Crisis Recovery: - Customers’ Perspective Towards Toyota’s Brand Proposal

Crisis is often a very fearful problem for organization around the world. As brand building takes up a very long period, destroying a brand on the other hand only require a blink of an eye. However, each and every organization will have their own module or particular ways to prevent their brand to have negative image in customers’ perception. But because of the unknown future, crisis might arise from nowhere and struck the organization with no mercy and brings the organization to an ending point.

Crisis can be devastating as the effect of the crisis its own can sometimes be very hard to calculate as there might be many parties involved. To break down, there are in effect three types of crisis, each of which is determined by an accompanying time constraint (Parsons, 1996). According to Parsons, 1996, the three types of crisis are 1) immediate 2) emerging 3) sustained. Immediate crisis is a type of crisis where it has no warning about its incoming. Often, this type of crisis leave no breathing room for the organization to research about the problem and the organization certainly will not have a detailed plan to overcome this type of crisis. Additionally, the second type of crisis is the emerging crisis.

Emerging crisis in compare to immediate crisis is much slower, but that doesn’t mean that emerging crisis deals lesser damage to an organization. But it shows that the emerging crisis will be more predictable than immediate crisis, however, it does need a lot of effort from the organization to find out about the starting sparks of this crisis. Last but not least is the sustained crisis, this type of crisis might be considered as very troublesome crisis for some organization as the nature of this type of crisis is that the sustained crisis will last up to several years. And the momentum to keep this type of crisis is often the speculation, gossip, and rumor.

After a walk through about several type of crisis, we already have brief idea on the type of crisis. However, most crises do not occur suddenly. The signals can usually be picked up and the symptoms checked as they emerge. A crisis can consist of four different and distinct stages. According to Fink, (1986), the four different stages are 1) prodromal crisis stage 2) acute crisis stage 3) chronic crisis stage 4) crisis resolution.

The prodromal crisis stage being in the first stage also knows as symptom of a certain disease in medical field. In business field however, it give warning signal to a particular organization regarding a rising problem. It is either the organization notice the problem and solves it or the organization oversees the problem and then the problem reach the second stage which we known as acute crisis stage.

At this stage, the warning light is not just blinking, but the problem is already on the surface and the organization have to take adequate action in order to solves this crisis. In this acute stage, problems are harder to take care of compare to prodromal stage, and the organization can only control the damage of this crisis. However, the losses are incurred. Additionally, the third stage is the chronic crisis stage.

At this stage, the problem is always occurring and it is very difficult for a firm to solve. This stage might be the recovery period for some organization or vice versa for another organization. And lastly is the crisis resolution. From starting of the crisis to the very danger stage of crisis, there is always a chance for an organization to solve the problem. However, it is then differ by the level of organization put in to detect symptoms of problems.

Besides, the lack of inexperience and inadequate method of dealing with crisis will also lead to an increase of level of the crisis. Keep in mind that no attempt to resolve the crisis or improper resolution might not be able to destroy a company. “But, its weakening effects can ripple through the organization and create a host of other complications” says Toby J. Kash 1998.

Toyota Motor Corporation is a Japanese Automobile Company which founded in year 1937 by Kiichiro Toyoda. Throughout all these years, Toyota had built a strong image in Malaysian customers’ mind. Based on a comment by UMW Toyota (Local Distributor of Toyota Motor in Malaysia) president Kuah Kock Heng, he said that UMW Toyota had the biggest share of the non-national makes in 2009, selling 81,785 units.

It outsold its nearest competitor by over 40,000 units. Although the mass recall crisis not affecting Malaysia’s consumers “UMW Toyota would like to emphasize that we have received confirmation from our principal, Toyota Motor Corp, Japan that all Toyota and Lexus models sold by UMW Toyota are not affected by this recall exercise,” a statement by UMW Toyota. However, Toyota’s mass recall crisis affects many of its constituencies. Based on a Bloomberg’s report;

Toyota roll out a global recalls of 8 million vehicles which experienced unintended acceleration. Although the affected vehicles are those in US, Europe, and China, and Toyota carry out whole series of action to resolve the critical issue and bare the responsible of this problem.

