A RE-BRANDING CAMPAIGN: Toyotas Quest to be viewed as an American Company

A directed research project

Submitted to

THE FACULTY OF THE PUBLIC COMMUNICATION GRADUATE PROGRAM SCHOOL OF COMMUNICATION AMERICAN UNIVERSITY WASHINGTON, D.C.

In Candidacy for the Degree of Master of Arts

By

Kristin B. Lowery May 2007

Acknowledgements I would like to thank my husband Mathew, for enduring the thesis process with me, and for giving me constant love and support. I would also like to thank my parents for always believing in me and giving me every opportunity to pursue my dreams. Finally, this thesis would not have been possible without Dr. Zaharnas endless encouragement, guidance and fabulous editing skills.

Table of Contents Chapter I: Introduction Objectives ..............................................................................................................................2 Study Significance .................................................................................................................2 Background ............................................................................................................................2 Study Limitations...................................................................................................................4 Study Overview .....................................................................................................................5 Chapter II: Literature Review Defining Branding .................................................................................................................6 Brand Equity ..........................................................................................................................7 Re-branding............................................................................................................................8 Re-branding Techniques ........................................................................................................9 Re-branding for Success ........................................................................................................11 Cases of Successful and Unsuccessful Re-branding..............................................................12 Chapter III: Case Profile Background: Toyota...............................................................................................................15 Toyotas Re-branding Campaign...........................................................................................16 Toyotas Economic Contribution to North America .............................................................17 The Toyota Tundra ................................................................................................................18 NASCAR and Toyota ...........................................................................................................21 Capitol Hill.............................................................................................................................21 Chapter IV: Case Analysis Re-branding............................................................................................................................23 Brand Equity ..........................................................................................................................25 Economic Contribution and Brand Loyalty...........................................................................26 Taking on the Competition ....................................................................................................27 Campaign Success .................................................................................................................28 Avoiding the Pitfalls of other Re-branding Initiatives...........................................................29 Lessons to be Learned............................................................................................................30 Long-term Predictions ...........................................................................................................31 Chapter V: Summary and Conclusion Summary and Conclusion ......................................................................................................32 Chapter VI: Works Consulted Works Consulted....................................................................................................................36

Chapter I- Introduction Toyota launched a re-branding campaign in May 2006, to portray itself as an American car company in the eyes of the American consumer. Re-branding is a technique often used when a company must change its image or reposition the company in the eyes of the companys key publics. Re-branding is often a result of a merger, scandal, or slump in sales. In this instance, Toyota is on track to surpass General Motors as the number one carmaker in the world and the company seeks to be welcomed in the United States, not as a competitor, that surpassed an American company, but as a company who contributes to the United States economy as well. However, to accomplish this, Toyota must gain market share in the United States, specifically in the truck market, which is still heavily dominated by the domestic car manufacturers (General Motors, Ford and Chrysler). Toyota must also prove to the American automobile consumer that when they buy an automobile produced by Toyota, the profit in invested in the United States economy, not just the Japanese economy. This study seeks to analyze how Toyota Motor Corporation is re-branding itself as an American car company. Specifically, this study will look at the steps Toyota is taking to change its image in the United States from an import automobile manufacturer to one that supplies jobs and revenue to the United States economy. The study will look at the wide-range of strategic communication tactics being used in the campaign as well as the effectiveness of the campaign thus far.

Objectives This study has several objectives including: Define branding; Define re-branding; Analyze the strategies and tactics Toyota uses in its re-branding campaign.

Study Significance This study is significant to the field of public communication because now more than ever companies are using public communication professionals in conjunction with traditional marketing professionals to create branding and re-branding campaigns. It is significant to consumers because as corporations become more globally based, consumers must understand the practices and financial impact on the United States economy.

Background Toyota Motor Corporation began selling automobiles in the United States in 1957, by opening a dealership in California. In 1975; Toyota was the best selling foreign automobile brand in the United States (CAR Report, 2005). Toyota entered the manufacturing market in the United States in 1986, forming a partnership with General Motors. According to Togo and Wartmann (1993) the United Autoworkers Association put heavy pressure on General Motors to forgo the venture, because Toyota was not a Union company (Togo and Wartman p. 1). Due to the pressure from the United Autoworkers Association as well as the American publics fierce loyalty to domestic

automobile brands, Toyota embarked on an ambitious uphill battle. Togo and Wartman state, American compact cars of the 1960s were Detroits efforts to drive the foreign competition out of the country (p. 166). However against stiff competition, by 1971, Toyota became the worlds third largest auto manufacturer only behind General Motors and Ford Motor Company (p. 181). In the early 1970s air pollution and the effects of auto emissions on the environment was being discussed among lawmakers and environmentalists alike in both Japan and the United States. Toyota realized that the company should begin to research technology that would reduce car emissions or the company may be put out of business (p.187). The United States automobile market has always been volatile, but in 1979, the market shifted more towards small automobiles, which Toyota benefited from. According to Togo and Wartman, in 1979, Toyota sold every car it exported to the United States and therefore the market gradually shifted in Toyotas favor (p. 206). Despite the newfound success in the United States, Toyota still relied on the founding principles to manage and make decisions within the company. Toyota constantly researched the U.S. market to determine what consumers desired and the best ways to provide a quality product at a low cost. Togo and Wartman state, When the motorists of the world decided this was what they wanted, Toyota was waiting to give it to them (p. 208). Throughout the eighties and nineties Toyota maintained its market shares in the United States and has gradually gained on General Motors in becoming the worlds largest auto manufacturer in the world. However, with success comes peril and as Toyota positions itself to become number one the company is facing intense criticism it has never

