post note: 1 22 12 I leave all posts up here as part of a timeline. This thread, brands in crisis during a social correction, is meaningful and will be improved upon later on by me. When? not sure? This post is a link resource for me and the subject of Toyota has been set asside by me as part of a larger and longer consideration of the idea. When I do revisit the thread, I will address Toyota. The Toyota issue certainly has been overshadowed by other national events and may be better re-framed inside of the bigger picture of social mood. end of note:
This is my original post and it has become a scrap book of links following this storyline. The triple calamity in Japan was two weeks ago and it is certainly not my intention to be insensitive. The point of this exercise is to follow an issue like this relentlessly through conclusion. There have been many twists and turns that endeavored to be or feel conclusive. Today I add a link that introduces "Tin Whiskers" to our lexicon and suggests that electronic controls could be at the heart of some of these reports as they have been shown to cause failure on satelites in orbit. The point of this thread is not about blame. That will continue on regardless of this effort. The point is how perceptions toward brands surf waves of emotion and that during a social correction this is a critical endeavor for companies that steward worldwide brands. The link thread is below, just page down. I make no offort to be complete but feel it captures the key turns in this issue. At his point I suggest you ignor my text on thie issue and simply note the link thread as it unfolds. It will be another year before this reaches what I suspect will be anything more definitive than today but the lessons will be rock solid by then. Brands in crisis during a social correction are critcal areas of concern because emotional perceptions are attached to rational use decisions and that demands extra special effort. Dave
Last link added to news thread: 3 22 11 (page down for most current links)
This post has evolved into a thread of ongoing news links and notes as this Toyota mess continues to unfold over many months. I say it several times below in different (earlier) entries but this brand crisis will not have smooth edges until a single problem is identified and that is beginning to seem remote.
By adding yet another model with a completely different problem, the brand crisis is cementing into American consumer's minds spending the hard earned brand equity like a spendthrift.
And when we revert to the original quality/speed control issues, if the problem is the electronic control units (the car's computer) the cost to recall them would be prohibitive enough to make this problem linger for years and maybe finish spending Toyota's brand equity in the US. (pure speculation? yes.) The story links will be valuable in the months ahead as experience shows how memories of time lines fade depending on your disposition toward this crisis. The reason this is worth monitoring is to better appreciate how a brand in crisis during a social correction is a wholly different kind of business crisis than during a period of social expansion. The caretakers of the Toyota brand will base their cost benefit decisions on their economic forecasting methods and if that happens they risk making a huge mistake with the future of the brand's image. For the rest of us, this is an exceptional opportunity to watch and learn. Dave
Links for my earlier thoughts on this subject:
Perrier & Tylenol:the revisionist lessons of social mood for brand managersManaging Brands in Crisis:
America's Financial Brands (an update is in progress)
Brands in crisis during a social correction - an updateSocial Corrections: shinning a light on the little parts of the larger process
comments from 3 10 10
Based on everything up till now (since 1-28-2010) and looking forward here is what I think will happen and why:
The lynch pin to this entire brand crisis, and the larger threat to American car buyer perceptions, is that the problem remains undiagnosed. There are three fixes and potentially three different problems that somehow are being combined in a very negative way. The electronics issue has been denied more than once and clearly does not offer an avenue of remedy at this point, though that may be misdirection. In fact, Toyota is now running ads on web sites that tell how their electronics are fail-safe...and how to learn more why. Risk to the brand remains high and at critical levels. Here's why: The entire premise of this idea offered here is how social mood, in a corrective state(now), affects our collective expectations of the always uncertain future. This uncertainty is skewed pessimistically during a social correction. When the macro force of this public perception is focused upon a particular brand and a persistent problem that is opposed to the existing perception of the utility of that brand, then the outcome is likely to be lost brand equity in a proportion much greater than how it was gained and long lasting too.
