MKT306 Assessment Question

Marketing strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
PART 1............................................................................................................................................3
EXTERNAL ANALYSIS...........................................................................................................3
INTERNAL ACTORS................................................................................................................5
SWOT ANALYSIS.....................................................................................................................6
ANALYSIS OF COMPETITIVE ADVANTAGE (USP)..........................................................6
TESLA'S VRIO MODEL...........................................................................................................6
MARKETING STRATEGY.......................................................................................................7
TESLA SALES GROWTH.........................................................................................................7
PART 2 ..........................................................................................................................................8
Q. Analyse and describe market segmentation, targeting and positioning ?..............................8
Q. explain objectives and goals for Tesla and describe in deep by using the model SMART ?.9
Q. Describe marketing strategies of Tesla on the basis of marketing mix by explain 7 P's ?...11
............................................................................................................................................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing strategy is an approach which is forward looking and set for long term. It
indicates complete game plan for whole business to reach prospective customers and make their
conversion into consumers of brands products. The strategies of marketing include value's of
company's preposition, brand messaging, target audience based data related to demographics,
other elements of high levels are also part of it. The organisation that was selected in this
assignment is Tesla, as it deals in auto mobile industry. Its an American electric vehicle and
clean energy company based in Palo Alto, California. Electric cars, solar panels, solar roof tiles,
battery energy storage from home to grid scale. The Chief executive officer of the brand is Elon
Musk. The company was founded in California, United States. Maxwell technologies, Solar city
are few examples of their subsidiaries. The brand has approx. 48,016 employees. Tesla designs,
develops, produce and sells electric vehicles and to serve the work of energy storage. The report
are divided into two portion that are PART A & PART B. The project covers the topics
PESTLE, SWOT, Analyse competitive advantage after explaining USP, evaluation of current
marketing strategy. In second part of the report analysation of market segmentation Targeting
and positioning is describe. SMART can be explain in detail along with determining goals and
objectives of Tesla. And the topic related to recommendation of marketing strategies on the basis
of P's of marketing mix in respect of selected company is also done in the assignmentSalman,
2019)
PART 1
EXTERNAL ANALYSIS
External analysis includes PESTLE. PESTLE is an acronym for Political, Economical,
Social, Technological, Legal and Environmental Analysis in regards to the forces which is not in
control by any organization but have to accept and adhere to it. It directly affects the company's
performance and its goodwill and also the internal management of the organization.
The PESTLE Analysis for the TESLA is as follows:-
 Political Factor: Political analysis refers to the impact of government and its policies on
industry and on organization which affects the firm externally. Since Tesla operates on
electronic vehicles manufacturing so this function helps the company to get various
incentives from the government as the electric vehicles reduces the carbon emission in
the environment which saves the planet from pollution.
◦ Positive impact:- Since the company is getting incentives from government so the
factor has a positive impact on Tesla.

◦ Negative impact:- If Tesla does not goes with the governments policies then it has to
face severe consequences or may be difficult for it to gain incentives.
 Economical Factor: The economic factors effects the company externally in a way such
as inflation, economic growth, unemployment, interest rates, etc. Economic factor of the
country is in favourable condition for Tesla as the demand of electric vehicles in the
market is increasing continuously and the demand leads to increase in supply which
ultimately helps the economy to boost up. When any economy gets boost up it is a
growth of the nation and growth is always preferable by any country or by any
organization.
◦ Positive impact:- If Tesla continues the production of electronic vehicle then the
factor has a positive impact on company in terms of growth.
◦ Negative impact:- If the country is facing a downfall in the economy then it will
affect Tesla negatively.
 Social Factor: Social factors of any country depends upon the society's culture,
preference, acceptance, ethics etc. since every organization survives within the society so
it has to adhere to the society's culture. Tesla is satisfying the society's preference as
people are now more concern about less use of fuel and focuses on reduction in carbon
footprints. Tesla is offering electronic vehicles in the society which is meeting the
demands of its customers and is accepted by the society.
◦ Positive impact:- Until the company is offering ozone-friendly products to the
society, the factor is in favour of Tesla.
◦ Negative impact:- When the company starts ignoring the society's culture, preference,
ethics then the company have to face disaster and will impact the organization's
performance negatively.
 Technological Factor: Continuous up-gradation in the technological world affects the
company's performance and its quality directly in both the ways that is positive and
negative both. It comprises of Research and Development, ICT innovation, automation
and E-commerce. To Tesla the technological factor is both a friend and an enemy. Friend
in the context as it gives an competitive advantage to the firm over its rivalries. Enemy
in the context that technology is very dynamic,, there is a frequent change in
technological environment in the market and accepting technology so frequently is
sometimes not possible for the company.
◦ Positive impact:- If the company is gaining the competitive advantage over its
competitors then the factor has a positive impact on Tesla.
◦ Negative impact:- If the technological change is very fast then it will be tough for the
company to meet the change and hence will affects its performance.
 Legal Factor: A macroeconomic factor which affects any organization both externally
and internally through governmental rules and regulations and various corporate laws
which is inseparable from any organization and to which every company needs to comply
with, if wants to survive in the market without any disturbance. It consists of various
copyright or patent laws, employment laws, consumer protection laws, etc. Since Tesla
is operating in more than one country so it needs Tesla to abide by the legal rules and
laws of each nation.
◦ Positive impact:- Tesla following rules and laws in every operating nation will
possess a positive impact on the company.

