Marketing Strategies of Tesla Inc. and the 8Ps of Marketing Mix

This report provides a comprehensive analysis of Tesla's marketing strategies, specifically focusing on the 8Ps of marketing mix as applied to the Model S. The report begins with an introduction highlighting the importance of marketing in gaining competitive advantages and the evolution of the marketing mix from the traditional 4Ps to the contemporary 8Ps, which include product, price, place, promotion, people, process, physical evidence, and partnership. A company profile of Tesla is provided, emphasizing its innovative approach and market impact, particularly with its electric vehicles. The core of the report is an evaluation of each element of the 8Ps for the Model S, examining product features, pricing strategies, distribution policies, promotional activities, and the roles of people and processes within Tesla. The report also assesses physical evidence and partnerships. The report concludes with recommendations for Tesla, including suggestions for more affordable models, diversification of product genres, expansion of distribution channels, and enhancements to promotional strategies and organizational flexibility. The report highlights the challenges Tesla faces, such as long waiting periods for its cars and offers strategic insights to improve its market position.

Running head: MARKETING AND MANAGEMENT
Marketing and management
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Introduction
Marketing plays an important role in gaining competitive advantages for the
contemporary business organizations. Thus, in order to gain the competitive advantages in the
market, contemporary business organizations initiate effective marketing strategies. This also
helps them in staying ahead in the competition. In the process of initiation of effective marketing
strategies, one of the key aspects being considered is the marketing mix (Leonidou, Katsikeas &
Morgan, 2013). Marketing mix refers to the various mediums of the business organizations, with
the help of which, they can gain competitiveness in the market. Moreover, marketing mix refers
to the factors, which helps the organizations in attracting the customers. Thus, initiation of the
effective marketing strategies in adhering to the marketing mix of the organization will help the
organization in having holistic approach in targeting the customers.
Traditional approach to the marketing mix consist of four elements namely, price, place,
promotion and place, which are to be considered by the business organizations in operating
effectively in the market. However, in the current business scenario, the aspects for the business
organizations are rapidly emerging and the existing 4Ps of marketing mix is not enough to cover
all the emerging aspects (Singh, 2012). Thus, for the contemporary business organizations, the
existing 4Ps of marketing are being modified to 8Ps of marketing. In 8Ps of marketing, the added
elements are the physical evidence, process, people and partnership.
This report will discuss about the effective implementation of marketing strategies in
adherence to the 8Ps of marketing for the Tesla Inc. all the 8Ps of marketing mix for Tesla will
be discussed here in this report. In addition, recommendations will be provided in accordance to
the identified issues.

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Company profile
In the current business scenario, organizations having innovative approach and having the
access to the latest and futuristic technologies are having more market potential compared to the
organizations incorporating traditional and conventional approach. This phenomenon made Tesla
an overnight sensation in the existing automobile market. Tesla was being founded in 2003 in
view to change the existing business scenario with the use of renewable energy ("About Tesla |
Tesla", 2017). Currently, they are having vast and diverse product portfolio ranging from solar
chargers, super chargers batteries to electric vehicles. However, the introduction of electric
vehicles made Tesla hugely popular in the global market ("Tesla’s Competitive Advantages — 5
Big Ones", 2017). This is due to the reason that, they had able to change the common perception
of the market around the electric cars. The models namely model S, model X and Model 3 can be
compared and are superiors in few aspects compared to the conventional vehicles. Moreover, the
future proposed offering from Tesla such as electric semi truck will help them to create huge
opportunities in the global market.
Evaluation of 8Ps of marketing of Tesla
As discussed earlier, for the contemporary business organizations such as Tesla, it is
important to determine their 8Ps of marketing mix. In this case, the model S will be taken to
evaluate the marketing mix. The following sections will discuss about the different elements of
the marketing mix for model S.
Product
Products of Tesla are their key source of gaining competitive advantages in the market.
This is due to the reason that, model S is electric sedan with having features as par or superior to

