Toyota Marketing Smartly Shifting
Jason Lancaster | Aug 16, 2010 | Comments 11
If you ask the average person what words come to mind when they think “Toyota,” there’s a pretty good chance they’ll say “quality and reliability.” Since the 1970’s, Toyota has garnered a strong reputation for building quality, reliable vehicles. While some would argue that this reputation is undeserved, that’s not what we’re talking about here. What we’re talking about is popular perception.
The popular perception of Toyota is, in a word, excellent. Toyota has led all automakers in Consumer Report’s brand perception study for years (if you doubt that, see studies from 2007, 2008, 2009, and 2010).
Why Does America Think Toyota is So Great?
Again, setting recent events aside (who knows what impact they have had), it’s likely that Toyota’s great reputation is a result of two things:
- PR, brand management, etc.
- Word of mouth
Since every automaker has PR and brand management people, I don’t think that’s a big part of the puzzle. I think it’s because all of us – everyone in America – knows someone who has had a great experience with a Toyota. I’m not saying that all Toyotas are perfect of course, I’m merely pointing out that all of us (or almost all of us) know somebody who knows somebody who swears by their Toyota. I think that’s Toyota’s key advantage when it comes to perception.
Using A Good Reputation 2.0
For a long time, Toyota used this great common perception of their brand to justify higher prices. Like Honda, Toyota resisted offering discounts and incentives on their vehicles for years, reaping substantial profits in the process. As recently as September 2008, Toyota’s average incentive was less than half the industry average. Times, of course, have changed. Toyota’s average incentives in July, 2010 were as high as they’ve ever been.
Now it seems that Toyota might be trying to use this great reputation differently. Instead of “riding” on that reputation to generate profits, they’re actively building that reputation in a first-person, “web 2.0” sort of way that reinforces the beliefs that many of us already have.
First, we had a very compelling series of videos about a Tundra that lived on a cattle ranch.
This “Tundra deconstructed” series is a great example of authentic, first-person testimonials that are pretty hard to argue with. Even if you’re not a Tundra fan, it’s hard to think that the ranchers in this video aren’t the real deal.
Next, we had a funny series of videos featuring the “typical” American family buying a Sienna minvan, trying to reconcile the utility of the vehicle with the popular perception of vans.
Funny and personable, it’s a good way to poke a little fun at the product while still selling cars. The video above, for example, has been seen 5.4 million times (as of today).
Finally we have Toyota Stories, a new website that features first-person accounts from Toyota owners like the one below:
Great towing truck – Submitted By: Joseph W. – Hammonton, NJ
Hi, I have a 2008 Tundra and pull a fifth wheel 10,000 trailer. We just stayed in Fl in Nov. at Fort Wilderness. The Tundra pulled that trailer with no problem over 3000 miles on that trip. Keep building great trucks Toyota.
There are hundreds of stories like the one above on the Toyota stories website, and they help reinforce the popular perception of Toyota because they’re “social proof” – real stories from real people (typos and all) that all like Toyota.
It’s my opinion that all of these efforts point to a shift in Toyota’s marketing strategy. By using individual perceptions of quality, Toyota can get us to believe stories like the one told in the deconstructed video or on the website. By making fun of themselves in the Sienna ads, Toyota is showing us that even people who don’t really want to buy their product still buy their product, perceivably because of quality (it’s definitely not because the Sienna is cool).
Whether or not this will result in sales success and reduced incentives is hard to say – it doesn’t do much to “win over” people who don’t already like the brand – but it seems like a smart strategy to me.
What do you think – are these efforts a smart move or just business as usual?
