Lexus Brand Management Strategy


Brand management is an important component of marketing. It determines the success of a product in the market while at the same time influencing organizational performance. The witnessed growth in both the global trade and companies in the international markets has necessitated investment in brand management (Keller 2012). The motor vehicle industry, especially the luxury car segment, is one of the industries that have widely applied the concept of strategic brand management (Keller 2012). Therefore, the brand that is selected for this essay is Lexus, which is a subsidiary of the Toyota Company that makes luxury vehicles. The essay seeks to answer some of the course questions on brand management strategy.

Brand Changes Notices

Role of Brand Management

Over the past several years, brand management for Lexus has gone through a series of changes. The presence of competition from other luxury carmakers has forced Lexus to adopt a customer-oriented marketing strategy. According to Keller (2012), this form of strategy allows brands to market themselves as the best choice for the respective customer category. Brand management for Lexus serves the purpose of increasing the perceived value of this brand in the eyes of customers. The recent changes have managed to increase the performance of Lexus on the international front, with the market expanding over the same period (Keller 2012). According to Keller (2012), a well-organized brand management process can increase the market participation of the brand, the experienced profits, and sales. The supply chain management for Lexus has improved over the years, with the quality control changes being instituted. Some of the other changes that have been instituted include the introduction of a variety of after-sale-services that contribute to the brand name being superior to some of the other brands (Keller 2012).

Delivery of Brand Strategy

The delivery of brand strategy changes in Lexus that have been observed over the past few years include an increase in brand value and positioning. Lexus, a subsidiary of Toyota Company, has adopted brand management that has propelled it among the best luxury car brands in the local Japanese market and on the international market. The process of strategic brand management adopted by the company consists of the adoption of a specific theme for each of the models that the automaker produces (Mandel, Petrova & Cialdini 2006). The strategic brand management process influences the outcome of brand management and the eventual profits and sales (Keller 2012).

Planning and implementing a brand strategy should be professionally done to ensure that the company is successful in creating a strong brand (Keller 2012). This strategy has been successfully utilized in Lexus where a strong department has been created to market the brand name (Mandel, Petrova & Cialdini 2006). The brand performance has been improving over the years, with the company challenging some of the renowned car manufacturers in the world. The type of brand strategy adopted by Lexus is corporate branding, which is the general brand strategy for Toyota Motors.

Positioning Statement

Target Customers

Lexus targets the high-end market since it manufactures luxury vehicles. The target customers are in different parts of the world. They include those that can afford higher priced models. The vehicles that Lexus manufacturers are marketed for a special class of people who are out to look for luxury in addition to good performance in a vehicle. Lexus makes different models of vehicles, with each having special features that incorporate the latest and best in terms of technology and performance (Mandel, Petrova & Cialdini 2006). The brand’s target customers include tech-savvy young individuals. It also targets professionals that are concerned with the type of car and model that they drive.

Key Benefits

The key benefits of the Lexus brand management strategy include the provision of class and performance. The car manufacturer emphasizes that the brand is one that targets class and status (Mandel, Petrova & Cialdini 2006). Some of the other benefits that the brand is associated with include better fuel efficiency compared to other models in the same category, better durability, and appearance. The car manufacturer markets itself as the best-looking model in any category (Mandel, Petrova & Cialdini 2006). One of the other benefits that the brand strategy is known to the market itself using is a proven performance since it has been in the market for a longer period than some of its competitors (Mandel, Petrova & Cialdini 2006).

Competitors’ Offering

The vehicle manufacturers in the luxury segment include Mercedes Benz, Range Rover, Jaguar, and Ford. These car manufacturers are in stiff competition with Lexus, with each offering different services and benefits for his or her customers. These competitors market their brand based on the differences in fuel efficiency, engine power, performance, and pricing. Most of the luxury cars are highly-priced. They attract high-end customers (Yu, Lei-Yu, Yu-Ching & Tai 2005). Price is not a major factor in this market, as customers also prefer highly-priced models. The competitors also market themselves by using the brand images that they have created over the years. Some of the models have been in existence for many decades. They are associated with a class. These constitute some of the issues that Lexus must overcome in the competition with these other car manufacturers in the industry.

