This report evaluates and reviews Tesla Company's marketing strategies, analysis, segmentation, targeting, and positioning. It also discusses the marketing environment, critical analysis, and strategies for growth and marketing objectives.
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Strategic marketing management TESLA INC. (Coursework- 2) Student’s name
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Introduction (Source:Cheney, 2011) Tesla Motors is one of the automobile manufacturing industries. This company was started for the development of the electric sports car. The Elon Musk as CEO of this former company has launched Tesla in 2003. The main purpose of the organization was to encourage innovation and ethical values. The main goals of the Tesla Company are to generate an entire ecosystem, and as a manufacturer, an ideal set of the energy solution, power wall, power back and the solar roof are maintained and helps in managing the renewable energy generation, storage, and consumption(Higgins, 2016). The objective and the main motive behind this report is to evaluate and review about Tesla Company. What all we understand from their marketing strategies, their marketing analysis, what all strategies in the context of segmentation, targeting and positioning of the firm, for the further improvements to be made as well as, what all the company can to increment their reputation world widely(Cheong, Song, and Hu, 2016). The marketing environment Critical Analysis InPEST, analysis, the external environment variables from political, economic, social and technological evaluate that there are numerous opportunities and risk associated with the set strategies and they needed to be changed which can leads to the significant transformation of Tesla Inc. especially in long run aspect(Popović, et al, 2015).
Inpoliticalandsocialconcern government specific roles help in generating opportunities for improving their financial future aspects moreover, they are also expanding themselves internationally or worldwide as in terms of technology, innovation and in sustainable concern, they stand first as compared with the other companies. Moreover, Elon Musk is also trying harder to be more social to customers. So that they can make aware people about the electric cars and on what theme, they are setting future, educating them about the strategies which they have adopted to make customers aware that the products are meant according to their needs, wants, and demand and also for overall society too(Karamitsios, 2013). Ina technologicalaspect, the company is earning a lot because due to the adoption of the technology which helps in forming electric cars which none other company forms without harmingtheenvironmentandadoptingsustainableaspectswhichgeneratecompany competitive advantage over the others. Lastly, the main important aspect of the company are the customers and the general public, their demands, needs, and wants for which Tesla company always took care of. InPorter's five-force model, the analysis states that the structure of Tesla seems to be favorable in many cases as it leads to the company’s future growth. Alternatively, this automotive market is very much competitive and attractive for all the automaker companies. Similarly, inrivalryterms, the competition will be even more intense because other companies are now focusing on keeping innovative, improving and making better cars. In terms ofsubstitutes, Tesla will be irreplaceable for their loyal customers as what they provide as facilities none other transports providers. Moreover, now people to prefer to have their own cars as that is more convenient to them. Furthermore, the threat ofnew entrantis high and generates risk because now every firm is moving towards sustainable approach and government is supporting to all firms for developing electric vehicles as they areeconomic friendly and linked with sustainability. Lastly, in terms ofsupplierstesla is highly dependent onsuppliers,whichgeneratesissueswiththedeliverycomponentswhichresultsin production disruption, which negatively affects the company reputation(Schoenfeld, 2014). A SWOT analysis,Highlights that Tesla, in recent times, the company will robust their sales as they having a competitive advantage over the other companies. This is all because of their brand recognition which they having in the market. Moreover, they are more focused on sustainable innovation. By adoption of all such factors tesla is on growth stage and have becomestrongerandanexperiencedcompanyascomparedtotheotherautomotive
companies. However, other than this, Tesla also faces weaknesses such as poor customers’ awareness, higher competition and due to the higher prices leads to low affordability(Fobes, 2015). With these weaknesses, certain threats are also highlighted likewise; higher competition due to the high price of Tesla motors and general people will be more focused on other brands. In addition, as cars cost is higher similarly,their cost for the servicesare also higher. Nevertheless, certain opportunities are associated with it as if Tesla is thinking of global expansion through diversifying its business. It is natural that with the diversified business will give more preferences to new technology are done by doing this, Tesla Company will grow its demand for sustainable products(Sharma, 2016). Positioning and Targeting The effectiveness of these market segmentation and attractiveness of the market The effectiveness of this market segmentation done by Tesla is because it helps them in findingthepeopleattitudetowardstheeconomyandenvironment.Accordingly,the segmentationisdone.ThemainthingaboutTeslaisthattheyuseaconcentrated segmentation strategy. The company does not try to attract their customers by engaging in the mass marketing campaign(Bhasin, 2018). Market Segmentation GeographicDemographicBehavioural
