Sources of Brand Equity:
Brand Equity is formed by collective effects of the marketing mix employed in the target markets by the company. Consumers should be able to identify differences among brands in the respective product or service category. Knowledge structures are produced when a high level of brand awareness and strong, favourable, and unique brand associations are created through communications, in the minds of the consumers. Hence, consumer responses and different types of customer–based brand equity are created with the help of such knowledge structures. This also helps acquiring and retaining customers besides highlighting the success of marketing mix and branding strategies for organizations. Collectively, the following are the sources of Brand Equity for Toyota (Keller, 2003, p. 67):
- Brand Awareness:
Brand Recognition and Brand Recall together form Brand Awareness. Toyota has been recognized as a brand which provides optimum quality products with appropriate safety at economic prices. During selection of cars at a store, consumers recognize the brand with comfort. With the help of its recalled communication programmes through various communication methods and features such as value and economy, consumers have also been able to recall the brand ‘Toyota’ whenever required by them.
Brand Awareness constitutes an essential character in the consumer decision–making process. It has not only help Toyota, registering the brand in the minds of the consumers, but has also facilitated structuring a positive brand image for the company.
The Brand name, logo, symbol and other branding elements are also linked with Brand awareness. Toyota has not only increased its awareness through magazine advertisements, press releases and newsletters to its consumers, but also through interactive one-to-one
communications where information about the brand, the company, its products and services is provided to consumers to fulfil needs. However, they sparingly utilise their promotions as over–utilisation of promotions may lead to reduction of Brand Equity. This also ensures utmost profitability (Automotive Aftermarket Industry Association – Pump up your product, 2001).
- Brand Image:
Brand Awareness and a positive brand image are formed when strong, favourable, and unique brand associations are created in the minds of the consumers through marketing programs and branding strategies. These associations can be created either through direct contact and experience by consumers or through communications by the company and other sources, or through word–of–mouth, or through inferences from the brands’ elements, or through the brands’ secondary associations (Keller, 2003, p. 70).
Favourable brand associations are formed by creating a high level of trust with consumers. Consumers should be convinced that the brand can satisfy their requirements with its features and benefits, which in turn forms positive brand judgements. Toyota has been observed as a brand with reliable products and this association has been evaluated and communicated to its consumers through its marketing programs and branding strategies.
The strength of these associations on its brand image has been identified by Toyota, and they have managed them in the best possible manner. These strengths are also inculcated in their branding strategies. Toyota constantly looks forward to increase the volume of the associations with their consumers.
An essential ingredient of Brand Equity is the relationship between the Brand and the consumer, which begins from a customer enquiry and is defined at every transaction. With the help of its organized TPS, Toyota provides optimum quantity of its products to its resellers. They have also handled warranty issues with comfort. This association with its consumers has helped them increase the bond with the customers and gain a high level of trust when they decided to offer industrial products of finer quality and functionality. Toyota has established high regards in the field of offering ‘conveyance’ and ‘high storage’ vehicles. These have been additions to the
altitude of Brand Equity accumulated over the years. They are keeping pace with their business objectives of providing superior quality products in the form of offering optimized materials handling solutions to its consumers (Automotive Aftermarket Industry Association – Pump up your product, 2001).
Hence, Strong Brand Equity will result in greater market share, high level of consumer loyalty, favourable responses to price increases, low levels of susceptibility by consumers to marketing activities by competitors, and greater opportunities for brand extensions, which in turn will lead to maximum profitability for Toyota (ACNielsen – Creating a winning brand, 2005).
Customer–Based Brand Equity Block:
Right brand identity, brand meaning, brand responses, and brand relationship together constitute to build a strong brand and these can be put together to form a Brand pyramid. Once the right blocks are put into place, the pinnacle of the CBBE brand pyramid will be formed leading to the creation of significant brand equity (Keller, 2003, p. 75).
Brand Salience relates to facets of brand awareness. It relates to consumers’ knowledge about the needs that the brands and products can satisfy. It entails relating the brand elements to the respective product types and its utility. It has been proved that that brands which can only be recognized hold a low level of brand awareness as compared to brands which can be recognized and recalled (Keller, 2003, p. 77).
Toyota has registered its brand in the eyes and the minds of its consumers, thereby concentrating not only on the depth, but also the breadth of its Brand Awareness. Toyota utilizes its Advertisements and promotions in an efficient and effective manner, which helps the company to enhance its sales and revenues.
Consumers’ expectations are met with the products offered through the ‘Toyota’ brand which ensures creation of brand loyalty and brand resonance. Brand performance relates to the manner in which the product or service endeavours to meet customers’ functional requirements. Hence, Brand Performance relates to the fundamental brand properties in terms of its innate product and service features.
Brand Imagery relates to the manner in which the extrinsic characteristics of the product or service endeavours to meet customers’ emotional or social requirements. Hence, it refers to the intangible offerings by the Brand. Imagery associations can be created either through direct customer interactions or through communications by the company and other sources or through word–of–mouth (Keller, 2003, p. 83). The primary and essential four types of intangible offerings by Toyota are:
- User profiles: Toyota has created a profile picture of a target–oriented individual with many of its consumers.
