Lexus Case - Emotional Price

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Lexus Case - Emotional Price

  1. 1. LEXUS &EMOTIONAL PRICECase study on how Lexus conquered United States rational marketwhile struggling in Europe emotionally driven market.
  2. 2. Lexus & Emotional Price SOMETHING ABOUT LEXUS The Relentless Pursuit of PerfectionLexus is the luxury vehicle division of Japanese Since the 2000s, Lexus has increased sales outside itsautomaker Toyota Motor Corporation. First largest market in the United States through anintroduced in 1989 in the United States, Lexus is now ongoing global expansion. The division inauguratedsold globally and has become Japans largest-selling dealerships in Japans domestic market in 2005,make of premium cars. The Lexus marque is becoming the first Japanese premium car marque tomarketed in over 70 countries and territories launch in its country of origin. Further debuts inworldwide, and has ranked among the ten largest Southeast Asia, Latin America, and other exportJapanese global brands in market value. Its world regions have since followed.headquarters are located in Toyota City, Japan, with The divisions lineup has also been expanded tomajor operational centers in Brussels, Belgium, and reflect regional specifications in model andTorrance, California, United States. powertrain configurations.Lexus originated from a clandestine flagship sedanproject, code-named F1, which began in 1983 andculminated in the launch of the original Lexus LS in1989. 1 of 13
  3. 3. Lexus & Emotional Price WHAT HAPPENED WITH LEXUS..?Lexus strategy in the first place was offering luxury carsin a lower price than the other luxury cars even it hadcompetitive qualities to compete with them.This strategy worked well in United States rationalmarket, but once it didn’t in Europe emotionally drivenmarket.Emotional factor affected its sales more than the lowerprice offered even so it had qualities. 2 of 13
  4. 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 3 of 13
  5. 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 4 of 13
  6. 6. Lexus & Emotional Price LEXUS OPPORTUNITIES• Strong Toyota fan-base• Opportunities to push market penetration and market development• Awards received 5 of 13
  7. 7. Lexus & Emotional Price LEXUS THREATS• Unstable economic situation• Perception over car price in Europe market• Increasing intensity of rivalry over luxury car industry 6 of 13
  8. 8. Lexus & Emotional Price SWOT Analysiscan be very subjective..!!Use it as a guide and not as a prescription.. 7 of 13
  9. 9. Lexus & Emotional Price OUR SOLUTIONS• Capitalize on strengths• Overcome or minimize weaknesses• Take advantage of some new opportunities• Respond to the threats 8 of 13
  10. 10. Lexus & Emotional PriceSWOT MATRIX 9 of 13
  11. 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 10 of 13
  12. 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. 11 of 13
  13. 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 12 of 13
  14. 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 13 of 13
  15. 15. THANK YOULexus & Emotional Price

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