Lexus Is A Segment Of Toyota Marketing Essay

A merchandise is anything that can be offered to a market to fulfill a privation or necessitate. Merchandises include physical goods, services, experiences, events, individuals, topographic points, belongingss, organisations, information, and thoughts. The client will judge the offering by three basic elements: merchandise characteristics and quality, services mix and quality, and monetary value rightness ( Philip Kolter, 2000 )

In a meeting with top direction, strategians, and applied scientists in August 1983, Toyota Motor Corporation Chairman, Eiji Toyoda posed a inquiry to the group, “ Can we make a luxury auto to dispute the really best? ” Their response was Lexus.

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Lexus is a section of Toyota where their war cry is luxury ; it specializes in the production of extremely sophisticated luxury and executive autos. Toyota started a top-secret undertaking, with code-named F1 merely intending “ Flagship ” + “ No. 1 vehicle ” . The undertaking was aimed to spread out the Toyota merchandise line The first merchandise of the F1 undertaking was the LS400, giving Toyota a bridgehead in the luxury section and offering both new and longtime client an up market merchandise, the debut of the merchandise had been successful and many more merchandises had been introduced after the launch of the first flagship LS400.

Merchandise naming: Lexus uses alone term in specifying it merchandises, usually categorized by Alphabet and figure terminology, theoretical accounts of merchandise are named alphanumerically by utilizing two-letter appellations, the first missive stands for the position in the Lexus theoretical account ranking and the 2nd missive tells the auto organic structure manner or type, after the two letters is a three figures figure separated by a infinite which indicate engine supplanting in litres multiplied by a factor of one 100 ( 350 for a 3.5 L engine ) and on intercrossed, the three figures means combined gas end product. Depending on the theoretical account same missive could intend something else ( ‘S ‘ for athletics or saloon and ‘X ‘ for SUV ) . For some theoretical accounts, a lower instance missive is placed after the figures denoting power works type ( ‘h ‘ for intercrossed, ‘d ‘ for Diesel ) , The category subtype is denoted by capital missive ( s ) placed at the terminal ( `C ‘ for coupe, ‘L ‘ for long-wheelbase, and ‘AWD ‘ for all-wheel thrust ) . The two-letter appellation followed by missive ‘F ‘ are used without Numberss or dashs on F trade name theoretical accounts, ( e.g. IS F ) , the diagram below illustrates how Lexus merchandise are being named.

Diagram exemplifying how Lexus merchandises are named

Merchandise Line-up

The Lexus line-up comprises of Sedans, Luxury Utility ( SUVs ) , Convertibles, Hybrid and F Performance, the LS, SC, RX, IS, and GS which would be discussed subsequently were antecedently sold in Japan under Toyota ‘s Celsior, Soarer, Harrier, Altezza, and Aristo nameplates before the debut of Lexus into the Japan luxury market.


A saloon or barroom auto is a rider auto with two rows of seats and equal rider infinite in the rear compartment for grownup riders. The vehicle normally has a separate rear bole for baggage, The Lexus saloons comprises of the LS, ES, GS, and IS.

Lexus LS is a life-size luxury saloon, the original Lexus LS 400 is the first Lexus to be developed which has a strong gross revenues and has won major awards since its debut in 1989. And now has four coevals since its launch in 1989.

Lexus ES is a mid-size luxury saloon sold since 1989, it looks batch like the Toyota Camry theoretical account, and five coevalss of this theoretical account has been produced till day of the month with an accent on its interior comfortss, soundlessness, and a smooth drive.

Lexus GS was introduced in 1993 in the United States, Europe and some countries in Asia as series of mid-size luxury athleticss saloons / executive autos designed to make full the spread between the ES and LS, J.D. Power and Associates awarded the GS series the best midsize luxury auto for 2002, 2003, 2004, and 2005

Lexus IS is an entry-level luxury auto / compact executive introduced in 1999, the IS stands for Intelligent Sport, it is one of the Best-selling Luxury Cars in USA ( Dan Lienert, 2006 )

Sport utility

A athletics public-service corporation vehicle ( SUV ) is a generic selling term for a vehicle similar to a station waggon, normally equipped with four-wheel thrust for on- or off-road ability, LX, RX, GX are Lexus theoretical account we can happen in this class, .

Lexus LX the largest and most expensive luxury public-service corporation vehicle by Lexus, is a life-size athletics public-service corporation vehicle sold since 1996 by Lexus, the first coevals LX 450 was the first to come in the SUV market all based to a great extent on Toyota ‘s Land Cruiser series of SUVs, the latest two coevals of Lexus LX has the capacity of eight riders besides, the largest and most expensive luxury public-service corporation vehicle.

