Principles and Practices of Marketing: Tesla's Marketing Strategies

PRINCIPLES AND
PRACTICES OF
MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK ONE......................................................................................................................................3
Overview of the company............................................................................................................3
A. Bricks and Mortar Locations..................................................................................................4
B. Away from Store.....................................................................................................................7
C. Digital......................................................................................................................................9
D. Press/ Industry Analysts/ Umbrella groups/ Regulatory bodies...........................................14
TASK 2..........................................................................................................................................16
Theories of marketing used by Tesla.........................................................................................16
CONCLUSION..............................................................................................................................21
REFERENCES..............................................................................................................................22

INTRODUCTION
Marketing plays the most important role to establish the relationships between the
organisations which offer something to the market and the customers. This gives the companies
the confidence to try something new related to the product in the market. It also helps in shaping
the image of the company and the ways in which people associate with the products and services
of the organisation (). The principles and practices of marketing are Product, Price, Place,
Promotion, People, Packaging, Physical evidence and the Process which are together known as 7
P’s of Marketing. Tesla headquartered in US is a company of electric vehicle and clean energy
dealing in products like electric cars, solar roof tiles and solar panels, battery energy storage and
many more (Tesla, 2021). The report will shed light on the ways Tesla markets and promotes its
products and services by making use of the promotional mix. Various theories will be used to
critically evaluate the ways in which the company applies the promotional mix.
TASK ONE
Overview of the company
Tesla Company was founded on July 1, 2003 by the founders Martin Eberhard and Marc
Tarpenning. It performs its operations in various industries such as Automotive, Energy storage
and Energy Production. The company has produced almost 509,737 vehicles till 2020 and more
than 3000 batteries. The revenue earned by the company till 2020 was more than $31.536 billion
and the operating income was $1,994 million. The company is owned by Elon Musk and more
than 70,757 employees work for the company. Tesla is considered to be the best car
manufacturer in terms of selling plug-in and battery electric passengers having a market of 16%
in the segment of plug in and 23% in terms of sales of battery electric segment (Tesla, 2021).
The company is also considered as the largest global suppliers in terms of battery energy storage
systems as it has supplied more than 3 GWh of battery storage in 2020. The first vehicle of the
company was named as Roadster. The company initially did not believe in the direct
advertisements rather prefers educating the customers through the showrooms which are situated
in the malls and not in the high-traffic areas (Lyyra and Koskinen, 2017). The company preferred
selling its vehicles online instead of selling through the conventional dealer network. The main
purpose of the company is accelerating sustainable energy by allowing the competitors for
licensing its technology.
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A. Bricks and Mortar Locations
Tesla from the time it was founded wanted to prove that the electric vehicles are quicker, far
better and more fun to drive as compared to the gasoline cars. The Tesla does not only build the
electric vehicles but also generates storage products of scalable clean energy. The company
believes that if the people will less rely on the fossil fuels, the future will be better with zero-
emission. Tesla Company sells its vehicles to the customers directly by making use of its
international network by its owned galleries and stores. The stores of Tesla can be found in 27
countries and its key metropolitan cities. The company is also planning to expand its
supercharger network in Asia, Europe, North America and many other markets for enabling the
long distance travel conveniently (Kissinger, 2018). The main reason because of which the
company could not expand itself in more regions was its different concept which made its
services inaccessible for some and second was its prices. The company follows premium pricing
strategy and along with this the brand also focuses on the design and style. The products of Tesla
are not only sustainable but great with respect to quality, design and technology. The company
attracts the particular premium customer segment due to its premium pricing (Thomas and
Maine, 2019).
Figure 1: Tesla Stores
Source: Dow, 2020
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The strategic locations of its stores help in promoting the brand as well as its products. The
company deals in two vehicles which are highly efficient and superb looking which are also
available at its brick and mortar locations. The first vehicle is Sedan and the other one is SUV as
they are superb in terms of efficiency, customer experience and functionality. The stores of the
company are located in the key metropolitan markets strategically which helps in marketing its
brand and also connecting with the customers. The locations are chosen such that the high end
customers arrive there frequently for purchasing the high end products (Koskinen and et.al.,
2019). Furthermore, the super charger networks also helps in promoting the brand as they are
located at key points such as inside the restaurants, malls, resorts etc. Partnership with these
facilities helps in attracting the prospective customers who visit these places frequently. This also
helps in increasing the brand awareness as well as attracts and retains maximum customers.
Figure 2: Service centre at Tesla
Source: Bonnici, 2016
STP of Tesla
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The company has chosen the segment of the lower volume but the price insensitive performance
car which can help the company in creating brand identity, earning significant unit gross margin
through making the rich and affluent the targets who will to spend more as that of vehicles and
also helps in premium pricing. The biggest strength of the company is its unique positioning in
the car market as it does not only sell the cars but also the technology. Tesla’s positioning
statement is “The only stylish care that can go from 0 to 100 in 3 seconds without a drop of oil”
(Bhasin, 2019).
The company do not use the cost strategy of the Porter’s Generic Strategies but make use of
focus strategy in which the main focus of the company is on the sustainability. Its vehicle stores
and the service centres also focus on transition towards the system of sustainable transport. This
increased the popularity of the business of Tesla as people understood the value of sustainability
and prefers adopting those products which has less environmental impact. The company also
follows the differentiation strategy by its engineering expertise, vehicles and the intense focus
towards sustainability. The premium pricing of the company also differentiates the company
from its competitors. The company is trying to change its premium pricing strategy, so that it can
attract people of all the class. This can help in adapting to the expectations of the customers
(Kim, 2020). This is why, the company plans to make its Model 3 less expensive as compared to
Model 1 and 2.
Figure 3: Model 3 of Tesla
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