Filed Under: Auto News
I think in rural areas like where i’m at, vehicle sales depend a lot on dealership location and accessability. In my home town, 20 years ago, there where 3 family owned dealerships and all of them were from the big3. Needless to say, 99% of all vehicles here were GM, Ford or Dodge. Now, there are no dealerships here, and 50% of the vehicles are Nissan, Toyota and Honda, respectively. The other 50% are the big3. The farther away a dealership is, then the less likelyhood of one being sold to a local person. Furthermore, people consider service. If you breakdown, how do you get to a dealship 100 miles away. Our Toyota dealer is 30 miles away and they will come get your car if they need to.
There is hardly any Toyota advertisements in any local media. The reputation of toyota cars here is, they last forever but they are boring cars. The reputation of the Tundra is that it’s “one badxss truck”. Even with that said, people with a long histoy of GM or Ford vehicles, have a reluctance to consider owning one. I was one of those people. Jason, i have never told you this, but my degree is in marketing. Now that by no means makes me an expert but there are a few basic concepts.
1. Name brand recognition. Everyone knows who Toyota is
2. Reputation. Good and Bad, Toyota has achieved that too.
3. Location, location location! If we had to travel 100
miles to buy this Tundra, it would have never happened.
4. Product placement. Tundra has been sponsering rodeos.
Ford is all over the place with Mike Rowe and GMC is
sponsoring the tv show This Old House.
As for Toyota’s change in marketing strategy, i think it’s a response to the changing world of media. More people get their new, infornation and entertainment from the internet than traditional media these days. Hence the hook of funny and cool commercials. These commercials will be viewed over and over again via internet after they debut on tv. Free advertising and the possible consumer is actually looking for a commercial instead of changing the channel on the tv.
To address bordom, i think that’s why Scion was created. Personally, i think the Supra needs to be reborn.
As for Personal experience commercials, Toyota has had a few commercials that have people showing off the high miles that they achieved. Even though 150k+ miles is admirable, it’s not unusual. heck i had 263k on my z-71.
As for word of mouth, i think its the most important of all. But, Toyota falls a lil’ short in this catagory. Well at least in the Good word of mouth lately. One of the biggest part of American society is perceived net worth. Who’s truck is bigger, who’s car is faster, who’s car is cooler. Bragging rights get more attention than reliability. I’m not saying that reliability isn’t important, i’m just saying no one really brags about it.
Now, take Toyota’s excellent reputation and add some cool and a dash of sexy (truck owners please add even more masculinity), then they would have it all. Then word of mouth is all you need. lol.
Sorry for the long post and slight deviation from the original post.
Danny – Interesting! Glad to hear a more informed opinion – my experience is in sales and online marketing, but I have no formal education in that area.
I have long thought that Toyota’s truck sales are at a distinct disadvantage because Toyota lacks rural dealerships…I’ve been told that this is a misnomer (rural sales are supposedly very small), but I just don’t buy it. A lot of rural folks will “go to town” to buy, and that will skew the rural sales figures if the sales are registered in a major city.
In any case, good points and good comment. Thanks.
Jason,
well, what is the real definition of “rural” anywho?
I also think that Tundra sales suffer from an absence of fleet sales and an absence of a diesel. I know, same arguement but it’s true. Fleet sales unfortunately seem to diminish resale value across the board. Toyota learned that with the Camry and Corolla as well as Ford and GM with their cars respectively with rental fleets. A few of my farmer buddies had tried Tundra’s out in the field. Their conclusion was, ya’ cant kill it, but where’s the diesel version. So, lets breakdown the diesel concept a lil’ more. Besides the natural advantages of the diesel, we all seem to have forgotten government subsidized farm diesel (tax exempt). Now, my best friend works for Valero and there are more changes coming to the formulation of diesel. It has a lot to do with the sulfur content. I’m not sure if it will eliminate regular diesel farm trucks from using this farm fuel or not. If it does, it may change the usage of diesel trucks on the farms. I just dont remember which direction they are going with that. Anywho, that’s the buzz in her office. I do know, dont ever get caught on the street with farm diesel in your tank. Mucho bucks in fines.
Back to the advertising, where and who is Toyota’s poster child? Ford has Mike Roe and GM has Howie Long. Who do we have?