- Purchase and user situations: Situations have been created for Toyota through its easy purchase mechanism for its consumers.
- Personality and values: Toyota has jelled well with people of diverse personalities; it has also mixed itself with the five facets of personalities i.e. sincerity, excitement, competence, sophistication, and ruggedness.
- History, heritage, and experiences: the Japan oriented brand carries its country–of–origin advantage with utmost positive energy.
Brand judgements relates to customers’ personal views and estimation of the brand. Four essential categories of brand judgements are (Keller, 2003, p. 88):
- Brand Quality,
- Brand Credibility,
- Brand Consideration,
- Brand Superiority.
Brand Feelings relates to the customers’ emotional or psychological reactions to the brand. These feelings can be placid or extreme, encouraging or discouraging and can be induced while product utility. Six essential categories of brand – building feelings are (Keller, 2003, p. 90):
- Warmth,
- Fun,
- Excitement,
- Security,
- Social Approval,
- Self–respect
The ultimate block of the brand–building pyramid focuses on the vital relationship between the consumer and the brand. Brand resonance relates to the nature of the relationship. Resonance is regarded in terms of strength and the breadth of the emotional or social bond between the consumer and the brand. Brand resonance can be classified into four different categories (Keller, 2003, p. 92):
- Behavioural loyalty,
- Attitudinal attachment,
- Sense of community,
- Active engagement
Organizational and Customers’ perspectives on Brand Equity:
Brand Equity has been thought about by every responsible authority in any organization. Aaker’s definition on Brand Equity includes sources such as brand awareness, brand loyalty, personality or image, and other proprietary assets involving patents, trademarks and buyer–supplier relationships. However, values to the organization need to be differentiated from the values to the consumers.
Organizational and Customer Brand Equity:
Organizational brand equity is associated with the knowledge structures created though sources of Brand Equity, as it generates cash flows through acquiring and retaining customers. It is accumulated not only by the current product lines offered to its consumers, but also through the expectation of forthcoming products and services by the consumers. It is observed as a difference between the brand’s market value and the various assets that support the respective brand. Toyota has also acquired Organizational brand equity in a similar manner (Organizational and Customer perspectives on Brand Equity, n.d.).
The supplementary product value and utility received by consumers from a branded product or service is referred to as Customer brand equity. This value could be in the form of reduced search costs and fulfilling the expectations of providing practical, psychological and monetary benefits to consumers. Customer brand equity is evaluated through consumer data collected through Research surveys on brand equity and utilizing that data to evaluate consumers’ awareness, thoughts and mindset about the respective brand. The price of a branded product or service may be higher at times, and it depends on a consumers’ willingness to pay the marked price. Customer brand equity is individualistic and separate and is not directly related to organizational brand equity, whereas organizational brand equity is based on hypothesis of forthcoming products and consumers, which in turn, affects projected revenues. Hence, they are inter–related to each other (Berthon, Hulbert and Pitt, 1999).
Toyota and General Motors (GM) joined hands in the year 1983 to form New United Motor Manufacturing Inc. (NUMMI), which manufactured two look–alike cars, the Toyota Corolla and the Geo Prism. Due to high level of Organizational brand equity and customer brand equity, Toyota’s annual sales (Units and value) for the car was almost twice as compared to that of GM. Its
depreciation rate in the market was also low as compared to GM, accounting due to high brand awareness and positive brand image of the company. In the year 2007, Toyota was reported
charging more than cars produced by GM, owing to its superior brand equity. (Organizational and Customer perspectives on Brand Equity, n.d.).
Links to Business Outcomes & Market Performance:
Market Performance measures include diverse factors such as profits or revenues, market share, revenue premium, price premium, and customer’s resonance for the brand. Fundamentally, these measures depend on the value and the volume of sales generated through the Brands’ Equity and the marketing mix employed by the company. Market performance measures are obtained through competitive stability through constant collisions between the market forces. Of the different factors, profits or revenues are judged as better indicators of a brands’ performance as they take account of price and volume modifications (Linking Consumer–Based Brand Equity to Market Performance, 2006).
Brand Elements:
Brand Elements form an essential component in the process of building Brand Equity. A Brand name should be easy to recognize and recollect, hint its positioning through its product category and the needs it fulfils, should be creative, naturally entertaining or appealing, transferable to diversity of cultures and geographic regions, offer durable meaning and relevance to consumers at all times, and should be legally and competitively protectable by way of patents, trademarks etc (Keller, 2003, p. 181).
The Brand Name ‘Toyota’ is a vital element as it regularly captures the fundamental theme or essential relations of the product or service in a solid, yet condensed and efficient fashion. It is a shorthand mode of communication between the company and its consumers. A consumer can capture and record the meaning of a brand in a span of a minute, thereby saving time for the company spent to communicate operational meanings through its marketing strategies.
- Uniform Resource Locators (URLs):
URLs or domain names are addresses which state the location of the company on the World Wide Web. Although the numbers of listed URLs or domain names have increased over the years, Toyota has still maintained its company URL since its inception.
