Full Court Press - the success of Lexus

Brandweek, July 27, 1998

Not much flash. Top-rated manufacturing processes. Bullet-proof quality. And a brand culture everyone understands. Jim Press puts his stamp on Lexus.

There are only a few extremely well-defined brands in the auto industry today with brand positions that have maintained a consistent posture: Jeep, Ford, Honda, Chevy Truck, Saturn and Lexus. Of those, Lexus may be the most remarkable story. As it enters its 10th year of selling cars, the brand has already eclipsed the likes of Cadillac and Mercedes-Benz in the minds of many as a standard of excellence, becoming part of the comparative lexicon: the "Lexus" of stoves, the "Lexus" of vacuum cleaners, the "Lexus" of airplanes.

Car companies, indeed any consumer-driven company struggling with its brand equity, image and sales, can grouse when Lexus is held up as a standard. After all, the luxury division of Toyota got to start with a clean sheet of paper. That would itself seem a luxury, compared to, say, Lincoln and Cadillac or Buick, all of whom can only make strategic turns as sharp as their years of compounded corporate and brand baggage will let them. And yet, Nissan's Infiniti division launched at virtually the same time, and its brand equity is as shallow and vaporous as Lexus' equity is deep and substantial, and Honda's upscale Acura unit, though getting a head-start on both, never quite clicked in body-and-soul with that highbrow clique. Plainly, people are aspiring to Lexus, as they do Mercedes and BMW while the other two Japanese luxe brands are still relying on discovery.

The recipe at Lexus has been great product, which everyone expected from Toyota, but with a marketing plan informed by remarkable clarity and focus, especially given the confounding tiers and positions bouncing around the marketplace. Toyota, with the help of El Segundo, Calif., agency Team One Advertising, launched the brand in 1989 with a campaign dubbed "The Relentless Pursuit of Perfection," and that slogan, arguably one of the most effective of the century, remains intact today at the heart and soul of every product and marketing decision made. Everyone, Japanese or American, white collar or blue collar, and every dealer, seems lobe on the same page with what Lexus is about. They all get it, top to bottom.

Jim Press took the helm of Lexus in the U.S. in 1995. And, though inheriting a sterling brand, Press was charged with the unenviable task of segueing from successful launch to maintenance of the brand's elan and relevance of new models, such as the CS series and the new LX470 sport utility vehicle, to the upscale car buyer, all the while fending off resurgent Euro-imports such as Mercedes and BMW His efforts earned him the promotion earlier this year to senior vice president and general manager of auto operations, a newly-created position that effectively has him overseeing both Toyota and Lexus brands in the United States. Press recently talked with Brandweek senior editor David Kiley about the Lexus formula, and shared his views on the competition and where Toyota is going as a brand.

Brandweek: When you took over Lexus in 1995. what WOS the biggest issue confronting you?

Jim Press: It was that our competitors, which had been surprised by our immediate success, had finally caught up with fresh product. The Europeans had slipped and reached all-time low sales levels, and as they grew back to just average sales, the feeling was that they were growing. And we weren't growing like they were. What we had to do was maintain the brand equity and not let their progress detract our vision from where we wanted to go, because we knew that the products we had in the pipeline would carry us forward. It was important at that time to not let short-term pressures cause us to deviate from the equity in the brand that added up to high desirability and high efficacy. And then, we had to prepare for what we call the second chapter in the book. We have the brand foundation. The first chapter was very successful. The pundits couldn't see the second chapter, all they could see was the first.

BW: 1-low do you define the second chapter?

JP: Redirecting our products. We took the GS and turned it into the world's fastest sedan. Lexus, before that, was not known for speed or performance. If you go back to the original LS400 sedan, that car set standards for value and smoothness and quiet. The feeling was that it would be hard to do that again with a large sedan, especially since the German brands had become reinvigorated. So, our challenge was to take the CS and make it a better car than the original LS400 was, and to pull it off in a more competitive environment than we had 10 years ago. And we did it. The current LS is better than the original LS400. But the CS is our thrust right now in the sedan segment. And now we have the sport utilities, which are, of course, a greater part of the affluent buying public than they used to be. The RX300 is a huge hit.

BW: Should Lexus hove been able to do better than 90,000 units last year? Did the division underperform?