The possibility exists that Toyota will not find the problem and that further unexplained incidents will occur. (wow, yesterday's runaway Prius in Los Angeles (3/09/10)made the all the evening news hours and prompted a recall notice by the WSJ that was retracted within hours....how's that for crazy media attention?) Should social mood deepen into this corrective state further, the risks to the brand will increase and the risk to the company along with it. It is very possible that the negative effects are only just beginning now. Personally, I still regard Toyota as offering a high quality product that I have considerable admiration towards. My opinion about the brand is not what matters. If these two factors should occur going forward, the lessons of Audi in the late 1980's and early 90's are well worth revisiting. A definitive conclusion to these malfunctions are mandatory IMHO.
Daily flow of headlines on the thread (newest last):
Toyoda Shrinks World’s Biggest Carmaker for Quality Control
Toyota Owners Frustrated With Massive Recall (Bloomberg) (sales hit and perception damage coming no matter)
Toyota U.S. Dealers May Lose $2.47 Billion a Month (Bloomberg) (distribution Channels will suffer)
Toyota Owners Frustrated With Massive Recall (CBS) (uncetainty)
Toyota safety recall spreads to Europe (clearly an accelerator issue) FT 1 29 10
With Recall Expanding, Toyota Gives an Apology NYT 1 30 10
Toyota to Issue a Fix for Recalled Cars NYT 1 31 10 A Solution is ready says the NYT
U.S. Doesn’t Object to Toyota Plan for Pedal Repairs BB 1 31 10
Toyota Plans Media Blitz After Stockholders Lose $21 Billion BB 1 31 10
Toyota’s Slow Awakening to a Deadly Problem NYT 2 01 10
With Eye on Its Reputation, Toyota Issues Repair for Pedal NYT 2 02 10
Toyota’s President Eludes Media Amid Ballooning Vehicle Recall BB 2 02 10
Toyota’s Electronics Said to Be a Focus of U.S. Recall Probe BB 2 03 10
Toyota Recall Crisis Mounts as U.S. Steps Up Pressure BB 2 03 10 (Amer. politics gets involved)
Toyota May Recall Prius After Japan Orders Probe BB 2 04 10
LaHood’s ‘On the Fly’ Toyota Statements Accelerate Confusion BB 2 04 10
In a Prius Preserve, Shaken Fans NYT 2 04 10
In California, a Rebuke to Toyota NYT 2 05 10
Toyota's payback for stealing from the Gods Op-Ed WP 2 05 10
Toyota Has Pattern of Slow Response on Safety Issues NYT 2 07 10
Toyota Is Expected to Add 2010 Prius to Recalls NYT 2 08 10 (add 300,000 more cars to the 8 million total now under recall for multiple reasons)
Toyota recalls 437,000 Priuses, hybrids globally Wash Post (headline) 2 09 10
Toyota recalls Prius over brake problem FT (headline) 2 09 10
Federal Officials Review Toyota Corolla Complaints WP 2 09 10
Toyota's Plan to repair its public image Op-Ed WP by Akio Toyoda 2 09 10
Regulators Hired by Toyota Helped Halt Probes, Documents Show BB 2 12 10
Toyota Is Said to Discuss Rebates, Warranties to Lure Customers BB 2 13 10
Toyota Acceleration Complaints Cite 34 Deaths, U.S. Data ShowBB 2 15 10
Crisis-hit Toyota to idle two US factories Breitbart 2 16 10
Toyota faces class-action problem FT 2 16 10
Toyota Chief to Meet Press for Third Time After Recall Crisis BB 2 17 10
Toyota chief to skip US safety hearings FT 2 17 10
Toyota’s President Softens on Speaking to Congress NYT 2 18 10
Toyota Chief Agrees to Testify Before House Panel NYT 2 19 10
Toyota Saved $100 Million in ‘Favorable’ Recall, Document Shows BB 2 22 10
We Didn't Listen by Akio Toyoda WSJ 2 22 10
Toyota Probe Fueled by Politics as Well as Safety, Critics Say BB 2 23 10
Congress says Toyota misled public about runaway cars, engine electronics WP 2 23 10
Toyota Official Says Recall May Not Fully Solve Safety Problem NYT 2 24 10
2/24 & 2/25 had substantial TV coverage of Congressional hearing where Toyota execs testified
Toyota accused of withholding records in lawsuits FT 2 26 10
Will Toyota's problems hurt Honda? CNN Money 3 01 10
Toyota Sudden Acceleration Tied to 43 Fatal Crashes, U.S. Says BB 3 02 10 this seems like a statistical conversation waiting to happen.
