A RE-BRANDING CAMPAIGN:

Toyota’s 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 2007Acknowledgements

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. Zaharna’s 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

Toyota’s Re-branding Campaign...........................................................................................16

Toyota’s 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....................................................................................................................361

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 company’s 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. 2

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 3

automobile brands, Toyota embarked on an ambitious uphill battle. Togo and Wartman

state, “American compact cars of the 1960’s were Detroit’s efforts to drive the foreign

competition out of the country” (p. 166). However against stiff competition, by 1971,

Toyota became the world’s third largest auto manufacturer only behind General Motors

and Ford Motor Company (p. 181).

In the early 1970’s 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 Toyota’s 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 world’s

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 4

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 5

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

Toyota’s 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 study’s findings. 6

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 1800’s.

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. 7

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). 8

Re-branding

Re-branding is another tactic of branding. Re-branding is used when a company

is attempting to redefine and change the consumer’s 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 company’s 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 9

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 company’s 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 don’t make this change?

• Exactly what is being signaled?10

• 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 11

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 was12

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. 13

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 Interbrand’s 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. 14

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 company’s 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

it’s ‘beyond petroleum’ re-branding campaign” (p. 3). 15

Chapter III: Case Profile

This chapter profiles the Toyota Company and the communications campaign the

company launched to promote Toyota’s positive impact on the United States economy.

The Company: Toyota

Toyota began as a textile company in the early 1900’s 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 Toyota’s 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

1970’s 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,

Toyota’s global projections for 2007- the production of 9.34 million cars and trucksindicated that it would soon pass G.M. as the world’s largest car company” (p. 1). 16

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”.

Toyota’s 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 Toyota’s 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. It’s 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 doesn’t 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 17

San Antonio, vowing to share technology with Ford, and pouring money into lobbying”

(p.2). Toyota’s 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). To

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.

Toyota’s economic contribution to North America

One of the first and major components of Toyota’s 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 18

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 Baker’s dozen; Toyota’s 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 19

relations push to counter the noise being made in advance of the opening of Toyota’s 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

it’s 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 Toyota’s 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 world’s 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. 20

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 we’ve made San

Antonio the home of the new full-sized Tundra, our biggest pick-up truck yet.

The San Antonio plant, Toyota’s 10

th

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 Toyota’s 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. It’s 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). 21

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 Toyota’s re-branding was the company’s 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 company’s 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 22

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 Toyota’s

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 Toyota’s 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.23

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

corporation’s impact on the United States economy. Assessing the potential success of

Toyota’s 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 public’s

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 Toyota’s re-branding effort, the company strives to be 24

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. 25

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 customer’s 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, Toyota’s 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. 26

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 Toyota’s 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 Toyota’s

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 Toyota’s

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 Toyota’s 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 Toyota’s leadership decided to enter a car in the Daytona 500 27

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 company’s 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 28

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 29

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 Toyota’s 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 company’s 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 company’s headquarters in 30

Japan, they will lose the American consumer for a very long time, if not forever. Where

the revenue generated by Toyota’s 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 Toyota’s 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. It’s 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. 31

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.

Toyota’s 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

company’s 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. 32

Chapter V: Summary and Conclusion

This study explored Toyota’s 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 company’s 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 company’s 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.

Toyota’s 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 33

difficult. Therefore, the re-branding campaign was launched to showcase Toyota’s

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 Toyota’s 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

company’s 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. 34

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 Toyota’s 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 35

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. 36

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