Product Recall and Brand Strategy - Case of Toyota Corporation - Essay Example

Toyota has other major brands, which are principally Lexus, Prius, and Scion. While these lesser brands themselves command a healthy following, the company has however concentrated its efforts in marketing the principal brand which is Toyota and its sub-brands (Daye & Van Auken, 2010).

Until the product recalls, Toyota’s brand architecture hinged primarily on the Toyota name.  It is typical for Japanese companies to focus their business and marketing efforts on a single corporate brand (Daye & Van Auken, 2010).   This strategy has obvious advantages, such as the development of a strong culture around the master-brand and therefore making their marketing efforts more efficient (Thomson, 2010).  It has strong implications in its production approach also because the single brand allowed the firm to lessen the number of components it needed.  Toyota’s sub-brands shared a large number of common parts, reducing design efforts and concentrating production on these shared components. “Compare this approach with US rival GM, which, until recently, was operating a house of brands structure with 11 distinct marques, and the reason for much of Toyota's success and GM's decline, becomes apparent” Daye & Auken, 2010).

While there are obvious strengths, there is one glaring weakness in the brand focus strategy.  Negative publicity which may attach for any reason to the master brand is going to affect not only all its existing sub-brands at the moment of the controversy but also all future sub-brands still to be designed.  It appears that this is the reason why Toyota’s strategy for 2011 and the near future is to shift global marketing emphasis to its Lexus brand (Toyota Annual Report for 2011, p. 11).
The executive report also emphasizes quality and safety as its two major parameters. Hence, the company strives to bring constant development in its operational and management process. Toyota’s production system “is steeped in the philosophy of ‘the complete elimination of all waste’ imbuing all aspects of production in pursuit of the most efficient methods” (Toyota 2011d). 

The global operation of Toyota is primarily based on two concepts of modern management. “The first is called ‘jidoka’ (which can be loosely translated as ‘automation with a human touch’) which means that when a problem occurs; the equipment stops immediately, preventing defective products from being produced” (Toyota 2011d).  According to Lander & Liker (2007), Toyota’s production system pioneered in the “lean production” movement which emphasized waste elimination in the value streams. The resulting system was highly standardized and high volume, with precisely sized buffers and a close view towards quality assurance (Liker & Morgan, 2006).

 The second concept is the just-in-time process that helps it to maintain a smooth process of operation without maintaining high inventory. The meaning of “Just-in-time” or JIT production is that the system is designed to produce “the right item at the right time in the right quantity” (Dennis, 2007, p. 67).

Because of its changing position on the issue of the cause of its product defects, a lack of trust began to develop in the public eye with regards to its core value i.e. reliability. A survey conducted by Piotrowski & Guyette (2010) found that: a majority (57%) were disappointed in how Toyota’s leadership handled the recall issue and rated it very poor; few respondents (18%) expressed confidence in the truth of Toyota’s public statements; half (50%) felt that Toyota’s decision making was unethical to some degree; the majority (56%) questioned the company’s transparency during the crisis, and only 13% believed that Toyota would regain its former reputation as a bastion of quality.