Effectiveness of Tesla's Marketing Mix Strategy for Model 3

This report discusses the effectiveness of Tesla's marketing mix strategy for Model 3 and provides recommendations for improvement. It analyzes the product, price, place, and promotion strategies of Tesla and identifies both positive and negative factors. The report concludes with recommendations for Tesla to expand its market presence, offer more affordable cars, and have an extensive distribution strategy.

Running head: MARKETING AND MANAGEMENT
Marketing and management
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Executive summary
The aim of this report is to discuss about the effectiveness of Tesla in marketing their Model 3 in
the market. In doing so, this report discussed about the marketing mix strategies of Tesla and
identified a few factors from it. Evaluation of the marketing mix strategies had identified
negative as well as positive factors. Based on the negative factors, a few recommended steps are
being discussed in this report.

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Table of Contents
Introduction......................................................................................................................................3
Objectives........................................................................................................................................4
Market mix strategy.........................................................................................................................4
Product.........................................................................................................................................4
Price.............................................................................................................................................4
Place.............................................................................................................................................5
Promotion....................................................................................................................................5
Evaluation of the marketing strategy...............................................................................................5
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................6
Reference.........................................................................................................................................7

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Introduction
There are number of companies in the recent time that have gained immense popularity in
the global market and are known for the innovative approaches. Tesla is one of the leading
names among these companies. They are known for their out of the box approaches and is
creating stir in the existing automobile market (Endsley, 2017). This is due to the fact that Tesla
is majorly responsible for extensive popularity and commercialization of electric mobility
solutions and posing challenges for the conventional car makers. Tesla is originated from the
United States and currently they are having their presence in Canada and China as well. They
proved the myth regarding the lack of practicality of electric cars wrong and is being known for
high performance and zero emission electric cars. They are currently having three models, Model
X, Model S and Model 3 (Stringham, Miller & Clark, 2015). Among all these, Model 3 is the
most popular in the market being the most affordable Tesla ever.
Model 3 is the most affordable from the portfolio of Tesla is a five door sedan. It is one
of the quickest accelerating cars in its segment in the world and even quicker than some of the
gasoline based vehicles. Currently, there are no exact competition being faced by Model 3 but
models such as Chevrolet Bolt, Nissan leaf and Toyota Prius is the major competitors for it
(Fleming, 2013). In the following years, the competition will more for Model 3 due to the
introduction of electric cars from more manufactures such as E-Tron from Audi. This paper will
discuss about the market mix strategy of Model 3 and some limitations will be identified. A few
recommended steps will be discussed on the basis of these limitations.

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Objectives
Tesla targets to capture the mass market segment with Model 3 due to the reason that
their previous Model X and Model S are expensive and are having limited success in the market.
Moreover, Tesla is also aiming to become the market leader in the electric mobility sector with
Model 3 in terms of market share. More market in different countries can be catered with mass
market cars such as Model 3 and will help Tesla in becoming the global brand.
Market mix strategy
Product
Model 3 is the most affordable car for Tesla stable and is already available in different
countries such as United States, Canada and China. Model 3 is available in different tunes and
specifications (Vynakov, Savolova & Skrynnyk, 2016). For instance, there is a high performance
version is available of this sedan beside the regular one. In addition, Tesla is also following
extensive customization options for the customers and they can choose the colors, accessories
and other minute details according to their choice (Hardman, Shiu & Steinberger-Wilckens,
2015). Thus, individuality factors will be more for the users. This is also helping Tesla in
increasing the value proposition for their customers, which are not available from other car
brands.
Price
Even though the Model 3 is the most affordable from Tesla but still the price point is
quite higher as compared to other conventional cars in the market. This is due to the reason that
Tesla is relatively a new brand in the market and they are having limited access to financial

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resources (Motors, 2015). Thus, the premium pricing is helping them in generating more revenue
for further development. Moreover, still now Tesla is not having the economies of scale to offer
their cars in more competitive price points. However, the exclusive and premium brand image of
Tesla is getting complemented from their premium pricing policy.
Place
Distribution strategy of Model 3 of Tesla is innovative and distinctive due to the reason
that Model 3 is available in different high end shopping malls also in the United States. Apart
from this, Tesla is having exclusive distribution strategy where they are having authorized retail
outlets. On the other hand, Model 3 can be booked via online website also (Chen & Perez, 2018).
Thus, it can be concluded that Omni Channel strategy is being followed and this is helping Tesla
to gain the maximum exposure for their Model 3.
Promotion
Multi model channels are being used in the promotion strategy of Tesla. This involves the
online and offline mediums. Promotion strategy of Tesla is mainly focused on creating
awareness about the tax credits to be gained by the customers by having electric cars. In addition,
Aesthetic values are another important element of the promotional approach of Tesla, which
helps them to offer cars with great looks and practicality.
Evaluation of the marketing strategy
It is identified that the consistency is one of the important features of the marketing
strategy of Tesla. This is due to the reason that each of the elements of marketing mix of Tesla is
being aligned with their premium positioning (Moritz et al., 2015). On the other hand, it is also

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identified that limited market presence is a major issue for Tesla due to the reason that still now
they are not being able to extend their presence across the world. This is also restricting their
ability to garner more sales revenue and extensive research and development.
Recommendations
 It is recommended that Tesla should follow growth strategy to have more presence across
the world and cater to larger customer segments.
 Tesla should have more affordable cars, which can truly compete with the conventional
cars in terms of sales volume.
 It is also recommended that Tesla should have extensive distribution strategy to involve
the third party retailers. This will ensure more presence and penetration in the target
market.
Conclusion
This is to be concluded that Tesla has gained an immense popularity in their few years
since incorporation mainly due to their innovative approaches. The market mix strategies of
Tesla for their Model 3 are effective enough to maintain the premium branding in the market but
they are having limited effectiveness. Thus, it is recommended that Tesla should be more
focused towards expanding their business in newer countries especially in the developing
economies. This will enable them to become a truly global entity in the long term.

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Reference
Chen, Y., & Perez, Y. (2018). Business model design: lessons learned from Tesla Motors.
In Towards a Sustainable Economy (pp. 53-69). Springer, Cham.
Endsley, M. R. (2017). Autonomous driving systems: A preliminary naturalistic study of the
Tesla Model S. Journal of Cognitive Engineering and Decision Making, 11(3), 225-238.
Fleming, B. (2013). Electric vehicle collaboration-toyota motor corporation and tesla motors
[automotive electronics]. IEEE Vehicular Technology Magazine, 8(1), 4-9.
Moritz, M., Redlich, T., Krenz, P., Buxbaum-Conradi, S., & Wulfsberg, J. P. (2015, August).
Tesla Motors, Inc.: Pioneer towards a new strategic approach in the automobile industry
along the open source movement?. In 2015 Portland International Conference On
Management Of Engineering And Technology (picmet) (pp. 85-92). IEEE.
Motors, T. (2015). Tesla Model S. Palo Alto. Online verfügbar unter http://my. teslamotors.
com/de_DE/models/design, zuletzt geprüft am, 17, 2015.
Stringham, E. P., Miller, J. K., & Clark, J. R. (2015). Overcoming barriers to entry in an
established industry: Tesla Motors. California Management Review, 57(4), 85-103.
Vynakov, O. F., Savolova, E. V., & Skrynnyk, A. I. (2016). Modern electric cars of Tesla Motors
company. Automation of technological and business-processes, (Volume 8), 9-18.