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Toyota is the seventh largest company in the world and the second largest manufacturer
of automobiles, with production facilities in 28 nations around the world and the highest-
production facility of any non-domestic automaker in the United States. Generally, Japanese
plants are flexible and produce multiple models, while foreign (especially American) plants are
devoted to a single model.
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! A brand name serves a variety of purposes for both the firm and the consumer (Meyers-Levy
1989). More than just a label, a brand name is a complex symbol providing a variety of
associations for the consumer (Zinkhan and Martin 1987).
Such associations go beyond simple product inferences and evaluations; and brand names
can serve a valuable social function by promoting feelings of group affiliation through brand
identification (Friedman 1991).

Hofstede's first value dimension, "uncertainty avoidance," demonstrates how individuals

handle uncertainty. A culture's perception on the "uncertainty avoidance" dimension will
usually reflect an individuals' need for security and their willingness to accept change and
take risks. Uncertainty avoidance provides guidance in dealing with anxiety about the future
and this reflects the desire to provide protection (via technology, rules or laws, and religious
teachings and beliefs). often consumers consciously or unconsciously find it hard to
differentiate between products on the basis of their physical characteristics. In differentiating
between competitors, consumers depend on a brand's reputation as an assurance that the
product or service will meet certain standards or quality. In brief, branding projects an avenue
or creates a way for consumers to reduce risk by capitalizing on their prior consumption
experiences associated with specific brands.

BRAND NAME AND IMAGE

Images play an important role in influencing the way that consumers respond to products and
services. Similarly, brand name plays a key role in consumer decision making, often through
decision-making heuristics or through inferences about quality. In this sense, brand name is
one way that brand image is communicated to consumers. From a consumer's point of view,




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a set of brand name associations may represent an accumulation of knowledge about the
brand along with accompanying emotions and affect (Zinkhan and Martin 1987).

Extensive studies have been carried out examining the association sets that follow brand
names and the effects these associations have on brand preference (LeClerc, Schmitt and
Dube-Rioux 1989), brand memory (Meyers-Levy 1989), and brand name attitude (Zinkhan
and Martin 1982, 1987). The view underlying these research is that, through semantic
associations in memory, a brand name can trigger a variety of inferences, which in turn can
influence preference, memory, or attitude.

Park, Jaworski and MacInnis (1986) categorized brand images according to the needs brands
satisfy for the consumer. An example could be, a brand with a functional image focuses on
solving consumption-related problems; in this case the images associated with problem
solving for example the coffee holder in the Toyota Human Touch campaign).

Symbolic brands attempt to satisfy needs associated with self-enhancement, role position,
group membership, or ego-identification most especially the images associated with
automobiles). Brands may also portray an experiential image which provides consumers with
pleasure, variety, and/or stimulation (e.g., food products). Hence, a brand name (and its
associated image) provides consumers with a multitude of attached meanings (Dobni and
Zinkhan 1990) hence, @

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Toyota's brand architecture has almost become its biggest strategic problem. Like many other
Japanese companies, Toyota has built its business from an almost exclusive focus on a
single corporate brand. It also markets Lexus and Scion, but most of the company's sales are
derived from Toyota sub-brands.

Such concentrated approach tends to have its distinct benefits. It fostered the single, united
culture that was seemed quite important to Toyota's overall success. This had allowed the
company to pump all its marketing investment into the Toyota master-brand rather than its
sub-brands for greater marketing efficiency.

Apparently fortunately, the single brand reduced the number of components needed, as its
sub-brands shared quite a significant number of common parts. In comparison to the US giant
GM (General Motors), which, until quite recently, the company operated a gallery of brands
structure with 11 distinct marquees, it could also be suggested that the reason for much of
Toyota's success and GM's decline, becomes clear.

Every brand architecture, however, has strengths and weaknesses, and Toyota is about to
learn the downside of the one it has adopted. Focusing on a sub-brand approach, in which




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most of its cars are linked to a single corporate brand, means that a problem with any vehicle
at Toyota will not only affect sales of the model in question, but also spread across the whole
range.