The Malaysian customers’ perception towards Toyota’s brand might be affected with negative image or remain the same after this mass recall by Toyota. Because of the crisis which affects the customers perception towards Toyota’s brand, this project is intended to examines the customers’ perspective towards Toyota’s brand before and after the mass recall crisis. And also to research on why would or wouldn’t the customers still trust Toyota after the mass recall crisis.

1.3Research Questions and Objectives The objectives of this Project Report are: * To examine what are the customers’ perception towards Toyota after the recall crisis. * To determine the customers’ level of trust towards Toyota. * To identify the factors influence customers’ trust towards Toyota’s product after the crisis.

1.4Timescale Month – May 2010 (Week 5) – Submission of IP (A) Project Outline Form Month – June 2010 (Week 6) – IP (A) Supervisors list published (Week 9) – First meeting with IP Supervisor Month – July 2010 (Week 10) – Finding journals and article for IP (Week 11) – Drafted IP proposal for IP Supervisor checking (Week 12) – Third meeting with IP Supervisor for finalizing the IP Proposal (Week 14) – Submission of proposal. Month – Sept 2010 (Week 1) – Design of questionnaire (Week 2) – Printing of questionnaire Month – October 2010 (Week 6) – Distributing questionnaire to target respondents (Week 10) – In-depth research with selected participants

Month – November 2010 (Week 12) – Analyzing research data (Week 13) – Finalizing Project report (Week 14) – Hand in of Independent Project [B] 1.5Resources This project will be carry by only 1 person and under supervision of a lecturer. Resources for this project are mainly from primary and secondary data. For example, journals which can be found in UCSI’s Digital Library section that links to Emerald. Besides, newspaper and the information from friends around are also sources for this independent project. 2.Literature Review

2.1 Definition of Crisis According to Parsons, crises by their very nature are unexpected and brief with few managers possessing either first-hand knowledge or practical experience. True that crisis is an unknown and unseen threat for each and every organization around the world. To deal with crisis, the company has to run with a planned crisis management or deal with available experience of the managerial level. 2.1.1 Types of Crisis

Parsons (1996) has shown that there are in effect three types of crisis, each of which is determined by an accompanying time constraint; they are: Immediate, Emerging, and Sustained. Immediate is that type of crisis which leave us little to no warning. Emerging crisis is slow in growth but problem is the difficulty in detecting the cause of crisis. Sustained crisis is the type of crisis which will be attach to the company because of the ongoing of speculation, rumors, and gossips.

2.1.2 Crisis Management. Crisis management is a mixture of applied common sense, experience – your own and other people’s – and time: time to devote to concentrating on the problem (Parsons, 1996). Crisis management is used to deal with occur of crisis for a company. To be efficient in dealing with crisis, the company have to united the ability of each and every employees and using their experiences and time, crisis can be solve efficiently. 2.2 Brand Equity

A recent study (Aaker, 1991, 1992) has shown brand equity is considered a key indicator of the state of health of a brand, and its monitoring is believed to be an essential step in effective brand management. The higher then brand equity, the better the brand perform in the market compare to its competitors and the customers’ retention rate is higher as well. 2.2.1 Country-of-Origin and Brand Image

Country of origin is another important variable influencing consumer perceptions of brands (Hulland, 1999) and brand images (Ahmed et al., 2002). Different country will have different specialty. Hence, customers will relate the country of origin of a particular brand with the brand image that they perceive. For instance, Japan is a technological advance country; hence customer will think SONY is a technological advance brand as well. 2.2.2 Brand Personality

Brands are inanimate objects, yet consumers often view brands as having human characteristics, in essence, creating a brand personality (Aaker, 1996, Aaker, 1997, Batra et al., 1993, Biel, 1993). Customers often treat brand as a human with different characteristic. For example, customers across the world will think that SONY will have a brand personality of innovative.

