Toyota & the Green Branding Effort - Essay Example

Using a Company as an Example, Explain the Advantages and Risks of Green Branding a Product or Service Table of Contents Introduction 3 Toyota & the Green Branding effort 3 Advantages of Green Branding 6 Risks of Green Branding 7 Conclusion 9 References 10 Bibliography 12 Introduction In today’s context, green brands are those brands which are not only eco-friendly but also help in conservation of the environment. People have become more conscious regarding the environment and they want each and every company to follow certain norms regarding the environmental pollution and hazards. Thus, the greener brands enjoy more popularity among the consumers than the brands which are not eco - friendly. The eco-friendly factor not only boosts a particular product but it also strengthens the image of the entire company. It is actually a new kind of marketing strategy adopted by the companies to stay favourable in the eyes of their customers. Green branding sometimes act as the unique selling proposition for a particular company or product. Green brands are actually the ones which are amongst the most sold products in the world and enjoy a better brand position (Fahey, 2007). Toyota & the Green Branding effort Automobiles are considered as one of the major source of environmental pollution in the world. Therefore it has been the need of the hour to deliver something new to the customers that will be attractive as well as eco-friendly. Toyota is one company which has tried its best to be on the greener side. For instance, the launch of the first generation of hybrid car named Toyota Prius back in 1998 was a great effort made by the company to reduce carbon emission and even Camry, Estima, Alphard etc is considered among the green sub brands of Toyota and are the models of hybrid synergy drive technologies. Though, Toyota in itself is not environment friendly and all their cars are not among the green band wagons as the likes of Avensis and Celica. But a conscious effort on the part of Toyota is made to change their image. The change has been highly appreciable among the people, which reflect in their sales records (Bruner, n.d.). Toyota started thinking of the environmental concerns way back in the year 1993 when it first drafted its action plan. In recent times, one of the major steps taken by Toyota towards the green branding of their company is by the formation of the Fourth Environmental Action Plan in the year of 2005. It was a vision of Toyota for the year 2006 to the year 2010 to develop a recycling based society. It was a long term oriented goal which emphasised more on the action plans which need to be undertaken for five years, so that it can bring about a considerable change in the year 2020 or at least by 2030. The company also aimed at becoming the global leader and the initiators of the total environmental change process. It was observed that the change could be brought about by only through the adoption of advanced environmental standards and techniques. The major issues which were addressed in the plan were the critical factor of global warming; it was also concerned with the recycling of resources, emphasis on management of substances and steps to improve the atmosphere quality. There were other related issues too that were addressed but the key problems identified were these four. Again the key ideas behind the issues were the understanding and also the reduction in the emission of CO2 in the global forum as well as reinforcing their business partners to undertake environmental management. It had major focus on the society and its enhancement in relation to the environmental issues. The other benchmark that Toyota implemented in the betterment of the environment was the launch of its Eco VAS System. It actually accesses the vehicles’ impact on the society and the environment from its production stage to that of the disposal. It takes into consideration the major components like that of the fuel efficiency, noise that the vehicles make, the elimination of substances causing environmental hazards, the disposal recovery rate and also the emission of harmful gasses throughout the entire lifecycle of the automobile. Therefore, it was a great step towards the prevention of environmental pollution or can be analysed as a counter active measure to fight environmental hazards. Another similar effort made by Toyota to promote environmental issue was the 2008 Toyota Environmental Activities Grant Program, which was intended to support environmental renewal and preservation activities, all over the world to promote sustainable development. One of the major steps initiated by Toyota to fight global warming was the manufacture of newer automated vehicles equipped with an eco-drive indicator. It was helpful in the reduction of the emission of the CO2 gas and also it increased fuel efficiency. Toyota has been adopting several other techniques and measures to stop environmental pollution and thereby making their image much cleaner in the eyes of their customers which result invariably increases sales and brand value (JCN, 2005). Advantages of Green Branding Green branding or green marketing, as it is often called, is significant in creating value for a brand or a commodity. The difference is majorly attitudinal and has a great potential in making relations with the customers. The image of the company enhances in the eye of the customers with such undertakings. It shows that the concerned company is responsible enough to address the implications of the environment related hazards. Actually, green branding has several advantages in store for the manufacturers. The Toyota Prius, based on the hybrid concept, was a great success story for the company. It was a trend setting incident and was inspiration for many other companies to develop more of hybrid cars. Another feather was added with the production of Camry which was yet another hybrid concept car coming