Marketing in an International Environment - Tesla's Entry into India

This report discusses the international marketing strategy for Tesla's entry into the Indian market. It covers SWOT analysis, product, segmentation, positioning, pricing, distribution and promotional strategies.

Running head: MARKETING IN AN INTERNATIONAL ENVIRONMENT
Marketing in an international environment
Name of the student
Name of the university
Author note

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Executive Summary
This report has developed the international marketing strategy for entering into a foreign. The
company that has been chosen is Tesla and the target market for the company is India. The
findings from the SWOT and overall analysis shows that even the cheapest product offered by
Tesla is quite costly than the offerings of the market competitors in the entry market of the
luxury segment. Tesla will have to make use of their innovation and technology to launch
products that are comparatively cheaper. The segmentation and positioning shows that mass
marketing and positioning product as environmental friendly and sports car are best options for
the company. The pricing strategy is something that the organization has to work on as the
minimum price of the model 3 is $ 35,000 which is quite high compared to the offerings of the
rival companies. The report shows that Tesla has to take their time to enter the market and
establish their own manufacturing units in India in order to gain competitive advantage,
Moreover, social media marketing is one of the key aspect of Tesla and Elon Musk and they will
have to improve on that in respect to the Indian market and deliver frequent updates.

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Table of Contents
Introduction......................................................................................................................................3
SWOT analysis................................................................................................................................3
Product strategy...............................................................................................................................5
Segmentation and Positioning strategy............................................................................................6
Pricing strategy................................................................................................................................7
Distribution Strategy........................................................................................................................8
Promotional Strategy.......................................................................................................................8
Problem Identification and Solution................................................................................................9
Future Management control and measurement systems................................................................10
Timeline.........................................................................................................................................11
Recommendations..........................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

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Introduction
This report will develop an international marketing plan for Tesla Inc., a multination
American organization. The target market for the company is India and the international
marketing plan has been developed based on the current scenario in the Indian market. The
company has been founded in the year of 2003 and specializes in the solar panel manufacturing,
lithium-ion battery for storing energy and electric vehicles. The organization consist of the range
of products in their product portfolio consisting of Powerpack, Powerwall, Model 3, Model X,
solar panels, Tesla Model S and Solar roof tiles (Tesla.com 2018). The company wants to make
their expansion in the Indian market as it is one of the fastest growing economy among the
developing countries and has a huge population sample which is quite untapped in this segment.
The report will describe the segmentation, targeting, positing, the internal analysis, product,
pricing and promotional strategy. The international marketing plan will be based on the problems
and will consist of a management control system along with the timeline.
SWOT analysis
Strengths Weaknesses
 Tesla is one of the most recognized
brand in the market and have been
able to develop a good reputation in
the market.
 Sustainable innovation model is one
of the key strengths of the
organization as they promote energy
 The vehicles offered by Tesla have
high prices and mainly cater as a
premium brand
 Its presence is limited in global market
as it totally dependent on the super
charger network
 The automobile industry is highly

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efficient vehicles and power sources
by reducing the environmental impact.
 There has been significant growth in
sales of the organization
 Strong technological and engineering
expertise and have progressed highly
in energy efficient technology
 The super charger network developed
by the organization is highly efficient
and effective
competitive and dependency of the
super chargers affects their
competitive positioning
 The production and overall
operational cost of the organization is
quite high
Opportunities Threats
 There has been significant increase in
demand of the sustainable products
with the increase in awareness of
energy consumption which is expected
to grow even further
 The growth of the Indian economy is
at its peak so the company has the
opportunities of tapping into such a
market. The demand in India for
sustainability products have gone up
 Tapping into the upper middle
segment where providing vehicles at
 Tesla will be facing difficulties while
dealing with all the luxury brands
available in the Indian market and the
Indian brands that are globally
recognized
 Dealing with the Indian government
and meeting all the regulatory rules
and regulation is one of the major
threat. It will take time to get into the
market as the Indian government
moves at their own pace and cannot be
compared with other countries.

