John Tantillo’s Two Losers of The Week: Toyota & Apple
Maybe it’s mid-winter blues, but I’ve decided to accentuate the negative by pulling a first: two losers. And, frankly, these two were such obvious marketing victims I simply had to do it. They say that with pride there is a fall and these two companies’ most recent debacles seem to prove the adage.
Loser Number One:
Toyota.
This car company was on the cusp of becoming the biggest and, arguably, the best worldwide.
But now Toyota’s on the hook for one of the biggest recalls in automotive history and their reputation for great quality at a great price is in tatters.
How did this happen? Well, I’ll leave the engineering post-mortem to the technical folks, but in my mind this disaster underscores how marketing should never be seen as an after-the-fact part of business. Marketing is business. End of story.
The Toyota recall is a great example of how you can have a great brand (or brands), then make one mistake and watch it all go down the tubes.
Harry Truman used to say something along these lines: the President should be habitually uneasy. His point? Much responsibility rested on a President’s shoulders and it would be wrong if a President didn’t sweat about these massive responsibilities and the possibility that a single slip-up could ruin everything.
Toyota, and any business for that matter, needs to remember Truman.
The design and production process must be scrutinized. Errors or potential errors must be minimized and, especially for a global company, the scope of any mishap must be compartmentalized (i.e., ten thousand recalls maybe, but not multi-continent million plus recalls; a foot pedal problem in one car brand not half of them).
People buy brands, they don’t buy companies…. But in Toyota’s case, things are not so clear cut. With the exception of their branding master-stroke of Lexus, Toyota cross-labels every one of its car brands with its corporate brand.
The problem with this kind of corporate brand strategy? Well, when one product in the corporate line-up has a problem, so does the entire corporate brand and all of the individual brands under the corporate umbrella.
In this case: If one of Toyota’s car brands has a problem, it infects all of Toyota’s cars and its corporate image –this won’t happen –or be as grave-- if Chevy has a recall (i.e., the Cadillac brand won’t be touched).
So what now?
Well, it’s crisis management time and after they work their way through the recall, they need to look ahead with marketing in mind.
First, they ought to start unwinding this connection between their corporate brand and their individual car brands. Part of this will be to emphasize the car brands that don’t have the foot pedal problem (i.e., Sienna, Solara, Yaris, 4Runner, FJ Cruiser, Land Cruiser, and the 2010 Prius).
To counter the Toyota contamination? They need to create something like a Toyota Safety Program. For example, every car can come with a card with the car purchaser’s name on it and a booklet that outlines what Toyota will do for the safety of the driver and his/her family. There should be a 24-hour safety hotline that the new purchaser can call and what about a free loaner car to be used by the owner during regular maintenance checkups?
In the face of all the negative, they need to emphasize the positive and remember that marketing begins with fundamental things like separating the individual car brands and putting quality control first.
Toyota must show that it is all about putting its customers first.
Loser Number Two:
What in the name of Newton is going on here?
Naming Apple as this week’s second loser is sad for me after I have trumpeted the virtues of this brand-based company so many times, but I have no choice…
I detect arrogance moving in and arrogance is marketing poison. Arrogance leads to the kinds of mistakes that can only come from thinking that you know your customers better than they know themselves.
What do I mean by this?
Well, first, let’s get through the obvious iPad deficiencies like its awkward (and possibly copyright-infringing) name and its lack of a camera (how could they forget this with 500 million Skype subscribers worldwide and cameras in virtually everything from cell phones to toasters?)…
What I’m really concerned about is Flash video. Turns out that Apple has not made the iPad capable of supporting Adobe Flash video which accounts for over 70% of all video content on the web.
Even Microsoft wouldn’t make this kind of mistake.
Obviously, the Apple consumer has told Apple simply by dint of the percentage of video on the web in Flash that he or she wants a device to be Flash enabled. Not making it so won’t make people abandon Flash, it will make them abandon iPad.
Build-it-and-they-will-come has never worked for any product. Real marketing dictates: build-what-they-ask-for-and-they-will-come.
Still, I won’t sell Apple short. Hopefully, this is only a glitch and the arrogance displayed isn’t a permanent part of their corporate personality.
Next step for Apple? In the weeks ahead, Apple must listen to the consumer and quickly march out updated versions of this product to meet the needs that are so clearly there.
Stay tuned.
John Tantillo “The Marketing Doctor” president of The Marketing Department Of America, and behavioral research psychologist, has worked in marketing industry for more than 20years.


Comments
John -
On Toyota - this is certainly not their first quality issue in the past couple years - they've had significant problems with engine sludge on lots of cars and premature frame rust on the Tundra. Just google "Toyota Sludge" or "Tundra rust" and see what comes up. Consumer Reports doesn't automatically recommend their cars anymore, which was a huge blow - the people that read that CR are the same ones that buy cars that are basically appliances - Toyota's core customers. Their reputation has been sliding slowly, this just accelerated the fall from their perch high atop the quality mountain. I think plenty of people (rightly) still believe Toyota makes a good product; they're just going to have to fight with Ford, GM, Honda and Hyundai for that title now instead of owning it.
And for a good perspective on what the Toyota recall says about our society, check this out: http://bit.ly/bBuSSx
Posted by: Kyle Rohde | February 4, 2010 4:32 PM
Repetitive Toyota recalls will be doing considerable damage to their brand. more than 2 million cars in the United States to rectify sticking accelerator pedals. over 4 million vehicles in the United States to correct pedals getting lodged under floor mats. nearly 700,000 automobiles in China owing to defective electrical window switches. Toyota managers on TV to apologise for recall and still the mass media flag issues as the company gets more tormented. I wonder how much brand value this has cost them.
Posted by: Sharla Bussy | February 19, 2010 5:26 AM
John - I couldn't agree more. I think there are a few things that Apple should learn from Toyota. Know your audience. Know your purpose. Commit to it - and deliver. Toyota forgot about that, and so might Apple w/ the 'Jobs' Pad.
Posted by: D Michael G | February 19, 2010 2:08 PM