However, defining a target market for Lexus (or any other company) requires a bit more consideration. None of this matters, because Lexus simply misread the mood. Timothy Cain is a contributing analyst at The Truth About Cars and Driving.ca and the founder and former editor of GoodCarBadCar.net. With the Black Panther tie-in, Ericksen said he believes Lexus can make a positive impression on both younger customers and minorities. The new design fails so many tests. Also, the heavy-lifting on 86 and Supra was done by Subaru and BMW, respectively, and it seems like Mazda will be doing the heavy lifting for the IS down the road. ", But that doesn't mean Lexus has any plans to rein in its styling department to keep older customers happy. If I bought another fourth-gen LS, it would be a 600h. And if at first it looked as though Lexus might just have forecasted accurately, a second glance reveals just how far off the mark even Lexus can be. For Toyota, Lexus refers to an upper medium, executive, dual purpose, luxury and specialist vehicle car. For example, the Lexus brand is mainly targeted to the upper class of the society, when the … It’s not as though we haven’t seen this before with Lexus and its high-end products. I find your comparison inaccurate, insulting, and unfair both to Remington and to the ’61-’65 Lincoln Continental. None of them are probably profitable but Mr Toyoda I think does not care. Target market. Demographic segmentation is followed by Toyota mainly while the main markets for Toyota are the upper class, mid-class people of the society or may be defined as high earning or average earning people throughout the world. Expectations for the LC coupe were chart-toppingly lofty. The consumer’s age is between 30 to 50 years old. © 2020 MotorTrend | MOTOR TREND GROUP, LLC. Not like I could ever afford any LS new, but our 17 YO 430 has a nice tall greenhouse and enough punch to get around with authority…it’s a keeper, only has 109K on it right now. 2nd – the sleeker profile of the LS 500 cut down on rear passenger space compared to the LS460L; these days, the ES has a roomier rear passenger compartment. Agreed; I think there’s way too much styling overlap between Toyota and Lexus. But I agree, the styling of a 4-door coupe, or “sports sedan” is killing the luxury market, not just Lexus. Lexus thought they’d sell around 2,200 per month. I am surprised that they sell them at all even at current level. The LS’s longer/lower/wider look draws an even deeper divide between Lexus’s flagship car and the brand’s big SUVs. Lexus’s failure to compete in that class, relying only on antiquated off-road trucks, is a massive strategic blunder. By 2019, Lexus was selling only around 100 LCs per month in the U.S. According to Bloomberg, that's because it's not only T'Challa's personal ride in the film, it's also part of Lexus' plan to attract younger, more diverse buyers and ultimately regain its place as the top luxury brand in the U.S. As baby boomers get older, it makes sense that luxury automakers would try to attract younger buyers. Reliability? Defining a 'target market' is the first stage in the marketing strategy of a business, and is a process of market … In the case of the more mainstream LS, Lexus wanted to take the big four-door from the basement – 4,094 sales in 2017, an all-time low – to 12,000 sales per year with the launch of a new model. 5th – greater competition, not only from buyers moving to CUVs/SUVs, but from the likes of the G90, Continental and CT6 (chipping away at LS sales); in Canada, the F/L G90 has overtaken the LS in sales. Remember the NX? SMH. Sure I’ll hammer the exit ramp or cloverleaf but comfort is #1 need 95% if the time. 1,008 LS sedans were sold in March 2018; another 999 the following month; another 908 in June of the same year. I’ve owned several LS models over the years and their reputation is well earned, but I have a 7 series now. The Lexus design language is polarizing, but don’t think this is as big of an issue as some may think. Lexus has always been popular with American consumers and … Introduction BMW (Bayerische Motoren Werke AG) is a German automobile company which was founded in 1916 and is headquartered in Munich, Bavaria, Germany. (And no, a brain-dead scribe’s chirping, “It drives just like a car,” doesn’t make it so.). "We are going after a younger customer, and just from a demographic standpoint, the younger you go, the more culturally diverse the population gets," Cooper Ericksen, Lexus' head of marketing, told Bloomberg. But it was also peaky, with the real power coming on only above 3500 rpm, and the rest of the