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lower prices than in other markets
 Autonomous driving technology is
another segment where the
organization could be the first movers
 Ride sharing services in India could be
another opportunity as it will provide
a cheaper option for transportation
Table 1: SWOT analysis
(Source: Tesla.com 2018)
Product strategy
Tesla offer products in the category of energy storage, energy generation market and
automotive industry. The products offered by the organization is aimed at catering to the
consumers opting for sustainable products. The different types of products offered by Tesla are
solar panels, batteries, energy storage, electric vehicle powertrain components and automobiles
(Arora 2016). The most popular product offered by the company are its electric vehicles and
considered as one of the leading car manufacturers. The organization has been contributing
immensely to goal of reaching sustainable energy and electric vehicles and provides other firms
with power train components. Batteries was one of the initial product offered by the company
offering for both industrial and home purposes (De Villa, Rajwani and Lawton 2015). The
organization also provides solar panel and installation services. In the Indian market, these
products have to be customized as per the needs of the Indian consumers. The Indian economy is
still developing in nature so the average disposable income of the overall population is average.
Moreover, the needs of the Indian consumers are different so the products have to be customized

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to address these needs. This is the reason that Model 3 has been launched which a premium
product is lying at the mid-level of the premium segment and upper middle class can afford this
product. This means that the organization will have to develop more products at border line
prices for the Indian consumers.
Segmentation and Positioning strategy
The major challenge the organization while making an entry into the Indian market is
their target market, segmentation and positioning. The price of the products offered by Tesla has
been quite high and targeted the affluent buyers as the brand has been portrayed as luxurious
brands. They were trying to provide luxury sports car to the premium market segments that
wanted to drive eco-friendly cars. However, in India, Model 3 launched by the organization
shows that they are catering to the upper middle class and middle class segment that can afford
to buy an entry level car in the premium segment (Uner, Çavuşgil and Çavuşgil 2018). The
organization will also launch their premium products offered in other countries which shows that
they will be using the demographic segmentation to offer products to premium consumers and
upper middle class.
Tesla has increased their consumer base by significantly reducing the price of their
offerings especially for the Asian market. Tesla has positioned their products as luxury electric
sports cars in the initial phase but they have changed their positioning strategy by addressing the
mass segment by offering luxury sports cars at lower prices. The positioning strategy is as such
that they offer both luxury cars and electric cars so consumers looking for either of the category
will look into the company product. In order to grab the Indian market, Tesla will have to
position their products as luxury products for the normal consumers where the consumers has the
opportunity to be associated with one of the top premium car brands.

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Pricing strategy
The pricing aspect has always been an issue for the company as they only offered luxury
cars at a premium prices. The product offered by Tesla are unique products so they uses the
premium pricing strategy and have added market oriented pricing recently for expanding into the
foreign market. Tesla has used high price points due to the uniqueness and high value attributes
of the products. The consumers have been willing to pay high prices for the products offered by
Tesla as they are considered to ecologically and technologically advance that other companies in
the market (Kienzler and Kowalkowski 2017). The company has been product differentiation
strategy so premium pricing has been a key aspect as product design and innovation add value.
However, the organization also uses market orientation pricing strategy for the other products
such as solar panels and battery products. However, in the Indian market, the organization will
be using market orientation pricing strategy where the products and prices have been set as per
the current needs and disposable income of the target population. The model 3 has been
launched at 23 lakhs that is $35, 000 dollars where other models offered starts from $85,000
(Arora 2016). This shows that they have to offer products at lower prices as the consumers in the
Indian market are price sensitive. The base prices of the products have to be reduced to at least
$20,000 for catering to the masses (Arora 2016). Indian consumers are obsessed with fuel
efficiency so offering products at lower prices is necessary for gaining sustainability and
competitive advantage for Tesla in the Indian market.
Distribution Strategy
Tesla has been using the online sales model which has been coupled with the stores of the
company for selling their cars. Tesla has been promoting their products by using their physical
stores as the sole purpose of the stores is not only selling the products but also promoting the use

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of sustainable vehicles (Olson et al. 2018). The organization prefers selling their products online
as it reduces their selling cost and in India the organization should set up their own units of
manufacturing and distributing to facilitate online selling of the cars offered by the organization.
In order to facilitate this, tesla will have to develop a relationship with the Indian government for
identifying suitable spots for manufacturing (Kashyap 2017). The cars offered by the company
are high end products which comprises of advanced technologies so they will have to setup
physical stores for distribution and servicing of cars. They cannot use dealers and franchises in
India as it reduce the essence of the overall customer experience and the value of the products
offered by the company. Therefore, it is essential that the organization their product by using
both traditional and modern methods by using combination of physical stores and online selling
stores.
Promotional Strategy
Tesla will use both traditional and digital marketing medium to promote their products in
the Indian market. The Indian consumers are highly active on the internet and the number of
online users have increased significantly in the past decade. The physical stores will have to be
located in prime locations of traffic so that consumers come across the stores majority of the
times. Tesla also use banners, posters and newspaper advertisements (Barhat 2018). The banners
will also be located at prime locations in business centres and malls to gain the attention of the
consumers. This will enable the company to communicate with consumers of varied types. Tesla
will make use of their string suit where they will use the social media websites like Twitter,
Facebook, YouTube and Instagram to promote their products. Elon mask has been instrumental
in communicating with the consumers regarding various updates about the products offered and
vision of the organization (Cosco, Moore and Smith 2014). Therefore, Elon mask will have to

