Company Profile: Lexus – Marketing History

In this week’s blog post, I will be covering the history behind one of my favourite car brands and just what it took for them to position themselves in the automotive industry the way they have. That’s right, I’m talking about Lexus. 

So I think the best way to start this week’s post, is to venture a little into the history of the Lexus car company. Lexus was established in 1983, around the same time as its Japanese rivals, Honda and Nissan created their luxury divisions, Acura and Infiniti. Owned and operated under the Toyota Motor Corporation, Lexus cars were originally manufactured in Japan. It was only recently (in 2003) that they started building their vehicles outside of Japan (for the first time) with a specially designed plant in Cambridge, Ontario (that’s right, shoutout to Canada). 

In 2018, the Cambridge plant received 2 J.D. Power Quality awards, including its 3rd Platinum for Best in the World – bringing its new total to 18 awards received overall. 2022 was also a big year for the Canadian division of the company as Lexus added the popular NX and NX Hybrid to its portfolio, producing the top 2 models – RX and NX – available to the entire North American market.    

Believe it or not, Lexus vehicle production actually started out as a secret project by a team of engineers, designers, and technicians that required them to reimagine luxury automotive, and they did a very good job, if I do say so myself. 

Marketing: Key to Success

Although everyone has their own opinions, marketing is one aspect that led to Lexus’s success. But I want you to think about the last time you saw an ad on tv for Lexus, whether it was for the Canadian division or the United States company…that’s right it’s rare. So if Lexus isn’t paying for television ads, how are they getting across to their target market? 

They use a little technique called the ‘focus’ strategy. This is actually a very popular technique that is used by many companies that have a specific market they are trying to reach. If you think about it, it really is one of the smartest marketing strategies to have, especially for a luxury car company like Lexus. The main idea or goal behind the focus strategy is to develop, market, and sell a specific product to a specified group of people. 

Benefits to this strategy include: 

• Reduce the threat of rivalry 
• Offer high quality or low cost products to the segment
• Increase customer loyalty 

Risks include: 

• Niche market may become saturated, shrink, or even disappear due to changes in customer spending habits/behaviours, tastes, technology, and even regulations 
• Risk of imitation or substitution by competitors, who offer or have the ability to offer similar products (or even better valued products at higher quality standards)  
• May limit growth potential, leading to difficulty expanding to other markets/segments without losing focus/differentiation 

Lexus represents class and when you think about the Lexus brand, words such as luxury, design, comfort, and thrilling performance may come to mind. Believe it or not, this is what gives Lexus a competitive advantage. Some other factors in the brands strengths include financial position, experienced workforce, product uniqueness and intangible assets (brand value). With all this being said, it’s not difficult to see why people prefer Lexus, not only as a luxury choice, but also a choice for people who understand the long-term value of luxury.

Final Thoughts

Lexus has done a good job positioning themselves in the minds of consumers looking for a luxury sports car (even if I’m the only one that feels this way). This is a company that really has proven investments in all sorts of media really isn’t necessary to reach your intended target market, it simply has to do with the quality and impression the car (and brand overall) leaves on the driver or consumer. They really do say it best with their slogan “Experience Amazing”, because that really is what Lexus (as a company overall) is.