2.3 Customer Retention According to (Gould, 1995), if you can extend the life of a customer relationship you increase sales. This is an example of customer retention benefit as better relationship with the customer; the company spends lesser time to look for new customer and save cost of being advertising to new customer and in the mean time increasing the new customer’s trust towards a company as well. 3.Methodology

Methodology consists of research design, sampling unit, sampling size, questionnaire design, and data analysis. 3.1 Research Design Research design is the process where the survey method of this independent project will be tailored to suit the project title. Basically, research design is a master plan specifying the methods and procedures for collecting the needed data that pending to be analyzed in further part of this project.

There are two methods that involve in the data collection procedures. The first is quantitative research which will be adapted to collect information about customers’ perception towards Toyota. Additionally, the second method is the qualitative research; where in-depth research will be carry out to few selected respondents in order to collect the further strengthen the findings of quantitative research. 3.2 Sampling Unit

According to (Friedrich, G.W.), a sampling unit is that element or set of elements considered for selection in some stage of sampling. The targeted respondents for this project is Malaysian who age around 20-50. Reason for this age group is that the respondents have their own driving license. Besides, the most important criteria is that the respondents have to either driving a Toyota vehicle, owning a Toyota vehicle, or have the capability to buy a Toyota vehicle.

3.3 Sampling Size Based on the title of this project, the sampling unit has to be a customer or a consumer of Toyota product. Hence, the sampling size of this project is limited to 50 sets. This is because the fact that Toyota owner is lesser compare to the local vehicle owner. 3.4 Questionnaire Design

Questionnaire is based on the quantitative research method that is wide spread to numbers of target respondents to collect the needed data. Hence, designing the questionnaire is a crucial part to correctly tailoring questions that can contribute findings to match with the research title of this project.

The first section in this questionnaire will be filled with demographic questions to gather the basic information like age, occupation, and income level of the respondents. The second section of this questionnaire is asking the respondents about the understanding of Toyota’s recall crisis. Example question is like asking do the respondent know what is the problem that causes Toyota to roll out a mass recall on the sold vehicles.

The third section of this questionnaire will be coming up with questions to find out the customers’ perception towards Toyota’s brand before and after the crisis. The last part in this questionnaire is to identify whether the customers will still purchase Toyota product after the recall crisis. 3.5 Data Analysis This is the part where the collected data from both quantitative and qualitative research will be put to analysis for results to support the finding of this project. To do analysis, SPSS software will be utilize to find out the analyzed result of each research questions.

4.References Creswell, J.W. 2003, Research Design, Qualitative, Quantitative, and Mixed Methods Approaches, Second Edition, Sage Publication, United States. Fetscherin, M. and Toncar, M. (2010) 'International Marketing Review', The effects of the country of brand and the country of manufacturing of automobiles: An experimental study of consumers’ brand personality perceptions, Vol. 27, No. 2, pp. 164-178. Friedrich, G.W. n.d., The State University of New Jersey Rutgers, viewed 28 July 2010 < http://comminfo.rutgers.edu/~gusf/sampling.html>. Gould, G. (1995)

'Why it is customer loyalty that counts (and how to measure it)', Managing Service Quality, Vol. 5, No. 1, pp. 15-19. Kash, T.J. and Darling, J.R. (1998) 'Crisis management: prevention, diagnosis and intervention', Leadership & Organization Development Journal, Vol. 19, No. 4, pp. 179-186. Pappu, R., Quester, P.G. and Cooksey R.W., (2006) 'Consumer-based brand equity and country-of-origin relationships: Some empirical evidence', European Journal of Marketing, Vol. 40, No. 5, pp. 696-717. Parsons, W. (1996) 'Crisis management', Career Development International, Vol. 1, No. 5, pp. 26-28. Thakor, M.V. and Kohli, C.S., (1996) 'Brand origin: conceptualization and review', Journal of Consumer Marketing, Vol. 13, No. 3, pp. 27-42.