Marketing Strategies of Tesla: Internal, External Analysis, USP

This report provides a detailed analysis of Tesla's marketing strategies. It begins with an executive summary and an introduction highlighting the growth of the electric car market and Tesla's position as a leading brand. The report then delves into internal and external analysis, including PESTEL and SWOT analyses, to understand the factors influencing Tesla's performance. It evaluates Tesla's competitive edge, focusing on its USP, which includes innovation, customer loyalty, and trendsetting designs. The second part of the report analyzes Tesla's segmentation, targeting, and positioning (STP) strategies, followed by a discussion of marketing objectives aimed at increasing brand awareness, market share, and profitability. Finally, it outlines marketing strategies based on the marketing mix, concluding with recommendations for future growth. The report emphasizes Tesla's focus on technology, customer experience, and environmental sustainability as key drivers of its success in the competitive electric vehicle market.

MARKETING
STRATEGIES
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EXECUTIVE SUMMARY
The market of cars is growing as they are including technology to drive the customers.
They have become smarter and use various innovations. The PESTEL and SWOT analysis helps
in understanding internal and external factors and USP makes the company stronger than
competitors. There are SMART objectives to make the strategies of the company and providing
them recommendation helps them to grow their business.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
1. Internal and external analysis to understand the factors.........................................................4
2. Evaluation of organisation's competitive edge(USP) over other brands.................................7
PART 2............................................................................................................................................9
1. Analyse the segmentation, targeting and positioning.............................................................9
2. Marketing objectives to increase the brand awareness, market share and profitability........11
3. Marketing Strategies based on marketing mix......................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
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INTRODUCTION
The market for electric cars is growing and companies are producing best quality electric
cars. The new technology, changing government regulations, global market has improved the
choices of customers (Alqahtani and Gupta, 2017). Innovation is driving the companies to
produce sustainable transportation. For this the chosen company is TESLA, founded in 2003 and
considered as the world's best selling electric cars. Its technology and innovation has made it a
success and has achieved brand name. Tesla's product line includes cars which are electric an
efficient and the prices are attractive. It has achieved a market share and profits are growing with
increasing number of customers. This project includes analysis of marketing strategies of the
company using internal and external analysis, identifying the competitive advantage and current
marketing strategies. Preparing smart objectives help the companies to increase growth and share
of volume.
1. Internal and external analysis to understand the factors
Pestel analysis
It is considered as an important tool that used to evaluate external factors that directly
impact on over the company performance. This tool is used by all the companies to know about
external factors which influence company performance and uncontrollable by the company.
Pestel analysis is also used by Tesla to know about its external factors (Bang, Joshi and Singh,
2016).
Political factors – This factors is helpful for the company to know about government
policies which can influence their business. In context of Tesla, Government of UK take
initiatives to uplift production of electric vehicles by providing incentives. This is beneficial for
Tesla as it is already famous for electric cars as they provide environmental friendly vehicles to
its customers. This will be helpful for the company if they wanted to expand their business in
other countries also as UK government already supporting them (Chanthinok,
Ussahawanitichakit and Jhundra-indra, 2015). Today people also try to save environment and
spread awareness through organising many play and events. Tesla can easily influence those
customers to buy electric vehicles.
Economical Factors – Economical Factors are very important for an organisation as they
can influence business profitability. This factor include Economic growth, Exchange rate,
interest rate etc. In context of Tesla, economical condition is batter for the company as demand
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of electronic vehicle increase globally. Government of UK is encouraging investment in
electronic vehicles and the price of electric batteries also reduce in past few months which is
beneficial for the company.
Social Factors – Social factors includes attitude and interest of the population, which are
educations level of customer, age , income level, health consciousness, purchase habits etc. This
factors influence a business through customers, employees and investors. Demand of low-carbon
lifestyle increased which is beneficial for Tesla as they provide environmental friendly vehicles.