Lexus RX is a luxury crossing over SUV introduced since 1998 to unite the functional features of an SUV and characteristics of a luxury saloon, Lexus RX is in its 3rd coevals, it has been the best-selling crossing over luxury SUV on the US market since its debut and has ranked as the best-selling luxury vehicle in the United States.

Lexus GX is a mid-size luxury-type athletics public-service corporation vehicle sold by Lexus since 2002 Targeted ab initio for the North American market, The GX exterior expressions like that of Toyota Land Cruiser Prado, it is situated between the entry-level crossing over RX and the life-size LX characterized as focused on intermixing both on-road and off-road capablenesss in a individual vehicle


A exchangeable is a type of car in which the roof can abjure and turn up off, change overing it from an enclosed to an alfresco vehicle. Lexus have many manners that are manufactured and marketed in exchangeable signifier

Lexus IS C is another organic structure styling of the habitue IS in exchangeable signifier introduced to the market On 2 October 2008, the latest IS exchangeable features a three-piece aluminium hardtop that can abjure in 21 seconds.

Lexus SC series is a personal luxury coupe sold since 1991, for Lexus the C signifies ether coupe or exchangeable, the Lexus SC has a front engine, rear-wheel thrust design and seating for up to four riders which normally comes in either convertibles or sedan coupe ( Two doors auto ) .


A intercrossed vehicle is a vehicle that uses two or more distinguishable power beginnings to power the motion of a vehicle, It is most normally referred to as intercrossed electric vehicles ( HEVs ) , which combine an internal burning engine and one or more electric motors, Lexus HS, RX Hybrid, GS Hybrid, and LS Hybrid falls into this class.

Lexus HS ( Harmonious Sedan ) is the first dedicated intercrossed vehicle introduced as a new entry-level luxury saloon in 2009, and unlike other Lexus vehicles it is a front-wheel thrust auto in the Lexus batting order, Harmonizing to division functionaries, the HS was produced in response to consumer involvement in dedicated intercrossed theoretical accounts.

Lexus RX loanblend is a full loanblend crossing over SUV sold since 2005 which combines a V6 gasolene engine with electrical motors, This characteristic gave it a high acknowledgments as an environmentally friendly transit, the original RX 400h became the first luxury loanblend and was named SUV of Texas at the 2005 Texas Truck Rodeo awards

Lexus GS Hybrid is the 3rd coevals of the regular GS which premiered globally for the 2006 theoretical account twelvemonth comes in both V6, V8, and intercrossed versions, The Lexus GS 450h was named the victor of the 2007 IF merchandise design award from the International Forum Design group in Hannover, Germany.

Lexus LS Hybrid is a gasoline-electric intercrossed version of the Lexus LS sold in major planetary markets like North America, Asia, and Europe. At its debut, the LS 600h L turned the most expensive luxury vehicle produced in Japan, with a monetary value of about $ 125,000.

F Performance are particular merchandises from Lexus combined with advanced racecourse engineering, they are most clip referred to as athletics autos, the Lexus LFA and IS F belongs to this class of autos.

Lexus ES Lexus GS / GS Hybrid Lexus GX Lexus IS Lexus IS F

Lexus SC Lexus LX RX / RX Hybrid Lexus LS / LS Hybrid

Other Merchandises

Lexus have other merchandises like “ Construct your Lexus ” and “ Future/Concept autos ” . As for the Build your Lexus, clients can stipulate on particular characteristics or properties wanted in their auto after taking a peculiar theoretical account, characteristics like Navigation System, Smog-sensing automatic recirculation manner for climate-control system and many more characteristics.

The Future/Concept autos are concept vehicle or show vehicle made to showcase a construct, new styling, engineering and more. They are most clip shown at motor shows to cognize client reaction to new design which may or may non be produced, an illustration is the 2011 Lexus CT 200h seen at the 2009 Frankfurt Motor Show which will come in production at the terminal of 2010, LF-A Roadster, LF-X, LF-S, LF-C.

Merchandise placement

Harmonizing to Philip Kolter “ Positioning refers to the act of planing the company ‘s offering and image to busy a typical topographic point in the mark market ‘s head. ” There are tonss of ways to distinguish a merchandise. Lexus merchandises can be positioned by Attributes/benefits, by price/quality, by use or application, by users, and besides by merchandise category.

Positioning by attributes/benefit: Lexus has properties such as design, Styling, public presentation and safety characteristics that clients perceive as showing excellence in quality and are viewed as being superior compared to the German rivals BMW and Mercedes Benz as the merchandise must look “ Luxury ” , these properties make Lexus merchandise attractive to the clients, Consumer evaluations house J.D. Power and Associates has named Lexus the most dependable trade name in the U.S. 14 times.

