The document discusses how Lexus succeeded in the rational US market by offering luxury cars at lower prices than competitors, but struggled in the emotional European market. Lexus' strategy of emphasizing lower price did not resonate in Europe where emotional factors are more important than price. The document also analyzes Lexus' strengths, weaknesses, opportunities, and threats, and provides recommendations such as improving branding, reformulating pricing strategy to consider emotional value, and minimizing weaknesses like inexperience in the luxury market.

1. LEXUS &
EMOTIONAL PRICE
Case study on how Lexus conquered United States rational market
while struggling in Europe emotionally driven market.

2. Lexus & Emotional Price
SOMETHING
ABOUT LEXUS
The Relentless Pursuit of Perfection
Lexus is the luxury vehicle division of Japanese Since the 2000s, Lexus has increased sales outside its
automaker Toyota Motor Corporation. First largest market in the United States through an
introduced in 1989 in the United States, Lexus is now ongoing global expansion. The division inaugurated
sold globally and has become Japan's largest-selling dealerships in Japan's domestic market in 2005,
make of premium cars. The Lexus marque is becoming the first Japanese premium car marque to
marketed in over 70 countries and territories launch in its country of origin. Further debuts in
worldwide, and has ranked among the ten largest Southeast Asia, Latin America, and other export
Japanese global brands in market value. Its world regions have since followed.
headquarters are located in Toyota City, Japan, with The division's lineup has also been expanded to
major operational centers in Brussels, Belgium, and reflect regional specifications in model and
Torrance, California, United States. powertrain configurations.
Lexus originated from a clandestine flagship sedan
project, code-named F1, which began in 1983 and
culminated in the launch of the original Lexus LS in
1989.
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3. Lexus & Emotional Price
WHAT HAPPENED
WITH LEXUS..?
Lexus strategy in the first place was offering luxury cars
in a lower price than the other luxury cars even it had
competitive qualities to compete with them.
This strategy worked well in United States rational
market, but once it didn’t in Europe emotionally driven
market.
Emotional factor affected its sales more than the lower
price offered even so it had qualities.
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4. Lexus & Emotional Price
LEXUS
STRENGTHS
• Has competitive quality compared to existing
luxury cars
• A division of Japanese automaker Toyota Motor
Corporation, strong in technology and experienced
• Competitive price for United States’ rational
market characteristics
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5. Lexus & Emotional Price
LEXUS
WEAKNESSES
• Inexperienced new-comer in luxury car industry
• Low brand-awareness
• Need improvement on their suspension and
handling
• Inappropriate pricing strategy over Europe
emotionally driven market
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6. Lexus & Emotional Price
LEXUS
OPPORTUNITIES
• Strong Toyota fan-base
• Opportunities to push market penetration and
market development
• Awards received
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7. Lexus & Emotional Price
LEXUS
THREATS
• Unstable economic situation
• Perception over car price in Europe market
• Increasing intensity of rivalry over luxury car
industry
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8. Lexus & Emotional Price
SWOT Analysis
can be very subjective..!!
Use it as a guide and not
as a prescription..
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9. Lexus & Emotional Price
OUR
SOLUTIONS
• Capitalize on strengths
• Overcome or minimize weaknesses
• Take advantage of some new opportunities
• Respond to the threats
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10. Lexus & Emotional Price
SWOT MATRIX
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11. Lexus & Emotional Price
Capitalize on strengths
• Continuously improving product quality over
competitors’ products
• Toyota is a well-known automaker that has strong
technology knowledge, technically experienced,
environmently safe, reliable, durable, convenient
• Propose a different ‘value’ to rational customer
and emotionally driven customer
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12. Lexus & Emotional Price
Overcome or minimize weaknesses
• Conducting marketing research that leads to fulfill
customer’s needs, moreover their wants and desires over a
luxury car
• Developing strong distribution channel
• Working on brand awareness and brand equity
• Continuously improving car comforts and its technical
quality
• Reformulate pricing strategy, emotional pricing plays a major
role in calculating the value of luxury car because the appeal
of such car is highly emotional.
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13. Lexus & Emotional Price
Take advantage of some new opportunities
• Maintain Toyota fan-base
• Push market penetration by gaining competitors'
customers
• Gaining new customers that hadn’t have luxury car
before through market development
• Capitalize awards received as a competitive
advantage empowering brand building
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14. Lexus & Emotional Price
Respond to the threats
• Continuously seeking the most efficient way in
terms of product cost
• Strengthening brand image as a luxury car
• Sustainable competitive advantage through
innovation
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15. THANK YOU
Lexus & Emotional Price