Can Toyota’s New Ads, Incentive Program Offset Recall Damage?

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Toyota is employing a marketing campaign to mitigate the horrific damage it has sustained over the past several weeks – including an estimated 18,000 “lost” sales in February, billions of dollars in repair costs, and an untold deterioration of its once-sterling reputation.

Even as Toyota executives testified on Capitol Hill this week, the brand was unveiling a whole new approach in its TV advertising and launching the company’s most ambitious incentive program ever.

“We’re back in the sales business,” Bob Carter, general manager of the Toyota division of Toyota Motor Sales USA, declared to reporters on a conference call yesterday.[more]

Specifically, Toyota has begun airing a new series of nine different TV ads featuring testimonials by Toyota owners “who are confident” in the Toyota brand even after the recent debacle, Carter said. They include the Murphys, a couple who were in the process of buying two Toyotas when the company’s cameras recorded them and who say in the ad that their trust in Toyota brought them back to the dealership.

Toyota has been running all sorts of TV ads with mea culpas, both explicit and implicit, but this series is aimed at reminding Americans that the brand still offers reliability.

Also, Toyota has launched what it is calling its “most far-reaching sales program in its history.” The incentives include zero-percent financing for up to 60 months on models that represent about 80 percent of Toyota’s sales volume, including most of the recalled vehicles. There also are low lease rates on many of the same vehicles.

And to reward the loyalty of returning Toyota customers, the company will award a complimentary, two-year premium maintenance program for customers who purchase or lease a new vehicle – and prove they already own a Toyota, Lexus, or Scion.

Challenged by a reporter’s question, Carter defended the notion that consumers would respond in significant numbers to a huge new incentive program when many Americans have profound concerns about Toyota’s brand and products – at whatever price.

“We’ve had 50 years of a very strong position providing the highest-quality vehicles in the industry,” Carter said. “We’re confident we’re in position to recover some of those lost sales.

“But we have work to do,” he conceded. “We stubbed our toe in terms of our image. There’s nothing I can do in terms of an incentive program to make that all go away. We’re going to work hard to re-establish our reputation with all customers.”

And, Carter said, “Obviously we think we’re on the right track. We’ll have this conversation [again] at the end of March to see if we were right.”

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