Proposed Positioning Statement

Lexus is one of the luxury carmakers that provide high-end customers with value for their money on performance luxury vehicles. Unlike other luxury carmakers, Lexus has been tried over time and found to provide special classes of vehicles.

Brand Effectiveness

Brand Element

Lexus is effective as a brand in many areas. The brand name is widely recognized in many parts of the world. Many high-end customers are glad to be associated with the brand name. According to Knittel (2011), the success of a brand name is a key aspect of brand management. The company can use its brand name to control the market (Yu, Lei-Yu, Yu-Ching & Tai 2005). In a market dominated by many luxury carmakers, the brand name is an important part of winning the competition (Mihaela, Eugenia, & Georgiana 2012). Lexus is a brand name that has been successful in the local and international markets.

The company also has a special logo and symbol that it uses in its rand management strategy. According to James (2012), this logo should be easily recognizable. Lexus uses the letter ‘L’ to indicate the brand, which is recognizable in many parts of the world. The target customers are also able to associate with the brand image and logo. Just like most of the luxury carmakers and other companies in different industries and markets, Lexus has also incorporated the use of slogans in its brand management and marketing strategies. The slogans that have been used in the various models under Lexus have proved to be popular in the market. However, they are not popular as some of the slogans used by competitors such as Mercedes Benz and Jaguar (Krzykowski 2011).

Some of the six characteristics of the criteria used to assess the performance of a brand in terms of the logo and the slogans include memorability, their meaningfulness, transferability, adaptability, and protectability (Yu, Lei-Yu, Yu-Ching & Tai 2005). Lexus’s brand management strategies can be described as having the above characteristics. The logo and slogans are memorable and meaningful. They are also easy to master and adopt in the daily lives of the target customers as suggested above.

Brand Dimensions

According to M’zungu, Merrilees, and Miller (2010), brand dimensions are an important part of the brand management strategy that is adopted by an organization. These dimensions should be consistent while at the same time complementing each other. In terms of function, Lexus has outlined the different capabilities of the models that it markets (Krzykowski 2011). An effective brand management strategy should state the different functions that are to be served by the products being marketed. The differentiation strategy for the brand should also set it above the other market players while at the same time contributing to its uniqueness. Lexus stands for quality and class. It has demonstrated this achievement in the range of vehicles that it has produced over the years. A description of how people feel about the company includes the fact that most of the people love the brand. The company is dedicated to improving the personality that it has established and kept over the years.

Brand Marketing Programme

The brand-marketing program that is adopted for any brand should consist of consideration in the areas of products, pricing, place, and promotion among others (Hanna & Rowley 2011). For Lexus, the products that it should offer to the market include a continuation of the luxury vehicles that it has been producing over the years. Lexus should consider creating higher-end models in the luxury vehicle category to ensure that it attracts the very high-end consumers that can afford the brand (Fagiano 1994).

In terms of pricing, Lexus has been known for the production of adequately priced vehicles (Hankinson 2012). However, the price should be adjusted to ensure that ordinary customers can afford vehicles. The carmaker should consider introducing models that are designed for ordinary customers who cannot afford the high priced high-end models (Dukes 2004). Favorable pricing is an effective way of increasing brand performance by escalating sales (Dukes 2004).

In terms of place, Lexus has been able to establish itself as a global brand that reaches many customers in different markets. This strategy is an effective one. The company should continue with it to ensure the success of its brand strategy. The growth in global trade has provided an opportunity for companies such as Lexus to increase their market base and general brand performance (Clarke 2002). Promotion is an important part of any strategy in an organization, especially in the marketing of the brand. Lexus has carried out many promotional activities in the past, with this effort targeting to increase the number of customers. Promotion for the products should continue for this brand.

Some of the measures that can be adopted to increase brand strength in the promotion include advertising, promotions, event marketing, public relations, direct marketing, and the use of electronic media (Van Ittersum & Wong 2010). Lexus should also continue to use the internet as a tool in the promotion and marketing strategy. The company should open its stores and outlets where the vehicles are sold directly to customers (Sang-Jin 2013). This plan will increase brand preference among traditional and new customers.

