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February 15, 2010#

Why Toyota Will Survive and Thrive Once Again

Much has been written and speculated about the crisis at Toyota due to its foot pedal malfunction, and its slow and underwhelming public response to the problem.

Despite the magnitude of the crisis, we suspect that Toyota will come out on top in the long run – stronger as a company and a brand. 

Here’s why:

1.  Although every company’s defective product crisis is different, just two years after it recalled 6.5 million tires, and was the poster child for crisis MIS-management, Bridgestone returned to profitability and infused its brand with renewed vitality.  

2.  While no one likes recalls, consumers know that they do happen to all automotive companies.    Toyota has built up enormous brand equity in the areas of quality and reliability.   While these equities will be temporarily strained, overtime, as the company reinvests in product quality and safety and marketing, they will return.  Consumers have short memories.

3.  Toyota has a huge war chest of $24 billion in cash.  Investing some of this back into product quality and image improvement marketing will go a long way. 

4.  The company is learning, albeit slowly, how to be more open and forthcoming with the public about its performance problems.   Although it hasn’t been easy for them, Toyota has learned the hard way how to admit errors, apologize and rectify the problem.

June 5, 2014#

Why Hasn’t GM’s Recall Eroded Sales?

Remarkably, GM’s sales rose 13% in May. Granted, total U.S. car sales were up 11%, with all major automotive companies enjoying significant growth. Still, given the massive on-going negative news concerning the death of 13 people driving GM cars, one has to wonder why is it that car buyers don’t appear to be factoring this into their purchase decision and bypassing GM cars altogether?   Does GM have a magical fortress around its brand?

According to industry analysts the major reason GM’s sales aren’t suffering is that consumers don’t associate the recall of GMs largely discontinued brands (Saturn) and models (Chevy) with the company’s new vehicles. In other words, Buick, GMC and Cadillac appear to be disassociated with the recall; so as separate brands they remain largely intact. The same goes for Chevy trucks, which appear to be viewed as a distant relative of the core Chevrolet brand, far enough removed to avoid be associated with the recall problem.

In addition to the protective benefits that come from cultivating separate and distinct brands underneath a parent umbrella, there’s another mitigating dynamic which has kept GM’s sales from being adversely affected despite the company’s lack of transparency and its failure to respond with corrective actions: namely, while they don’t like them, consumers have come to expect and accept recalls within the auto industry.   In 2010 when Toyota was dealing with it’s exploding cars many experts wondered if they’d survive the negative press fall-out. Not only did they survive, they thrived as a business and a brand.   GM will too.

January 17, 2011#

J&J Product Recalls Damage Corporate Brand

How damaged is J&J’s reputation as a result of the recent multi-product recalls?

The company is limping, but we see no reason why it can’t turn things around.

Of course, J&J wrote the book on product crisis management. Yet the company seems to have forgotten everything it learned when it earned high praise from consumers and industry pundits alike following the original Tylenol recall in 1982.

Recently, J&J has recalled “288 million items, including about 136 million bottles of liguid Tylenol, Motrin, Zyrtec and Benadryl for infants and children,” according to a recent report in the New York Times.   The causes:  quality control problems.

Up to this point, J&J has been able to lay low, and hide in the shadow of other, bigger corporate crises, namely, BP and Toyota.

But with a growing number of negative news reports and surging consumer disenfranchisement expressed on-line, it’s time for J&J to step forward and take center stage.

As a first step, J&J needs to dust off its brand credo which has successful guided the company to being one of the most trusted in the world.

Next it needs to fix the product problems–fast–and to physically communicate its safeguards in the form of tangible proof (once again taking a page from the original Tylenol recall when they invented the safety cap).

Simultaneously, it needs to start talking publicly, broadly and repeatedly, to reestablish its historically well-earned reputation for transparency, by honestly explaining what went wrong, what the company is doing to fix the problems, how and when.   They could actually learn a thing or two from BP and Toyota on this.

J&J can fix this.  It’s time to step forward into the spot light.

August 9, 2010#

Too Much Marketing

Ad Age this morning posed the question whether company brands might be better served by investing more in product quality and less in marketing communication. 

The article poses this question in light of the recent troubles at BP, Toyota and J&J.  

Here’s the short answer.  Yes. 

Andy Rooney said this once on 60 minutes:  “What we need today is less marketing and more quality.”

We couldn’t agree more.  All professional marketers should heed the pity wisdom of those simple words.  As we said in our book Why Johnny Can’t Brand:

“Make genuine performance, service, trustworthiness, fair dealings, helpful innovation, and improving the live of every customer the soul of your brand.  Make your vision nothing more than to be the very best you can be at what you do.  Make your mission to do it the right way always.

BP, Toyota and J&J all built their reputations on superior product and service performance.  In other words, their brand images have less to do with advertising and more to do with customer experience of their products.  Toyota built its brand image of reliability by building reliable cars.  J&J built its brand image of uncompromised trust by bending over backwards to be trustworthy, even if that meant losing money as with the Tylenol recall years ago.  

In the world of branding, action is character.  What a brand does is much more important than what it says.  Just like people, we judge people by what they do, not what they say they’re going to do.

June 3, 2009#

How to Fix GM

As GM goes about the business of restructuring itself through bankruptcy, the company will need to quickly reposition itself in the minds of consumers.  This will require finding a singular differentiated idea of superior value.  Just as Toyota stands for reliability, Volvo stands for safety and BMW stands for the ultimate driving experience, GM will need to find something to stand for—one big thing—and commit to it in everything they do:  their engineering, design, services, distributors, pricing and marketing and sales.      

New advertising for GM (go to http://www.gmreinvention.com) promises that the new, reinvented GM will have “fewer, stronger brands; fewer, stronger models; greater efficiencies; better fuel economy; new technologies; be leaner, greener, faster, smarter.”   Sounds great.  Except it also sounds like a laundry list of things to do simply to catch up with Toyota, which already does a pretty good job of all these things   For GM, for any “new” car company, catching up simply isn’t enough.  GM needs to distinguish itself.  It needs to put a stake in the ground and seek ownership on one big idea of differentiated value that resonates with consumers.  A big part of GM’s branding problem has been that no one’s known for sometime what it stands for.  It’s now more important than ever to rectify that. 

Once GM has identified its corporate big idea, it needs to apply the same brand positioning discipline to each of its remaining car brands.   They, too, will need to stand for a singular idea of differentiated value, and be clearly defined underneath the parent umbrella.