Also, whether sponsored or not websites like your play a pivotal part in many people’s decisions too.
I do like the Camry being used in Nascar and Winston cup racing but where is the hopped up version of the camry available to the general public. For example, Chevy uses the Monte Carlo body and they offer the Monte Carlo SS to the general public. Even though i feel that GM muddied the SS badge with the ss version of the monte carlo, cobalt and hhr, those are available for purchase. Even though the ss version sales number were relitively small, they are rolling advertisment prowling the streets. Here’s another way of looking at it and it’s warm to my heart. Let’s take the Buick Grand National. Only around 36k were made in its 6 years run. The reputation still lives today 20+ years later. Their reputaion of powerful reliable cars lives today eventhough they have moved to the family car image. I actually think buick tried to shed that image starting in 1988 when the regal went front wheel drive. But, thats just my crazy thoughts coming out.
There i go again. Sorry for the rambling but you did ask us for our thoughts. Oh, my formal education may be in marketing and management, my real world experience starts with retail, continues into casino operations and gaming law and has since moved to real estate. Now that’s a strange mix. Also, those who think that real estate is a bad field to be in right now, well opportunity comes in different shapes and forms and my end of the market is booming. I just need mo’ money!
Danny – Personally, I would define rural as small cities in the Colorado mountains, Western slope, and/or on the plains. I know of a handful of Toyota dealers around the state, but dozens of GM/Ford stores.
My wife’s family is from Iowa, and having visited a few times, I find two things to be remarkable. First, the number of trucks and SUVs on a per capita basis seems even higher than Colorado in much of the state. Second, I don’t see a lot of Toyota dealers…or a lot of Toyota trucks.
If you look nationwide, you’ll see a similar trend. “Rural” areas and/or smaller cities don’t have Toyota dealers, but they do have Ford or GM dealers. To me, this accounts for a significant truck sales advantage, as I would guess 10-15% of truck sales are to rural customers.
I’ve posited this theory to people who “know” the numbers, and they tell me that my estimate is too high. However, I’m guessing the official numbers are skewed by the fact that people leave the rural community to buy in a larger community in order to get the best deal. SO, that’s what I think…no proof, however.
I wholeheartedly agree that a lack of a diesel hurts Toyota’s truck image, but no other half-ton is available with a diesel, so I don’t think that explains Tundra sales. Your point about fleet sales, however, is absolutely correct. Ford and GM fleet pricing is incredible – Toyota doesn’t have a chance to match simply because they don’t have the economies of scale.
I also agree that a lack of a strong spokesperson and a lack of performance products hurt Toyota too. While I’m not sure Toyota will ever embrace the concept of a spokesperson – seems like the Japanese culture of the company prohibits it – you will be pleased to learn that Toyota is actively engineering some performance cars that will (hopefully) bring some luster back to the brand.
The Grand National you mentioned is the “halo” car that can change the perception of a brand. The Viper is a great example as well. Both cars were available to the public, and both cars were a tremendous value in terms of the performance they offered at their price point.
Toyota has tried to make the Lexus LF-A a halo car, but I don’t think it will stick because of the outrageous price tag. If Toyota brings back the Supra (rumor is that they will), then Toyota fans will have something to brag about again. Until that time, I’ll just dream of a 500hp Tundra. LOL.
P.S. Gaming, retail, and real estate? Sounds like you’ve got some interesting experience.
Agree on the rural thing. In southern WI owned by GM and Ford pretty much exclusively, Toyota dealers are harder to find. Once you do go in, they think they own you since they are the only dealer in the area within 50 miles of each other and basically say take what we have or go away. Heck, there are 5 GM dealers for every 1 Toyota dealer around here in WI. That is supply and demand. I’m not saying to have tons of toyota dealers around like GM has in every little hicktown, but more would be better to offer a lower price to us customers having dealers fighting for our business.
