Section 3. Rapid Growth of the Japanese Market and Development of the Lexus

Item 2. Reaffirmation of the Customer First Philosophy

Customer Satisfaction Improvement Committee

Although Toyota's customer ratings had been extremely high in the first half of the 1980s, other automakers started to catch up, and Toyota's lead shrunk in the second half of the 1980s. For example, in the U.S. market, the Initial Quality Study (IQS)1 by J. D. Power and Associates showed that Toyota had fallen to fourth place in 1987 from first place in 1985. Feeling a sense of crisis stemming from the knowledge that trust once lost is difficult to regain, TMC executives rapidly realized that company-wide activities must be reassessed from the customer's perspective. At the time, Japan was in the middle of the bubble economy and TMC's sales volume was still increasing rapidly. Yet TMC believed it more important to reaffirm its commitment to its "Customer First" philosophy than to focus on increasing sales volume. In January 1989, TMC established the CS Improvement Committee (chaired by President Shoichiro Toyoda) as the core of company-wide activities to improve its customer satisfaction (CS) level.

The key point in promoting these activities was to instill the Customer First philosophy into TMC's employees and its suppliers and make it a group-wide way of thinking. TMC wanted to reaffirm Customer First, an essential part of its basic philosophy since its founding, throughout the entire company and beyond. Therefore, TMC repeatedly implemented measures to increase awareness of CS, using various means such as broadcasting the president's message throughout the company and publishing a special CS issue of the in-house newspaper, in addition to developing a slogan and a logo.

In terms of specific actions, the Vehicle Quality Subcommittee and the Sales & Service Subcommittees (both in Japan and overseas) were established under the CS Improvement Committee to carry out CS-related initiatives in all areas, from the design and production of vehicles to sales and service. TMC also asked its dealers and suppliers all over the world to participate in the initiative. In response, these affiliates established similar committees and appointed directors responsible for CS, creating a core for promoting the initiative. This became a link to CS improvement activities, leading to deeper instillation and further evolution of the Customer First philosophy.

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