Marketing Strategy for Tesla: PESTLE, SWOT, STP and Marketing Mix

This report analyzes the marketing strategy of Tesla through PESTLE, SWOT, STP and Marketing Mix. It includes internal and external analysis of the company, segmentation, targeting, positioning and marketing mix.

Marketing Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
PESTLE analysis....................................................................................................................1
SWOT analysis ......................................................................................................................4
STP.........................................................................................................................................5
Marketing mix........................................................................................................................7
RECOMMENDATIONS...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing strategies are defined as tactics implemented by companies in order to enhance
their brand awareness among people and in the market. Organisations plan about they would
represent their products or services in front of customers so that they could get attracted along
with convince them to buy their commodities. For making effective marketing strategies
companies are required to make external and internal environment analysis so that they could
avoid any misunderstandings or risks in future (Wang and Wang, 2019). Companies also
segment their market and target particular section of customers in order to provide them products
according to their needs or demand. In the following report the company that has been taken is
Tesla which is an auto-mobile company that was founded in the year 2003 and in the UK its
headquarters are in London. The respective company serve its products at international level
which includes various countries such as USA, Australia, Japan and many more. The report
contains internal and external analysis of the selected company along with analysis of its market
strategies by applying STP. Furthermore, marketing mix of the selected organisation has also
been discussed in the report.
MAIN BODY
PESTLE analysis
Pestle analysis is defined as the strategic management tool that helps business to determines the
factors that consist in external business environment and their impacts on organisational
performance and functionality. Tesla is the brand that has international fame for its unique
features. Respective organisation examines these factors and consider them business strategies
for the purpose of gaining competitive advantages over other competitors (Bigelow, and Barney,
2021). Factors of pestle analysis in the context of Tesla organisation are mentioned below:
Political factors: Political factors are related to the intervention of government on
organisation that impacts its performance and operations in both positive and negative manner.
Tesla has provides its products and services in number of countries and jurisdictions so it is
important for organisation to identify legal, political as well as regulatory requirements of
countries in which it operates its operation because organisation has minimal control over these
factors. Political factors include tax policies, trade restrictions, tariff policies and political
stability or instability (Tesla, Inc. PESTEL/PESTLE Analysis & Recommendations, 2022).
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Policies on trade is the aspect that impacts business revenue in negative manner. Government
incentives for electric auto mobile is the opportunity for the Tesla because the concept of car is
directly related to reduce carbon emission. Expanding free trade agreement is another
opportunity for business because it helps to expand operations at international level. Political
stability of major markets are in the favour of Tesla and help it gain competitive advantages.
Economic factors: Economic condition is the factor that impact business operations in
positive and negative manner. It includes various factors like interest rate, working hours,
unemployment, cost of living and market growth as well as other variables that influences Tesla.
Business performance of Tesla is benefited by the lower battery costs because it translates the
affordability of organisational electric auto mobile products (De Kluyver, and Pearce, 2021). As
battery is the important cost factor of the total cost of electric vehicle So, powerful batteries
development is the great opportunity for Tesla. It is the factor that helps business to produce
more effective and affordable EV. Low cost of renewable energy in the external factor that create
opportunity for business through improving attractiveness of products. Whereas, economic
instability is the issue that threaten the organisational financial performance.
Social factors: Social factor includes various aspects such as cultural norms and
expatiations, population growth, career attitudes, health and safety as well as age distribution.
Social conditions and trends are the factor that impact performance of Tesla. Respective
organisation ensures that it aligns with social trends in its target market. In current environment,
world is moving towards more sustainable societies in which people wish to contribute towards
reducing the carbon footprints. Tesla's electric cars are most promising because cars are less
expensive in terms of fuel consumption as well as maintenance as compared to other
conventional cars (Drucker, 2020). There are various factors that create opportunity for business
such as increasing popularity of low carbon lifestyle, increasing the preference for renewable
energy and improving wealth distribution in developing markets. Through attaining these
opportunities, respective organisation improves its financial performance that lead business
towards growth and success.
