Tesla's Marketing Strategies: A Growth Plan

The assignment content is about Tesla Motors' marketing strategy, product line, distribution channels, promotional mix, and pricing strategy. The company targets the upper middle-class families with typical incomes of above $100,000 and focuses on loyalty and satisfaction to increase profit. They use a marketing mix that includes 4Ps: product, place, promotion, and price, which has helped them grow their brand popularity and market penetration. Tesla's products include automobiles, electric vehicle powertrain components, batteries, and other related products.

RUNNING HEAD: MARKET ANALYSIS
TESLA MOTOR COMPANY
MARKET ANALYSIS

MARKET ANALYSIS 2
Tesla Motor Company
Tesla, Inc. is an American automaker company, energy Storage Company and the solar panel
manufacturer based in Palo Alto, California founded in July 2003.
Tesla’s vehicles are being produced at the factory of Fremont in California, in this large number of
vehicles are being made and they are trying to expand its product line and their production plan of the
company was to increase to a production capacity of vehicles that should be around 500,000 a year
from the year 2018.
When Tesla reached to the public in the year 2010, it had become the first American car company
after the Ford motor company in 1956. After that Tesla's stock has lifted as the company was
continuously updating the new models and the features by using the perception of the curios public.
In the year 2012 tesla stopped the production of the roadster and started concentrating on its new
model of S sedan which was cheered by the automotive critics for its design and performance.
The best part they have contributed for an economy was that if someone buys the Tesla roadster sports
car they are indirectly helping to pay for the development of the low-cost family car.

MARKET ANALYSIS 3
Situation Analysis
Tesla motor is focusing on advertising their model S vehicle. Their goal was spreading the
information to the consumers about the S model that is far better than its customers. They were trying
to attract the consumers by their environmental friendly vehicle and as well as their luxury options
too.
The factors affecting the tesla motor company was its distinctive competencies, its growth
perspective, pull management model and its competition, in spite of all these factors affecting
company then also it has achieved the competitive advantage without compromising the design or the
functionality.
They are using the SWOT analysis for gaining the competitive advantage. Most affecting competitors
are Chevrolet Volt, Toyota Prius, Honda Civic, Smart car and the Toyota rav4 hybrid. (Tansel, A.
K,2015)
Segment Information
The main segment of the Tesla Motor company as per the metrics of the company was Revenue as it
has shown a major growth in the automotive sales from 20.585 dollars million in Q1/10 and have
shown a major growth and have reached to 878.09 dollar million in Q1/15.
The information for the tesla motor are:
Lack of competition: As every company at the time of establishment announces it launch but if they
will do so it will be their biggest loss so they have not announced anything about the launching their
electric vehicle. Due to it, Tesla has become one of the companies who is selling the volume of a
high-end, high-range electric vehicle. Only due to this strategy being used they have gained a lot in
the market and this was according to them was the main strategy to be used for gaining the
competitive advantage.
Segmentation on the basis of Green car market: it was easy for making the mistake of treating all the
alternative fuel cars as belonging to the same car segment. Due to this, all the vehicles i.e. hybrid
vehicles, plug-in hybrid all are treated similarly to each other. They have used in this green car
segment for capturing the market which was like putting a fake picture in the minds of the consumers.
As this cannot be possible so they should not use these type of fake words for increasing their
revenues and their profits
Model S is one of the major segment which is fully electric, four door, having a capacity of five adult
passenger that produces zero tailpipe emissions and accelerates from zero to 60 miles per hour in as