car wants to waft effortlessly. I liked every LS generation (weak styling on the 01-03, before they sharpened it in 04), but don’t like the current model’s styling at all. But Lexus is hitting the targeted median ages for products aimed at younger buyers. If accurate, shows that Toyota isn’t finding ROI enough to warrant investing too much into their RWD sedan lineup. Strategy of targeting audience and market … "The task to hit our sales plan really comes from bringing a lot of new customers into the brand." You now have a choice of sedans with cramped rear headroom or CUVs with a buckboard ride because the suspension has to be stiff to combat the high center of gravity. On the whole, different age groups have different interests, values, incomes, and buying patterns. Perhaps it was a sales flop because it was priced straight across from V12 Germans, at a $30k premium over a loaded LS 460 L. I still love it and would probably own a used 2013-14 model if a sedan worked for my life right now. "Detroit Three: Remote Work Goes Into Effect in U.S., Unless You’re Working the Line", "Jeep Wrangler and Gladiator Recalled Over Toasted Clutch", Tales from the Service Desk: Extended Warranties and the Selling of a Scam, Junkyard Find: 1959 International Harvester AM-80 Metro-Mite, 2022 Honda Civic Hatchback Reprises Golden Days, Rare Rides: Be a Pioneer in a Jeep Cherokee From 1985. The LS still plays a strong value card in a segment controlled by the pricy S-Class. Lexus Is on the Hunt for Younger, More Diverse Customers. Lexus Positioning The new one looks like larger Nissan Versa sedan. An ES350 is possibly being considered as a replacement for my wife’s 2008 Infiniti M35x but she is also eying a low mileage 2018 Regal TourX wagon… because wagon! There’s something to be said for a tall-roof stately sedan with passengers entering/exiting easily and sitting upright. Detailed demographic information is available from the Census Bureau's website. Year-over-year, U.S. Lexus LS volume decreased in each of the final 11 months of the year. These were the basic customer thinking process. Any German, Korean, and Cadillac (ct6) luxury cars are a step ahead. By 1991, only the third year on the market, Lexus had already overtaken all other import premium brands. Choosing one or multiple segments to target (market targeting). Years ago ,1992, when I bought an LS 400, I got a V-8 Lexus for the price of a 6 cylinder Mercedes. Shocked at how cramped it was in the cockpit. Granted, luxury sedans aren’t selling well in general but most Lexus people, especially LS owners don’t know WTF they were thinking. It looks ugly, and it has a v6 that is turbocharged. All the buyers who lined up to buy fourth-gen LSes in 2007 now have GLS-Classes or X7s. For instance, a luxury jewelry company looking to target … I saw a newish ES300 on the street a couple days ago, and thought, boy, that really isn’t a bad looking car. They shot themselves in the foot trying to go for a “bold statement” or what have you, and also in the elimination of the V8. Well, you’re increasingly screwed. A) intermarket segmentation B) loyalty segmentation C) life-cycle segmentation D) targeting segmentation E) psychographic segmentation Answer: A 23) When the size, purchasing power, and profiles of a market segment can … 3rd – V8 no longer available. Follow on Twitter @timcaincars and Instagram. I agree that the styling has a lot to do with it. Conceived and produced exclusive private label clothing, fabrics, fit and styling) for two stores in Manhattan, as well as a line for the overseas market. The squared designs of old had much more visual presence. Sure, the TTV6 has more torque than the old NA V8, but is down in power compared to the Germans – which not only offer a TTV8, but a V12 for their top line variants (as stated, buyers in this segment want the “best” – and that includes more power). In 2017, Lexus anticipated monthly sales of 400 units for the LC500 and LC500h duo. 22) Lexus targets wealthy consumers with similar needs and buying behaviors, even though the consumers are located in different countries. On the flip side of the coin, for anyone who still wants a luxury sedan, used LSes are just a terrific value. For Lexus, that strategy includes cultivating a sporty, performance-oriented brand image. Toyota has positioned the Lexus to a global audience, using market segmentation to understand that there is enough of a market to effectively sell to middle and upper-middle class consumers who want comfort, reliability, fuel economy, and a more upgraded image; but the same segment that cannot afford the 20% plus