had to endure. This is one of the main reasons behind Toyota repositioning itself in the United States auto market by launching a re-branding campaign to be perceived as an American company. The American consumer is not the only audience Toyota is targeting in its re-branding efforts. From a political standpoint, Toyota is seeking more clout on Capitol Hill. Toyota executives yearn for lawmakers to acknowledge that they provide jobs to the American people and the company contributes and sustains communities and local economies. While critics of Toyota in the United States acknowledge that Toyota does provide numerous jobs to Americans, they argue that the profit Toyota earns still goes back to Japan, where the Toyota headquarters are located, and in turn the Japanese economy. Therefore, critics prefer and encourage others to support domestic auto manufactures, because the headquarters of these companies are located in the United States and they invest in the United States economy. However, those who support Toyota argue that due to the number of manufacturing plants, research and development centers, and dealerships, Toyota also invests in the United States economy. Nevertheless, due to the majority of people in the United States who view Toyota as an import or foreign automobile company, Toyota launched the re-branding campaign discussed in this study.

Study Limitations This study has several limitations. The study is incomplete because it only focuses on Toyota and omits all other foreign automotive brands. Moreover, the campaign this study analyzes is an ongoing campaign; therefore the study cannot analyze the final results of the campaign discussed. This study will only look at one foreign

automotive company and its re-branding campaign because of the vast number of automotive companies in the market and wealth of information.

Study Overview The first chapter, is the introduction to the study and will outline key objectives, background and study limitations. The second chapter is the literature review and it reviews scholarly literature on branding and re-branding as well as successful cases of rebranding and failures of re-branding campaigns such as British Petroleum. The third chapter is the case profile and it provides an in-depth description of the Toyota rebranding campaign highlighting the new advertisements Toyota launched for the Toyotas new pick-up truck, the Tundra. The fourth chapter is the case analysis and it reviews and dissects the Toyota re-branding campaign by looking at the advertisements, product placement and messages of Toyota. Finally the fifth chapter is the conclusion, and it summarizes and wraps up the studys findings.

Chapter II: Literature Review In order to study how Toyota is re-branding itself as an American car company, this chapter surveys the literature on branding and re-branding as well as successful cases of re-branding.

Defining Branding A product is something that is made in a factory; a brand is something that is bought by a customer. A product can be copied by a competitor; a brand is unique. A product can be quickly outdated; a successful brand is timeless. Stephen King, WPP Group, London Branding is a marketing concept that has been around since the 1800s. According to Aakers (1996), consumer branding came about after the industrial revolution when railroads began transporting goods to other destinations. With the rise in trade and production, consumers were given various choices of products, and therefore manufacturers were forced to distinguish themselves from each other. However, it was not until the twentieth century that branding became a necessity to companies and manufacturers. Aaker (1996) contends that differentiated brands have become a defining component of modern day marketing. Companies now more than ever must fight for the consumer. Aaker states that in recent years brand loyalty has been decreasing and companies must now fight more than ever to gain a long-term customer (p. 8). For instance, gone are the days when people bought Oldsmobile automobiles out of loyalty for the brand. Today, consumers shop around to different manufactures to compare quality and prices.

Doyle (1990) defines branding as the way in which companies who offer competing merchandise distinguish products from competitors. He defines a successful brand as, a name, symbol, design, or some combination, which identifies the product of a particular organization as having a sustainable differential advantage (p. 6). In other words, a successful brand conveys something that make consumers want to buy their product. Doyle contends that successful brands portray an image that customers strive to achieve, therefore conveying the belief that if a customer buys a specific brand it will help them attain a certain status or image. There are many subsets of branding such as brand equity, brand identity, and brand management. To better understand the concept of branding, these subsets are discussed below.

Brand Equity Aaker (1996) states that brand equity is an intangible asset that is represented by the brand name. There are four ways that brand equity generates value for a company: brand loyalty, brand awareness, perceived quality, and brand associations (p.8). Aaker asserts that brand awareness is how strong a brand is in the mind of a consumer. Brand awareness is measured by the various ways people recognize brands. According to Aaker, psychology research shows that when people recognize a brand they are immediately more positive and relaxed (p. 10). This goes hand in hand with brand name dominance, which is the ultimate goal for many companies. For example, there a certain brands in which consumers use the name of the brand rather than the product name such as: A-1 Steak Sauce, Kleenex, and Xerox (p. 15).

Re-branding Re-branding is another tactic of branding. Re-branding is used when a company is attempting to redefine and change the consumers perception of the corporation. Some companies change their name and logo in an attempt to signal new beginnings. Others choose to change specific aspects of their brand such as the target audiences, new campaigns, and a newly defined image. Muzellec and Stuart (2004) define rebranding as the way a brand is reborn. They state that a corporate rebranding has different facets. Revolutionary change means that everything is created anew by changing three elements: name, logo, and slogan. Evolutionary change is when a company changes their logo, slogan, or both (p. 473). Muzellec and Stuart contend that when a company decides to go through the rebranding process, the overall goal is to show the stakeholders, consumers, and the marketplace that the company has changed (p. 473). Scholars have suggested various reasons a corporation chooses to re-brand. According to Muzellec and Stuart, corporations may decide that the company needs to be taken in a new direction, with a fresh vision and new strategies. More common reasons include mergers and acquisitions, economic reasons, legal reasons, or a desire a company possesses to become a global brand. Re-branding is an expensive endeavor whether a corporation changes everything or just the companys slogan. Muzellec and Stuart state, An Advertising campaign can prove to be extremely expensive but it is a minor cost when calculating the total cost of a change of identity (p. 478). Corporations must determine how best to change the image of the company while maintaining the loyal customer base of the company. According to

Muzellec and Stuart, when corporations decide to re-brand, they will have to spent money not only to promote the new brand, but to disassociate the company from the old one. Moreover, corporations must determine a way to compensate employees for both the work they do in their day-to-day tasks as well as the time the spent on the re-branding effort of the company. Muzellec and Stuart contend that the success or failure of a companys rebranding effort is very difficult to measure. The best way to evaluate a rebranding campaign is to look at the initial goals and objectives of the campaign. However, many companies use changes in performance of the company to evaluate the campaign such as increased revenue. Muzellec and Stuart also state that companies should be aware that many rebranding campaigns face ridicule and skepticism from the press. Re-branding efforts are not always successful and some revert to the old image of the company.

