Critical Evaluation of Tesla's Marketing Strategy in China (MBA7018)

This research report critically evaluates Tesla's marketing strategy in the Chinese market, employing a pragmatic approach and quantitative methodology. It investigates the various marketing strategies implemented by Tesla, including the marketing mix, STP analysis, and SWOT analysis, to understand their impact on market share and consumer perception. The study reviews existing literature, identifies gaps, and utilizes primary data collection and data analysis techniques like simple linear regression analysis. The analysis incorporates graphical representations and examines the role of digital marketing, social media engagement, and innovative strategies in Tesla's success. The research aims to assess the effectiveness of Tesla's strategies in China and offers insights into the company's approach to the market, considering factors like premium pricing, R&D implementation, and patent strategies. The study also explores the external and internal difficulties faced by Tesla and the impact of change management, particularly during the pandemic. The findings contribute to a better understanding of Tesla's marketing strategies and their effectiveness in the Chinese market.

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MBA7018- Research Methods
Critical Analysis of Marketing Strategy of Tesla for the Chinese Market
Contents
1. Introduction.........................................................................................................................3
2. Research Question..............................................................................................................4
3. Aim of the research.............................................................................................................4
4. Objective of the research....................................................................................................4
5. Theoretical Background......................................................................................................5
Gap in Literature Review.......................................................................................................8
6. Theoretical Framework.......................................................................................................9
Marketing mix......................................................................................................................11
STP analysis.........................................................................................................................12
SWOT Analysis....................................................................................................................13
7. Research Methodology.....................................................................................................14
Pragmatism...............................................................................................................................14
Research strategy.....................................................................................................................14
Methodology Grid................................................................................................................15

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Data collection......................................................................................................................16
8. Critical evaluation of Research Methodology..................................................................17
Data analytical tools.............................................................................................................17
Ethical consideration............................................................................................................17
References................................................................................................................................19
1. Introduction
Critical evaluation of the marketing strategy of Tesla, Inc. has been done in this research
paper, and an attempt has been made to put forth the findings and the lessons learnt by this
evaluation. In order to execute this research, pragmatic approach has been adopted. The
research methodology adopted is quantitative. This research also employs techniques like
SWOT, marketing mix, and STP analysis for the purpose of assessing the marketing strategy
of the organization. Primary data has been collected for the purpose of this research. Existing
literature on the topic has been reviewed and an attempt to fill the literature gaps has been
done. The data analysis is also an imperative part of the research that should be taken care of
with care. The data analysis method that is employed in this research study is simple linear
regression analysis in which the marketing strategies be taken as dependent variable while the
impressions of the masses and in other words, the effects of these strategies and plans be
taken as independent variable. For the analysis of the collected data in this research, the
gathered data will be analyzed and presented using graphs, bar charts and pie charts which
are the techniques based on the visual representation of the data. The graphical representation
of this data helps in the statistical formation of the assembled facts.
The Forbes magazine has presented an article which notes that the company has been going
digital and made several changes in its operations since the start of 2020 or say the pandemic
attack. This has worked in favor of the company and created a favorable trend for its market
and targeted customers (Yang and Liang, 2017). The marketing strategies of the company
have been shifted to digital platform and so, its market share in china has witnessed a
noteworthy increase in its latter half of the previous year. The strategy that the company

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incorporated there was the word of mouth that helped the company to save a lot of
advertisement cost and helped in boosting its share in the market (Forbes, 2020).
There have been several cases in which the company owned to their mistakes publicly and
this made the potential buyers and customers to think more affectionately of the company and
aided in the marketing strategy of the firm (Coiro, 2021). The simplification of user’s
experience and operations in company-owned outlets, has also created customer delight and
helped the marketing process.
2. Research Question
 What are the varied marketing strategies introduced and included by Tesla in
China to apprehend the market and verge the competition in the country?
 What are the impacts of Tesla’s marketing strategies and how has it helped the
company to increase their market share in the country?
3. Aim of the research
 This research aims to critically evaluate the marketing strategy of Tesla, Inc. in
the Chinese market.
4. Objective of the research
 To review and analyze the marketing strategies-based literature of Tesla’s
Chinese market critically.
 To assess the plan, structure, regulate for the factors that affect the strategies of
marketing of Tesla in China developed by the manager.
 Critically assess the marketing strategy of the chosen organization in China, and
put front the taught process.
1.