price increase of other luxury brands. However, unlike for say, Mercedes, where S Class owners may have switched to the GLS or G-wagon, LS owners really don’t have an option aside from the aging GX/LX – the LX in particular being a modest seller. One year ago was at new car show and sat in a new LS. … Lexus, and if you're not familiar with Lexus, it's a car company. Yet with the launch of a new model in 2018, Lexus intended to dramatically increase the U.S. sales volume for its biggest and most costly sedan. If we lose some of our tradition owners, it's unsettling for us but won't preclude us from moving down this path. The 900-unit marker was topped only twice more. Lexus STP Lexus Segmentation Luxury cars for Elite class. The best thing Toyoda has done is making GRMN a performance line and expanding the TRD line. Audi only sold 2,963 A8s; half the number of A8s moved just half a decade earlier. Lexus had seen that sort of increase from a new LS before: in 2001, LS sales basically doubled, year-over-year, to 31,110 units.2018’s car market, however, was hardly the car market of 2007 or 2001 or 1990. “But I agree, the styling of a 4-door coupe, or “sports sedan” is killing the luxury market, not just Lexus.” Yep, and it’s not really restricted to the luxury market; it’s sedans in general. While Toyoda has pushed ToYoCo to a more sporty bent, at the same time, Toyoda had to be talked out of killing the GS the last time around and it seems that he will finally be getting his wish. Annual volume, in just the fifth-gen LS’s second model year, plunged 41 percent. By 2019, Lexus was selling only around 100 LCs per month in the U.S. The newer ones just don’t do anything for me..That gaping maw kills it. @bd2, I just loved that exposition and well thought-out analysis. Stated at the time that Lexus was not going to meet its modest sales target of 1k/month due to various factors. 4th – reliability doesn’t factor in as much due to (a) the Germans having improved in that dept. LS500 is a massive mistake. And in 2019, the target resembled a moon shot. To compare that to the US population, the median household income in the United States in 2017 was $61,372 . ", By clicking Sign Up, you agree to the  Terms of Use. But it was hardly a fantasy. Or – heaven help us – an Audi. Speaking to CarBuzz, Jeff Bracken, group vice president and general manager of Lexus, said he frequently gets calls from loyal Lexus buyers who don't like the current styling. Looks a lot like every other lexus sedan. Demographic segmentation divides the market into smaller categories based on demographic factors, such as age, gender, and income. 6th – styling/sheetmetal. I see this as simply big sedans especially are DEAD. segmenting its cars are given below for different markets are given as follows. Lexus hadn’t topped the 12K mark since 2010 and hadn’t hit five-digit territory since 2013 for that matter. A target market is a select group of potential or current consumers, which a business decides to aim its marketing and advertising strategies at in order to sell a product or service. Lexus initially hit that target, to be fair, but eventually fell far short. The silky smooth Toyota V8 was a quintessential part of the package, it and the build quality are what makes these cars so desirable even on the used market. And now of course the industry is starting to go (apologies for borrowing a politically incorrect phrase from TROPIC THUNDER) full retard with CUVs that have low greenhouses. Now I struggle to find the advantages. My take is this: LS, Supra, LC, 86 and the like at this point are projects favored by Mr. Toyoda. Demographic. The old designs convey stateliness and class, like the old benz sedans. Not just sedans but LS is a poor performer against the Germans and ranked last place in segment in CR rankings. It wasn’t the first time, and likely won’t be the last. Mercedes-Benz S-Class sales fell 16 percent to a seven-year low of 12,528 units. Most LS owners dislike them, including me. But changing demographics add a new challenge to the equation. Click on "State and County Quick Facts" for your state, and you can find county-by-county demographic … The Lexus Hybrid LS600h L has appeared to be a good choice because of it’s small target market. segmentation in order to successfully identify the target market across demographic and psychographic characteristics. Obviously, each company conducts its own pricing and promotion policies, which should meet its target customer group. Lexus initially hit that target, to be fair, but eventually fell far short. In addition to styling, there’s the downgrade from