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This is a measure of the percentage change in the quantity of a good demanded divided by the percentage change in price.This is shown by the following formular;
Price elasticity demand=percentage change in quantity demanded divided by percentage change in price of goods.
Price elasticity of demand measures the change in its own price.
For the case of toyota price elasticitiy applies in that the more substitutes in the market the more elastic the demand for a product because consumers can switch their demand if the price changes the same in toyota the recall can easily cause less demand of cars.
It also affects changing of products and in this case most people might switch to other brand of cars and refuse to buy the affected brand.
Peak and offpick also affects price elacticty of demand because when the peak is high the price are elastic and in the toyota company off course now the pick is very low to to the recall.Also the defination of a good or a service matters or affects elasticity and so in these case it affects.
When it comes to market sructure there is need of market segmentation which differenciates products and in these case toyota kenya has differentiated its products from others despite the recall.
Toyota has used market structure for many years which has brought them to where they are today and these is by appliying the following market segmentation requirements:
1.actionabilty-For a good market structure must be capable of being addresed by use of companies market strategies
2.Stability-A segment which is not stable cannot be targeted of which toyota has been.
3.Measurability-A good market must be measurable in terms of intended parameters.
The market structure can be segmented in the following ways
1.demographic-This deals with population it deals with variables used to subdivide the market and the choice of the variable is based on the product in question.
2.gegraphic-This is dividing the market in to regions and cities which toyota has done as it has many outlets allover the world.
3.Purchasing frequency-This is the frequency at which products are purchased and toyota uses these by producing cars according to purchase frequency.
According to my reseach toyota is increasing its awareness for the brand despite most news being negative.
By so doing it creats awareness to even those people who dint know about the company now are aware because they are getting to get information of the company now and before the recall of which some are getting intrested by othere brands which have not been affected.
From a report form the (CEO of Edmunds.com) the bargain for the toyota prius has gone up from where it was before the racall before it was at 7.4% and now after the recall it has risen to 8.7% this shows that there has been no damage in the short run to the toyota brand but these will be determined with the long term effect. Below is a gragh showing the global coverage of toyota recall gotten from(mashable.com)
I would advise toyota to do the following change its strtegies to strengthen the companies position in this time of a weak economy.this will bring about positioning the company as the market leader by even increasing media visibility.
They should use a pr practise known as”thought leadership”this is the art of communicating a strategic vision to others in an informative and convincing way.
Let the company also look for oppotunities to release news to the press explaining the problem to the public and by so doing it will become compelling and a perception will be created to continue with the company.
My other thought or dvice would be that it is essential to track the planned reports and articles that the reporters write so as to avoid the romours that are going on creating a bad name or picture for the company.
Also let the company communicate with the shareholders.Shareholders must be given adequate opportunities to raise and ask questions at annul generall meetings.This is because share holders want to know the company goalsa nd progress towards success.
By so doing they will influence people towards believing in them and at the end of the day they will make it because they will have created an inspiring vision of the future.