This may seem strange coming from a brand guy, but investing in a powerfully recognized brand has its pitfalls.
Consider Toyota, which is erroneously considered a powerful brand (as opposed to what I would call it — a popular brand) and has failed to manage the equity (quality and reliability —see my earlier blog about that) that it claimed. If you are going to stake everything on a category table stake like quality, then you had better make sure you have the operational issues in place to prevent slip-ups.
Today, Toyota as a brand name has been besmirched. The head of the company today said, “We allowed growth to outstrip quality control.” As a result all of Toyota has suffered. Not just the Prius. Every Toyota model has suffered.
Contrast this with what happened in 1978 to Ford and the Ford Pinto.
I remember vividly going to a football game with my best high school buddy in 1978 in his brand new Ford Pinto. We pulled up to a traffic light and the guy in the car next to us rolled down his window and asked sarcastically, “So, how do you like driving around in a time bomb?” As some of you might remember, the Pinto was known for its gas tank exploding if you were hit from behind.
What is interesting about this story is that the sneering driver spoke those words from the front seat of his Ford Country Squire Station wagon.
Detroit in those days (and even to a big part today) invested its marketing in branding its models (like Pinto and Mustang) with Ford (the parent brand) in a supporting role. It was a MUSTANG (capital letters) by ford (lower case).
As a result of this inefficient brand model, Ford was spared the brunt of this recall. It was not a safety inconvenience like an “occasionally sticky accelerator pedal” — no. It was a gas tank that exploded, not just a sticky pedal.
What is interesting is that Pinto had the problem, not Ford. Ford continued to sell cars. Pinto faded away (even after the fix).
Am I suggesting that everyone follow the “house of brand models” (like Ford in 1978) as opposed to the “branded house model” (read more about these two branding models here)? Not at all. I am just suggesting that when you invest in the brand model you fully understand the obligations that go along with it.
Toyota has a problem. It is not Prius or Corolla or acceleration or braking. It is a problem with what their brand promises. Too bad no competitor (except BMW) has a real brand right now. If they did, they could take customers from the world’s largest automaker permanently. As it is, this is just a blip.