TESLA Motors: Global and Cross-cultural Marketing in the Kuwait Market

This report provides a comprehensive analysis of TESLA Motors' potential entry into the Kuwait market, focusing on global and cross-cultural marketing strategies. It begins with a brief background of Kuwait, highlighting its economic and demographic characteristics relevant to the automotive industry. The report then conducts a PESTLE analysis to identify environmental factors, including political, economic, social, technological, legal, and environmental influences, to assess business opportunities and challenges for TESLA. Various proposed modes of market entry, such as export, contractual agreements, joint ventures, and wholly owned subsidiaries, are evaluated. Finally, the report explores the applicable marketing mix strategy, including target market identification and key marketing mix elements to recommend an effective market entry strategy for TESLA in Kuwait. The analysis considers the unique cultural and economic landscape of Kuwait to inform its recommendations.

Global and Cross-cultural
marketing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Brief background of country .............................................................................................1
2.Environmental factors highlighting business opportunities and challenges for product....2
3.Proposed modes of entry in to market.................................................................................4
4.Applicable marketing mix strategy: target market, marketing mix elements.....................6
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Cross-cultural marketing is analysed as a strategic process of marketing that is used
among consumers whose perception is different from marketer's own culture. Global marketing
refers to processes of conceptualization and determination of final products or services
worldwide with hope of reaching international marketing community (Nonis, 2017). It is also
considered as ability of company to expand business at global scale through implementation of
different strategies based on region in which company is marketing too. Present report is based
on analysis of TESLA motors which is not currently available in Kuwait. Inc. It is an American
company which has its specialization in sports cars and electric vehicles. It is also considered as
an independent auto maker that aimed at eventually offering electric cars at prices affordable to
average consumers. Further, brief background of Kuwait is analysed to understand factors that
affect marketing of TESLA Inc. PESTLE analysis of brand is also accomplished to study
environmental factors that provide challenges and opportunities to organisation along with
proposed modes of entry in auto mobile market.
1. Brief background of country
TESLA motors is most emerging and innovative Automotive brand that deals in new and
innovative designs of electronic cars Kuwait is another rich country in which products and
services of TESLA Inc. are not officially available for sale. It is a country that exits in western
Asia situated in northern edge of Eastern Arabia, share its borders with Iraq and Saudi Arabia. It
currently has population of around 4.2 million people (Miller, Kilic and Vollmers, 2013). Kuwait
is constitutional emirate that consists of a semi democratic political system. Study has
determined that auto mobile industry of Kuwait has achieved a major growth and development
due to continuous introduction of innovation by organization by companies in different vehicles.
Moreover, Kuwait is identified as rich and economic developed country in which all
technological and other types of resources are available (Albahri and University of Kuwait,
2012). It is also analysed as best country in which TESLA Inc. has opportunities to promote its
products and achieve high sales revenue as compared to other nations. Continuous economic
growth of country has increased financial condition of people in Kuwait and provided them
ability to purchase vehicles. Therefore, it can be said that Kuwait is an effective place to promote
its products and services.

2.Environmental factors highlighting business opportunities and challenges for product
Analysis of business environment is considered as a strategic tool which consists of
framework used to identify all external and internal business elements that will affect
performance of organisation. Present analysis entails at assessing level of threats or opportunities
that factors will present. This evaluation will further be translated in to a process of decision
making and it also helps in aligning strategies with environment of firm (AlDosiry and et.al.,
2016). There are various strategic analysis tools that are used by firm to analyse major factors
that provide impact on business operations and generate some challenges and opportunities
towards growth and development. In present scenario, there are some environmental factors
analysed which have highlighted various important business opportunities and some issues in
establishment and marketing of products and service of TESLA brand in UK. PESTLE analysis
consists of various factors that affect business environment which can affect directly and
indirectly operations of enterprise.
 Political: These are important factors that mainly focus on countries' financial political
situation and also, consider effect of global political condition on country and business.
In this context, Business of TESLA Motors is also affected by some political factors like
government policies, tax laws and tariff, stability of government and regulations on
mode of entry (Mahfooz, 2015). Kuwait is considered to be one of most democratic and
liberal countries in Middle East region. Political environment of country is analysed as
stable which has led to economic stability and gives rise to higher economic activities and
prosperity. But there are some decisions of political parties which have provided some
restrictions on industrial sector because there is large part of supply chain of auto mobile
business is located in Kuwait and these political restriction has increased disruptions in
supply chain of motor.
 Economic: These forces have a significant role in business and provide impact on
success in various ways. TESLA has seen its business rising fast in past years. This was
occurred due to increase in economic activity and provided positive impact on its growth
along with rise in economic activities at global level. Economic factors that affect
business of TESLA motors are inflation, interest, credit accessibility, unemployment,
monetary and fiscal policies and foreign exchange rate, etc. Rise in economic activities
has also raised level of employment at global scale and led to higher spending of people
2

