Transportation Secretary Ray La Hood sent Toyota stock into a nosedive two years ago when he told a congressional House Appropriations subcommittee, “My advice is, if anybody owns one of these vehicles, stop driving it.”
Jay Leno quipped, “Things are not looking good for Toyota. In fact, today, two crash test dummies refused to get in the car.”
And of course, experts lined up to predict doom for the Toyota brand. On expert told CBS Co-Anchor Harry Smith, “We’ll be seeing for at least a decade, maybe two, that there will be major problems with the Toyota brand.”
Fast-forward just two years, not ten or twenty: The Toyota brand is definitely back. After a disastrous year of sinking sales, expensive recalls, congressional hearings and a seemingly endless public relations meltdown, Toyota’s reputation remains intact and sales are soaring.
As a brand consultant who works with various automotive brands (though not Toyota), I have been following this story closely over the last year. Here are highlights from over 40 parking lot interviews from New York to Florida of drivers and their opinions about Toyota:
Confounding comedians and critics, Toyota has become a textbook example of how a brand can bounce back. As of February, 2012, Toyota’s market share had rebounded to 13.8% of the market, despite continuing supply problems due to last year’s tsunami. Toyota’s pre-recall market share was 14.7% in January, 2010, according to Edmunds.com. According to the just-released Consumer Reports 2012 Car-Brand Perception Survey, Toyota still holds on to the #1 spot and Lexus remains in the top ten.
Part of Toyota’s recovery is due to Toyota being cleared of accusations that electrical and engine glitches caused deadly, uncontrolled acceleration. A lengthy joint investigation by NASA and the Department of Transportation found that most Toyota and Lexus crashes were due to “pedal misapplication,” that is drivers stepped on the gas instead of the brakes. A decidedly secondary cause was floor mat interference with brake pedals. The rocket scientists at NASA and engineers at the DOT found no electronic or engine failures of any kind.
Toyota’s targeted and effective communications with consumers have also helped the brand bounce back. The company’s advertising, public relations, and digital communications have been direct, honest and voluminous. Moreover, Toyota’s use of social media show that they “get it,” engaging people in true, human, back and forth conversation. At the grass roots level, dealers have earned high marks in communicating with customers affected by the recall and performing recall services promptly.
But by far the most credit for Toyota’s recovery is due to decades of delivering on its brand promise of durable, affordable high quality cars. As part of my work helping brands understand their consumers, I frequently turn on the video camera and conduct on-the-street interviews. I talked to drivers in a series of video interviews during the height of the recall crisis in back February 2010. In light of Toyota’s fast rebound, I was curious to hit the parking lots again. I interviewed dozens of drivers in Florida and New York to find out their opinion of Toyota and their reaction to the recalls.
There is still some left over recall anxiety. One young mom said, “I love the Land Cruiser. It is probably my favorite. But we actually just bought a Ford Flex. My husband does all the new car research and the recalls were something he mentioned as being a factor.”
More often people were philosophical. One woman said, “Technically, the defect didn’t cause the deaths and we are beginning to find out that a lot of those deaths were caused by driver error.” Another young man said, “Lots of cars are recalled. It is not just Toyota.”
The recalls don’t appear to have much negative impact. “I just bought a 2010 Toyota Venza,” said a dad I interviewed. “It’s been a great car. It’s brand new, put out after the recall. The recalls did not affect my decision at all. I thought they (Toyota) stepped up and took care of the cars the way they should have.”
In fact, excellent service at the dealer level plays a big role in the strength of the Toyota brand. One woman I talked two pushed back her sunglasses and enthused, “I love my car! I have no problem with Toyota at all.” She was directly affected by the recalls, “I had to take it back to the dealer. They were very cooperative and I was very happy. I got in and out real fast.”
And she wasn’t the only person to use the word “love.” That level of passion came through with surprising frequency when Toyota owners talked about their cars. One sprightly grandmother said: “I love Toyota. I happen to own one. It’s a beautiful little car.”
When companies find their brand in a crisis, they face three potential outcomes. First, their brand can suffer permanent damage. The only way to recover shareholder value is to sell it off or merge it with another. Second, the brand can soldier on, nursing its wounds for many years, waiting for consumers to slowly forget its woes. In the rarest of cases is what has happened to Toyota. The brand made a quick recovery because of the many years invested in keeping its brand promise, combined with effective communication, and the fact that Toyota was absolved of suspected engineering problems. It was the slowly built resiliency of the Toyota brand that made its fast rebound possible. Toyota teaches us that winning isn’t an event; it is a process of consistency and endurance.
