Marketing Strategy for Tesla Inc.

This document provides an in-depth analysis of the marketing strategy used by Tesla Inc. to upgrade its brand image and influence sales revenue of electric cars. It includes a situational analysis, SWOT analysis, and evaluation of the current marketing strategy. The document also explores market segmentation, targeting, and positioning strategies used by Tesla Inc.

MARKETING
STRATEGY

TABLE OF CONTENTS
Executive summary.....................................................................................................................3
INTRODUCTION...........................................................................................................................4
PART 1............................................................................................................................................4
Situational Analysis.....................................................................................................................4
Swot Analysis..............................................................................................................................6
Analysis competitive advantage and USP...................................................................................7
Evaluation of current marketing strategy....................................................................................9
PART 2..........................................................................................................................................10
Analysis of market segmentation, targeting and positioning.....................................................10
Objective of Tesla......................................................................................................................11
Recommendation of marketing strategies.................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

Executive summary
It has provided understanding about marketing strategy that used by organization to
upgrade it’s brand image and influence sales revenue of the electric car product. Tesla Inc. used
various porter’s five model, pestle analysis and swot analysis to examine it’s environment in the
business market.

INTRODUCTION
Marketing strategy can be defined as the organization’s games plan to reach users
perspective and transform them into the user’s products or services. it is a long term process that
is used by organization to achieve a sustainable competitive advantage by analysing consumer’s
needs and expectations. It is important for organization because it supports to discovers some
areas which can affect organizational growth and assists to develop an organizational plan that
fulfil needs of the customer. In addition, it supports in fixing the right price for the business
goods and services that are based on information which is collected through deep market
research. It also use to develop goals of the company such as influence brand awareness of the
product and services in the people. It also uses to each a new customer segments as result easy to
generate high revenue in the company. To understand role of the marketing strategy has an
example of Tesla company. It is an American electric vehicle and clean energy organization
which is based on Palo Atto, California. The brief study provides understanding about pestle
analysis of the Tesla company.
PART 1
Situational Analysis
Pestle analysis is the framework that is used to analyse external environment of the
company. The key factors are political, economic, technological, legal and environmental
factors. The framework is used to analyse external business environment of the Tesla. It is
described as follows:
Political factors:
Political factors are political stability, free trade policies, tax etc. impacts on the
organization’s marketing strategy (Dana, 2018). For example, political stability is great factor for
the organization that causes organization enable to have a better functioning as compared others.
organization has marketing strategy to promote it’s products in other countries whereas political
stability supports company to globalize themselves because it does not have to pay high taxes as
well as does not have to change policies as resultant gets positive impact on it’s operations,
productivity and performance.

Economic factors
Economic factors i.e. Brexit, changes in disposable income, foreign exchange rate and
unemployment rate etc. impacts on the organization performance (Gafarov, 2019). Organization
has marketing strategy to influence sales volume of the electric car so it creates cost-effective
vehicle for the public. On the other hand, battery cost decreses in the numerous countries as
result gets opportunity to the Tesla Inc. it enables to manufactures cost-effective electric car
which can meet each customer’s objective. Due to the Brexit gets change in the economical
stability which become major threat for the Tesla Inc. because it directly impacts financial
performance of the company in the business market.
Socio-cultural factors:
Social condition and trends are social factors that impacts organization’s performance,
sales volume, employees and investors as well. Increasing customer trends of low carbon
lifestyle leads beneficial opportunity for the organization. the reason behind is that company
offers electric car so it can easily fulfil each customer’s preference and encourage customers
buying behaviour.
Technological factors
Emerging technology and highly technological change give opportunity and threats to the
organization. Organization has strategy to give high quality technology in the electric car which
fulfil user’s expectation. whereas high rate of technological change impacts on organization’s
performance positively because it influences automation in the business. in addition, it improves
cost of the product as well because continues change in technology leads financial loss as well as
creates uncertainty in employee’s working.
Legal factors
The legal issues i.e. patent rights and energy consumption regulation etc. impacts on
organization’s performance, productivity and operations as well. Company gets opportunity from
energy consumption regulation because it promotes it’s electric car products with energy solution
products. Organization has taken international patent protection policy to comply each

