Part II of an Interview with Bruce Ertmann, Corporate Manager of Consumer Generated Media, Toyota
Shifting a company’s customer base from early adopters to mass market consumers is one of the key challenges facing green marketers. Few green companies have been able to expand their niche beyond a core set of customers. One of the primary reasons is that consumers tend to not like paying price premiums for green products. Another reason is simply that consumers have not traditionally prioritized “green” as a deciding attribute when making purchase decisions.
Yet, certain green brands like the Toyota Prius seem to be crossing this “chasm” into the mass market. Though still in the early stages of their adoption, hybrids have already generated broad appeal with mainstream consumers. Moreover, the stereotype of hybrid owners as treehuggers is far from the truth: in fact, they are high income, mainstream consumers.
The results from a recent consumer survey by Topline Strategy Group (“Why People Really Buy Hybrids”, 2007) concur. Topline found that 73% of Prius owners surveyed acted like mass market consumers (ie, they had a financial incentive to purchase the vehicle such as lower sticker price or operating costs than other choices considered) versus 23% of early adopters who paid a premium over alternative choices to purchase the hybrid. Moreover, for marketers, Prius owners are an attractive target audience: 71% have household incomes over $100,000, with 28% at $200,000 or more.
While it is uncertain whether this research is statistically significant (n=118), it is at least directionally representative of what Toyota itself is observing in the market. Recently, I had the opportunity to speak with Bruce Ertmann, Corporate Manager of Consumer Generated Media at Toyota. We spoke of Toyota’s success in the hybrid market, its target audience and the shift to the mass market consumer. Here are his words:
MG: What kind of consumers purchase Prius vehicles?
BE: When we first launched the Prius, people joked about all of the tree huggers who bought the car. Yes, we had those diehard owners, passionate people. But, it truly has become a mainstream vehicle.
For the longest time, we were undersupplied with the Prius. [Toyota’s] US president went to bat for us this past summer and was able to get additional production in Japan. Production came on late last year [followed by a] big sales push in December which most manufacturers have.
And then in January our Prius sales dropped off significantly. At the same time, we had all of this new inventory coming into the dealership. So instead of a six month waiting, list we had inventory at our dealerships – which is frankly normal. We began to see some of the traditional media ask whether the bloom was off the rose for the Prius and hybrid technology in general.
But, in February we had a strong sales month. Just this past weekend, we sold 2,000 Prius vehicles nationwide – a record for us. So, [March] will be a record sales month. The vehicle continues to be hot and the hybrid technology still seems to be a winner with consumers.
MG: Are you seeing the same customer shift across all your vehicles?
BE: Yes, definitely. We are seeing this with the Camry, our top selling car. That vehicle as a hybrid version has become very hot. The demographic is such that the more mainstream Camry buyers interested in a hybrid version found the premium to be tolerable.
Right now, our belief is that integrating hybrid technology into more of our vehicles is the smart thing to do.
MG: How have you evolved your marketing as your audience shifts?
BE: We have changed our marketing approach to push it towards a more mainstream audience. We pulled all of our Prius advertising for a while. While was kind of unique in of itself – and perhaps green-oriented you might say – because we did not have enough vehicles to supply demand. But we have changed that now.
We do some different things besides straight advertising. We have a hybrid synergy tour, for instance, that launched last month. It really is an educational effort on our part. It is almost like a moving auto show on a semi-truck that exhibits our hybrid technology and how we are trying to integrate it into other vehicles that we are bringing to market.
We show [consumers] how the technology works. People like the idea of the regenerative nature, where you are actually recharging the battery when you put on the brakes. At the same time, there are others who want us to develop a Prius that you can plug-in to the electric grid to recharge the battery.
From a pricing standpoint, we are trying to offer more in that vehicle for the money. For instance, we are coming out with different versions of the Prius, a sports version. We put leather in the car last year and added more features. People wanted a little bit of a luxury feel to the vehicle which may seem counter to the type of people that we may think buy that vehicle.
MG: Overall, how would you characterize your target audience?
BE: We are seeing a broader customer demographic base that we have in the past based on our research.
People feel it is a smart decision on their part to drive a vehicle with hybrid technology. They do not think that they are bragging or showing off or becoming a tree hugger.