Tesla's Relationship Building: Disruptive Technology in Indian Market

This report examines Tesla's strategic approach to relationship building within the Indian automobile market, focusing on its role as a disruptive technology. It defines relationship marketing in the Indian context, identifying challenges and opportunities. The analysis highlights key customer relationships and proposes strategies, including the application of the six-market model, to establish customer retention and manage business networks effectively. It discusses the global relationship marketing theories, particularly the Anglo-Australian School, and assesses potential barriers for Tesla in the Indian market, such as import duties, political instability, and cultural differences. Furthermore, the report provides an overview of Tesla's customer markets, including internal, influencer, supplier, recruiter, and referral markets, and strategies to build strong relationships within these markets. The report concludes by emphasizing the importance of relationship marketing and loyalty programs in gaining a competitive advantage in the local market.

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TESLA'S RELATIONSHIP BUILDING AS A DISRUPTIVE TECHNOLOGY IN
AUTOMOBILE INDUSTRY IN INDIA
Article · November 2020
DOI: 10.21172/1.171.21
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2Senior Lecturer, Department of Business Administration, Sylhet International University, Sylhet, Bangladesh a
TESLA’S RELATIONSHIP BUILDING AS A DISRUPTIVE
TECHNOLOGY IN AUTOMOBILE INDUSTRY IN INDIA
Md Imrul Jobaid1, Kamrun Naher2
I. INTRODUCTION
Transport causes around 23% of CO2 emission globally and is projected to be doubled by 2050. Passenger transport
in the road are in the highest among the transports causing these emissions (Edenhofer, 2015). So, it is high
increase efficiency along with the shift from fossil-fuel to biofuel, hydrogen and/ or electric vehicles
decarbonisation (Creutzig et al., 2015).
Based on these ideas, an engineer group founded Tesla in 2003 in USA with the mission of accele
worlds transition to sustainable energy. Tesla is producing its entire car in California, USA. Now they have sta
manufacturing plant in China which is under construction (Tesla, 2019).
II. RELATIONSHIP MARKETING
Creating, developing and maintaining long term relationship based on trust and commitment is the main con
relationship marketing concept (Morgan and Hunt, 1994). Network, relationship and interaction are the focal
of relationship marketing and CRM, customer relationship management, (Gummesson, 2011). Regular engag
with the partners for maintaining long term relationship and research on the effective relationship strategies
company to keep pace with the fierce competition and gain success. Further, the buyer seller relationship
influenced by dependence, trust, commitment and relational norms and values (Zhang et al., 2016).
understandings of the relationship marketing theories and frameworks and implementation of the dynamic s
to the target audience market are the success factors for the companies in this digital era ( Palmat
2019).
Tesla relationship with its customers is not transactional like the traditional company customer relationships
customers want Tesla to be successful. And the loyal customers were built based on the good experience re
their mission with honesty, consistency, digital focus, and supportive services (Morgan, 2019).
Additionally, the 4Ps of marketing, (product, price, place and promotion), is the controllable and tactical tool
are used by most of the companies as an effective plan and strategy (Kotler et al., 2015). The Tesla 4Ps is di
than the others automotive industries that made it stand out of the crowd. This is ensured by the significant
Abstract-This report aims at outlining the strategic significance of rapport building for Tesla as a new technological m
automobile industry in the Indian market. First of all, the relationship marketing is clearly defined and analysed for th
market identifying challenges and difficulties. Secondly, key relationships are identified based on the custome
developing framework for Tesla for the particular market. Then, several strategies with proper models are p
justified to establish retention. Further, depicting the concepts from the previous part, the reasons with justification o
the organization is highlighted with strategies for building proper relationship highlighting the management o
networks.
Keywords: Relationship, Technology, networks
International Journal of Latest Trends in Engineering and Technology
Vol.(16)Issue(1), pp.142-153
DOI: http://dx.doi.org/10.21172/1.171.21
e-ISSN:2278-621X