on goods' and services (Angrill and et.al., 2012). Now, people are more focused towards
buying luxurious cars and especially demand for TESLA SUVs has increased. Thus, it
has provided major opportunities for brand to establish business operations and sell
products in market.
 Social: These are just important as the other factors and they can also have their impact
on the demand and supply of some products. In Kuwait, the demand for the sustainable
products has risen as people tends to buy the products which are good for environment.
The environment is considered as favourable for the sustainable brands (Meredith and
et.al., 2016). TESLA will achieve growth in Kuwait because they make sustainable
products and that is major plus point for the brand. Electronic cars which are
manufactured by TESLA comes under the category sustainable products which does not
exert emission. It helps at marketing the brand of TESLA motors and works for the
improvement of sales in auto mobile sector of Kuwait. Therefore, company needs to
focus on helping brand transition towards a better, greener, sustainable and more fuel
efficient future.
 Technological: It is one of the biggest factor affecting the growth and marketing of the
business at global scale. It affects various things in the business world. From
manufacturing to the operations and marketing of Vehicles, technology plays very
important role in auto mobile sector as it makes the efficient and also affects their
competitiveness. Technology has further determined the competencies of TESLA motors
in business to develop new and innovative cars as per customers demands. In Kuwait,
Sustainable technology is very effective because its popularity has been grown very fast
in the modern era. TESLA as technological brand is leading market in terms of growth
and profitability. With implementation of new technologies in products, company will
achieve a major growth in sales if they establish their company in Kuwait. Thus,
technology will be major determinant for TESLA to increase its sales and profitability in
Kuwait and also supports in marketing.
 Legal: Laws and regulation developed by parliament of country is important force that
affects the business of TESLA in Kuwait. Legal factors has grown its importance in the
21st century (Moritz and et.al., 2015). From the labour regulations to the environmental
health and other kinds of business regulations, law which can directly effect on the
3

business operations. Moreover, the laws have become friendly with the sustainable
business, still any type of problems with the laws will make it complex for TESLA to
regulate its business. Kuwait have laws that are friendly towards the sustainable brands
which makes the TESLA tasks easier but there are several other laws which are related to
supply chain and labour which affect and tends to raise the costs of operations.
 Environmental: factors of environment are also growing in significance in the context of
business. At global level, brand which has invested in the environment have grown faster
in the popularity. In Kuwait, in relation with environment impact, TESLA brand has very
good reputation (). From its electrical vehicles to the other energy saving appliances,
everywhere the company focused on sustainability and saving energy. Thus, overall
TESLA has a very good reputation in terms of environment impact in the auto mobile
sector of Kuwait. Moreover, organisation is also working on the creation of products and
supply that will be more energy efficient.
Therefore, it is analysed that there are various important business and growth
opportunities have been provided these environmental for TESLA to start the sale of electric cars
in auto mobile market of Kuwait. But there are some challenges needs to faced by organisation
due to some political disruptions and decisions along with the legal regulation on supply chain
and labour.
3.Proposed modes of entry in to market.
For TESLA to enter in to auto mobile sector of Kuwait, there are various important
modes entries have been available which tends to make the business operations of organisation
easier. Study has determined that modes ODF entry in to foreign market differs in the degree of
risk which they present, control and commitment of resources as they need and return on the
investments which they promise. The non equity modes category includes export and contractual
agreements. The equity modes category involves the joint venture and wholly owned
subsidiaries.
 Export: It refers to the sending of goods and services manufactured by the company in
one country to another. In this context, TESLA can also enter in to the market as they
will get support of home country resources for selling their electric cars (De Villa,
Rajwani and Lawton, 2015). In this, exports of products and services often requires
involvement of customs authorities. Company can began their expansion of business in
4

