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  1. Welcome Beijing Meeting May 20, 2008 DRAFT

  2. Play NAAB Sept 07 Pump Up

  3. Lexus Dealer Association

  4. LDA Idea Organization Idea Management Creative Development: 17 Operations: 5 Idea Production Broadcast, Online, Print, POS, OOH Zenith Buying: XX LDA Idea Communications Planning: XX Idea Creation Strategic Planning Creative Ideas

  5. LDA Overview • Purpose of the LDA • Bylaws • LDA Structure • National Advertising Advisory Board (NAAB) • Board of Directors (BOD) • LDA Markets • Individual Dealer Meetings • Why LDA Works

  6. Purpose of the LDA

  7. Why a Dealer Association? The LDA was established in order to: • Help Dealers build Dealer Showroom Traffic • Ensure message consistency • Maximize overall communication to target audience • Leverage efficiencies and economies-of-scale

  8. Why LDA? Benefits to Lexus: • Increased share-of-voice • For every $1 the Dealer spend, Lexus spends .50 cents • Lexus-guided creative • Demonstrates commitment and support to Dealers

  9. Why LDA? Benefits to Dealers: • Increased share-of-voice • Lexus funds all production • Ability to buy richer media plan, increasing footprint in marketplace • Increased message quality through better production quality • Eliminates/helps control dealer vs. dealer advertising • Creates forum for dealers to provide guidance and input • Access to the resources of Lexus Marketing

  10. Role of the LDA Purchase Funnel 12 months CREATE DESIRE Evolve Brand/Model Image Put Lexus on the consideration list ROLE OF NATIONAL Tier I 6 months CREATE ACTION Present Individual Models Keep Lexus on the consideration list ROLE OF LDA Tier II 3 Months GENERATE TRAFFIC Present Individual Models Come to my dealership ROLE OF DEALER Tier III 1 Month Purchase

  11. LDA Bylaws Purpose: • Ensure all state and federal laws and regulations are observed as the LDA conducts business • Establish clear definition of DMA, Area BOD, and NAAB. • Establish consistent Election and Voting procedures • Establish clear and consistent LDA Advertising Guidelines

  12. LDA Structure

  13. NAAB, Area BOD, & LDA Market Roles /Responsibilities NATIONAL ADVERTISING ADVISORY BOARD • Creative Review and approval • Represent their Constituencies • Communicate and represent decisions and directions to the Areas and Districts AREA BOARDS • Uphold the By-Laws • Fiscal responsibility • National LDA media decisions LDA MARKET • Control of decision-making for respective LDA activity • Decisions of overall budget and media mix, messaging plan, creative selection from LDA library

  14. Eastern Area Board of Directors Southern Area Board of Directors Central Area Board of Directors Western Area Board of Directors Michael Lindsay Sam Scatterday John Burns Jim Richardson Al Haldeman Richard Dorschel Bill Berardino (at large) Jack Kendall Stefan Smith Frank Eskridge Pete Olmstead Peter Hennessy Tony Stampone Mike McGrath Steve Bennett Rick Germain Rick Avare Kevin Whalen Ken Meade Dan Davidson Tracy Moorman Phil Lane Gregg Stone Keith Katz Ken Greene LDA Board-of-Directors/NAAB 223 Lexus Dealers = 4 Area Associations National Advertising Advisory Board (NAAB) 12 Members (highlighted in yellow above)

  15. LDA Structure: DMA Markets • LDAs are segmented by primary television market, as defined by A.C. Nielsen’s Designated Marketing Area (DMA) • The 223 Lexus Dealers are grouped into 109 DMAs • 35 Multiple-Dealer markets • 74 Singe-Point markets • Individual plans are developed for all 109 DMAs

  16. DMAs Dealers % of Sales Central 29 47 14% East 20 57 25% South 38 59 31% West 22 60 30% 109 223 CENTRAL EASTERN WESTERN SOUTHERN WESTERN AREA SOUTHERN AREA

  17. LDA Organization Team One Eastern LDA Office Team One Southern LDA Office Lexus Eastern Area Office Lexus Southern Area Office SouthernLDA EasternLDA Western LDA Central LDA Lexus Western Area Office Team One Central LDA Office Lexus Central Area Office Team One Western LDA Office

  18. NAAB/LDA Creative Development

  19. NAAB/How LDA Creative Development Works • The LDAs have a unique system in which the Dealers, along with Lexus marketing management and Team One, co-develop LDA advertising • The conduit for Dealer input in the creative development process is the NAAB, and the NAAB participates in the creative selection process alongside Lexus • Creative executions are presented to Lexus Management and are screened/approved for strategic consistency • Multiple concepts and/or executions are presented to the NAAB for review and final selection