Positioning by Price/Quality: Luxury autos which is the focal point of Lexus are normally expensive Lexus matched Mercedes, BMW and other luxury trade name on the public presentation standards but was priced much more moderately lower, supplying consumers the value they desired, and doing them experience that they were smart purchasers.

Positioning by use or application: Lexus with broad scope of theoretical accounts and different functionality, LX SUV which is designed for on and off-road map is an illustration, the luxury saloons that feature a four seating are normally a household or executive compact autos, Lexus do n’t hold theoretical accounts of pickup, Lorries or trucks.

Positioning by users: In the Luxury auto market Lexus is attracted to high category societal group, Lexus was faced with the challenge of taking at younger consumers ab initio which is as a consequence of monetary value and size but immature people are now acquiring attracted to Lexus because they now have some entry-level, mid-size and personal luxury autos which are non excessively large. The life-size luxury are normally excessively large for people in Europe, they prefer smaller autos with lower fuel ingestion because of their little route and high fuel monetary value. Lexus is chiefly because is specially designed and created for the U.S. market.

Positioning by merchandise category: Lexus trade name is the taking super-premium auto in America, Lexus known for solid luxury has for eight back-to-back old ages been the highest superior trade name by J.D. Power and Associates, The function below illustrates assorted Luxury positioning harmonizing to size, form, fuel ingestion degree and affordability.

Luxury car positioning map

Beginning: International Selling: Cleavage Targeting and placement by e??a‡? e??a?-e›?


A premium trade name is a quality trade name with a specific trade name equity that is planned to demand a premium monetary value for the quality, Lexus has chosen this distinction scheme because it is a trade name that presents uniqueness between rivals and clients pick of the merchandise among the rival because of its broad scope of uncomparable features.

The name ”Lexus ” has been attributed to the combination of the words “ luxury ” and “ elegance ” and another theory claims it is an acronym for “ luxury exports to the U.S. ” , harmonizing to Toyota the name has no specific significance and merely denotes a epicurean and technological image. The original Lexus logo featured a stylized “ L ” within an ellipse ; and they besides have a slogan “ The Relentless Pursuit of Perfection. ” Which was developed after the image consulting ( Toyota publicizing company ) house representatives visited Lexus interior decorators in Japan and noted their obsessional attending to item ; it was changed in 2000 to “ The Passionate Pursuit of Perfection. Today ‘s Lexus has built their vehicles based on the chase of flawlessness cultivated in the production of the first Lexus model-the LS 400. This slogan since the production of the first Lexus has helped them to overcome legion challenges. And, all Lexus theoretical accounts since so have been built with precisely the same tireless, uncompromising attempt and committedness.

Lexus singularity is focused on two facets: its inside, its client service and environment.

Inside: Lexus inside shows its polish and is frequently described as cushier and warmer than German autos, but firmer and more purposeful than a Cadillac. Since the first LS400, a policy adapted for finding the size, form, and place, of controls and shows by how frequently they were used. The driver can take between many, driving place place accommodations ( Pacic Miro, 2004 )

Customer service: The Lexus trader web, which started since 1990, was established strictly for the Lexus division of Toyota cooperation. Traders with their consistent, caring attitude common to all the franchises, has been as of import to Lexus ‘ success as its merchandises, The focal point on client service is really of import to Lexus because it is in a extremely competitory market where production invention can merely be of advantage for a short period of clip. While Lexus add new characteristics to their merchandises, it does non take long before rivals add the same to their ain merchandises excessively. Therefore, nowadays the most sustainable competitory advantage is continuously giving exceeding client service to derive client trueness ( Pacic Miro, 2004 )

Lexus Environmental policy: Lexus ‘ responsible attack to the environment is embodied in one purpose: zero-emissions Lexus. From design and industry to its end-of-life-vehicles policy, Lexus ‘ doctrine – the Pursuit of Perfection – holds true ( Lexus Europe functionary web site )

The Passionate Pursuit of Perfection

Lexus doctrine:

Peoples want to purchase trade names name and non merely vehicles, in the instance of Lexus qualitative analysis frequently play greater function than technology because competition is carefully considered, Lexus shared a methodological analysis for communicating about its trade name with employees and it besides shared the doctrine: Brand are about more than merely merchandise, the logo and advertisement. Lexus have a design doctrine of “ L-finesse ” which denotes ‘Leading border with delicacy ‘ and refers to: Challenging Elegance, Incisive Simplicity, and Seamless Anticipation. All Lexus vehicles portion a five development constructs that form the “ I.D.E.A.L. ” values: Impressive, Dynamic, Elegant, Advanced, and Lasting. In conceptual footings, each L-finesse design is intended to unite elegance with simpleness, while expecting the demands of the driver and riders.