from the Toyota. Both were huge success and other manufacturers understood the need for change in the fuel based concept and to try their hands in newer and more eco-friendly concepts. Studies show that the customers are willing to pay more for the greener technologies or for the products related with such a cause. There are several other benefits of green branding such as having a value addition which will help in eliminating competitors from the market. It also helps in creating brand image as well as greater customer satisfaction. What ever may be the reasons but the creation of a green brand is creating value for both the manufacturers as well as the customers. Manufacturers’ experience an increase in sale of their products, whereas the customers get the satisfaction of contributing towards a better society (Hartmann, 2005). Toyota has been undertaking such practices in the past which helped them to gain the brand image and also increase in sales. It is one of the top brands in the world in terms of value as well as the sales. Toyota is a success story that signifies that greener brands do work in the market (Welch, 2005). Risks of Green Branding Green brands though desirable possess certain threats from the external environment and the market where it operates. One of the major threats that green brands actually possess is that of a limited market. A green brand may be sometimes costlier than a competitive brand; in that case the green brands can have a back seat in terms of the sales or in terms of customer preferences. The other threat to the green brands is their increased cost structure. To be a green brand, it is very important for a company to invest considerable amount in their research and development departments which will generally increase the cost of the products. Many a times, in order to become more green or eco-friendly, the companies neglect their core aim and objectives. Green brand can only become a value addition to a certain product as it can never be a product in itself. Again, it is very important for the green brands to highlight their innovations and their achievements in order to compete in the market. Therefore, the marketing is to be thoroughly taken care of, if it can not be clearly communicated to the customers then there would be less chances of the acceptability by the customers. Even sometimes the innovations make no practical difference in the environment. In such cases, the company faces a great risk in the market. Mostly in case of the automobile industry the fact remains that the fuel based cars are more popular on road than any other technology, therefore the manufacturers like Toyota is forced to balance their production in between fuel based and hybrid concept cars. So sometimes it can only be accessed as the Corporate Social Responsibility on part of the manufacturer and nothing else (Meyer, 2009). Conclusion Green brands are becoming more and more popular with time. People are becoming more conscious regarding the planet and are looking forward to a better world to live in. In this effort of going green, citizens across the world are embracing products which conserves the nature and do not harm it by any way. One such example of a successful brand is Toyota which has been getting accolades from all concerned quarters worldwide for its effort of going green with increased sales. The success of Toyota Prius has proved to other manufacturers that the world is ready for the newer concept of cars which is much more eco-friendly than the fuel based versions (Mulkey, n.d.). References Bowman, J., 2008. Climate Change: Green Branding - Cashing in on the Eco-Market. WIPO. [Online] Available at: http://www.wipo.int/wipo_magazine/en/2008/02/article_0003.html [Accessed Aug 30, 2010]. Bruner, K., No Date. Toyota Motor Corporation. Pacific Lutheran University. [Online] Available at: http://www.plu.edu/~brunerkm/Final%20report-toyota.pdf [Accessed Aug 30, 2010]. Fahey, A., 2007. Not always, but green branding has potential to connect consumers to their ‘inner green’. Grist. [Online] Available at: http://www.grist.org/article/is-greenwashing-good-for-you/ [Accessed Aug 30, 2010]. Goodman, F., 2008. Integrating Green Practice into your Building Management Strategy. University of Louisiana. [Online] Available at: http://cepm.louisville.edu/Pubs_WPapers/practiceguides/PG22.pdf [Accessed Aug 30, 2010]. Hartmann, P. & Et. Al, 2005. Green branding effects on attitude: functional versus emotional positioning strategies. Abstract. [Online] Available at: http://management.uta.edu/Casper/MultiStat/Articles%20Fall%202007/exploratory%20factor%20analysis/Exploratory_Factor_Analysis_Green.pdf [Accessed Aug 30, 2010]. JCN, 2005. Toyota Outlines Fourth Toyota Environmental Action Plan. Report. . [Online] Available at: http://www.japancorp.net/Article.Asp?Art_ID=10041 [Accessed Aug 30, 2010]. Prophet. No Date. Beware the Pitfalls of the Green Branding Push. Articles. [Online] Available at: http://www.prophet.com/downloads/articles/gelman-pinedo-beware-green.pdf [Accessed Aug 30, 2010]. Meyer, R. 2009. Five reasons not to have a green brand. Landor. [Online] Available at: http://www.landor.com/index.cfm?do=thinking.article&storyid=745&bhcp=1 [Accessed Aug 30, 2010]. Mulkey, M., No Date. Marketing Green Globally: Catering to Cultures. Abstract. [Online] Available at: http://www.oc.edu/library/StudentColloquium/marketing_green_globally.pdf [Accessed Aug 30, 2010]. Welch, D., 2005. Toyotas Hit and Myth Marketing. Bloomberg Business Week. [Online] Available at: http://www.businessweek.com/innovate/content/oct2005/id20051027_151002.htm [Accessed Aug 30, 2010]. Bibliography Friend & Et. Al. The Truth about Green Business. Que Publishing, 2009. Frick, C. Green Brand Management. VDM, Müller, 2006. Grant, J. The Green Marketing Manifesto. John Wiley and Sons, 2009. Miller & Canary. Green Brand Aprons. The Company, 1904. Seirreni & Fields. The Gort Cloud. Chelsea Green Publishing, 2009. Read More