The customers also give preference for renewable energy products as today they are more aware
about environmental issues. Tesla have opportunity to grow internationally as there is great
demand for environmental friendly vehicles.
Technological Factors – Today technology is very important in every sector so the
company can work effectively. This factor influence business as customers are also prefer those
products which help them to work easily by using new technology. Tesla is also focus on new
technology so they can provide better options in their products (Chiang, 2018). On the other
hand their vehicle price is also very high as compare to other company's product. Even so they
provide Environment friendly products but customers not prefer high cost product if they can use
same facilities in other low cost products.
Legal Factors – Legal factors play very important role in a business as it influence
business activities. It includes law and rules set by the country government for all the business
like Consumer law, Discrimination law, Fraud Law, Import and Export Law etc. Tesla can
expand its business internationally by using patent protection policy. The Company can also
expand the business by direct sale which is allowed in some states in the US. Through this
analysis company can identify there is opportunity to expand the business internationally (Dixon,
Martinez and Martin, 2015).
Environmental Factors – Environmental factors includes those factors which influence
a business due to environmental change like climate, weather, pollution etc. Tesla produce
electric cars which is beneficial for the environment so they can spread more awareness among
people about climate change to influence more customer to buy their product. The company can
also organise environmental programs to increase demand of electric cars.
This analysis of Tesla shows company is growing in the market continuously which is
also increasing its profitability ratio. The Company can also expand its business internationally
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by using free trade agreements as it is already have government support due to its environmental
friendly product.
SWOT analysis –
Swot analysis is used by the company to know about its internal factors which effect
business performance. This analysis help Tesla to know about all the internal factors like
strength, weakness, opportunities and threats of the company (Hollensen, 2019).
Strength of Tesla
 Automotive Company – Despite its high cost electric cars Tesla is able to increase its
sales ratio and became one of the leading Automotive company.
 Focus on Employee satisfaction - Tesla is increasing its sales and profitability day by
day on the other hand the company is also focusing on employee satisfaction. Employee
play very important role in the company to achieve its target. Tesla take care of
employees requirement which help company to achieve its goals effectively. The
company also received best employer 2019 in Forbes.
 Best class electric Car- Tesla is famous for environment friendly cars and it left many
big brand behind because of producing best electric cars in the market. They also prove
that their cars can cover maximum distance in single battery charge.
Weaknesses of Tesla
 Unable to fulfil product demand – Tesla always do experiments with the product and
its manufacturing process is also complicated which increase unbalance between demand
and supply of the product.
 Limited supply of batteries – Tesla business is affected by shortage of batteries as there
is limited supply of batteries. Due to this issues company have to face many difficulties in
production process and fulfil customer demand on time.
Opportunities of Tesla
 Less Expensive Car – Tesla always focus on innovation in their product which also
increase product cost. This is an opportunity for the company by reducing product cost so
the company can attract new customers (Khan, Dongping and Wahab, 2016).
 Start Battery production – Although Tesla is a leading company in electric cars still the
company face issues to fulfil customer's demand due to limited supply of battery. Tesla
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can plan to produce its own battery cells which can help to fulfil customer demand on
time.
Threats for Tesla
 Extensive Competition -Tesla provide electric car and self- driving technology, on the
other hand many other companies also providing electric cars which are Mercedes,
BMW, Audi etc. Many other brands are also planing to launch electric cars on low price
which is threat for company like Tesla because of its extremely expensive product and
uneconomic for many customers.
 Product defects – Due to complicated manufacturing process, many time customers have
to face issues regarding the product (Liu and Chou, 2016). There are some incidents
where customer receive defected product which is a threat for the company as it can harm
Company's image.
SWOT analysis of Tesla helps to study about all the internal factors which affect the
company. Tesla is growing organisation despite of that there are many opportunities for the
company. If the Company can focus on those opportunity they can take competitive advantages
from the market and also expand the business internationally.