The ‘Innovation ‘ focal point at Lexus is the realisation of bring forthing a luxury auto because it is the nucleus rule of the trade name. Toyota reported that “ ‘The kernel of luxury ‘ agencies bring forthing the highest-quality merchandises and supplying an alone buying and after-sales service experience for clients, every bit good as a feeling of superior exhilaration and comfort when cruising in a Lexus vehicle, Lexus adopted more than 500 alone merchandise quality criterions, known as “ Lexus Musts ” , sing all development facets, from quantitative public presentation to the existent experience of quality, “ Lexus Musts ” are fulfilled through the realisation of a construct that was foremost set Forth by Ichiro Suzuki, main applied scientist of the first Lexus which are the ”YET ” statements

aˆ? Great high-speed handling/stability yet pleasant drive

aˆ? Fast and smooth drive yet low fuel ingestion

aˆ? Super lull yet light weight

aˆ? Great high-speed stableness yet low clash ( C sub vitamin D )

aˆ? Elegant styling yet great aeromechanicss

aˆ? Warm yet functional inside

The above statements were formed after a market research was done by comparing some luxury trade name before come ining the luxury market.


Before the monetary value of a merchandise can be set, A company must make up one’s mind on the footing on which it will vie, Of class, one of the aim of pricing is to do net income but this may non be the primary aim, Once a house has developed its pricing aims, It must choose pricing methods to respond to make that end. There are three major different factors to be considered when puting monetary value which are cost of production, demand for the merchandise, Competition and Governmental charges ( VAT ) .

Lexus pricing scheme: Lexus pricing scheme is chiefly driven by client demand, location and competition ; though its focal point was on USA market ab initio but Lexus had took the measure to touch other parts of the universe, it uses Flexible cost plus pricing, Penetration/Skimming pricing, Premium pricing and value pricing methods.

Flexible Cost Plus pricing: Lexus as an international trade name applies different monetary values to same merchandises in different states or location, which is as a consequence of factors like cost of transit, currency exchange rate, and governmental policy and charges. “ MSRP does non include bringing, processing and managing fee of $ 875. Excludes revenue enhancements, rubric, licence and optional equipment. Dealer monetary value may change ” ( Lexus USA Official web site ) , This statement is normally found on all Lexus web sites and it denotes that Lexus gives a Manufacturer Suggested Retail Price ( MSRP ) to traders at which clients are expected to buy its merchandises which excludes all charges and cost of transit.

In Canada monetary values of some Lexus and Toyota trade name were reduced in 2007 When the Canadian dollar surged in value in the autumn of 2007, “ We have ever monitored the Canadian market and taken action consequently, ” said Stephen Beatty, Managing Director of Toyota Canada Inc, This shows that Lexus pricing can differ in states sing the exchange rate, tabular array below shows different monetary value in different states, the trade name is most expensive in Japan, it ‘s state of beginning and cheaper in USA

Penetration/skimming pricing: “ We introduced the U.S. auto at $ 35,000 in 1989, and now it sells at $ 51,500 ” , a Toyota functionary said, “ Our occupation was to do it worth the extra $ 16,500. “ Industry perceivers have attributed Lexus ‘ early selling successes to higher degrees of perceived quality and lower monetary values than rivals, It ‘s possibility to bring forth high quality autos at lower cost enables Lexus penetrate the market by doing their trade names low-cost to the client, This method is used when they are aiming a market that has something similar to what they offer, Lexus had an issue with BMW because of this pricing method, BMW president Eberhard von Kuenheim accused Toyota of “ dumping ” Lexus in the U.S. market at below-market monetary values ( Time News Sep. 17, 1990 ) , Lexus came up in September 1989 with the flagship LS400 priced in the scope of $ 35,000-40,000, the monetary value of $ 35,000 was about $ 10,000 less than the competitory German brands Mercedes 300E and BMW 535i, one time clients were entrenched with the low monetary value they convey to their merchandises with “ intangible values ” ( The pride of holding a high category auto ) . By 1994 the LS400 theoretical account carried the approximative monetary value of $ 55,000. However, the gained popularity and image, that is the intangible values, helped Lexus to forestall a bead in gross revenues. On the other manus Lexus uses the planing pricing method when they have a alone merchandise ; an illustration is the LS600h saloon “ it ‘s the most powerful and expensive hybrid-engine auto about and its set to alter the universe. ” ( autoexpress UK, 2007 ) , with the monetary value ticket of $ 108,800.

