7003 MKT - Marketing Plan: Tesla Model 3 - Analysis & Implementation

This report provides a comprehensive marketing plan for Tesla's Model 3, focusing on segmentation, targeting, and positioning (STP) strategies to reach a mass audience while maintaining sustainability goals. It details the marketing mix, including product attributes, pricing strategies (market-oriented and premium), direct distribution methods, and promotional activities using both conventional and unconventional channels. The report also outlines evaluation and control measures to assess the effectiveness of the marketing mix, followed by a 12-month implementation plan with timelines and recommendations for Tesla to expand its market share and promote environmental sustainability through the Model 3.

Running head: MARKETING
Marketing
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Executive summary
Tesla, a leading innovative automobile manufacturer has provided a unique product that is
electric vehicles (EV). Through premium pricing Tesla offers the cars with highly advanced
technology. The new Model 3 is comparatively a cheaper product that is targeted towards the
mass market. It also meets the goals of the company to promote sustainability at a large scale and
transforming the public transport system. This report presents the segmentation, targeting,
positioning and marketing mix strategies of Tesla, followed by the evaluation and control
measures and 12 months implementation plan and recommendations for the company.

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Table of Contents
1.0 Introduction................................................................................................................................3
2.0 Target marketing and positioning for Tesla Model 3................................................................3
2.1 Selection of target market......................................................................................................3
2.2 Positioning strategy...............................................................................................................4
3.0 Marketing mix strategies...........................................................................................................5
3.1 Product...................................................................................................................................6
3.1.1 Defining the product attributes.......................................................................................7
3.2 Price.......................................................................................................................................8
3.3 Place/Distribution..................................................................................................................9
3.4 Promotion..............................................................................................................................9
4.0 Evaluation and control.............................................................................................................11
5.0 Implementation and schedule..................................................................................................14
6.0 Conclusion and recommendations...........................................................................................16
References......................................................................................................................................18

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1.0 Introduction
Tesla, the leading luxury electric car manufacturer of the world, is launching a new
model. The Model 3 is cheaper than the flagship model S and thereby is aimed towards the mass
audience in the existing as well as in the new markets. This report presents the segmentation,
targeting and positioning of Tesla for its model 3 and it is followed by a detailed marketing mix.
The report will also present a discussion about the evaluation and control measures to be adopted
by Tesla for assessing the effectiveness of marketing mix and it is followed by the
implementation plan, timeline, recommendations and conclusion.
2.0 Target marketing and positioning for Tesla Model 3
2.1 Selection of target market
As stated by Tanner & Raymond (2015), segmentation represents categorization of the
target market on the basis of geography, demographic factors, social status, behavioral and
psychological characteristics. Targeting represents designing specific marketing mix for the
segments that a company wants to sell its products. Tesla offers fuel efficient and sustainable
electronic vehicles (EV) and the company aims to contribute in the protection of environment by
not affecting the depleting resources of fossil fuel. Thus, producing electric vehicles is a step
taken by Tesla to promote sustainability. Tesla segments its market on the basis of the following
factors.
Geographic Rural and urban customers of the USA, Asia, Europe, Australia, Canada,
and New Zealand (Eisler, 2016)
Demographic Salaried individuals with higher annual income, male and female aged

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more than 30 years, business individuals, belong to all religion, ethnicities
and nationalities (Eisler, 2016)
Behavioral Brand loyal, preference for long term value from the products and have
awareness about environment and sustainability
Psychographic People with luxury lifestyle, are price insensitive
Marketing and
brand dimensions
People with preference for specific brand promotions and product
attributes.
Hence, it can be inferred that Tesla has a target market belonging to the higher income
groups of the societies in the developed countries, that maintain luxury lifestyle, have awareness
about environment and its protection and brand loyalty, irrespective of nationality, race, gender,
age, and religions.
2.2 Positioning strategy
As stated by Schlegelmilch (2016), positioning strategy implies the actions by the
markets that help to create an impression in the minds of the customers about the products or
services. These strategies enable an organization to promote the strengths or unique selling point
(USP) of the goods or services, which helps it to get a competitive advantage in the market.
Tesla has a unique positioning strategy as it is not only selling vehicles, but also selling
innovative advanced technology. It dominates the long range luxury electronic vehicles market,
which is quite different than the traditional automobiles and the market. Tesla also provides
supercharger network, battery swapping stations and company owned service stations. Hence,