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its conventional competitors. According to the business principle of Tesla, their vision is to
change the perception of the customers regarding the electric vehicles. Hence, they have
introduced model S with having all the relevant features being required by the target market.
Moreover, the model S is being designed to give it a sporty stance. In addition, the engine is also
being tuned to have superior acceleration compared to the conventional competitors. The range
to be covered in a single charge is also being enhanced. Thus, model S is racier, sporty and
luxurious even being an electric car (Team, 2017). This is helping Tesla in promoting their
product as a worthy competitor in the market along with being a vehicle running on renewable
energy (Mangram, 2012).
Price
In terms of initiating pricing strategy, Tesla involved an innovative approach. This is due
to the fact that, model S and model X are being touted as premium offerings. It helped them to
gain an exclusivity among the customers by operating in the niche market (Wood, 2017).
Moreover, the premium pricing of model S helped them to gain the capital needed for further
development of the model 3. Thus, the one the one hand, premium pricing helped them to gain
the required customer awareness about the product and on the other hand, it helped them to raise
the fund for further development (Keller, 2017).
Place
The innovative marketing approach is visible in their distribution policy also. According
to the business policy of Tesla, the new products such as model S are in the requirement of mode
market exposure and awareness (Kanagal, 2015). Thus, unlike their competitors, they have opted
for small stores in various shopping malls for displaying their products along with having

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conventional automobile showrooms (Lowry, 2017). This approach helped them in catering to
more number of potential customers. It is being seen in various reports that, in the case of having
their showrooms in the shopping malls, various people not aware about the model S got the in
hand impression and decided to have one. Moreover, model S is also being available from the
official website of Tesla. Thus, customers have the convenience of booking their car according to
their choice online.
Promotion
Unlike its conventional competitors, Tesla does not follow extensive marketing strategy.
There are various reasons being given by Tesla regarding not initiating extensive marketing
policy. One of the key reasons is the cost being incurred in involving extensive marketing. Thus,
Tesla is saving a good amount of money from their limited marketing activities. In addition,
according to Tesla, earned media is more effective compared to the paid media
(referralcandy.com, 2017). Thus, the positive word of mouth being generated from the existing
users will help them to reach out to more number of potential customers. However, the
promotions being done for model S are mainly targeted in its utility. The product is being
positioned as greener version compared to the conventional vehicles.
People
For the contemporary business organizations, people hold an important area in gaining
competitive advantages. Tor Tesla, the key people are their employees and customers.
Leadership style being followed by Elon Musk, CEO of Tesla motors is more of transformational
and visionary (Avolio & Yammarino, 2013). This has positive impact on the effectiveness of the
employees. Moreover, the customers are being treated as the key stakeholders for their business.

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Thus, customer satisfaction of Tesla is being maintained effectively and positively.
Organizational culture in Tesla is also being enhanced with having the transformational
leadership Elon Musk (Alvesson, 2012). This in turn helps to enhance the level of motivation of
the employees. Eventually, the motivated employees help them in providing effective customer
service.
Process
As discussed earlier, customer service is being given the most preference and
concentration by Tesla. Accordingly, they are designing the service delivery (Wilson et al.,
2012). To handle the customer grievances, they have a designated portal in their official website.
However, there is one issue being originated from their process and it is the huge waiting period
for all of their models. Moreover, with the introduction of affordable model 3, the waiting period
is increasing rapidly. Thus, it is of urgent requirement of them to enhance their process in order
to reduce the waiting period.
Physical evidence
Physical evidence is favorable and positive for Tesla due to the fact that they are offering
cars to their customers. Moreover, the buzz being generated around their products is enough to
promote to new markets and to reach out to more number of customers. The designs of their
showrooms are also being designed to create positive impression among the customers (Das,
2014). Moreover, as being earlier discussed, the earned media is being more preferred by them.
Thus, the positive physical evidence of them also contributes in creating the positive user
reviews. In the case of the model S, physical evidence includes faster acceleration, sporty design
and the brand value.

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Partnership
Partnership is the extended form of 8Ps of marketing. It is being added in the existing
form of marketing mix due to the reason that for the contemporary business scenario, strategic
partnership plays key role in gaining market share in the global market scenario along with
effectively catering to the target market (Mahoney, 2012). In the case of Tesla, still now they are
not in the need of strategic partnership due to the fact that, the global market presence of Tesla is
limited till now. However, in the future, they might be in the need of strategic partnership to
extend their market across the globe (Prajogo & Olhager, 2012). In the recent time, Daimler AG
bought 10 percent of stake in Tesla. Thus, it will help Tesla in acquiring the expertise in
automobile engineering of Daimler AG by Tesla. One the other hand, Daimler AG will gain the
market presence in the electric vehicle market.
Recommendations
 The product portfolio of Tesla consists of model S, model X and model 3. However, as
per the strategy of Tesla, model S and X are the premium offerings and model 3 is
affordable targeted for mass market. However, model 3 is being priced at $35000 and
model S is priced at $70000. Thus, though Tesla is promoting the model 3 as a mass-
market model. However, the pricing of model 3 is not affordable compared to its
competitors. Thus, it is being recommended that, Tesla should come up with more
affordable models in order to cater to the mass-market. Only then, their market area will
get extended along with their brand value.
 The products portfolio of Tesla consists of a SUV and two sedans. Thus, in order to cater
to diversified taste and preference pattern of the customers, they should introduce models

