FT MBA 2007 - HKUST Group G Stefano  Di Genua David Dore   Hilda   Kwok Mark Li Sushma Srinivas LEXUS GLOBAL BRANDING
LEXUS’S CHALLENGE GLOBAL BRANDING As Lexus expands around the world, there is growing stress on the brand
It maintains its constant position above the Earth LEXUS’S CHALLENGE GLOBAL BRANDING Lexus Brand Stakeholders The Lexus br...
LEXUS’S CHALLENGE OUTLINE <ul><li>BRAND VALUE drivers behind the brand </li></ul><ul><li>GLOBAL POSITIONING   US, Japan, E...
“ Even the best managed companies have opportunities to better leverage their brand and generate more value for stakeholde...
LEXUS Brand Value in 2007 5,421,000,000 US$ (*) (*) according to BRANDZ LEXUS BRAND VALUE BRAND VALUE
<ul><li>Intangible Earnings : Corporate Earnings based on analysts reports, etc. </li></ul><ul><li>Brand Contribution :  P...
“ If we apply a lot of localization, we may be able to increase volumes faster, but that’s not the right approach. We have...
Characteristics evaluated in Products:  Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience...
Characteristics evaluated in Products:  Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience...
Characteristics evaluated in Products:  Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience...
Characteristics evaluated in Products:  Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience...
“ The best brands follow their stakeholders’ journeys so that they provide effective, consistent and appropriate messaging...
Brand Voice   Clarity Lexus 360   =  Brand Expression  Consistency Brand Message  Credibility LEXUS 360 3 POINTS FOR BRAND...
Brand Governance Steering Committee HQ Regional Brand Stewards Central Brand Data Repository Brand Focus groups Customers ...
Unified  Brand Identity  awareness as a mean to attaining high fidelity adherence to  Brand Values  across multiple market...
<ul><li>Lexus Value focused Events </li></ul><ul><li>Host Hybrid Technology Symposiums; </li></ul><ul><li>Benefits : </li>...
Maintain Consistency of  Brand Image  across channels and segments, to build a mechanism to track exceptions and ensure a ...
<ul><li>Repository of all Brand related feedbacks </li></ul><ul><li>Track Qualitative, Quantitative data for every interac...
Optimize & sustain  Brand Loyalty  and  Credibility   among customers, community LEXUS 360 CREDIBILITY Lexus 360  =  Clari...
<ul><li>LEXUS for Life </li></ul><ul><li>Luxury Chauffer driven service to customers across the globe; </li></ul><ul><li>B...
“ Branding requires a clear and consistent message” [P. Kotler, G.Armstrong] LEXUS BRANDING
Customers Community Management Employees Distributors LEXUS 360 SUMMARY Brand Earnings: 162,553,820 US$  Brand Earnings: 1...
Q&A THANK YOU!
LEXUS IN EUROPE REASONS <ul><li>Lexus brand appears to be positioned in the same place of  Mercedes </li></ul><ul><li>Let’...
“ If brands are managed correctly they can move seamlessly across geographies, creating demand for their products around t...
“ Brands are important assets requiring proactive and consistent investment, management, and measurement” [ Jez Frampton, ...
Upcoming SlideShare
Loading in...5
×

Lexus Global Branding

10,939

Published on

Second presentation for Case Analysis course in the 2007 Full Time MBA Program at Hong Kong University of Science and Technology.
The challenge required the groups to come up with ideas on how to organize the brand governance at Lexus for its global presence.
The group focused first on evaluating the bran value and propose then a few practical ideas on how to increase it.

Published in: Business, Sports
0 Comments
21 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
10,939
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
0
Comments
0
Likes
21
Embeds 0
No embeds