A pretty good example of such was in 1990 when Professor Mary Sullivan used quantitative
modelling to demonstrate the impact of brand architecture on automotive sales. At the time,
Audi was struggling with its accelerator problems. Sullivan demonstrated that the resale value
of the Audi 5000, which had been involved in a number of fatal accelerator accidents,
declined significantly as a result. However, she went on to show that the other brands in
Audi's stable were also affected to varying degrees, depending on how close they were to the
5000 in the company's brand architecture. Despite never having a quality problem, the Audi
4000 lost significant resale value and so, to a lesser extent, did the Audi Quattro. Crucially,
despite being part of exactly the same company, VW's sales in the US were not affected at
all.

Fortunately there is a reality check for Toyota in the sense that each one of its sub-brands,
including ones yet to be launched, will now be stained with the same spill. Although it is not
just a matter of perception, because the marquee has led the world in using shared parts and
technologies across multiple models, a technical hitch with one car will ultimately also mean
that potential risk of similar problems with the others.

2 Measuring the effects of the Toyota automobile recall can be carried out using the following;

' Panel or longitudinal research; provides data which enable trends to be identified;
-Panels can be made up of individuals, households or firms
-Panel research data are useful in developing long-term forecasts of new product sales.
-Technological advances in store audits are: optical mark reading, bar coding and point of
sale scanning.
' Omnibus surveys consist of a series of short questionnaires on behalf of different clients who
share the costs of interviewing, etc

Businessweek.com denoted that according to Bloomberg, Toyota Motor Corp.¶s U.S. January
sales dropped by 16 percent following a recall that placed some of its most-popular models
off limits, around the same period, General Motors Company and Ford Motor Company
reported increases that beat analysts¶ estimates.

Bloomberg reported that GM¶s deliveries had climbed 14 percent and Ford had acquired a 25
percent gain as the two U.S Giant automakers targeted Toyota buyers last week with trade-in
incentives.




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Other automakers that reported changes at the same period included Nissan Motor Company
which reported sales increase by 16 percent. Honda Motor Company suffered a fall of 5
percent in sales, while Chrysler Group LLC suffered a drop of 8 percent.

It was reported that apparently Toyota¶s decline snapped off three months of rising sales and
meant the Japanese automaker couldn¶t take advantage of what could have been the U.S.
market¶s longest winning streak since 2006. GM and Ford reported that they added U.S.
market share after the recession dragged deliveries in 2009 to their lowest levels since 1982.

According to businessweek.com Jesse Tropak the vice president of industry trends at

researcher TrueCar.com in Santa Monica, California suggested that within the following few
months of the recall, it would be a difficult challenge for Toyota to convince consumers to
consider their cars,´ she reportedly also added that ³This is going to be a tough, uphill battle
for Toyota.´

Toyota¶s sales slumped to 98,796 from 117,287, the lowest monthly total for the Toyota City,
Japan-based automaker since January 1999, reflective of data compiled by Bloomberg. Ford
outsold Toyota, reversing previous year¶s pattern.

Industrywide Deliveries

Industrywide deliveries are rates that Manufacturers, dealers and investors use the rate to
compare monthly totals by taking into account seasonal buying patterns. Toyota¶s
Industrywide deliveries may have run at a seasonally adjusted annual rate of 10.5 million cars
and light trucks, based on the average estimate of eight analysts. The January 2009 pace
was 9.6 million. A rate matching the estimates would still mean a U.S. market less than two-
thirds of its size from 2000 through 2007, when annual deliveries averaged 16.8 million.

Stephanie Brinley, an analyst at AutoPacific Inc. in Troy, Michigan commented that ³It¶s a
good sign for the economy to see some growth in sales,´ also adding that. ³We expect to see
month-over-month improvement all year, the Toyota problem notwithstanding.´

The performance of the U.S.-based automakers was measured against the average estimate
of five analysts surveyed by Bloomberg, while the results from the Japan-based companies
were compared with projections from auto researcher Edmunds.com. The estimates are
based on daily selling rates. January had 24 sales days, 2 fewer than in 2009. Without the
adjustment, results reported by some automakers could have been about 8 percent lower.




