A company’s target market consists of the group of potential customers that will find the greatest value in the product the company is offering. By extension, this group will be the most receptive to the firm’s marketing message and provide the greatest base of sales revenue. You may think that defining the target market of a luxury car company like Lexus would be fairly simple: people who buy luxury cars. However, defining a target market for Lexus (or any other company) requires a bit more consideration.
Define the Lexus branding strategy. A branding strategy consists of the images the company will try to link to its brand. Publicly traded corporations like Toyota, the Lexus parent company, will usually disclose the planned marketing strategy for their different brands in their annual report. This will give you an overall idea of how Toyota plans to market the Lexus brand in the future. Most telling are the “campaign descriptors,” the terms used to describe the planned impact of the marketing effort. Terms like "classy" or "refined" imply one type of market group, while terms like "innovative," "adventurous," and "youthful" relate to a very different group of customers. By listing these terms you can get a good indication of the type of customer group that would most respond to these brand images.
Analyze the Lexus marketing message. Review the images, slogans, and advertisements Lexus uses to promote their product. What do the people in the ads look like, what social or economic class do they represent, and in what environment or background do the ads take place? Answering these questions will draw you even closer to identifying what target market would most be attracted to these elements. For example, when evaluating an ad for a luxury car brand like Lexus, does the ad environment reflect refinement and relaxed enjoyment, or excitement and achievement? The first suggests an older market and the second reflects a 30 or 40-something consumer group. List your observations of these elements alongside the terms from step 1.
Look at what ways Lexus delivers its marketing message to consumer groups. Are ads placed in magazines like "Maxim" or "GQ," or "Women’s Day," "AARP," or the "Wall Street Journal"? Do you see their commercials on ABC or PBS, and which cable channels do their ads appear on? What times of the day or week are the commercials most visible and in what types of programs do they show up? Do they have ads on YouTube.com or Hulu.com? Once you can discern how Lexus delivers the marketing, you can define which consumers would most likely be exposed to these ads.
Consolidate your findings by looking at looking at the one or two types of customers that would find the greatest appeal in the terms from steps 1 and 2 and frequently be exposed to the ad channels in step 3. Your results describe the Lexus target market.