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5. Theoretical Background
The prospective customers of Tesla are the upperclassmen of the country and thus the
company uses premium pricing strategy in China (Wang & Peng, 2020). The company has
several outlets that allows the organization to manage its supply chain and that aids in its
marketing plan. Tesla is a giant organization and so it has attracted many researches and
interests in varied fields including technical, management, marketing and every other field
that it concerns with.
Innovation of customer-friendly vehicles: As studied by H Kim in 2020, the organization
creates a core innovative electric vehicles that cater to the needs and demands of their
customers. As per this study, the reason the company is able to create its market in China and
turn it in its second largest market is because the company provides high quality products at
premium prices. The study also claims that the marketing of the company plays a good role in
the market capturing (Kim, 2020).
R&D implementation: In the study by Jing XU, the researcher has analyzed the operation
strategy of the company in China and claimed that the implementation of R&D in electric
vehicles in China has greatly supported its marketing formation. The operation strategy
studied by the researcher proves that the operations within the company are simplified at all
levels and this helps the employees to understand their work and the aims of the company.
So, all the employees work efficiently in creating better models for their customers and thus
satisfying their customers through newest technology. This study shows that the customer
satisfaction of Chinese market is above 52 percent on an average and this is another factor
that helps the company to increase their market share in China (Jing, 2020).
Social Media engagement: The social media strategy of Tesla has attracted many
perceptions and Li and co-authors of the journal have addressed a case study in the same
context. In conclusion, the researchers presented the data that Tesla has greatly benefitted by
its social media and digital marketing of products and services. They presented another
argument that the CEO of Tesla, Elon Musk actively engaging in social media has escalated
and aided the marketing process and strategies of the company earning a better response from
the Chinese market (Li et al. 2020).

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Digital marketing strategy: As researched by Na Jing, a Chinese researcher, the company
Tesla has increased its market in China based on its digital marketing strategy. The
company’s CEO Elon Musk is one of the most active top managers of Tesla over the social
media platform Twitter. As per this study, the customers of Tesla in China feel more
connected to the company through these social media platforms and thus support more to its
marketing plans and strategies. This helped the company to edge the competition in Chinese
market from its major competitors like Audi, Volkswagen, Ford et cetera (Jing, 2020).
Patents: The financial development of Tesla is assisted by the patents the company holds in
regarding to its technologies of new energy vehicles and thus it also helps in marketing
indirectly. As discovered by Wang and Peng, the patent that Tesla favors is the open source
patent that allows the company to gain a common ground with the developer of the
technology while they both reserve some deviation from the core technology and attain a
win-win situation with each other (Wang & Peng, 2020).
External and Internal Difficulty: In a strategic audit of Tesla done in 2018 by Li, the
externa and internal difficulties of the company are discussed and analyzed in a descriptive
manner. The research also studies the present and previously exercised policies and
stratagems of Tesla that induced its growth and development of business across the several
countries in varied continents. This study concludes that one of Tesla’s internal weakness is
its production bottlenecks and deficiency of cash flow because of high cost material and
machinery used in its vehicle production. The investigation also suggests the company to
comprehend its evaluation of market share and implement its plan accordingly (Li, 2018).
Change management in Tesla: There has been significant loss of jobs in the past year after
pandemic struck (Samuel et al., 2020). The major economic failure in 2020 followed by
lockdowns in many countries, caused the company Tesla, to lose its distribution channel and
that caused a threat to its market share. However, the organization soon adapted and
witnessed a change management in its digital transformational period of its marketing
campaigns. As researched by Samuel, the market of Tesla earned noteworthy amount of
profit thanks to its operational transformation that helped the firm to curb its losses in the
lockdown period.