Owning your brand name is critical for your business, but what many people don’t realize is that owning a trademark on your brand name is not the same as owning a unique name.
Facebook raised a ruckus last year when it applied to trademark “face”–yet there were hundreds of “face” trademarks granted before Facebook made their application. There are almost a thousand trademarks on the name “Delta” for everything from airlines to faucets to power tools. That is because trademarks are granted by classification of goods and services as defined by various international agreements. You cannot own a word exclusively and universally; only for the actual products and services you offer.
You’d be surprised at how many well-known brands share names:
Domino: Sugar and pizza
Burlington: Discount retailer and holding company
Dove: Soap and chocolate
Finlandia: Cheese and vodka
Apple: Records and computers
Eos: Cameras, cars and software
Pink: Victoria’s Secret and Thomas Pink
Then there are the sound alikes: Thompson and Thomson, Sonoco and Sunoco, Sysco and Cisco, Coke and Koch…
Mashable has an interesting take on the do’s and don’ts of creative job titles quoting Merriam Associates. Your job title is part of your personal brand so make sure it says the right things about you. Here’s the advice on Mashable.
Other quick tips:
1) Be clear. If it makes people stop and wonder, it’s a mistake.
2) Job titles are not the place to convey personality. More often than not, that corporate personality does not fit the person carrying the business card. It’s disconcerting to get a business card that calls someone a “rock star” when they are over weight, middle aged and quite shy.
3) Don’t over-promise or promise something you really don’t want. You can’t have a “guru” answer “I don’t know; I’ll get back to you.” As a client, do you want a “ninja” pressuring you to buy?
Predictably, a Greyhound representative has fired back: “I don’t know if he’s ever been on one of our buses (it doesn’t sound like it), but there are about 17.6 million people who travel with us every year who I’m sure wouldn’t share [his] feelings. I don’t know why he’s mentioning Greyhound, but we take pride in our safe and enjoyable service.”
Greyhound can claim “enjoyable service” all they want. Their years of providing a “brand experience” that includes dirty bus stations, surly drivers, creepy co-travelers and indifferent customer service will always undercut that marketing spin. The Greyhound brand most definitely has become a synonym for general awfulness. And, Alec Baldwin is a certified jerk, but he is right about the American Airlines brand experience. They are definitely approaching Greyhound status.
The marketers at Greyhound seem to realize fixing their brand might be impossible. They have found an effective way to escape those low-rent associations with a new brand: Bolt Bus. As a regular on their NY-DC route, I can personally attest Bolt Bus is a thousand times better than American Airlines. And on Bolt Bus, one never need worry about encountering Alec Baldwin!
Overstock.com fixed a huge brand blunder today when they announced they were abandoning the attempt to change their name to O.co.
Here are the top five reasons why the rebranding was doomed to fail:
There was never a strategic reason to change the company name. Name changes are expensive and risky in the best of circumstances. You should only do it when the benefits outweigh the costs.
They totally owned the word “Overstock.” They could never hope to own a single letter.
The word “Overstock” worked for search engine optimization. Try putting just “o” in the search bar–their Web site doesn’t even show up in the top ten pages of results.
It’s tough enough to change the company’s name, but they also tried to change the url–and to a non-standard option at that. Most everyone types in .com no matter what. They at least expect the top level domain to have three characters. Non- technical people would might not even know a .co name was possible.
The change was never tested with consumers. We’ve written before that your consumer is the ultimate “owner” of most brands. It’s crazy to try to impose a change of this magnitude without even a little bit of testing with external audiences. O.co is what people might call the company internally, but your brand lives externally. If you are going to make a change like this, ask at least twenty people–even random people–outside your company for their reaction.
When ABC debuted its new show “Pan Am” this fall, reviewers mentioned the long-gone glamour of jet travel when people dressed up to take flight. Flying today is about as chic as traveling by bus. Now new advertising programs like those being offered by Spirit Airlines and Ryan Air make the bus analogy all the more apt. Advertisers can now buy ads on overhead bins like the ads above the heads of strap hangers.
The ads aren’t just overhead. For $14 million, you can even do an exterior “wrap,” and brand the outside of a Spirit Airlines plane just like you can the outside of a bus. You can also buy ads on tray tables, napkins, flight attendant aprons, ticket jackets, broadcast during the flight (Lincoln advertised on Delta’s preflight safety videos), and even on the barf bags.