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keep on giving updates about the company operations on Twitter. However, there are still
Indians preferring Facebook, YouTube and Instagram will have to provide information regarding
the organization offerings. The majority of the Indian research for products using the digital
channels (Folschette 2017). Therefore, the use of the digital channels have to be effective for
attracting more and more consumers. Tesla has created their own rules of communication with
the consumers but at the initial phase they will have to be frequent with their posts and videos as
it will take time for the company to form a bond with the Indian consumers. The organization
will have to form contracts with Indian celebrities for promoting their cars as Indian follow the
celebrities religiously.
Problem Identification and Solution
The major problem for the organization is developing the super charger network from
scratch which will increase the expenditure of the organization. The price of building a charging
station in Indian will vary from 150,000 to 200,000 which could also be reduced based on the
current resource capabilities of the organization (Bhagat 2017). The foreign direct investment
policy in India suggest 30 % of local sourcing which implies they will have to develop
manufacturing factories in the country and it will take time for the company to discuss about
waving duties (Bhagat 2017). Even though, the lowest model offered by Tesla is their model 3
which will cost around Rs.23 lakh in India which is more than average price of the premium cars
offered by other premium brands in the country (Arora 2016). This could be a big issue for the
organization and they will face challenges in developing products at equivalent prices compared
to BMW, Audi and Renault. India has also developed the national electric mobility plan which
will aim to electrify all the passenger vehicles by the end of 2032 and the important duties are
out of sync with these policies which means that Tesla will have to pay high import duties of

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about 60% which is unviable for them. These will make the marketing of the products difficult
for Tesla as their marketing mix will be highly affected by these factors.
Tesla will have to firstly wait for some time and analyse the Indian market effectively to
identify the options they have to enter the Indian market. They will have to develop cost
effective measures to reduce the internal cost and offer products to the mass at competitive
prices. Tesla will have to keep this in mind that fuel efficiency is a mind-set of the consumers so
cost effective products is needed to get hold of the market.
Future Management control and measurement systems
In order to measure the future performance, the organization will have to first use test run
to check the response they are receiving from the Indian market. Test marketing of the products
and business analytics would be used to check the tendency of the Indian consumers of
purchasing the products. The bookings of the products and amount of market share that
company is able to capture will determine the success of the marketing plan. The online traffic
on company websites and social media pages are also indicators of the success. The analysis of
the marketing plan will help in identifying the areas of concern and control measures will be
developed accordingly. The control measures will consist of regular update on the social
websites and organizing events to increase the awareness among the Indian consumers.
Timeline
Task Name Duration Start Finish

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Marketing Campaign 148 days Mon 01-10-18 Wed 24-04-19
1.0 Review the business strategy 25 days Mon 01-10-18 Fri 02-11-18
1.1 conduct macro environmental
analysis
7 days Mon 01-10-18 Tue 09-10-18
1.2 conduct micro environmental
analysis
6 days Wed 10-10-18 Wed 17-10-18
1.3 Evaluate go to market and
corporate alignment
5 days Thu 18-10-18 Wed 24-10-18
1.4 review the marketing plan 4 days Thu 25-10-18 Tue 30-10-18
1.5 Make amendments 2 days Wed 31-10-18 Thu 01-11-18
1.6 Document the market plan 1 day Fri 02-11-18 Fri 02-11-18
1.7 Milestone 1: Business strategy
reviewed
0 days Fri 02-11-18 Fri 02-11-18
2.0 Campaign development 60 days Mon 05-11-18 Fri 25-01-19
2.1 traditional marketing
activities
25 days Mon 05-11-18 Fri 07-12-18
2.1.1 Posters and brochures
development
6 days Mon 05-11-18 Mon 12-11-18
2.1.2 Billboard design 4 days Tue 13-11-18 Fri 16-11-18

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2.1.3 Advertisements 15 days Mon 19-11-18 Fri 07-12-18
2.2 Digital marketing media 21 days Mon 10-12-18 Mon 07-01-19
2.2.1 Develop Twitter content 4 days Mon 10-12-18 Thu 13-12-18
2.2.2 Develop content for YouTube 7 days Fri 14-12-18 Mon 24-12-18
2.2.3 Develop content for Facebook 6 days Tue 25-12-18 Tue 01-01-19
2.2.4 Develop content for Instagram 4 days Wed 02-01-19 Mon 07-01-19
2.4 Sent emails 3 days Tue 08-01-19 Thu 10-01-19
2.5 Search Engine optimization and
search engine marketing
4 days Fri 11-01-19 Wed 16-01-19
2.6 Test marketing 7 days Thu 17-01-19 Fri 25-01-19
2.7 Milestone 2: Marketing plan
developed
0 days Fri 25-01-19 Fri 25-01-19
3.0 Implement Marketing plan 55 days Mon 28-01-19 Fri 12-04-19
3.1 Implement the traditional
content
15 days Mon 28-01-19 Fri 15-02-19
3.2 Implement the digital content 30 days Mon 18-02-19 Fri 29-03-19
3.3 Review the success of the plan 7 days Mon 01-04-19 Tue 09-04-19