2. Evaluation of organisation's competitive edge(USP) over other brands
Tesla has always satisfied it customers by providing them cars which are trendy in the
market. Their business strategy is different from the competitors which makes them have a wider
market share. They have formed the brand loyalty and focuses on proving best experience to its
customers.
The USP of Tesla is to provide customers with best quality cars with affordable prices
and have an emotional connect with its customers. The USP has factors which are included in the
business strategies of Tesla.
 Innovation- Tesla has used technology and innovation which is its USP as they have
sustainable battery options like stations are available at each stop and have a fast
charging. They can charge at the speed of mobile phones and have a good quality (Micu
and et.al., 2017). The phones can be connected to cars where you can instruct it.
 Customer loyalty- Tesla makes the best product and customers like them. They give a
customer experience which makes them feel that the company is making products for
them and increases customer loyalty (Mothersbaugh and Hawkins, 2016).
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 Trend- There are many competitors for Tesla in the market but their share is not affected
by change in market. They always innovate products which makes competitors design
strategies. They always are market attractive and provide trendy cars.
Organisation's effectiveness over its competitors
Tesla has accepted that its can be effective over its competitors when they are building
the brand and its electric market segment has made it achievable for the company. It is having
many competitors but the growth of the company is increasing. There best marketing strategy is
that they do not promote its products and do not spend money in advertisement. The promotions
are through customer experience.
 Market growth- The company has achieved a level of success where they grow faster
than industry and when the sales of industry decline Tesla's share gets reduced with a
smaller share. The industry is having sales of electric cars as 15% declining which Tesla
has a growth of 2% (Tesla Inc Growth Comparisons, 2020).
 Profitability- Tesla has achieved a growth of 25% as the market is growing and
increasing profitability when customers are buying cars from them. They are profitable as
they do not invest in promotions and invest the money in innovation. They have launched
a app where you can find where your car is. They are increasing their profitability by
creating products which are efficient.
 Sales Trends- The sales of Tesla has increased 107% and have grown in volumes. The
operating profit of the company is always increasing as marketing strategies are effective.
The sales of the company are ever increasing and the market is growing which makes the
competitors design their strategies to meet the sales of their companies. Their electric cars
are best in the market and current strategies to make it better are included in the business
strategies of Tesla. The sales are increasing because they are increasing their trends of
their products.
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PART 2
1. Analyse the segmentation, targeting and positioning
STP of the company helps them in understanding customers and their behaviours towards
products. They provide the understanding of needs and wants of market. When market is
segmented on the basis of demographics, behaviours and psychographics factors then companies
target customers and position their products to them (Palmatier and Crecelius, 2019).
Segmenting is a marketing strategy where market is formed into segments of
heterogeneous or homogeneous customers.
Segmentation of Tesla-
 Geographic segmentation- It is important for companies to segment its customers based
on geography because companies are operating in many countries and the external factors
affecting the businesses are different for them. Tesla's segmentation is based on religion
where they have western culture and density where they have products for rural and
urban people.
 Demographic segmentation- In this segmentation, customers are formed on the bases of
age, gender, lifestyle and occupation. Tesla has customers of young generation and male
and females are its customers where they are working professionals at good positions in
the companies.
 Behavioural segmentation- There are factors which helps in building strategies for an
organisation like degree of loyalty, benefits sought, user status. Tesla make strategies to
attract the customers who are loyal to company and who can be loyal and who are
switchers. They provide sustainable cars and customers who want cost effective car with
best quality. They want customers to use their products so they innovate them so that they
can get the sale from non-users also which is a market for them.
Targeting involve taking the segment of customers which company wants to provide its
products to. It is the strategy of companies where they keep the needs and wants of customers in
their business goals and making plans to meet their demand (Palmatier and Sridhar, 2017). Tesla
has a good market and it has a growing market share. They keep products which are liked by
males and provide them that they are driving a car which is made for them. Their cars are
expensive and customers having a good salary and position in companies can afford it. They
meet the socio economic need of customers and provides them efficient cars. Tesla has targeted
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its customers where they trust that they will like the product and innovate them so that they gets
attracted. Their target segment is rich customers who can afford technology so they made it its
business strategy.
