International Marketing Plan For Tesla Inc. In India

SWOT Analysis

This report will develop an international marketing plan for Tesla Inc., a multination American organization. The target market for the company is India and the international marketing plan has been developed based on the current scenario in the Indian market.  The company has been founded in the year of 2003 and specializes in the solar panel manufacturing, lithium-ion battery for storing energy and electric vehicles.  The organization consist of the range of products in their product portfolio consisting of Powerpack, Powerwall, Model 3, Model X, solar panels, Tesla Model S and Solar roof tiles (Tesla.com 2018).  The company wants to make their expansion in the Indian market as it is one of the fastest growing economy among the developing countries and has a huge population sample which is quite untapped in this segment. The report will describe the segmentation, targeting, positing, the internal analysis, product, pricing and promotional strategy. The international marketing plan will be based on the problems and will consist of a management control system along with the timeline.

Table 1: SWOT analysis

(Source: Tesla.com 2018)

Tesla offer products in the category of energy storage, energy generation market and automotive industry.  The products offered by the organization is aimed at catering to the consumers opting for sustainable products.  The different types of products offered by Tesla are solar panels, batteries, energy storage, electric vehicle powertrain components and automobiles (Arora 2016).  The most popular product offered by the company are its electric vehicles and considered as one of the leading car manufacturers. The organization has been contributing immensely to goal of reaching sustainable energy and electric vehicles and provides other firms with power train components. Batteries was one of the initial product offered by the company offering for both industrial and home purposes (De Villa, Rajwani and Lawton 2015). The organization also provides solar panel and installation services. In the Indian market, these products have to be customized as per the needs of the Indian consumers. The Indian economy is still developing in nature so the average disposable income of the overall population is average.  Moreover, the needs of the Indian consumers are different so the products have to be customized to address these needs.  This is the reason that Model 3 has been launched which a premium product is lying at the mid-level of the premium segment and upper middle class can afford this product. This means that the organization will have to develop more products at border line prices for the Indian consumers.

Product Strategy

The major challenge the organization while making an entry into the Indian market is their target market, segmentation and positioning.  The price of the products offered by Tesla has been quite high and targeted the affluent buyers as the brand has been portrayed as luxurious brands. They were trying to provide luxury sports car to the premium market segments that wanted to drive eco-friendly cars. However, in India, Model 3 launched by the organization shows that they are catering to the upper middle class and middle class segment that can afford to buy an entry level car in the premium segment (Uner, Çavu?gil and Çavu?gil 2018). The organization will also launch their premium products offered in other countries which shows that they will be using the demographic segmentation to offer products to premium consumers and upper middle class.  

Tesla has increased their consumer base by significantly reducing the price of their offerings especially for the Asian market. Tesla has positioned their products as luxury electric sports cars in the initial phase but they have changed their positioning strategy by addressing the mass segment by offering luxury sports cars at lower prices.  The positioning strategy is as such that they offer both luxury cars and electric cars so consumers looking for either of the category will look into the company product. In order to grab the Indian market, Tesla will have to position their products as luxury products for the normal consumers where the consumers has the opportunity to be associated with one of the top premium car brands.

The pricing aspect has always been an issue for the company as they only offered luxury cars at a premium prices.  The product offered by Tesla are unique products so they uses the premium pricing strategy and have added market oriented pricing recently for expanding into the foreign market.  Tesla has used high price points due to the uniqueness and high value attributes of the products. The consumers have been willing to pay high prices for the products offered by Tesla as they are considered to ecologically and technologically advance that other companies in the market (Kienzler and Kowalkowski 2017). The company has been product differentiation strategy so premium pricing has been a key aspect as product design and innovation add value. However, the organization also uses market orientation pricing strategy for the other products such as solar panels and battery products. However, in the Indian market, the organization will be using market orientation pricing strategy where the products and prices have been set as per the current needs and disposable income of the target population.  The model 3 has been launched at 23 lakhs that is $35, 000 dollars where other models offered starts from $85,000 (Arora 2016). This shows that they have to offer products at lower prices as the consumers in the Indian market are price sensitive. The base prices of the products have to be reduced to at least $20,000 for catering to the masses (Arora 2016). Indian consumers are obsessed with fuel efficiency so offering products at lower prices is necessary for gaining sustainability and competitive advantage for Tesla in the Indian market.

