Marketing Strategy of Tesla in China

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Added on  2022/03/08

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In the world of automobiles, the industry is growing fast, and with the Corona epidemic, people are more inclined to prefer their own vehicles over public transportation, which means the companies in this industry are also innovating new products catering to the needs of the customers. Tesla, an electric vehicle specialized company, has been active in the automobile industry since its founding by a group of engineers in 2003.

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Marketing Strategy of Tesla in China – An Analytical Approach
Contents
1. An introduction to the research context (~250 words)..................................................................3
2. The theoretical background of research (~500 words)..................................................................4
3. Research Question(s) (~100 words)...............................................................................................5
4. Research Aim: (~250 words)..........................................................................................................5
List of References (15-20 academic sources).........................................................................................6
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1. An introduction to the research context:
The world of automobiles is fast growing and with the Corona outbreak people are more
inclined towards their cars and vehicles over public transport and thus the companies in the
automobile industry are also innovating new products catering to the needs of the customers.
Tesla, an electric vehicle specialized company, is a multinational brand active in the field of
automobiles since 2003 when it was founded by a group of engineers (Tesla Inc., 2021).
Because of the environmentally friendly models introduced by the company, the company
has grown in more than 40 countries in the past decade. In 2018, the company debuted in the
Chinese market which soon turned into its second-largest market in the world. In the country,
the company has several competitors the biggest one being XPeng, NIO, Li Auto et cetera
which requires the company to research and develop technologies that can gain them a
competitive advantage over the others (Dai, 2020).
As per Forbes magazine, in the past year since the outbreak of the COVID-19 pandemic,
Tesla has been more active over the digital platforms and thus has been creating a favourable
trend for itself in the field of automobiles in the world and China is not untouched either. The
China market of the organization has witnessed a significant increase in its market through
the word of mouth (Forbes, 2020).
The customers are to be given with selective information in regards to the company’s
technology and its use and that is the significant work of marketing which also depends on
the financial standing of organization (Falát & Holubčík, 2017). As per CNBC (2021), the
revenue of Tesla in third quarter of 2021 had been recorded to 13.76 billion USD.
There have been several studies on the market development strategies of Tesla in China,
however the changes that it has brought to the Chinese market of electric cars has not been
significantly discussed and thus, this study will focus on the marketing strategies in light of
the Chinese electric vehicle market and its changes. (Habib et al., 2020). To understand these
strategies, the study will incorporate marketing mix because the marketing mix involves the
overall marketing plan and helps in viewing the marketing campaign from varied points
including the internal factors of the company (Lang, 2021). The research will also include
secondary data that will be acquired from the published articles, journals and other
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trustworthy online sources. Also, to analyse the findings, suitable data collection and analysis
techniques will be explored and incorporated in the study.
2. The theoretical background of research:
There are several theories that the companies apply when designing their marketing strategies
thus, these theories can help the researchers in understanding and forming a theoretical
framework for the same (Dzwigol, 2020). The conceptual framework that this section of the
proposal attempts to form is consisting of theories such as the marketing mix of Tesla in the
context of China to conceptualize the advertising and positioning campaign of the company.
This will also help the researcher to understand the marketing phenomenon and campaign of
Tesla in a competitive and populated economy like China (Kim, 2020).
Marketing Mix: The marketing mix of the organisation consists of the strategies
incorporated to capture the market. There are 7ps of the marketing mix that affect the
marketing of the company or product (Lim, 2021).
They are:
Product range that the company sells in the targeted market which in case of Tesla
there are several electric car models that the company sells such as Model 3 Sedans
and Model Y sports utility vehicles et cetera (Perera, 2020).
The price which the organization sets based on the type of its product like Model 3
cars range between 33,000 USD to 36,500 USD in China’s prominent cities such as
Shanghai (Tesla Inc, 2021).
Place where the products are available and distributed for instance, Tesla has more
than 30 outlets scattered in several big cities of China like Beijing, Shanghai,
Guangzhou et cetera
Promotional activities encompassing advertising and PR strategies of the firm such as
Tesla’s digital marketing campaign apart from the traditional marketing based on
electronic and print media (Jing, 2020).
People that involve in the whole transaction such as the employees and salespersons
of the company are also taken into consideration in the marketing mix so that the