No notes for slide
  • Lexus Global Branding

    1. 1. FT MBA 2007 - HKUST Group G Stefano Di Genua David Dore Hilda Kwok Mark Li Sushma Srinivas LEXUS GLOBAL BRANDING
    2. 2. LEXUS’S CHALLENGE GLOBAL BRANDING As Lexus expands around the world, there is growing stress on the brand
    3. 3. It maintains its constant position above the Earth LEXUS’S CHALLENGE GLOBAL BRANDING Lexus Brand Stakeholders The Lexus brand must be clear, consistent and credible to all stakeholders
    4. 4. LEXUS’S CHALLENGE OUTLINE <ul><li>BRAND VALUE drivers behind the brand </li></ul><ul><li>GLOBAL POSITIONING US, Japan, EU, China </li></ul><ul><li>LEXUS 360 our approach to brand governance </li></ul><ul><li>RECOMMENDATIONS </li></ul>
    5. 5. “ Even the best managed companies have opportunities to better leverage their brand and generate more value for stakeholders” [Millward Brown Optimor, BRANDZ] LEXUS BRAND VALUE BRAND VALUE
    6. 6. LEXUS Brand Value in 2007 5,421,000,000 US$ (*) (*) according to BRANDZ LEXUS BRAND VALUE BRAND VALUE
    7. 7. <ul><li>Intangible Earnings : Corporate Earnings based on analysts reports, etc. </li></ul><ul><li>Brand Contribution : Portion of Intangible Earnings attributable to brand </li></ul><ul><li>Brand Multiple : Calculated based on market valuations </li></ul><ul><li>(*) This approach is suggested by BRANDZ and Interbrand </li></ul>LEXUS BRAND VALUE OUR APPROACH (*) <ul><li>Corporate Earnings calculation based on discounted EVA (Economic Value Added) </li></ul><ul><li>Evaluation of NOPAT, WACC and Capital Employed </li></ul><ul><li>Intangible Earnings and Brand Earnings defined through % analogy of BRANDZ </li></ul><ul><li>Brand Contribution and Brand Multiple factors calculated and then averaged in terms of Total Sales by country </li></ul>331,914,360 356,897,160 15.19 Brand Multiple 494,615,010 531,844,100 0.67 Brand Contribution 31 % 27 % 42 % 209,893,900 225,692,370 Corporate Earnings 5,041,530,000 5,421,000,000 BRAND VALUE (*) 151,175,050 162,553,820 Brand Earnings 133,546,050 143,597,910 Intangible Earnings 2006 2007
    8. 8. “ If we apply a lot of localization, we may be able to increase volumes faster, but that’s not the right approach. We have to maintain the identity of the brand. That’s different from Toyota, which should be local. Lexus should be global” [Yuki Funo , Toyota’s Board Member and Automakers Top Manager in North America ] LEXUS GLOBAL BRANDING
    9. 9. Characteristics evaluated in Products: Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience, Security, Innovation. Characteristics evaluated in Brand: Innovation, Domain, Reputation, Affinity, Service, Performance, Quality, Recognition, Message, Passion, Integrity LEXUS IN THE WORLD NORTH AMERICA <ul><li>THE MARKET </li></ul><ul><li>US luxury car market divided into comfort, performance and prestige </li></ul><ul><li>Home to some of the greatest brands </li></ul><ul><li>FACTS </li></ul><ul><li>Introduced in the USA in 1989, in Canada in 1990 </li></ul><ul><li>In USA, Lexus associated with a main benefit, quality (*) </li></ul><ul><li>(*) durability, fit and finish, quality, reliability, and refinement </li></ul><ul><li>THE CUSTOMERS </li></ul><ul><li>They rank fuel economy and safety features in the middle of the pack </li></ul><ul><li>Choice driven by purchase price, value, reliability, and styling </li></ul>
    10. 10. Characteristics evaluated in Products: Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience, Security, Innovation. Characteristics evaluated in Brand: Innovation, Domain, Reputation, Affinity, Service, Performance, Quality, Recognition, Message, Passion, Integrity LEXUS IN THE WORLD JAPAN <ul><li>THE MARKET </li></ul><ul><li>Tax prices have inflated the prices of cars </li></ul><ul><li>In 2006 it grown by around 10% </li></ul><ul><li>FACTS </li></ul><ul><li>Launched 2 models in 2005 that turned out to be too sporty </li></ul><ul><li>Lexus wants to be perceived at the same level of European brands </li></ul><ul><li>THE CUSTOMERS </li></ul><ul><li>They prefer European brands to Japaneses’ </li></ul><ul><li>High brand conscious </li></ul>
    11. 11. Characteristics evaluated in Products: Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience, Security, Innovation. Characteristics evaluated in Brand: Innovation, Domain, Reputation, Affinity, Service, Performance, Quality, Recognition, Message, Passion, Integrity LEXUS IN THE WORLD EUROPE <ul><li>THE MARKET </li></ul><ul><li>World's No. 1 luxury car market </li></ul><ul><li>Gas can cost twice as much as it does in the United States </li></ul><ul><li>A car in Europe tends to be more of a luxury good </li></ul><ul><li>FACTS </li></ul><ul><li>In 2006, Lexus sold fewer than 37,000 vehicles in Europe </li></ul><ul><li>In Europe, hybrids are turning out to be Lexus's big advantage </li></ul><ul><li>THE CUSTOMERS </li></ul><ul><li>They appreciate innovations and advanced technology </li></ul><ul><li>People buy cars because they like them </li></ul>