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In demographic segmentation, according to the age and their preferences are known from such segmentation. Likewise, for example, Tesla is more focused towards millennials as now they are innovating something, which is meant for them through innovation. Moreover, geographicsegmentationhighlightsaboutthetasteandthepreferencesaccordingto geographic or regions taste of the individuals. Alternatively, Tesla Company concentrates accordingly.Lastly,behavioralsegmentationhighlightsaboutthecustomer'sloyalty, behavioral patterns, and repetitive or non-routine consumption. Hence, it will be easier for the company to generate more innovative techniques in order to attract more of customers Moritz, et al, 2015). According to my opinion, target market should be the millennials and the strategy they should set the various prices and allow to attract them should work over their requirements, needs, preferences, taste, and easiness in handling the cars, which they want. Current positioning in the target market: Tesla’s unique position is on auto car market, which helps them in achieving the particular target. Moreover, the current target market of tesla highlights about the purchases made for model S that was priced 70k for those who are tech savvy and are green friendly. Moreover, the Model S has also considered aa luxury car with the best performances, which simply added to the fully electric cars without scarifying the styles, and performances(Chen, and Perez, 2018). Perception map of Tesla Inc. Positioning
(Source:Chen, and Perez, 2018) (Source:Chen, and Perez, 2018) 4C’s of positioning to access the effectiveness of the Tesla positioning strategy Clarity In Tesla concern, there should be clarity and a clear vision of the particular product and the target market Consistency Inconsistency aspect, the message should be ormustbeconsistentthroughoutallthe aspects in relation to the product. Competitiveness Incompetitivenessconcern,thecompany should develop something new and attractive which is different from the other companies Likewise, in terms of Tesla, in reputation concern, they serve customers in a direct and honest way but not to just take their money. Creditability Creditability comes for the services which they offer to the ultimate customers Likewise teslasometimesagodeliversfr6ee superchargingtotheirbuyersinorderto retain them for a longer time(Schoenfeld, 2014)
Strategies for growth and marketing objectives BCG Matrix of Tesla (Source:Mangram, 2012) BCG Matrix framework is helpful in evaluating the strategic position of the company by its brandportfoliointofourdifferentcategorieslikewise,industryattractiveness,and competitive position of the company. In Tesla company concern, it is on the question mark stage as the earning and the profits are done by the company in current years and are growing at a faster pace. However, the matrix also highlights that the cash flow is currently negative and its strategy is to invest more in order to improve overall. The below image highlights that Tesla currently in is suspense with its upcoming market growth (Mangram, 2012).
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(Source:Mangram, 2012) Tesla’s Ansoff matrix (Source:Carlson, 2013) Tesla growth strategies are revealed in these four ways:
Market Penetration:This particular strategy highlights about the selling of the existing products into an existing market. As Tesla thinks of selling their Models such as Model X, Model S,as well as solar panels, inverters, electric hardware and monitoring devices in all 29 countries for their growth. Product development:This strategy highlights the development of the newer product in order to sell them in the existing market. Tesla not easily develops its product easily due to its higher cost in electric vehicles and the power storage sectors. Market development:Market development strategy highlights the development of the newer market for the existing products. Likewise, Tesla is now trying to tap India. As according to Elon Musk, tapping the Indian market will be a strategically appropriate decision as it is the third largest auto market in the world. All this will be done by 2020(Stringham, et al, 2015). Diversification:In this diversification aspect, the company earlier manufactured electric vehicles, and then Tesla tapped and purchased a solar company in 2016 in order to enter the energy storage sector.The alternative fuelvehicles manufactureris the further efforts made to diversify and manages to overcome its current severe financial issues(Carlson, 2013). SMART Objectives- Short-term, Medium-term and long-term SMART Objectives/ Time period Short TermMedium termLong term SpecificInthis,themain specific goal of Tesla isbeeninnovatein current times. Practice going further ininnovation likewisethegreen environment etc. In a long run, they are thinking of going innovative in electric carsalongwiththe sustainable touch MeasurableItwasplannedto generate demand for electric vehicles so it was measured that it isdonewithinthe shorter period. In this, they need to measure the existing customers’basein ordertogenerate loyaltyand customers recommendations. Buildinglong-term awarenessand managingcorporate reputation.
