Archive for March, 2010

Toyota and Tiger… Brand Collapse or Rebirth or Both?

March 25, 2010

We have all heard the news…. 8+ million Toyota automobiles are recalled due to a variety of malfunctions; and everything and more than we wanted to know about the many loves of Dobie Gillis… oops, I mean Tiger Woods.

Toyota, a brand synonymous with quality and reliability for decades appears to be imploding right before our eyes. Their war room/siege mentality, ready to rebut “any and all” negative customer comments strategy does not resonate with the public or in any way appear authentic. Whether it’s the floor mats, the gas pedal or of course, customer error, yes, the company is sorry, so sorry for injury or death. Software, hardware issues? Apparently Toyota can’t replicate some of these problems, therefore it appears they do not exist, or isn’t it our fault anyway?

And does this calm our fears?, and support the brand promise of quality and reliability?

I don’t know about you, but I feel a deep and shocking sense of uncertainty with Toyota’s response. And I own two Camry’s, although of a vintage before these apparently unstable “drive-by-wire” electronic technologies we adopted. Yikes!

Talk about a brand conflict, reliability versus uncertainty.

This is a huge problem for Toyota. And a major inconvenience at best for customers worldwide. We have to bring our cars in for a fix we aren’t sure will solve the problem. Oh, and now what about the resale value of these cars? Toyota was noted for high resale value… who wants to buy a used and potentially unsafe Toyota now at any price? Not me! You?

And if that isn’t enough, Toyota appears to be diddling. You can sense it, and as some of their internal e-mails we hear about attest, their approach is to delay, stall and of course, minimize the cost of the damage.

Their ads add insult to injury. “Thanks for sticking by us,” they intone… and to “thank you, we are offering incentives like 0% financing so you can buy a new one.”

Just what I want! Even though you, Toyota can’t replicate them, these issues may still exist. People have died, cars have very publically careened out of control for who knows why, and resale value at least for now has gone down the tubes. And to top it all off, I have to suffer the inconvenience to bring in my car to get a fix that may or may not take care of the problem, and you thank me by trying to sell me a new car!

This is outrageous and insulting. Add it all up and what this says to me is that Toyota has lost touch with the power of their brand. And such moves like these are damaging it, perhaps permanently.

Tiger has a similar problem. Although perhaps not on the same scale as Toyota, he is a very public, well known brand, like it or not, and a multinational one at that. For many people Tiger is golf itself and a $ multi-billion corporation burnished with a champion’s glow…. He and his handlers positioned him as a problem-solving icon able to take on and beat any challenge that may come his way. Until now.

We now know this is may, I repeat may, be limited to the golf course and in the “perception is reality” world of brand recognition, but certainly not in real life.

I will argue that Tiger’s final lot as a brand is not yet set in the public mind. Yes, he is certainly human, a junk yard dog perhaps, but is this unusual? And yes, a number of high profile sponsors like Gillette and Accenture have pulled away.

Questions still linger that if answered authentically and humanly, could likely restore his brand image to be even more powerful than before.

Here’s how.

Tiger himself proclaimed at his highly staged news conference a few weeks ago that he thought he was above it all and could behave as he wished… that the rules the rest of us follow didn’t apply to him.

He also told us that he understands the hurt he has caused and the error of his ways and that he will do what it takes to be a better person. Great stagecraft!, and positioning…. I am working hard to be a better person. Who can throw the first stone with such a revelation?

So that is where we are.

Two powerful brands under attack, one disintegrating right before our eyes, the other, a work in progress, the jury still out. What kind of marketing thinking and strategy could be applied to turn these brand conflicts around?

Let’s look at Toyota first.

Toyota’s issue is that they appear to be self-absorbed and cheap, focused on cost containment and damage control, going so far as to lay the blame on those pesky customers that are us.

This is not the time for that type of non-marketing approach by an automobile company. Audi famously blamed their customers in the 80’s for cars that apparently shifted into gear on their own. They had to change the names of their models and literally re-build demand for their vehicles from scratch, a costly process that took them out of the game for years.

