Is Toyota’s “Brand Insulation Effect” Protecting Its Sales?
In a recent study released by Rice University, of the Toyota faithful, “Toyota owners maintained a more positive view of the company than their counterparts.” Furthermore the survey found that…
“When Toyota owners were asked to rate on the same 0-to-10 scale whether they would consider Toyota if they were to buy a new vehicle today, their ratings averaged an 8, whereas other automobile owners’ ratings averaged a 4.”
The study’s author, Vikas Mittal, the J. Hugh Liedtke Professor of Marketing at Rice, and co-authors Rajan Sambandam, chief research officer at TRC, and Utpal Dholakia, associate professor of marketing at Rice, termed this a “brand insulation effect” built upon previous positive customer experience with the company.
If this is true, (and it remains to see if future customer actions support their stated intentions,) then it bodes well for companies that perform consistently over the long haul. Tylenol faced a similar challenge when they recalled millions of dollars of products off store shelves from a product tampering incident. Tylenol’s share reportedly dropped from 35% down to 8%, but quickly rebounded within a year. Consumers came back to Tylenol due in large part to their proactive response and proven history.
It will be interesting to watch Toyota and see if their brand image withstands this withering assault of news reports. What are your thoughts? Is there a “brand insulation effect?” Will it work for Toyota, or is this a case of too little, too late?
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