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TESLA
High quality
Low quality
Premium pricingAverage pricing
BMW
AUDI
Mercedes
Honda
Toyota
New position
the Tesla products and services are positioned with premium pricing due to its highest quality
among the customers who have high income, maintain luxury lifestyle, and are price insensitive.
The positioning statement of the Tesla cars says that only Tesla offers the stylish cars which go
from 0 to 100 mph within 3 seconds without a single drop of oil (Tesla.com, 2019). The
positioning statement also highlights the initiative towards sustainability and environment
protection by Tesla.
Figure 1: Perceptual map for Tesla
(Source: Author)
3.0 Marketing mix strategies
Marketing mix represents the combination of all types of marketing or promotional
techniques and strategies that are applied by the companies for convincing the target market to

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purchase their products or services (Ang & Rusli, 2018). Tesla will apply 4P’s of marketing mix
to influence its target market to sell their new Model 3. 4P’s of marketing mix includes product,
price, promotion and place (distribution).
3.1 Product
Tesla, Inc. is one of the most influential player in the automobile industry of the US and
Europe. It has introduced one of the most unique products in the automobile market, that is, the
electronic vehicles (EV). The company also offers supercharger network, batteries and charging
stations across the countries. Its flagship product, Model S, is one of the most accepted sedans in
the world (Ehsani et al., 2018). Tesla is aiming to spread the sustainability awareness among all
the classes of the society and thereby launching the new model at a lower price. It also plans to
install technology for renewable energy production for the cars. This initiative will not only
reduce the stress on the depleting resources of the fossil fuel, but also reduces the level of
pollution by decreasing the level of carbon emission. It also aims to launch cars for the mass
market and thus increase the awareness about the necessity of sustainability. It has also launched
driverless vehicles, Pilot, however, those are not suitable for the less developed and populous
countries.

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Figure 2: Model 3 of Tesla
(Source: Tesla.com, 2019)
The new model of Tesla, that is, Model 3 is equipped with electronic motor, which makes
the vehicle to go to a speed of 0 to 96 kmph within 6 seconds. The mileage is 346km per single
charge. These features are an improvement from its flagship model S and it is targeted towards a
larger mass market with an aim to promote more sustainability (Tesla.com, 2019).
3.1.1 Defining the product attributes
Current Product Attributes New Product Attributes Resulting Consumer Benefit
Tesla model S
- Length: 196 inches
- Speed: 2.5 – 4.2 sec
for 0 to 60 mph
- Miles range: 259 –
335
Tesla model 3
- Length: 184.8 inches
- Speed: 3.3 – 5.6 sec
for 0 to 60 mph
- Miles range: 260 –
Though the new model has
fewer features than the
flagship model, yet there
are features suitable for
mass market, which will
help in addressing a bigger

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- Powered Rear
Liftgate
- Front & Rear Trunk
Cargo Volume: 30 cu
ft
- 2 digital displays:
Driver display + 17”
Touchscreen
- 1500+ configurations
(Tesla, 2019)
310
- Manual Trunk
- Front & Rear Trunk
Cargo Volume: 15 cu
ft
- 1 digital display: 15”
center Touchscreen
- Less than 100
configurations (Tesla,
2019)
target market.
- Consumer will have
both the options for
aluminium and steel
body
- Coil suspension
- Optional glass roof
- More wheel options,
that is, 18’ Aero, 19”
Sport or 20”
performance wheels
- Affordability
- Suitable for mass
market (Tesla, 2019)
Table 1: Product attributes
3.2 Price
The base price for the flagship Tesla Model S is $70,000 in the USA market. The new
Model 3 has been given a base price of $35,000, along with long range battery at $9000+, and
the base price for premium package is $5000+. This makes the base price for Tesla Model 3 is
$49,000 (Field, 2018). Therefore, it can be inferred that for the new model, Tesla is adopting the
average pricing policy, which can be suitable for the mass market, that is, to both the upper and
middle income group. It can be termed as market oriented and premium pricing strategy.

