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Saturday, March 9, 2013

Brand Integrity

Today, you hear and read a great deal about brands and branding. I read about it constantly and find the majority of it vague and sometimes way off center. My favorite brand guru is Bill McEwen, who spent many years at Gallup and some major ad agencies. Now a brand consultant, he gives this definition of what a brand is: “A great brand is simply a powerful promise. This promise creates a very personal, emotional connection with consumers. But it’s not enough to have a big idea and it’s not enough to make a big promise. The promise must be KEPT....not just once, but at each and every consumer encounter. A great brand is much like a great marriage. It takes work, time, mutual respect, and evidence of real commitment.”

A brand is a promise. Isn’t that wonderfully concise?  This concept hit me by accident in my 17th summer when I visited Paris. After sleeping off some of the effects of my first transatlantic flight, my brother and I began walking through the city. We stopped and bought Coca-Colas from a vendor in a public park. Before we took a sip, we knew exactly what we were getting--the sugary water and caffeine gave us a buzz even though we had jet lag and the iconic bottle and consistent taste were just what we needed in our first trip off the North American continent. Today, Coke may be the most valuable brand in the world and it can be purchased easily in even the most remote areas of over two hundred countries. Several hundred million times a day, Coke keeps it promise to consumers again and again. Like it or not, the brand has integrity. And, with their advertising and promotion they have communicated trustworthiness to a few billion people around the globe.

The issue of integrity is something that has been a particularly important issue in many industries but the US auto segment is a standout if you are looking for a case study. Back in late 1977, I was home in Rhode Island for the Christmas holidays. My father’s health was declining and he asked me to go with him to a local car dealership as his vehicle needed service. We waited in a big room with other customers and had a great talk. While we were there, another customer was told that his engine needed a valve job which would cost several hundred dollars. He exploded to the service manager and produced his service book showing that he had dutifully come in every 4,000 miles for oil changes, tire rotation and other routine maintainance . The service manager started laughing and said something like “You don’t believe that service manual from Detroit, do you? Your oil should be changed every 2,000 miles.” He then went in to a lengthy discourse on American automakers “planned obsolescence” that would require most customers to buy a new car shortly after they had paid off the loan on their existing one. The irate customer said that the car company was dishonest. The sales manager continued laughing and said “write a letter to Detroit if it will make you feel better.”

As a boy, I often heard the line “As General Motors goes, so goes the country.” It was the largest industrial company in the world and for a long time had the highest stock market capitalization. It was a fairly accurate bellwether of economic activity. Clearly, by the 1970’s, the company had lost its way. The products were not as good as they had once been. The brand had lost integrity.

Compare that to an upstart company from Japan, named Toyota. Launched in 1937 in Japan by Kiichrio Toyoda, the company grew very slowly and was certainly set back by World War II. Always, however, there was a focus on reliability and the customer. Just after the company rolled off its first vehicles, Toyota executive Shotaro Kamija was quoted in the Tokyo press as follows: “The priority in receiving benefits from automobile sales should be in the order of the customer, then the car dealer, and lastly, the maker. This attitude is the best approach in winning the trust of customers and dealers and ultimately brings growth to the manufacturer.”

It seems as if Toyota had brand integrity built into their corporate DNA!  As the 1970’s began, Toyota began to make inroads in to the American market. The cars were inexpensive, reliable, and energy efficient which had great appeal as we had the first gasoline shortage in 1973. Detroit did its bit by not producing the best cars.

Back in 2005, Detroit laughed at Toyota as they faced a major test. Toyota actually recalled more cars in 2005 than they sold in America. They cleaned up their act and recalls dropped 83% over the next two years. Then, a major problem hit in 2008. Certain Toyota Tacoma trucks manufactured between 1995 and 2000 had frames that were corroding from the inside out. Research showed that it was most acute in areas with large snowfalls and heavy salting of roads.

Toyota offered to buy back the cars from consumers at 1.5 times the Kelley Blue Book rate. The offer was made to 813,000 owners. Toyota behaved splendidly. Some of the vehicles were 13 years old and management could have hidden behind warranty agreements. They did not just do the legal minimum. They went the extra mile for sure. The result was that many people took their rebate checks and went to their nearby Toyota dealer and purchased a new car. A few years ago, Toyota received some bad press with a Prius recall (I have two and they handled everything to my cranky satisfaction!) but have seemingly put that behind them as well.

Toyota is now the largest automobile manufacturer in the world although a resurgent GM is nipping at their heels with their new improved products.

So, may I urge you to think about the brands you work for or represent? Many of the problems that the brand may be experiencing could be a lack of brand integrity.

If you would like to contact Don Cole directly, you may reach him at doncolemedia@gmail.com

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