Tesla’s Relationship Building as a Disruptive Technology in Automobile Industry in India143
of the management. Products are the first marketing mix element and for Tesla the main product
Additionally, components and batteries and solar panels are also the part of the product (Panmore Institute,
This alternative to fossil fuel depended car will save the world and should be the most priority and accept
because of environment issue (Nordlund et al., 2018). The places for Tesla are the stores, company
charging points and service canters. For promotion, viral marketing is most significant. Further, the promotio
also plays a significant role except the advertisement (Panmore Institute, 2019).Other than the 4P’s of mark
McCarthy in 1960, the 7P’s also developed adding people, process and physical evidence for the service indu
by Bernard Booms and Mary Bitner in 1981. The people for the Tesla are engineers and the all other employ
involving from the idea generation to after sales services are in consideration. The process is starting from th
material collection to delivery and MRO services, how each of the service is provided as step by st
Finally, the physical evidence is the store ambience and the charging and MRO stations. These all add value
the proper experience regarding the Tesla (Dudovskiy, 2019).
Relationship marketing
for Tesla in India
Dyadic Relationship
(Tesla with customers)
Tesla Relationship chains
with suppliers and buyers
and other stakeholders
Tesla Relationship
networks
Figure 1: Tesla relationship marketing
III. GLOBAL RELATIONSHIP MARKETING (GRM) AND THEORY OF SCHOOLS
There are five schools of relationship marketing theories and for Tesla global relationship marketing, the
Australian School is most appropriate. Though it is seemed that the North American School emphasis on
relationship (Payne, 1995), company and customer or company with supplier and it is helpful for building en
profitable relationship with Tesla and its customers. Here we can observe a heavy influence and emphasis o
customer service. Thus, Tesla succeeds till now.
However, for a company to be globally successful and to keep pace with the global arena of competition and
success, the relationship with the all stakeholders is also essential. This is the base of the Anglo-Australian S
Hence, the six-market model was developed based on this school to understand and implement the importa
building enduring profitable relationship within the customers market incorporating internal, influence
recruiter and referral market (Christopher et al., 2002).
Thus, for the global marketing perspective to make a long-term profitable relationship and gain suc
should go for beyond the dyadic relationship and maintain the proper relationship with the all stakeholders.
Additionally, relationship marketing along with the loyalty program is the major differential strategies
factors influencing the global competition and gaining competitive advantage in a local market (Beck et al.,
A. RM Difficulties/ Barriers for Tesla in Indian Market
This report is based on the relationship strategies of Tesla for official starting in the Indian market. Though p
and the customers has positive attitude toward the EVs, especially Tesla, there are some controvers
hinder the build-up a relationship to a new market along with the current market. The issues are its green cr
Though the Tesla doesn’t do harmful emission the charging needs electricity. Till now most of the countries
world is dependent on fossil-fuel generated electricity (Marketline, 2013, 17).In India, though solar power ele
generation increased by 34%, 78% of the electricity is produced by thermal energy that is using of fossil fue
2018). So, the first challenge would be making the target group of customers and stakeholders to make awa
Tesla use solar and renewable energy. Further, the tax for importing will make the situation challenging as T
doesn’t have any factory in India. Importing a car that cost more than 27 lakh Indian rupee will cost an impo
of 100% and 60% for less than this amount. So, the Tesla’s all cars will have to incur a duty of at least 60%.

Md Imrul Jobaid , Kamrun Naher 144
was an assembly plant the import duty would be 10 to 15% though the government reduced the GST on EVs
12 to 5% (CarAndBike, 2019).
For the PESTLE analysis perspective, India has low score having 17.14 percentile in 2017 in case o
stabilityand violenceabsencebecauseof hostilediplomaticrelation,terrorismand increasein corruption
(Marketline, 2019, 04). So, though the ease of doing business score is above average, 67.23, (The
2019) it will be difficult for Tesla to maintain and build relationship with the stakeholders enforcing contracts
along with high import tariff (CarAndBike, 2019). Further, in the economic aspect India is an FDI restrictive n
(Marketline, 2019, 05) that will hinder the relationship with the direct supplier and dealer investmen
building plant and factories. Government regulations on vehicle mobility also hinder the relationship of Tesla
other parties (Bahree, 2019).
Further, Hofstede cultural dimension creates additional challenge for a US company relationship building in I
In the 6 dimensions, other than masculinity in all other aspects there is a huge cultural dissimilarity between
Indian culture that will be a barrier for a US company to operate in a country like India to establish and main
relationship with the stakeholders (Hofstede, 2019).
Figure 2: Hofstede-Insight Cultural Comparison Between USA and India (Hofstede, 2019)
IV. CUSTOMER MARKETS AND RELATIONSHIP
Building and maintaining the customer relationship are the bases of relationship marketing. Customers shou
given the first priority with the serviceand quality,and thus the customerrelationshipmarketingworks
(Christopher, 1991).
To build and maintain relationship with the customers, the customer market should be analysed first b
relationship with the customer also depends on the company relationship with the other parties. Lots of cus
relationship and retention related researches are going on. Here, the Cranfield University’s one of the most p
relationship framework, the six-market model for relationship (Payne et al., 2005, 857), is analysed for the T
the Indian market perspective. Strategies on the basis of relationship have increased a lot because of deregu
and information technology over the last few decades.
Internal market comprises of the employee relationship with the company. Tesla has a very good e
environment along with good employer-employee relationship (Tesla, 2019).
Then, Tesla doesn’t use any commercial and it is becoming successful without any commercial till the startin
This is because of the loyal customer base has already made the successful referral who used the
positive WOM and helped the company to reach this position (Balroo et al., 2019). Now Tesla is the number f
selling luxury cars in USA after Lexus, BMW and Mercedes in 2018 (Assis, 2019) and number one i
expenditure out- innovating the car industry (Richter, 2019). So, all of the above are creating a hu
group for the Tesla and they are working as influencers that create the success of the company as without tr
advertising and this will work for the country, India where there is a huge number of collectivist co
connected to internet and social media and have the intention to buy eco-friendly efficient driving options lik
There are a huge number of suppliers for manufacturing Tesla (Appendix 1), (Investopedia, 2019) and th
huge possibility and option for most of them to work with Tesla in India a well.
In 2012, Tesla has the merger with the Daimler and Toyota (Cheong et al., 2016, 02) and other core supplier
is with the Panasonic the largest car battery manufacturer. With the supplier Tesla has already build Gigafac
meet the need of the electric vehicle battery all over the world within decades (Tesla, 2019).

