| Crisis management is not just about contacting | | | | number one automotive brand, with $30.5 million |
| news outlets or writing an apologetic press | | | | brand earnings, according to Interbrand. Should we |
| release. In the digital age, crisis management | | | | expect the Toyota brand to move down |
| requires swift, sweeping action on all digital fronts: | | | | Interbrand’s list next year? Depends on how |
| social media, blogs and company websites. For the | | | | they manage the situation. At least for now, |
| potentially long-term damage to Toyota’s no. | | | | Toyota needs to stop the bleeding or it could |
| 1 auto brand, you’d expect the Japanese | | | | cede its brand earnings to its automotive |
| automaker to be more proactive in managing the | | | | counterparts. Since Jan. 15, Toyota’s stock |
| media firestorm surrounding its faulty floormats | | | | has tanked 430 points, or 10.4% while Honda and |
| and accelerator pedals. | | | | Ford have seen a mere 4.3% and 2.1% decline, |
| “It’s not good news because it hurts their | | | | respectively. While the auto market is slumping, |
| image for quality and reliability,” said Thierry | | | | Toyota’s stock is falling like a rock compared |
| Huon, an auto analyst at Exane BNP in Paris to | | | | to its competitors. Toyota can minimalize damage |
| the NYT. “It’s not good advertising.” | | | | through effective crisis management. |
| For a brand whose core competency is superior | | | | Successful crisis management requires timing, |
| quality and leadership that needs to grow 50% in | | | | response and sincerity. Dr Rory Knight and Dr |
| the next year to meet it’s ambitious goal of | | | | Deborah Pretty have performed extensive |
| 15% global market share, the company could do | | | | research in crisis management. They have studied |
| better to manage its recent recall crisis. | | | | the stock price of brands facing catastrophic |
| Toyota has the opportunity to utilize social | | | | failures (similar to Toyota). They bucketed those |
| platforms, such as Facebook and Twitter, to | | | | company’s whose stock price recovered to |
| manage this branding crisis, but has shown a | | | | the level prior to the catastrophic event and |
| half-hearted effort. Facebook, the largest social | | | | those that did not recover. Knight and Pretty |
| network, is not being utilized by Toyota to reach | | | | determined effective management is critical in the |
| out to its nearly 70,000 fans. While loyal fans stick | | | | recovery of company value. |
| up for the brand — for instance Ron Short | | | | How can a be crisis managed well? Mattel Inc. |
| points out GM is also recalling its vehicles — | | | | faced a recall similar to Toyota when it retracted |
| Toyota’s voice is silent. The Japanese car | | | | 28 of its products in 2007. The toy manufacturer |
| manufacturer is also under-utilizing its Twitter | | | | reacted quickly to identify the problem and took |
| account to get the news to its 14,000 followers. | | | | immediate action to recall faulty products. To curb |
| Toyota has posted a mere six tweets regarding | | | | a public outcry, Mattel worked closely with the |
| the recall — not as much as you might expect | | | | media. At the end of the day, Mattel... |
| a brand in crisis management mode. | | | | To read more about Toyota's recall and crisis |
| The consequences of poor crisis management | | | | management, go to Sparxoo, a digital marketing, |
| could severely damage its reputation as the | | | | branding and business development blog. |