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Services of Tesla: The exploration done by Yang and Liang in 2017 examines the
innovations in Tesla including the financial, marketing service and technological research and
development that the company has shown over the years since its commencement. The paper
also provides policy implications focused on the R&D brought forth by Tesla’s core
technology and how it changed the Chinese market and also transformed the marketing and
distribution chain in the country. The e-vehicle infrastructure development in China is also
strengthened by Tesla’s presence and thus the company has earned many domestic
competitors (Yang and Liang, 2017).
Traditional and digital market: Coiro researched the effect of social media marketing of
Tesla on its share value. The investigations in the study show that the social media
engagement of the company brings positive outcomes to the company and also supports its
marketing campaigns based on the historical data of the company. The exploration of these
connections also reviews the traditional market to the digital marketing of Tesla in Chinese
market concluding that the company is more benefitted by digitalization because it helps in
curbing the cost of the advertisement and ads on digital platforms and engaging in social
media trends is much cost and time effective (Coiro, 2021).
China EV market: In the study by Wen et al., the researchers have explored the effects of
Covid outbreak on the China market of e-vehicles. The researcher employed various tools for
data analysis and concluded that the pandemic has shifted the steady demands of the
consumers to large e-vehicles and brought greater profits to Tesla because it provided them
with better performance. The study also investigated and predicted the future trends in
Tesla’s market expansion policy and innovative digital marketing schemes post-pandemic
(Wen et al., 2021).
There have previously been a number of studies on the marketing development strategies of
Tesla in China however most of them are qualitative and thus unable to present quantitative
data of the effects of the marketing strategies incorporated by the organization (Dai, 2020).
To understand these strategies, the study is integrating various theories of marketing such as
Marketing mix, SWOT analysis of the business opportunities & STP analysis of the products
by the company. Also, to understand the effects of these strategies and obtain quantitative
data, an online survey is going to be used in this study. This study shows the impact of
strategies and stratagems on the public image and brand image of the company whether it can

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be remolded into a successful one or not depends on the marketing and PR activities of the
firm.
Gap in Literature Review
The literature and theories as explained previously by various researchers about the
marketing strategies of Tesla brings in several arguments and takeaways. However most of
these researches present the qualitative data and not the quantitative data. As qualitative data
is more depended on the psychological and intangible parts of the Tesla’s marketing
strategies, there is a gap between the analyses of these strategies. For instance, Wang and
Peng claim that the company’s patents are the main cause of successful marketing of the
company however, the study doesn’t present any quantitative data for this stance and thus is a
theory or principle one can refer to. Therefore, a study that analyzes both qualitative data as
well as presents the quantitative data is necessary to understand the effects of the marketing
strategies applied by Tesla.

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6. Theoretical Framework
The theoretical framework states about the present theories in this study and elaborates the
background and environment of research issues (Wen et al., 2021). It is beneficial in building
a framework that is theoretical in regards to this research and also about the methods this will
be displayed and responded to in the ongoing study. The major focus of this theoretical
framework is to provide evidence about the legitimacy of results and reports received by this
research.
The strategies of marketing of the firm and the impact or influence of this in the Chinese
market can be understood with the assistance of a vast number of theories available.
Marketing mix, SWOT analysis and STP analysis must be integrated or combined in order to
examine and explore the reports of this research through this study (Handa, 2020).

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Theme/references Research method Findings
Theme 1 – Marketing mix
Reference/s:
1) Dadzie, K. Q., Amponsah, D. K.,
Dadzie, C. A., & Winston, E. M.
(2017). How firms implement
marketing strategies in emerging
markets: An empirical assessment of
the 4A marketing mix
framework. Journal of Marketing
Theory and Practice, [Online] 25(3),
234-256. Available from:
https://doi.org/10.1080/10696679.201
7.1311220. [Assessed 16 December
2021]
2) Thabit, T., & Raewf, M. (2018).
The evaluation of marketing mix
elements: A case study. International
Journal of Social Sciences &
Educational Studies, [Online] 4(4).
Available from:
https://papers.ssrn.com/sol3/papers.cf
m?abstract_id=3173274. [Assessed 16
December 2021]
1) Collection of
primary data
2) Assessing the
secondary data
The marketing mix also
proves beneficial in
analyzing how the marketing
strategies help in growth and
development of the
organization and to know if
any views that are critical are
present which are useful in
limiting and reducing the
negative impacts of these
strategies. Any other
substitutes or changes that
can be explored and known
for better results can also be
of assistance through
marketing mix.