Positioning is giving an identity to your products to customers. It is difficult for
companies to position products to all the members of the segment, understanding their need and
make products for them. The effectiveness of products depends on marketing strategy and their
plans to make products achieve profits. Tesla has positioned it products uniquely.
 Innovative- Tesla focuses on innovation where they believe that they are not selling cars
they are selling technology. They have positioned themselves as the best quality cars
where their focus is on maintaining efficient products. The are increasing their share
because of its innovation in electric cars.
 Disposable income- Tesla has products for rich customers with good disposable income
and can afford expensive cars. They position their products as luxury as they are
expensive and meet the needs of rich customers. They have electric cars for customers
who want effectiveness (Peterson and Crittenden, 2020). They have stores on the markets
near Zara or brands where customers can be attracted to it.
 Brand Name- They have positioned its products as better than its competitors where they
believe that they want to buy Tesla because it is Tesla. They have a good image in market
and have a good market share in countries. Their price and quality is helping themj in
maintaining brand name.
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As compared to its competitors, Tesla is in the quadrant of innovative and modern
products. It has achieved a level where its competitors are not able to innovate its products.
2. Marketing objectives to increase the brand awareness, market share and profitability.
The car manufacturers have understood that customers who purchase cars which are
expensive wants a good customer experience. They do not focus on cost but on the services
provided by them to customers. Tesla has products which are good quality and can meet the
needs of customers.
SMART objective:
(Specific, Measurable, Achievable, Relevant and Time Bound)
These are objectives which provides direction and govern the strategies of companies.
They helps them make the strategies which make them increase their operations in market.
 To introduce electric cars within 3 months in markets of Africa to expand market with
desired increase in profitability by 15%
Recommendation to increase market of Tesla
 To give the best customer experience- The businesses should make the strategies to
attract customers. They need to understand that customers experience helps them in
building strong relationships with customers. Tesla is successful because it has a good
relationship with customers. Their customers are satisfied because they get a good
experience. Tesla maintains a good relationship with customers and provide them with
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Illustration 1: Target Market Segmentation: How Tesla Pulled off a
Billion Dollar Pricing Strategy in the Automotive Industry. 2020.

services which are making them believe that they are buying good products from good
company. When they will market their products in Africa, customers will increase and
will get the best customer experience.
 Brand Exposure- The brands should always make customers aware of its internal
processes. It increases the brand awareness of customers and helps in increasing sales.
The customers need brands to be attractive in market as it give them that brands are the
best and they have a good quality. Tesla has a good brand name in market because it is
connected to customers. The companies will expand to Africa which will give them
exposure. The brand awareness will increase and which will increase their profits.
 E-commerce- The market on e-commerce has increased. It gives them opportunity to
target wider market and increase their brands (Taoketao and et.al., 2018). The brands
should focus on making strategies to sell its products on them. They help companies to
understand behaviour of customers. The customers gets to compare company's products
with its competitors. The business strategies should be made to increase customers on e-
commerce. Tesla should focus on this strategy and have good share in market. They have
products which are sold directly by them. Tesla can have its customers in Africa where
they can provide products and it will increase customers. It is important that Tesla
understands their market and then make products for them.
3. Marketing Strategies based on marketing mix
Marketing strategies are based on the marketing mix of companies. They make strategies
to build products to meet demand. Tesla has a marketing strategy which focuses on product
quality and innovation. The success of products of companies depends on its marketing
strategies.
 Product- The product is what companies focus on. The quality of product gives
customers opinion about the brand. The companies sell its products to achieve profits and
to be successful it is important that products should be good to increase the profits.
Tesla has products to meet the needs of customers. It products are different from its competitors
and have achieved success as they have the best quality.
It is recommended that Tesla should increase products and it will give options to customers to
choose. They should differentiate its products.
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