Re-branding Techniques According to Muzellec and Stuart (2004), consistency and continuity are key elements of a corporate re-branding campaign. Moreover, research as with most marketing and communication campaigns is a necessity. Corporations must research the long-term effects of changing the logo, slogan or brand name. Muzellec and Stuart contend that one of the most common mistakes corporations can make is being too short sighted. They suggest that the following questions be addressed before launching a corporate re-branding campaign (p. 480): What will happen if we dont make this change? Exactly what is being signaled?

Are the key stakeholders cognizant and positive about the change? What will be the reaction of my competitors to this change, or is the organization merely reacting to competitor changes in corporate branding?

Muzellec and Stuart note that it is vitally important that companies recognize the important and decision-making role stockholders have in companies. Muzellec and Stuart contend that many stockholders do not believe that corporate re-branding leads to a positive outcome. Instead, stockholders become suspicious of the change and become very upset by the costs accrued by a re-branding campaign. The scholars also state that many corporations neglect to realize that the employees of the company may feel loyal towards the old name, logo, and missions of the corporation, and not necessarily the new ones. According to Kaikati (2003), re-branding is the buzzword of the moment (p. 17). Kaikati states that, re-branding has increased by 7 percent all around the world. In the first half of 2001, the United States led the world with 1,761 name changes (p. 18). Kaikati contends there are four pitfalls of re-branding campaigns. First is the heritage re-branding trap, which is when a company attempts to distance itself from its heritage. For example, many companies have been trying to stay away from their Britishness, such as British Telecom, British Gas, and British Petroleum (p. 18). Second, the do not follow the crowd pitfall means that many companies may feel that if competitors are consolidating brands and launching re-branding campaigns then they must also. Corporations then rush into re-branding campaigns that are unnecessary for their particular company. The third pitfall, resist merger re-branding, is when two

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companies merge together and then automatically launch a re-branding campaign. It is most effective for companies who have recently merged to do research and take time to decide whether a re-branding campaign is necessary and will be effective (p. 20). Finally, the watch out for celebrity re-branding snits means that when corporations feel they need to revamp their image, they immediately turn towards celebrities. However, corporations cannot solely rely on celebrities to boost their image.

Re-branding for Success Kaikati (2003) asserts there are six strategies that can lead to a successful rebranding campaign. The first is the phase in/phase out strategy. The phase in/phase out strategy is when the campaign ties the new brand to the old brand for a certain time period in the beginning of the campaign. Disney used this strategy when they launched Disney in Paris. In the beginning, they called the new theme park Euro Disney, but then changed the name to Disneyland Paris (p. 21). The second is the combined branding strategy. Combined branding is when the campaign combines existing brands. Kaikati uses the example of the National BankAmericard and Visa. They combined both brands and became Visa International, which is in over 120 countries (p. 21). The third is the translucent warning strategy. Kaikati asserts that the translucent warning strategy is when the campaign is designed to alert customers before and after the brand change. The campaign uses communication tools such as, promotion, in-store displays, and product packaging (p. 21). An example Kaikati gives for a success of this tactic is the Marathon campaign. The marathon bar in the United Kingdom was

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re-branded as snickers. The fourth strategy is the Sudden eradication strategy is when a corporation distances itself from the old brand name immediately and then replaces it immediately. Kaikati contends this is a good option for companies who need to distance themselves from a brand that has been negative. Kaikati cites the McCall magazine campaign, which re-branded the magazine as Rosie immediately. The fifth strategy is counter-takeover re-branding. According to Kaikati, this method is used most frequently when a company has been taken over. However, the company that is taken over does not re-brand the company that acquires the brand leaves behind their brand for the acquired one. Finally, the retro branding strategy is when a company changes its name, realizes it is the wrong decision and then restores the old name. Kaikati cites the case of Wunderman, which is a marketing company, founded by someone deemed the father of marketing (p. 22). The firm went through several acquisitions and was ultimately re-branded as Impiric. However, clients were confused and it dramatically hurt their business. They eventually went back to the originally name, Wunderman (p. 22).

Cases of Successful & Unsuccessful Re-branding Over the years many companies have decided to launch re-branding campaigns in an effort to define an entire corporation or specific products companies manufacture. Below are various successful corporate re-branding cases and an unsuccessful summary of a re-branding case.

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AT&T and Cingular Interbrand was hired to manage a re-branding campaign for AT&T when the company acquired Bell South and Cingular. According to Interbrands case study, the firm conducted brand research to determine if the AT&T brand was still well-known, respected and held brand equity. It was determined that AT&T was in fact a viable brand and it was found to have a 98% awareness rating all over the United States (www.interbrand.com). The re-branding campaign launched a new logo and was supported by an integrated communications plan to highlight the new, fresh and revitalized brand. Interbrand assisted AT&T in creating various advertisements, conducting media outreach and showcasing the new logo. According to Interbrand, the campaign was successful with both the external and internal publics.

