It is not unusual for Toyota to rotate executives through various departments, but for Bill Fay it meant taking over as group vice president of marketing in May -- just as the brand was under assault after driver reports of unintended acceleration.
Since joining Toyota in 1982, Fay has worked in sales, sales administration, market representation, advertising, merchandising, fleet and field operations. But working to halt the free fall in Toyota's brand image may be the biggest career challenge for the 54-year-old executive.
He spoke in Los Angeles with West Coast Editor Mark Rechtin.
From a marketing standpoint, how would you rate Toyota's response to the unintended-acceleration crisis?
Collectively, we did a great job. We very quickly set up a SWAT team to guide us through this. The first task was to look at what was going on, see what we needed to communicate and how and what we were going to say. We needed to express remorse over the recalls and plan to fix and repair the vehicles that were affected. We folded in a retail campaign through the TDAs [Toyota dealer associations], so we were connecting with a big owner base that has a lot of loyalty.
We expanded our communication to talk about repairing the vehicles and then moving on to communicating various components of our vehicles, like the Star Safety System and the IIHS awards we have won. That will continue as we go forward.
A lot went on in a couple months, but the associates, agencies, field staff, TDAs and the dealer staff were terrific. The dealers were a big part of our communication. They have done an outstanding job repairing our image. Toyota is still the top retail, top Hispanic, top African-American and top Asian brand. It wasn't perfect, but we did a great job.
What is Toyota doing in the near future to address its image problem?
We're studying that as we speak, so I can't lay out a specific plan. But we are molding the customer perception of Toyota and the brand. We've gone through our current flight of safety ads, and that will evolve. Some product launches will be incorporated into our marketing efforts.
What is the most effective way for Toyota to reassure its customers and bring in new ones?
We continue to support the retail efforts. The company has been very good to support us from the broadcast spending level. We have been more aggressive than last year to get our messaging out. We are looking at the benefits of digital and social media reinforcing the broadcast message. We need to keep the retail going, keep the positive message and reinforce our brand attributes.
Has this crisis affected the way Toyota looks at marketing its brand?
That's what we're working on. We used to bring QDR [quality, durability and reliability] by talking about specific core products. This year we've had to talk about specific parts, like safety. So how do we go forward and deliver that QDR message in the marketplace? We still have it -- we just have to assure customers that's the case.
The communication will evolve, and we don't have that totally approved yet. But we are evolving from kind of apologizing to being a bit more confident and reassuring in the QDR message that got us this far.
We have to find different executions of that which talks to different audiences. Current owners might feel differently than intenders do. This will evolve well into next year. Next year we have product plans we can incorporate that can help us bring that message to market. We'll have a bit more time to work our way through the plan. This is not a short-term thing where we run an execution or two.
Are you changing your emphasis from traditional media to new media?
Our foundation is still broadcast. That's where everybody gets eyeballs. But there is an opportunity in the digital world. We are investing a lot in our owner site, but that's not for the sake of moving away from traditional media.
We're still looking at different ways we can connect with owners. There are a bunch of third-party Web sites that are as popular as our site right now. You have to look at how you can work with those companies, to see how we can make it work to our audience. The retail method has changed. Smart phones can pull up a price quote, and people do business from that. We need to be in a position to work with a customer so we can deliver what they want.
What part does social media play for Toyota?
Between digital and social media, everyone has a chance to connect with the customer and get some two-way communication going. We've reorganized our digital and social media, added some more resources. We are experimenting with social media and seeing how it might work best for us.
Some of the ways we are using social media include the "Ask the Expert" section for the Prius, where Prius owners go on Facebook and answer each other's questions. We are coming up on the 10th anniversary of Prius, and people can share their experiences with their Prius on Facebook. The most interesting stories get a celebration in their hometown. And millions of people have seen the Sienna "Swagger Wagon" microsite on YouTube, reinforcing that we can have some fun in that segment.
How much of the marketing spending are you asking the Toyota dealer associations to shoulder?
The spending ratios have stayed the same. They have been a great partner and carried most of the weight on the retail side of the business while we were communicating the recalls, remedies and fixes. They were an active part of the retail message being communicated.
After all, you still had cars to sell, right?
We're a very aggressive retail organization. The dealers have a business to run and employees to pay. They wanted to keep forging ahead, and they were outstanding. They are having a very good year. We held our own in the marketplace pretty well for all the headwinds we had. We can't ignore what's happened, and we will need to focus our future efforts on addressing what's happened this year.
Because of the underlying quality, durability and reliability theme of your message, Toyota advertising has been pretty dull. But there have been exceptions, the "Spy vs. Spy" Yaris launch, the "Swagger Wagon" campaign for the Sienna. Are these one-offs or a sign of a new creative direction?
That's what we're looking at. Over the next year, we are asking, "What do we say and how do we say it?" We have different audiences. We need to make an emotional connection with people who own or are considering our product. We need to address the concerns of the customer, based on what we've been through this year. We need to find a way to fit all those components into our communication strategy to stand out and make an emotional connection. Saatchi and our three minority agencies have been very excited to be part of this. They are hooked in at the hip with us.
Where is Toyota's marketing budget moving from here?
We've taken a big step this year. It's up substantially from last year, a double-digit increase. We'd like to see a gradual industry recovery to help the increased spending. And we're going to have a busy 2011 with product launches, so that will continue into next year.
Toyota's incentive spending hit an all-time high this year, then has backed off a bit. But is this plateau the new level, or do you predict a retreat for Toyota incentive spending?
We have to support the dealers and make sure they are competitive. We are at a higher spending level than we used to be, but we are still below the industry average. Toyota Financial Services has been a great partner in working with us for leasing opportunities and having competitive APRs, and they have allowed us to be more effective and efficient. If we can start to bring it down some, that would be the ideal.
Does an increased incentives budget mean a reduced advertising budget?
We don't take a dollar from one and give it to the other.
How does Toyota look at newspapers and magazines?
We still look at it as an opportunity to reinforce the overall message. It gets exposure and eyeballs and reinforces what we get from broadcast. It's a good option.
How do you market big trucks to a public going sour on them as "want" purchases?
It's nice to see some rebound in some light-truck segments, and a good part of our success has been in the light-truck area. There seems to be a renewed strength in full-size pickup and SUV segments. With stable gas prices, Americans still like the utility, room and capability. Some people need them, some people like them. The full-size pickup segment may grow 200,000 units from last year.
Is Scion's approach to marketing changing? At the tC launch, executives said the car would get a traditional TV launch. Is this a reaction to Scion sales being off so dramatically in the past two years?
We are expanding the boundaries a little bit, but not significantly. Scion is going a little more mainstream, but largely what you've seen of Scion is what you'll see in the future. We are experimenting with how we can expand its reach and get out a bit broader.