Marketing Plan For Tesla Motors

Situational Analysis

Discuss about the Marketing Plan for Tesla Motors.

Tesla Motors was established in the year 2003. A group of engineers formed the company. Tesla’s products include the cars that are affordable. Tesla’s engineer firstly, started with the design of a power train for a sports car that was built around an AC induction motor. Nikola Tesla patented the company in the year 1888. The Tesla Roadster was launched in the year 2008. In the year, 2012 Tesla launched Model S.

Tesla’s vehicles are manufactured at its factory at Fremont and California. The company has provided thousands of jobs in these areas and the manufacturing plants of the company produces 1000 cars a week. The cars of Tesla have the charging points that can be charged at home so, they do not have to visit the gas station. The company is planning to expand its operations in the areas of Tilburg, The Netherlands, Lathrop and California.

The SWOT analysis of the company is being shown below  

Source: Author

The marketing strategy will result in increase of the revenue. The shares of the company reported the huge loss for the year 2015. In the year 2016, the investor is going to report the huge losses. The return on investment (ROI) provided to the investors are in negative but in the coming years the ROI will be improved. The marketing goal of the company is to start the company with the making of the sports car to make the car competitive in the market. The company has the aim to accelerate the world’s transition to sustainable energy (“Elon Musk Has a Marketing Plan. Do You?”, 2016).

The Tesla cars costs around or more than $1, 00,000 (“Forbes Welcome”, 2016). The company must hire the dealers in order to increase the sales and the revenue. The price should be negotiable not much flexible but should be flexible. The test drive plays an important role while purchasing a car. The Tesla cars are not provided for the test drive until and unless the deposit of $5,000 has been m deposited. The buyer has to wait for long in order to get the car at their doorstep. The cars should be high volume car and the prices should be high. Tesla does not spend much on the advertisement. Whereas, on the other hand, the competitors of the Tesla spends much on the advertisement (Keith O’Brien, 2016). Nissan motors spend approximate $25 million in advertising. This lack of advertisement is bad for the company.  The cars of Tesla are the most expensive ones (McCarthy, 2013). They are named as the new luxury brand. Tesla has the long way to make profits. The company has the orders of more than 18,000 luxury cars (“Tesla’s Radical Marketing Strategy”, 2016).  Tesla’s market focuses on the group of individuals that are in need of the upscale vehicles. People who tend to have a high income to afford the cars. The cars are pollution friendly. The Tesla’s newest model i.e. Model S focus lies on the family as it can seat up to seven passengers (“That new Tesla probably won’t be as cheap as you think”, 2016). The target market of the Tesla cars ranges between the age of the 30-60. The company also focuses and makes the product in the upper middle class families. An individual earning an income of $80,000 can buy the cars of the Tesla’s. Tesla uses the online sales model in order to, sell the cars (“Tesla’s $0 Marketing Budget Is Great Marketing”, 2016). A completely company owned distribution model is very much new in the market and faces several challenges.  The biggest challenge that company faces is the setting up its own network of distribution. The setting up of the distribution channel requires a substantial amount of the capital.

Marketing Goal

The target market of the Tesla’s cars is the upper middle class. The individuals who are looking for the high performance electric car. The main targeted audiences of the company are upper middle class that includes wealthy and rich segment of the society (Zart, 2014).

The value proposition considers the positions and differentiates companies and the brands from each other. It also explains what consumers will benefit from the existing competitors, products and services.  The value proposition explains how to compare the product and service cost (Zart, 2014).

Product- Tesla Motors Inc. targets its competitors with the help of the online sales, stores, test drives.. The cars of Tesla are different and the technology used in making the cars is different. The company mainly focuses on the electronic device in order to sell the cars that it manufactures. The company should use the dealer model in order to increase the sales and revenue. The company should invest in building the dealer network (“Tesla’s bold approach to advertising: Don’t do it”, 2016).

Price- The price that the car cost is $ 60,000- $1, 00,000 (“Musk Reboots Tesla’s China Strategy”, 2015). The company is targeting the upper middle class and the businessman who can afford to buy the cars.

