the prius a car of a new generation and that’s affecting its sales.

The strategy Toyota is using is very successful even though when first Prius come in the market was not that accepted by the customers. Its price was too high for people to buy it but a completely different car like that made the difference. Prius was the first hybrid-friendly to environment car and Toyota took advantage of that and dropped its price when the economic crisis hit market. Along with the advertising and its strategy and thanks to the operations manager Toyota have improved a lot as a company and now it have three hybrid cars on its arsenal the Prius, Camry and a jeep called highlander.

Question 2

James C.W. Ahiakpor (2003) in his book classical macroeconomics-some modern variations and distortions states Classical macroeconomics involves applications of their theory of value-the determination of the exchange value of commodities by their supply and demand in the short run, and by their cost of production in the long run. Thus, to understand clearly classical macroeconomic analysis, it helps to understand their theory of value; getting their theory of value right is, in a sense, the modern equivalent of working out the “micro-foundations” of macroeconomics.

Kotler (2004) points out that the company and many other economic forces are affecting the company itself and plays an important role on the macroenvironmental factors. Some of them are:

Economic environment: the economic environment includes factors that forces the customers to buy products, their opinion to be more specific and spending partners around the world.

Natural environment: The producers must show to the customers that except their products they are also concerned about the environment and how it is changing from their creations. Avoid pollution, toxic wastes, and help recycling

Cultural environment: each nation has its own traditions which most of the people want to be satisfied by the products they buy.

Technological environment: the technology is an always changing factor that plays an important role on human’s life. New things are invented every day each of them to improve the way of life and to satisfy some specific needs.

Demographic environment: The study of the characteristics of human populations, such as size, growth, density, distribution, and vital statistics.

All these macroenvironmental factors are extremely important to Toyota because they have to satisfy every need of the customer and also be careful with the environment. Toyota wanted to motivate people also to change and to be more careful and curious about their decision. Do they need a new revolution expensive car which pollutes the air when the engine starts or a cheap friendly to environment and very comfortable car like a Prius? In my opinion Toyota is improving gradually and along with advertising and customer research can be a trustworthy company for the customer and for the environment.

Question 3

Slack (2007) identifies the five performance objectives that each business want to improve or to achieve and he is characterizing them as abroad stakeholder objectives. These five objectives can be seen and applied in every business. Below we can study them and they have been put in a priority order that Toyota is concerned.

1 The quality objective

The most successful organizations are those that give customers what they need. Satisfied customers are loyal to those suppliers and as a result they will make repeat purchases and recommend the company to their friends. Businesses that do not focus on quality will quickly find out that there are costs need to be paid. Products with low quality have also low prices but customers seems to want best quality and the goes the price… it is very important for a business to be associated with quality. Competition can close down big companies that do not improve their quality and the customer needs. Quality is highly important because it ensures the living level of a business. Without it the business may survive but it won’t reach its optimal earning potential.

2 The speed objective

With speed we mean the time is needed for a customer to request a product the time the product is delivered to the customer. For the organization, speed is not as high on their priorities as quality, however they must still give it a high priority otherwise they will lose customers. As we can see in the case study Toyota between July and October 2000 sold 2610 priuses and its was very hard to keep up with demand. The production was low and the demand was really high so many customers were disappointed by the waiting list they had been put.

3 The dependability objective

Dependability is a complicated mean which includes reliability, safety, security, and availability. Dependability also has the same effect inside the operation due to the fact that the internal customer rely on each others processes in delivering material and information in time. With dependability the company saves time and money and it gives more stability to its operations.

4 The flexibility objective

Nowadays the competition is very high and every business to survive it must change its strategy and need to be flexible enough to achieve its goals. Here we must say that rather than tradition or some standarts the company has to transform to satisfy customers needs which are changing each day. Only a company who is flexible can survive that competition and can attract the attention of the customers. That’s where Toyota took advantage of and tried to attract more customers by the creation of the Toyota prius. Climate is changing so does the company if you want to protect the environment who is changing then you have to make a car which is friendly and it don’t pollute the air. It was a risky try but Toyota compete with the other companies who hadn’t had a hybrid yet and won.

5 The cost objective

Cost is also very important but it’s the last on our list. First all the other objectives must be fulfilled and the cost comes last. Companies always compete about the price and the product with the lower price and the higher quality wins the battle. At Toyota motor sales they are very proud because they claim the quality innovation and reliability objectives.

Question 4

Prius entered the market in 1997 as the world’s first mass-produced hybrid. The name Prius, “to go before” in Latin, became symbolic of a car that was launched even before environmental awareness had become a mainstream social issue.

From the beginning, Toyota’s full-hybrid system was developed almost entirely in-house and has become a driving force behind advanced vehicle technology. The company’s exclusive Hybrid Synergy Drive System was introduced in 2004 on the second-generation Prius. Since then, more than 700,000 have been sold in the U.S.

In designing the new, third-generation Prius; Toyota engineers combined a careful refinement of existing systems with an aggressive measure of new technology necessary for the future of automobiles.

During the development of the Prius, more than 1,000 applications for patents were filed worldwide.

The third-generation Prius extends its record of continuous improvement in fuel economy. The first-generation Prius, which was rated 41 EPA combined mpg, was replaced by the current model, which is EPA rated at 46 miles per gallon (mpg), combined city/highway. Using a combination of technologies, fuel efficiency was increased to an EPA estimated city/highway mpg rating of 51 in the city, 48 on the highway and a combined 50 mpg for the new Prius.