Brand Value Chain Analysis

In the case of Lexus, a market value chain has all the above-named characteristics. The marketing program investment part of the value stage consists of the product, trade, communication, and employees among other components (Helm & Jones 2010). The customer mindset includes customer factors such as awareness, attitude, attachment, and activity (Helm & Jones 2010). Market performance includes price premiums, market share, expansion success, cost savings, and profitability (Helm & Jones 2010). Shareholder value factors include stock prices, the P/E ratio, and market capitalization (Helm & Jones 2010).

In the case of the multipliers, each of the multipliers has a specific number of factors that attest to it. Program quality encompasses relevance, distinctiveness, consistency, and cohesiveness (Uggla 2013). The marketplace conditions include competitive reactions, channel support, and profile (Helm & Jones 2010). Investor sentiment is the last multiplier, which consists of market dynamics, growth potential, risk profile, and brand construction (Helm & Jones 2010). These elements are illustrated in the diagram below.

Brand Value Chain Analysis
Source: (Helm & Jones 2010).

Concerning the above brand value chain, Lexus has several options in an attempt to increase its market value and presence. Brand value chain analysis is also important for Lexus because it ensures that the brand performance is assessed. In the value stages, Lexus should have a working marketing program that markets the company and the brand. The company can arrive at this goal by developing objectives in its marketing program, appointing a team to oversee the program and a feedback process that allows sustainability and evaluation. The marketing program investment part can be used by Lexus to affect the next value stage, which is the customers’ mindset.

Lexus has several options in influencing the customer mind-set, including the running of a marketing campaign that is driven by the specific needs of the consumers. A feedback program where customers can interact with the organization can also be useful in influencing this value stage. Market performance can be improved in this organization by taking into consideration the overall performance of the company and developing strategic goals and objectives that are aimed at improving performance. Market performance is also influenced by how well an organization can deal with its competition and efficiency, financial, and expansion success among others. Lexus should embark on an expansion program that ensures the organization can progress to profitability.

While improving the shareholder value, Lexus will have to improvise and find ways of increasing the overall stock price. This goal may be achieved through the introduction of better accounting methods and improvements in the market capitalization for the company. The multipliers, program quality, marketplace conditions, and the investor sentiment at Lexus may be improved through several processes (Helm & Jones 2010). The company needs to have a quality assurance department that ensures that the quality of the delivered goods and services is adequate. There is also a need to have a training program for investors who are interested in the company shares. The company should hold a widespread campaign to encourage more investment in this organization.

Strengthening the Brand

Several ways can be used to strengthen Lexus as a brand. For instance, various models may be applicable in the improvement of the brand selected, although the most applicable one for Lexus is the Customer-Based Brand Equity (CBBE) (Oliver & Holweg 2006). In this model, four steps should be followed, along with the six brand building blocks (Tsai, Lo & Cheung 2013). The CBBE model can be illustrated effectively in the form of a diagram.

Strengthening the Brand
Source: (Tsai, Lo & Cheung 2013).

The Customer-based Brand Equity (CBBE) Model and the Four Stages of Brand Development

Salience, breadth, and depth of brand awareness form the foundation of brand building. Lexus has to utilize these elements to be more effective as a brand. The four stages of brand development include the relationship stage, response, meaning, and identity stage (Christodoulides & de Chernatony 2010). Each of these stages has a particular question that it targets to answer in the process of brand management (Kakati & Choudhury 2013). These questions are also demonstrated in the figure below.

The four stages of brand development.
The four stages of brand development.

The six brand building blocks include resonance, judgment, feelings, performance, imagery, and salience (Dukes 2004). Lexus applies them to brand management. In resonance, some of the important factors include loyalty, attachment, community, and engagement. These factors have been fulfilled in the Lexus brand management strategy. Judgments include quality, consideration, superiority, and credibility where the organization influences the judgments of customers and other stakeholders. The feelings that a brand should create to be favorable in the market include the feeling of warmth, excitement, self-response, security, and social approval (Christodoulides & de Chernatony 2010). These elements are emphasized in the promotions that Lexus is engaged in. Performance in the brand strategy results from the primary characteristics of the products being marketed and the secondary features that include the effectiveness of the brand. Lexus has guaranteed this outcome through the provision of car models that have these considerations in place. In terms of imagery, the product brand strategy that is adopted should encompass the provision of favorable user profiles while at the same time having high personality and values.