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Marketing mix
To understand the strategy of promotion as well as the price, products and also the processes
concerned with the purchasing and its impact on the marketing of the company (Handa,
2020), the marketing mix of Tesla is learnt, observed and studied. The marketing mix of an
organization contains and involves the schemes, policies and tactics of the company fused to
capture the market. The marketing of the company or product is affected by the 7ps of the
marketing mix. The 7ps namely are promotion, product, place, price, people, physical
evidence and process. This assists in examining and inspecting the strategies of marketing, its
effect and importance in the firm or organization (Jing, 2020). This also proves beneficial in
analyzing how the marketing strategies help in the growth and development of the
organization and to know if any critical views are present which are useful in limiting and
reducing the negative impacts of these strategies. The marketing mix is a beneficial plan to
estimate the upcoming risks and take proactive measures accordingly. The marketing mix is
significant for an organization as it helps the organization to market and promotes the
products or services of a company to increase sales. With proficiency in the plan of the
marketing mix, Tesla can evaluate the suitability of products for its customers. This study
will help us understand the marketing mix used by Tesla; the marketing mix implemented by
Tesla is acknowledged globally and is renowned in the sector of the automotive industry. The
research will assist in comprehending the market mix of Tesla and how the marketing mix
plans and develops strategies of effective marketing. Any other substitutes or changes that
can be explored and known for better results can also be of assistance through the marketing
mix. The marketing mix essentially focuses to attain success in the target market of the
organization.

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STP analysis
The Segmentation, Targeting and Positioning abbreviated as STP model is an analysis of the
market of the company. Most businesses globally use the STP model for marketing; it is one
of the most acknowledged and trendy modules of marketing. The main focus of the STP
module is to ensure that an organization implements an approach that is customer-centric and
not just product-centric. With the guidance of the STP module, organizations can
comprehend the target market and estimate their position of success in the market. The target
market of Tesla is the upperclassmen and celebrities who prefer luxurious electric vehicles
over regular ones. As the company delivers its objectives through promotional ads and other
indirect advertisements, it proves to be useful in terms of market share increment (Lang et al.,
2021). The characteristics identified by the organization for the potential buyers is their
paying capacity and demand for comfort regardless of the age barrier the company provides
various e-vehicles to meet the demands of different needs of their patrons. The segmentation
of Tesla's products is demographic and psychological as it concerns more about the income
ratio of the potential customers. The image of the company in the minds of the masses is
called the positioning which is in favour of Tesla because the company has repeatedly
reported that the positioning they want to create is that of a lavish and comfortable ride of e-
vehicle laced with numerous customized features and facilities from the company (Jing,
2020), and that is the positioning of its products in its marketing campaign. The success of
the STP module in marketing is because of the efficiency in results achieved with the use of
this model of marketing. The STP model develops a specified approach of marketing the
products of an organization; by dividing the target market according to the preferences,
targeting the choices of each segmented sector and then making arrangements of marketing
or promotion strategies.

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SWOT Analysis
SWOT analysis is a structure that is used by an organization SWOT is the analysis that give a
360-degree view of the business of Tesla. The positive attributes of the organization
demonstrate its strengths be it the strong marketing strategies that estimate and assess the
competitive edge of an organization, which helps in understanding the market position.
SWOT analysis comprises the organization, weaknesses, opportunities and threats of an
organization. The study of SWOT analysis helps in understanding the external as well as
internal factors of the organization and estimating the present situation of business operations
and also the upcoming potential of the organization. Tesla makes or the distribution channel
the company owns or the high-end materials the company utilizes in all of its models earning
the trust and dependency of the customers (Coiro, 2020). Also, the negative or limited
features of the organization add on to make weaknesses of the firm. In the case of Tesla, the
weakness of the company lies in its limited presence in a few continents and small targeted
market in the upperclassmen only. There are also several opportunities in the form of
undiscovered markets of underdeveloped countries (Li et al., 2020). However, the threats of
the global market and financial stability is a constant threat to the business of Tesla. The
analysis helps in the identification of core strengths and weaknesses, opportunities and threats
of Tesla, which will help in the accumulation of facts and new perspectives and opinions. The
SWOT analysis of Tesla helps in the interpretation of threats and risks of the future, it also
helps in constructing a pattern to utilize the resources of Tesla in an efficient approach.