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3.4 Make changes if necessary 3 days Wed 10-04-19 Fri 12-04-19
3.5 Milestone 3: Marketing plan
implemented
0 days Fri 12-04-19 Fri 12-04-19
4.0 Closure phase 8 days Mon 15-04-19 Wed 24-04-19
4.1 Review the success of the
overall plan
5 days Mon 15-04-19 Fri 19-04-19
4.2 Identify new strategies to be
implemented in the next phase
3 days Mon 22-04-19 Wed 24-04-19
4.3 Milestone 4: Campaign
completed
0 days Wed 24-04-19 Wed 24-04-19

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Gantt Chart
Recommendations
It is recommended that Tesla should focus on producing products at lower prices so that
they can use the cost leadership to gain competitive advantage in the market. Product

15MARKETING IN AN INTERNATIONAL ENVIRONMENT
differentiation will not work effectively in this market as Indian population is highly sensitive to
prices and other premium brands have started offering products at considerably lower prices.
Conclusion
Tesla will have to be provide the consumers in India with luxury sports car at lower
prices and this is very much possible for the organization if they make use of their superior
technology and innovation. However, initially Tesla will have to use aggressive marketing
strategy for competing with the other luxury brands in the market. In order to do so, they should
take time and make a slow entry into the market so that they are able to strategies based on the
response they have been receiving from the consumers.

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References
Arora, R. 2016. Tesla to take call on setting up unit in India post Model 3 launch. [online] The
Economic Times. Available at: https://economictimes.indiatimes.com/industry/auto/tesla-to-
take-call-on-setting-up-unit-in-india-post-model-3-launch/articleshow/53310399.cms [Accessed
30 Sep. 2018].
Barhat, V. 2018. From a single Elon Musk tweet, the keys to Tesla's India strategy. [online]
CNBC. Available at: https://www.cnbc.com/2018/06/18/in-a-single-elon-musk-tweet-the-key-to-
teslas-india-strategy.html [Accessed 30 Sep. 2018].
Bhagat, H. 2017. Tesla’s India plans: Challenges and hurdles that they must face. [online] The
Economic Times. Available at: https://economictimes.indiatimes.com/teslas-india-plans-
challenges-and-hurdles-that-they-must-face/articleshow/60125995.cms [Accessed 30 Sep. 2018].
Cosco, N.G., Moore, R.C. and Smith, W.R., 2014. Childcare outdoor renovation as a built
environment health promotion strategy: evaluating the preventing obesity by design
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De Villa, M.A., Rajwani, T. and Lawton, T., 2015. Market entry modes in a multipolar world:
Untangling the moderating effect of the political environment. International Business
Review, 24(3), pp.419-429.
Folschette, C. 2017. Tesla’s successful marketing strategy shows that it’s time for CEOs to get
social. [online] Talkwalker. Available at: https://www.talkwalker.com/blog/tesla-marketing-
strategy-social-ceo [Accessed 30 Sep. 2018].

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Kashyap, K. 2017. [online] Forbes.com. Available at:
https://www.forbes.com/sites/krnkashyap/2017/08/21/why-tesla-decided-to-wait-another-year-
before-entering-india/#2f3191923c15 [Accessed 30 Sep. 2018].
Kienzler, M. and Kowalkowski, C., 2017. Pricing strategy: A review of 22 years of marketing
research. Journal of Business Research, 78, pp.101-110.
Olson, E.M., Slater, S.F., Hult, G.T.M. and Olson, K.M., 2018. The application of human
resource management policies within the marketing organization: The impact on business and
marketing strategy implementation. Industrial Marketing Management, 69, pp.62-73.
Tesla.com 2018. Electric Cars, Solar Panels & Clean Energy Storage | Tesla. [online]
Tesla.com. Available at: https://www.tesla.com/ [Accessed 30 Sep. 2018].
Uner, M.M., Çavuşgil, E. and Çavuşgil, S.T., 2018. Build-operate-transfer projects as a hybrid
mode of market entry: The case of Yavuz Sultan Selim Bridge in Istanbul. International
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