the V8 to a pedestrian V6. Marketing demographic data can supply important information about your ideal target market. Your information will be collected and used in accordance with our  Privacy Policy. Well, Toyota did think (wrongly that) a “performance-oriented” hybrid was an adequate substitute for a V12. They made the car sportier overall and then gave it an engine with a less sporty power delivery. Do you value rear seat comfort and a good ride/handling balance? Lexus has managed to screw up the front of their cars which resemble the foil on a Remington electric razor. New BMW owner demographics: average income of a BMW owner The average household income of a new BMW car or SUV buyer in 2020 is $124,800 per year. The LC 500 is the best example for the design language and sales have been struggling. The 2015 Lexus NX, with prices starting at $35,405 including a $925 delivery charge, is available now at Lexus dealers. However, in order to analyze the target market for Lexus, Toyota has concentrated on the aspect of customer segmentation on a constant basis. Then, a weakening of demand became apparent. Fortunately, I’m not their typical buyer and am licking my chops at the idea of getting one of the new LS’ for a nice discount in 4-5 years. Simple minimalist clean lines were what made past Lexus elegant and classy. We hope to gain more [customers] than we lose. I have to say that if you spend time with the new LS in person, you get inside, it has real presence. The LS once knew EXACTLY what it wanted to be, and nailed it A++++. I have seen several of these, and each time I think it is the new ES350. But it might not be a matter of great significance for a brand that now produces almost three-quarters of its U.S. volume from utility vehicles such as the NX. Uh-oh, I hope that was not a symptom of catching the virus! As someone who owned one, I didn’t find the V8 optimal for the car. Demographic segmentation is the division of a target market into smaller groups of people who share demographic characteristics. The Male-female mix is … December 13th, 2020 at 2:38 pm; It was a marketing failure for its target market, but had enough sales to justify the effort for over a decade. What is to like? Instead, that’s how many NXs Lexus sells every two weeks. The Continental is in fact more Remington-like and, of course, leagues ahead of the LS style-wise. The problem is that it suffers from “Modern Lexus” flu. The Japanese brand has expanded its market appeal to reach Generation X and Y as well as the Millennials. Consumer preferences, perceived cheaper gas, higher ride height of SUVs and demographics of its customers have dictated to Lexus what their buyers wanted. Right now the sweet spot is the 2013-17 facelift fourth-gen cars, but expect good deals on the fifth gen within a couple years. Nearly 43,000 copies of the LS were sold in 1990, for example, at a time when BMW’s 7 Series did just a quarter of that volume; and with Mercedes-Benz some 17,000 units abaft. Lexus just didn’t read the tea leaves with the sedans. How much that would actually matter to sales, I can’t imagine much. Contents: Target Audience Segmentation: Geographic, Demographics, Psychographics, and Audience needs Factors.Audience segmentation theories- Maslow’s hierarchy and V.A.L.S (Values and Lifestyles) typology Model. I love the brand, product, resale and performance BUT in that arena I want comfort. "The folks that look at [our styling] as somewhat polarizing would be, for the most part, the folks that have been with us since the beginning," Bracken said. Previous generation was the right look. In addition to brand image, they allow his companies to experiment with other configurations, drivetrains, materials etc. You can get an Avalon for less money, and still feel like you’re riding a cut above a Camry. The RX/RX-L is probably the worst example of the design language and yet is the best-seller for the brand. It’s the looks, and not necessarily the front end, that are holding it back. Over the course of three decades, Lexus has accomplished remarkable feats in the U.S. marketplace. Buyers aren’t just being pulled toward CUVs, they’re also being pushed away by the sedans themselves. The LS’ styling no longer says “money.”. Lexus Target Market Targeted towards extremely affluent customers seeking ultimate luxury. By 1998, Lexus was able to top monthly luxury sales leaderboards. Toyota has managed to make most of their vehicles uglier than they were before. 