Defensive Strategy

Stretching the Prius Brand

10 Jan 2011  

Toyota announced today that it was launching a family of cars under the Prius brand name.  The company will add a new larger hybrid, the Prius v (a mini-SUV) and the very small Prius-C.  Toyota will also add the Prius PHV, a plug-in variety.

You can read about the full line here:

Is this a good idea?  It is easy to argue it both ways. 

On the one hand, by adding more vehicles to the Prius family, Toyota can capitalize on the power of Prius to drive growth.  All of the vehicles use hybrid technology, so there is some consistency across the line.  The vehicles are fairly small, too, so that is consistent as well.

The problem is that by stretching the Prius brand Toyota will water it down.  Yesterday, when I thought of a Prius I knew exactly what it was; a small, environmentally friendly hybrid car.  If I walked into a Toyota dealer and asked for one I knew what I would get.  It was a brand with very clear associations.  Today, I’m not sure what I would get if I went to a Toyota dealer and asked for a Prius.  Would I get the Prius I know?  Or would I get a bigger one, or a smaller one?

Historically, Toyota has supported its brands with remarkable consistency.  Toyota launched Camry in 1982, Highlander in 2000 and Corolla way back in 1966.  Sticking with the brands has worked well for Toyota; the company has built a strong brand portfolio.

Broadening the Prius will drive short-term sales, certainly, but I think it will significantly weaken the Prius brand over time.

6 Responses

  1. Fox Toyota says:

    Loved it when Toyota announced they were growing this brand. The Prius is one of our top sellers and it’s definitely helped build our business. We’re one of the top Prius sellers in the country because we can get them in so regularly.

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  3. Eleanor Chen says:

    I don’t think this is inconsistent with Toyota’s past positioning. For instance, they launched and produced the Camry Solara for nearly a decade. The problem was the Solara’s development far lagged the Camry, leading to poor sales. Hopefully they will keep the Prius family much more close knit.

  4. […] This post was mentioned on Twitter by Kellogg Alumni and others. Kellogg Alumni said: RT @KelloggSchool: Stretching the Prius Brand #Kellogg Prof Tim Calkins on the pros and cons […]

  5. This is particularly interesting when you consider the recent problems the Prius brand has had regarding their braking problems. To extend a line that is suffering from bad press and customer concern doesn’t sound like the best brand decision.

    I’m sure the brand isn’t the only thing that Toyota considered but I would advise getting the brand back on to solid ground before moving it forward.

  6. shira abel says:

    It sounds like Toyota is turning the Prius into a spin off car company.

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