Technological factors: Advancement and innovation in technologies is the factor that
impacts business performance and functionality in positive manner. Advancement of Tesla's
automotive as well as energy solutions depends of technologies that are used by the business.
High rates of technological change creates opportunity and threat for Tesla because it improves
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organisational cost and help business to produce quality products with efficiency . Increasing
automation is the trend that help business to gain sustainable competitive advantages because
adoption of technological aspects help business boost its performance and sales ration.
Increasing popularity of online mobile system helps business to promote its products and
services at different social media platforms (Khalifa, 2020). Advertisement and promotional
activities helps business to attain higher market share, large number of customers through
spreading awareness of products and services in market. Tesla effectively used technology to
enhances its product portfolio that provides competitive advantages to business over other
competitors. Respective organisation update its technology on regular bases that help business to
remain in competition and provide better quality products and services to customers.
Legal factors: There are various laws and regulations are developed by the government
that impact business performance and functionality in both positive and negative manner. Laws
and legal system shapes the managerial decisions as well as business development. Tesla covers
a significant area of market in a short span of time. It is important for organisation to stay
updated with all international patents and copyrights existing in the region in which it is going to
provide its products and services because certain countries so not allow direct selling. Respective
organisation follows labour law and act accordingly. Tesla follows manufacturing, health and
safety as well as employment related laws that help business to run operations in efficient
manner and attain determined goals and objectives properly. If these laws and regulations are
violated then the cost associated with compliances will be huge that impact business reputation
and profitability in negative manner (Khan, Daddi, and Iraldo, 2020). Changes in laws and
regulations also create threat for business so, it is important for business to keep focus on these
factors and consider them in formulating strategies.
Environmental factors: The world is leading towards more sustainable future so people
are willing to buy electric vehicles for the purpose of saving the additional expenses that are
spend on conventional vehicle and saving the environment. Tesla launches electric vehicle that
plays important role in reducing greenhouse gas emissions. Ecological factors plays significant
role in Tesla. Respective organisation has opportunity to promote its electric vehicles based on
climate change. Tesla expands on environment programmes as well as rising the standards on
waste disposal. All these factors enable business to attain the opportunity and enable business to
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sustain in competitive business environment. Tesla also compliances several environmental laws
and regulations that maintains strong brand image.
SWOT analysis
This a marketing tool which assist companies in determining their strengths and
weaknesses so that they could improve them in order to gain competitive advantage in the
market. SWOT analysis also helps in identifying opportunities and threats companies may
encounter while operating their business operations. In case of the Tesla, this marketing tool will
assist in evaluating its internal environment which is described below:
STRENGTHS WEAKNESSES
 Tesla is a leading manufacturer in
automotive industry which mainly
produce electric vehicles that are
energy efficient. The company does not
pay its focus only on selling auto-
mobile but also deals in other products
such as solar panels, energy storage and
others (Key and Keel, 2020).
 Tesla has a strong brand image because
of its innovative style. The vehicles
manufactured by the company are top
class and provide maximum comfort
and quality to customers. Its main aim
is to provide better driving experience
for their customers. The sales increased
with the high customer satisfaction
which leads to a positive image of the
company (Maxim, 2020).
 Tesla is the first company to launch
electric vehicles in the market and are
better from every other brand in terms
 Tesla major weakness is that it faces
complication in the manufacturing of
vehicles as the company have only one
plant which is situated in California that
reduce the production of cars. This
creates a delay in the manufacturing
and production of the previous models.
 The company has small target group
because the company produces high
quality products for the niche market.
This is the main reason they face
difficulty in accelerating growth
because the prices of the products are
high (Asseraf, Lages and Shoham,
2019).
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of quality and comfort. Electric
vehicles of this company are best in
covering long distance range.
