Total Recall: Toyota and the Future of Green Marketing

Two steps forward 2 Joel Makower analyzes the impact of Toyota's recall problems on the green marketing realm. He predicts that though Toyota's credibility will be seriously degraded, its reputation as an environmental leader will be sustained due to customer loyalty. He goes on to say that it will make it more difficult for green brands and products to be successful in the marketplace.

Posted Feb. 15, 2010

By Joel Makower, Two Steps Forward

What does Toyota's travails mean to green marketing?

That
question seems ripe these days, as the leading Japanese auto maker gets
a comeuppance for its allegedly serious safety defects — and the more
than 8 million cars it has recalled worldwide as a result. Toyota,
after all, had become a darling of the eco-minded, a case study in the
green halo that can inure to old-line companies that bring
environmental innovation to mainstream audiences. Toyota seemed to have
done it the right way: with products that weren't just greener, but
better — in this case, high-aesthetic, high-performance, affordable
cars.

In some regards, Toyota's Prius gas-electric hybrid represented the
green consumer ideal: no tradeoffs — a product that pushed all the
right buttons. It came from a trusted brand, didn't require consumers
to change habits, performed well, looked great, and provided an
environmental benefit. It made a public statement about the owner's green cred. It offered consumers, as I've dubbed it, "Change
without changing." There haven't been many other consumer products from
major brands, save for a handful of household cleaners, that have fired
on all those cylinders.

But now that ideal has experienced a crash-course in reality, a
collision of technological snafus and a corporate culture that shunned
transparency for expediency — and may have committed criminal neglect.
The result, as everyone knows, is a massive global regulatory
undertaking, media-fanned anxiety on the part of Toyota vehicle owners
— and more than a little handwringing on the part of environmentalists,
who aren't sure what to think of a company that had come to be seen as
a corporate hero.

One evidence of that hero status comes from the Green Confidence Index
co-produced by my team at GreenBiz.com. Every month we ask 2,500
Americans — a demographically representative sampling of the adult
online population — a simple but profound question: "What company, if
any, do you think of as being 'green'?" It's an unaided question,
meaning that no list of companies is provided. Respondents simply name
companies that are top of mind. For the past six months, Toyota has
remained among the top 8 companies named. (Walmart and Clorox have
consistently been the top two, while 64% of Americans aren't able to
name any company they consider to be green — a story for another day.)

It will be interesting to see how the troubles will tarnish Toyota's
green sheen, especially since the company's recalls have been so widely
and persistently reported; this isn't some scandal limited to the
blogosphere or the green world. The Green Confidence Index will be
following this closely over the coming months.

So, what does the recall mean to the world of green? There are several potential scenarios:

1. The recalls will severely damage Toyota's credibility,
making room for other car companies to emerge as green leaders,
especially as a new wave of hybrids, diesels, and electric vehicles
rolls out over the next 18 months: Nissan's Leaf, GM's Chevy Volt, Ford's Focus, Volkswagen's Touareg, higher-end cars from BMW, Porsche, and Infinity — in addition to cars, vans, electric bikes, and other alt-fueled vehicles made by countless smaller firms, from Aptera to Zap. Plus, the high-profile (and high-priced) Tesla Roadster and Fisker Karma. In an era in which nearly everyone has one or more green vehicles to promote, the Prius may take a back seat.

2. Toyota's brand leadership and reputation for quality and environmental leadership will survive intact.
So indelible is its reputation, the scenario goes, and so loyal are its
customers — especially diehard Prius owners — that the public will see
Toyota through. This scenario, of course, hinges in large part on
whether and how the company digs itself out of its reputational hole in
the coming weeks: how it executes on its recalls, how it survives
upcoming U.S. congressional hearings (and their counterparts in other
countries), and what evidence of corporate malfeasance arises. It also
depends on things outside of the company's control. For example, every
serious accident involving a Toyota vehicle could become fodder for
local (or national) news media to burnish a Toyota-as-death-trap
reputation that could take years to undo.

3. Toyota's plight will be a setback for green products in general and green vehicles in particular.
The Prius — the darling of environmentally minded consumers — has now
been tarnished as unsafe, thanks to its occasional loss of braking.
(So, too, have the upscale Lexus hybrid and the Toyota Sai compact,
another hybrid sold only in Japan.) For skeptics, climate deniers, and
green grumps of all stripes, this "proves" that green marketing is a
scam, simply another means to separate consumers from their wallets.
When all is said and done, the Prius will have mowed down a host of
promising products with environmental attributes — and not just cars.
At minimum, it will give solace to those who already had been looking
for reasons not to purchase fuel-efficient cars, energy-efficient
appliances, organic foods, and other greener goods.

4. The Prius recall will prove that greener cars are just like any other,
in that they come from real companies with real problems. As such, it
will help to socialize the new crop of green vehicles, and maybe other
green products, helping people to see them as part of the "regular"
marketplace. This will reduce the negative stigma some people hold
against green products. And while Toyota's products may take a while to
regain favor, their woes won't impede other companies' success.

Which of these scenarios pans out is anyone's guess. And it's not a
zero-sum game. Toyota could win this battle (Scenario 2) while green
products lose the war (Scenario 3). It will be interesting to watch —
another speed bump in the long and winding road toward the
mainstreaming of green.

Joel is co-founder and executive editor of Greener World Media, Inc., which produces GreenBiz.com and its sister sites, ClimateBiz.com, GreenerBuildings.com, GreenerDesign.com, and GreenerComputing.com. Joel is also the principal author of the annual State of Green Business report and the Greener by Design conference, both produced by Greener World Media.

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