Hyundai and Lexus’ opposing marketing strategies

Isaac Mostovicz writes that focusing on service is better than creating controversy...

In recent years in the US, Hyundai has been working to shed its image as a budget automaker by focusing on quality, styling and performance. They seem to have found some success, as they are now in a position where they can launch a new luxury automobile, the Equus, that could cost as much as $60,000. Hyundai is going out of its way to offer services that few other luxury automakers offer: they are driving the car to peoples’ homes to give them the chance to test drive the car at their convenience, and they are also offering a valet service, where owners having trouble will be visited by a Hyundai service technician who will fix the problem or take the car in for repairs, leaving a loaner vehicle behind. This sort of service sets Hyundai apart and may work to further distinguish the brand from its budget beginnings.

While this Hyundai scheme focuses on individual attention, Lexus recently announced a marketing strategy bound to create collective controversy. They are hosting a series of debates about climate change featuring non-scientist climate change deniers. It’s unclear whether Lexus is supporting and endorsing these unscientific views by bringing in these dubious ‘experts’, or drawing attention to them to show that there’s more to the argument than these deniers say. In either case, Lexus would be better served by hosting debates with experts from both sides of the argument.

Lexus’s attempts to go for controversy may backfire, especially as they have pushing green features in their cars for a long time now. Rather than potentially alienating some of their customers while creating a large controversy, they would be better served by doing what Hyundai is doing, offering the kind of service that people will only respond to well. Hyundai is creating good word of mouth that will enhance its brand’s reputation, something Lexus has been known for doing in the past — but this climate change controversy may cause more harm than good.

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Lexus for Luxury with a Social Conscience?

Isaac Mostovicz writes...


In its latest promotions, Lexus is moving further into the market for hybrid vehicles by linking its reputation as a luxury car manufacturer with the eco-friendly merits of hybrids.  Lexus claims to be the first carmaker to focus on this relationship between luxury and environmentalism and in its ads (seen online on various websites), the company talks about how:

One should not have to choose between luxury and social conscience.

Lexus is positioning itself to the luxury car buyer who is not willing to sacrifice design and performance in order to be environmentally aware (sort of like die-hard coffee fans who are unwilling to sacrifice taste but want to buy fairly traded products). Lexus’ tag line argues that it gives more to the driver and takes less from the world. This may be true, but it’s a little hard to swallow when its most expensive hybrid only gets 20 miles per gallon in city driving. Nevertheless, the company is engaging with issues that many other luxury companies aren’t. Just this week Lexus launched an online forum to discuss the impact of hybrid cars on society.

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Jack Yan says of this article...

I have always been cynical about the Lexus hybrids, too, considering that the system appears in an SUV and its top-of-the-line sedan. Toyota, as a group, has even opposed some of the fuel-economy standards that California wants to impose. The Lexus hybrids are a “better than doing nothing” approach, but not one that definitively addresses the problems relating to greenhouse gases.
   The real clever approach would be to build a luxurious and smaller car with a distinctive, futuristic bodyshell, though efforts such as the Cadillac Cimarron (and I would even say the Lincoln MKZ) show that that is not always easy. However, mated to a hybrid system, this could be a useful way forward.

Jacqueline says of this article...

While Lexus might be the best option for those looking to “save the earth in style” (to quote 3Luxe’s very complimentary Lexus GS 450h listing), I tend to be a bit suspicious of a true eco-friendly luxury car.

That said, it is better than doing nothing – and I’d certainly like to have my suspicions proven wrong!

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One for the irony file: Lexus Low-Mileage Hybrid

Isaac Mostovicz writes...


This week Toyota announced a new luxury performance sedan, the Lexus LS600h L. At $104,000, it’s the most expensive car ever offered by the company. Decked out in leather and high-tech amenities, the car goes from zero to 60 miles per hour in 5.5 seconds and has 438 horsepower. It’s also “green”—its hybrid gasoline-electric engine gets it better gas mileage than a gasoline engine alone.