In this case, assuming Toyota is doing everything in its power to solve the issues, known and unknown, the company needs to remember that it’s the brand connection and it’s relationship with customers that matters most. That is where real long term value is.

I am not privy to the details but over time, the value of the Toyota brand, as the perhaps soon to be world’s former #1 auto maker, has to be in the $ hundreds of billions, or even more.

From an integrated, marketing to win perspective, Toyota needs to take a two-pronged, pedal to the metal communications approach:

1. Reassuring the public that the cars are safe, and

2. Acknowledging customers’ inconvenience and uncertainty along with the hassles of bringing cars to the shop entails.

In other words, they need to be bold in terms of solutions, it will cost, and the investment is worth it!

As far as reassurance is concerned, good news or bad, in today’s instant, social media world, transparency is essential. Customers need to be in the loop to see for ourselves what the company is doing to make us safe again.

It easy today to take us the labs and testing grounds, give us Q&A and other access to the engineers and scientists, etc. Let us see that no stone is being left unturned and at the same time show us the operational excellence the company is famous for, in action.

And as far as customer inconvenience is concerned, Toyota needs to honor the value of our time, let alone the anxiety we feel, and understand it in the context of brand value as well.

Once understood, the company then needs to then honor us with something tangible. That means, Toyota if you are listening, setting up drive in check stations for all post 2002 cars and then, give us something in return like a free oil change or service, something of value that honestly recognizes the value of our time and our loyalty. Giving to receive is the operative principle here.

I can tell you now, that a great deal on a new Toyota feels cynical and indeed is NOT it! And if they were clever, perhaps Toyota could partner up with say a Sirius/XM or other outside entity and offer a free 3-month subscription or something like that… because “you care… care about us, your valued customers!”

On the Tiger front.

His solution is a bit more under his personal control, but no less impactful. He can no longer claim the cover of privacy to be left alone… the genie is out of the bottle and won’t fit back in. And yes, just like the Wizard of Oz, we now have peered at the man behind the curtain, and see all too well that he is human like the rest of us.

Now that Tiger is off the pedestal and the announcement has been made that he will indeed play at the upcoming Masters Tournament, it comes to two things again:

1. His performance on the course, and

2. His performance on the course.

What do I mean?

On one level, we will expect him to play well and perhaps even win. He is to many, Golf after all. But we also expect that he has learned from his self-induced embarrassment, that he is, in fact, in the process of becoming that better person. This means that no, we don’t necessarily want him to be more approachable, but we need to know he can perform in this “better,” more realistic and human manner.

So how does this play out?

First, that he handles the catcalls, the embarrassing hoots, questions and other assorted unscripted realities that will inevitably come his way with humor and poise. That he not dodge but roll with it in a manner befitting a champion. In other words, the focus and drive (no pun intended!) that has made him the champion he is, also extends to his personal improvement, and that he is a winner here too.

If he does a Brat Pack-type, moody thing and wrap a club or two around a tree or smash a camera, punch someone out or otherwise behave poorly, or that he sets up an impenetrable barrier so no one can get near and utter a bad word, he will be positioned by his own actions as an arrogant “bad person” which will forever tarnish the best golfer, iconic status that he has already achieved.

If you don’t believe me, remember 2004 presidential candidate Senator John Kerry? Like him or hate him, that wishy-washy answer he gave at the Grand Canyon regarding whether he would change his vote for sending troops to Iraq, knowing the original premise of “Weapons of Mass Destruction” was inaccurate, forever labeled him as… well you know, a Flip Flopper, irrespective of his many impressive achievements.

The jury is still out on this one, at least for the moment. One thing is certain, the embarrassment and hurt will fade over time, but the position he takes and fosters in the public eye through his next set of actions will stick, and the choice in the end will be his. So what will it be, great golfer and jerk, or very human champ for the ages. What would you choose?

And I will guess that if Tiger does take the high road and shows us he has or is mastering his demons like he has mastered his sport, will Accenture, Gillette and other more lucrative sponsorships be far behind? It is clear that the “championship, do anything image” would be more real this time, and well earned to boot.

Move forward Toyota… Go get ‘em Tiger!

