Japan's auto dealers have tried just about everything to revive sales. One Toyota Motor Corporation dealership in Tokyo throws monthly festivals in its parking lot and offers discounts of as much as USD 2,500 on new models. But potential customers such as Kai Matsuda, a smartly dressed 28 year old, is not buying. Sure, after spending a recent Sunday touring Toyota's swank four-story Amlux showroom in Tokyo, Matsuda came away impressed. The building housed everything from rugged recreational vehicles to sleek luxury sedans such as the USD 37,000 Aristo. Matsuda would love to buy a new car: "if I had the money". However, with Japan's economy on the skids, he does not.
For Japanese carmakers preparing to roll out their new fleets at the Tokyo Motor Show, consumers such as Matsuda illustrate why 2000 was such a tough year. Despite a flurry of new launches, the recent increase in Japan's consumption tax from 3 per cent to 5 per cent has caused car sales to decline for six months in a row. Dealers sold nine per cent fewer cars in September then in the same month a year earlier, and several have now fallen into the red or have gone bankrupt.
So carmakers are desperately hoping their 2000 models will boost sales. The Motor Show's new lines have the latest in breaking, engine, transmission technology, more sporty designs, and more environmentally friendly engines—including a "hybrid" car that can get 66 miles per gallon on a combination of gasoline and electricity. "Every maker is preparing new launches to keep sales from falling through the floor," says Christopher Redl, automotive analyst at ING Barrings Limited.
But Japanese consumers are already overwhelmed with choices. "There are now over 190 car models available in the market," says Atsushi Fuyi, member of the board of directors in charge of domestic sales at Nissan Motor Company, "and the average consumer can only remember about 11 of them."
Yet at the Motor Show, Japanese carmakers will be coming out with even more. Toyota wants to target young people with fun European-looking models and convertible sports car. Toyota also plans to roll out the world's first mass-produced hybrid, with sales projected at 1,000 a month. The company admits it will see the hybrid as one-third of the world's auto market by 2005. After working out the kinks in the hybrid in Japan, Toyota plans to take it for a spin in overseas markets. However, analysts worry the hybrid could cannibalize sales of other models. "Why would you want to buy a Corona when you might be able to buy a hybrid car for just about the same price?" asks Edward Brogan, automotive analyst at Salomon Brothers Inc.
In this chapter we will look at the special challenges that the marketing of products possess. Moreover, we will delineate the unique characteristics associated with products as they pass through the various stages of their lives. Particular attention will be given to the kinds of decisions that are necessary through this process. 1