    12. 12. Characteristics evaluated in Products: Design, Performance, Price, Consumption, Space, Quality, Image, Driving experience, Security, Innovation. Characteristics evaluated in Brand: Innovation, Domain, Reputation, Affinity, Service, Performance, Quality, Recognition, Message, Passion, Integrity LEXUS IN THE WORLD CHINA <ul><li>THE MARKET </li></ul><ul><li>China is the fastest growing market for luxury products </li></ul><ul><li>The most competitive market for all luxury car makers </li></ul><ul><li>FACTS </li></ul><ul><li>The only brand that provides a 4 years warranty </li></ul><ul><li>It invites every potential buyers to drive every car they want to buy </li></ul><ul><li>THE CUSTOMERS </li></ul><ul><li>Wealthy Chinese are only a small percentage of the current population </li></ul><ul><li>They are picky and want to be unique </li></ul>
    13. 13. “ The best brands follow their stakeholders’ journeys so that they provide effective, consistent and appropriate messaging throughout the experience” [ Jez Frampton, Chief Executive Interbrand ] LEXUS 360 THE NEW LEXUS BRAND GOVERNANCE
    14. 14. Brand Voice Clarity Lexus 360 = Brand Expression Consistency Brand Message Credibility LEXUS 360 3 POINTS FOR BRAND GOVERNANCE
    15. 15. Brand Governance Steering Committee HQ Regional Brand Stewards Central Brand Data Repository Brand Focus groups Customers Community Employees Distributors Management Internal Stakeholders External Stakeholders Lexus 360 = Clarity + Consistency + Credibility Brand decision makers Brand Enablers LEXUS 360 BRAND GOVERNANCE STRUCTURE
    16. 16. Unified Brand Identity awareness as a mean to attaining high fidelity adherence to Brand Values across multiple markets, stakeholder groups and channels LEXUS 360 CLARITY Lexus 360 = Clarity + Consistency + Credibility
    17. 17. <ul><li>Lexus Value focused Events </li></ul><ul><li>Host Hybrid Technology Symposiums; </li></ul><ul><li>Benefits : </li></ul><ul><li>Communicate LEXUS’s hybrid design Innovations </li></ul><ul><li>Build awareness and acceptance among the masses </li></ul><ul><li>Sustain competitive advantage over rivals </li></ul><ul><li>Collaboration with industry and technology fraternity </li></ul>LEXUS 360 CLARITY - RECCOMENDATIONS Lexus 360 = Clarity + Consistency + Credibility
    18. 18. Maintain Consistency of Brand Image across channels and segments, to build a mechanism to track exceptions and ensure a unified Brand Experience for the Customer Lexus 360 = Clarity + Consistency + Credibility LEXUS 360 CONSISTENCY
    19. 19. <ul><li>Repository of all Brand related feedbacks </li></ul><ul><li>Track Qualitative, Quantitative data for every interactions </li></ul><ul><li>Measure internal employee factors of Brand Awareness, Trust and Commitment </li></ul><ul><li>Circulate a Scorecard to the Brand Steering Committee for periodic review </li></ul>Lexus 360 = Clarity + Consistency + Credibility LEXUS 360 CONSISTENCY - RECCOMENDATIONS LEXUS Listening System
    20. 20. Optimize & sustain Brand Loyalty and Credibility among customers, community LEXUS 360 CREDIBILITY Lexus 360 = Clarity + Consistency + Credibility
    21. 21. <ul><li>LEXUS for Life </li></ul><ul><li>Luxury Chauffer driven service to customers across the globe; </li></ul><ul><li>Benefits: </li></ul><ul><li>Introduce new models, technology to potential customers </li></ul><ul><li>Increase customer touch points </li></ul><ul><li>Boost Word-of-Mouth publicity </li></ul><ul><li>Value added service to existing customers </li></ul>LEXUS 360 CREDIBILITY - RECCOMENDATIONS Lexus 360 = Clarity + Consistency + Credibility
    22. 22. “ Branding requires a clear and consistent message” [P. Kotler, G.Armstrong] LEXUS BRANDING
    23. 23. Customers Community Management Employees Distributors LEXUS 360 SUMMARY Brand Earnings: 162,553,820 US$ Brand Earnings: 186,962,380 US$ Customers Community Management Employees Distributors
    24. 24. Q&A THANK YOU!
    25. 25. LEXUS IN EUROPE REASONS <ul><li>Lexus brand appears to be positioned in the same place of Mercedes </li></ul><ul><li>Let’s then look at a comparison to the top models to understand where Lexus stands out: </li></ul>79   80   TOTAL 7 V12 bi-turbo, 5500cc 10 Hybrid V8 dir inj, 4960 cc Innovation 9 Powerful brakes, reactive steering 9 Electronic controls that change the steering incidence Security 9 Lively 6 Relaxed Driving experience 6 Customers have mixed view on the car. Many would rather buying a different brands for the same price 8 Customers look at Lexus as synonim of eco-friendly cheaper luxury car Image 10 Top quality in all the parts 10 Top quality in all the parts Quality 9 Space is more than enough 7 Hybrid engine limits space Space 6 Mixed: 14.3 l/100km City: 21.7 l/100km 10 Mixed: 9. l/100km City: 11.3 l/100km Consumption 6 € 150,000 7 € 110,000 Price 8 4.6 sec for 0-100 km/h 7 6.3 sec for 0-100 km/h Performance 9 Sportive, innovative; clean cockpit 6 Elegant, traditional; too many buttons Design Mercedes S 600 Lexus LS 600h Parameter
    26. 26. “ If brands are managed correctly they can move seamlessly across geographies, creating demand for their products around the world” [ Jez Frampton, Chief Executive Interbrand ] LEXUS IN THE WORLD GLOBAL POSITIONING
    27. 27. “ Brands are important assets requiring proactive and consistent investment, management, and measurement” [ Jez Frampton, Chief Executive Interbrand ] LEXUS 360 BRANDING

    ×