Coca Cola in the United Kingdom The Coca-Cola Corporation launched a re-branding campaign in the United Kingdom of their diet drinks in 2002. Coca-Cola determined that it was necessary to rename their diet products from Diet Fanta and Diet Dr. Pepper to Fanta Lite and Dr. Pepper Lite. The corporation did this so that the products were the same as others marketed throughout Europe. However, interestingly enough, it was decided that Diet Coke would not change its name due to its brand equity. A significant amount of financial resources have been invested in the product since in was introduced to the United Kingdom in 1983.

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British Petroleum According to a case study conducted by Ogilvy Pubic Relations, in 1999, British Petroleum merged with Amoco and renamed itself BP- Beyond Petroleum. The company launched a global re-branding campaign to redefine the brand now that two companies had successfully merged, and a few smaller ones merged under one name. Ogilvy states it was hired to execute, The re-branding entailed the introduction of a new visual identity and a new brand positioning, designed to help BP transcend the oil sector, deliver top-line growth, the define the company as innovative, progressive, environmentally responsible, and performance driven (www.ogilvypr.com/case-studies/bp.cfm). The re-branding campaign consisted of an integrated communications plan consisting tools such as numerous video news releases, town hall meetings, interviews with key executives, and advertisements. In the immediate aftermath of the campaign, it was hailed as a success, especially because of the image portrayed as a more environmentally friendly, socially responsible corporation. However, in recent years, BP has come under criticism, with some saying that the re-branding campaign was just a tool used to boost the companys image, as environmentally friendly and their actions have not reflected the new image. According to Beder (2002), It seems BP is investing more in image than environment. Would a company spend hundreds of millions of dollars in solar investment just to enhance its reputation? Well, BP has already spent that much just on its beyond petroleum re-branding campaign (p. 3).

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Chapter III: Case Profile This chapter profiles the Toyota Company and the communications campaign the company launched to promote Toyotas positive impact on the United States economy.

The Company: Toyota Toyota began as a textile company in the early 1900s in Japan. Toyota produced its first automobile in 1935 (www.toyota.com). Why? Maybe a little more Many industry insiders have attributed the success of Toyota to a Japanese quality of persistence and ingenuity (Gertner 2007). Gertner writes, It (Toyota) builds on many things that are Japanese precision, quality, and loyalty. But the Toyota culture dominates (p. 7). Toyota still uses the 14 principles the company was founded on encompassing ideals such as having a long-term philosophy, quality always comes first, and developing teams with great leaders. Toyota first came to the United States in 1957 with a dealership in California. The first few years Toyota were in the United States the company were not profitable. It was not until the 1965 Corona, that Toyotas sales began to increase. This was due to a number of factors such as, the low cost to manufacture in Japan, rising gas prices in the 1970s and the fuel efficiency of the Corona versus domestic cars (p. 9). In 1975, Toyota became and remains to this day, the best foreign automobile brand in the United States. Currently, analysts predict that Toyota will replace General Motors as the number one automobile manufacturer in the world. According to Gertner (2007), By late December, Toyotas global projections for 2007- the production of 9.34 million cars and trucksindicated that it would soon pass G.M. as the worlds largest car company (p. 1).

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Toyota is experiencing success in every facet of the company, except the ability to capture the United States market. This is due to the popularity of large trucks and sport utility vehicles in the United States (of which Toyota does not manufacture as many as domestic manufacturers), as well as the notion of Americans wanting to Buy American.

Toyotas Re-branding Campaign In 2006, Toyota launched a multi-faceted campaign to re-brand the company as an American company in the United States that contributes jobs and wealth to the U.S. economy. The company wanted to maintain its Japanese traditions and culture that are instrumental in the overall brand of Toyota. Moreover, they wanted to maintain a balance between remaining a Japanese company in the eyes of international consumers, while branding themselves as an American company in the United States. The objective of Toyotas re-branding campaign is to show the American consumer the positive impact Toyota has on the United States economy. Perhaps the most interesting part of the campaign is the reason Toyota is pushing to re-brand itself in the United States. Many industry insiders are writing articles recently on why Toyota is afraid of becoming the number one global automaker. The Chief-Executive-Officer of Toyota, Katsuaki Watanabe states, We constantly need to think about the potential backlash against us. Its very important for our company and products to earn citizenship in the U.S. We need to make sure we are accepted (Welch 2007). According to Welch, Toyota doesnt want to be seen as the one that pushes Detroit over the edge. So to prevent backlash, the company is amping up the charm- launching literacy programs in

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San Antonio, vowing to share technology with Ford, and pouring money into lobbying (p.2). Toyotas biggest challenge will be convincing consumers where the money actually goes, because while American workers may make some Toyota automobiles here, the headquarters and heart of the company is still in Japan. Welch quotes a man in Texas, I have never owned a Japanese car of any kind. I believe in supporting American jobs. I know Toyota creates jobs here, but the money goes back to Japan (p. 3). overcome these hurdles achieve its re-branding objective, Toyota has implemented several strategies to make their presence known in the United States. First, Toyota opened a large number of plants, as well as research and development centers in the all over the United States, specifically in regions dominated by the domestic automakers such as Southern states. Second, Toyota aggressively promoted their new Tundra pickup truck to bring attention to the amount of jobs and capital they bring to the U.S. economy. Third, Toyota entered a car for the first time ever at the Daytona 500. Finally, Toyota increased its lobbying efforts on Capitol Hill, specifically targeting lawmakers who have Toyota plants located in their districts. To

Toyotas economic contribution to North America One of the first and major components of Toyotas re-branding campaign entailed increasing its visibility by opening several new manufacturing plants, as well as research and development centers in the all over the United States. Toyota specifically selected sites in regions dominated by the domestic automakers such as Southern states. Currently, Toyota operates 14 manufacturing plants in North America and in 2005, employed 38,340 people in North America (www.toyota.com). According to a