customer’s experience with a company can be briefly seen (Yaning, 2021).
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Process including the cycle from when the product leaves the manufacturing unit to
when it reaches the end-user for example Tesla’s Shanghai factory produces the
products and then the company promotes it and after the customer places the order
online or in one of the outlets, the company sends the product in lieu of the payment.
This whole cycle is included in process part of the marketing mix.
Physical evidence of the company’s existence that Tesla proves through its websites,
social media handles, the physical outlets and headquarters et cetera (Yaning, 2021)
This helps in analysing the marketing strategies and their effect and significance in
the organisation. The marketing mix of Tesla is studied to understand the products,
price and promotional strategy. This also includes the processes involved in the
purchasing of the product such as the order and billing process that every customer is
entitled to and how it affects the marketing of the company (Handa, 2020). For
instance, if the processes are not user-friendly and take up a lot of time of the
customer, then they may avoid using the brand because of this reason and this can
affect the market of the firm. Hence, this study will incorporate the various aspects of
marketing mix to understand the above-mentioned impact.
3. Research Questions:
1: What are the marketing strategies incorporated by the company Tesla in China to capture
the market and edge its competition in the country?
2: How the marketing strategies help in increasing the market share of the company?
4. Research Aim:
The research aim is to understand the marketing strategies incorporated by Tesla and their
effects on the Chinese market.
5. Research Objectives:
1: To critically review the marketing strategy of Tesla’s Chinese market
2: To evaluate Tesla’s Chinese marketing strategies’ impact on the Chinese market
3: What are the impacts of Tesla's marketing strategies on the market in China?
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List of References:
CNBC (2021). Tesla posts record revenue and profits in third quarter. [Online] CNBC.
Available from: https://www.cnbc.com/2021/10/20/tesla-tsla-earnings-q3-2021.html
[Accessed: 12 November, 2021].
Dai, R., (2020). The analysis of Tesla's competitive strategy for the Chinese market. [Online]
Available from:
https://webofproceedings.org/proceedings_series/ECOM/EDBM%202020/EDBM20229.pdf
[Accessed 04 November 2021].
Dzwigol, H., (2020). Innovation in marketing research: quantitative and qualitative analysis.
[Online] Available from: https://essuir.sumdu.edu.ua/handle/123456789/77087 [Accessed: 09
November, 2021].
Falát, L. and Holubčík, M., (2017). The influence of marketing communication on financial
situation of the company–a case from automobile industry. Procedia engineering, [Online]
192, pp.148-153. Available from: https://doi.org/10.1016/j.proeng.2017.06.026 [Accessed: 09
November, 2021].
Forbes (2020). Eight digital marketing lessons we can learn from Tesla [Online] Available
from: https://www.forbes.com/sites/forbesagencycouncil/2020/12/10/eight-digital-marketing-
lessons-we-can-learn-from-tesla/?sh=6865015248c8 [Accessed on: 07 November 2021]
Grewal, D., Hulland, J., Kopalle, P.K. and Karahanna, E. (2020). The future of technology
and marketing: A multidisciplinary perspective. [Online] Available from:
https://doi.org/10.1007/s11747-019-00711-4 [Accessed: 09 November, 2021].
Habib, T., Kristiansen, J.N., Rana, M.B. and Ritala, P., (2020). Revisiting the role of modular
innovation in technological radicalness and architectural change of products: The case of
Tesla X and Roomba. Technovation, [Online] 98, p.102163. Available from:
https://doi.org/10.1016/j.technovation.2020.102163 [Accessed: 09 November, 2021].
Handa, M.B., (2020). Constant rise of Tesla Inc.: Strategic marketing plan leading to
company’s colossal growth in 2020. [Online] Available from: http://afca.apeejay.edu
[Accessed 07 November 2021]
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Jing, N., (2020). Research on Tesla’s Customer Care Innovation. 2020 Management Science
Informatization and Economic Innovation Development Conference (MSIEID) [Online] pp.
469-478 IEEE. Available from: https://ieeexplore.ieee.org/abstract/document/9382535
[Accessed 09 November 2021]
Kim, H., (2020). Analysis of How Tesla Creates Core Innovation Capability. International
Journal of Business and Management, 15(6), [Online] pp.42-61. Available from:
https://pdfs.semanticscholar.org/1424/81e9a7f04faa376cad9ea5cc583a97e35742.pdf
[Accessed 10 November 2021]
Lang, J.W., Reber, B. and Aldori, H., (2021). How Tesla created advantages in the EV
automotive paradigm, through an integrated business model of value capture and value
creation. Business & Management Studies: An International Journal, [Online] 9(1), pp.385-
404. Available from: https://www.bmij.org/index.php/1/article/download/1790/1535
[Accessed 5 November 2021].
Lim, W.M., (2021). A marketing mix typology for integrated care: the 10 Ps. Journal of
Strategic Marketing, [Online] 29(5), pp.453-469. Available from:
https://doi.org/10.1080/0965254X.2020.1775683 [Accessed: 09 November, 2021].
Tesla Inc., (2021). About Tesla [Online] Available from: https://www.tesla.com/about
[Accessed 09 November 2021].
Yaning, L., (2021). Stages and methods of marketing analysis of the market: annotation to
master's thesis. [Online] Available from:
https://elib.bsu.by/bitstream/123456789/264959/1/%D0%9B%D0%B8%20%D0%AF
%D0%BD%D0%B8%D0%BD.pdf [Accessed: 09 November, 2021].
Yuwei, Y., (2021). Development of the marketing strategy of the commercial company.
[Online] Available from: https://elib.bsu.by/bitstream/123456789/269404/1/YAN
%2CYuwei.pdf [Accessed: 09 November, 2021].
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