Segmentation and Positioning Strategy

Tesla has been using the online sales model which has been coupled with the stores of the company for selling their cars.  Tesla has been promoting their products by using their physical stores as the sole purpose of the stores is not only selling the products but also promoting the use of sustainable vehicles (Olson et al. 2018). The organization prefers selling their products online as it reduces their selling cost and in India the organization should set up their own units of manufacturing and distributing to facilitate online selling of the cars offered by the organization. In order to facilitate this, tesla will have to develop a relationship with the Indian government for identifying suitable spots for manufacturing (Kashyap 2017). The cars offered by the company are high end products which comprises of advanced technologies so they will have to setup physical stores for distribution and servicing of cars.  They cannot use dealers and franchises in India as it reduce the essence of the overall customer experience and the value of the products offered by the company.  Therefore, it is essential that the organization their product by using both traditional and modern methods by using combination of physical stores and online selling stores.

Tesla will use both traditional and digital marketing medium to promote their products in the Indian market. The Indian consumers are highly active on the internet and the number of online users have increased significantly in the past decade.  The physical stores will have to be located in prime locations of traffic so that consumers come across the stores majority of the times. Tesla also use banners, posters and newspaper advertisements (Barhat 2018). The banners will also be located at prime locations in business centres and malls to gain the attention of the consumers.  This will enable the company to communicate with consumers of varied types. Tesla will make use of their string suit where they will use the social media websites like Twitter, Facebook, YouTube and Instagram to promote their products. Elon mask has been instrumental in communicating with the consumers regarding various updates about the products offered and vision of the organization (Cosco, Moore and Smith 2014). Therefore, Elon mask will have to keep on giving updates about the company operations on Twitter. However, there are still Indians preferring Facebook, YouTube and Instagram will have to provide information regarding the organization offerings. The majority of the Indian research for products using the digital channels (Folschette 2017). Therefore, the use of the digital channels have to be effective for attracting more and more consumers.  Tesla has created their own rules of communication with the consumers but at the initial phase they will have to be frequent with their posts and videos as it will take time for the company to form a bond with the Indian consumers.  The organization will have to form contracts with Indian celebrities for promoting their cars as Indian follow the celebrities religiously.

Pricing Strategy

The major problem for the organization is developing the super charger network from scratch which will increase the expenditure of the organization.  The price of building a charging station in Indian will vary from 150,000 to 200,000 which could also be reduced based on the current resource capabilities of the organization (Bhagat 2017).  The foreign direct investment policy in India suggest 30 % of local sourcing which implies they will have to develop manufacturing factories in the country and it will take time for the company to discuss about waving duties (Bhagat 2017).  Even though, the lowest model offered by Tesla is their model 3 which will cost around Rs.23 lakh in India which is more than average price of the premium cars offered by other premium brands in the country (Arora 2016). This could be a big issue for the organization and they will face challenges in developing products at equivalent prices compared to BMW, Audi and Renault.   India has also developed the national electric mobility plan which will aim to electrify all the passenger vehicles by the end of 2032 and the important duties are out of sync with these policies which means that Tesla will have to pay high import duties of about 60% which is unviable for them. These will make the marketing of the products difficult for Tesla as their marketing mix will be highly affected by these factors.

Tesla will have to firstly wait for some time and analyse the Indian market effectively to identify the options they have to enter the Indian market. They will have to develop cost effective measures to reduce the internal cost and offer products to the mass at competitive prices. Tesla will have to keep this in mind that fuel efficiency is a mind-set of the consumers so cost effective products is needed to get hold of the market.

