On Bauer Business Focus — A conversation on the recent General Motors recall with Houston Public Media News 88.7 Business Reporter Andrew Schneider.
C. T. Bauer College of Business Marketing professor Partha Krishnamurthy recently stopped by Bauer Business Focus to discuss how GM may recover from the recent recall and how it compares to the last large Toyota recall.
It’s still early on for the GM recall, but many are already looking at how they will be affected. Krishnamurthy compared the GM recall to Toyota’s, but explained that it is not on the same level but still a large problem for GM and that they have a different set of problems to deal with, such as the amount of time it took for the recall to be released and their reputation from the bankruptcy.
“Toyota’s was a very large recall and it was unexpected for that company. It’s positioning was that of a liable automaker, so the impact from the media coverage was a little bit more intense,” Krishnamurthy said. “GM’s positioning is not based on the liability it is based more on a value pricing plus a cultural element that it speaks to the essential American brand experience.”
Companies almost always come out of crises like this, it’s just a question of how long it takes to come out, Krishnamurthy said, and added that certain customers will come back to the brand sooner than others.
“There are two segments of customers if you want to think of it like that. For the emotionally tied customers, they are the last to ditch the brand and first to come back to the brand,” Krishnamurthy said. “I think what will happen, if Toyota is any kind of precedent, is that they will experience a decline and then they will experience a rapid coming back, but then it will plateau and it will take a while for the outsiders start considering the brand again.”
Click here to hear the full interview.