Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
Luxury car manufacturer, Lexus, has seen the return on marketing investment of long-term impact activities in order to improve brand equity double thanks to a repositioning of its strategy.
Speaking on the latest AANA Marketing Dividends program, Lexus corporate manager, Adrian Weimers, said Australia is one of the most competitor car markets in the world, with 65 car brands and about 350 models to choose from. This is having a huge impact on the market the brand approaches its marketing strategy, and putting the emphasis on winning top-of-mind share.
At the same time, improved affordability is seeing renewed growth in luxury car sales, and Lexus has joined a range of providers in the luxury category by creating a lower entry price, allowing consumers to engage with the brand earlier in their lifecycle, Weimers said.
“Twenty per cent of our luxury car sales at the moment are to people aged 35 years and under,”he commented. “Most have grown up with luxury vehicles or luxury goods as an aspiration, so the desire to own luxury vehicles won’t diminish. While we wouldn’t target millennials specifically, I think that they are tastemakers and there’s a lot that you can learn from them to shift and change your approach to presenting your brand.”
While car manufacturers have traditionally focused on model launches as a big area of spend, Weimers said the emphasis now needs to be on winning mindshare, while preserving prestige and credibility.
“Everything you do has to be around recency, and your whole marketing strategy has to change accordingly,” he said.
Weimers noted Lexus has year-on-year sales growth targets it’s trying to meet, and that it’s increased its investment into long-term return on marketing in order to make this happen. It's tracking this through attribution models, prior and post its repositioning as a brand, and found the return on marketing investment had improved by 10 per cent.
“You can also split out marketing investment that drives short-term sales versus marketing investment that returns long-term brand equity, and that return on investment for the long-term brand equity has actually doubled,” he said. "That supports our repositioning strategy and when I go in to see our financial officer later this year, I'll certainly be making that case."
Weimers also highlighted the profound impact digital has had on the purchase cycle for car brands. He said insights research undertaken by the industry showed consumers start with two brands.
“You add, you subtract, and then you buy something that is completely different to what you started out looking for,” he claimed. “From a marketer’s perspective, you have to work out what the moments are that you need to win, and where you can change consumers’ direction.”
More from the Marketing Dividends program:
- IGA marketing leader: Purpose and personalisation are critical to competitive success
- Marketing chiefs advocate innovation on the board agenda
- Foxtel: Marketing is the customer growth engine