WP-BLOOMBERG: Toyota needs more than an ad campaign

[Omaha Steve]

http://www.thepeninsulaqatar.com/Display_news.asp?section=Business_News&subsection=market+news&month=April2010&file=Business_News201004291276.xml

Toyota needs more than an ad campaign
Web posted at: 4/29/2010 1:27:6
Source ::: WP-BLOOMBERG

By Frank Ahrens

Toyota, the Japanese auto giant, is trying to win back hearts and minds after recalling more than 8 million vehicles in six months, enduring a round of humiliating hearings on Capitol Hill and limping through a February sales slump of 11 percent after doing nothing but rising since seemingly forever.

Can any company simply advertise its way out of all that? No. A company in crisis must first convince the public that it has found or is working hard to find the problem and be as upfront and as prompt about it as possible. Toyota did not do that and admitted as much when it agreed to pay a $16.4m fine to the US government this month for failing to report its sticky-gas-pedal problem quickly enough.

Also, companies must convince consumers that their products retain a compelling value. In Toyota’s case, it had to lower the prices on its new vehicles enough so that customers were forced to perform a sort of price vs. safety calculus: On the one hand, I’m worried that if I buy a new Toyota, the gas pedal might stick. On the other hand, I need a new car. Toyotas had a long track record of reliability. And boy, that price sure is reasonable.

This is why the automaker offered so-low-we’ll-practically-pay-you new-vehicle incentives in March, which boosted sales an amazing 41 percent over March of last year. Toyota spent $2,256 in incentives on each new vehicle sold, a record high for the company, Edmunds.com said. Detroit automakers pay more in incentives, but Toyota has never had to buy sales the way it did last month.

Finally, a company in crisis must win the message. And that’s where Toyota’s advertising comes in. In recent weeks, Toyota has primarily run a two-pronged video-advertising offensive on television and online. In one series are the product ads. Comically hip young parents are shown living with their Toyota Sienna minivan, an attempt to show that minivans can be cool. One shows the wife using the Sienna’s rear-mounted backup camera to surreptitiously check out fellow arrivals at a yoga class she’s thinking about attending, making snarky remarks about each. That’s pretty standard auto advertising fare: Identify your customers, then cast actors they identify with. Those ads could air whether Toyota had recalled eight or 8 million vehicles.

In the other series are the crisis ads. Although they take a variety of paths, they all lead to the same message: We know something’s wrong. We’re sorry. We’re trying to fix it. Our cars are still safe. Five months after its first major recall, Toyota still has a big problem. It does not know for sure the root of its problems. Why have some of its customers experienced runaway acceleration, which the US government says has led to 34 deaths?

FULL story at link.