Tesla Company's Market Segmentation and Product Strategy Analysis

This report analyzes Tesla's product category and market segmentation, focusing on its presence in developed countries like the United States and its expansion into markets such as Australia. It highlights the company's current focus on battery electric vehicles and suggests capitalizing on plu...Read More

Tesla Company 1
TESLA COMPANY; PRODUCT CATEGORY AND MARKET SEGMENTATION
(Name)
Name of professor
Name of institution
Location of institution

Tesla Company 2
Tesla cars are mostly used in developed countries (Loureiro et al, 2017). Tesla Company
sold the most cars in the United States, in California especially in 2017, where 4.8% of the units
produced were sold. European countries bought 1.74% which was an improvement from 2016
when Europe consumed 1.3% of the Tesla products. The electric cars available in the market are
divided into plug-in electric vehicles which are more preferred because of their flexibility in the
sense that they can use fuel too. Tesla should, therefore, capitalize in the manufacture of more
PHEV vehicles to capture more of the global electric cars’ market. Customers are segmented in
lines of those that prefer battery electric cars since they prefer to use cars that do not require
petroleum fuel only that the current Tesla products are not entirely reliable especially in places
away from urban developments since the customers are afraid of finding themselves stranded
while on cruise with the prestigious machines. Tesla Company should therefore improve the
efficiency of the cars that are currently available in the market to satisfy the needs for all
consumers some of whom may prefer longer-lasting batteries in case they cover long distances
on a daily basis.
Tesla Company manufactures personal cars at the expense of market segment s
such as the public transport sector (Vlasic and Boudette, 2016). This does not satisfy the demand
for electric vehicles, especially in public transport in countries such as China that facilitate
transport in their cities using electric buses and trains for intercity transport. The consumers in
the public transport sector therefore by their products from other companies and this is one of the
market segments that Tesla should target, study, plan for and manufacture more efficient electric
vehicles for public transport than the ones that are currently in the market. Most of the people
that buy electric cars lead luxurious lives and the main aim of buying these cars is to ensure
boost the effectiveness and efficiency of their transport needs in term of speed, comfort, and

Tesla Company 3
prestige. The development of new technology such as the use of solar energy as an additive to
the electric cars that were already in the market is one of the key steps that the Tesla Company
has taken to ensure that it satisfies the market fully.
Tesla is now targeting on expanding the Australian market as from 2014(Roy, 2017). The
Tesla Model S was one of the products that were advertised the first in Australia. The Australian
market segmentation includes an opportunity for electric automobiles manufacturers for public
transport since electric buses are some of the most used means of public transport. Major cities in
Australia such as Sydney and Brisbane have well-developed taxi systems that are a good target
market for the personal car models produced in Australia. The Tesla Company should, therefore,
diversify their products to accommodate all classes of consumers and exploit favorable
government policies such as the concerns for pollution from the Australian government echoed
in the Beyond Zero Emissions policy. Electric cars are a cleaner means of transport than the cars
that use gasoline and this is an advantage that could be fully exploited by minimizing the cost of
production and diversifying the products to suit the preferences of the consumers.

Tesla Company 4
References
Gianesello, P., Ivanov, D. and Battini, D., 2017. Closed-loop supply chain simulation with
disruption considerations: a case-study on Tesla. International Journal of Inventory
Research, 4(4), pp.257-280.
Loureiro, S.M.C., Sarmento, E.M. and Le Bellego, G., 2017. The effect of corporate brand
reputation on brand attachment and brand loyalty: Automobile sector. Cogent Business &
Management, 4(1), p.1360031.
Roy, R., 2017. The Changing Face of Performance Improvement: Lessons Gleaned from the
Electric Car Company. Performance Improvement, 56(6), pp.49-50.
Vlasic, B. and Boudette, N.E., 2016. As the US investigates fatal Tesla crash company defends
Autopilot system. The New York Times.