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Business Essays - Toyota Consumer Lexus

Toyota Consumer Lexus

Application of Consumer Tendencies concepts in Toyota Lexus


The research paper discusses about the blissful luxury make of Toyota Engine Inc. , Toyota Lexus. Its main aim is to study the application of consumer behavior concepts in the analysis of marketplace and brand marketing for the given product. In the beginning the paper offers a brief review & track record of the organization, product as well as the brand.

Subsequently, it recognizes the relevant theory/ideas of consumer tendencies which can be applied on the merchandise. Furthermore, the paper researches upon the value of these ideas for the business and the proper benefits gained through them. The newspaper will include information, facts and characters from reliable options and so ensure the authenticity of the research.

Overview of the Organization

Toyota Engine Inc. -Toyota Motor Corporation is the next largest designer of automobiles on the planet. It offers its headquarters in Japan and is present in a large amount of countries across the world. This multinational company was established by Kiichiro Toyoda in 1937. It had been formed consequently of an spin-off from a business known as Toyota Companies which was held by his father.

At present, the company leads a group made up of 522 subsidiaries. The carmaker is generally engaged in the look, manufacture, set up and deal of passenger cars in addition to recreational & sport-utility vehicles, minivans & vehicles and related parts & accessories.

The basic idea of the management at Toyota has continuing from enough time of the business's genesis which is clearly exhibited in the conditions used such as "Lean Making" and simply In Time Production. These terms and tactics have been central in the quest of the business till time.

In fundamental terms, Toyota's philosophy is based on four major components. These include: a) basing the decisions considered by the management on long-term thinking, b) development of a strategy for problem-solving, c) value addition to the organization through the development of all the resources and especially the people, and d) keeping in mind that the process of organizational learning is influenced by solving the fundamental problems on the major basis.

Toyota in addition has ventured directly into other fields of business like financial services and development of robots in addition to its car production operations. The business, in combination using its parent group-Toyota Market sectors, forms one of the primary conglomerates of the world. In addition, it gets the honor of being the only car producer showing in the top10 BrandZ name acceptance ranking.

The leading brands had by the business include Toyota, Lexus and Scion. It has many shareholding in Daihatsu Motors and has a talk about in Fuji Heavy Companies, Isuzu Motors, and the engine unit, street motorcycle and marine craft company Yamaha Motors. The values adopted by the company's management have been developed by its founders and also have played a significant role in its success. These beliefs have emphasized the importance of terms like, "Lean Manufacturing" and simply in Time Production (JIT).

At present, this carmaker has factories as well as creation plants all around the globe. These centers are constantly employed in the procedures of manufacturing or assembling vehicles for satisfying the increasing demands of the neighborhood customers. The business has processing or assembly vegetation in Japan, China, Australia, India, Canada, Indonesia, Poland, South Africa, Turkey, the uk, the United States, France and Brazil.

On the foundation of the phenomenal growth registered before few ages, Toyota has recently got into into countries like Pakistan, Czech Republic, Malaysia, Thailand, Vietnam, Argentina, Venezuela, Mexico, the Philippines and Russia.

Overview of the Product

Luxury Car- This refers to a division of vehicles which provide luxury and catch the attention of the upper section of the clients. The vehicles in this category usually own modern accessories, high degrees of comfort, performance and technological innovation. In general, these vehicles symbolize high brand image and offer a blend of features desired by the clients.

A luxury vehicle is a comparatively exclusive vehicle that includes additional features made to amplify the comfort of the driver and travellers. Luxury autos are some other form of automotive breed; they're less about requirements and much more about wants. There's lots to attract clients and plenty of models from which to select.

Undoubtedly, the blissful luxury cars are incredibly expensive on the basis of the various features contained in them. As economies across the world are undergoing a rise phase and there is a constant increase in the income-levels of the individuals, luxury cars are gradually capturing the attention of customers. However, this portion is still affordable for the high income group, till day.

The record of the blissful luxury cars reveal that these automobiles derive their origins from the expensive and tailor-made sporting luxury cars produced in the ages of 1920s & 1930s. These autos were primarily manufactured by car makers like Alfa Romeo, Delahaye, Delage, Mercedes-Benz, Duesenberg and Bugatti. It is also evident from a variety of research studies that luxury cars provide cultural prestige to their owners. It gives comfort of modern technology to its users enjoy it is very easy to handle for each one. Every company which is entering in luxury section is trying to raise the top features of their vehicle by using exclusive modern techniques.

As these vehicles emphasize typically on style, comfort and customer satisfaction, certain features like passenger space and cargo capacity are sacrificed to a certain extent. In fact, the blissful luxury car section has remained to be always a profitable section in the automobile market since World War II. These vehicles are produced on a sizable scale and promote their mechanical parts to be able to boost the profitability.

