Situation

Toyota Motor Sales wanted to introduce its new line of forklift trucks to the US.
   Downtime caused by parts failure and replacement is industry’s biggest materials handling cost. Minutes of downtime in a factory can cost more than a lift truck itself several times over. The question never was “Can you get parts?” The question always was “How long will it take to get the part in and my truck back up and running?”
   Most lift truck dealers in the U.S. carry some parts, but not all parts. Toyota was first inclined to think its dealers would assume the full level of commitment necessary to sell, service and maintain accounts. Toyota was not initially prepared to make a direct commitment to those accounts in support of its dealers.
   To compete with Clark, Hyster, and the other major companies which were responding in real time from local basing points within regions, Toyota needed to commit to another level of its U.S. presence. It could not succeed with U.S. industries if its closest parts and service support was based in Japan.

Problem

In November, Toyota’s new Industrial Management Team called in the agency. Materials Handling Magazine had just sold them space in a feature issue adjacent to the big upcoming Plant Engineering Show. They needed an ad to fill the space they believed would enable them to set up a new distribution network and begin writing orders.
   While feature issues opposite trade shows are part of a well-integrated campaign strategy, Toyota’s Industrial Management Team was inclined to believe one ad in one magazine would have companies knocking on their door. The agency knew this would not be the case; that it would catch the flack when Toyota’s expectations fell short; that now was the time to respond with a concept more centric to what Toyota needed. What they were asking for was clearly not what they needed.
   The agency conducted an independent audit of other lift tucks in the market with field interviews from major users and service providers to support its contention that any Toyota advertising - without an established parts and service capability in place - could only hurt the company. “Nothing kills a bad product faster than good advertising.” In essence, the agency refused to do the ad, unless Toyota Industrial would commit to a marketing campaign based on a new local factory based parts and service presence in the U.S. first.

Solution

The Toyota Serves You Right Campaign: The agency did ultimately produce a filler ad for the trade show, but it was produced with the expressed written understanding that Toyota would use it to announce a new commitment to parts and service in the U.S. Toyota agreed to postpone its U.S. launch until after it could establish regional basing points for parts warehousing and local service in its major markets.
   In July, eight months later, Toyota had parts inventories established in ten key markets. While it had continued working with the agency through approved strategies for its impending advertising campaign, it had not committed to media schedules or moved ahead with creative execution on the campaign itself.
   Recognizing that Toyota’s tough-minded industrial group really didn’t understand the potential impact of the campaign, sensing that it might be hedging on a commitment to full representative media schedules and a rotation of six ads in the mix upon launch, the agency decided it really needed to get Toyota’s people into the act. It added another ad to the campaign mix.
   The layout was presented as a way to personalize the Company behind the Toyota Brand. The ad would only be seen in trade media by potential lift truck dealers and would show the actual people behind the new parts and service commitment Toyota was making.

Results

   By launch date, Toyota had already doubled its dealer base. In the nine months following, its sales had already increased 320% over best projections. And, the Campaign was awarded “The Belding” by the American Advertising Federation for Best Industrial Ad Campaign.
   Toyota’s parts and service legacy rewrote the story on “downtime” in US industry. The model also extended to the parts/service commitment Toyota made to its automotive business, a legacy that evolved to the development of closed-loop satisfaction and customer-retention strategies, and to the creation of independent SAT comparison companies. Service was taken to another notch, not only to keep products working, but as a strategy to retain customers. “It costs less to keep the customers you have than to replace them with new customers.”

    “You were tough on us. That was exactly what we needed.“
         Koji Okamoto,
         VP Marketing,
         Toyota Motor Sales

   “We envy you that ad”
          Dick Scott,
          VP, Account Supervisor,
          Clinton E Frank Advertising
          Toyota’s Automotive Agency