government policies around the world. The international patent explores opportunities to grow
business directs through direct sales which is permits in various state of US.
Environmental factors
Environmental factors are the key opportunities for the organization because company’s
electric car products are environmentally friendly and uses electricity instead of fuel. It causes
company enables to compliance with many environmental regulations and impacts on carbon
emission as compared traditional cars. To expand its electric vehicles Tesla Inc. collaborates
with environmental programs that influence brand image in the business market.
Swot Analysis
Swot analysis is used to analyse individual and organization’s strength, weaknesses,
threats and opportunities (Huang, 2019). It is strategic tool that is used to analyse internal
environment of the company. Tesco Inc. uses analytical model such as Swot analysis to examine
capabilities and resources and threats of the company. It is described as follows:
Strengths
 Organization has strong brand image in the technology market because it manufactures
environmentally friendly car products. Tesla Inc has high support from the government
because it manufactures sustainable vehicle which impacts on the environment positively.
 Past few years’ organization has generated a USD 465 billion for the energy management
project which is undertaken by US department of energy. Thus, company gets numerous
advantages from the government support (Salgueiro, 2017).
 Brexit has imposed environmental concern policy for the vehicle industries which
impacts on organization performance positively. Tesla Inc. manufactures cost-effective
electric car which comply governmental policy’s and efficient for the customer’s budget.
Weaknesses
 Company manufactures specialized products that are crucial for the environment because
of their pollution free angle or sustainability. Electric car vehicles are highly futuristic
due to unawareness that causes most of the customer still not sure they must invest in
these expensive technologies or not.

 The manufacturing plan of the Tesco Inc. is located only in Fremont, California. It has
capacity to manufacture estimates 500,000 vehicles that denotes maximum production is
limited. So it is quite difficult for the organization to target high volume customers.
Opportunities
 Organization has opportunity to take new turn through the host of new technologies such
as hybrid cars, green cars, electric cars, battery operated cars and self-driven automated
cars. Even company has launched numerous new products in the emerging area.
Threats
 Tesla Inc. has tough competition from the numerous giant car companies i.e. Ford,
General Motors, Fiat Chryster Automobiles and other technology companies such as
Google.
 Brexit is major threat for the company because they impact disposable income, economic
instability, political change and others. Due to these factor changes in trends of customer
that do not like to buy expensive product which declines volume sales of the electric cars
(Nobile, 2019).
Analysis competitive advantage and USP
Porter’s five force is a analytical tool that is used for examining a company’s competitive
environment. There are five forces that supports organization to determine the force which
shapes competition in the organization. Tesco Inc. uses porter’s five force model to determine
strategy that leads competitive advantage and increases potential profit (Khan and Ahmed,
2019).
Bargaining power of customers (Moderate)
Bargaining power of the customer has moderate because substitutes of the product are
rarely available to others. So, switching cost of the product is low that is beneficial advantage for
the Tesla Inc. Low switching cost and high-quality products helps company to build a large base
of customers as result it reduces bargaining power of the customers.
Threats of substitute

Threats of substitute is too high because there are lots of giant vehicle industries i.e. Ford,
Toyota which has wide range of high-quality alternatives cars and they can offer same utility as
an electric car without offering environmentally friendly products. So, company can impact
through the competitors negatively (Kokotilo, Derian and Graf, 2018).
Threats of new entrants
Tesla Inc. offers high quality futurist electric car products which is environmentally
friendly products. There are other companies like Ford, Toyota etc. also competent companies
which provides highly developed technology in the fuel cars. These companies give high
competition to the Tesla Inc. So, there is very rare chances to enter new entrants therefore
company has low threat of new entrant.
Bargaining power of suppliers
Bargaining power of suppliers is too high because all auto manufacturer companies buy high
quantity raw material from the various suppliers. There has high shortage of potential suppliers
in the market so suppliers bargaining power is high which impacts overall profitability of Tesla
Inc.
Intensity of Rivalry in the industry
Tesla Inc. have to face tough competition from it’s exiting rivals i.e. Toyota, Ford which
offers high quality fuels cars and has high switching cost which impacts organization’s
profitability. The companies have high brand image in the auto sectors that causes traditional
customers still prefer to buy traditional car as compared electric cars.
USP
It is important factor that is used to differentiate product from it’s competitors i.e. lowest
cost, high quality products. Tesla also gets name as unique company in the business market
because it sells high quality new technologies. Company has influence market for the luxury,
long range electric automobiles (Liu, 2019). Organization introduce its products through two
markets such as one market is distinct for cost effective electric vehicles and other for luxury
gas-powered vehicle. Thus, company achieves unique position in the auto-car market. Tesla Inc.