A larger and more powerful 1.8-liter Atkinson-cycle, four-cylinder engine will produce 98 horsepower at 5,200 rpm in the new Prius. Together with its electric motor the hybrid system in the new Prius will generate a combined net horsepower of 134, an improvement of 24 horsepower over the previous generation. Contrary to conventional wisdom, the larger engine actually helps improve highway mileage. By making more torque, the new engine can run at lower average rpm on the highway. When operating at lower rpm, the new engine uses less fuel. Mileage is especially improved in cold-start conditions and at higher speeds.

Use of an electric water pump and a new exhaust gas recirculation (EGR) system also contribute to the engine’s efficiency. The 1.8-liter Prius engine is the first Toyota power plant that requires no belts under the hood for better fuel economy and less potential maintenance.

A multi-information display panel that monitors fuel and energy consumption is standard. It provides feedback on the Prius’ efficiency using three different displays to help the driver acquire economical driving habits. Unlike most other hybrid vehicles available, Prius has been an uncompromised “full” hybrid since introduction. This allows it to run on engine alone, battery alone, or a combination of both. The system blends the best of parallel hybrid and series hybrid designs to achieve the ability to operate on the electric mode alone, and to charge the batteries while the car is running.

Cutting Edge Styling

In designing the new Prius, aerodynamic performance was an important factor. The goal was to create a beautiful silhouette, while not compromising function. Designers preserved the dynamic triangle form of the

current model–instantly recognizable as a Prius–but made alterations to the overall profile, pillar position and angle. The front pillar, extended forward, helps refine the performance-focusing, shaped form.

The overall height of the Prius is the same, but the roof profile is altered by moving the top of the roof 3.9 inches to the rear. This emphasizes the wedge shape, and also allows for enhanced rear headroom and improved aerodynamics.

The design of the new Prius’ front and rear corners are sharp, sporty and aerodynamic. Strong side character lines, rising from front to rear, define the glazed geometric shape. Viewed from the rear, wider rear treads provide a solid, firmly rooted stance.

Dimensionally, the new Prius has the same wheelbase as the current generation. Overall length is slightly increased by 0.6 inches, in part by moving the front cowl forward.

Safety

The new Prius was designed to comply with class-top level collision safety performance in each global region of sale, and to accommodate increasingly strict safety requirements in the future.

In addition to advanced driver and front passenger Supplemental Restraint System (SRS) airbags, front and rear side curtain airbags, driver and passenger seat-mounted side airbags and driver’s knee airbag are standard equipment. Active headrests are used in both front seats to reduce the possibility of whiplash in a collision. Anti-lock Brake System (ABS), Electronic Brake Distribution (EBD), Brake Assist (BA), electronic traction control (TRAC) and Vehicle Stability Control (VSC) are included with Toyota’s standard Star Safety System.

A Dynamic Radar Cruise Control system, using advanced millimeter wave radar, is an available option. The system also enables Lane Keep Assist, which helps the driver stay safely within the lane, and the Pre-Collision System, which retracts seatbelts and applies the brakes in certain conditions when a crash is unavoidable.

Next-generation Intelligent Parking Assist features simplified settings to help guide the car into parking spaces.

A backup monitor, who provides a view of rear obstacles when reverse is engaged, is available with an optional voice-activated navigation system. Safety Connect, Toyota’s first safety and security service, includes automatic collision notification, stolen vehicle locator and an SOS call button. Safety Connect will be available a few months after launch.

Fuel consumption

Fuel consumption, or fuel-efficiency in cars is generally measured as distance traveled per unit volume of fuel, as in miles per gallon (mpg), or as the volume of fuel required to cover a given distance, as in liters per 100 kilometers (L/100 km). Diesel fuel does have about an 11% higher energy density than gasoline (petrol), so that needs to be taken into account in pure energy-efficiency calculations and comparisons. Fuel-price-efficiency calculations will vary between various parts of the world, with diesel fuel pump prices being higher than gasoline prices in some countries, whilst in others it is less expensive than gasoline.

First and foremost, this quintessential hybrid is the most fuel-efficient mass-production car currently on sale. While you pay a premium for all that hybrid sophistication, you’re rewarded with considerably more refinement than a typical fuel-efficient subcompact (like a Honda Fit) has to offer, and there is something to be said for rewarding Toyota’s technical innovation rather than Exxon-Mobil’s ability to refine crude oil.

Beyond its fuel-sipping ways, the Prius features loads of available high-tech luxury goodies, which should appeal to those who are trading out of a pricier luxury car, as well as those cross-shopping the Prius against midsize sedans like the Accord and Camry. Moreover, the Prius stands out against such sedans by offering a funky but uniquely space-efficient body design. Believe it or not, there’s more backseat legroom than a Ford Crown Victoria, with ample hatchback cargo capacity to boot. It may not look big from the outside, but climb inside and you’ll find the Prius surprisingly large and utilitarian. It is a tad narrow, though, and taller drivers will find the driving position off-puttingly awkward.

There are other standout hybrid vehicles available for 2009, each offering similar gasoline-electric systems while providing a little something different. The Toyota Camry Hybrid offers a more luxurious and conventional driving experience. The Nissan Altima Hybrid is the fun choice for those who think of cars as something other than just an appliance. The Ford Escape Hybrid is the choice for those looking for an elevated driving position, all-wheel-drive and added utility. Finally, the Honda Civic Hybrid is an economical choice priced similarly to (but smaller than) the Prius.

Nonetheless, no car combines fuel- and space-efficiency quite like the 2009 Toyota Prius. In the end, we think this is the hybrid that will best meet the needs of “most people

Toyota prius is definitely a car which will bring a new era in the hybrids and a total new way of car construction. Toyota had made a long step by creating this car which has been a steady improvement until now.