◦ Negative impact:- Following different rules and laws is sometimes not in control or
does not satisfies fully which gives a negative impact on company's performance.
 Environmental factor:- Environmental factor is one which is indivisible to any
company no matter small cap, mid cap or large industry. It is something into which
organizations need to concentrate more in order to stay live in the society. It is directly
related to sustainability, pollution, weather, climate and all other factors associated with
environment. Tesla takes care of the environment and is works upon greenhouse gases.
Electric vehicles are in favour of environment as they are eco friendly and possess less
pollution.
◦ Positive impact:- Less carbon emission and production of electric vehicles has a
positive impact on Tesla.
◦ Negative impact:- If the company does not concentrates on pollution free vehicles
then this will have a negative impact on Tesla and will reduce sales of the company.
INTERNAL ACTORS
Internal factors of any organization includes all those stakeholders who are internally
related to the company and affects its performance and growth. It includes Shareholders,
Employees, Organizational Structure, Internal Research & Development, Vision & Mission, etc.
These internal factors are discussed below:
 Shareholders: Shareholders are those who pools their money into business and gains
voting and decision rights in the organization. Tesla has a large number of shareholders
due to its goodwill and all are very important for the company ((Rimmer, 2018)
◦ Positive impact:- Shareholders value are at the top priority and that's why they put
their best to bring goodwill to the company which impacts in a positive way.
◦ Negative impact:- If shareholders of Tesla gets disappoint from any decision then it
will decrease the market value of the company and will impact negatively to the
image of Tesla.
 Employees: Employees of any company are those who actually works upon the
operations and does hard work to bring success for the company. For Tesla the
employees are very valuable and their safety, security is at the top by Tesla.
◦ Positive impact:- If employees and Tesla both will feel belongingness for each other
then this will increase efficiency in work and will give a positive impact to the
company.(Long, 2019)
◦ Negative impact:- If at any instance the employees have grudges then this will
decrease efficiency and will not have any coordination. This imbalance will have
negative impact on Tesla's performance.

SWOT ANALYSIS
SWOT refers to the analysis of company's Strength, Weakness, Opportunities and
Threats which every company has directly or indirectly. SWOT in relation to Tesla is under:
STRENGTH
 Production of electric vehicle with less
carbon emission.
 Niche market segment.
WEAKNESS
 High level prices of the cars.
 Limited Operational area.
OPPORTUNITIES
 International market reach.
 Variants in electronic vehicles.
THREATS
 International market competition.
 Frequent technological changes.
ANALYSIS OF COMPETITIVE ADVANTAGE (USP)
USP is an acronym for Unique selling point or preposition which every company has its
own, different from others in the market. USP is something which brings goodwill to the
company. Like other companies Tesla too have its USP which brings Affordable electronic
vehicles with the latest updated technological innovation in market. (Li, 20180)
TESLA'S VRIO MODEL
VRIO stands for Valuable, Rare, Inimitable and Organized. The model analysis
company's resources and its competency. VRIO for Tesla is considered as under:
Area of expertise Valuable Rare Inimitable Organized
Goodwill √ √ √ √
Customer
Satisfaction
√ √ √ √
Human Resource √ x x √
Product variants √ x √ √
Market Situation √ √ √ √