The stages of brand development should be followed in the improvement of the brand performance for Lexus. In terms of relationships, Lexus should ensure that it can market itself as a preferred car manufacturer by making the models that are preferred by many high-end individuals (Krzykowski 2011). This plan will ensure that the car manufacturer can attract the same group of customers. A response should be emphasized, with the question asked in this part being answered. Lexus should ensure that all the target customers can identify with the car models that it produces. The utilization of this model should guarantee the improvement in performance for this carmaker.

Lexus can also use the above-suggested ways to improve the performance of this brand. To ensure that Lexus improves and performs very well as a brand, there is a need for several measures. The brand awareness for the company should follow the proposed foundation to ensure that that each of the stages is adequately addressed. At the relationship stage, the company needs to ensure that customers and other relevant shareholders are incorporated into the plans. The company should target to answer the above question that targets to improve the relationship between it and the stakeholders.

The relationship stage, just like in most other companies, should be followed by the response stage where the organization assesses the response of the processes that have been put in place. Lexus should ensure that this stage has an effective feedback mechanism where the relevant stakeholders may answer questions regarding the brand response. In brand meaning, Lexus should ensure that it establishes its position in the market, the targeted audience, the requirements of the targeted audience, and the specifications for each of the stakeholders. It is only through the establishment of this mechanism that Lexus can manage to improve the performance of the brand. Other means and ways that Lexus can establish meaning include the development of adequate objectives for the marketing program.

Lexus applies the six-brand building blocks including resonance, judgment, feelings, performance, imagery, and salience as stated by Dukes (2004). The company has managed to perform adequately with the application of these strategies, thus ensuring adequate brand marketing. Lexus has managed to create a strong customer base with a brand name that guarantees performance. The models that are marketed by the company have resulted from the combination of the above characteristics. They make the company’s marketing program easy.

Brand Strategy Proposal

Brand’s Current Status

The corporate strategy for Lexus is to be the preferred luxury vehicle manufacturer in the world. The brand has been performing adequately in the different areas of brand management. An external analysis shows that Lexus is performing very well in several areas, including marketing and the number of sales. The luxury car manufacturer has also managed to compete with the other car manufacturers in the same category such as BMW and Mercedes Benz. It is among the leading luxury car manufacturers in the world.

An industry analysis shows that the automaker is suited to replace the old industry dominants such as those named above. A competitor analysis indicates that the company is in close competition with brands such as BWM and Mercedes Benz, with the other brands in the same category being Ford and Range Rover. The market share for Lexus has significantly increased even in the face of this competition. The existing brands and models under Lexus are performing positively, with profits being reported for this company on the global front.

The strengths of the company include the quality of the models being produced, a large customer base, and the strong brand name created over several decades. The weaknesses of this company include the high pricing that the models attract because the models are designed for the high-end markets. The opportunities for Lexus as a luxury brand include the availability of a large market on the global front. The company has marketed its models in the US and European markets. This exposure has seen its sales increase significantly. The main threat that the company faces is the rising competition from renowned brands.

Brand Elements

An analysis of the various brand elements shows that Lexus has maintained a strong image on the local and international front. The company has a strong brand name, logo, and a recognizable symbol that it uses in its marketing campaigns. Some of the other factors of consideration also include the packaging, pricing, and products among other factors (Spiggle, Nguyen & Caravella 2012). Lexus has used these factors to its advantage. It has experienced success in the industry because of the same factors. The produced products can be described as being of a high standard, adequately priced, and targeting the right group of customers. The brand has built its image as a high-end car manufacturer, thus promoting its models as the best brand that exists in the market.

Brand Recommendations

The brand has performed well in the past few years. Nevertheless, it can improve in several areas. The pricing of the different models that it makes should be adjusted to reflect the different needs of customers. The price of the various models should be reduced. The company should make new models that can be marketed for the markets at lower prices. The other recommendation is that the car manufacturer needs to increase its marketing and promotion budget to increase the marketing campaigns. This move will contribute towards improving brand performance through increasing recognisability and the popularity of the brand.

Lexus also needs to increase its promotion activities in developing markets such as those of South Asia, South America, and Africa. The North American and European markets are very competitive. The carmaker has been forced to make many sacrifices. Venturing into the developing markets can strengthen the brand name and image further. The brand strategy used by Lexus is appropriate for the success of its models.


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