Corporate Case Study: Toyota's PR team drives carmaker to higher sales

By playing up the attributes of its hybrid Prius and targeting younger car buyers on behalf of its new Scion brand, Toyota's PR unit has been able to shift the company's sales into high gear.

By playing up the attributes of its hybrid Prius and targeting younger car buyers on behalf of its new Scion brand, Toyota's PR unit has been able to shift the company's sales into high gear.

The days have long since passed when Toyota was the scrappy outsider trying to earn a place in the US auto market. Toyota cars and trucks - which include its Lexus and Scion brands - collectively outsold Chrysler in the US in July and August, prompting some industry watchers to speculate that the auto world's "Big Three" moniker now should refer to General Motors, Ford, and Toyota, rather than the Chrysler division of DaimlerChrysler. Toyota has captured the lion's share of media attention in the fast-emerging, hybrid gas-electric vehicle market. Even competitors grudgingly give Toyota credit for getting celebrities to trumpet the virtues of the Toyota Prius hybrid and marvel at how environmental groups applaud Toyota's efforts while denigrating Detroit automakers' undertakings in the same arena. Toyota's new Scion brand, which the company developed to attract younger buyers, seems to be a hit, as well. In a dismal August for US auto sales, Scion led all car brands in terms of sales gains, recording a 588.4% jump from its admittedly small August 2003 numbers. With so much success coming its way, journalists and analysts say the major things Toyota has to worry about now are complacency and arrogance. Hubris in the auto industry can be a dangerous thing, especially in a marketplace crowded with new models, and new entrants from Korea and elsewhere trying to nab larger shares of US sales. Toyota hasn't been without its image problems. Art Spinella, president of CNW Marketing Research in Bandon, OR, notes that his surveys consistently find consumers are dissatisfied with Toyota dealers, even though they give high marks to company products. For years Toyota was cavalier in cleaning cars for auto writers to test drive, and even refused to deliver such cars to writers, a routine practice for other large carmakers, notes Kelly Toepke, manager of vehicle testing with Edmunds.com, a car-buying website. Since moving from Detroit to Southern California, she's found it more difficult to get information from Toyota's PR staff at headquarters than she did from its field people in Detroit. Veteran auto writer Paul Eisenstein, publisher of TheCarConnection.com, knows how success can hurt an automaker's PR efforts. "They're a big organization. Sometimes I think they suffer from what big organizations can, which can be a little arrogance from time to time," he says of Toyota. Journalists needn't worry about Toyota becoming too cocky, assures Irving Miller, group VP of corporate communications with Toyota Motor Sales USA (TMS), the Torrance, CA-based US distribution, sales, and marketing arm of Japanese parent Toyota. Miller has a screen saver on his office computer that scrolls, "Don't believe your own press clippings." "The corporate communications group is steeped with a dose of paranoia," says Miller. Mike Michels, corporate manager of external communications with TMS, agrees. "The company's philosophy is to operate as if everything's going to go down the tubes tomorrow. We know reversals of fortune happen dramatically and frequently." Moving PR beyond the traditional TMS' PR isn't resting on its laurels, insist Michels and Miller. Rather, it's preparing for new product rollouts next year and expecting to increase efforts in the hybrid arena. It also will continue to support the Scion brand with grassroots efforts that blur traditional lines between marketing and PR. PR is an integrated part of Toyota's marketing, adds Jim Lentz, group VP of marketing for TMS. Toyota's PR has moved beyond the traditional role of dealing with car-enthusiast magazines, auto shows, community relations, and crisis management, Lentz explains. Toyota uses PR for what Lentz terms the pre-launch and soft-launch phases of introducing a new model in the US. That means PR gets attention for the product before any advertising or traditional marketing begins. "I look at our role as the artillery," Miller elaborates. "Our role is to bombard the beaches before sales and marketing comes ashore." In some cases, such as with the Prius, PR can be so effective that a traditional hard launch with a major dose of mass- media advertising is unnecessary. "With the fragmentation in the traditional media, without PR there's no way we could effectively reach the numbers of consumers we do and get our message across," Lentz contends. TMS gets its message out via 55 communications staffers. Add on other Toyota entities operating in the US - including its manufacturing arm, corporate communications in New York, public affairs, government relations, and investor relations - and the US communications staff reaches 150. Michels' external communications group includes product communications, media relations, strategic communications, and field operations, which maintains offices in Detroit, New York, Washington, and Miami. The other arm of TMS communications is its community relations and internal communications team, which oversees employee and dealer communications, executive communications, and community relations and corporate giving efforts. Three years ago, Toyota brought Golin Harris on board as its national PR agency. It also works with a network of agencies in Dallas, Houston, Northern California, and the Northwest. Toyota also plans to add an agency in Denver. As for those aforementioned complaints, such as the issue of journalist relations for the parent Toyota brand, Michels says that while the automaker is still open to journalists picking up test cars, it now delivers them, as well. On the dealer-image issue, he notes that Toyota sellers have been investing billions to upgrade their showrooms recently. A dealer magazine the company produces talks about success stories and best practices they can follow to improve customer relations. Scion will continue to integrate PR and marketing as it seeks out younger buyers in nontraditional ways. Scion's marketing team has a PR person embedded in it. The team is in a separate building from the rest of PR on the TMS Torrance campus. "Our customers are completely and thoroughly skeptical," says Jim Farley, VP of the Scion division. "We spend our money on trust-building exercises." Almost half of Scion's marketing budget goes to local events. Furthering the hybrid message Toyota PR next year will work on introducing new models, but also will get more into the hybrid story, says Miller. While hybrids have gotten media attention because they increase fuel economy, Toyota sees them in the long term as an answer for environmental concerns about auto emissions. It will continue to stress an environmental message for its Prius and the SUV hybrids it's bringing out. It also will talk more about how its hybrid technology differs from others, such as the approach Honda is using. Hybrids present Toyota with several PR challenges. One is the mileage claims for hybrids. Stories have started appearing in auto magazines and elsewhere questioning if hybrids can get the mileage numbers they achieve in government tests. Michels says Toyota has worked to educate reporters to the fact that such numbers are always slightly off. Toyota wants consumers to think of the tests as a benchmark to compare its hybrids to others, not as hard-and-fast achievable mileage targets. Eisenstein notes that Toyota has worked hard to frame the debate in ways favorable to it, but he sees the mileage issue continuing to hang over hybrids. Toepke sees another PR issue for Toyota's Prius hybrid - the difficulty of buying one. "Everyone personally seems to know at least one person who is on a waiting list," she says. Having to wait for the Prius could turn people off to Toyota, she says. Toyota's Michels responds that the company is aware of that problem and has announced stepped-up production targets for Prius. He hopes to have the backlog issue out of the news by the middle of next year as waiting lists disappear. Whatever happens to Prius waiting lists, it's sure Toyota isn't going to disappear from the US market. It will continue to use PR to position its products as innovative and its company as a major player in the US. PR contacts Group VP of corporate comms Irving Miller Corporate manager of external comms Mike Michels Corporate manager, community relations and internal comms Michael Rouse PR agencies Golin Harris, Hopkins & Associates, Brouillard Communications, Michael Dobrin PR

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