Data Shows Camrys Outside Recall Also Had Problems NYT 3 02 10
Millions of Toyotas Recalled, None in Japan NYT 3 05 10
Toyota runs clickable ads saying its electronics are fail safe and offers details why. 3 06 10
AP IMPACT: Toyota secretive on 'black box' data 3 04 10
Toyota to Recall Prius Models including one in runaway incident WSJ 3 09 10 (Toyota rebuts story)
3 23 10 CNN has a video on their web site this AM showing a service bulletin from 2002 that suggests electronics are the root of the problem and that the billions required to fix the problem is why it has not been directly addressed. If even a portion of this is true no amount of positive or negative spin will change the outcome: This problem will continue for years and ruin the brand's reputation toward quality.
http://cnn.com/video/?/video/us/2010/03/22/pkg.cb.griffin.toyota.document.cnn
Americans Saying ‘No’ to Toyota as Ford Leads Opinion Survey BB 3 25 10
Recalls Triple as Electronics Run Cars, Swamp Regulators BB 3 26 10 (not Toyota specific but important to thread)
NASA to investigate cause of Toyota Problems WP 3 30 10
Steep Discounts Boost Toyota's March Sales FT 4 01 10
Toyota faces $16.4 million U.S. fine for waiting to warn of defect WP 4 06 10
Regulators May Pursue More Fines Against Toyota NYT 4 10 10
Lexus Stops Selling SUV That Was Called Unsafe NYT 4 14 10
Canada's Doubt on Toyota NYT 5 05 10
US Opens New Investigation in Toyota FT 5 11 10
Common Products, good returns Marketwatch on Toyota qrtly results 5 12 10
the link above, when read closely, shows a clear cost to managing the crisis so far
Toyota Finds Most Sudden Acceleration Crashes Are Driver Error BB 7 13 10 (this is a classic!)
Toyota Educates Customers as Floor Mat Alert Ignored BB 7 16 10
The latest? 'But you are using our cars the wrong way!' I use Bloomberg discussions for the objectivity of the reporting. The tone emanating from Toyota corporate is one that is terribly defensive. Understandable though it may be, it is not helping when objective reporting makes it sound like excuses. Why do people stack mats? If you are going to put 100,000+ miles on a car and not use floor mats then the carpet will wear out. Period. Toyota seems to have forgotten why so many people buy their cars in a very subtle way. If in their attempts to be defensive they abandon their market position, the brand will be further tainted.
1 11 10 Toyota Hegemony Fades as Damage Brings Sony Style Decline Bloomberg
2 09 11 US report finds no electronic flaws that would cause acceleration Wash post
So, one year ago we were all ready to hear TV testimony froM Mr. Toyoda himself in our Congress. Today we read that the government says it finds nothing like Toyota did when looking at computers in their cars. Was it all a mistake with a few nutjob outliers mixed in? If you are following this thread you know that isn't the point. The point is how the Toyota brand has suffered because of the social momentum created around scrutiny of the venerable brand. What really matters now is how much damage was done to Toyota's brand image and will a few stories denying the concerns fix what went wrong? The real point about brands is how the ultimate decision in made somewhere in the background. IMO
2 24 11 Toyota recalls 2.17 million cars for floor mat issues WP
3 22 11 Toyota Plaintifss Challenge NASA report on Sudden unintended acceleration BB (introducing: Tin Whiskers)