offers highly attractive cars along with in affordable price which makes it harder for other
competitor to compete and they cannot afford financial loss from the premium segment. Tesla
Inc. offers in uniqueness in its auto-cars so it does not have to face high competition and sells it’s
product in large volume. Company applies market segmentation strategy and categories it’s
products as per requirements such as green car market for environmental concern government
while electric cars for those customers who wants different automotive cars as compared
traditional cars. Thus, organization uses unique pricing strategies i.e. value pricing,
psychological pricing and penetration pricing which supports to access different type of
customers on same time (Lugtu Jr, 2019). Penetration pricing through offers low price for high
volume by organization that influences purchasing behaviour of the customer. Thus, company
uses different pricing strategy to maintains uniqueness in the auto sector.
Evaluation of current marketing strategy
Digital marketing strategy
Tesla Inc. uses digital marketing strategy instead of traditional advertisement because it is quite
cheap. By the strategy easy to promote it’s electric cars in the business market and provokes
customers to buy the cars. This strategy helps company to access new customers and increase
sales volume of the electric cars.
Product life cycle
It is another marketing strategy that is also used by organization to focus on the process of a
product such when it introduces in the market until it removes from the market (McCain, 2019).
The strategy is applied for electric car which helps to predict sales of revenue of the products in
the company. It contains four stages i.e. introduction, growth, maturity and declines whereas
company applies whole stage to influence product’s market share and puts pressure on the
competitors.
Marketing mix strategy
It is another marketing strategy that is applied by organization to differentiate it’s brand
from others through the electric cars as product. The strategy is also known as 4p’s market mix

strategy because it contains various elements i.e. product, price, place and promotion that helps
to influence product value proposition and attracts customer towards products.
Porter’s five force
It is also effective marketing strategy that is used to identify beneficial strategy in the
competitive industry and supports to take competitive advantage. It contains five forces whereas
each force assists to determine strategy based on the competitor’s weakness. Thus, this
marketing strategy supports to develop sustainable business performance in the competition
market.
Swot analysis
It is another strategic tool that is used to examine capabilities and resources of the
company so that easy to improve sales revenue of the electric cars (Musonera and Cagle, 2019).
Organization has aim to capture high market share of the electric cars so that it can get high rank
in the vehicle industries. While this strategy supports company to meet it’s objectives.
Pestle Analysis
It is analytical tool that is used to examine external environment of the company. It is
used by Tesco Inc. to understand impact of external force on the business performance,
productivity and operations as well. This strategy helps company to examine other countries
business nature so that it can easily explore it’s products in different countries and improves
sales volume of the products. It is also considered in the marketing strategy because it helps
company to determine business opportunities and threats in other countries.
PART 2
Analysis of market segmentation, targeting and positioning
Manager of Tesla has effectively segment its customers on basis of various factors such as
demographical, age, income, geographical location, psychological factors thus appropriately
targeted and position in mind and heart of customers to gain maximum customers satisfaction.
STP of Tesla is as follows:

Segmentation: Tesla in order to promote its luxury brand products has classified people on the
basis of different factors such as social preferences, geographical location and income level of
customers. Therefore such segmentation has helped manager to formulate effective strategies to
attract target customers range and helps in attracting maximum number of customer to make
purchase (Durand, 2018). It has also classified people on basis of behaviour such as degree of
loyalty, high status personality in order to attracted people of high segment; trust worthy for long
term growth and success of firm.
Targeting: Tesla have target businessman, politician and cricketer and people that belong to
high class society wants luxury car to satisfy their needs. Company by effectively targeting high
class or rich people for its products and services is able to earn large amount of profitability and
expand its market share across worldwide. Therefore, appropriate strategies of manager of Tesla
have helped in growth and expansion of business.
Positioning: Company have strong brand image in automobile industry and well know for
providing qualitative services to customers. Thus, strong brand image, customer’s loyalty and
satisfaction, continuous innovation stay that firm has effectively established its positioning in
minds of each customer segments (Hughes and et.al., 2019). 24 hours after sales services,
qualitative, unique and luxuries products range of Tesla has influence each customer to have
such dream car for living luxury live. Therefore effective positioning of Tesla has provided
opportunity to company to expand its market across different countries to earn more profitability.
Objective of Tesla
 To build strong brand image and increase market share by 20% till 2021 by satisfying
needs of customers.
 To maintain customers loyalty and satisfaction level for long term growth of
organisation.
 To increase awareness among customers about quality of products of Tesla within
particular year.
 To increase sales volume and profitability by 10% through adding new customers range
in the organisation.

