- March 13, 2013
- Posted by: essay
- Category: Term paper writing
The development of the contemporary automotive industry faces the problem of the steady decline in the consumption and decrease of demand, which is explained by different reasons, including the financial crisis, environmental concerns of customers, high fuel prices, and others. In such a situation, many companies attempt to enhance their position in the market, including Lexus, which is the premium brand of Toyota. In actuality, Lexus holds a strong position in the market but the brand has to improve its position even more under the impact of the growing competition and changing customer behavior. In this respect, the company focuses on the maintenance of the positive public image and popularity of its brand among the target customer group. At the same time, the company has to introduce positive changes, which can enhance the position of Lexus in the market. At this point, it is possible to distinguish two major criteria, which Lexus can define as its major priorities in the development of their marketing strategies, including luxury of Lexus vehicles and focus on innovations. In fact, Lexus can enhance its position in the market offering customers luxurious cars, which offer customers innovative solutions and technologies that rivals of Lexus do not possess at the moment.
On analyzing the current position of Lexus in the market and its development, it is important to place emphasis on the fact that the company faces the strong competition from the part of its major rivals, such as Mercedes, BMW, Acura, and others. At the same time, Lexus is a renowned brand, which is popular in Japan, the US, and other countries of the world. However, Lexus does not focus on the mass audience as other products developed by Toyota. Instead, Lexus focuses on the narrow customer group, which can afford buying Lexus vehicles. Therefore, the target market of Lexus is the premium segment of the automotive market. The company focuses on customers representing the upper-class and able to afford buying and maintaining Lexus vehicles. The belongingness of Lexus to the premium segment naturally raises the price of its vehicles consistently. On the other hand, the company has to spend substantial costs on the manufacturing of Lexus vehicles as well as on the development and construction of new vehicles. At this point, it is worth mentioning the fact that Lexus has to update its vehicles and introduce certain changes and improvements on the regular basis to keep pace with its major rivals. In such a situation, the development and construction of new vehicles or modernization of existing ones increases costs of production, taking into consideration the fact that Lexus belongs to the premium segment of the market.
At this point, it is necessary to dwell upon the major attributes with the help of which Lexus can reach its target customer group and outpace its rivals persuading customers to purchase Lexus vehicles instead of vehicles manufactured under other brands. In this regard, it is possible to point out that two primary attributes of Lexus are the belongingness to the premium segment that means the top equipment of Lexus vehicles and the innovativeness of Lexus’ vehicles. In such a way, Lexus focuses on two major attributes of its products, including luxury and innovativeness. In fact, Lexus pays a lot of attention to the equipment of its vehicles and innovative technologies the company applies in its vehicles. At the same time, customers expect the high quality of products and they look for technological solutions and innovations, which could make the vehicle they purchase better than the vehicle of other brands.
In fact, the focus on the creation of luxurious cars is crucial for the marketing success of Lexus because cars of the premium segment of the market have to be luxurious. Otherwise, customers will turn their attention to other brands. As the matter of fact, today, customers are not ready to pay for the brand solely. In addition to the brand, they need some luxurious elements, which make driving the car comfortable and pleasant. Luxurious cars can attract customers of the upper-class and put Lexus into an advantageous position compared to its rivals. On the other hand, rivals of Lexus also create luxurious cars and Lexus has to take the lead in the luxury of its cars. What is meant here is the fact that the company can manufacture new vehicles, which have better comfort characteristics compared to the past models of Lexus and compared to rivals of Lexus. In addition, luxurious cars may differentiate from others by certain specifications, such as different engines or some specifications of the interior. In this regard, Lexus can use the practice of manufacturing limited editions of vehicles, which are created specifically for the limited number of customers and customers may order the purchase of such vehicles before the manufacturing of cars begins. Limited editions of Lexus vehicles will heat up the interest and attention of customers and they will be eager to buy a car from the limited edition. The consciousness of the fact that they possess the unique vehicle will be the major driving force attracting customers to Lexus vehicles. At the same time, the vehicles manufactured in limited editions will hold the top position in the premium segment of the market. Alternatively, Lexus may consider the possibility of developing a sport-car, like Ferrari or Lamborghini, but the development of a sport-car will involve the change of the market segment and the target customer group.
Along with luxury, Lexus pays a lot of attention to innovations, which may be an important factor attracting customers to Lexus vehicles. In fact, Lexus was traditionally oriented on innovations and its vehicles used the most advanced technologies developed by Toyota and Lexus. For instance, often Lexus used technologies, which were implemented and tested in F1 and other sport competitions. As a result, customers buying Lexus vehicles felt being a part of the sport world and they could enjoy high tech devices and new technologies implemented in Lexus vehicles. At this point, it is worth mentioning the fact that contemporary customers grow more and more concerned with the development of innovations, especially innovations that make cars environment friendly. In this respect, Lexus develops new projects and new vehicles, which have low greenhouse gas emissions and are fuel efficient. In fact, the development of hybrid vehicles and vehicles using alternative sources of energy are not only the matter of innovations but also the matter of creation of a new environment friendly public image of Lexus’ brand. The company has already created hybrid vehicles, which are more fuel-efficient and environment friendly than previous models of Lexus. Even though rivals of Lexus attempt to manufacture hybrid cars too, Lexus has an excellent opportunity to take the lead in manufacturing hybrid vehicles. Moreover, Lexus can enhance its position even more, when the company starts manufacturing vehicles using alternative sources of energy. In such a way, the company could refuse from using fossil fuels in its vehicles. As a result, its vehicles would be more fuel efficient, environment friendly and, what is more, meet needs of customers. In addition, such vehicles would be less expensive in maintenance that does matter in the time of economic crisis even for the premium segment of the market.
In such a context, the product strategy of Lexus focuses on the development of well-equipped, luxurious vehicles with a large number of technological innovations. The company can use this strategy effectively and successfully on the condition of the proper combination of luxury and innovations. What is meant here is the fact that the company can create a technologically advanced car, but, if this car is uncomfortable, customers will never buy it and the car will not have a marketing success. Or, on the contrary, if Lexus creates a luxurious car but this car uses technologies and devices, which are out of date, this car will also have little, if any, success among customers. Therefore, the strategy of Lexus is the balance between luxury and innovations. They should complement each other and enhance the position of Lexus in the premium segment of the market.
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that Lexus is a successful company, which though needs to develop effective marketing strategy to maintain its position in the market. In this respect, the company should respect its traditions and maintain the positive public image of its brand. At the same time, the company should develop the marketing strategy oriented on luxury and innovations. In fact, luxury and innovations should be the main driving powers attracting customers to Lexus vehicles. Obviously, customers representing the upper-class, who are the target customer group for Lexus vehicles, are interested in the high level of comfort and advanced technologies being implemented in cars they use. Therefore, Lexus should provide them with such vehicles. At the same time, Lexus should pay a lot of attention to the balance between luxury and innovations. They should not overlap or outpace each other. In contrast, luxury and innovations should be perfectly balanced in Lexus vehicles. In such a way, the company can enhance its competitive position in the market and attract customers.