Overview of the Brand

Toyota Lexus- Lexus identifies the luxury car section of Toyota Motors, based in Japan. The brand for Lexus company logo was created by Molly Designs & Hunter Communications and featured a stylish "L within an oval. Presently, it's the largest advertising luxury car in the United States, where it was first unveiled. The brand fundamentally started in 1983 from a top secret flagship sedan job. Gradually, the project resulted in to the development of the original Lexus LS. Consequently, models like coupe & sedan were added to the Lexus brand.

From the start of the development process, these vehicles have been manufactured in Japan on a constant basis. The major creation centers of the luxury car are located in the regions of Kyushu, Chubu and Kanto. Among the many features proposed by Lexus, aerodynamics, superior performance, simple ride, inner ergonomics, tranquil cabins, fuel efficiency, protection and reliability are the most prominent. Actually, Lexus is renowned worldwide for its high quality & reliable customer services and constant focus on get together the requirements of the clients.

Lexus has summarized the general characteristics required in its various models in the form of Lexus IDEAL philosophy-referring to Impressive, Active, Elegant, Advanced, and Lasting. This school of thought monitors the production and development process of each Lexus model. At the same time, it is essential that every Lexus model fulfills more than 500 specific product standards that happen to be popularly known as the Lexus Musts. These product standards incorporate a range of processes beginning with steering wheel responsiveness to leather seat stitching.

Lexus functioned as an unbiased division as a consequence of a full organizational separation from Toyota in 2005. This was made possible with the help of highly committed centers of design, engineering, training and processing centers which commenced to work entirely for this luxury division. The fundamental manufacturing techniques like the methods and criteria related to quality control which are contained in Lexus differ from various other models of Toyota launched every once in awhile. (Surf Lexus for 2008, 2008)

Facts & Characters related to Lexus: In the year 2007, annual sales of Lexus U. S department had risen to 329, 177 vehicles. In terms of volume level, Lexus had established itself as the main selling luxury brand in the automotive market for days gone by seven years consecutively. It is the fourth-largest luxury car brand in the world as advised by its sales statistics. In 2006, Lexus sales worldwide, was 476, 000 vehicle roughly and with this accomplishment it came into in Interbrand's set of the very best 100 Global Brands for the very first time with an estimated brand value of around $3 billion on a yearly basis.

Identification of Relevant Theory/Concept

From the beginning, Toyota has accorded a high priority to the issues related to consumer tendencies and designed its functions accordingly. That is clearly evident in the way in which Toyota has promoted its Lexus brand and examined its target market. It is a well known proven fact that Lexus began with an in-depth evaluation of the objectives of the vehicle under the advice of perceptive and highly experienced band of engineers.

Generally, consumers accord a higher priority to the problems related to quality. As a result, Lexus has based its operational superiority on tools and quality improvement methods such as JIT & Kaizen. In fact, the extraordinary success of Lexus originates from a deeper business school of thought devoted to its understanding of men and women and human inspiration.

In order to look for the customer attitude towards luxury cars, a set of frame of mind variables considered by the audience include dependability, quality, durability, safe practices, security, performance, comfort, position, prestige, visible impact, efficiency, technology, value, style etc. These different attitudes are straight related to different types of customers because of this of certain phenomenon like cognition, emotions and response dispositions.

1. Consumer Loyalty & Social influences: Consumer devotion refers to the behavior of repeat customers, to choose one product over another for a specific purpose. (Customer Loyalty, 2008) Customer devotion is achieved through smartly designed customer retention programs. In fact, these programs be based upon effective communication with the customers and motivating them to stay associated with the company. Such kind of loyalty plays a crucial role in creating positive word-of-mouth promotion for the business. Because of this, the brand is sold and marketed without incurring any extra costs. (Morris & Holman, 1988)

Generally, organizations develop customer devotion by supplying a quality product with a company guarantee. In today's competitive scenario, the ultimate goal of various customer loyalty programs is to keep carefully the customers satisfied. This may in turn effect into repeat sales for the business and also develop clients through word-of mouth publicity. (Zeithaml & Bitner, 1996)

In truth, the sensation of customer commitment holds significant amounts of significance in the luxury car section. Also, customer commitment and turnover is becoming very crucial in the current scenario for each organization. Keeping because such factors, Toyota realizes a slight drop in customer commitment and a steep high in customer turnover may become a subject of concern for just about any organization.

Consequently, a significant part of Toyota's initiatives are directed in the development and maintenance of customer commitment. Consumers have a company belief that they can depend on the Lexus brand from the very first time as it retains the same degrees of performance. Lexus has comprehensively explored on the idea of consumer devotion and means that its customers do not switch to other brands. It includes based its work-processes beyond the ideas which suggest that the consumers mainly concentrate upon functional, tangible, visible characteristic, or ˜utilitarian needs' when purchasing a car.

