Lexus Imparting Value to Luxury and Luxury to Value

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case study ( Lexus: Imparting value to luxury and luxury to value) CASE – 1 Lexus: Imparting Value to Luxury and Luxury to Value! In the 1980’s Toyota developed a concept for a new car that was destined to be a success. The concept of the car, which was to be called Lexus, was based on the observation that there was a large affluent market for cars that could boast exceptional performance. A significant portion of that market ranked value highly. However they were unwilling to pay the extraordinary expensive prices that Mercedes charged for its high performance vehicles. Toyota planned to target this market by creating a car that matched Mercedes on the performance criteria but was priced much more reasonably, providing consumers the value they desired and making them feel that they were smart buyers. Toyota introduced the Lexus(www.lexus.com) in 1989with much fun fare. A clever advertising campaign announced the arrival of this new car. For example, one ad showed the Lexus next to a Mercedes with the headline,” The First Time in History That Trading a $73,000 Car for a $36,000 Car Could be Considered Trading Up”. Of course, Lexus had all the details that Mercedes did: a sculptured form, a quality finish, and a plush interior. The detail was not, however, limited to the car. Separate dealerships were created that had the type of atmosphere that affluent consumers expected from a luxury car maker, including a grand showroom, free refreshments, and professional sales people. Toyota placed a strong emphasis on performance of the new car. A package was sent to potential new customers that included a 12-minute video displaying Lexus’ superior engineering. The video showed that when a glass of water was placed on the engine block of Mercedes and Lexus, the water shook on the Mercedes while the Lexus had a virtually still glass of water. This visually told

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