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study commissioned by Toyota, conducted by the Center for Automotive Research (CAR) Toyota employed 29,135 jobs to the United States in 2003, which resulted in $1.9 billion in compensation (CAR 2003, executive summary). Furthermore, Toyota indirectly provided an additional 74,060 jobs through those who service and sell Toyota products in the United States, which resulted in $2.6 billion in compensation (p. I, executive summary). Toyota is incorporating the campaign slogan in its new advertisements using slogans such as: 13- Donuts in a Bakers dozen; Toyotas U.S. investment, in billions (Sewell 2006). They are also advertising on the radio and in airports across the country (p.1). In a 2005 advertising campaign Toyota featured a West Virginia Toyota plant with the slogan, It takes local talent to build world-class engines (PR Newswire, 2005). The advertisement showcased eight Toyota plants in the United States and the assembly lines and production that take place in the plants.

The Toyota Tundra A second component of the campaign was the hiring of a public relations firm to launch a major promotional campaign to highlight the Toyota Tundra. The pick-up truck market is still a sector of the automobile industry that the domestic auto companies continue to dominate, specifically General Motors and Toyota. However, in 2007, Toyota launched its new pick-up truck, the Tundra, also manufactured in San Antonio, Texas. Texas encompasses the Buy American consumer attitude in the United States, thus Toyota launched a large scale advertising campaign to promote the Tundra along with the jobs and revenue it is bringing to the state economy in Texas. According to Welch (2007), The Company is ramping up a marketing and public

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relations push to counter the noise being made in advance of the opening of Toyotas new San Antonio plant, which will build 200,000 of its new Tundra pick-up trucks a year starting next month (p. 1). Toyota kicked off the campaign with commercials during the NFL Super Bowl in February. According to Collier (2006) in the coming year, Toyota plans on tripling the money it spends marketing its vehicles. The campaign is also going to operate on a grassroots level, reaching out the potential customers by sponsoring community activities and activities as a local level (p. 1). The vice president of marketing for Toyota indicated that the Tundra marketing campaign is the largest marketing campaign to date conducted by Toyota in the United States (p.1). Toyota is working with advertising firm Saatchi & Saatchi Los Angeles and some reports estimate its spending $100 million on the campaign. The Tundra campaign is comprised of print, television, and Internet advertisements. This advertising does not focus on the aspects of Toyota that Americans are used to such as hybrid cars and advanced technology. Bunkley (2007) states, Nowhere in Toyotas newest round of ads is there a mention of fuel economy, hybrid technology or anything else that has helped put it on pace to become the worlds largest carmaker this year (p. 1). One slogan that is being used is the truck that changed it all (p. 3). A full page print advertisement in the USA Today (2007) states, They say things are bigger in Texas. Just look at the truck we build there. Toyota-moving forward. The advertisement is a picture of the Tundra with a pair of cowboy boots next to it.

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They have multiple facts underneath the picture such as:

Toyota U.S. Operations Plants..10 Total Jobs..386,000 Investment$15 B

When you think Texas, chances are you think big. Which is why weve made San Antonio the home of the new full-sized Tundra, our biggest pick-up truck yet. The San Antonio plant, Toyotas 10th in the U.S., is a vital part of our U.S. operations. With a total of over 4,000 team member and on-site supplier jobs, it represents a sizeable investment in the local community, bringing Toyotas total U.S. investment to over $15 billion. Which is impressive, even by Texas standards. This new plant is just one more example of our commitment to America. Its what drives us to think big- about our vehicles and the people who drive them. According to Miller (2007) the campaign is going to target five key truck segments: hunting and fishing, NASCAR, construction, country music, and sports (p. 1). The Tundra will also run a 4-page advertisement in the 2007 Sports Illustrated swimsuit edition (p. 1). Toyota will also be featured on SI.com with swimsuit models posing with the Tundra. Miller states, The Big Three has a ferociously loyal truck base, a made in America following that will not waver in many regions. But Toyota, too, has attached an assembled in America statement in its advertising for the Tundra to ensure that consumers are aware that the trucks are being built here by Americans, a perception that has been almost impossible to shake in a country where Toyotas and Hondas are still antiquatedly referred to as Japanese cars (p. 1).

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As stated above Toyota is focusing on grassroots efforts to gain in the truck market. For example, Box (2007) writes of one dealership owner who purchased two Chevrolet Silverados, two Ford F-150s, two Dodge Rams, and two Nissan Titans. He disassembled half of the trucks so that customers that visit the showroom can compare the bare chassis of the competitors to the new Toyota Tundra (p. 1). In an advertising blitz Toyota will host ride and drives of the Tundra at local events such as fishing tournaments, Brooks & Dunn concerts, and many other events in an attempt to introduce the Tundra to domestic truck drivers. Currently, Ford holds the number one spot in the pick-up market (nearly 800,000 sold last year) and General Motors is a close second with the Chevrolet Silverado, which is also the second best selling automobile in the United States overall (p. 2).

