1. Case study on how Lexus conquered United States rational market while
struggling in Europe emotionally driven market.
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
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 division’s lineup has also been expanded to reflect regional specifications in
model and powertrain configurations.
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 didn’t in
Europe emotionally driven market.
Emotional factor affected its sales more than the lower price offered even so it had
• 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
• Inexperienced new-comer in luxury car industry

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 ..• 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.!!Use it as a guide and not as a prescription. OUR SOLUTIONS • Capitalize on strengths • Overcome or minimize weaknesses • Take advantage of some new opportunities • Respond to the threats 10. LEXUS THREATS • Unstable economic situation • Perception over car price in Europe market • Increasing intensity of rivalry over luxury car industry 8. durable. 9. Overcome or minimize weaknesses • Conducting marketing research that leads to fulfill customer’s needs. technically experienced. Capitalize on strengths • Continuously improving product quality over competitors’ products • Toyota is a well-known automaker that has strong technology knowledge. SWOT Analysis can be very subjective.. convenient • Propose a different ‘value’ to rational customer and emotionally driven customer 10 of 13 12. reliable. environmentally safe. SWOT MATRIX 11.

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. 13.• Reformulate pricing strategy. THANK YOU . 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 14. emotional pricing plays a major role in calculating the value of luxury car because the appeal of such car is highly emotional.