With better handling Toyota can get its brand back on track

Marketing experts tell James Moore that the car maker's problems can be fixed as easily as its accelerators – if it is sensible

Saturday 06 February 2010 01:00 GMT

Toyota increasingly looks engulfed by a perfect storm. The problems with the accelerators – and now the brakes – that have emerged in some of its cars are looking like they will rank alongside Hoover's free US flights promotion, Eurodisney's financial problems, and the cyanide contamination that rocked Johnson & Johnson's Tylenol in the annals of brand crises.

The experts say what matters now is how Toyota reacts. Brands can recover remarkably quickly from shocks – Tylenol being the classic example – but only if their owners act quickly and decisively to remedy the situation.

In 1982 seven people died after taking Tylenol tablets that had been poisoned. Johnson & Johnson, however, reacted quickly issuing warnings to hospitals and distributors, ceasing production and paying for warning advertising. A huge US-wide recall of Tylenol products was set in train involving 31 million bottles that were in circulation with a retail value of more than $100m.

The company's swift action (which included the development of tamper-proof tablets) was widely praised and today the drug remains a top seller.

Toyota's difficulties pale by comparison and experts say that brands with its power need not suffer long-term damage from such an affair. However, the response must be swift,decisive, and honest.

Hugh Morrison, a co-founder of City public relations company M Communications, says: "The first think is that you have to get the messaging right. All companies have a crisis plan, but they also need to rehearse it. You need to establish the facts and be truthful. Truth is very important."

He worries that Toyota's messaging has been shaky – the firm's UK boss has talked about how he drives his family around in a Prius. "What they should have said was, 'if you fear you have a problem, bring the car down to our service centre and we'll sort it out'."

Mr Morrison, who worked with Eurodisney in the midst of difficult early years when its financial problems became a cause célèbre, also says that companies in a Toyota style situation often find themselves in the spotlight of media they are not used to dealing with.

"That's when they need to bring in outside help which can build upon relationships a crisis torn company lacks.

Brand expert Rune Gustafson, who runs the Rebus Partnership, says: "Brands like Toyota have a lot of stakeholders. But what they need to do now is communicate with customers. If you don't talk to your customers, they can only assume the worst. If you do, and you are open and you recognise there is an issue, you can win them around."

Like Mr Morrison, he says Toyota must move on to the front foot and tell its customers that it will do what it takes to look after them.

He points out that even if the brand endures a short-term hit from initial poor handling, problems can quickly be reversed. Witness Perrier's struggles when traces of Benzene were found in several bottles by a laboratory in North Carolina. The company stumbled at first and ultimately recalled more than 100 million bottles. Today the incident is all but forgotten.

Clever advertising can help after a crisis has passed. Tim Bazeley, from advertising agency Lean Mean Fighting Machine, praises British Airway's strategy after the initial debacle at Heathrow's Terminal 5. "They did a very, very smart campaign just afterwards. Once they had everything fixed they showed in real time the terminal working. They took out ads which featured quite mundane shots of what was happening during the terminal's day-to-day operations.

"They weren't pretending everything was wonderful, they were simply showing the terminal working. In a very real sense, it shows not only can you do well by being transparent when things go wrong. You can also win by being transparent when things go right."

Jonathan Sands, chairman of branding agency Elmwood, says Toyota still has two key brand fundamentals – familiarity and prestige. What is under threat are its "difference" and its "relevance" which are more fleeting. "What Toyota might now need to do to re-establish its relevance and difference from its competition is to give its consumers something extra, something to give it back its edge."

Mr Sands also points out that if Toyota was clever, it could win by making use of the conflict the brand now faces.

"Just look at how Skoda embraced its conflict after it was taken over by VW. It had this image of being East European and a rust bucket, something people would run away from. They embraced that in their advertising and it worked."

British brands in trouble: Barclaycard thrives but Ratners is still too risky

Britain's most popular credit card looked primed for a crashing fall in 2003 when Barclays' then chief executive, Matt Barrett, said that Barclaycards were "too expensive" to borrow on before the Treasury Select Committee.

The remarks led to him being accused of "breathtaking cynicism" by MPs and prompted a wave of hostile media coverage. The next day Barclays released a letter he sent to staff, which revealed that Mr Barrett had three Barclaycards himself and said half of the company's customers paid their bills off every month (like him).

Mr Barrett described the business as the "jewel in Barclays crown" and said the cards were never intended to fund long-term borrowing. It worked and the incident has largely been forgotten, even though Mr Barrett was accused of "doing a Ratner" at the time.

That was a reference to Gerald Ratner whose description of a cut-glass sherry decanter set sold in his shops as "total crap" shattered his chain of jewellery shops which, while they hardly had a reputation for top-of-the-range quality, were still hugely popular with the public.

The chain ultimately had to scrap the brand – it became Signet – and refused Mr Ratner permission to use the Ratner name when he launched an internet jewellery business, Gerald Online.

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