LEXUS &EMOTIONAL PRICE

1. Case study on how Lexus conquered United States rational market while
struggling in Europe emotionally driven market.
2. SOMETHING ABOUT LEXUS
The Relentless Pursuit of Perfection
Lexus is the luxury vehicle division of Japanese automaker Toyota Motor
Corporation. First introduced in 1989 in the United States, Lexus is now sold globally
and has become Japans largest-selling make of premium cars. The Lexus marque is
marketed in over 70 countries and territories worldwide, and has ranked among the
ten largest in market value. Its world headquarters are located in Toyota City, Japan,
with major operational centers in Brussels, Belgium, and Torrance, California, United
States.
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 in1989.
Since the 2000s, Lexus has increased sales outside its largest market in the United
States through an ongoing global expansion. The division inaugurated dealerships in
Japans domestic market in 2005, becoming the first Japanese premium car marque
to launch in its country of origin. Further debuts in Southeast Asia, Latin America,
and other export regions have since followed.
The divisions lineup has also been expanded to reflect regional specifications in
model and powertrain configurations.
3. 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 didnt in
Europe emotionally driven market.
Emotional factor affected its sales more than the lower price offered even so it had
qualities.
4. 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
5. 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
6. LEXUS OPPORTUNITIES
Strong Toyota fan-base
Opportunities to push market penetration and market development
Awards received
7. LEXUS THREATS
Unstable economic situation
Perception over car price in Europe market
Increasing intensity of rivalry over luxury car industry
8. SWOT Analysis can be very subjective..!!Use it as a guide and not as a
prescription..
9. OUR SOLUTIONS
Capitalize on strengths
Overcome or minimize weaknesses
Take advantage of some new opportunities
Respond to the threats
10. SWOT MATRIX
11. Capitalize on strengths
Continuously improving product quality over competitors products
Toyota is a well-known automaker that has strong technology knowledge,
technically experienced, environmentally safe, reliable, durable, convenient
Propose a different value to rational customer and emotionally driven customer
10 of 13
12. Overcome or minimize weaknesses
Conducting marketing research that leads to fulfill customers 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.

13. Take advantage of some new opportunities

Maintain Toyota fan-base
Push market penetration by gaining competitors customers
Gaining new customers that hadnt have luxury car before through market
development
Capitalize awards received as a competitive advantage empowering brand
building
14. 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
15. THANK YOU