Ben Wise on Branding

Watching the world through the lens of the brand

Posts Tagged ‘Toyota

Lexus Saved By Toyota’s Brand Portfolio

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Large companies often debate if their expansion should be done through brand extensions or by launching new brands. There are strong arguments for both. Brand extensions let you leverage an existing brand into a new product or category with much less investment in marketing and brand awareness. Conversely, a new brand can let you go after a drastically different value proposition. Additionally, any damage to the brand is relatively limited from other brands in the portfolio.

It is this last point that has become apparent recently in the case of Toyota. As this blog (and most other business or branding blogs) has noted, the Toyota brand has taken a beating amid the unprecedented product recalls. Amazingly, the Lexus brand, owned completely by Toyota, hasn’t suffered.

A New York Times article says that Lexus sales are up 5% so far in 2010, in line with the average for luxury car brands. Toyota sales, on the other hand, are down 15%.

The recent success of the Lexus brand was only made possible by being distanced from the Toyota brand, despite being the same company.

This is a great example of the benefits of a brand portfolio. The combination of Lexus and Toyota allows the company to credibly play in the mainstream and luxury markets while protecting each brand from any problems experienced by the other. Had the problems been primarily with Lexus, the Toyota brand would have likely been fine.

What do you think? Will the Lexus brand be hurt by Toyota’s problems?

Written by benwisebranding

March 12, 2010 at 9:37 pm

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Recovering From a PR Mess

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With all the troubles facing Toyota after their giant recall, it is hard to imagine their brand recovering the prestige it once held. For that matter, it can be hard to see how brands in general are able to come back from a giant PR disaster.

But hope is not lost. Last week, Domino’s Pizza announced great financial results. This should remind us that it is possible to overcome challenges in the media – if handled properly.

In the spring of 2009, a video made it onto YouTube showing some Domino’s employees doing some pretty nasty things in the kitchen. The video became an instant YouTube sensation. But the company reaction was fast, releasing their response via YouTube almost immediately. The message from Domino’s communicated a few key things that deserve to be called out:

  • First, they thanked their loyal community for bringing the problem to their attention, implying that customers have a stake in the brand
  • Second, they outlined how they were dealing with it, showing that the issue was being taken seriously
  • Third, they emphasized that not only was it an isolated incident, but that the rest of the locations were run by hardworking, honest people, thus providing a human face to a multinational corporation
  • Finally, they concluded by showing a renewed emphasis on their customers, for whom they would work to regain their trust

This may seem like common sense, and it should. But Toyota’s response was lacking each of those points. The result is that despite the setback, Domino’s is now thriving while Toyota continues to be attacked from all corners.

What do you think? Is it too late for Toyota to learn from the Domino’s example?

Written by benwisebranding

March 7, 2010 at 11:41 pm

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Toyota’s Brand Revisited

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Previously, I had posted about the opportunity that Toyota had to salvage their brand amid recalls that have reached an unprecedented scale.  Other brands have managed this in the past, such as Maple Leafs Foods or Johnson & Johnson. Toyota could have acted quickly to remedy the situation and communicate to the marketplace how seriously they were taking the problems.

Alas, Toyota missed their chance and now their brand is essentially in a free-fall.  The apology from Toyota’s boss, Akio Toyoda, was generally seen as lackluster. The recall has been slow and the details to consumers have been scant. All of this tells Toyota’s consumers and partners that the problems just aren’t that important to the company.

A brand at its essence is a promise to all stakeholders, consumers and otherwise. Toyota’s promise was about operational excellence and innovation. For the foreseeable future, this promise will carry no credibility in the market. Their perceived ability to be flexible and move quickly is gone. Their public image is shot. In sum, a once mighty brand, that caused terror in their American counterparts, is badly damaged.

What do you think? Will the Toyota brand ever recover?

Written by benwisebranding

February 11, 2010 at 8:51 pm

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Dealing With Toyota’s Crisis

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The halt in sales and production of 8 Toyota models, including the best-selling Camry and Corolla, will cost the company millions of dollars. Others have been forced to halt sales briefly for quality reasons, but the scale of Toyota’s troubles is unprecedented and will have an equally profound impact on their brand.

That being said, the level of reaction from Toyota might actually improve their brand. Think back to the scare that Johnson & Johnson had with Tylenol or the issues Maple Leaf Foods had with listeria. In both cases, giant recalls took place and the company suffered massive losses. But in both cases they proved to their consumers that safety is a top priority, potentially improving their brand.

Will this work out the same for Toyota? It is hard to say. I’m sure there are many more examples of recalls that didn’t have this silver lining. The list of faulty toys alone could fill a few pages. But watching Toyota navigate this issue should provide some great insight into how to handle these situations to minimize the damage to the brand.

What do you think? How will Toyota deal with the current crisis?

Written by benwisebranding

January 28, 2010 at 6:37 pm

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