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	<title>Menachem Lubinsky &#187; Quality Control</title>
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		<title>The Toyota Fiasco: Lesson # 1 – The Product</title>
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		<pubDate>Tue, 09 Feb 2010 07:48:38 +0000</pubDate>
		<dc:creator>Menachem Lubinsky</dc:creator>
				<category><![CDATA[Out of the Box]]></category>
		<category><![CDATA[Quality Control]]></category>
		<category><![CDATA[china]]></category>
		<category><![CDATA[crisis management]]></category>
		<category><![CDATA[japanese]]></category>
		<category><![CDATA[Menachem Lubinsky]]></category>
		<category><![CDATA[product]]></category>
		<category><![CDATA[testing]]></category>
		<category><![CDATA[toyota]]></category>

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		<description><![CDATA[By Menachem Lubinsky The recent Toyota debacle is already becoming a textbook case for marketers on how not to handle a crisis. Surging gas pedals and faulty brakes are not necessarily what are preoccupying the marketers. They are obsessed with how the company handled the crisis and there is a great deal to learn from [...]]]></description>
			<content:encoded><![CDATA[<p><span style="font-size: small;"><strong>By <a href="http://squidoo.com/menachem-lubinsky">Menachem Lubinsky</a></strong></span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">The recent </span><span style="font-size: small;">Toyota</span><span style="font-size: small;"> debacle is already becoming a textbook case for marketers on how not to handle a crisis. Surging gas pedals and faulty brakes are not necessarily what </span><span style="font-size: small;">are</span><span style="font-size: small;"> preoccupying the marketers. They are obsessed with how the company handled the crisis and there is a </span><span style="font-size: small;">great</span><span style="font-size: small;"> deal to</span><span style="font-size: small;"> learn from their mistakes, but I chose to focus on the pedals and brakes.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">There is sufficient evidence that the company knew about </span><span style="font-size: small;">some</span><span style="font-size: small;"> of the problems with the gas pedals and with the brakes. In fact, sources say, that </span><span style="font-size: small;">Toyota</span><span style="font-size: small;"> officials were told months earlier of </span><span style="font-size: small;">safety</span><span style="font-size: small;"> issues with the gas pedals.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">The Japanese appear to have a </span><span style="font-size: small;">history</span><span style="font-size: small;"> of sweeping such problems under the rug. </span><span style="font-size: small;">Sources</span><span style="font-size: small;"> say that they often simply delay in the hope that either the problem will go away or some solution will surface in time as opposed to American companies that know that delay will not augur well for them in the long run.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">Ironically </span><span style="font-size: small;">Toyota</span><span style="font-size: small;"> had always positioned itself as a model of quality and reliability. It almost </span><span style="font-size: small;">single-handedly</span><span style="font-size: small;"> took on the American auto manufacturers and possibly contributed to the decline of the auto industry in this country. </span><span style="font-size: small;">Toyota</span><span style="font-size: small;">’s problems had an immediate impact on Ford which took advantage of the silenced </span><span style="font-size: small;">Toyota</span> <span style="font-size: small;">showrooms to make some instant profits</span><span style="font-size: small;">, something that had failed them in recent years</span><span style="font-size: small;">.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">There is an important lesson here that perhaps takes precedent over the </span><span style="font-size: small;">crisis</span><span style="font-size: small;"> management issues that we will no doubt discuss in the weeks ahead. There is no excuse for an inferior product, and certainly if it also </span><span style="font-size: small;">involves health and safety. The consumer can forgive many flaws </span><span style="font-size: small;">in</span> <span style="font-size: small;">a </span><span style="font-size: small;">company but not when it produces a product that is not up to </span><span style="font-size: small;">standard</span><span style="font-size: small;">.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">Nearly a year ago, a young man asked for my marketing advice on a new food </span><span style="font-size: small;">product</span><span style="font-size: small;"> that he promised would be a “big hit.” It was a dietetic product that seemed to mimic the “real thing,” as he put it. He invested </span><span style="font-size: small;">considerably</span><span style="font-size: small;"> into the packaging and on the surface I agreed that the product might be a winner.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">The initial launch seemed to go well as the product made it into many stores including several supermarkets. But soon the problems began. Although the shelf life was approximately 6-7 weeks, customers complained of spoilage well before the date. Several stores called to say that a few of the customers complained of severe stomach cramps after they had eaten the product.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">It wasn’t until two weeks had passed that the entrepreneur reached out to me for advice on how to handle the crisis. It seems that at least three of the stores had cancelled orders and worse, a Letter to the Editor appeared about the spoilage issue. I advised him to </span><span style="font-size: small;">issue an instant product recall and to </span><span style="font-size: small;">quickly deal with the quality issue, with an </span><span style="font-size: small;">analysis</span><span style="font-size: small;"> by a lab and a review by a food technologist that I had recommended. The culprits were found and the product was reformulated. While the taste was slightly off from the original, it still was superior to a competing product. But it was too little too late. The stores would not give him another chance. Despite large ads of the reformulation, customers abandoned the </span><span style="font-size: small;">product</span><span style="font-size: small;"> in droves and the venture died a slow death.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">Of  course</span><span style="font-size: small;">,</span><span style="font-size: small;"> the ideal </span><span style="font-size: small;">scenario</span><span style="font-size: small;"> would have been if the product were properly tested in the first place. The entrepreneur admitted that he had tried to save the cost of the additional testing. He also agreed that he thought that the initial </span><span style="font-size: small;">complaints</span><span style="font-size: small;"> of the spoilage were isolated and not a reflection on the product.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">There can be no </span><span style="font-size: small;">compromise</span><span style="font-size: small;"> when it comes to quality, either in a product or service. </span><span style="font-size: small;">Investing</span><span style="font-size: small;"> in marketing is naturally a good thing but not if it comes at the expense of product </span><span style="font-size: small;">perfection</span><span style="font-size: small;">. There are indications that the </span><span style="font-size: small;">Toyota</span><span style="font-size: small;"> pedal issue may in the end turn out to be a software issue. </span><span style="font-size: small;">Early on, </span><span style="font-size: small;">Toyota</span><span style="font-size: small;"> said that it was not a problem for cars manufactured and sold in </span><span style="font-size: small;">Japan</span><span style="font-size: small;"> because those parts appeared to be working well. </span><span style="font-size: small;">All not very comforting to the average consumer</span><span style="font-size: small;"> in the </span><span style="font-size: small;">US</span><span style="font-size: small;">.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">Too often a manufacturer will attempt to cut corners when it comes to quality, feeling that the co</span><span style="font-size: small;">nsumer would accept the product</span><span style="font-size: small;"> as being more than adequate. It was perhaps the beginning of the problems with </span><span style="font-size: small;">China</span><span style="font-size: small;"> when that country was more bent on churning out volume at cheap prices than to deal with quality issues. It too was caught with its </span><span style="font-size: small;">severe shortcomings in quality</span><span style="font-size: small;">.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;">I suspect that </span><span style="font-size: small;">Toyota</span><span style="font-size: small;"> will get it right in time, but its road back to respectability and reliability will be long and </span><span style="font-size: small;">ardu</span><span style="font-size: small;">ous. The first lesson that we can all learn from the Toyota fiasco is that there is no replacement for quality; quality that is tested and retested, to avoid what one </span><span style="font-size: small;">of the world’s </span><span style="font-size: small;">large</span><span style="font-size: small;">st</span><span style="font-size: small;"> auto manufacturer went through.</span></p>
<p><span style="font-size: small;"> </span></p>
<p><span style="font-size: small;"> </span></p>
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