Distribution- The cars of Tesla are winning all the awards that gasoline cars used to win. The company should invest a huge amount in its research and development programme. The company can tie up with the third party developers and sell the cars through them. The expansion of the operation is very much necessary for the company. The company should employee the commissioned sales person in order to increase the sales of t he company. The transactions that are conducted online for Tesla shall have the option of both physical mode of payment and online mode of payment. The company does not have a stock in hold. The company makes Model S only on orders.  Any of the Tesla cars are not provided for the test-drives until and unless the end-users pay a deposit of $5,000.  In many countries where the buyer cannot see or drive the car even after paying the deposits. The buyer who places the order for the cars wait in line for months or years in getting the delivery. The price for the car that is fixed and not negotiable. The price that the car cost is $ 60,000- $1, 00,000 (“Musk Reboots Tesla’s China Strategy”, 2015). The individual who are paying for buying the Tesla car is not just investing in the car rather investing in the future. Tesla’s story was not on billboards, TV commercial. Tesla lack of advertisement is the big negative for the company.  The site where the cars are manufactured or the office is built are very much clean and tidy (“Ad Age Homepage – AdAge”, 2016). The company should be master in driving and press coverage, reviews and awards for the cars. The company tries to make the best cars and for the promotions of the best cars the company should use different types of the promotions In order to, make the innovations known to the market. The Tesla Motors Inc. should use internet marketing. The company must use e-mail marketing wherein the company can reach to the businessman and the upper middle class. The distribution strategy of the Tesla is much different as compared to the other companies like Ford, Fiat Chrysler, General Motors and many others (“The Secret Tesla Motors Master Plan (just between you and me)”, 2006). The company is using the selling strategy for its cars. The buyers buy and book the car online. Tesla does not have dealers that would help in convincing and selling the cars (“Tesla’s Marketing Strategy: Accelerating the World into Sustainable Transport”, 2015). Not having dealers is actually turn out to be the double edged sword

Marketing Strategy

Promotion- The Company should also make tie-ups with the third party to increase their sales. The company should also drive the big budget campaigns. The company should have tie-ups with the dealers in order to make profits and increase the revenue of the business. However, the dealers earn more by selling the tune-ups, selling services and the add-ons (“Tesla’s China Strategy Could Make It the Apple of the Automobile”, 2016). However, in order to increase the footfalls in the store the staffs should be trained. The staff must be trained and possess the convincing power. The technology used in the cars should be kept on modifying. The software should be kept on modifying to provide the feeling that the car is not just a depreciating lump (“The Secret Tesla Motors Master Plan (just between you and me)”, 2006). The company must take advantage of the social media. The social media plays a vital role in making the people aware of the new product that is being introduced in the market. From the survey, it can be analyzed that the company can penetrate into the market with the help of the social media advertisement (“Tesla’s bold approach to advertising: Don’t do it”, 2016). The shopping of cars is becoming a social experience. Tesla does not spend much of the capital in advertisements so in order to increase the sales and target the market the company should use hoardings and television advertisements (“Ad Age Homepage – AdAge”, 2016). 

References

2013: Tesla’s media strategy: build a brand without spending on advertising – The Mercury News. (2016). Mercurynews.com. Retrieved 20 October 2016, from https://www.mercurynews.com/2013/04/07/2013-teslas-media-strategy-build-a-brand-without-spending-on-advertising/

Ad Age Homepage – AdAge. (2016). Adageindia.in. Retrieved 20 October 2016, from https://www.adageindia.in/Tesla-Generates-Small-Sales-Big-Buzz-Without-Paid-Ads/articleshow/45821863.cms

Elon Musk Has a Marketing Plan. Do You?. (2016). Huffington Post India. Retrieved 20 October 2016, from https://www.huffingtonpost.in/entry/elon-musk-has-a-marketing_b_8499344

Forbes Welcome. (2016). Forbes.com. Retrieved 20 October 2016, from https://www.forbes.com/sites/siimonreynolds/2013/09/01/why-you-should-copy-teslas-way-of-marketing/#53aad45f3c51

Keith O’Brien, E. (2016). Five Marketing Lessons from Tesla. DMN. Retrieved 20 October 2016, from https://www.dmnews.com/marketing-strategy/five-marketing-lessons-from-tesla/article/510913/

McCarthy, M. (2013). Tesla Generates Small Sales, Big Buzz Without Paid Ads. Adage.com. Retrieved 20 October 2016, from https://adage.com/article/news/tesla-generates-small-sales-big-buzz-paid-ads/241994/

Musk Reboots Tesla’s China Strategy. (2015). Bloomberg.com. Retrieved 20 October 2016, from https://www.bloomberg.com/news/articles/2015-03-29/musk-reboots-tesla-china-strategy-as-range-anxiety-crimps-sales

Tesla’s bold approach to advertising: Don’t do it. (2016). San Francisco Chronicle. Retrieved 20 October 2016, from https://www.sfchronicle.com/business/article/Tesla-s-bold-approach-to-advertising-Don-t-6843488.php

Tesla’s Radical Marketing Strategy. (2016). Business 2 Community. Retrieved 20 October 2016, from https://www.business2community.com/marketing/teslas-radical-marketing-strategy-0604838#pi1w7qe1ghLZlWcF.97

Tesla’s $0 Marketing Budget Is Great Marketing. (2016). Word-of-Mouth and Referral Marketing Blog. Retrieved 20 October 2016, from https://www.referralcandy.com/blog/tesla/

Tesla’s China Strategy Could Make It the Apple of the Automobile. (2016). Real Money. Retrieved 20 October 2016, from https://realmoney.thestreet.com/articles/04/21/2016/teslas-china-strategy-could-make-it-apple-automobile

That new Tesla probably won’t be as cheap as you think. (2016). Business Insider. Retrieved 20 October 2016, from https://www.businessinsider.in/That-new-Tesla-probably-wont-be-as-cheap-as-you-think/articleshow/50952835.cms

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