Sustainable Management and Marketing

This document discusses sustainable management and marketing strategies used by Tesla. It covers the principles of sustainable marketing and provides insights into the company's sustainability report. The document also evaluates Tesla's strategies and practices.

Running Head: TESLA 0
Sustainable management and marketing

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Table of Contents
Background................................................................................................................................2
Principles of sustainable marketing...........................................................................................3
Sustainability Report..................................................................................................................6
Evaluation of the strategies and practices..................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Background
Tesla Motors manufactures, designs and sells electric vehicles and changed the world with
its internal combustion engine in the 20th era (De Santiago et al, 2012). The company is also
known for bringing new ways of transportation, and even new industries like energy
industry that is far superior anything that any automobile company had undertaken.
The company has its facility located at California including its manufacturing and assembly
operations. At present, the company have more than 45,000 staff and their revenue for the
quarter ending March 31, 2019 standsout on $4.541B, a 33.23% rising continously (Lambert,
2018).
Considering target market of Tesla, the company identify that electric vehicles have been
marked as a car that will first save money and the environment. The company developed all
electric vehicles targeted to a segment that have not seen luxury market segment and
electric vehicles. With targeting the customers within the luxury car market, or customers
belonging to upper middle class and upper class, the company provides luxury vehicle
customers a new type of experience entirely different from luxury vehicles such as Audi or
BMW. In terms of target market segmentation procedure, the organisation uses an
defensive type of positioning within the target market segmentation.
In addition, the company new product pricing strategy is formed using psychological
approaches but conversant by a data-driven target market segmentation procedure. In
terms of product strategy, the company uses differentiation strategy in their products such
as model S and X inclusive of various innovation and trendy features.

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In terms of pricing strategy, the company have adopted premium pricing strategy implies
setting high prices of the product to encourage satisfactory insights to consumers (Abrate,
Fraquelli and Viglia, 2012). The company always brings out their vehicles at superior prices
as they believe in product quality and innovation and Kotler (2011) also stated that some
consumers always ready to pay higher price to attain more quality products from the
company. However, in future, the company may use price skimming strategy as various
competitors may come into electric car segment.
In relation to place strategy, the company uses online distribution channel such as official
website of Tesla Australia allow customers to order their products through this channel. In
addition, the company also have various stores in Melbourne and Sydney that includes
various cars sample for the purpose of test drive (Alex, 2018).
At last, the promotion strategy of Tesla implies the company adoption of social media to so
as to advertise company products with the help of online websites like Facebook, Twitter,
and other websites. The company also uses different types of marketing such as viral
marketing (releasing of theTesla electronic car model S for children) and video clips which
are normally different from traditional marketing forms (Tanasic, 2017).
Principles of sustainable marketing
The main objective of sustainable marketing is to promote sustainable consumer behaviour
with offering of suitable products with the aim of environment and economic sustainability
(Gordon, Carrigan and Hastings, 2011). It can be said as holistic approach with the objective
of satisfying the wants and requirement of customers in a more responsible way.

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According to Kim et al, (2012), there are five sustainable marketing principles depicted in
below pic -
Source: (Kim et al, 2012)
In consumer oriented marketing, the main principle standouts that an organisation needs to
consider consumer perception for the purpose of undertaking its marketing activities (Coley,
Mentzer and Cooper, 2010). Metting the expectations of the consumer's results in superior
satisfaction and also a profitable long-term relationship. Peattie and Belz (2010) also stated
a process of customer orientation known to be profit chain started from customer
orientation and end at economic success. It is said that organisation need to obtain data as
per the consumer requirements and set up the range to which they are presently assisted.
It can be said that Tesla has customers concerned marketing as the enterprise follows old-
style marketing channels of selling the producst directly selling and advertises mainly
through word of mouth and media coverage. These practices helped Tesla to decrease its
various costs like marketing in align with dispersing a word of trust to increase its deals in
the electronic vehicle market fragment. The enterprise also maintained their own stores
interact straightly with consumers considering their feedback and thus raise customer
satisfaction.

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The next significant principle is customer value marketing that states an organisation need
to shift its various resources towards generating high customer value developing marketing
funds. Here, the meaning of consumer value implies to present value of total revenue
attained from these consumers while maintaining relations with the consumers. With the
internationalisation of economic environment, it is become challenging to develop relevant
marketing strategies in match with the intense market competition (Murray, Gao and
Kotabe, 2011). The main source of any enterprise profit is customer.
It can be said that Tesla lacks consumer value marketing as the company lacks vision
through which it operates. However, the consumer focuses on consumer satisfaction but
they are not driven by profitability instead of it supports the environmental perspective. As
the company presents electric vehicles, it is a decent substitute to reduce the fuel
consumption.
The next principle of sustainable marketing is innovative marketing and requires an
organisation to gain actual marketing and product improvements. To meet customer needs
effectively, the market rivalry hustles up the process of innovation and technology. It also
comprises product innovation intended at rising concern of customer with the help of
innovative marketing tools. Innovativeness is embedded in all aspects of promotion as well
as publicizing communication and also innovative developments necessitate company to
adopt promotional communication tool to allow instant feedback (Wirtz, Schilke and Ullrich,
2010).
Considering this principle, it can be said that Tesla has advanced marketing as the enterprise
has come up with own bar of innovative values and also being determined by green
technology. With the changing requirements of customers and their preferences resulted in