Kuwait as exporter and only later switched to the another mode for serving in to foreign
market. But there are some trade barriers during exports will be faced by company such
as government laws, regulation and the major policies or practices which either affects
their domestic products from the foreign competition or artificially changes the exports of
some particular domestic products.
 Contractual agreements: It is also important mode of establishment of business in other
country for company and expansion of business at global scale. In this, TESLA tends to
make a contract with the other auto mobile sector company to sell its vehicles in their
outlets (Holtbrügge and Baron, 2013). They can also create contract for manufacturing of
products with combination of their brand name. For example: Volkswagen has also made
a contract with BMW for its vehicles in their showrooms in Europe which has decreased
their costs of operations and provided more profitability.
 Joint venture: It is termed as business entity which is created by two or more parties
which is usually characterised through the shared ownership, returns, governance as well
as risk involved in business operations. In this, TESLA can typically pursue the mode of
joint venture for getting access to new market, evolve particularly in emerging markets,
to increase the scale of its efficiencies by associating assets as well as business
operations, in order to share amount of risk for the high financial investment or the
projects and getting access to the important skills and competencies. As per (Laszlo,
2015), there are lot of negative information have been received about joint venture but
the statistical information points out that they lay actually outperform, wholly owned or
the controlled affiliates.
 Wholly owned subsidiaries: It is also important mode of entry which also implies to
setting up of business at personal risk and investment in another country for expansion of
business and introduction of products and service in market. As per (Hoffman, 2015), a
subsidiary can be company, corporation or a limited liability company. In Kuwait, there
are certain restrictions which will arise while establishment own subsidiaries for the
TESLA such as competitors influence, high rates of locations and government regulation
etc. It is also contains high risk on investment as the company will tend to face various
challenges from strategies of competitors in auto mobile sector. Moreover, establishment
5

of wholly owned subsidiaries requires huge investment but company has strong financial
position which provide support in establishment of own subsidiaries.
 Franchising: Most effective and less risky mode of entry in to foreign market for
manufacturing companies. It is also considered as continuing relationship in which the
franchisor needs to provide a licensed privilege to the franchise in order to regulate the
business and offers the assistance in organizing, training and merchandising in return of
monetary consideration. In this, TESLA can expand its business by providing its
franchises to the other organization or individual in Kuwait to get amount of return as
royalty and sales of its products in market. It contains less risk and requires low
investments but provide major opportunities to brand for getting high amount of
profitability. Thus, it is considered as effective mode of entry for TESLA to enter in to
the auto-mobile sector in Kuwait.
4.Applicable marketing mix strategy: target market, marketing mix elements
It is also considered as statistical analysis that is used to estimate the influence of various
marketing strategies and tactics on sales and then analysing the impact of future set of tactics. It
is an essential for the enterprise in order to create the correct strategy of marketing and its
application through the effective tactics (Birk, 2015). It involves the assessment of target market
of brand in the country. In this scenario, for entering in to Auto mobile sector of Kuwait, TESLA
brand also needs to target is customers in country for marketing and selling of products and
services.
Target market: It is also considered as the market of TESLA in which they want to sell its
products and services to and involves a target set of consumers for whom they will direct their
marketing efforts. In this, TESLA can separate its target market on the basis of geography,
buying ability, demographic and psycho graphic etc. As a new entry, company needs to target its
consumers on the basis of their buying power. They must target middle class people for who they
have developed electric cars at low cost.
Further, the marketing mix of brand is also discussed which provides a completed about
companies ability to establish its business and attract the target customers. Below given are the
elements of marketing mix such as:
 Product: This element identifies the company's good which are sold to target customers.
Study states that more profitable products will provide values for which the customers
6

pay (Kapferer, and Bastien, 2012). As an Automotive company, TESLA has various
products such as Auto mobiles, electric vehicles and batteries etc. In Kuwait, company
needs to focus on providing proper quality vehicles to meet the demands of customers
and maintaining sustainability. For example: TESLA Model Ssedan is one of the most
popular electric car. By providing products at competitive prices as compared to
competitors, the organization will be able to generate high sales and profitability. As we
have discussed earlier that people are focused buying of sustainable products to reduce
the impact of pollution of country environment. Thus, it has provided a plus point for
company to launch its electric cars in Kuwait. Tesla's generic and intensive growth
strategies will also provide them support in getting profitability.
 Price: It is also important element that is covered in the element of marketing mix. It is
analysed that company used premium pricing strategy which involves application of high
prices of products on the basis of uniqueness or high values which are attributed to the
companies. For establishment of business as a new entry in another country companies
needs to put fewer prices of their products in order to attract the target customers
(Kissinger, 2017). In this scenario, TESLA needs to adopt the penetration pricing policy
in which they will first sell their electric cars at low prices as compared to Australia in
order to develop customer base then after increasing demand they will be able to raise the
prices. Product innovation and design are also important factors in effectively using this
strategy of pricing.
 Place: The location or outlets to reach the target customers are analysed in this element
of the market mix. It states that company make distribution or sell its products through
such venues (Steenkamp, 2017). In above scenario, TESLA can use the places such as
company's website, stores and galleries and service centres. Customers will be able to
check their vehicles at their owned stores and showrooms located at prominent places
such as industrial areas, malls etc. Moreover, customers can also use the website of
company to complete the sales transactions. Moreover, company can also buy its own
service centre in Kuwait where they can render after sale services to its customers.
 Promotion: In this, strategies and tactics of marketing communication are taken in to
consideration. Promotional mix of TESLA motors involves the same important
components like viral marketing, sales promotions, direct marketing, personnel selling
7

