Environment management assignment on: Consumers about their environment

Introduction:For the past many years, consumers have started thinking about the environment, their surroundings & have taken up little steps for the same. In order to keep the environment clean & pollution free, fuel efficient or the electric cars have been adopted by the same. The regular passenger cars & the Sports Utility Vehicles (SUV’s) have been moved away to some extent due to a subsequent increase in the level of prices. The popularity of the HEV’s has led to a change in the overall automobile sector in various countries such as Australia, etc. HEV’s have been referred to as the most fuel efficient & environmental friendly car available for the consumers.. Small, more fuel-efficient vehicles are also becoming more popular and are an alternative for consumers seeking an environmentally friendly car (REF). HEVs, such as the Toyota Prius, will face increasing competition as more manufacturers provide the market with alternative environmentally friendly vehicles such as the increasingly popular electric vehicles (Nissan, GM and Mitsubishi are all expected to sell electric cars in Australia by 2012) (REF).HEVs still represent a niche market and a product that is still in the growth phase of its life cycle. Sales of HEVs are estimated to account for 1.4% of total cars sold in Australia in 2010-11 and increase to about 5.5% over the next five years (REF). Currently the two main players in HEV market are Toyota (Prius and Camry) and Honda (Civic and Insight). However as consumers have learnt more about HEVs and continue to do so, sales have expanded and will continue to do so (REF) Toyota, for example, has sold 2 million Prius’s worldwide with the first million being achieved in 10 years and the second million being achieved in only 2 years and 5 months and a target of 1 million on average per year in 2010’s is envisaged (REF).

Potential market segment:

Green Car Institute’s market research, conducted by The Dohring Company in July 2000, quantified the potential consumer market for EVs. More than 900 California new car buyers were surveyed about their next car purchase, and they showed a strong interest in adding an EV to their households.

The market research, which sampled a representative group of the California car-buying public, showed a strong consumer market for EVs among new car purchasers. Almost one-third (29.2 percent) of those polled indicated they would be “likely” or “very likely” to acquire an EV as their next car purchase if that vehicle were priced close the same price as a gasoline vehicle. After being provided further information on EVs (both their limitations and benefits), purchase intent rose to more to 33.4 percent. Interestingly, the actual people responding positively to EVs changed between the two questions because of the information (some who initially chose EVs changed their minds while others who had not considered EVs initially decided they would like to buy one). Further, more than two-thirds (69.6 percent) of those who wanted to buy an EV indicated a willingness to pay a premium for that vehicle.Consumers in this research study were attracted to EVs because of their positive environmental benefits, followed by their economic advantages (such as lower fuel and maintenance costs) and the perception that electric vehicles are “the cars of the future.” Those who chose to stick with gasoline-powered vehicles did so because of those vehicles’ greater driving range, use for out-of-town travel and proven reliability.

Until 2015, the market penetration of EVs will remain fairly low compared to

sales forecasts of 53 million conventional cars in 2010. The estimation based

on several government announcements, industry capacities and proliferation

projects sees over five million new EVs on the road globally by 2015, the

majority of these in the EU. The main markets for EVs are in order of

importance the EU, the US and East Asia (China and Japan), also representing

today’s main markets for ICE passenger cars in a different order. Some further

target markets like Israel and the Indian subcontinent will evolve as well.

In the long term, the share of EVs will most likely increase as additional

countries adopt technologies and initiate projects themselves. On the other

hand, there is also a likelihood that Electric Vehicles might fail to reach mass

markets and will remain a niche product for technology leaders.

In some countries, non-passenger car EVs already hold market shares of up to

10%, as do electric bicycles in the Netherlands. In East Asia, especially in

China, there is also a clear trend towards electric bicycles. These examples

highlight the potential for electric mobility in non-car applications.

Additionally, concrete beginnings of existing market penetration can be

observed as postal and messenger services as well as other companies

increasingly plan to equip their inner-city fleets with short-range electric vans

and trucks. In these cases, the EVs are used in their typical urban field of

application where they prove to be profitable and attractive also for private

companies.

Generally, non-passenger car market penetration in the short term might have

more impact than passenger cars as postal and messenger services as well as

other companies increasingly equip their inner-city fleets with short-range

electric vans and trucks, however starting from very marginal levels.

Socio demographic segment:

Based upon one of the books written by Michael Solomon, demographics have been defined as the characteristics of the entire population. It has been seen that, marketers use demographics of the population which would help in order to segment the entire population in the most effective & efficient manner.Some of the factors which shall be taken into consideration while segmenting the Hybrid Electric vehicle (HEV) on the basis of demographics refer to age, ethnicity, income group & gender.

Þ    Age: The first demographic variable which shall be taken into consideration in case of HEV will not play a very important role. It shall be seen that, the age group for the hybrid owners would be middle aged population. Based upon the research it has been that, consumers ranging between 25- 54 years of age will contribute to the target population for HEV. Based upon the sales, it can be seen that 18% of the entire sales would be contributed by people belonging to the age group 25-34, 19.6% will be contributed by those between 35 – 44 & 19.5% will be contributed by the rest.