Value/Premium pricing: Customers are non monetary value sensitive ; they are value witting, Lexus bid premium monetary value because client perceive that the luxury and prestigiousness of owing these vehicles are something deserving paying for, Lexus do non ever aim consumers, in general, instead, they focus on specific societal groups that will be interested in the trade name, and would be willing and able to pay the monetary value ticket. In 1989, a athleticss saloon ES250 was introduced with the monetary value ticket of $ 21,050 to vie with Acura Legend but the clients did non comprehend the theoretical account as it was thought they would, because the monetary value ticket did non look “ luxury ” at all, The mark societal category believe that high monetary value is an indicant of good quality, they believe it to be a mark of ego worth and They require unflawed public presentation from the merchandise, and on the other manus many purchasers were choosing for pricier, to the full laden versions of the LS400 with a basal monetary value of $ 35,000, where the traders had waiting lists for autos with leather upholstery and Cadmium modifiers which cost $ 5000 more than the basal monetary value ( Business Week 1990 ) , clients believe that the high monetary value is an indicant of good value, By using theoretical account fluctuation and monetary value haggle trades Lexus overshoot their gross revenues figure 63,534 versus the 60,000 which was expected in 1990.


Lexus vehicles are officially marketed in 68 states and districts worldwide with 1000s of traders, most assembly procedure takes topographic point at Toyota workss in Japan and it besides has a production works in Canada which is the first Lexus production site located outside of Japan where a peculiar theoretical account, Lexus RX is produced, though they have production workss in Other states but they are chiefly for production of parts which are later sent to the major assembly workss where the chief vehicle production takes topographic point, Lexus production takes topographic point in Toyota fabrication company but on different workss, The transit of Lexus portion is transported through Toyota Logistics Services, Inc. or Independent logistics houses which are different in each state or continent, The tabular array below shows the different Lexus merchandise and where they are produced.

Mediators: Franchise

Lexus could hold sold autos thorough the bing Toyota traders but decided to put 1000000s in constructing a new web of traders carefully groomed and trained to run into the demand of the targeted clients, Toyota ‘s market research concluded that a separate trade name and gross revenues channel were needed to show its new trade name so as to keep a good client service and relationship and get after sale study. Lexus merchandises are transported to the traders worldwide through either Toyota logistics houses or independent logistics after production ; clients are expected to purchase their merchandises from the traders at a maker suggested retail monetary value ( MSRP ) plus extra cost and charges

Lexus in North America: Lexus began gross revenues in USA in 1989 with the launch of the flagship LS and since so had gain a high market portion of the United States luxury car market with Headquartered in Torrance, California. Area gross revenues offices in California, Georgia, Illinois, and New Jersey that direct gross revenues and operations for 226 Lexus traders located throughout the U.S. Lexus Office in Toronto, Ontario. Began operation in 1990 and it is responsible for selling, parts, and service operations for 30 traders in seven states of Canada

Lexus in Asia and Oceania: Lexus was launched in Japan and China in 2005, Malaysia in 2006, Indonesia in 2007, Chile in 2008, and the Philippines in 2009, Lexus was ranked as the top-selling import in 2005 in South Korea and in Taiwan, it besides became the top-selling luxury import in 2005, Lexus besides began limited exports to Australia in 1990 where it reached 3rd in luxury auto gross revenues in the 2000s.

Lexus in Japan: Lexus ‘ arrived in the Nipponese market in July 2005 with IS, GS, and SC. Gross saless were ab initio slower than expected but increased the undermentioned twelvemonth. In peculiar, the debut of the LS 460 in September 2006 exceeded outlooks ; Lexus Japan ‘s web of 143 new franchises became profitable in 2007.

Lexus in Latin America and Caribbean: Lexus officially launched gross revenues in Brazil in January 1998, doing its introduction in South America ‘s most thickly settled state. The trade name has besides been marketed in Costa Rica via regional distributer Purdy Motors S.A. During the Santiago Auto Salon in 2006, pavilion was besides officially launched in Chile in April 2008 with the gap of its first showroom in Las Condes and Santiago.

Lexus in Europe: After the launch of the Lexus flagship theoretical account in 1989, Lexus increased its gross revenues outside the United States by exporting its merchandise to some parts of Europe and UK, Toyota Motor Europe in Brussels, Belgium handles the sweeping selling of Toyota and Lexus vehicles and parts accoutrements. In 2005, Lexus announced programs to spread out the figure of dedicated franchises in Europe.



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