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Sue the Barbarians! Who Knew This Is a Marketing Strategy?… and A Brilliant One at That

March 6, 2010

I used to think that patent lawsuits and such were not in my area. For Lawyers, inventors and innovators and maybe even engineers. Absolutely! Marketers like me? Absolutely not. That is until now.

An article just appeared in Wired entitled,  Apple Fires at HTC, But the Target is Google http://www.wired.com/epicenter/2010/03/apple-fires-at-htc that got me me thinking about smartphones, iPhone and the recent launch of the Google Nexus One smartphone manufactured by HTC.

I remember seeing that Google’s groudbreaking strategy of selling this next generation, unlocked and carrier-agnostic smartphone direct to customers had run into a few bumps early on.

Some customers were having trouble trying to sign up or get their phones activated. It appeared that others who couldn’t figure out where to get activation and other issues resolved, found themselves in customer service “purgatory,” getting an endless runaround between Google or T-mobile, the charter carrier for this landmark product with limited success. And then some folks, who got sick of the whole thing and attempted to end their new service apparently were hit with a $350 early termination fee from their old friends at, no not the carrierT-Mobile, but Google itself.

These issues I think could be attributed to a new product and in fact whole new paradigm and distribution eco-system that is no longer under carrier control. My initial thought was, so what, there are a whole lot of customers out there hungrily waiting for this great device that will buy it anyway.

If you read my last posting, you may remember my response to Nexus One and the very real threat it posed to Apple’s iPhone franchise, the leader in its space. And what I perceived (and still do) as a very real threat capable of exploiting Apple’s weakness inherent with it’s excusive ATT relationship. Because of this, a strong Nexus One product has the ability to render the current leader iPhone to niche status.

Then it hit me. Add up the launch glitches with this new wrinkle, and any uncertainty before has now been amplified many times over.

And what does that mean?

It means that mainstream, early majority/mainstream buyers who may be very interested in this product, especially on say a Verizon or other non-ATT platform… are now forced by their very nature to hold off any such purchase and wait, wait until these issues have been resolved… a process that I bet may take years to sort out if Apple has its way!

This is NOT good news for Google!

How is this so? Geoffrey Moore in his great book that I still use in my Principles of Marketing class entitled Crossing the Chasm defines “early majority” buyers as conservative and pragmatic.

They don’t gamble on horse races… they buy from already established winners. They also adopt when peers adopt, and peers don’t adopt until leadership has been established. This paradox gets to the core of the Chasm.

And of course, once things are hashed out and leadership established, customers buy often moving all at once as a herd creating a lucrative Stampede, Tornado or Tipping Point that we have all heard so much about.

The key underlying risk and now major impediment to market domination comes down to, “What happens to my $500 investment in Nexus One if this suit is won by Apple?” In this case, this is a $ billion question!

I will bet that this very lucrative and key mainstream segment will most likely do what they always do when faced with such uncertainty… they stay with the status quo, perhaps begrudgingly, and wait until things get sorted out.

This makes this patent lawsuit a classic market-buster, at least for now.

Google/HTC had an opportunity to grab a significant market share of smartphone buyers who if nothing else, had an interest in a product of this class outside of ATT from a trusted brand and innovator.

But now this prize is out of reach, at least for now with this very clever, marketing move by Apple. The market will wait. And I will bet Apple is in no rush to settle either.

Google still has another prong to its strategy, which is to evangelize its Android operating system as far and as wide as possible, but the lucrative profits from its own handset will elude them, at least for now.

I will leave you with this thought. I still don’t think lawsuits like this should be considered savvy marketing strategy or tactics, except perhaps under unusual circumstances.

One criteria which makes this a marketing move is the fact that the Plaintiff in this case  (Apple) is the established leader in this category, and under attack by the Defendant newcomer (Google/HTC).  Conquest of the top-dog, especially a leader such as Apple, which is marketing at a consistent, radical and best practice level, is very, very hard, even if you are Google.

Secondly, Apple’s claim of patent infringement is credible even to us lay folks. It does not appear frivolous. Just look at the phones side by side.  If it did, we probably wouldn’t care.

Are there others? I would love to know what you see and think.