MARKET ANALYSIS 4
low as 4.4 second in its performance versions and tey had began their delivery to customers on june
2012. They are offering S model with a variety of battery pack options 40 kWh, 60 kWh, and 85 kWh,
which is having a range on the single charge of upto 265 miles.
The another segement is Powerstrain Development and Sales in which in addition to their vehicles
they are also designing, developing, manufacturing and selling advanced electric vehicle powerstrain
components to other automotive manufacturers. They are trying to perform these principle out of our
Palo Alto facility. This facility also serves their headquaters, reseacrch houses including cell and the
testing components or prototyping and making the components for sales to third party.
These were the main segments that were used by the Tesla motor company. (Birk, D,2015)
Target Market Analysis
The target market of the Tesla Company was trying to reach out to the average families by using the
IDE software for making it easier in driving and for the safe drive.
They were also targeted towards the rich families by providing a luxurious and comfortable car as per
their perception or even more than that. So they were focusing on the loyalty and the satisfaction of
their rich customers. As by focusing on their needsa nd wants they can increse their profit to a large
extent and gain the competitive advantage and makes their brand image in front of the rich people so
they would only prefer this branding cars and they try to lauch their car above the expectation of the
peoples even.
They were only focusing on the age distribution of their target market analysis which can be done by
analyzing the age group people who are mainly presented in the target market. For example: if there
are more teenagers they will be focusing on the styles and the features of the car or if there are many
peoples who are in the old age they will be focusing more on the comfortable level of the car. So they
are doing these market anaysis for the manufacturing for their models and incresing the revenue for
their copmany.
As per the analysis being done Tesla was mainly focusing on the upper middle-class families with
typical incomes of above 100,000 dollars and by researching in their market they found that almost 77
per cent of the buyers is falling in this particular category. (Tansel, A. K,2015)
Marketing Mix
Tesla motor used the marketing mix that stands out in the automotive industry. The marketing mix has
4Ps which are product, place, promotion, and price as a set of strategies that are used by the
companies for its marketing plan. These level of control maximizes the effectiveness of the companies

MARKET ANALYSIS 5
in reaching to its target customers and optimizing the profits. Tesla uses the marketing mix strategy
for supporting the market penetration and for the potential expansion in overseas locations.
By using the four P’s it has grown its brand popularity along with the increased market penetration.
From the four P's is the best suitable for this company was the place and promotion components
which have made a Tesla company an unusual in the automotive industry. There are some profitable
products that provide values for the customers that they will be paying for.
Product mix
It includes the following products from an automotive industry and the products are:
 Automobiles
 Electric vehicle powertrain components
 Batteries
Place or distribution mix in Tesla
 Official company website
 Company-owned stores and galleries
 Company-owned service center
Promotional mix
According to significance, there are some components mentioned below:
 Viral marketing
 Personal selling
 Public relations
 Sales promotions
 Direct marketing
Price mix
Tesla Company uses a premium pricing strategy which includes a high price points on the basis of
uniqueness or on the basis of high-value attribution for the products of the company. (Park, J,2014)

MARKET ANALYSIS 6
Competitive Analysis
The above table shows the analysis of the Tesla’s sales with other Luxury vehicles of the U.S. as it
has been seen in the table the revenue of the Tesla Company has a major growth than the other
vehicles company.
As per the table, it is been seen clearly that the sales within a particular year have been increased to
around fifty per cent from the previous year, whereas the other companies sales have been declined to
the large extent or occurring a loss. So according to the table, it is seen clearly that it has become the
top most company among all the luxury vehicles company. (Wesseling, J,2014)
Conclusion (Growth Plan)
Tesla's has a growth plan of dramatically increasing their car production by launching one or around
two cars which are being new for the customers and conquering the self driving vehicles till the year
2020 that the tesla is planning for the next few years.
The initial product of Tesla motors was the high performer electric sports car which was known as the
Tesla roadster. Due to the success of that car, a company is planning to build a wide range of models
including affordably priced family cars. This plan is being made of the fact that they want to move
towards a solar electric economy which was the primary sustainable solution for them.

MARKET ANALYSIS 7
The strategy that has been used by Tesla was to enter the market at the high end, where the customers
are prepared to pay the premium and then they drive down to the market as high as possible to the
more higher volume and the lower prices with each of the successive model. According to me, the
second model will be costly as it will the sporty four-door family model of Tesla roadster and the
third model will be affordable for many of the individuals.
But the best thing they have contributed was that if someone buys the Tesla roadster sports car they
are indirectly helping to pay for the development of the low-cost family car.

MARKET ANALYSIS 8
References
Tansel, A. K. (2015). Analysis of Tesla Motors’ Marketing Communications Strategy.
Birk, D. (2015). Tesla Motors, Inc. Market Analysis and Definition.
Bohnsack, R., Pinkse, J., & Kolk, A. (2014). Business models for sustainable technologies: Exploring
business model evolution in the case of electric vehicles. Research Policy, 43(2), 284-300.
Tansel, A. K. (2015). Marketing Report on" Tesla Motors".
Park, J., Rast, J., MacDoughall, T., Nitti, B., Sinton, D., Geissler, A., & Roseli, K. L. (2014).
Marketing Plan for Tesla Motors’ Model S.
Wesseling, J. H., Faber, J., & Hekkert, M. P. (2014). How competitive forces sustain electric vehicle
development. Technological Forecasting and Social Change, 81, 154-164.