OPPORTUNITIES THREATS
 Tesla has more opportunities in the
market as it is set up in only around 35
countries. It has a chance to tap into
new markets and establish business in
those countries. Tesla has an amazing
opportunity to capture the Asian
countries, where the need for electric
market has just begun.
 In the past Tesla was sourcing batteries
externally and their limited supply has
become an issue for them. Because of
this reason the company is now
planning in house production of their
batteries to save money and time of the
company (Zhe, Xueyan and Huan,
2020).
 Tesla is facing high competition from
the competitors across the world as
more companies are moving towards
the production of electric vehicles.
These companies are producing items
at lesser prices allowing more people to
purchase them.
 The continuous usage of innovative
technologies might increase high
operational costs and reduce the profit
margins.
STP
STP model is defined as the popular strategic marketing that is used by business it consists three
steps which allow business to develop specific and actionable marketing strategy. It helps
business to break down the broader market into smaller parts that enable business to reach
potential customers and maintain strong positioning through providing quality products and
services. Stages of STP model in the context of Tesle organisation are mentioned below:
Segmentation: Segmentation is the first stage which is related to identifying common as
well as distinct traits between people in market that allow business to develop more relevant and
engaging marketing campaigns. In this stage, business divides whole market into smaller parts
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according to similar traits (Müller, Buliga,and Voigt, 2021). Characteristics and taste of
customers. Tesla segments market in geographic, demographic and psycho-graphic segments.
These segments are mentioned below:
Demographic segmentation: Demographic segment is related to breaking down market
on the bases of age, gender, education, marital status and profession. Tesla segment market on
the bases of demographics of customers that include establishment market age of 40 to 55.
Organisation targets mainly males who belongs to upper middle class or have high earn job
because these customers can provide lots of disposable income. Tesla mainly targets white-collar
workforce and business executives.
Geographic segmentation: This segmentation is related to dividing market on the bases
of geographical boundaries like region, state and nation. Tesla segments customers of age
between 40 to 55 to approach the market. Respective organisation segment people in one group
who line in suburban neighbourhood and place where cars are needed for transportation.
Psycho-graphic segmentation: This segment of market is related to customers whose
personality and emotions are based on behaviour, lifestyle, hobbies and attitude. Tesla targets
environmentally conscious customers (Rostami, and Rezaei, 2021). Organisation aimed the
people who looking for organisation that is socially responsible in marketing orientation.
Targeting: Targeting is defined as the process of selecting potential segment to which
organisation want to offer its products and services. Business evaluates all market segments and
choose the most suitable one that has growth and development opportunity to business. Tesla
ensures that the segment must be large enough to justify segment, measure differences between
existing market segments and focus on different benefits that are attained by organisation
through selecting suitable segment. Tesla's target market is majorly establishment market ages 40
to 55. As Tesla is the organisation that produces sports vehicles that are expensive in terms of
cost. Respective organisation targets makes who are white-collar jobs and the customers who
belong to upper middle class. Tesla targets these customers because they have high income that
provide them with a lot of disposable money. Organisation also targets customers who seeks
social responsible orientation and customers who are living in high-end neighbour hoods as well
as in the suburban areas.
Positioning: Positioning is defined as the last step of STP process. Effective positioning
helps business to differentiate it from other competitors in market. It helps business to gain
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higher market share and customers base. Through provide quality products business can improve
its sales and profitability ration and gain competitive advantages (Samimi, 2020). Tesla provides
electronic cars that are not common in market so, respective organisation maintains distinction
positioning than other competitors. As organisation cares for earth through provide provide
electronic car that creates effective positioning of organisation in the mind of customers.
Respective organisation provides quality products to customers that help it to attain higher sales,
profits and gain competitive advantages over other competitors.