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Adjusted Estimates

On that basis, Ford¶s increase was 35 percent, compared with an average estimate of 34
percent, GM¶s gain was 24 percent compared with an estimate of 16 percent and Chrysler¶s
drop was less than 1 percent, missing a projected 3.3 percent gain.

Honda, based in Tokyo, had a 2.9 percent adjusted gain, missing the estimate of an 11
percent advance from Edmunds. Yokohama, Japan-based Nissan¶s 26 percent adjusted
increase beat the 23 percent estimate from Santa Monica, California-based Edmunds.com.
Toyota posted an 8.7 percent adjusted drop, almost twice as large as Edmunds.com¶s
estimate for a 4.6 decline.

Toyota suspended U.S. sales of eight models on Jan. 26 while fixing an accelerator-pedal
flaw, which meant that customers couldn¶t purchase popular sedans such as the Camry and
Corolla for the last five days of the month. Apparently they were the top- selling cars in the
U.S. in 2009.

Collectively, the eight models made up 56 percent of Toyota¶s 2009 U.S. deliveries, according
to Autodata. Vehicles still on sale include the Prius hybrid, Sienna minivan and Yaris
subcompact, as well as its Lexus and Scion models.

Toyota¶s Slump

Toyota¶s January deliveries slumped to 98,796 from 117,287, the lowest monthly total for the
Toyota City, Japan-based automaker since at least January 2000, based on data compiled by
Bloomberg.

GM¶s light-vehicle sales rose to 146,315 from 128,198 a year earlier. GM¶s Chevrolet Malibu
posted a 77 percent gain from a year earlier to 16,439 units, topping the Camry¶s 15,792 after
the Toyota model fell 24 percent. Ford, which followed GM with incentives aimed at Toyota
buyers, had a 49 percent rise for the Fusion, to 12,179.

Ford climbed to 116,534 from 93,506. Sales to fleet customers, such as rental car companies,
more than doubled last month, while retail sales to individual consumers fell 5 percent, Ford
said. Business buyers are increasingly attracted to models like the Fusion sedan because of
improving resale values, the Dearborn, Michigan-based automaker said.




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³January retail sales to consumers were below our expectations,´ Ken Czubay, Ford¶s U.S.
sales chief, said in a conference call. ³We can¶t seem to get traction in consumers¶ minds
except when there is a whole bunch of merchandising coupled with incentives.´

The Ford models with the top gains were the Crown Victoria, Taurus and Mustang.

Auburn Hills, Michigan-based Chrysler said sales dropped 57,143 from 62,157. Tokyo-based
Honda said sales fell to 67,479 from 71,031. Yokohama, Japan-based Nissan climbed to
62,572 from 53,884.

Industrywide deliveries totalled 656,693 light vehicles in January 2009, the lowest tally of the
year, making sales comparisons easier for automakers.

 Toyota has launched a multitude of marketing and brand reassurance campaigns to combat
this problem. Such campaigns include:
- Public Relations campaign;
- Advertising Campaigns;
- Price cuts;
- Customer Sales Promotions for example finance deals, free servicing and extended
warranties;
- CEO on Television.

Although according to Jonathan Hemus¶ article on Tuesday 9 February 2010 17.09 GMT (cited
www.guardian.co.uk), Toyota has done many things right in responding to its current crisis: its
spokespeople have filled the media with messages of reassurance, its PR people have
blogged and tweeted non-stop to fill the information vacuum, its website is full of details about
the recall and its call centre is working flat out to deal with customer enquiries.

Despite its bombardment of communication in response to the incident, it still appeared to

have been fighting a losing battle. Although the reason for these problems were not fully
reliant on what happened before the crisis rather it was its response to it that seemed
inadequate. The apparent problem was the perception of delay in regards to Toyota¶s
handling of the situation at the first place which means that whatever Toyota says now and
however well it acts, there is still the underlying perception that it had ignored the problem
until it was ultimately necessary to do something about it.