The measures used by Lexus in the direction of customer support and satisfaction began from the outset with the "Lexus Covenant". This identifies a fundamental determination stating that "Lexus will care for each of its customer like the manner in which a guest is treated in our homes. "

This commitment was truly justified when fresh Lexus models were immediately recalled by the company due to the claims regarding a particular element of the model. In fact, these models were extracted from the owner's for no additional charges. In certain cases, these automobiles were returned after being washed to compensate for the hassle caused to the car-owners.

In reality, Lexus's management works in accordance with Lancaster's theory which clarifies that that the consumers purchase a combination of traits in place of a particular one. As a result, Lexus's initiatives are directed towards creating a distinctive set of features which gratify the luxury requirements of the clients.

On observing the buying patterns of the clients, the marketing research section of Lexus is convinced that rather than the objective traits themselves, it's the subjective understanding which decides the consumer's decision. Generally, the upper end of the buyer section of the consumers spends their money for non-routine utilization purposes. Their main objective is to obtain experiential or symbolic benefits from the product they would like to purchase.

To load the lacunae between your demand fluctuations and its effect on the commitment of the customers, Toyota has applied certain options, which also includes the IMV project (Progressive International Multipurpose Vehicle, which refers to SUVs, pickups, and other multipurpose vehicles that Toyota produces and produces overseas for marketplaces worldwide), launched recently. (Annual Record, 2006) This task is set up with a construction which involves achieving the customer's demands in a adaptable & fast manner and optimally using development & supply features. Finally, the job aims to lessen down the risks associated with the variations in demand and ensure the maintenance of customer devotion. To be able to sustain the devotion of the customers, Lexus hold its marques as a flagship. This clearly demonstrates the energy of Lexus brand which serves as a substantial entry barrier. Toyota has moved the Lexus upwards into a new segment to improve the brand's vitality. As Toyota had not been usually identified to maintain the blissful luxury car portion, it used the strategy of diversifying into a sub-brand. Fundamentally, for understanding the buyer tendencies for luxury automobiles, an analysis of potential buyer attitude towards the automobile is vital.

Basically, Lexus adopts a honest approach towards the concept of consumer loyalty. At the moment, it is well known worldwide for its promotions to portray a luxury image also for the service which are given after the deal of the models. This process is clearly revealed in the way in which the Lexus preserves its ready areas in the service departments. These ready areas are well equipped with facilities such as internet access, refreshment bar, in house putting renewable, and accessories shop.

The retailers provide additional services by offering complimentary loaner autos and free car washes, on a regular basis. At exactly the same time, many of the Lexus dealers have included on-site cafes and designer boutiques, in recent times. More importantly, service bays are usually made with large-size picture home windows, which enable the shoppers to view the whole service-process with their vehicles. Lexus's strong determination to keep high amount of customer devotion is shown in the follow up research conducted by the business, every once in awhile. These surveys offer an chance to the Lexus owners for rating their recent service experience at the many service centers of the business.

In order to enhance the standards of customer service to a higher level, certain traders of the business have allowed their workers to undergo the process of training. These training sessions are conducted at service-focused establishments like Nordstrom shops as well as the Ritz-Carlton hotels. Inside the chain of its customer focused measures, Lexus has provided the facility which provides exclusive parking lots at prominent sporting centers, entertainment events and shopping locations, reserved designed for Lexus vehicles.

Hence, the company is currently located among the visible global organizations that enjoy high rates of customer loyalty in a variety of business segments. Regarding Lexus, such a high level of consumer loyalty has experience on the basis of its high quality customer support and product satisfaction steps.

Similarly, social affects are an integral determinant in the choice and buy of luxury automobiles. As a concept of consumer behavior social affects highly effect the behaviour and thoughts and opinions of the consumers. As a part of luxury market, the company is convinced that the public factors play a key role in doing exercises a strong affect on the consumer action. These factors can include lots of variables, like the consumer's communal class, his mobility, guide group etc. Consumer's reference point group, family, and interpersonal tasks and statuses also exercise strong affect on the consumer's tendencies.

A large no. of market research workers also emphasize after the significance of imagery in cultural influences. (Oliver, 1997) There's a huge opportunity that customer imagery and his use may be associated with their school and status. Actually, as per the theory of social constructionism, belongings are regarded as socially shared icons of identity which is clearly evident regarding luxury products.

At once, the procedure of changing the sociable meaning of subject is distributed by all individuals. This implies that consumers have the meaning of things that happen to be communicated by others plus they subsequently transmit this to others as well as change its cultural meaning.