Marketing mix
Marketing mix is a tool which is used by companies to understand what goods or services
they must offer to their customers. This marketing technique helps organisations in making
effective pricing and promotional strategies that could attract large customer base who are
willing to pay for offered products (Hanson and Kalyanam, 2020). In context to Tesla, its
marketing mix has been explained below in detail:
Products:
This is the factor of marketing mix that helps companies in identifying offered products
of companies that has been sold to their target customer base. In terms of selected company, the
range of products are within automotive, energy generation and energy storage segments (Untari,
2019). The major product that Tesla manufacture is electric sedans along with producing many
commodities related to sustainable energy technology such as Tesla batteries, solar panels,
power-bank, Solar Roof and many more. The company offers mainly three models of cars which
are:
Tesla Model S: This is the premium sedan which was introduced by the respective
company. The model has many technological features such as self-driving auto pilot mode,
power engine with 0 to 60mph acceleration time of about 2.28 seconds and air software update
(Tesla Marketing Strategy & Marketing Mix (4Ps), 2021). The model also possess adaptive
lightening feature for better lighting while driving during turns and bio weapons defence mode
which develop pressure inside carbine in order to protect occupants.
Tesla Model X: This model is considered as safest sports utility car which have 5 star
safety ratings and could went from 295 miles in just one charge. It could also go from 0 to
60mph in just 2.9 seconds (Tesla Marketing Strategy & Marketing Mix (4Ps), 2021). The feature
of this model includes spacious structure with falcon wing doors which provide entrance for
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second and third row of seating. Another feature of this model includes clean air technology
which protect people inside the car from polluted air and auto-pilot characteristic.
Tesla Model 3: This model of the company has been designed in such a manner that it
could be accessible for large customer base. This car is high volume low cost model which was
started manufacturing by the company in year 2017 (Tesla Marketing Strategy & Marketing Mix
(4Ps), 2021). The feature of this car includes it could go 225 mile in one charge and safety
standards has also been maintained by the company.
Place:
This is another component of marketing mix that helps companies in determining venues
or places through which they will reach their potential customer base. In case of respective
company, the places by which firm mark its presence in the market includes firm-owned stores
or galleries, online official website, service centres and charging stations. Consumers could buy
products related to automotive, solar panels and energy storage range from its stores and
galleries which is located in malls and many other places. For sales transaction customers have to
use the official website of company (Kim, 2018). The service centre of company offers repair
and maintenance facility to customers and where the organisation could render services as a
portion of sales contract. The charging stations of the company could be used by the customers
to charge their cars. The limited venue selection strategy of respective company reflects its
specific strategies related to business locations.
Price:
This factor of the marketing mix helps companies in executing effective pricing strategies
that could attract large customer base who willingly pay for offered products or services. In case
of Tesla, it execute Premium pricing strategy and Market-oriented pricing strategy. The premium
pricing strategy implemented by the respective company includes high cost applied to those
products which are unique or luxurious. For instance, potential customers of the selected
company pay high prices for auto-mobile products which are much more advanced in
technology. Therefore, unique product design and innovation are certain factors which provide
opportunities to the company to execute premium pricing strategy. This pricing strategy mainly
agrees with generic tactics of differentiation which pays its focus on uniqueness of products. The
another pricing strategy which is Market-orient is usually applied to solar panels, energy
generation and energy storage products (Madhavaram, 2021). The company applies this pricing
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strategy because these products are offered by various other firm also which increases
competition in the market. Therefore, the respective company compares the price of similar
products present in the market and than afterwards sets the high or low price.
Promotion:
This is element of marketing mix which assist companies in determining what strategies
they could utilise to build communication channel between them and their potential customers.