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Market oriented pricing strategy allows Tesla to charge price for the energy sources that are
sustainable for maintaining a competitive position. And the premium pricing strategy allows
Tesla to charge a higher price for the innovation and advanced sustainable technology offered to
the market. It aligns with generic differentiation strategy, which focuses on the uniqueness of the
vehicle. For Model 3, Tesla will follow the market oriented cost differentiation strategy of
pricing that is focused towards the mass market. In other words, the price is set quite lower than
its flagship model to appeal to a larger market.
3.3 Place/Distribution
Tesla follows a direct distribution strategy. Under this strategy, the company uses its own
showrooms and service centers for selling the cars (Du, Ouyang & Chen, 2017). It also uses its
own website for selling cars. Customers can perform the comparison between the cars on the
website directly. On one hand, this strategy is useful to maintain the quality of before and after
sales customer service, on the other hand, it limits the visibility of the product as the number of
company owned showrooms and service centers is less than the franchise stores. In every market,
Tesla follows the direct distribution and direct sales strategy, that is, B2C model. In this method,
the company can approach to the customers directly and this results in better before and post
sales personalized customer service. For expanding in the new markets, that is, Asia, Canada,
Australia and Europe, Tesla will adopt the direct distribution strategy by opening new company
owned showrooms, service centers and charging stations.
3.4 Promotion
Promotions are the most important aspects of any marketing mix. Correct marketing
strategies are extremely important for Tesla as it is selling a unique product at a high price.
Along with the conventional digital and print media advertisements, the unconventional

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channels, such as, social media, media releases and PR techniques will be followed for reaching
out to a bigger audience. To create a mass awareness about sustainability of the environment and
its product, that has innovative technologies, Tesla will use its social media accounts, such as,
Facebook, Instagram, Twitter, etc. it helps it to a bigger and global target market (Lashley,
2017). Hence, viral marketing, sales promotion, public relations, personal selling and direct
marketing will be included in the marketing strategy of Tesla for Model 3.
Tesla will adopt the conventional promotional strategies for its new Model 3 likewise
Model X and Model S. For targeting a mass market, the comparative and imaginative ad style is
the most suitable marketing technique. In this strategy, the new model of Tesla will be compared
with its other products and also with the competitors’ products. The primary focus of the
promotion campaigns will be to introduce a sustainable product at a lower price so that it can be
affordable to a larger market, that is, to the middle income group also, which will help the
company to expand its market share. Hence, Tesla will highlight its sustainability agendas in
their marketing campaign for Model 3. It will create impactful advertisements that will illustrate
its target of helping the society and the environment by raising the sales of the eco-friendly cars.
Media June July Aug Sep Oct Nov Dec Jan Feb
Radio
Channels
TV
Channels
Newspaper
ad
Magazine
ad
Outdoors
Transit

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Billboards
Press
release
Social
media
Online
website
Table 2: Promotion plan for Tesla model 3
Therefore, it can be inferred that various conventional and unconventional media
channels will be used by Tesla for the promotions. Different types of advertisements will be
created for print media such as newspaper, and magazines, digital media, such as, television and
radio, billboards, social media, websites etc. while the television and radio channels will run 4
slots of 1 minute and 5 slots of 30 second audio and video advertisements. The leading dailies
and magazines will get full page advertisements once a month. In every 3 months, there will be
press releases. Apart from these, Tesla will put up hoardings and billboards in and around the
cities and along the highway transit to increase the visibility. Along with that, continuous
promotional activities will be run on the social media account and also on its own website to
reach out to a wider and global audience.
The customer support system tools should be used by Tesla for its marketing activities.
The personal selling processes and the service support systems can be applied for conducting
direct marketing. No discount promotional techniques will be applied but event marketing plans
will be adopted by Tesla.