AchievableAchievingthemass market competitiveness They thought of car which changes lanes automatically in 2015 and they achieved it. Their long-term goal is to tap India as it is on the third position intheaspectof electric concern. RelevantEducatedcustomers about Tesla goals in order to improve the future Focusingonthe marketshareand strategies to improve overall An eye towards the futureisthelong term goal of Tesla TimedEducate, inspire and empowerwithinno timetotheir customers Rather than focusing onprofitsshould focusonthe improvementsmade are the medium term goals by 2020 Focusing on the next levelaswellas earningmoreof profitswith maintaininga reputationforthe long run(Mindtools, 2018) How these objectives help in meeting stakeholders’ needs Tesla’s stakeholders include investors, directors, employees, suppliers, partners, public and lastly the financial institutions. If the set objectives are full filled by the organization within no time or the set period, then the company will definitely earn a lot of a lot of profits and with the profits, the company would get extra earning to improvise themselves further. For employees more of salaries, Suppliers with more orders, partners in benefits with overall earning, and lastly financial institution are free from bad-Debt issues or the repayment of taken loans. The marketing Mix 4 P’s analysis of Tesla Inc. Product Accordingtotheanalysisinproduct formationbyTeslashouldbemore Price In price, affordability matters a lot. Due to the uniqueness of their products, the high rise
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diversified likewise, solar panels, inverters, electric hardware, and monitoring devices so thattheycantapmoreofproductsand ultimatelyleadstotheimprovementin overall growth. inpriceisnatural.However,inorderto generate accessibility of the products they have to make it affordable that lies in the range of middle level. Place ThinkingoftargetingIndiaastheirnext profit generation is a good tap but currently targeting India would be a bit difficult as Indian’s population is more of middle-class people, which would be a bit risky for Tesla to earn more. Promotion Tesla should focus on direct marketing and personal selling aspect so that they can know moreaboutthecustomers’perceptions, moreoverabouttheirneeds,wants,and influences(Folschette, 2017). Budget Measurement and control of Tesla Key Performance Indicators ExplanationCost estimation Revenue Increases Withthenewprojects, revenue increment is natural. InTeslaconcern,withthe morediversifiedproduct formation, more of revenue is generated Aspeoplearenowmore aware of nature and so with products which Tesla forms (Sustainable products) Inthiswiththenewer concept leads to the higher cost Higher the cost higher will be thereturnsinthefuture. Supposenormallycostis 1crore,butnowthe additionalfeatureof sustainableaspectcost20 lakhs more than the overall cost will be 1crore, 20 lakhs. Theninthefuture,the
revenuegenerationwillbe more than the cost covered currently.(morethan 1crore,20lakhs) Web trafficWeb traffic highlights about thecustomerswhohave visitedthecompany webpage, how many times, and the number of pages Inthisthemainbenefit associatedwithwhichit helpsingeneratingsuccess by-payinglesstodigital marketing cost and naturally theyaretappingthe customersandtriggering theirmindswiththeir productsofferingsonsite (Mangram, 2012). Socialmedia Likes Socialmediacomprisesof Instagram, Twitter and many more. Nowadays the most authentic wayistodosocialmedia marketinglikewise,Tesla uses Twitter for customers’ engagementandforthe customer'sservices,social listening.Inaddition,uses Instagram to connect with the customers. Bythis,theadvertisement cost is saved by the company Conclusion The above report highlights about the business plan of Tesla in which the analysis of Tesla’s marketing strategies, SWOT analysis, and porter’s five-force model, which states that what all techniques and strategies they should adopt in order to generate more of success.
