New Highlander Key Component of Toyota’s Marketing Strategy

Special to The Auto Channel
By Marty Bernstein
AIADA Contributing Editor

Short lead model press reveals (the cars are on sale now or within days) are usually perfunctory events: arrive in the morning at a nice hotel for coffee and danish; sit through an hour or so of exec-techno-presentations; then a short drive (10 to 15 minutes) through the area around the venue; next is lunch; and, that’s it.

There’s seldom big news. Until Tuesday, July 31, 2007.

Tuesday was different. Brian Smith, Toyota Motor Sales corporate marketing manager of truck and SUVs, announced that the 2008 Highlander crossover, the brand’s first car-based sport utility vehicle, would be “a key component along with Prius and Camry in the industry’s only three vehicle hybrid strategy.”

But if an announcement earlier this year is prescient, and I believe it is, the Highlander is more, much more, than just part of the Toyota hybrid family strategy. Toyota announced it was building a new plant in Tupelo, Mississippi to build (drum roll please) 150,000 new Highlander’s a year, which means the company is preparing for significant sales growth and has a dual role to play in future sales.

Launched in 2001, the 2008 Highlander is the first vehicle to be developed under the “Customer First” agenda instituted by Toyota’s president, Katsuaki Watanabe just two years ago.  The purpose of this program is to re-prioritize product quality, emphasizing what he called "smart engineering."

This term is code for improving quality in every aspect of the vehicle from design to production to meet customers’ ever-evolving needs. Engineers were asked to offer new ideas to improve quality. Everything from tools and processes to budget was open to discussion and change.

Four results of the Customer First initiative were noted by Smith, “The program re-allocated assets, allowed more development, increased staff size and allowed for additional prototypes to gauge quality during development. Additionally, raw materials were reconsidered and assembly was extensively analyzed.”

Now, anyone with minimal knowledge of Toyota’s business and operational success realizes this is not typical of the company’s usual organizational behavior in Japan. Bluntly, it’s counter-culture. Usually Toyota’s goals are simple: cut costs, manpower and development time to maximize profits.

With that in mind, how does the new 2008 Highlander compare to the older version? Very nicely, to quote one journalist attending the press preview this week in Dearborn Michigan. And I agree. Here are a few of the key points that I found impressive:

~New chassis based on the Camry and Avalon sedan platform;
~More sophisticated exterior design and styling – less boxy;
~Easy in and out - a very nice feature for a three row vehicle;
~Suspension improved and upgraded – comfortable ride;
~Bigger interior with vastly improved design;
~Packed with safety features, including 7 air bags;
~New 3.5 liter V6 engine – more horsepower, more responsive;
~Quieter than previous model;
~Fuel economy reasonable –18/24/20 for 2WD, 17/23/19, Hybrid 27/25/26; and,
~Wide choice of models, both gas and hybrid.

Marketing and advertising has already begun with a few limited appearances on broadcast and cable television networks, but Smith, the Highlander marketing manager, told me in an interview following the presentation, “There are more media programs coming to reach a younger demographic than the previous model without turning off an older demo. This is a multi-generation model with varying demographics.”

When pressed for details he noted special events, a key element in all Toyota and Lexus marketing, will continue to play a big role. “It gives us the opportunity of putting people behind the wheel in a relaxed, no pressure setting,” he noted.

Interestingly, the Customer First agenda has a viable consumer benefit too. As vehicles from every brand become more technically complex and controls are sometimes difficult to remember there is a need for more information and training, right? Smith smiled knowingly as he described a new DVD formatted key points owners manual and a website that reminds the new owner of the presentation of the vehicle made at the dealers. And that’s really nice.

Gas models of the 2008 Highlander are already in most Toyota dealers showrooms – the hybrid will arrive in late September or early October. Five different models necessitate a rather complex MSRP price list:

• Base: 4 x 2 is $27,300; 4 x 4 is $28,750
• Sport: 4 x 2 is $29,950; 4 x 4 is $31,400
• Limited: 4 x 2 is $32,700; 4 x 4 is $34,150
• Hybrid – TBA

It’s going to be interesting to industry pundits and competitors alike, how the consumers react to the design, engineering and assembly innovations that created the new 2008 Highlander.