NASCAR and Toyota A third major initiative of Toyotas re-branding was the companys participation in the Daytona 500. For the first time ever in, 2007, Toyota entered the Daytona 500, otherwise known as the great American race (Jenkins 2007). According to industry experts, Toyota entered the race to gain a following behind its new Tundra pick-up. Jenkins states, Joining NASCAR is the companys way of asserting, after 50 years, its claim to be treated as an American company based on the factories it has built here and the thousands of jobs it has created (p. A20). Capitol Hill Finally, Toyota stepped up its presence on Capitol Hill. Over the past year, Toyota has been gearing up to face the backlash repercussions it expects to face should it

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pass General Motors as the number one automaker in the world. They are starting to build their presence on Capitol Hill and forming alliances with lawmakers who represent districts where Toyota plants are located. The company added money and manpower to its lobbying efforts. They have increased their lobbying budget by 4 times with it now at $3.4 million in 2005 (p. 2). It has also added experience to its lobbying staff, hiring a former aide to Vice-President Cheney, when he was in Congress. Due to Toyotas increasing number of plants, they are steadily gaining allies in Congress because of the jobs they are bringing to state economies. Toyota reinforced its presence on Capitol Hill with increased visibility in Washington. In 2006, Toyota launched an advertising blitz inside the beltway. According to Newmyer (2007), the purpose of the ads is to press Toyotas American credentials to policymakers (p.2). Toyota placed advertisements at a number of metro transit stations. One banner reads the number 8 with the words Members on tug-of-war team. Maids amilking. Toyota models built in U.S. (p.2). Another advertisement states, 386,000. Bird watchers in Nebraska. Kilometers to the Moon. Jobs created by Toyota in the U.S. (p.2). Toyota also sponsors local community events in Washington, D.C. at places such as the Kennedy Center for the Performing Arts (p.2). It is still too early to tell the effectiveness of the re-branding campaign. However, according to Inous and Komatsu (2007) in April 2007, Toyota reportedly surpassed General Motors Corporation in first-quarter sales for the first time in 76 years.

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Chapter IV: Case Analysis

The Toyota re-branding campaign is an ongoing initiative that is gaining momentum in 2007. This chapter analyzes the Toyota re-branding campaign using the scholarly writings and case studies citied in the literature review. Since 1975, Toyota has retained the title of the most successful import automotive company in the United States. According to various financial and automotive analysts, Toyota is poised to become the number one automaker in the world, a position currently held by the General Motors Corporation. This presents new challenges to Toyota and the image of its brand. Therefore, Toyota launched a re-branding campaign to showcase the corporations impact on the United States economy. Assessing the potential success of Toyotas re-branding campaign can be understood by looking at the important components of re-branding.

Re-branding Muzellec and Stuart define re-branding as the way a brand is reborn. Re-branding is most often used when a company is seeking to change the publics perception of its image or reposition itself in a specific market. Toyota is in a unique position because the company is attempting to create a new image in the United States while maintaining its current image overseas. Toyota did not want to be seen as the company that surpassed the number one domestic automaker from being the best selling Automotive Company. As part of Toyotas re-branding effort, the company strives to be

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respected and accepted by American consumers. It sought to reach out to American consumers. One technique the company used was opening plants around U.S. Then, in some plants, to connect with the community, it launched literacy programs in San Antonio where Toyota built a new plant. This enabled Toyota to create a positive image of the company while also showcasing the founding principles that guided the company on how best to relate to the community. This was extremely successful in bridging the gap between the automaker and the community as well as achieving a formidable relationship between Toyota and the community. Advertising was also part of the re-branding effort. The advertisements they ran in many national newspapers and magazines were a success as well, specifically the ones showcasing the amount of revenue the company contributes to the United States economy. The advertisements facilitated the process of creating a dialogue with the American consumer and showcased facts and figures consumers were not exposed to before. For years, Toyota did not portray an image that the company desired to court the American consumer and the company did not put an exorbitant amount of energy or financial elements behind the messaging campaigns in the United States. Toyota soon realized, when the domestic car manufacturers began to struggle, the company could benefit from aligning itself with the American consumer and capitalize on the opportunity. This allowed Toyota to educate the consumer on its economic contributions and become more of a presence in the United States.

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Brand Equity Aaker states that brand equity is an intangible asset that is represented by the brand name. Brand equity generates value for a company in four ways: brand loyalty, brand awareness, perceived quality, and brand associations. Toyota was very aware of the importance of brand equity. It sought to find a balance between convincing American consumers that the company is investing in the American economy and American interests, while also assuring the customers in Japan and around the world that at the very core it is still a Japanese company. The Toyota Corporation encompasses all four of the above-mentioned characteristics of brand equity. Brand loyalty is the long-time customer base, and Toyota has a solid base of consumers that purchase autos, simply because they are made by Toyota. Brand awareness is how strong a brand is in the mind of a consumer and Toyota is known in the automotive industry and among consumers for producing well-made reliable products. The perceived quality element is what the customers preconceived notion of a company is, for Toyota it is for the most part a positive image. Finally, brand association is the image a company is associated with. For example, when consumers think of Toyota, many think of the Prius, Toyotas hybrid electric car. Toyota frequently discusses its founding principles and the Japanese traditions the company culture is based on. Toyota quickly discovered that all of the above aspects that made the company extremely successful in Japan and other countries might not have the same impact in the United States because of cultural differences between the United States and other countries.

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The current campaign targets the American consumer who chooses to solely buy automobiles manufactured by domestic car manufactures, also known as the Big 3. This market demographic purchases domestic autos in support of the U.S. economy and they strongly believe that by buying a foreign automobile supports the economies of other countries rather than the United States. One of Toyotas challenges is to maintain the aspects that make its brand equitable, while proving to American consumers that the money does not go back to the Japanese economy, rather it is put back into the U.S. economy. For instance, one aspect of Toyota that has been a major factor in Toyotas success is the Prius, the best selling hybrid electric car. However, in the United States, while it sells well among a select consumer group, the general market is still the truck and Sport Utility Vehicle market. As stated in the case profile, some of Toyotas advertisements for the new Tundra make no reference of fuel economy or the environment, and in fact the tundra does not have good fuel economy. This has attracted criticism and opponents of the advertisements feel that Toyota is forgetting about the customers who contributed to Toyotas success; while the company moves on to conquer the next viable market.

