Slowdown, Toyota

“Quality” and “Dependability” were probably the first words you would have thought of when heard the name “Toyota”. Their brand equity, or its reputation as a quality carmaker, was such a strong one – especially in the U.S. – that it seemed nothing could ever crumble it. However, in the course last few months, such rock-solid brand equity has been tore apart into pieces, and Toyota is now looking for ways, if any, to get them back together.

But how? Is it even possible for them to regain trust and the sales along with it? The answer is yes. In fact, Toyota has already begun its healing process. Toyota first analyzed where they were standing. Then, they moved quickly to stop the on-going incidents/accidents related to defects with recalls. Once all of that has set in motion, Toyota started rebuilding its trust with a massive P.R. campaign. Then they started providing discount promotions to quickly increase sales.

However, I see one huge mistake in all of that. Toyota should be much more careful with providing discounts because it might completely change the consumer perception of Toyota from a “Quality” brand to a “Less-quality-but-it’s-cheaper” brand. In other words, they should not try to regain its sales superficially by approaching the problem with sales tactics. Only properly managed marketing tactics including well managed public relations will help Toyota dig them out of the trench and stay out.

How did it all come to be like this for Toyota?

One accident couldn’t have possibly damaged Toyota’s brand equity this much; it was rather a series of incidents that happened one after another that led to the current crisis.

On August 28, 2009, a tragic accident occurred when the 2009 Lexus ES350 started accelerating out of control with an off-duty California Highway Patrol officer and his whole family inside. It killed all four of the occupants. However, despite the gravity of the accident, Toyota and local authorities indicated shortly after that the main cause of the accident was improperly installed floor mats but nothing more.

A month after the accident, it seemed as though everything was wrapping up pretty well with Toyota seeming to fix the problem quickly. They announced a recall on the floor mats on 4.2 million of their vehicles and provided instructions for drivers to remove the floor mats and store them in the trunk. Toyota was sure that the accident was caused by those floor mats, or maybe they wanted it to seem like so.

In spite of their rather quick response, the media claimed the real problem was at the drive-by-wire electronic throttle system while also highlighting the number of overlooked complaints related to unintended accelerations. For example, Los Angeles Times claimed Toyota had ignored over 1,200 related complaints, and that the brakes on Toyota’s vehicles are not capable of overriding the gas pedal. The real tragedy for Toyota began unfolding about then.

Toyota’s initial response to those claims that blamed the drive-by-wire system was a very firm denial. They continued to blame the floor mats saying that there is no manufacture defects on Toyota’s vehicles while admitting to the claim related to their brake system not being able to override acceleration.

Then, Toyota moved quickly to put a closure to the issue by instructing their dealers to remove the gas pedal and shorten it so it cannot interfere with the floor mats, as well as updating – only as an “extra measure of confidence” – the onboard computers on a number of Toyota vehicles with a new program that overrides the electronic gas pedal when the brake pedal is pressed. Then finally to seal it off, they sent out letters to their customers assuring them the only real problem was the floor mats, which could be and should be removed from the vehicles. However, their attempts cover up the problem as quickly as possible with the least damage done turned out to be the worst decision the company could have ever made.

On December 26, 2009, a Toyota Avalon crashes after it accelerated out of control. The accident kills again all four of the occupants. But this time the driver had the floor mats removed and safely stored in the trunk as he was instructed to.

A month after, Toyota recalls over 2.3 million vehicles because of a problem with the gas pedal. It was found that the cause of the accident that killed the four people was actually a manufacture defect with the brake as opposed to mere floor mats that Toyota kept blaming. As a result, it not only lost Toyota’s brand image as a “Quality” and “Dependable” carmaker but also the trust from its consumers.

The Healing Process

It has now been about two months since Toyota went into full crisis management mode as Patricia Faulhaber states. Patricia mentions it has successfully executed the crisis management campaign by employing multimedia resources to address its customers using a consistent tone and message. Let’s watch the video of one of their new commercials.




As shown in the video, I agree with how Toyota is properly trying to rebuild its brand from the existing trust (or what’s left of it). A consistent feed of such campaign along with the diminishing memory of what’s happened will slowly but surely bring Toyota back on their feet.

But this whole healing process can lead to an unexpected outcome and result in a changed perception of the Toyota brand if it tries to get quick results as it did to put a closure to the issue too hurriedly. It is currently using sales tactics to quickly recover the lost market share. Along with the marketing campaign to rebuild its brand equity, the company started providing its customers a number of discount deals from no-interest loans to discount leases. It seems like a great solution, but such efforts to increase back the sales artificially can lead to changing the consumer perception of the entire brand at this point. In other words, you do not want to give customers a chance to think: “Toyota has become a more affordable brand now that their quality has been compromised.” Toyota should consider the fact that it is not anymore backed up by the brand equity (as a quality carmaker) that it used to have last year. Simply, providing discounts to customers when the brand image has totally shattered can drastically change the foundation of the consumer perception of the brand.

Supporting my point, Derrick Daye from Branding Strategy Insider strongly suggests the danger of using sales tactics without a due consideration of its branding strategy. He says, “today, all communications must incorporate brand-building. Otherwise, brands risk coming across as interchangeable, schizophrenic, watered-down and reactionary.” That is exactly what I meant earlier: Toyota at this point can easily be “schizophrenic” and come across as a “quality” brand that has a compromised quality if they continue their sales tactics along with the kind of brand building campaign that you saw in the video. Further supporting my point, Daye even provides a great example of such incongruent campaign:

Even more problematic is when price-led efforts are disconnected from concurrent branded efforts—evident in an effort for the Morrisons supermarket chain in the U.K. In a clear attempt to stifle the ominous threat from discounters, Morrisons has ramped up its price-led advertising. A series of cheap-looking ads fronted by Nick Hancock—a fairly low-profile, low- cost TV face—highlight some worryingly low prices: all the ingredients for a family barbecue for just £4. Confusingly, a simultaneous campaign uses higher-profile celebrities (Helen Baxendale,Tara Fitzgerald, Lulu) waxing lyrical about their passion for fresh, quality British produce.

The bottom line is that Toyota really needs reconsider using sales tactics while trying to rebuild its brand image because it will lead to an unexpected outcome and change the perception of the brand.

However, interestingly enough, I found this article today from Businessweek that talks about the rationale behind providing such discount programs. It says that Toyota thought the quickest way to restore consumer confidence and trust is to have more potential customers to drive Toyota vehicles so that they can feel themselves that they are very safe after all. That sounds like a plausible reason, but it still seems as though it’s just trying to quickly recover its market share in order to satisfy its investors. I still believe that Toyota should learn from the recent experience and take slow steps to recover the brand equity it used to have.


Toyota does have a long way to go, but hurrying up the process will lead it to an unexpected direction again and possibly result in a worse outcome than now. I mean, the Japanese company doesn’t really need me to tell them this because they even have an old saying to learn from: “急がば回れ – Slowing down when you’re busy will take you there faster”