Recommendation of marketing strategies
Tesla is an American company which manufactures all types of electric cars in the market to
complete the demand. Tesla cars are highly recommended models for its unique design and
outstanding performance in the automobile sector (Tani, 2018). Tesla analysis of marketing mix
by covering several P’s like price, product, place, promotion etc. are being discussed below:
Product strategy: Tesla is the top most brand of cars which deals in the electric cars of the
market. Tesla is also known for its unique features in the automobile sector of the world. Tesla
manufactures eco-friendly vehicle for the customers prevailing in the market. Company deals in
the premium segment of the market to achieve the goal of the group. Company also provides
auto pilot version of the cars which make company out of the competition of the automobile
market (Kreutzer, 2018). Company products are fully updated by the latest technologies within
the world. Company is the leading brand of manufacturing of battery powered electric cars in the
market to achieve the goal. Sedan and SUV are the major segment of the car which are being
manufactured by the brand. Company is being rated 5star in the automobile industry just because
of the product designed with unique technologies and facilities provided to the customers in the
market.
Price strategy: Branded product are developed with more research, material, technologies etc. to
serve the premium customers of the market. These all needs a huge investment to develop the
unique products for the customers. Development costs when compared with other brands in the
automobile sector are found to be low by the Tesla and also providing high quality product to the
customers without any compromise in the features. Company focuses on satisfaction of the
customers to achieve the brand value (Jovanovic and et.al., 2016). Tesla vision is to provide
more in the market for obtaining profits. Price is the first factor which cover the business from
the people. Company plays the price strategy to generate the sales volume in the market. Tesla is
the leader of the competitor market in order to achieve the goal.
Place strategy: Tesla is the US based company which providing its products and services all
over the world. Company manufactured all its parts and products in the different parts of the
country to make best out the resources available in different location to generate profits.
Company doesn’t make any compromise in the resources as customers are ready to pay the price
indulged during manufacturing of the Tesla products (Kostelijk and Alsem, 2020). Company

needs to achieve the timelines delivery in the process to complete the demand by generating
smooth supply chain over the world. Tesla needs to improve production rate by allocating of
resources in the perfect manner to obtain the better results in the market. Company establish its
different units at different location of US to achieve the goal effectively and efficiently. Effective
refers to achieving of task on time whereas efficient refers to bringing most out of the resources
to achieve the goal. As locating of manufacturing units play important role in obtaining the
objective from the market.
Promotion strategy: Tesla motors are not spending over the marketing of the brand. Company
doesn’t advertise commercially on platform such no bill boards, no advertisement agency, no
CMO etc. which make brand value out of the competitive market. As Tesla has number of orders
pending over the period of time that need to be achieved by having speed in manufacturing to
make the supply according to the demands prevailing in the market by the people. Company
charging points are located at the highways which also work as promotion platform between the
new customers in the market (Sterne, 2017). Charging points which are located at different
places such as, restaurant, hotels, malls etc. are being branded with having the name written over
the points. Apart from the offline promotion through various self-branding, Tesla also does
promotion through digital marketing such as twitter, and whenever some new product launched
in the market are being promoted by various online platform in order to generate data of the
people. Tesla is the gooder brand for the humanity which help in creating the brand image
between the public of the market.
People: Tesla is huge organisation that operates across worldwide to deliver with number of
employee’s approx 48,016 to delivery qualitative products and services to large number of
customers in order to earn maximum amount of profitability. Tesla have highly skilled, qualified
and knowledgeable employees that work together so that better services can be render to
customers. Manager of Tesla formulated effective strategies to retained most of employees
within firm for long term growth and survival of enterprise (Stojiljković and Đurić, 2018).
Employees of company are highly dedicated, committed to perform their best so that company
can gain competitive advantages. Therefore strong brand image and satisfaction of employees
needs helps in effective operation of firm.

Process: Manager of Tesla has planned in advance about various roles, responsibilities that need
to be performed by each individual so that company can easily achieve its objectives and
maximise customer’s satisfaction. Standard process, procedure and policies of Tesla helps in
effective completion of task and maintenances of quality of products and services to meet
customers expectancy. Innovative technology and highly skilled employees helps in effective
operation of various task, process that need to be followed so that customers can provide
products within limited time frame. Therefore definite organisational structure, clarity of roles
and responsibilities and standard that need to be followed by employees contribute towards
growth of Tesla.
Physical distribution: Company have number of stores across various countries so that people
can easily come and select particular products to satisfy their requirements. Online presence of
Tesla helps customers to easily review about various products and services in which company
deals so that their needs can be fulfilled beyond their expectancy (Ganguly, Das and Farr, 2017).
Therefore, various warehouse and strong supply chain of firm has helped in effectively delivery
of products and services to customers.
CONCLUSION
This report provided understanding about the marketing strategy and its role in the
organization. To analyse external environment of the organization used pestle analysis, included
political, economic, socio-cultural, legal and environmental and technological factors which
impacted Tesla positively and negatively. Swot analysis model supported to analyse internal
environment of the organization and evaluated threats of epidemic in the company. The brief
study supported to analyse competitive advantage and USP of the company through the porter’s
five model in the report. It has evaluated current marketing strategy of the Tesla that was used to
promote car products in other countries. It has been concluded STP model that stand for market
segmentation, targeting and positioning of the products in the business market. SMART
objectives and goals of the Tesla can be summarized in the report. It has been concluded
marketing strategies that based the application of the marketing mix strategy in the context of
product.

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