Economic Contribution and Brand Loyalty Aaker pointed out the importance of economic contribution and brand loyalty when launching a re-branding campaign. As discussed in the literature review, Aaker discusses the recent decrease in brand loyalty and in the long-term customer. Therefore, Toyota is capitalizing in the new consumer who is searching for the next best brand. For example, when Toyotas leadership decided to enter a car in the Daytona 500

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for the first time ever, it was a conscious decision to target the NASCAR community, who are known for still being fiercely loyal consumers. However, they also tend to buy American brands. Toyota recognized that if the company wants to conquer the United States market it must conquer the competitors market also. As stated in the case profile, Toyota used various advertisements to garner attention on the impact the company continues to have on the United States economy. Toyota used these advertisements to entice consumers who felt they needed to be loyal to American-made brands that they should feel comfortable buying Toyota as well. The company used traditional re-branding tactics to gain market share, such as capitalizing on the equity of the companys name to generate more customers and revenue.

Taking on the Competition According to Doyle, another aspect of re-branding is being aware of the competition and companies must set themselves apart from the competition. Toyota sought to take on the competition through its Toyota Tundra truck campaign. For many years, the American truck market has been a facet of the automotive industry that Toyota simply could not conquer. Toyota decided to build a truck plant in San Antonio, Texas, the heart of domestic truck consumers. The company launched a multi-faceted campaign to present itself as an American truck manufacturer. Their campaign is still building momentum in San Antonio, as people entertained the possibility of buying a Toyota, something these consumers have never considered before. Over the past few years, domestic automakers sales have been declining which is leading them to close manufacturing plants all across the United States. Toyota is

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capitalizing on these closures and is hiring people who never thought they would work for an import car company. Perhaps this is a signal of that Toyota is becoming a viable brand in America and maybe recognized as an American car company. They are also gaining support in the United States Congress, as they open more plants and research facilities in the United States; they find more members on Congress who are willing to sponsor legislations that will help them in the Unites States such as trade policy.

Campaign Success The campaign is still ongoing, and the actual outcome of the campaign will not be determined for another year or so. However, the company has successfully gained U.S. market share and since the inception of the campaign, a U.S. customer base is building around the Toyota Tundra. Moreover, the company has received a small number of national stories about truck buyers who have switched to the Toyota Tundra from domestic truck buyers. Nevertheless, Toyota is still the first to admit, the company has a long way to go in winning over the American consumer. Many Americans will agree that Toyota automobiles are well-manufactured products, but the company does not support Unions or healthcare benefits the same way domestic auto manufacturers do. Further, while Toyota is still gaining popularity in the United States, and opening up more plants and research and development centers, the Big 3 still employ significantly more workers in the United States and contribute more to the United States economy. However, the Toyota campaign is gaining speed and with the current state of the U.S economy, they have a good chance at successfully re-branding themselves. The key

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will be balancing their Japanese traditions and corporate culture with American consumerism and leveraging their image in the proper arenas.

Avoiding the Pitfalls of other re-branding initiatives As discussed in the Literature Review, British Petroleum (BP) launched a campaign to change their image or re-brand the company as a more environmentally friendly company. They changed the color of their logo, their mission statement and goals. The campaign was hailed as a great success in the early days, but quickly came under heavy criticism, as many consumers and watch groups claimed they are hypocritical and misrepresent what they really stand for as a company. The Toyota rebranding effort certainly has the potential to fall into this path also. From the beginning of Toyotas campaign, critics have said it is just another public relations stunt attempting to gain market share and Toyota does not truly care about the American consumer. Toyota cannot deny that the ultimate goal is to takeover the number one spot from General Motors, but it also states that the companys founding principles demand the company respect its consumers and be aware of their needs. However, Toyota must recognize that those Americans who steadfastly believe in buying American will be the sharpest critics of the campaign, and eventually might be the ones who are leading the opposition against it. One cultural consideration Toyota must make in order to avoid being called hypocritical, is that nothing gets the American consumer more passionate than being misled. Therefore, in the re-branding campaign if Toyota continues to sell itself as a company who contributes greatly to the American economy, and then it is discovered that most of the money still goes back to the companys headquarters in

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Japan, they will lose the American consumer for a very long time, if not forever. Where the revenue generated by Toyotas sales in the United States ends up, has the greatest pitfall for the campaign.

Lessons to be learned Toyota is a fascinating global, multi-cultural case study that other corporations can benefit from. It is a lesson in understanding a new market, discovering how best to brand the company in the new demographic, and how to re-brand a company while maintaining its roots. The most important lesson to be learned is, no matter how much money is spent on a campaign, it must be the right time to launch the new identity. As with many things, timing is 90% of the success of a campaign and re-branding is no different. Toyota launched its campaign at a time with the domestic auto market was declining and American consumers were searching for something different and refreshing. However, companies may also learn from Toyotas approach to taking over the United States market. As previously quoted in the case profile, the Chief-ExecutiveOfficer of Toyota stated, We constantly need to think about the potential backlash against us. Its very important for our company and products to earn citizenship in the U.S. We need to make sure we are accepted. Perhaps that statement showcases the biggest difference between the Japanese and American cultures. The ever-evolving culture of American consumerism operates under the notion that goods and services are a not a luxury, or we do not need to earn them, but they are owed and expected by Americans. In the Japanese culture goods are earned, not expected, as is the loyalty of the consumer.

