Segmentation and Targeting Essay

Lexus is a luxury division of Toyota Company, which focuses on the premium segment of the market. The company focuses on the development of the effective market expansion strategy to meet needs and wants of customers capable to afford the price to pay for Lexus vehicles. The company operates in the premium segment of the international market but still, today, the company faces considerable problems because of the economic recession and the growing dissatisfaction of the public with the negative impact of vehicles on the environment. In such a situation, Lexus has to and does develop new models, which are more environment-friendly compared to previous models and, therefore, more competitive in the market. At this point, it is worth mentioning the fact that Lexus has proved to be quite successful in the contemporary business environment but, today, the company has to develop changes to improve its marketing position and to expand its market share.
In actuality, the target market of Lexus is the premium segment of luxury vehicles. In such a way, the company focuses on customers, who are representatives of upper-classes. The company attempts to strengthen its position through the provision of the diversity of models of the premium segment for different groups of target customers. To put it more precisely, Luxury offers customers sedans, SUVs and other vehicles, which aim at different age group and lifestyle of customers. For instance, SUVs are destined for customers leading active lifestyle or customers with large families, whereas sedans and sport cars are destined for customers, who are more concerned with their status and representation in the society. In such a way, the company can focus offer customers different vehicles of the premium segment but oriented on different groups of customers depending on their needs and preferences.
In such a context, the positioning strategy of Lexus is also oriented on the premium segment of the market. At this point, it is worth mentioning the fact that Lexus positions its vehicles as luxury vehicles and, therefore, the company focuses on the creation of vehicles of the top quality. In this regard, the customer satisfaction is extremely important for the company because the company can develop its marketing strategy and introduce improvements respectively to needs of customers and their satisfaction. If customers feel uncomfortable about some issues in Lexus’ vehicles, the company introduces changes that meet needs of customers. As a result, customers are satisfied and enjoy using Lexus’ vehicles. At the same time, the company positions itself as the major luxury car manufacturer from Asia offering the original cars different from European ones, which were traditionally leaders in the luxury car manufacturing industry.
At this point, it is possible to speak about the uniqueness of the company because Lexus is really one of the leading Asian companies, operating in the premium segment of the market. Even though Lexus faces the rivalry from the part of other Japanese manufacturers such as Acura, for instance, but Lexus is still a symbol of the quality and style, which is different from European style. At the same time, Lexus always focuses on the introduction of technological innovations, which allow the company to take the lead in the industry and outpace rivals. In fact, the company attempts to create comfortable cars but, what is more important, the company is always concerned with the introduction of some technological innovations, which make its cars better for customers. The company attempts to introduce some innovations to show that the company is working on the improvement of its cars and that its cars are really the best in the segment and the industry at large. In this regard, it is worth mentioning the introduction of the first model of Lexus in the market, when champagne glasses were placed on the hood of the car to show the smoothness of its V8 engine. In such a way, Lexus attempted to distinguish its cars from those of its rivals and to prove the audience that Lexus’ cars are better than other cars in the industry.
On analyzing the current position of Lexus and the attitude of customers to its products, it is possible to estimate that the products of Lexus fit with the target market and positioning. To put it more precisely, the company has managed to create the demand for its vehicles and gain a considerable share of the market, which was traditionally occupied by European companies. Customers are eager to have an alternative manufacturer but traditional leaders in the industry. As a result, Lexus becomes a perfect alternative to Mercedes, BMW and other car manufacturers operating in the premium segment of the market. What is meant here is the fact that the company offers customers cars of a high quality at a high price but customers are ready to buy these cars because they are different from conventional cars offered to them by European manufacturers, for instance. In addition, the Japanese market is large enough and Lexus holds one of the leading positions in the Japanese as well as Asian markets challenging the position of traditional leaders in this segment of automobile market.
At the same time, the quality of products manufactured by Lexus is high and the price is justified by the quality and innovations of cars sold by Lexus to its customers. In such a situation, the company can maintain the manufacturing of luxury cars and count for the steady demand on these cars. In such a way, Lexus can offer customers excellent cars at high price and customers are ready to buy these cars. As a result, the company can benefit from its position, whereas changing its position makes the development of Lexus pointless because other divisions of Toyota Company manufacture less expensive cars holding strong positions in other segments of the market. In addition, entering cheaper segments of the market would mean the steady degradation of the company and devaluation of its brand. This means that if Lexus starts manufacturing D- or C-class vehicles, its target customer group will turn to its rivals and ignore it vehicles even from the premium segment.
At this point, it is worth mentioning the fact that the major competitors of Lexus are Mercedes and BMW as well as some other largest companies operating in the premium segment of the market. In fact, rivals of Lexus hold a strong position because they have a large share of the market and well-recognizable brands. As a result, they can exploit their brands and provide customers with products of the high quality as well as Lexus does. Hence, the competition in the premium segment of the car market persists and Lexus attempts to maintain its competitive position and expand its market share. Rivals of Lexus, such as Mercedes and BMW, have substantial resources and renowned brands. They also focus on the introduction of innovations but they are more concerned with the traditional style and customer satisfaction that leads to fewer experiments compared to Lexus. Therefore, Lexus can often introduce new, original products, such as its hybrid models, and outpace its rivals.
Thus, it proves beyond a doubt that today Lexus holds a strong position in the premium segment of the market. The company aims at customers from the upper-class and offers them vehicles of the high quality. At the same time, the company attempts to enhance its position in the market and introduces innovations, which help the company to attract customers and offer them larger opportunities for using the full potential of its vehicles. Lexus has always being one of the first to introduce new products, including the introduction of crossovers and SUVs as well as hybrids in the premium segment of the market. In such a way, the company conducts reasonable positioning strategy and has a substantial potential for the further growth and development. Therefore, Lexus can keep focusing on its target customer group and diversifying the line of its products to meet all needs and interests of its target customer group.