Moreover, the perception map also highlights the current market positioning of Tesla in the market. For this, 4 c’s which are clarity, competitiveness, creditability, and consistency are the approaches are taken into consideration in order to improve the situation of the company. Lastly, the cost estimation according to the key performance indicator is measured in order to improve and generate success of the Tesla Company(Hanlon, 2015). References Bhasin,H.(2018)MarketingstrategyofTesla[Online]Availablefrom https://www.marketing91.com/marketing-strategy-of-tesla/ [Accessed 17/02/2019] Carlson, W.B., (2013)Tesla: Inventor of the electrical age. Princeton University Press Chen, Y. and Perez, Y., (2018) Business model design: lessons learned from Tesla Motors. InTowards a Sustainable Economy(pp. 53-69). Springer, Cham Cheong, T., Song, S.H. and Hu, C., (2016) Strategic alliance with competitors in the electric vehicle market: tesla motor’s case.Mathematical Problems in Engineering,2016 Fobes. (2015) Tesla’s unique position in the car market is one of its biggest strength [Online] Availablefromhttps://www.forbes.com/sites/greatspeculations/2015/07/02/teslas-unique- position-in-the-car-market-is-one-of-its-biggest-strengths/#66eb835d3ad7[Accessed 17/02/2019] Folschette, C. (2017)Tesla’s successful marketing strategy shows that its time for CEO to get social[Online] Available from: https://www.talkwalker.com/blog/tesla-marketing-strategy- social-ceo [Accessed 17/02/2019] Hanlon,A.(2015)the4c’smarketingmodel[Online]Availablefrom https://www.smartinsights.com/marketing-planning/marketing-models/4cs-marketing-model/ [Accessed 17/02/2019] Karamitsios, A., (2013) Open innovation in EVs: A case study of Tesla Motors, (1), pp. 198- 341 Mangram, M.E., (2012) The globalization of Tesla Motors: a strategic marketing plan analysis.Journal of Strategic Marketing,20(4), pp.289-312
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Mindtools. (2018)SMART Goals, how to make your goals achievable[Online] Available from https://www.mindtools.com/pages/article/smart-goals.htm [Accessed 17/02/2019] Moritz, M., Redlich, T., Krenz, P., Buxbaum-Conradi, S. and Wulfsberg, J.P., (2015) August. Tesla Motors, Inc.: Pioneer towards a new strategic approach in the automobile industry alongtheopensourcemovement?.In2015PortlandInternationalConferenceOn Management Of Engineering And Technology(pp. 85-92) Popović, S., Tošković, J., Macura, R., Aničić, J. and Aničić, D., (2015) The Importance Of Evaluation Of Risk Management In Business.Analele Universităţii Constantin Brâncuşi din Târgu Jiu: Seria Economy,1(1), pp.83-89 Schoenfeld,L.(2014)TeslaModelS[Online]Availablefrom: https://prezi.com/7fmuvpm7p4gm/tesla-model-s/ [Accessed 17/02/2019] Sharma, S., (2016) the Tesla Phenomena.A Business Strategy Report, 1(1), pp.89-111 Stringham, E.P., Miller, J.K. and Clark, J.R., (2015) Overcoming barriers to entry in an established industry: Tesla Motors.California Management Review,57(4), pp.85-103 Tesla.(2013)themissionofTesla[Online]Availablefrom: https://www.tesla.com/blog/mission-tesla [Accessed 17/02/2019] Vynakov, O.F., Savolova, E.V. and Skrynnyk, A.I., (2016) Modern electric cars of Tesla Motors Company.Automation of technological and business-processes, (Volume 8), pp.9-18