REBUILDING A BRAND

SUMMARY
1. Overview of Toyota 2. The Recall Problem and solution 3. Toyota losses 4. Timeline of events

5. RACE
6. C-Macie 7. Suggestions 8. Counsel

COMPANY OVERVIEW
Japanese multinational automaker, headquartered in Tokyo, Japan
Founded by Kiichiro Toyoda, 1937 President: Akio Toyoda (2009-Present) 3rd largest automobile maker Toyota, Scion, Lexus, Daihatsu and Hino motors

Toyota Motors, 2013

2010 RECALL CRISIS THE PROBLEM

Recalled over 7.5 million vehicles in two separate recalls over the course of 6 months. Investigation by National Highway Traffic Safety Administration Excessive coverage in the media

2010 RECALL CRISIS THE PROBLEM

Lack of communication from Toyota Toyota's sluggish response suggests lawyers, not PR experts, are handling its communications "Lawyers don't want to broaden your culpability, and they don't want you to apologize, but you've got to win back trust by communicating early, often and consistently. Jon Harmon, PR Chief of Ford during 2000 recalls

Conwan, 2010

2010 RECALL CRISIS SOLUTION

Poor crisis communication plan, initially failed Apologies and financial compensation Feb 2010, Toyota announces SMART plan to rebuild Toyoda announces at press conference:
Improve Quality Inspection Process Enhance Customer Research Establish an Automotive Center of Quality Excellence Support from Outside Increased Communication Improve regional autonomy

Toyota Recalls, 2010

TOYOTA LOSSES
Loss of revenue due to the production and sales halt in January 2010 estimated $895 Million in lost sales over recall Loss in paid civil fines mandated by the government for failing to report known safety problems as it is required to do under the law $16.375 Million Loss through the exuberant legal fees paid to the hired defense attorneys Loss through the decline in the stock prices of the company 1 year change of about 9%- $11 Billion Loss in sales from the customers who turned away from Toyota products because of the improperly handled safety concerns Yet to be quantified losses that may result from the settlements in civil and criminal cases brought up against the company in the wake of the recalls- by some estimates could be above $10 Billion

Toyota Recalls, 2010

TIMELINE OF EVENTS
Aug. 28, 2009

Horrific accident in So. Cal

Sept. 14, 2009

First floor-mat accusation

Sept. 29, 2009

First recall of floormats

Mackenzie, Evans, 2010

TIMELINE OF EVENTS
Oct. 2, 2009

Toyota finally makes a statement

Oct. 18, 2009

NY Times exposes years of Toyota complaints

Oct. 30, 2009

Toyota sends letters denying defects

Mackenzie, Evans, 2010

TIMELINE OF EVENTS
Nov. 25, 2009

Toyota attempts to fix the problem

Dec. 26, 2009

Second Toyota-related death

Jan. 21, 2010

Recalls 4.2 million vehicles

Mackenzie, Evans, 2010

TIMELINE OF EVENTS
Jan. 26, 2010
Toyota halts production

Jan. 27, 2010

Toyota blames pedal supplier, CTS Corp. Recalls 2..3 million

Presently
Toyota campaigns, bounces back!

Mackenzie, Evans, 2010

RACE FORMULA

RESEARCH
Customer expectations Current customer perceptions Effective media channels Initially did not do enough. Without research, Toyota failed to effectively communicate to their stakeholders.

ACTION
Target market: Toyota owners, dealers, stockholders, regulators, media Situational analysis: Toyota brand and values are put into question due to vehicle recalls Goal: To restore trust and brand image

Objective: To restore publics ratings to 80% positively disposed

ACTION CONTINUED..
Strategy: Informational Campaign Tactics: Press conferences, letters, mass print ads, TV ads, news appearances by CEOs, Expert endorsements, public events Timeline: Sept. 14, 2009 Feb. 2010

COMMUNICATIONS
Letters to Toyota Owners Print ads featured in national newspapers Public appearances by CEOs Commercials: http://www.youtube.com/watch?v=XH_fzCTiQE8 http://www.adforum.com/creative-work/ad/player/42947

SOCIAL MEDIA
Aggressive on social media outlets Increased FB friends from 71,000 to 79,000 in five weeks Daily Twitter feed Interacts with consumers by answering questions directly Connect with brand loyalists through retweets and hashtags Open lines of communication between publics and Toyota
6-8 staff working on social media alone, daily.