But is it really the perfect car for the rich but environmentally-conscious consumer? I can’t say I think so.

I don’t want to go so far as to call putting a hybrid engine into the car a gimmick, as it’s surely a well-engineered, luxurious vehicle (and admittedly it does emit less pollution), but the car only gets 20 miles per gallon in city driving. That’s less than many non-hybrid sedans and only a third of the city mileage that Toyota’s first hybrid, the Prius, gets. The Prius is also a quarter of the LS600h’s cost.

You don’t exactly scream environmentally-friendly when you’re using more petrol than many non-hybrid cars. Are consumers wealthy enough to spend six figures on a car are concerned about this? For now it’s unclear, but car makers and other luxury businesses are increasingly offering green choices.

The fruits of green technology should themselves be green, but this Lexus isn’t (or at least isn’t as green as it could be). As consumers become more aware and discerning of green choices, they may want a car with four times the gas mileage of the Prius if they’re spending four times as much.

Janus Thinking says of this article...

Lexus for Luxury with a Social Conscience?

In its latest promotions, Lexus is moving further into the market for hybrid vehicles by linking its reputation as a luxury car manufacturer with the eco-friendly merits of hybrids.  Lexus claims to be the first carmaker to focus on…

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What is luxury? “The no-need need”

Isaac Mostovicz writes...

Having analysed almost every model of luxury branding for my PhD thesis, I ultimately decided that Dubois and Paternault’s model was being the most complete and explanatory power. D&P propose 6 attributes of luxury brands:

They are:

extreme quality
aesthetic appeal
and time incorporation

Despite being an excellent distillation of the nature of luxury brands, these criteria are clearly insufficient to explain the full range of luxury experiences.

Superfluousness is clearly a ‘qualifying criterion’ for luxury. That which is needed cannot, de facto, be luxury. But all the other criteria are open to challenge at some level.

Extreme quality, for example can be challenged by brands whose quality is utterly questionable – TVR sportscars, for example or more pertinently, Ferrari itself.

Expensiveness is less open to debate. Even allowing that expensiveness is a relative term, both in competitive terms, and from the perspective of the individual, some luxury brands are not differentiated on price.

Examples here would be brands that pull of the trick of becoming discretionary, while being functionally similar. These are brands that attract the attention of connoisseurs by branding heavily on the basis of being ‘an acquired, specialist taste’. In spirits, for example, limited release batches, or special finishes can be luxury brands, without necessarily being more expensive. From a marketing strategy the point is to sell greater volume to heavy users rather than increase margin on individual units.

Another example would be limited release handbags, or signed copies of books, which are luxury because they require effort and expertise on the part of the brand purchaser.

Scarcity is a very marginal criterion and has been widely challenged in branding literature. In the east social ubiquity does not undermine perceived brand cachet at all. In the west the growth of masstige brands like Molton Brown cosmetics has been dramatic.

The value of aesthetics is superficially the weakest criterion. We can all think of brands who have brutal aesthetics – Bristol, Hummer cars or Toughbook computers spring to mind, but they are still luxury on other measures. These sort of brands do at least have distinctive aesthetics, though, which appeal to connoisseurs, and lean on their brand heritage – but consider Lexus. Definitely a low-level luxury brand, but with zero aesthetic appeal.

The most intriguing category is ‘time incorporation’. When people talk about craftsmanship, or discuss a designer’s style, or talk about the quality of the purchase experience, this is what they are alluding to. Luxury brands compress and distill the process of design, manufacture and ownership of a product into their relationship.
When individuals buy a Ferrari, they buy 60 years of racing heritage. When they buy Chanel, they engage in nostalgia for a bygone age.

Based on Dubois & Co’s criteria, I wonder what the world’s most luxurious brand is…Rolex? or Patek Philippe? Linn Hi-Fi?

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