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Long-Term Predictions Toyota is well on its way to becoming the number one automaker in the world and as with anything, becoming number one, brings many new challenges and criticisms. Toyotas biggest strength is the quality its products are known for as well as the business model the company adheres too. Toyota attracts fiercely loyal customers because of the companys reputation for producing good quality, long lasting products. However, Toyota still has an uphill battle to fight in conquering the made in America demographic. Many still firmly believe that while Toyota is creating jobs in the United States, the company has still not been able to effectively showcase that they put the money back into the U.S. economy rather than the Japanese economy.

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Chapter V: Summary and Conclusion

This study explored Toyotas campaign to reposition the company as an American automotive company, rather than an import company in the United States. This study sought to define branding, define re-branding, and finally to analyze the strategies and tactics Toyota is using in its re-branding campaign. Branding and Re-branding are vital marketing and communication practices used to define a companys image and messaging. Re-branding is commonly used when a company seeks to reposition itself in the marketplace. As stated in the literature review, Aaker (1996) contends that a company must distinguish itself from competitors now more than ever. As the practice of brand loyalty has begun to decrease among consumers, companies must fight for the long term customer and their loyalty to the companys product. Moreover, companies must portray an image of the brand that consumers want to embrace. According to Doyle (1990), successful brands portray an image that consumers strive to achieve and believe that by associating themselves with that brand it will enhance their image. Toyotas goal of the campaign was for American consumers to associate Toyota with the United States economy. The company approached the campaign using various communication strategies and mediums to effectively convey the messages to the target audience. Toyota is on track to surpass General Motors as the number one selling automotive manufacturer in the world. However, Toyota realized that with out the support of American consumers the quest to become number one would prove to be

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difficult. Therefore, the re-branding campaign was launched to showcase Toyotas economic impact on the United States economy as well as in local communities. The analysis of the Toyota re-branding initiative yielded several observations. First, the company opened new manufacturing plants in the United States. Most recently, they opened a plant in San Antonio, Texas and at the same time, launched a number of community events such as literacy programs, to mobilize and engage the community. This was vital to Toyotas re-branding efforts because without the support of the local community, the campaign would not succeed. It was necessary for Toyota to prove that the company is committed to local communities where the company employees live and work. Second, Toyota launched an expensive and comprehensive advertising campaign comprised of; advertisements in various national newspapers, magazines and national television stations. These advertisements provided Toyota the ability to showcase the companys economic contribution to the United States to a variety of target audiences. Third, Toyota capitalized on the brand equity of the company. As Aaker (1996) defined brand equity as an intangible asset that is represented by the brand name. Toyota used the reputation the brand has for manufacturing well-priced, quality products to connect with the American consumer. Finally, Toyota also recognized the power of brand loyalty. For example, Toyota has maintained its loyal customers by continuing to produce products they are known for such as the prius, while at the same time introducing new products such as the Toyota Tundra. The company appears to rely on the brand loyalty of its customers as Toyota seeks to win over a new target audience.

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This study is significant to the field of public communication because as corporations pursue to manufacture products in a more complex global marketplace, communication professionals must learn how to think and implement global communication campaigns in a strategic way. Future research should be done to determine the ultimate success and effectiveness of this campaign once it draws to a close. More research should also be done in the areas of branding and re-branding. Scholars should focus on more global branding and re-branding campaigns and what makes them campaigns successful. The research in these fields would be very beneficial to communication professionals as they plan global campaigns. The Toyota re-branding campaign is an on-going campaign; therefore the overall success of the campaign cannot yet be measured. However, it is gaining momentum and resulting in higher profits for Toyota. According to Inous and Komatsu (2007) in April 2007, Toyota reported higher sales of cars and trucks than General Motors Corporation in the first-quarter, for the first time in 76 years. This is a slight indication that the campaign has been successful thus far. As stated earlier in the study, the Toyota campaign is slightly different than other re-branding campaigns. This is because the company must find the delicate balance between staying true to Toyotas roots and founding principles in Japan, while also integrating the American consumer and marketplace into the company. Toyota must

convince the American consumer that the company is vital contributor to the United States economy, while also convincing the Japanese consumer that Toyota is still the same company it was one hundred years ago, in order to surpass General Motors, as the

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number one automobile manufacturer in the world. This campaign may also set the standard and precedence in the United States for what constitutes an American company. Is a company American if the headquarters are in the United States, but it out sources all of its jobs to other countries where operations are cheaper? Is a company considered an American company if it makes significant contributions to the United States economy by employing hundreds of Americans and supporting the communities in which the company operates, but its overall profit goes back to the country in which the corporation is headquartered? These questions are beginning to emerge all across the map, and perhaps the American consumers reaction to Toyota will provide some insights into the answer. Moreover, regardless of how Toyota and other global corporations are perceived, will it ever really be enough to overcome the buy American mentality numerous Americans embrace? Regardless of what the answers to these questions may be, branding and rebranding are extremely important tools in shaping the global image of corporations all over the world. As corporations become more socially responsible and consumer friendly, the way in which a corporation is branded is more important than ever before.

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Works Consulted
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Riezebos, R. (2003). Brand Management. Essex, England: Prentice Hall. Robson, M. and Dunk, M. (1999). Case study Developing a pan-European co-marketing Alliance: the case of BP Mobil. International Marketing Review, 16(3). Simoes, C. and Dibb, S. (2001). Rethinking the brand concept: New brand orientation. Corporate Communications, 6(4). Togo, Y. and Wartman, W. (1993). Against All Odds. New York: St. Martins Press. Toyota Motor Corporation Sustainability Report 2006.

Websites
http://www.tutor2u.net/business/marketing/casestudy_rebranding.asp www.ogilvypr.com/case-studies/bp.cfm www.allaboutbranding.com www.interbrand.com www.adweek.com

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