  20. NAAB/How LDA Creative Development Works • Once final executions are approved by the NAAB, they move forward into production (which is funded 100% by Lexus) • Team One presents the finished advertising to Lexus and NAAB for final approval prior to release for LDA use • NAAB meetings are held 2-3 times per year as well as monthly conference calls in between

  21. Radio :60 commercials :15 billboards :10 IDs :05 IDs Newspaper/Magazine 11 standard sizes Outdoor • Traditional • Digital Online Core Model Templates Lease templates LDA CREATIVE DEVELOPMENT / OPERATIONS (highlights) Television • Production of: • :30 commercials • -:23/:07 lease commercials • Running Footage Tagging • Dub./Ship/Traffick Operations • Launch/Showroom Videos • AdPlanner: Online Advertising • resources for Dealers • Price & Product Revisions on all creative • NAAB Communications/Mailings, E-Mails • Manage Production Budgets & Timelines • Analyze usage reports Point-Of-Sale • Postcards • satin banners • service banners etc.

  22. NAAB/How LDA Creative Development Works • Team One maintains a complete creative library (TV, radio, print, magazine, interactive, direct mail) for full car line • This library is continually updated to reflect model changes, pricing action and new key selling points • Enables each market to custom-tailor media model mix

  23. Creative Library Review: MY09 RX

  24. NAAB Meetings

  25. NAAB : Pre-Meeting Planning • NAAB meetings are: • Designed to achieve the business goals • Collaborative • Multi-media productions • Entertaining (pump-up videos) • Surprise and Delight • FY and MY planning provides the “roadmap” for LDA creative development based on: • New product launches • Competitive launches • Special Editions • Media plan depth


  27. NAAB : Pre-Meeting Planning • Lexus and Team One collaborate on the NAAB meeting with key deliverables four months in advance

  28. NAAB: Pre-meeting Planning Good Evening Gentlemen, This provides notification of the National Advertising Advisory Board's Conference Call to be held on Tuesday, May 13, 8AM PDT/11:00 AM EDT. The agenda topics are as follows: 1. August Sales Event Campaign Concepts 2. LS AWD Television Concepts 3. RX 350 Banner Concepts PROCESS A FedEx package will be delivered to each of your stores on Monday May 12th, containing the materials to be discussed on the call. Please take a moment to review the materials prior to the call. (Should you require delivery of your package to an alternate location, please respond to this e-mail with the address information). This meeting will be handled via conference call and is anticipated to last 90 minutes. Please dial into the conference call at: 1-800-308-9936 , Passcode: 827104# . Once you have been connected to the call, please announce yourself so we can take roll call and begin on time. We look forward to speaking with you on the call and thank you in advance for your time. As always, please contact your Team One account representative or me with any questions/comments you may have. • Clear communication in advance • Lexus announces location and arranges travel/accommodations for the NAAB • Conference Calls communicated and reminder notifications provided

  29. NAAB : Pre-Meeting Planning

  30. Presenting Creative Concepts • Offer choices • NAAB is invested /endorses the work when they are part of the approval process • “Three for One” • Example: IS 250 AWD

  31. IS 250 AWD Strategy 1. The Business Problem:Drive consideration of the IS 250 AWD. 2. The Consumer Problem: Awareness of the IS 250 AWD needs a boost. Though the IS has established itself as player in the sports sedan segment, many are unaware that it’s also available in an all-wheel drive format. This is of particular concern given the well-reputed all-wheel drive variants of the BMW 3-series and Audi A4. 3.The Challenge: Prove that the Lexus IS 250 AWD confidently handles adverse road conditions. 4. Target Observation/Insight: “Independent thinkers”. Passionate, sophisticated individuals who have a constant desire for knowledge. Confident decision-makers driven by a desire to be free from conventions and liberated from social expectations. Have a passion for driving and desire a luxury vehicle capable of performing well in all weather conditions. 5. Ways In/Feature Focus: Emphasize AWD and related performance features. AWD: directs engine power from the rear to the front axles when needed. VSC: vehicle stability control helps the driver maintain vehicle control under adverse conditions. Integrates traction control (TRAC) and anti-lock braking system (ABS).

  32. IS 250 AWD Television Concepts • “Ball Bearing” • “Chase” • “TBD”

  33. “Chase”