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It takes decades to create a reputation and only a few days to destroy it, Toyota is the latest brand to be falling into the death spiral with a massive erosion in its equity.

Something that it's key competitors can only be extremely happy about, especially when a number of the players including- GM, Ford and the the emerging Korean brands have made such strides in this space.

The problem is especially acute for Toyota because quality has been such an integral part of the company, management books have been written about it and the whole DNA of the organization is structured around it.

It's been suggested that Toyota's push for growth has been the cause of all these problems. It was so fixated with overtaking GM to become the biggest automaker in the world, that corners were cut and compromises made.

Pushing hard for growth has been the undoing of many a great brand.

Toyota's problem seems to a show a lack of understanding of how to scale their production to achieve optimal quality and not thinking hard enough about the impact of potential failure on the brand.

Starbucks is another brand who expanded way to fast and ended up diluting their equity.

In both these cases, while it certainly true that they built amazingly powerful brands, they failed to treat them with respect and didn't use tools to help them to understand the resulting impact of over-expansion on their most valuable assets.

Quite simply, their brands were important, but not important enough to be front and center of the CFO and CEOs agenda.


Posted by Ed Cotton In their original incarnation, brands were signifiers and guarantees of quality, something consumers could rely and depend upon.

In the later part of the C20th, two forces emerged that changed branding.

The first was the drive by marketing experts and ad agencies to suggest that brands needed emotional differentiation in a world where all brands were functionally similar.

Secondly, businesses discovered that a quick way to improve shareholder value was to strip out as much of the costs as possible.

We are now starting to feel the consequences of both these actions. We are starting to see a "brand vacuum" emerge, a fault line between what brands say they do and what they actually do. The rapid rise of the Internet is making it hard for brands to manage and control this ever widening chasm.

Recently, the notion of marketing experts that brands are at parity and that it’s therefore impossible to provide rational brand differentiation is being severely tested.

If the global factory, producing all our goods, China, can’t be trusted for safety, what does that say about the quality of the brands produced there?



What If airlines can no longer guarantee that their planes fly on time?

How about if banks can’t guarantee that their customers will be able to withdraw funds from ATMs?

We’ve got so enamored with the development of emotional connections and business strategists have driven down costs to such a point that brand trust, the fundamental platform for brands has been eroded.

While brand experts may still wax lyrical about Lovemarks and emotional bonds, isn’t it time to go back to basics?

I don’t think you can become a Lovemark without being a Trustmark first.

Agencies may hate me for saying it, but the rational has just suddenly taken on a whole new level of importance.

For brands, proof has now become the order of the day.



Posted by Ed Cotton