Visual brand elements have acted as contributors in building brand equity for Toyota, primarily increasing brand awareness. Logos relate to the origin, possession, or relations. Toyota’s logo, although not related to the brand name, provides a sense of exclusivity and security to its consumers. This has been possible owing to the company’s marketing programs and branding strategies.
Toyota had endorsed George Clooney during its marketing campaign and this has been a contributing factor for its consumer’s relation with the Prius range of products offered by the company.
Slogans communicate expressive and influential information about the brand. Toyota’s slogan, “Moving Forward” has played an essential role in its marketing programs and branding strategies. Its slogan has been effective and has helped them increase brand equity.
Current Marketing Strategy:
“Moving Forward” Towards Diversity:
Toyota’s current marketing and branding programmes operates on the principles of Kaizen which means to change for the better & attaining prospective customers from diversified backgrounds. It has been evident that the face of the global marketplace has been constantly changing and emerging communities across the globe have been retaining their wealth. These emerging communities hold large influential ethnic markets in the geographical markets (Diversity in Business – Toyota, 2005).
To tap the potential offered by the ethnic markets across the globe, Toyota has utilized the fragmentation of media to its benefits and has modified their marketing strategies. In the year 2001, Toyota promised its resellers to augment diversity across all its functions and as put across by Steve Jett, national car advertising and event marketing manager for Toyota Motor Sales, U.S.A., customers offer reactions to tailor–made advertisements and promotions. Hence, Toyota has allocated $150 million towards the marketing efforts and has partnered with different ethnic marketing partners such as their alliance with Burrell Communications Group, to reach the African–American consumers. They are making constant attempts to help consumers make optimum utilization of their existence through their current marketing strategy “Moving Forward” (Diversity in Business – Toyota, 2005).
Toyota has also endorsed the services of celebrities from a wide variety of ethnic backgrounds to compliment their diversified marketing strategies. This has helped project entertaining and effectual advertisements for its diversified audience, thereby helping them increase brand equity (Diversity in Business – Toyota, 2005).
This diversity has been moved forward to the company’s website and it offers a functional Spanish version to its consumers in Spain. Toyota also works towards the creation of opportunities for women and minorities through the Diversity Advisory Board, established by them (Diversity in Business – Toyota, 2005).
Current Secondary Brand Associations:
Toyota Motor Sales, U.S.A., has participated in a Department of Defence program, America Supports You, connecting people and corporate houses to offer support to the armed forces and their families. Toyota has been a supporter of the U.S. military-support programs since quite a long time and intends to associate it with the efforts of the America Supports You (ASY). This would be achieved through the Bass Anglers Sportsman’s Society (B.A.S.S.), owned by ESPN, through tours by country music artists Brooks & Dunn and through the Toyota–United Pro Cycling Team (America Supports You – Toyota, 2007).
Toyota has also partnered with some social organizations such as the Los Angeles (L.A.) Urban League and the United Negro College Fund (UNCF) to develop a positive brand image across the globe. The L.A. Urban League Automotive Training Centre, which has been established by Toyota, offers automotive expertise to unemployed and under–employed residents of Los Angeles (Diversity in Business – Toyota, 2005).
What Could Dull Toyota's Edge?
TMC has always saved costs per car through its cost–effective payroll process. However, low sales of its SUVs and industrial products have declined; employees at the manufacturing units have been engaged in team–building activities instead of manufacturing cars. Hence, the company has been facing the blues with its diminishing edge over Detroit Three who has formatted a different payroll process for employees whose work is not directly related with the car–manufacturing process (Business Week – What Could Dull Toyota’s Edge, 2008).
With it’s more than 20 years old manufacturing plants and highly paid workers as compared to that of Detroit Three, Toyota is on its way to become the company with the highest labor costs in the U.S (Business Week – What Could Dull Toyota’s Edge, 2008).
To resolve this issue of high costs through rising wages, Toyota has established an on–site medical centre at its plant located at San Antonio in an attempt to reduce their health–care costs. Their revised payroll process indicates low wages per hour for employees and an increase of tenures for promotions of newly–recruited employees (Business Week – What Could Dull Toyota’s Edge, 2008).
Conclusion:
Toyota is known as the most profitable car producer across the globe. Toyota has maintained a high level of brand strength and brand stature gained through its differentiation of products, its relevance of products with the requirements of its consumers and through its knowledge structures created by recalled communication programmes through diversification of media. The maximum profitability is derived through its single branded house, the only exception being sales accounted through its niche brands ‘Lexus’ and ‘Scion’. Their values mix well with focus on internal customers and strong branding strategies which ensure delivery of brand values and brand promise to its consumers (Branding Strategy – Profit Edging Sales in the Great Car Race, 2007).
Although the level of Brand Equity may decline for the brand due to increasing bias of imports by consumers in certain countries and a recall has done marginal damage to their positive Brand Image, however, Toyota has shown respect and dignity for its consumers through optimum customer satisfaction and hence, should discard the worry factor and sustain its strong Brand Equity formed in the automotive industry across the globe.
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