I just used the Toyota dealership locator for North Mississippi and they seem to be located about 80 miles apart in the rural areas. The metro areas (yes we have a few) there seems to be about 2 per area. That seems about right. It puts a dealer about less than 40+ miles from any dealer unless you’re out in the sticks. I’m sure that’s not true for all areas of the USA. Too many dealers would cause finiancial issues like the big3 being bottom heavy. Unfortunately the big3 are heavy in the top, mid and bottom. But, Jason, you are correct about the numbers being skewed. They’re counting where the sales are made, not where the vehicles are going. A lot of people around here will go to the metro areas where the competition is stronger, whether another Toyota dealer or another company, to get a better price and then use the closest dealer for service. Without the local dealer, the sale probably would not have happened.
Back to the original post, i do think Toyota is somewhat making the right move in their media campaign but i also think their reluctence to promote anything but their reliability is a downfall. Toyota offers just about something for everyone but you never hear about it.
This list could go on and on but i promised to keep my post a little shorter.
Also, Toyota does seem to sell just as many vehicles as GM with less dealers. We must also consider the economic Law of Diminishing Returns. Just because you have more dealers, doesnt mean you will sell more cars and it may actually make it cost more to sell a car, per unit.
mk – That’s an EXCELLENT point – Toyota dealers are much less likely to deal than their “domestic” counterparts, especially when they aren’t surrounded by competing Toyota dealers.
Danny – I’m with you on the dangers of too many dealers. Most people don’t realize this, but the main reason that GM and Chrysler wanted to kill so many of their dealers is that, in the long run, too many dealers devalue a product. When five Ford dealers in the same small market compete for business by slashing prices, it’s not long before consumer perspectives on the product are devalued as well. Toyota has the right number of dealers, but a lack of rural Tundra dealers hurts Tundra sales (at least I think so).
I think your point about expanding the marketing message beyond reliability and safety is a good one too – putting all the eggs in one basket (quality/reliability and safety) is potentially devastating if the manufacturer has a perceived quality and safety issue (aka unintended acceleration).
Hopefully, they’ll start focusing on environmental friendliness, technology, and performance in addition to safety and great quality.
Really hoping that they make a limited edition Tundra supertruck like the old F150 Lightnings…might be a nice way to show off the supercharged Tundra’s outrageous power advantage over the competition.
A long time ago, in a galaxy far far away, there were Chevy, Ford and DOdge/chrysler. They all thought that the only fear they had was the anti-trust/monopoly acts. They never thought that the Japanese import cars were a serious threat. So Here’s the real reality check. It’s pretty obvious that the japanese imports have taken half of the US auto sales market. Oh, we were talking about trucks. The japanese will never be able to compete in the mid to compact truck lines. Wrong again. Well, the mid-size truck market is now dominated bt the Frontier and the Tacoma. Let’s not forget the other Japanese trucks being the Ridgeline and the Raider. So the big 3’s only answers was the Colorado/Canyon, Range and Dakota. Seems too little too late.
Now, the full size truck series. Well, it’s only a matter of time. You may be right, but the near future will tell the whole story. The big 3 were wrong on the first two counts, if they blow this one, it will be a clean sweep by the japanese.
Let’s also not forget that the big 3 had protected markets in the past with import tarrifs on import vehicles to give them an unfair competitive advantage. With japanese imports being made here the the Good Ol’USA, you cant slap a tarriff on it.
I’ll be the first to admit that it will be hard and unlikely for the Japanese American made trucks to dethrone the big 3 in the full size truck market, but no one thought they would dethrone the big 3 in the car market or the midsize truck market. And if you dont think that the big 3 were dethroned, think again.
peace!
Jason,
my last comment seems out of place without the comment i was responding to. Oh well, i know you get my point and i hope everyone else does too.
Danny – No worries. If you see a note from Hexmate, go ahead and ignore it…he was banned from this site a long time ago.