This represents a serious dent to Toyota’s sterling brand. Have they been successful in building brand equity? Have they built enough to withstand this collision? Is their brand a resource they can rely on in times of trouble? It could be. And a CNBC Poll today indicates it is doing a remarkable job. In that poll, slightly over half of respondents indicated they would not consider buying a Toyota now, and surprisingly almost half said they would consider buying a Toyota. They still believe in the brand. This could change over time depending on how things play out, but today’s indication is significant.
Distressed sales?
It could be expected that after revealing these potentially deadly mistakes that much more than half the respondents would have indicated they would not consider buying a Toyota at this time. But almost half still would consider buying a Toyota. That’s remarkable. How can it be explained aside from the power of the brand? (Join the update poll)
Intangible assets.
I wouldn’t be surprised if Toyota management understood the value of building a strong brand from day one. Sophisticated businessmen do understand these intangible issues. In fact, taking advantage of their understanding, all leading companies achieve valuations much higher than book value. For example 70% of Disney’s valuation cannot be attributed to book figures. For Heinz the ratio is 75%, Coca-Cola is 80%, Microsoft is 98%, and take a guess at Apple’s percentage. Most of this premium is due to the brand equity they have created.
We’ve seen brand value provide protection in the Tylenol tampering episode of the 80s, and with the disastrous introduction of “New Coke,” etc. Building a strong brand does provide insulation from negative events associated with the brand. This is one of the primary reasons savvy companies invest in branding. For one thing, a brand can provide protection. It gives the company the “benefit of the doubt,” it provides breathing space to allow the company to recover.
The value of customer retention.
Customer retention is very valuable. Many studies have been conducted on this issue. And they’ve all demonstrated that dramatic financial leverage is provided by achieving only an incremental increase in customer loyalty. In a study by Bain & Co Research, it was demonstrated that companies that improve the retention of their best customers by as little as five percent can increase the enterprise profitability by as much as seventy five percent.
Creative excellence is a distinguishing characteristic of Steven Sessions, having won over 400 top awards in regional, national and international creative competitions. In 2005 the firm’s brand design work was judged the “Best of the Last 50 Years” by the Art Director’s Club of Houston.
Sessions’ work is in the Advertising Federation’s Hall of Fame, nominated for inclusion in the Permanent Archives of the U.S. Library of Congress and was included in a special cultural exchange exhibit in Beijing, China sponsored by the Art Director’s Club of New York.
In addition, Sessions has been cited as examples of creative excellence in nearly 60 books, magazines and websites in the US and abroad.
Sessions has received many business honors as well, including most recently, for the second year, being selected one of the business leaders featured as “Houston’s leading and most exciting entrepreneurs” at the Houston Technology Center’s 2009 Gala.
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