Why would Toyota spend a billion dollars on one quarter's worth of advertising on a car that is so popular they can't make them fast enough to satisfy demand? I"m looking to buy before the end of the year, I'm wondering is this is a good sign for buyers or bad?
I believe that you misread the original article which was originally published several weeks ago... From Bloomberg...Toyota Prepares $1 Billion Marketing Blitz in U.S. (Update2) - Bloomberg.com This means that Toyota's marketing budget for 4th Qtr will be increased up to $1 Billion ( an increase of 40% )....all products, all brands, all stores, all incentives, all adv buys, etc, etc. The Prius will get only a small part of that money.
"Billion here and billion there and pretty soon you're talking about real money." Caught a Toyota corporate commercial playing at the local pizza joint this weekend - just a bit of it - it was talking about electric cars - wish I'd seen the whole thing - or that I could find it on the Internet!
If they sell 500,000 vehicles in the quarter...which is likely...then that's $2000 per vehicle. ...advertising ...promotions ...subvented interest rates ...customer cash incentives If however by doing this they can sell 600,000 units which might be a stretch...then that cost is only $1667 per vehicle. The phrases that come to mind are: On the one hand ... 'Ya gotta spend money to make money' On the other hand.. 'Diminishing returns'
I've seen a lot of Toyota Prius commercials in the last 2 weeks on the San Francisco TV stations. I think that Toyota is beyond the point of "diminishing returns" for their advertising dollar. I understand that Toyota recently raised the price of the Prius by several hundred dollars. I now know where those dollars are going....... Keith
That's interesting. Consider this. I own 2 Prius's. I have never seen a Toyota ad. Never. Not on TV, radio or print. I have not seen a tv ad since 1998. (when I got my first tivo) I have not seen a computer ad or popup in many many years. I listen to XM or CD's so I won't hear radio ads. When I listened to FM, I would be off the station in less than a second if an ad came on. If they want to sell cars to me, just make a quality car, I'll buy it. Ad money is money burned. If I see an ad I will boycott them. When I bought my Toyota's it had zero to do with advertising. A billion dollars? What a waste of money. They could have used that for something useful. Like developing their technology. The people who are influenced by advertising are not the utensil-using people who are going to have jobs and money to buy cars... If you need advertising to sell your product, then your product is crap. (and a lot of (most?) products are) Not a sermon, just a thought.
Read the post two just above. It's not $1 Billion for advertising. It's $1 Billion for the marketing of all Toyota, ( and Scion ) vehicles which happens to include advertising. The biggest part of it however is incentives at the point of sale for those vehicles that they want/need to incentivize. The Prius, Lexus and Scions will get very little because there is no need to push vehicles imported from Japan. Why? Toyota is cutting back on the sales of these vehicles anyway so why spend money to spur on the sales. The Prius is oversubscribed in Japan and there's a currency penalty to ship them here now ( hence the $400 boost in price ) so there's no reason to spur these sales. The bulk of the marketing dollars will go toward Camrys, Corollas, Venzas, RAVs, Siennas, Tundras, Tacomas and the brand new 4Runner.