Þ    Gender: Gender refers to the next best variable which shall be taken into consideration while segmenting the population based upon demographics. Out of the entire population of 100%, 51.8% of the girls & 48.2% of the boys wou ld be interested in HEV’s.

Þ    Income group: People belonging to the income group of $75,000 annually will be able to buy a hybrid electric vehicle.  It shall be taken into consideration that the average income of the people will increase but the same time the number of people owing the hybrid electric vehicle will not increase. Therefore, it must be kept in mind that people with lesser annual income will able to buy more number of hybrid electric vehicles. The average price fixed for a hybrid electric vehicle would vary from $40,000 – $59,999.

Þ    Ethnicity: Ethnicity refers to one of the extreme demographic variables which would provide a clear view regarding the trend of the hybrid vehicle. It must be taken into consideration that, majority of the owners consider themselves amongst the white & the rest belong to the black or African ethnic group.

Psychographic segmentation:Based upon the article written by Danny Bradbury, it has been seen that green consumers refers to the early adopters who use the environmental friendly vehicles, such as the electric vehicles. It must be kept in mind that, people who use such type of vehicles are highly creative as compared to the entire population. The mindset of the people driving the hybrid electric vehicles is those who are more liberal, open minded as well as quite spontaneous.

Based upon the psychographic segmentation the following aspect shall be taken into consideration. They are as follows:

Þ    Green Marketing Strategies: With an increased level of pollution, global warming, etc the manufacturers manufacturing automobiles are finding various ways in order to have an edge as well as over pass the cut throat competition. Therefore, hybrid vehicles have been emerged as one of the perfect solutions for the same. Manufacturing the hybrid electric vehicles (HEV’s) is one of the major focuses for the big automobile manufacturers. One of the biggest advantages of HEV is that they help to reduce the levels of pollution as well as minimize the green house gases within the atmosphere. It has been analyzed that, approximately 60% or more hybrid vehicles on the road will be able to eradicate 450 million metric tons of carbon dioxide by the year 2050. This will be able to have high levels of benefit over the planet. The benefits attached with the hybrid vehicles shall be well stated in the mind of the automobile manufacturers as more & more customers are being careful for the atmosphere. Based upon the review conducted by Stanford Social Innovation Review, it has been well stated that – “majority of the population is concerned regarding the increased levels of seas, shrinking in the number of animals, lengthening of the droughts, etc”.

Therefore, many of the automobile manufacturers have started trying their automobiles into “green marketing”. This means that, there is a trend within the automobile industry which helps to promote the hybrid vehicles so as to improve the quality of life. As consumers, they shall be made aware regarding the danger which might affect the environment in the future years to come. Hence, fair responsibility shall be taken up by the consumers itself & take a step forward for the same. They shall be sure as to either choose from the passenger vehicle of the HEV’s. It would be quite an important task for the manufacturers to maintain green marketing philosophy which would drive the trend with different types of developments & innovations within the same.

Þ    Benefits sought segmentation:

Targeting & Positioning:After recognizing the demand of the consumers for a better fuel economy & reduce the levels of emission different targeting and positioning methods shall be used. This will help in order to provide a well defined positioning strategy for the automobile manufacturers to position their product i.e. HEV. Just like Honda & Toyota have launched hybrid vehicles in the American market more number of such vehicles shall be launched in other parts of the globe as well. This will help in order to keep the environment clean & eco friendly. It shall be noticed that with the launch of hybrid vehicles, the levels of sales within the HEV industry would increase manifolds. There will be a specified percentage of market shares which would be enjoyed by hybrid electric vehicle.

The initial strategy which shall be practiced by the automobile manufacturers would be to target the innovators along with the early adopters which might be ready to use new technologies. A campaign shall be highlighted upon by the automobile manufacturers which would commit in creating a better environment as well as use the technologies which would engage technophiles in the entire production process.

A special website shall be made where in the customers will be able to read regarding the benefits & the impact of using the hybrid electric vehicle. It must be taken into consideration by the manufacturers that, comfortable, affordable price, good quality; high class technology, clean operation, design & safety should be attached with the vehicle.

A television along with a print advertisement in the local as well as the global newspaper highlighting the hybrid technology shall be done. This will provide the customers with a major aspect i.e. freedom from oil & make the environment a better place to reside in. Online brochures shall be used by the manufacturers of HEV consisting of a video clip which will be sent to masses. The hybrid electric vehicles (HEV) would also be benefited by the endorsements done by celebrities. This will provide the viewers a sense of belongingness. Celebrity endorsements help in accelerating the advertisements as well as attract attention of the customers. It has been reported that, Toyota offered its customers an opportunity to preorder the cars & finalize with the dealers. This led to an increase in the number of cars sold by the respective dealers.

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