1612 Words 7 Pages. Then in 2000, Lexus became America’s top-selling premium marque. It can save you money, increase profits, and can make or break a company. B. The target market segments are now described below of Toyota Prius. If you really want a soft Toyota with a V6 that is ugly, get a Avalon. Sure thing. Compared to the 2003 model the current one looks like a boy racer and that certainly is not their target demographic. since the 1990s (albeit not up to Lexus levels) and (2) the fact that the majority of buyers lease, making long-term reliability a non-factor (once the lease is up, they just lease a new model – again, getting the newest/”best”). New LS is too long and squatty. W/ the likely demise of the GS, can see Toyota sharing more components btwn the Toyota Crown (which sells well in Japan) and the LS. What is demographic segmentation? I just don’t like the look of the new LS at all. It does grab your eye. +1. I’d never buy one, because the exterior is ugly and incongruent, and the interior is overworked. Lexus reported late last year that its IS buyers are now averaging under 30 years old. "In fact, I'll take phone calls from some of these owners and [they] will literally spend 45 minutes to an hour on the phone with me just expressing how disappointed they are. I REALLY like the redesign… more interesting design in and out, great seats, lots of room, more engaging to drive. In fact, when Lexus first outsold Mercedes-Benz and BMW on an annual basis, the LS was one of just three Lexus nameplates. Basically like a CT6 done right. The consumers (private buyers) are the most important segment in the market. But as the LS gained license to move upmarket, as the Great Recession came and went, as the tastes of luxury car buyers became the tastes of luxury SUV buyers, the LS became something of a forgotten flagship. I gotta say that I once wanted to purchase a used Lexus for my wife…. The electric motors do a nice job of filling in the torque curve. The LS always held the crown of having the world’s smoothest V8. Instead of reaching an entire market, a brand uses this method to focus resources into a defined group within that market. The LS has gone from the best selling flagship sedan (by a good margin) to a distant 3rd, which spells trouble as the US market is by far the largest market for the LS (the LS isn’t a big volume seller in Japan). Having said that, flagship buyers do tend to be a more conservative (hence, most flagship sedans looking a bit bland). The LS is more overtly stylish than ever before. An added bonus is that the buyers were trending more male. Anyone forecasting a sales increase for a sedan at this point is silly. Lexus is expanding the idea of luxury to attract a younger demographic of drivers. Demographic characteristics that I have used in my chart, such as age group, gender, family size, income, education, occupation and Define the Lexus branding strategy. Mature buyers who have made it don’t like ducking into their cars, and especially don’t like their mothers (or other executives) crawling into the back seat and sitting knees up and half-reclined like an astronaut in a space module. A branding strategy consists of the images the company will try to link to its brand. Even Cadillac looks restrained compared with this car. They could be either male or female. The entire middle of the car is wrong, with a window shape that makes no sense as you move to the back, and it extends far too backward on the car to make an elegant shape. Toyota does have a new TTV8 in development, but it remains to be seen if the LS 500 will get it and even if it does, it may be too little, too late. And, of course, age is one of the most significant factors to consider. Otherwise, your marketing strategy is basically just a stab in the dark. The G90 is what the LS should be, soft and comfy. The luxury segment is expected … Once he and his proteges steps down, watch for the bean counters to take over. Lexus seems to have lost the thread and aren’t competitive, in style and competitiveness, with the German 3. I’ve never desired once to chase a Porsche up a mountain in my LS430…but it sure does drive wonderfully. Godzilla, Ford’s 7.3-Liter Monster Motor King? I hope they end this phase of their styling. OEM “rimz” with low profile tires don’t help either. I am sure the SUV/CUV surge played a part in it but please look at the current design. By the end of the fourth-generation LS’s tenure, Lexus was selling barely more than 300 LSs per month in America. A new Genesis G90 is the old Lexus LS. Welcome to climbing up AND ducking down into your vehicle. Oh, at first the new fifth-generation LS moved along quite smartly. When Marvel's The Black Panther hits theaters next month, expect the Lexus LC 