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Seeking Deals

Double Down: Lexus Dramatically Expands Sponsorship Activity

LEXUS REGIONAL OFFICES AND CONTACTS

Luxury auto line plans to double the number of properties it sponsors; seeks local, regional and national opportunities to create experiences for owners and prospects.

Toyota Motor Sales U.S.A., Inc.’s Lexus division is taking a cue from its parent when it comes to sponsorship.

Following in the tracks of Toyota’s major increase in sponsorship spending for its flagship nameplate, its luxury division doubled the number of events it sponsored in ’06 and plans similar increases over each of the next two years, according to Deborah Meyer, Lexus vice president of marketing.

The new deals come with an increase in the company’s sponsorship budget and are happening at the national, regional and dealer level. “We are increasing both our event portfolio and our spending on events,” said Keith Dahl, national manager-Lexus event marketing.

“While the largest increase in the number of, and investment in, events has occurred at the corporate level, our regional offices and our dealers are also increasing their use of events as a strategic marketing tool,” he said.

In one of its most recent sponsorships, Lexus last month inked a multi-year partnership with the U.S. Golf Assn., an agreement that makes it the official vehicle of the U.S. Open, U.S. Women’s Open, U.S. Senior Open, U.S Amateur and other sanctioned events.

In addition to signing new marketing-driven ties, Lexus also has launched a new cause-related initiative. The division last month rolled out The Lexus Pursuit of Potential, a program allowing its dealers to fund new and existing partnerships with children’s charities using matching funds from corporate.

Pursues Opportunities To Get Closer To Target Market
Lexus is expanding its use of sponsorship to support its “pursuit of perfection” brand positioning, gain media exposure and, perhaps most importantly, offer premier, one-of-a-kind experiences to customers and prospects.

“Sponsorships afford Lexus the opportunity to interact with owners and prospective customers in a way that broadcast media and other marketing tactics cannot,” Dahl said.

“In many instances we approach an opportunity in two dimensions: On one level is overall brand awareness, interaction and value brought to all attendees, and on another level there may be extensions that allow a very high degree of engagement and a unique luxury experience for a select number of people.”

He cited Lexus’ sponsorship of the Aspen Ideas Festival as an example. In addition to having on-site display and test-drive opportunities for all attendees of the event’s lectures and courses, the automaker also worked with Aspen Institute organizers to provide vehicles for Lexus Excursions to off-site activities for a smaller number of participants.

Lexus’ USGA deal, which runs through 2010, deepens the company’s already significant involvement in golf. Lexus has titled the Champions for Charity grassroots golf series for the past 18 years and has endorsement deals with pro golfers such as Ray Floyd and Peter Jacobsen, as well as Annika Sorenstam, whom it plans to use in its USGA-related marketing. The 11 pro golfers that currently endorse Toyota also will move under the Lexus banner.

Lexus will leverage the partnership through themed ads, dealer events, on-site vehicle display, USGA membership activities and other initiatives, said Ed Kiernan, executive vice president and chief marketing officer of Peter Jacobsen Productions, which brokered the deal.

Similar to its multi-faceted partnership with the U.S. Tennis Assn. and its US Open, Lexus will leverage its USGA tie with premier events for customers and prospects. Lexus vehicle owners receive valet service and other personalized treatment at the tennis championships.

“The partnership is really going to mirror what they have done with the USTA and US Open,” Kiernan said, noting that activation plans are still being finalized.

One event that the division already is pointing to is the ’10 U.S. Open, which will be played at Pebble Beach Resort where Lexus has an agreement to provide its owners with special perks such as room upgrades.

Lexus’ focus on premium positioning and hospitality trickles down to regional and local ties.

The company’s first-year partnership with the NBA Minnesota Timberwolves affords exposure on courtside seats and branded valet uniforms, as well as complimentary dinner and drinks for Lexus owners in the Lexus Lounge, a new private area within the Target Center’s NBA City Restaurant. The lounge also features premium leather seats similar to those in Lexus vehicles.

The division has similar partnerships with the NBA Portland Trail Blazers, NHL Florida Panthers, MLB Atlanta Braves and Texas Rangers, as well as other pro sports teams.

New Cause Program Supports Dealer Initiatives
With The Pursuit of Potential initiative, Lexus has committed $1 million to match dealers’ cash contributions to or sponsorships of local nonprofits that benefit children in the community. Funding comes from Toyota Motor Sales’ corporate contributions department.

The company’s 221 dealers will work with brand experience managers in Lexus’ four area offices to access the funds. The annual maximum match for any one dealer is $10,000.

In addition to supporting worthwhile causes and demonstrating its community involvement, Lexus will use the program to build its presence in front of affluent consumers that are involved in philanthropic activities.

“If they interact with a Lexus dealer through a charity, it is more likely they will go to the dealer that they know when they are in the market for a new car. It’s another way of bringing people to our dealers,” said Nancy Hubbell, Lexus’ prestige communications manager, who oversees the program.

Although Lexus had considered sponsoring a national charity, “we decided to build a program that would support dealer initiatives. When our dealers support a cause, it has a positive impact on the Lexus brand,” Hubbell said.

In early ’06, the company used an online survey and one-on-one meetings to ascertain what causes its dealers supported.

It then surveyed owners and prospects to determine the types of causes they were most interested in.

“Our owner base is very involved in charity. We wanted to make sure that our giving initiatives matched theirs,” Hubbell said.

A research firm conducted focus groups in seven major Lexus markets–Chicago, Dallas, Los Angeles, Miami, New York, San Francisco, and Washington, D.C.

The firm queried the participants about their philanthropic activities, why they supported specific charities, their thoughts on cause marketing and their take on luxury auto manufacturers and their philanthropic initiatives.

The research revealed that a significant percentage of customers supported youth initiatives.

“They brought up the importance of children’s charities,” Hubbell said. “Two-thirds of our dealers already supported children’s charities, so we created a program that could home in on that.”

To support the initiative, Lexus has provided its dealers with collateral marketing materials and ad templates.

Lexus’ Sponsorship Decision-making Process
National marketing-driven opportunities are reviewed by Dahl, with final approval coming from Meyer.

Lexus’ four regional offices have sponsorship budgets managed by merchandising managers (see table), who frequently co-fund deals with dealers.

For example, Lexus’ sponsorship of the Panthers, which includes title of two seating levels and free parking for Lexus owners at the BankAtlantic Center, is funded by Lexus’ Southern Area office and five South Florida dealers.

Dealers are the primary point of entry for submitting local sponsorship opportunities, Hubbell said.

Sources
Toyota Motor Sales, U.S.A., Inc., Lexus division, Tel: 310/468-4000
Peter Jacobsen Productions, Tel: 503/526-9331

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LEXUS REGIONAL OFFICES AND CONTACTS

 
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