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in other genres also. An affordable hatchback will be effective and suitable for them to
target the mass-market. This is due to the reason that, the market scenario can get
changed at any time and thus, it will be helpful for Tesla to have presence in every
automobile genre.
 In terms of distribution of model S, it is being made available through every medium
possible. However, involvement of third party automobile retailers will help them to
target more number of audiences effectively. Moreover, the brand exposure will also get
increased with the involvement of third party vendors.
 They have involved all the possible means of promotional channels in order to cater to
the target customers. However, in this case of promoting model S, Tesla can follow the
footsteps of its competitors regarding the steps to follow in promoting the products. One
of the key steps can be sponsoring any events. Event sponsorship or celebrity
endorsements will help them to enhance their brand value along with effectively
penetrating in the potential market.
 As discussed earlier, Tesla is already having effective people management in their
internal organization along with providing favorable service quality to the customers.
However, it is also to be considered by Tesla that, the present business scenario is much
more fluctuating and rapid change is taking place regarding the taste and preference
pattern of the customers. Thus, the organizational culture of Tesla should be made
flexible in order to cope up with the change in the business scenario.
 The existing process of Tesla is facing issues due to the huge demand of their cars.
However, still now they cannot able to enhance the productivity of their process. This
will have negative impact on their business potential due to the reason that customers will

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wait for more time, rather they will opt for other brands also. Thus, the business process
should be enhanced by starting new assembly line and more shifts. This will help them to
reduce the waiting period.
 Having a physical product, Tesla is having the advantage of providing physical evidence
to their customers. It is being earlier discussed that, there are various unique features such
as auto pilot mode, which enhances the providence of physical evidence for the
customers. However, it should be noted by Tesla that, the physical evidences being
offered by them should not have any negative implication. According to various reports,
the auto pilot mode of Tesla has caused accidents for the owners. Thus, this type of
incidents will reduce the satisfaction level for the customers.
 As already discussed, Tesla has not involved in extensive strategic partnership due to
their limited market area. However, in the recent time they have went to strategic
relationship with Daimler AG. Moreover, in the future, Tesla will obviously extend their
global presence and at that time, strategic partnership with various domestic
organizations will be beneficial for them. The current issues that they are facing in
reducing the customer wait period can be solved by entering in strategic partnership with
other organizations having similar expertise.
Conclusion
This report discussed about the 8Ps of marketing mix of Tesla. Various issues are being
identified in discussing the marketing mix. However, apart from these issues, various other
issues may also have negative impact on the performance of the organization and their marketing
strategy. These issues are the environment, social media, technology and corporate social
responsibilities.

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Environmental issue
For the automotive industry, environmental issues are one of the key issues being faced
in effectively operating in the market. The emission being generated by the vehicles is on of the
key sources of pollution and thus governments of different countries to counter it are initiating
various stringent regulations (De Santiago et al., 2012). This legislations will prove challenging
for the automobile businesses due to the reason that, the market potentiality will get reduced.
However, in the case of Tesla, it will act as competitive advantage due to the reason that, Tesla
vehicles operates in electric. Thus, the suitable marketing strategy for Tesla will be to promote
their products as environment friendly and green, which will in turn help to create a distinctive
image in the market.
Social media
Social media is one of the most potential and effective medium for the business
organizations to engage with the customers and market their products. However, social media
can also have negative impact on the marketing activities of Tesla (Kumar & Mirchandani ,
2012). This is due to the reason that, social media also contributes in generating negative word of
mouth. In this case of the auto pilot accidents of Tesla, involvement of social media will
communicate it to the larger sections. It will affect the earned promotion of Tesla. Thus, in Tesla
should not only rely on earned media only, rather than they should involves other conventional
mediums also.
Corporate social responsibility
As of now, Tesla does not maintain sustainability report or being involved in any social
responsibilities. However, one of the key advantages being for Tesla in this case is that their

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business profile is based on the sustainability. They promote their products as the sustainable
options over the conventional vehicles (Tai & Chuang, 2014). Thus, the perception of Tesla is
being created as an ethical, sustainable and socially responsible organization. However, it is
required for them to have some presence in the social responsibility. This will help them in
gaining more social goodwill and reputation in the market.
Thus from the above discussion, it can be concluded that, Tesla is having huge potential
in the global market. However, there are some issues being identified, which may affect their
business activities. Effective implementation of the discussed recommendations will help them in
overcome the issues and enhance their potentiality.

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