The four variable of VRIO model that is Valuable, Rare, Inimitable and Organized are
taken into consideration with respect of company's several area of expertise such as Goodwill,
Customer Satisfaction, Human resource, Product Variants and Market Situation. The company
gets fit in all the four aspects of the model for Goodwill, Customer satisfaction and in Market
Situation whereas, it is lacking behind in Rare and Inimitable aspect of Human resource and Rare
aspect in its Product variants (Gilson, 2017)
MARKETING STRATEGY
Marketing strategy refers to a blueprint on which the company works upon in order to
have more customers, more sales and generate high profits. Unlike other companies Tesla also
works upon its marketing strategy in order to increase its sales and cater more customers in
market. Tesla is a big giant and operates at multinational level so formulates different market
strategies for its customers. Tesla promotes its brand by word of mouth, viral marketing and also
direct selling. Word of mouth refers to the promotion of the product by its customers itself. Viral
marketing means promotion of product via social media such as by uploading short videos, etc.
Tesla does not give franchise or dealership to others, it sales directly in market (Galpin, 2019)
TESLA SALES GROWTH
$7000 $11759 $21461 $24578 $28176
2014
2015
2016
2017
2018
2019
2020
YEAR
Annual Revenue of Tesla from 2016-2020
The above graph shows the annual revenue of Tesla from 2016-2020 in Million Dollars.
Tesla is experiencing a continuous growth in its revenue which shows increase in its sales of
electric vehicles. The annual revenue during the year end 2016 was $7000 Million which grows
to $11,759 by the year end 2017 and raised to $28716 by the end of 2020. This shows that Tesla

is catering more customers in the market and is gaining more profits which is ultimately
increasing the company's goodwill in market.
PART 2
Q. Analyse and describe market segmentation, targeting and positioning ?
STP
STP marketing indicates segmentation, targeting and positioning. This strategy of
marketing makes activity of marketing easy. It is a simple method so that it can easily be
understand and try to apply these in business. The main objective of this system of marketing is
to attract large number of audience and also try to get appropriate and right end-users who shows
their interest in products and items of organisation. So to serve the purpose, smart managers and
executives of such department make division of groups into segments, after that segment is to be
targeted who are interested in our items and at last company make arrangement to prepare the
product according to the desires of targeted segments (Fisher, 2019)
Segmentation: It is a type of market research in which business bifurcate their customers
into small groups on the basis of following features like behaviour, income, age, gender etc. On
the basis of this category advertisement can be done for different age group customers.
Types of segmentation
1. Demographic Segmentation: In this analysis is done on the basis of factors related to
age, income, gender, religion, occupation,etc. Tesla establish market for the people
between the age of forty to fifty five years and only for males. For those who whose
income is more than $ 100,000 and also for upper middle class people, for those
customers who have high end jobs that gives lots of disposable income.
In the organisation Tesla , the segmentation is to be done on the basis of performance vehicles
like Tesla roadstar, premium vehicles such as Model S and model X. On the basis of small
premium vehicles for example Gen lll, famiy vehicles.
2. Geographic Segmentation: It is related to country, city, state, region etc. Tesla targets
those who lives in neighbourhood of suburban. As these are so developed place of
nighborhoods where many customers are present in establishment market. The brand
targets the location where cars are needed for purpose of transportation (Falát, 2019)

3. Behavioural Segmentation: It reflects the manner people use product, how customers
are loyal towards the product and what benefit they looking for.
4. Psychographic: It is based on personality, values, lifestyles, risk aversion etc. Tesla
make emphasis on those customers who are most environmentally concious. And also
focus on those people that observing for organisation who are socially responsible for
marketing orientation.
Targeting: As it is a niche specific marketing method. Niche is not product based but
based on customers. In this customers are identify who are ready to purchase items according to
their desires. Mainly the target market of Tesla are those people who has between the age of 40
to 55 years. As Tesla offers sports vehicles so the brand mainly targets male customer. As
vehicles of Tesla is costly so these males have white collar jobs. Tesla targets high net worth
people who live in high end neighbourhood mostly in suburban areas.
Positioning: According to market positioning means in what position the product of
company stands in the competitive market. Also reflects how the firms product is different from
items of competitors and how it is better & suitable for customers.
As electric cars are not so common that's why districtive positioning will consider best
for the brand Tesla. In audience mind brand serves the message that tesla have variety of electric
cars whose objective is to make care for Earth. In auto mobile industry, Tesla is the organisation
that fills the gap of environmental consciousness.(Draganic, 2019)
Q. explain objectives and goals for Tesla and describe in deep by using the model SMART ?
The main marketing objectives of the company is capture the large market area for
different profession and age group people. To serve this purpose Tesla build sports car and
utilize money in manufacturing an affordable car. Along with these objective, it also make focus
to provide zero emission electric power generation options. Tesla concentrate on high priced and
high performance based electric vehicles which compete against cars that serves traditional
performance. And should achieve the target of business that leads to increase sales as well as
revenue. The main purpose to introduce such type of electric cars are that they are cheaper to
maintain. As battery electric vehicles has lot less moving parts than diesel cars and it also not
include costly exhaust system, radiator, fuel injection system and also many other parts which
are not require in an EV. Also these electric cars are better for environment because it emits less

