Toyota and the Future of Green Marketing

Two Steps Forward

Toyota and the Future of Green Marketing

What does Toyota's travails mean to green marketing?

That's a question that seems ripe these days, as the leading Japanese auto maker gets a comeuppance for its allegedly serious safety defects -- and the more than eight 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 percent 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 Makower is executive editor of GreenBiz.com.