MK9700 Strategic Marketing in the Digital Era
Added on 2021-05-20
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Northumbria UniversityMK9700 Strategic Marketing in the Digital EraTesla Business ReportPromotional Strategy and BrandingStudent: Lukas DolinskisStudent number: 18035289Words: 20051
Contents1.Introduction........................................................................................................................22.Target market.....................................................................................................................53.Recommendations for the Tesla company.........................................................................63.1.Non-direct promotional marketing strategy...............................................................63.2.CEO in social media and branding...............................................................................73.3.Authenticity.................................................................................................................73.4.Importance for the target market...............................................................................84.References..........................................................................................................................92
1.IntroductionTesla company is relatively young, and it was founded in 2003. This company'spurpose was to start electronic vehicles era and create a sports car, which they did in 2008with Tesla Roadster. The price of this car started at $109,000, and it was quite an attractivepurchase for sports cars enthusiasts. The biggest secret of this car and later for all Tesla carsis batteries which are built-in under the floor of every car. This little trick saved many spacesinside the car, and also it created better stability feeling on the road. Tesla car has big andheavy batteries which low the centre of gravity. However, model Roadster was not thatsuccessful as company owners expected, which led to the bankruptcy's edge. After thisfiasco, one of the first investor - Elon Musk, took over the company management in 2008.He had to make several drastic changes to save the company. Firstly, he cut 25% of theworkforce and recalled 75% the roadsters. Later Elon Musk raised 40 million dollars of debtfinancing, formed the strategic partnership with Daimler company, more known asMercedes-Benz, and borrowed 465 million dollars from the United States government(Reuters, 2008). After all these decisions Tesla company made 2450 cars of modelRoadsters, and the iconic car became the springboard for the electric vehicles revolution.This was the beginning of the Tesla company domination in the electric cars market.Tesla is one of those companies which make exciting and rarely seen solutions in theircompany management. Moreover, the second most interesting area after cars production ishow they are dealing with marketing. There are three digital trends which company areusing. Firstly, let us start with the word of mouth trend or more precisely non-directpromotional marketing strategy. Tesla spends insignificant amounts of money onadvertising. To say that Tesla does not invest in marketing is not quite right, they areinvesting, but relatively with other car companies, it is a minimal amount. For example, in2015, Tesla spent 58.3 million dollars, while companies like AUDI and BMW spent 195 and196.6 million dollars, respectively (Luck, 2018). However, according to the Brandtotalresearch in 2019, they studied companies social advertising costs information from March26 till April 26. Automobiles brands paid media mix3
FacebookTwitterInstagramYoutubeAudi49%<1%18%32%BMW48%18%32%2%Tesla0%0%0%0%Table 1. Car's manufacturer's digital marketing analysis (Brandtotal, 2019)These percentages show what piece of advertising budget they assigned to a specificwebsite. Numbers show that Tesla company more focusing on word of mouth withoutinvesting in the advertisement. For example, based on data from March 13 - March 19 in2019, Tesla company had approximately 2 million organic engagements on Instagramwithout spending money, while Porche reached 2.2 million organic and non-organicengagements (Brandtotal, 2019). The second digital trend is the impact of CEO in social media and branding. In thisspecific case, Elon Musk activity on Twitter and Youtube. Usually, on Youtube, we can findinterviews or podcasts in the most popular Youtube channels. For example, a viral interviewfor Marques Brownlee channel where he explains how Tesla factory works, and what planshe has for the company. These two videos were viewed between 10 and 12 million times.Another interview with Joe Rogan in his podcast was viewed approximately 40 million times.In this podcast, they talked a lot about Elon Musk's future world imagination. There weremany unusual questions with profound answers. However, the more critical impact for thecompany does Elon Musk tweets on Twitter. Sometimes some thoughts from Elon Musk canbe controversial and impact companies' value both ways. However, the communicationvalue he gives for the company is massive, straight from the mouth of the most importantperson in the company. "Few things make a brand as irresistible as the top man staying intouch with the customers" (Chandran, 2015). Elon Musk uses Twitter to announce productupdates and Tesla accomplishments. He is also using it to attack critics, share jokes, ortrigger the occasional stock price spasm. For example, on May 1 2020, Elon Musk tweetsthat Tesla stock price is too high and sells all his physical possessions. This move cost £114
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