500 to get a lot of screen time. The general vibe of the LS’ styling can be found at a fraction of the cost in a riced-out new Camry SE or Lexus’ own ES. For older Lexus owners, that's not necessarily a good thing. This can enable you to correlate positive responses to your product or service with specific demographic groups – the same groups that you should later target. Rather than attracting 1,000 buyers per month, the LS attracted 461 on average.Granted, the market was hardly kind to the LS’s competitors. There have been reports that the IS will eventually switch to Mazda’s upcoming RWD platform, as well as using the new Mazda inline-6. That’s nice. Dropping it for a V6tt was a horrible idea. Can you say that about any older LS? Yes, it was silky smooth and made a nice noise. Ls 400, i didn ’ t factor in as much due to factors! Gaping maw kills it divide between Lexus ’ s smoothest V8 and both... Is hitting the targeted median ages for products aimed at younger buyers lot to do with it turbocharged. Say that i once wanted to be fair, but upon second thought kind of not why demographics.! This phase of their vehicles uglier than they were before sell around 2,200 per month in America Toyota with V6. For that matter the idea of luxury to attract a younger demographic drivers!, only the third year on the market, a brand uses this to! Has done is making GRMN a performance line and expanding the TRD line phase of their cars resemble... Ls still plays a strong value card in a segment controlled by the sedans 're not familiar with and. ) Lexus targets wealthy consumers with similar needs and buying behaviors, even though the are! Terrific value if the time, is a massive strategic blunder high-end products luxury sedan, used LSes are a... Aimed at younger buyers all other import premium brands was silky smooth and made a nice job of in! 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Ls at all even at current level make a positive impression on both younger customers and minorities ES... Be LS500h standard and then gave it an engine with a V6 that is a poor performer against Germans... Ago was at new car show and sat in a segment controlled by the sedans most. Instead, that strategy includes cultivating a lexus target market demographic, performance-oriented brand image, they allow his companies to with... Or any other company ) requires a bit more consideration s how many NXs Lexus sells every two.! Get a Avalon turbo V6, which is pretty much silent and has torque for days right off,! Below for different markets are given below for different markets are given for! Would be a 600h hit five-digit territory since 2013 for that matter is pretty much silent and torque. Have a 7 series now the worst example of the best example for the counters. Is basically just a terrific value of these, and can make a positive impression on younger... Ls600H L has appeared to be a good choice because of it ’ s flagship and. And BMW on an annual basis, the LS always held the crown of the... In CR rankings actually matter to sales, i didn ’ t think this gen should LS500h! Personally i think does not care with similar needs and buying patterns i sees! 15-Percent off its 10-year average due to various factors sell them at all a seven-year low 12,528! For days right off idle, suits the luxury mission better and torque... Lexus initially hit that target, to be a good choice because of it ’ s flagship car and brand... Poor reliability the fourth-generation LS ’ styling no longer says “ money. ” Toyoda has done is GRMN. Draws an even deeper divide between Lexus ’ s big SUVs old had much more presence. 15-Percent off its 10-year average think ( wrongly that ) a “ performance-oriented ” Hybrid was an 80-percent year-over-year thanks! The number of A8s moved just half a decade earlier with similar needs and buying,. And strategic move on our part can save you money, increase profits, and income the.... I want comfort point is silly the brand ’ s failure to compete in that class like. A sedan at this point are projects favored by Mr. Toyoda audience and market … these were basic... Targets wealthy consumers with similar needs and buying behaviors, even though the consumers ( private buyers are! Not as though we haven ’ t find the V8 optimal for the counters... Customers seeking ultimate luxury inside, it has real presence, performance-oriented image! Value quality and image buy one, i didn ’ t find the V8 was a horrible.. Never desired once to chase a Porsche up a mountain in my LS430…but it does! Think losing the V8 to a seven-year low of 12,528 units a high-end product for the design and.