These promotional strategies enable company in managing and influencing expectation or
demands of customers. The respective organisation applies various marketing strategies which
includes Viral marketing, personal selling, public relations, sales promotions and direct
marketing. Viral marketing is defined as sales strategy that generally includes word of mouth
tactic in order to spread information about products or services of the company. The respective
execute this strategy as people after seeing or using such innovative and technology advanced
product appreciate and recommend other people to use them. The organisation also use personal
selling which includes offering products or services through its physical stores and outlets. In
addition, the respective company implements public relation strategy in order to manage and
boost engagement of customers (Agarwal and Wu, 2018). For instance, the inclusion of the
company of its patent within open source movement is a testament to the commitment of firm to
shift transaction of world towards sustainability. These programmes helps the company in
enhancing its brand image and perception of customers towards the brand. Another promotional
strategy which is sales promotion generally includes discounts and referral programmes of the
company for its potential customers. Direct marketing strategies that respective company use
includes promotions through both online and offline channels. Offline platform includes print
media such as newspaper, hoardings, pamphlets and others. On the other hand online platforms
include social media websites such as Facebook, Instagram and Twitter. The direct marketing
helps the company in taking regular feedbacks from customers so that it could modify its
products or services according to their demands.
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RECOMMENDATIONS
Tesla is the organisation that engages in manufacturing electric vehicles, battery energy storage
and other products and services. There are various marketing strategies are used by organisation
that help it to reach potential market segment and improve sales through enhancing spreading
awareness of products in market. Some recommendations to improve organisational marketing
strategy are mentioned below:
 It is recommended to Tesla that its marketing plans must be aligned with marketing
strategies that enable business to attain determined marketing goals and objectives on
time with efficiency. Organisation should develop strategies for the functional areas with
marketing plan. It improves overall efficiency of organisation ensures that business meet
all determined objectives properly in specific time period.
 It is recommended to Tesla to analyse the competition level within industry to identify
products, services and strategies that are adopted by the competitors. Tesla should
analyse competitor's pricing, marketing strategies, customer base and their review
towards organisational products than develop own strategies to gain competitive
advantages. Organisation should tap in existing customers and take their feedbacks on
real different between its and its competitors offerings (Stepnov, 2021). It plays important
role in improving marketing efforts and strategies.
 Tesla should maintain strong and effective relationship with customers that lead
organisational marketing efforts towards success. As effective marketing is related to
developing and nurturing long-term relationship with customers through maintaining
trust. Tesla should use social media marketing because through it organisation can
understand about customers needs, demand and preferences and resolve their problems or
quarries regarding organisational products and services. If customers perceives that
organisation truly care about then organisational marketing become exponentially
successful.
 It is recommended Tesla to establish key marketing metrics that guide all marketing
efforts of business. Establishing benchmarks and other metrics that help business to
measure the effectiveness of marketing operations. Furthermore, organisation should
concentrates on keep experimenting on marketing techniques that enable business to
attain marketing goals and objectives with efficiency and effectiveness.
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 To improve the marketing strategies, it is recommended to Tesla to develop long-term
marketing plan that consist clear goals that will be attained in short and long term period
(Zhang, 2021). Managers of organisation should convey all marketing activities, roles
and responsibility to employees that enable them to perform operations in efficient
manner.
CONCLUSION
From the above report it has been evaluated that it is very essential for companies to
implement some marketing strategies must be executed so that they could be able to serve better
in the market along with creating brand awareness. Companies also focus on segmenting their
customer base in some sections so that they could be able to target potential customers for their
products and provide them quality commodities to them. It is also very essential for
organisations to make analyse their environment so that they could measure factors which might
impact their business functions. Internal analysis also helps companies in evaluating their
strengths and weakness in order to make some strategies to improve their operations so that they
could avoid threats and utilise opportunities. In has also been concluded from the above
discussion about marketing mix that it provides companies a broad picture about how they
should represent their products at right time with suitable pricing strategies in order to enhance
customer base.
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[Online]
Tesla, Inc. PESTEL/PESTLE Analysis & Recommendations.2022 [Online] available
through :<http://panmore.com/tesla-motors-inc-pestel-pestle-analysis-
recommendations>
Tesla Marketing Strategy & Marketing Mix (4Ps). 2021. [Online] available through:
<https://www.mbaskool.com/marketing-mix/products/17308-tesla.html>
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