pollution. As due to renewable energy the brand can reduce emission of green house. The main
purpose behind it introduction is recycle material and padding is create with bio based material.
Due to use of eco friendly material the brand can save the natural product of environment. The
other purpose is to serve health benefits as due to better quality of air creates less issues related
to health as Evs are quieter than petrol vehicles that shows less pollution related to noise. To
raise safety improvements. It can reduce the risk of explosions. As the brand offer better benefits
regarding employment by using locally produced electricity.
SMART defining respective objectives helps in achieving goals that relates to long term.
Below mentioned table show how Tesla objective is SMART(Chen, 2018)
Base Particulars
Specific  Raise awareness of brand Tesla upto
94 points.
 Increase sales upto 40 % for the Model
X
 By collaboration with big company the
brand focus on improving performance
related to battery backup.
Measurable  Tesla score 94 points in the year 2020
 battery based performance as it reach
range for large miles like 700 miles , to
prefer cars of Tesla for longer trips.
Actionable  As the company's performance improve
due to increase sales and change the
brand into large scale economy firm
selling around ninety thousand cars
upto year 2017.
 Improvement in battery tends to assure
audience regarding purchase of car
differently.

Relevant  The objectives of Tesla are
contextualized in monopolisic maket,
on which survival depends on many
factors like market share, brand
awareness , positioning and sales.
Time bounded  Tesla try to reach at large scale
economy and also increase potential
upto the maximise level of their
technological assets.
Q. Describe marketing strategies of Tesla on the basis of marketing mix by explain 7 P's ?
Product
On Innovation the rand Tesla make focused and do concentration. The company presents
all the points that are fundamental , those features that needs to be hundred percent electrical.
For short term the brand focused on 2 types of cars. The name of these cars are Model X &
Model S , as these are the cars that are luxurious and results high performance. Models S is five
seater car, that have feature of luxury design in both external and internal. Like wheels of
different sizes, leather refinements, 17'' touch screen control panels, It is available to customers
having different battery packs as per the price which audience are ready to pay. Model X also
deals with further innovation as well as for differentiation for Tesla. It also maintains
technological & luxurious features it is built in such a manner to transport for seven adults. The
new aim is provide security at high level and comfort along with the combination of technology
& luxurious designs.
Promotion: As compare to their competitive brands like Audi, Tesla reserves their
budget to do technological investment. Tesla also spent large amount on costly advertising like
in making posters, Television etc. Every time the brand arrange an event for the purpose of
launching new cars that tends to create mystery & high expectations of audience regarding
product.

Price: As price of launching is high and typical of skimming strategy. The brand is quiet
rigid regarding their product prices. The fair high prices are set by the brand tesla car. It is not
only due to latest technology but also to features of sports luxury (Bruijl, 2017)
Place : As Tesla do not have spacious and large showrooms to display their model of cars
but has only single car inside that are stands like a sample to advertise and attract audience(Agre,
2017)
CONCLUSION
After deep analysis it is conclude that different marketing strategies and models are used
to analyse and capture the large competitive market by targeting audience of different age,
income, behaiviour etc . For that market segmentation, positioning and target is performed
necessarily by the organisation. In this report is concentrate on providing vehicles that are
electric as well as luxury, as premium prises are set for these vehicles. As decision is justified as
the brand use material of high quality and used skills of engineering for manufacturing.
Additionally set high price is connected to high level of brand recognition , due to this customers
are happy regarding payment of premium prices due to sense of belonging to brand and to
provide security for feeling at the time purchase made by customer. Hence the organisation has
the potential to gain that level of brand impact on audience due to environmental concern which
were blended with exclusive variety of luxury designs. After deep study it is conclude that it
observe the market it necessary to analyse the market with the help of different strategies and
models that support to achieve the objectives of the company in effective manner.

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