Tesla’s Relationship Building as a Disruptive Technology in Automobile Industry in India145
There is a huge employment opportunity creating by Tesla and currently around 45000 people are working (
2019). Tesla CEO sometimes post on Twitter to hire and recruit excellent engineers having no prior experien
car and interview by himself. In India there is a no of engineers and lots of Indians are also working in Tesla w
other expatriates. So, multicultural skill head can gain success in Indian market as well.
The above illustration of the six-market model is the key to develop the following modification of this framew
for the Tesla in India market:
Customer
Market
Tesla
Customer
Markets
in India
Tesla
Internal
Market
Tesla
Referral
Markets
Tesla
Influence
Markets
Tesla
Recruitment
Markets
Tesla
Supplier/
Alliance
Market
Tesla Internal Market
Tesla Referral Market
Tesla Supplier/ Alliance
Market
Tesla Recruitment
Market
Tesla Influence Market
Figure 3: Tesla relationship marketing in India, adapted and modified, based on six market model (
2005)
Customer relationship is building and maintaining for a win-win long term relationship with custome
company also known as total relationship marketing and 30 R (Gummesson, 2017). Among the 30R
important and relevant relationships are given below for the company Tesla to start their operation and mai
India:

Md Imrul Jobaid , Kamrun Naher 146
Picture: Further illustration of the related Rs from 30Rs for Tesla in India

Tesla’s Relationship Building as a Disruptive Technology in Automobile Industry in India147
Figure 4: The customer, Tesla and competitor triangle, Modified from (Mbaboost, 2019)
A. Retention
Retention is the process of holding the customer for a longer period of time maintaining relationship. For tha
most popular IDIC model (Pepper and roger, 2004) can be applied for Tesla launching in India. The model is b
on the Identification of the customer for Tesla, differentiation based on the value and needs of the
Interaction with the customers and Customization of the goods and services. It is mainly emphasis on the on
relationship building, like- Tesla and the customers. The detail illustrated in the following diagram:
Huge carbon emission in India make it necessary to use
alternative energy driving and there is a number of people will
accept the new electric tesla vehicle
Tesla
Customer
Identification
in India
Middle high
income people
of India
interested to
buy
environment
friendly electric
cars
Tesla
Differentiation
(Value)
Electric eco
friendly driving
experience
without emission,
belong to a
community, long
term value
Tesla
Differentiation
(Needs)
Average 215
miles per charge,
efficient driving,
easy charging
Tesla
Customer
Interaction
Direct company
interaction and
C2C
interactions
through social
media
Customization
Though the cars
are the same
with different
colors but there
is huge
collection of
accessories and
supplementary
Eco friendly
Zero emission
Efficient driving
Opportunity to be a part of the environment friendly
community with efficient luxury vehicle experience
Figure 5: The IDIC Methodology for Tesla in India, Adapted from (Peppers and Rogers, 2004)