Suggestively, corporate denial seemed to have been the issue here as most effective crisis
management usually commences prior to an escalation of a problem to an out-of-control
situation, rather than tackling the situation during the µincubation¶ phase, Toyota turned a blind




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eye to the situation. While Toyota took the rights steps in rectifying the situation, their
hesitation to rectify the situation swiftly left a huge dent on their overall brand reputation.

ï Many companies develop predictive models to assist future planning and investment
decisions. Analysing historical data on marketing mix spending, Sales revenue is divided into
parts that can be attributed to advertising, promotion, distribution, product, and pricing. The
elasticity of these components of the marketing mix is then used to simulate what could
happen to future sales if each of these marketing levers were altered. The effects are
analyzed and graphed periodically. Such analysis often reveals that the effects of the
marketing levers account for a relatively small changes in the overall sales of the brand.

The largest component of total sales is at the brand level. The sales of a particular brand are
not ultimately influenced by immediate changes in marketing levers such as promotion
spending and price changes. Apparently, it represents the endurance of the brand reputation
that is independent of the marginal changes made in brand marketing tactics on a daily basis.
This clearly illustrates the value and consequence of the building and managing of the brand
that has taken place over the years. Brand value or Brand reputation results from activities of
the marketing organization along with other parts of the company, such as manufacturing,
supply chain, etc. (cited;Vhttp://arunkottolli.blogspot.com/2005/11/measuring-

marketing-effectiveness.html)




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Creating a strong and sustainable brand requires developing a well-conceived brand strategy.
To be successful, all aspects of the brand strategy must deliver a consistent message that is
in tune with the overall goals of the business. However, there is no universal rule that governs
the designing of brand strategies. In a 

VV  Vnote, µBrand and Branding¶,
author Douglas B. Holt outlines this four-step process for developing a brand strategy:

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Not all business goals require or demand a branding solution. Therefore, a brand manager
must identify those business goals which are amenable to branding. In the cases, where a
business goal can be achieved by enhancing perceived product value, brand strategies are
most appropriate.

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Mapping the existing brand culture involves evaluating the brand culture across the four
components of brand value described in Exhibit I. This requires collecting information in tune
with the four different components of brand culture. In this step, it is important for a marketer
to identify the points of divergence between the firm¶s current brand strategy and brand
culture.

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Analysing competition involves mapping the competitors¶ brand culture as done in Step 2.
This step must be carried out because achieving competitive superiority in brand value
requires benchmarking against competitors¶ brands. Carrying out mapping of competitors¶
brand culture will enable a marketer to improve the firm¶s brand culture over those of its key
competitors, and at the same time, identify and work on any possible weak-points that may
enable the competitors to make inroads into the future. The other and perhaps most important
aspect to be taken into consideration while branding, is the shift in environment. Identifying
opportunities in the environment ± consumers, technology, infrastructure, etc. ± that
competitors have failed to identify or react to, is the way to create the most significant brand
value.

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The final step involves creating a blueprint of the path that a firm should take to make a
transition to the desired brand culture. This design must chart out the firm¶s existing brand
culture, outline the opportunities identified in Step 3 and then, finally detail the desired brand
culture.

Ways of measuring the effectiveness of this strategy would include using quantitative analysis
such as Ansoff¶s Matrix to determine market share, Porters 5 Forces to evaluate the
competitive rivalry. Other methods could include longitudinal or panel surveys and omnibus
surveys among others.

Although Toyota carried out the PR campaign effectively, the perception of its hesitation is the
centre of its problem and the reason for the decline in consumer confidence which evidently is
proved by the sales figures following the major recall. Therefore, if the company had taken a
more proactive approach to the situation at its incumbent stage, it would have demonstrated a
more corporate and socially responsible conduct of operations.

Understanding the fact that the modern consumer tends to be more informed thereby quite
sceptical about brand promises, most especially with the amount of media bombardment all
around the modern consumer in this digital age, consumers find it difficult to differentiate
between genuine and bogus brand promises. With the continuous search for quality
assurance and peace of mind, a prompt response would have provided such reassurance
they desperately need.




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