and public relations etc. In Kuwait Viral marketing is most effective strategy for TESLA
which provide them capability to communicate with the customers. Moreover, company
can also focus on the development of public relations in order to increase its sales of
products and services.
 Physical Evidence: It states that the features of products and services which are
developed by the organisation also provided impact on their products and services
(Smilansky, 2017). Uniqueness and attractive feature of electric cars will support the
organisation to promote its brand in Kuwait.
 People: This element focus on the people working in organisation which also have their
influence on providing growth and development to business (Baines, Fill and Page,
2013). Study has determined that TESLA motors has major strength of qualified
employees at their workplace in every department which are specialist in development of
attractive products and its marketing.
 Process: This element states the ways through which the company provides services to
its customers (Rüttger, 2017). For entering in to new market company needs to adopt
effective and attractive ways to provides services to customers in order to develop
positive public image of brand in Kuwait. This will tend to raise its sales and profitability
in automotive sector.
CONCLUSION
In this report, it is concluded that establishment of business operations in another country
is complex task which requires development and implementation of effective business policies
and practices. Moreover, it is also analysed that auto mobile industry of Kuwait has achieved a
major growth and development due to continuous introduction of innovation by organization by
companies in different vehicles. Kuwait is considered to be one of most democratic and liberal
countries in Middle East region. Rise in economic activities has also raised level of employment
at global scale and led to higher spending of people on goods' and services. Thus, in order to
enter in to new country it is suggested to TESLA that they should target middle class customers
and use penetration pricing policy for selling of products and services.
8

REFERENCES
Books and journals
Albahri, T.A., University of Kuwait, 2012. Electronic window shading system for houses,
transport vehicles and the like. U.S. Patent 8,102,586.
AlDosiry, K.S and et.al., 2016. Relationships between emotional intelligence and sales
performance in Kuwait. Revista de Psicología del Trabajo y de las Organizaciones. 32(1).
pp.39-45.
Angrill, S. and et.al., 2012. Environmental analysis of rainwater harvesting infrastructures in
diffuse and compact urban models of Mediterranean climate. The International Journal of
Life Cycle Assessment. 17(1). pp.25-42.
Baines, P., Fill, C. and Page, K., 2013. Essentials of marketing. Oxford University Press.
Birk, D., 2015. Tesla Motors, Inc. Market Analysis and Definition. GRIN Verlag.
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.
Hoffman, A.N., 2015. Tesla Motors, Inc. Strategic Management and business Policy, p.671.
Holtbrügge, D. and Baron, A., 2013. Market entry strategies in emerging markets: An
institutional study in the BRIC countries. Thunderbird International Business Review.
55(3). pp.237-252.
Kapferer, J.N. and Bastien, V., 2012. The luxury strategy: Break the rules of marketing to build
luxury brands. Kogan page publishers.
Laszlo, C., 2015. Sustainability for strategic advantage. Corporate stewardship: Achieving
sustainable effectiveness. pp.94-111.
Mahfooz, Y., 2015. Brand equity-consequence relationship: Evidence from Automobile industry.
International Journal of Business and Management. 10(3). p.81.
Meredith and et.al., 2016. Based analytical devices for environmental analysis. Analyst. 141(6).
pp.1874-1887.
Miller, D.W., Kilic, O. and Vollmers, S.M., 2013. GLOBAL AND CROSS CULTURAL
MARKETING. ADVANCES IN MARKETTING, p.154.
9

Moritz, M. and et.al., 2015, August. Tesla Motors, Inc.: Pioneer towards a new strategic
approach in the automobile industry along the open source movement?. In Management of
Engineering and Technology (PICMET), 2015 Portland International Conference on (pp.
85-92). IEEE.
Nonis, S.A., 2017. GLOBAL AND CROSS-CULTURAL MARKETING. THE ASSOCIATION
OF COLLEGIATE MARKETING EDUCATORS LITTLE ROCK, AR MARCH 9-10.
2017. p.40.
Rüttger, A., 2017. Will Tesla turn the Whole Automotive Industry Upside Down? An Analysis
of the International Marketing Activities of Tesla.
Smilansky, S., 2017. Experiential marketing: A practical guide to interactive brand experiences.
Kogan Page Publishers.
Steenkamp, J.B., 2017. Global Brand Strategy: World-wise Marketing in the Age of Branding.
Springer.
Online
Kissinger, D., 2017. “Tesla Motors, Inc.’s Marketing Mix (4Ps) Analysis”[Online]. Available
through:<http://panmore.com/tesla-motors-inc-marketing-mix-4ps-analysis>
10