Toyota's safety recalls and brand reputation recovery strategy

Toyota

Marketing

Toyota: Improving brand trust

Toyota: Improving brand trust

It is hard to believe that a year ago, Toyota was one of the most respected brand names in the world, perhaps the most respected brand in the automotive industry. While the elite triumvirate of American car manufactures -- General Motors, Ford, and Chrysler -- floundered, Toyota's reputation remained above reproach. Toyota's management and manufacturing approach of high quality control; lean supply chains and minimal inventories; and just-in-time production were studied even by companies outside of the car industry.

Resolution 1

Toyota has instructed dealers to shorten the pedals on the Lexus ES 350 and Toyota Camry and Avalon at no cost. Additionally, "Toyota told dealers to begin installing a small metal bar in those vehicles that was intended to keep condensation from forming inside the pedal assembly, which the company said could cause the pedal to become stuck….Toyota said the cars from owners who complained about the repair most likely had not been fixed properly, and said the remedy should address the problem when done correctly….if a customer is not satisfied with the operation and/or the feel of the accelerator pedal after the reinforcement bar has been installed…a replacement pedal is provided at no charge to these customers" (Maynard & Bunkley 2010).

However, federal safety regulators are considering fines against Toyota, including a $16.4 million penalty for taking too long to notify consumers of defects in the accelerator pedal design. Toyota "inexplicably told its American division not to stop installing defective pedals even after it made engineering changes in other countries" (Bunkley 2010). To prove the safety of its vehicles, Toyota must demonstrate in a very public fashion that the modifications are effective. Having its engineers do live, unscripted interviews with trusted but friendly media personalities and explaining exactly what happened to cause the problem is essential to 'take control' of the Toyota message that is being disseminated to the public, particularly after a one-sided, anti-Toyota segment on an ABC news show. For drivers who have had their vehicles repaired at dealers, Toyota could offer buyers a year's worth of free, monthly car inspections to ensure that the drivers had no problems with unintended acceleration due to floor mats or sticky brakes. Such a program would not only boost consumer confidence: if drivers did not have any problems after the repairs, this would also repair the public's trust in the Toyota brand.

Concern 2: Mistrust of flagship electric car model the Prius

Perhaps even more damaging have been the problems with Toyota's flagship electric car model, the Prius. The Prius has also been accused of unstoppable, unintended acceleration. Toyota had become synonymous with eco-friendly cars. Damaging the reputation for the safety of electric cars not only hurts Toyota's short-term profits; it also impacts the likelihood of consumers to buy electric cars in general. This shift would be particularly damaging to Toyota, given it has invested so much of its brand image and research and development capital in the success of the Prius.

Resolution 2

As well as improving the safety features on new models and repairing old models, Toyota must undertake a particularly aggressive effort to rehabilitate the image of the Prius. Drastically slashing prices would be one way to attract eco-friendly, young, and budget-conscious consumers who are the Prius' target audience. Younger people are making less money, given that the job market has been especially cruel for new college graduates with student loans. It is critical that young people become loyal Toyota customers early on in their driving lives, and are not scarred by the brand's current difficulties.

Problem 3: Appearance of a cover-up at Toyota

Trying to cover up a problem is often worse than the problem itself. Widespread belief that Toyota tried to cover up the technical problems of its cars at the expense of consumer safety has damaged the brand's image as committed to consumer quality. After a long public relations fight to establish a trusted position in the hearts of American car buyers, the Japanese manufacturer Toyota has squandered consumer goodwill. "The brand's quality reputation plunged since its recall-66.4% of consumers now consider it reliable vs. A near-universal 92.4% before" and if the company is required to pay fines regarding the 'foot-dragging' it exhibited in America, its brand image domestically will be even more difficult to resurrect (Steinberg 2010).

Concern 3

The federal government has recently undertaken an independent review of Toyota's acceleration problems, specifically to see if electrical as well as mechanical problems are the culprit. It is essential that Toyota cooperate fully with this effort. Toyota asserts that floor mats and condensation are its only problems while "dozens of Toyota owners who had their cars fixed in the recall have complained of more problems with their vehicles surging forward unexpectedly. Regulators have linked 52 deaths in Toyotas to crashes allegedly caused by accelerator problems" (Safety concerns, 2010, AP). Toyota's failure to be fully cooperative in the independent federal investigation will only draw more ill will and makes Toyota's public apologies in press releases and television commercials seem hypocritical and self-serving. Even if the findings are damaging, trying to conceal evidence will be more hurtful to the Toyota brand in the long run, and more costly in lost sales than any product modifications that must be made.