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various expansion opportunities and volume of sales. With better technology, Tesla also
focuses on improving customer convenience.
The next important principle is sense of mission marketing that leads an organisation to
describe its missions in wide social terms instead of narrow product term (Desmidt, Prinzie
and Decramer, 2011). This approach brings out new activist entrepreneur generation who
are necessarily skilled corporate managers from perspective of communal responsibility and
a desire for greater basis.
It can be said that Tesla enriched with sense of mission marketing as they have a extensive
mission to speed up the global evolution to sustainable energy. The company is again
focusing on clean transportation and energy production by offering affordable products to
people.
The last principal of sustainable marketing is societal marketing which states that an
organisation need to take marketing decisions by including wants of customers and society
long-term interest (Laczniak and Murphy, 2012). Tesla also follows societal marketing as
with their various offerings and products, the company keeps elongated interest as its key
goals. With the evolving technology and varying need of the customers, it shows the
importance of increase on dependence on alternative fuels and decreases dependence on
fossil fuels.
Sustainability Report
With the growth of business rooted in sustainability, the mission of Tesla is to speed up the
world transition to sustainable energy. The enterprise focuses on a balanced and engaging
workforce as it offered safety solutions through active safety teams and transparent

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recording of happenings. As per 360-survey in January 2018, 83% of employees agreed that
Tesla cares about their well-being and safety (tesla.com, 2018). The company was found to
engage with the workforce on safety issues and act upon opportunities for improvements.
For instance, their leaders conduct events and walkthroughs so that staffs have a voice to
constantly enhance the work surroundings.
The company also intend their practices towards environment principal of sustainability. In
December 2017, Tesla turned on the world’s largest lithium-ion battery in South Australia
(tesla.com, 2018). After few weeks while failing of a major coal-fired power plant, the
battery system of Tesla’s was started in mere milliseconds to help stabilize the electric grid.
Evaluation of the strategies and practices
Considering sustainability energy, it was found that the company makes important progress
in the direction of goals of operating global Tesla manufacturing, vehicle charging and other
operations using 100% renewable energy (tesla.com, 2018). In 2016, the Fremont Factory
was licensed as a “Zero Waste” facility and was identified towards their assurance to produce
resue and recycling. In 2017, 93% of waste in the Fremont Factory was diverted from
landfills to recycling.
With shifting the generation of chilled water to the night time, the workshop is able to
function in “dry mode” so that no water evaporation is needed and this improved design may
decrease the factory chilled water electrical consumption by as much as 40% and water

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consumption up to 60%, pushing Gigafactory towards its net-zero emission goals (tesla.com,
2018).

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Conclusion
In last, recognising the importance of sustainability management and their principles, Tesla is
successfully able to improve its competitive standing in the industry. Hence, it is important
for any enterprise to gain competition edge in the business environment by focusing on
building a sustainable competitive advantage.
It will also benefit the enterprise to respond quicker to the environmental trends and moves
and leverage environmental performance to narrow the competitive gap in the market.

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References
Abrate, G., Fraquelli, G. and Viglia, G., 2012. Dynamic pricing strategies: Evidence from
European hotels. International Journal of Hospitality Management, 31(1), pp.160-168.
Alex. (2018) The Tesla Model 3 Drive Zero Car Guide [ONLINE] Available from:
https://www.drivezero.com.au/cars/tesla/tesla-car-guides/tesla-model-3-guide// [Accessed
12/05/2019].
Coley, L.S., Mentzer, J.T. and Cooper, M.C. (2010) Is" consumer orientation" a dimension of
market orientation in consumer markets?. Journal of marketing theory and practice, 18(2),
pp.141-154.
De Santiago, J., Bernhoff, H., Ekergård, B., Eriksson, S., Ferhatovic, S., Waters, R. and Leijon,
M. (2012) Electrical motor drivelines in commercial all-electric vehicles: A review. IEEE
Transactions on vehicular technology, 61(2), pp.475-484.
Desmidt, S., Prinzie, A. and Decramer, A. (2011) Looking for the value of mission statements:
a meta-analysis of 20 years of research. Management Decision, 49(3), pp.468-483.
Gordon, R., Carrigan, M. and Hastings, G. (2011) A framework for sustainable
marketing. Marketing theory, 11(2), pp.143-163.
Kim, K.H., Jeon, B.J., Jung, H.S., Lu, W. and Jones, J. (2012) Effective employment brand
equity through sustainable competitive advantage, marketing strategy, and corporate
image. Journal of Business Research, 65(11), pp.1612-1617.
Kotler, P. (2011) Reinventing marketing to manage the environmental imperative. Journal of
Marketing, 75(4), pp.132-135.

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Laczniak, G.R. and Murphy, P.E. (2012) Stakeholder theory and marketing: Moving from a
firm-centric to a societal perspective. Journal of Public Policy & Marketing, 31(2), pp.284-
292.
Lambert, F. (2018) Tesla has grown to 45,000 employees despite laying off ~4,000 people
earlier this year [ONLINE] Available from: https://electrek.co/2018/10/15/tesla-45000-
employees-elon-musk/ [Accessed 12/05/2019].
Murray, J.Y., Gao, G.Y. and Kotabe, M. (2011) Market orientation and performance of export
ventures: the process through marketing capabilities and competitive advantages. Journal
of the Academy of Marketing Science, 39(2), pp.252-269.
Peattie, K. and Belz, F.M. (2010) Sustainability marketing—An innovative conception of
marketing. Marketing Review St. Gallen, 27(5), pp.8-15.
Tanasic, B.R. (2017) DEVELOPMENT OF INTERNET ADVERTISING. Journal of Electronic
Research and Application, 1(2).
tesla.com. (2018) IMPACT REPORT [ONLINE] Available from:
https://www.tesla.com/ns_videos/tesla-impact-report-2019.pdf [Accessed 12/05/2019].
Wirtz, B.W., Schilke, O. and Ullrich, S. (2010) Strategic development of business models:
implications of the Web 2.0 for creating value on the internet. Long range planning, 43(2-3),
pp.272-290.