Bush, 2010

ADS AND PLEDGES TO DRIVERS

Pledge to Toyota Drivers Temporary Pause Ad (Jan. 2010) Toyota Customer Ad

They are trying to do the right thing but whats going on isnt stated very clearly and that causes more uneasiness with customers.
Alexander Edwards, president of automotive research group Strategic Vision

Associated Press, 2010

PUBLICATIONS & EXPERT ENDORSEMENTS

Toyotanation.com Caranddriver.com Car and Driver magazine

Motortrend.com
Motor Trend magazine Buyatoyota.com CNN.com Yahoo.com news main page

TOYOTA SAFETY TECHNOLOGY MEDIA TOUR

Create vehicles and a mobility society in which people can live with a sense of safety, peace of mind, and comfort. http://www.youtube.com/watch?v=8mGm_bbihOU July 2011, July 2012

COAST TO COAST EVENT

Promote Toyota vehicles Keep customers minds off recent recalls Establish credible partners that cater to a variety of target markets Reward Toyota customers for their loyalty NASCAR Event
Target market Diver endorsement

SMART PLAN
Rapid-response Swift Market Analysis Response Team To respond quickly to customer reports of unintended acceleration in the U.S. Opened lines of communication

EVALUATION

Kelly, 2012

C-MACIE FRAMEWORK

C-MACIE: ANALYSIS
SWOT: performed in order to identify what issues needed to be addressed both internally and externally Analysis: Stakeholder loss Issue: Losing trust from brand loyal drivers, prospective drivers, major loss of funds

C-MACIE: MANAGEMENT
Lack of leadership in managing PR Lack of open communication (Internally and externally) Lack of understanding about seriousness of issue by top executives Absence of crisis policies and procedures

Hemus, 2010

C-MACIE: IMPLEMENTATION
Initial lack of open communication once established communication channels DISTRUST Lack of control and consistency from top executives Timeline of crisis communication was ineffective Too late Timeline of rebuilding campaign was effective SMART Plan, Coast to Coast Events, Toyota Safety Tours

C-MACIE: EVALUATION
Management initially needed structure and concrete crisis plans

After apologies, rebuilding was slow but successful

Created crisis communications plan Quality craftsmanship and smart pricing & planning

Kelly, 2012

ETHICAL IMPLICATIONS
Neglected safety concerns Conspired with National Highway Traffic Safety Administration

Constraints on free-flow of information

Hirsch, Pfiefer, 2010

LEGAL IMPLICATIONS
Toyota Pres. & executives summoned to testify.

Handling the safety problems of unintended acceleration Allegations of possible cover up of the problem by the company 22 law firms in 16 states that are pursuing a class-action lawsuit seeking compensation for lost car value At least 30 seeking class-action status over lost use of vehicles.

Hirsch, Pfiefer, 2010

SUGGESTIONS FOR TOYOTA

Develop formal crisis communication policies and procedures Communicate quickly and as accurate as possible under the circumstances Establish direct and candid relationship with the media Adopt the policy of honest of and full disclosure of the companys findings Always follow up!

A LEARNING EXPERIENCE
1. Aggressive growth can create unmanageable risk

2. Get the facts quickly and manage your risks aggressively

3. Your supply chain is only as strong as your weakest link.

4. Accept responsibility

Connor, 2010

QUESTIONS?

WORKS CITED
Bush, Michael. "The Cult Of Toyota." Advertising Age 81.9 (2010): 1-20. Academic Search Premier. Web. 9 Apr. 2013. Connor, Michael. "Toyota Recall: Five Critical Lessons." Business Ethics. N.p., 31 Jan. 2010. Web. 25 Apr. 2013. <http://business-ethics.com/2010/01/31/2123-toyota-recall-five-critical-lessons/>. COWAN, JAMES. "Toyota Has Hard Time With 'Sorry'." Canadian Business 83.2 (2010): 14. Academic Search Premier. Web. 9 Apr. 2013. Hemus, Jonathan. "Accelerating towards Crisis: A PR View of Toyota's Recall." The Guardian. Guardian News and Media, 02 Sept. 2010. Web. 25 Apr. 2013. <http://www.guardian.co.uk/business/2010/feb/09/pr-view-toyota-reputation-management>. Hirsch, Jerry, and Stuart Pfeifer. "Toyota Faces Massive Legal Liability." Los Angeles Times. Los Angeles Times, 12 Feb. 2010. Web. 25 Apr. 2013. <http://articles.latimes.com/2010/feb/12/business/la-fi-toyota-liability12-2010feb12>. Kelly, Anne Marie. "Has Toyota's Image Recovered From The Brand's Recall Crisis?" Forbes. Forbes Magazine, 05 Mar. 2012. Web. 25 Apr. 2013. <http://www.forbes.com/sites/annemariekelly/2012/03/05/has-toyotas-image-recovered-from-thebrands-recall-crisis/>. Mackenzie, Angus, and Scott Evans. "The Toyota Recall Crisis." Motor Trend Magazine. N.p., Jan. 2010. Web. 25 Apr. 2013. <http://www.motortrend.com/features/auto_news/2010/112_1001_toyota_recall_crisis/viewall.html>. The Associated Press. "Toyota Hopes Media Blitz Will Reassure Customers." Ocala.com. N.p., 31 Jan. 2010. Web. 25 Apr. 2013. <http://www.ocala.com/article/20100131/ARTICLES/100139966?p=4>. Toyota Motors. "Toyota Moving Forward with America." Toyota: History. N.p., n.d. Web. 25 Apr. 2013. <http://www.toyota.com/about/our_business/our_history/index.html>.

"Toyota Recalls and PR Management Crisis." Part-time MBA Degree in DC. N.p., 17 Sept. 2010. Web. 25 Apr. 2013. <http://parttimembadegree.com/business-school-cases/toyota-recalls-pr-management-crisis/>.