In order to measure the future performance, the organization will have to first use test run to check the response they are receiving from the Indian market.  Test marketing of the products and business analytics would be used to check the tendency of the Indian consumers of purchasing the products.  The bookings of the products and amount of market share that company is able to capture will determine the success of the marketing plan. The online traffic on company websites and social media pages are also indicators of the success.   The analysis of the marketing plan will help in identifying the areas of concern and control measures will be developed accordingly. The control measures will consist of regular update on the social websites and organizing events to increase the awareness among the Indian consumers.

It is recommended that Tesla should focus on producing products at lower prices so that they can use the cost leadership to gain competitive advantage in the market. Product differentiation will not work effectively in this market as Indian population is highly sensitive to prices and other premium brands have started offering products at considerably lower prices.

Conclusion 

Tesla will have to be provide the consumers in India with luxury sports car at lower prices and this is very much possible for the organization if they make use of their superior technology and innovation. However, initially Tesla will have to use aggressive marketing strategy for competing with the other luxury brands in the market. In order to do so, they should take time and make a slow entry into the market so that they are able to strategies based on the response they have been receiving from the consumers.

References

Arora, R. 2016. Tesla to take call on setting up unit in India post Model 3 launch. [online] The Economic Times. Available at: https://economictimes.indiatimes.com/industry/auto/tesla-to-take-call-on-setting-up-unit-in-india-post-model-3-launch/articleshow/53310399.cms [Accessed 30 Sep. 2018].

Barhat, V. 2018. From a single Elon Musk tweet, the keys to Tesla’s India strategy. [online] CNBC. Available at: https://www.cnbc.com/2018/06/18/in-a-single-elon-musk-tweet-the-key-to-teslas-india-strategy.html [Accessed 30 Sep. 2018].

Bhagat, H. 2017. Tesla’s India plans: Challenges and hurdles that they must face. [online] The Economic Times. Available at: https://economictimes.indiatimes.com/teslas-india-plans-challenges-and-hurdles-that-they-must-face/articleshow/60125995.cms [Accessed 30 Sep. 2018].

Cosco, N.G., Moore, R.C. and Smith, W.R., 2014. Childcare outdoor renovation as a built environment health promotion strategy: evaluating the preventing obesity by design intervention. American Journal of Health Promotion, 28(3_suppl), pp.S27-S32.

De Villa, M.A., Rajwani, T. and Lawton, T., 2015. Market entry modes in a multipolar world: Untangling the moderating effect of the political environment. International Business Review, 24(3), pp.419-429.

Folschette, C. 2017. Tesla’s successful marketing strategy shows that it’s time for CEOs to get social. [online] Talkwalker. Available at: https://www.talkwalker.com/blog/tesla-marketing-strategy-social-ceo [Accessed 30 Sep. 2018].

Kashyap, K. 2017. [online] Forbes.com. Available at: https://www.forbes.com/sites/krnkashyap/2017/08/21/why-tesla-decided-to-wait-another-year-before-entering-india/#2f3191923c15 [Accessed 30 Sep. 2018].

Kienzler, M. and Kowalkowski, C., 2017. Pricing strategy: A review of 22 years of marketing research. Journal of Business Research, 78, pp.101-110.

Olson, E.M., Slater, S.F., Hult, G.T.M. and Olson, K.M., 2018. The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, pp.62-73.

Tesla.com 2018. Electric Cars, Solar Panels & Clean Energy Storage | Tesla. [online] Tesla.com. Available at: https://www.tesla.com/ [Accessed 30 Sep. 2018].

Uner, M.M., Çavu?gil, E. and Çavu?gil, S.T., 2018. Build-operate-transfer projects as a hybrid mode of market entry: The case of Yavuz Sultan Selim Bridge in Istanbul. International Business Review, 27(4), pp.797-802.

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