Md Imrul Jobaid , Kamrun Naher 148
According to a Harvard study, selling to an existing customer can reduce the company cost to 5 to 95%. For
service related company, it is much applicable. And providing continuous quality services, like MRO, after sa
components part for the car manufacturer can increase the customer retention and increase the ov
lifetime value.
B. Community Relationship
As Tesla owners belong to a member in a community, they always want to be by the side of the
Previously mentioned social networks platform and groups made them to contact and communicate with ea
and sometimes works as referrals.
V. RELATIONSHIP WITHOTHER STAKEHOLDERS ININDIA MARKET
Though most of the relationship networks with the stakeholders are justified in relating to the previous mode
the Tesla in Indian market further network management with model relativity has pervasive impact.
A. Relationship with the Suppliers
It has already been mentioned that there are a number of Tesla suppliers (Appendix 1). Supplier diversity en
competitive advantage as well. All suppliers are equally important. But for specific, there is a greater Gigafac
plan for the world lithium ion battery supply for the electric car industry by Tesla and Panasonic p
providing over 60% of the world’s current electric car battery and providing the demand of the ele
battery of the world by 2030 (Bahree, 2019).
Though it is possible to meet the demand of the electric car and accessories of the Asian market from the on
China manufacturing plant, new establishment in India could reduce the production cost and ultimat
Suppliers’ coproduction also can have the same comparative advantage for accessories and parts in
market with proper relationship (Anon, 2019).
B. Relationship with the environmental groups in India
In case of CO2 emission, India is the fourth largest country the world (Gayathri, 2019). As most of the vehicles
fossil fuel dependent, they are contributing more and mentioned before. Tesla already saved more than 4 m
metric ton CO2, equivalent to emission produced by more than 500K ICE automobiles having fuel economy of 2
MPG (Tesla 2019).
Additionally, usage of the water while production is minimized and battery recycling also contribute to enviro
safety and less pollution (Tesla, 2019).
In USA energy generation, electricity is 100% solar dependent for Tesla ensuring zero emission in all aspects
2019).
So, all these technologies can be implemented in the Indian market as well if Tesla create production plan in
The environmental activist and community will also support these issues for the greater benefit.

Tesla’s Relationship Building as a Disruptive Technology in Automobile Industry in India149
Figure 6: Relationship of Tesla in Indian market, based on the marketing in the new millennium (Doyle, 19
C. Relationship with the Government
Indian government is encouraging the alternative fuel vehicle and giving a 12-5 percent reduced GST for ele
vehicles (CarAndBike, 2019). So, maintaining the proper relationship over the Indianazation will have
impact. The main challenge is that the Indian government is patronizing the local Mahendra product orderin
EVs from them. But there is an option in luxury category. Proper networking and connectivity with the key pa
will make this a success for Tesla. This is because of the ease of doing business score of India, is above aver
67.23% (DBR, 2019).
D. Business Network Strategy and Implementation
There are lots of relationship strategies to maintain and implement for the success of the company. The
maintain relationship with the other stakeholder along with the customers. Zhang and others develo
mechanism for relationships states and migration. For Tesla in Indian market, existing customers of fuel bas
users can be migrated to the EVs with the awareness and information providing of the overall benefits.

Md Imrul Jobaid , Kamrun Naher 150
Figure 7: Overview of the Mechanisms of Relationship States & Migration (Zhang et al., 2016)
Further, Becker and others developed the relationship between loyalty program and relationship mar
mediated by the following contingency factors. The Tesla customers can go through the same effec
Indian market if the loyal customer base be developed in the long term period.

Tesla’s Relationship Building as a Disruptive Technology in Automobile Industry in India151
Figure 8: Loyalty Program and Relationship Marketing effectiveness on Emergency Factor in International M
(Beck et al., 2015)
E. Network management for Tesla in India by McKinsey 7s Model
Tesla is building and maintaining relationship network in a different way than other traditional busin
strategy is to gain sustainable energy in the world by zero carbon emission. Its distribution and manufacturin
own channel with huge suppliers. Low cost is the competitive advantage. There is no formal organizational s
but division based classification in the company. Each division can maintain relationship with the related par
Business intelligence, CRM, Equal employment opportunity, transaction processing, and team development
systems that ensure company success. The stuffs are recruited sometimes even by the CEO. So, it can ensur
skills and knowledge of the employees and partners (Dudovskiy, 2019).
Figure 9: McKinsey 7S model in 1980 (Dudovskiy, 2019).

Md Imrul Jobaid , Kamrun Naher 152
VI. CONCLUSION
To recapitulate, personal normative reasoning can influence the acceptance of electric vehicles over the fos
vehicles. So, public policies regarding the use of electric and alternative fuel vehicles for the benefi
environment can have a huge impact on the people’s acceptance toward the fuel alternative vehicles (Nordl
al., 2018).
Further, Long term relationship building with the all stakeholders with the company and customer c
success of the Tesla in the Indian market. The related model, frameworks and strategies have greater impac
with the social and political needs like- Indian government requirement for electric car to be 30% by 2030 (B
2019) and huge carbon emission in India by using huge thermal energy (Marketiline, 2019, 04).
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