Of course reports of backlash are everywhere. Industry experts claim fliers don’t like the ads and that airlines risk losing customers. Not likely. If ads keep fares low, people will grumble, but still book a ticket. There’s a long history of people grumbling about ads in places like movie theatres, but that hasn’t stopped them. And ads in modes of transportation are as old as public transportation itself.
Despite the inevitable grousing, the ads work. Spirit Airlines says that on-board ads have the higher recall rate than all other media. Spirit spokesperson Misty Pinson says, “These results are unachievable with traditional advertising mediums. We provide an environment where cellphones are turned off and the consumer is stationary with the ability to focus on nothing but your brand for an average of three hours.”
The “Occupy Wall Street” movement has spawned a brand: the “Occupy” brand. Since the start of demonstrations a month ago, we’ve seen “Occupy Times Square,” “Occupy Atlanta,” and “Occupy San Francisco” spring up. We also have “OccupyTogether.org” as an unofficial hub for other “Occupy” activities, and “OccupyEverything.org” with its “militant research…and mediatic (sic) intervention.”
Key to the “Occupy” brand is a general anti-ness from anti-capitalism to anti-fur. As the movement spreads, it adds new attributes such as “Occupy Tokyo’s” anti-nuke position and “Occupy Rome’s” violence. “Occupy Sydney” didn’t take off, as one participant regretted, ““we don’t have the depth of crisis here in Australia.” You have to be anti-something to really get the “Occupy” brand, and the folks in Sydney don’t appear to be angry enough about anything.
But could the “Occupy” brand stretch too far? It embraces all sorts of issues, but can it embrace outright hypocrisy? Can anti-capitalists get away with trying to capitalize on the movement by selling t-shirts and pimping for donations? Can the bailout president and Wall Street funded Barak Obama successfully “Occupy Populism” and “acknowledge the frustration that he himself shares” with the protesters as ABC reports?
It’s doubtful the “Occupy” brand can stretch that much.
UPDATE: Well that didn’t take long. On October 18, Robert Maresca of West Islip, New York filed a claim with the U.S. Trademark and Patent Office for “Occupy Wall Street.” Someone else had already filed for “We Are the 99%.” The hypocrisy of capitalizing on anti-capitalism continues…
David Boorstin, a noted expert on brands and society, politics, culture and business, has an interesting take on the rise of Herman Cain and the 9-9-9 brand. We’ve had candidates who have effectively used marketing principles, but this is the first time we have a candidate who is himself a master marketer. Read David’s article here.
Milton Kotler, the preeminent marketing pioneer in China, updated me on Chinese brands. They may not be taking over the American market, but they are most definitely growing outside of China. Here are Milton’s observations:
“Consumer brand management is making headway in the domestic China market and developing countries,even in Europe, with apparel, appliances, computers, white goods, black goods, autos, etc. You would be surprised, too, at the number of Chinese brands in Africa, SE Asia, Latin America and Eastern Europe.
The U.S. is the toughest consumer brand market to enter, and the Chinese want to get their brand management ducks in order so they don’t lose the shirts make a premature plunge.
There are strong Chinese brands in the B2B industrial sector. Huawei is now the world’s second largest telecommunications company. Sany heavy duty vehicles is building a plant in Georgia to compete with Caterpillar in the U.S. home market. Yutong bus is making a brand deal with Greyhound. So there is movement.
The key thing is that brand management takes time to learn how to do well. So China vigorously tries it in China and patiently waits for scale entry into the U.S.market, so they don’t lose their shirt with a premature entry. Meantime, let’s not forget that Chinese companies are acquiring well known Western brands, like Volvo and whatever else in manufacturing, distribution and retailing that they can get their hands on.”
Milton Kotler has been a business pioneer in China for since 1999. His company Kotler Marketing Group, with offices in Washington DC, Beijing, Shanghai and Shenzhen, conducts projects in marketing strategy, management and training. Clients include Motorola, Ford Motor, IBM, JP Morgan Private Banking, Exxon Mobil, American Express, Microsoft, Novartis, British Telecom, Pfizer, and other Fortune 1,000 companies. He is an economic advisor to the Mayors of Xian, Dalian and Harbin and is the author of A Clear-Sighted View of Chinese Business Strategy, Renmin University Press, Beijing; 2003. His new book (forthcoming 2009) is Why China? A Business Adventure.