For example if Lexus is favored in Japan, it is due to the actual fact that prestigious, well known encounters, politicians and billionaires are using it. (Samli, Still & Hill, 1993)To increase its product value, marketing section of Toyota helps bring about it as a pricey, luxury, and prestige car. It is also promoted in order to propagate the high expectations of reliability, stability and durability preserved by the parent company Toyota, over the years.

Imageries of customers are then linked to cognitive elaboration device from which they use information and therefore increase the general level of interest in the product under consideration. Possession of such cars is strongly seen as a mark of success thriving in luxury in the society. There is another portion of individuals who like Toyota for reasons like its performance, handling and appearance indicating ramifications of its brand image and identity.

Often customers lack frequent opportunities to gain practical and experiential benefits of performance and handling of Toyota Lexus however they take benefit for technical and sporty edge of these vehicles. In fact, a number of studies conducted by the marketplace research division of Toyota claim that a significant part of the Lexus's sales is an end result of the sociable affect factor.

2. Customer Segmentation: It is vital to section customer on the basis of their likely habit and potential success in order to understand them well. (Kotler, 2002)Understanding consumers has become vital in today's fast changing and highly competitive market segments and the fact is duly taken into consideration by Toyota Lexus. Before the starting of Lexus brand, the market research team at Toyota decided that it's necessary to design & develop an exclusive brand and sales channel for the new brand.

This was a significant step in the course of the customer segmentation efforts continued by Toyota in order to provide this new luxury flagship brand. To be able to segment the customers properly, Toyota designed strategies with an try to create a new network of dealerships in the U. S. market. Inside the opinion of the company's management, this approach was essential to understand the needs & requirements of the business and segment the clients, accordingly. Ultimately, the market segmentation strategies of Toyota allowed it to establish a precise target market for Lexus.

Customer segmentation may also be also referred as market segmentation. It entails segmenting the customers into groups predicated on common characteristics. It gets easier for companies to understand customers by grouping them and making marketing program suiting them. Toyota realizes that it's appropriate to tell apart between car buyers who desire low-cost transportation and those who wish for luxurious driving a vehicle experience. A couple of basically two approaches to segmentation. Is the traditional segmentation and other is value established segmentation.

The first approach involves segmentation of customers by key factors such as demographics. The second strategy i. e. value-based segmentation requires taking a look at customer needs as well as the costs of establishing and retaining customer associations. (Ramaswamy & Namakumari, 2005) It is this second kind of segmentation that retains significant amounts of significance for Toyota Lexus's online marketing strategy.

The management always understood that segmenting the clients based on their income levels will be important for ensuring the success for Lexus. Also, such kind of segmentation will lead the company's promotional plan to the potential buyer section effectively as luxury cars aren't purchased by individuals belonging to lower income-groups.

Lexus specifically specializes in the concept of customer segmentation. It really is observed that Lexus as a luxury car is a ˜multi-segment' brand that seeks to cover all customer sections on the market. For Toyota, Lexus refers to an upper medium, professional, dual purpose, luxury and specialist vehicle car. However, in order to analyze the prospective market for Lexus, Toyota has focused on the aspect of customer segmentation on the continuous basis.

As a result, Lexus has been projected as a high-end product for the customers demanding luxury automobiles. The variable related to the country-of-origin also retains a great deal of relevance in Lexus's customer segmentation strategy. Generally, japan car makers are anticipated to maintain high quality expectations. Subsequently, Lexus design its marketing & campaign campaign accordingly. In addition, it maintains the fact that country stereotypes surely make a direct effect on product assessments and in the end the purchase decisions.



Annual Article 2006. (2006). Retrieved June 30, 2008, from http://www. toyota. co. jp/en/ir/library/annual/pdf/2006/ar06_e. pdf

Browse Lexus for 2008. (2008). Velocity Automotive Journal. Retrieved July 1, 2008, from http://www. velocityjournal. com/journal/2008/lexus/

Customer Devotion. (2008). Retrieved June 30, 2008, from www. jimnovo. com/Customer-Loyalty-more. htm

Kotler, P. (2002). Marketing Management. New Delhi: Prentice Hall of India Pvt. Ltd.

Morris, M. & Holman, J. (1988). ˜Source Devotion in Organizational Marketplaces: A Dyadic Point of view', Journal of Business Research, Vol. 16 (March), pp. 117-131.

Oliver, R. L. (1997). Satisfaction: A Behavioural Perspective on the Consumer. Singapore: McGraw-Hill.

Ramaswamy, V. S. & Namakumari, S. (2005). Marketing Management (3rd Release). New Delhi: Macmillan India Ltd.

Samli, A. , Still, R. & Hill, J. (1993). International Marketing: Planning and Practice. New Jersey: Prentice-Hall.

Zeithaml, V. & Bitner, M. (1996). Services Marketing. Singapore: McGraw-Hill.

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