Brand Strategy of Lexus

Question 1: Outline and discuss the product map of one luxury car brand mentioned in the marketing highlight. Which brand strategy has your selected company adopted to compete effectively on the market? Lexus is Toyota’s new brand, which aims to target the luxury market of car makes to compete with BMW and Mercedes Benz. Lexus build their cars with emphasis on quality. Consumers purchase Lexus for genuine quality, ride comfort, reliability and fuel economy. Lexus very technologically advanced being engineering in Japan, also giving it reputation.

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Lexus provides customers with excellent luxury grade interior such as leather seats as standard and manufactures warrantee. Lexus has made a name for itself setting it apart from Toyota. The design are now much different from Toyota to give Lexus a class of its own, it does not resemble Toyota at all from the styling. However the engine is still developed and built by Toyota’s elite. The manufacturing quality of Lexus deserves great credibility for using precise assembly techniques, using a backronym for their development process IDEAL “impressive, Dynamic, Elegant, Advanced and Lasting”.

Each Lexus vehicle has 500 specific product standards such as leather stitching, premium audio systems by a joint venture with Nakamichi audio instruments and precise manufacturing techniques. This ultimately demonstrates to consumers the sheer quality and effort that every Lexus car is produced with, with quality build control, Lexus’ are reliable Lexus has a variety of line extensions for their cars to specifically cater for anyone who is in the market for a ‘luxury’ car.

For example the IS range is the entry level Lexus and offers high tech gadgetry such as satellite navigation, keyless entry, electric heated and ventilated seat. The IS range focuses on value for money with a sporty feel and design. While the LS range is the flag ship model of Lexus. The main priority was luxury and quality. The LS series used all of Lexus’ advanced technology and building techniques, such as laser welding which provided precise seamless steel welds; the measurement margins were as accurate as 0. 01 mm. As quality was Lexus’ strong points their manufactured cars were reliable and won various awards for the most reliable car and best value for money during the 20th century. When a customer purchases a new Lexus they become a member of the Lexus Encore privileges programme, which offers exclusive benefits such as free servicing to every Lexus even pre-owned ones within the factory warranty period, 100 000 kilometres or within 4 years whichever comes first.

Lexus also offers DriveCare which is similar to NRMA offering 24 hours on the road assistance and maintenance for customers, with over 800 response centres around Australia customers can feel reassured how reliable Lexus’ services are. In addition being an Encore Privileges member customers receive exclusive access to premium ticketing to big name concerts, sporting events and special one-off events before official release to the public while offering exclusive parking spaces for Lexus vehicles only, giving customers a satisfying experience. Customers feel there is more value for money because of all these augmented products offered to them.

As a result Lexus has one of the highest customer loyalty rates in the industry shocking pedigree luxury brands such as BMW and Mercedes whose sales drop 29% and 19% respectively since its debut. Question 2: do the product mix decisions of top marques, such as those mentioned in the highlight, seem to differ? If so how? Depending on the actual brand marques will try to secure their own niche in the automotive industry and compete with any other marques that challenge their niche, such as BMW 7 series, Mercedes’s S class and Lexus LS 400 series. Marque does this to remain completive in the market.

Lexus develops breadth in their product mix to accommodate different car design preference mainly the mostly used, sedans, coupes, SUVs, hatchbacks and convertibles. These are distinguished by their prefix before the model number. Lexus CT referring to the hatch, IS LS and GS are all sedans denoted by the “S” at the end, the letter in front signifying their class, style and price range. The RX and LX are SUVs. However BMW organises their cars differently, the 3 series is comparable to the IS and 7 series comparable to the LS. The X5 would be the competitor for the RX300.

Lexus carries a variety of cars within the same class have notable differences such as larger engine capacity and drivetrain. Lexus IS250 for example has a 2. 5L V6 while the IS350 has 3. 5L V6 equating to more power. Consumers have a choice for a more powerful version within a similar price range. Furthermore Lexus adds depth to their product mix by their hybrid variants of their original line up, these cars are denoted by the suffix of “h” after the model number. For example the GS450h is a medium luxury Lexus with hybrid technology for fuel economy.

Furthermore some will have renditions such as “sport” with added performance parts from Lexus and luxury edition which is a grander version of the current car such as the IS250 Luxury which will have more products and features as ‘standard’ compared to a stock IS250. BWM will have a add length and depth too with the addition of the M series. A BMW M3 for example will have the characteristics of a BMW 3series but with much more tuned and luxury compared to the 3series counterparts. This is true for their M5 series too.


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