Analysis of Tesla Motors' Marketing Channels and Segmentation

This report provides an analysis of Tesla Motors' marketing channels and market segmentation strategies, particularly focusing on the Model 3. It discusses the nature of Tesla's product category as premium offerings targeting customers seeking green, high-technology gadgets and a premium lifestyle. The report details Tesla's current market segmentation approach, including geographic (major US cities), demographic (millennials, educated individuals, baby boomers with moderate to high income), and psychographic (upper and middle-class techies and environmentalists) factors. Furthermore, it outlines Tesla's future endeavors, such as increasing production to 500,000 cars annually and introducing more advanced vehicle models. The report references various sources to support its analysis of Tesla's marketing strategies and future plans, emphasizing the company's focus on clean energy and sustainable transportation solutions. Desklib offers students access to similar solved assignments and study tools.

Running Head: MARKETING CHANNELS 1
Marketing Channels: Tesla Motors

MARKETING CHANNELS 2
Nature of Tesla’s Product Category
Considering the features of Tesla’ products, it can be stated that company is offering premium
products to the potential customers. Tesla’s Model 3 is about to become the best-selling mid-
sized premium sedan in the United States. It offers featuring green, high-technology gadgets and
premium life style products which all the customers of Tesla want to have. The company is
developing the luxury sedan which is fully electric and named as Model 3 (Tesla, 2018). The
products of the company are manufactured with a budget in the mind to enhance operations in
potential target market. The major features of Tesla’s products are their efficiency, clean energy
source, performance, range, safety and acceleration. The organization offers its new car models
on premium prices so that it can encourage the positive perceptions among Tesla lovers on the
basis price only. For instance, it has released Model 3 as its first mass market car with the initial
prices of USD35000 (Nykvist and Nilsson, 2015).
New approach (Current Market Segmentation)
For Tesla Model 3, the organization targets its market considering different characteristics and
behaviors of customers (Hill, Jones and Schilling, 2014). The new market segmentation for
Model 3 is stated below:
Geographic
Under geographic segmentation, the organization focuses on the people who are living in the
major cities of United States of America like San Francisco, Chicago, Los Angeles, Boston, New
York City etc. The company targets the mass population in the country. After successful
establishment in US, the company should expand its operations in international markets.
Demographic
Tesla offers its Model 3 Cars considering different demographic characteristics like age, gender
and income (Radius, 2017). It targets millennial customers who belong to moderate to high
income class. Other targeted audiences are well-educated individuals, males, baby boomers etc.
Psychographic
In the country, 80.7 million people are from the upper and middle class so company targets this
customer segment. In addition to this, Tesla targets both techies and environmentalists in
America as 29% of Americans are techies and around 40% of the people are environmentalists.

MARKETING CHANNELS 3
Thus, the company segments the market for Model 3 considering the life style and characteristics
of potential customers (Tesla, 2018).
The above-mentioned are the growing markets so Tesla’s sales will be increasing constantly.
Future Endeavors
In the year 2017, the batteries manufactured at the Giga-factory allowed the Tesla Motors to
develop its first mass market vehicle i.e. Model 3. The company will set its sights on clean
energy and inspire the world to store more and consume less (Tesla, 2018). In the future, it will
be offering its products considering the above target markets. It has estimated that by the end of
year 2018, it will manufacture 2500 new vehicles per week. In the second quarter of this year, it
is planning to approach 5000 cars. The major objective of the Tesla is to reach to the annual
production of 500,000 cars of Model 3. In the future, the company will make efforts to introduce
more advanced vehicle of Model 3. It is estimated that it would push out two new vehicles before
the year 2020 (Hill, 2013). Tesla will adopt effective strategies to approach these future
endeavors by targeting the potential market segment.

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References
Hill, C. W., Jones, G. R., and Schilling, M. A. (2014) Strategic management: theory: an
integrated approach. UK: Cengage Learning.
Hill, J, (2013). electronic vehicle sale expected to grow globally to 1.8 miilion by 2023,
Available from https://cleantechnica.com/2014/08/12/electric-vehicle-sales-expected-grow-
globally-1-8-million-2023/. [Accessed on 23 May 2018].
Nykvist, B. and Nilsson, M. (2015) Rapidly falling costs of battery packs for electric
vehicles. Nature Climate Change, 5(4), pp.329-332.
Radius (2017) Tesla Motors: achieving excellence and innovation overseas, Available
https://www.radiusworldwide.com/knowledge/case-studies/case-study-tesla-motors, [Accessed
on 23 May 2018].
Tesla. (2018) Model 3, Available from https://www.tesla.com/model3. [Accessed on 23 May
2018].