Tesla Marketing Strategy case study

A Marketing analysis for TESLA company in DBA program by Cairo University. It discussing
how TESLA is competing Electric Vehicle Market and advancing the development of such
Sector. In addition, Tesla is taking further steps toward future by inventing futuristic cars
and innovative technology.

Muhammad Eddieb
Logistics and Supply Chain Officer at Hali Pharm
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 Tesla Marketing Strategy case study

1. 1. 2018 By: Muhammad Eddieb Supervised by: Dr. Reham Moawad 12/21/2018 Tesla
Marketing Case Study
2. 2. 1 Tesla Case Study ‘TESLA’S MISSION IS TO ACCELERATE THE WORLD’S
TRANSITION TO SUSTAINABLE ENERGY’. Tesla was founded in 2003 by a group of
engineers who wanted to prove that people didn’t need to compromise to drive
electric – that electric vehicles can be better, quicker and more fun to drive than
gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely
scalable clean energy generation and storage products. Tesla believes the faster the
world stops relying on fossil fuels and moves towards a zero-emission future, the
better. Launched in 2008, the Roadster unveiled Tesla’s cutting-edge battery
technology and electric powertrain. From there, Tesla designed the world’s first ever
premium all-electric sedan from the ground up – Model S – which has become the
best car in its class in every category. Combining safety, performance, and efficiency,
Model S has reset the world’s expectations for the car of the 21st century with the
longest range of any electric vehicle, over-the-air software updates that make it
better over time, and a record 0-60 mph acceleration time of 2.28 seconds as
measured by Motor Trend. In 2015, Tesla expanded its product line with Model X,
the safest, quickest and most capable sport utility vehicle in history that holds 5-star
safety ratings across every category from the National Highway Traffic Safety
 Administration. Completing CEO Elon Musk’s “Secret Master Plan,” in 2016, Tesla
introduced Model 3, a low-priced, high-volume electric vehicle that began
production in 2017. Soon after, Tesla unveiled the safest, most comfortable truck
ever – Tesla Semi – which is designed to save owners at least $200,000 over a million
miles based on fuel costs alone. All Tesla vehicles are produced at its factory in
Fremont, California, where the vast majority of the vehicle’s components are also
made. To achieve our goal of having the safest factories in the world, Tesla is taking a
proactive approach to safety, requiring production employees to participate in a
multi-day training program before ever setting foot on the factory floor. From there,
Tesla continues to provide on-the-job training and track performance daily so that
improvements can be made quickly. The result is that Tesla’s safety rate continues to
improve while Model 3 production ramps. To create an entire sustainable energy
ecosystem, Tesla also manufactures a unique set of energy solutions, Powerwall,
Powerpack and Solar Roof, enabling homeowners, businesses, and utilities to
manage renewable energy generation, storage, and consumption. Supporting Tesla’s
automotive and energy products is Gigafactory 1 – a facility designed to significantly
reduce battery cell costs. By bringing cell production in-house, Tesla manufactures
batteries at the volumes required to meet production goals, while creating
thousands of jobs. And this is just the beginning. With Tesla building its most
affordable car yet, Tesla continues to make products accessible and affordable to
more and more people, ultimately accelerating the
3. 3. 2 advent of clean transport and clean energy production. Electric cars, batteries,
and renewable energy generation and storage already exist independently, but when
combined, they become even more powerful – that’s the future we want. Marketing
Strategy of Tesla Mission and Vision: The vision and mission statement of Tesla
reflect the company’s aim for dominance in the global electric vehicles and battery
market. Tesla’s mission statement: “to accelerate the world’s transition to
sustainable energy”. It believes that the faster the world stops relying on fossil fuels
and moves towards a zero-emission future, the better it will be for the world. The
vision statement: “to create the most compelling car company of the 21st century by
driving the world’s transition to electric vehicles”. Tesla wants to accelerate the
advent of sustainable transport by making products accessible and affordable to
more and more people ultimately leading to clean transport and clean energy
production. Tesla focuses on bringing compelling mass market electric cars to market
as soon as possible. Market analysis in the marketing strategy of Tesla: Tesla Internal
Analysis SWOT analysis of Tesla Motors Tesla Motors is a new age automotive
company which manufactures alternative energy vehicles like solar- powered cars,
hybrid vehicles, and battery-operated vehicles. A pioneer of sustainable energy
options Tesla Motors is backed by a very strong research and development team and
is considered to be a benchmark in green technologies. Strengths in the SWOT
analysis of Tesla Motors The following are the strengths of Tesla: Technology: Tesla
has always been associated with cutting-edge technologies and many companies
have adopted the technologies introduced by Tesla. Some examples of top brands
which have used Tesla technologies include Daimler which uses Tesla’s battery
packs; Mercedes-Benz a user of Tesla powertrain; Toyota with Tesla motor. In fact,
pioneers like GE have set up trackers which keep track of Tesla’s innovations.
4. 4. 3 • Political and government support: The company has ample support from the
government. The company had obtained a USD 465 billion for energy management
projects under the US Department of Energy. Tesla started its operations at the right
time when Obama had launched the clean tech initiative and this resulted in the
company gaining a lot of advantages from the government. • Monopoly: Tesla
Motors started off targeting a very niche segment which was electric and alternate
energy cars. The strategy was to move deeper into the existing segment and it would
not be wrong to say that the company operates in a monopoly market. This has
helped it gain steeper growth than most of its counterparts. • Great leadership and
team spirit: The CEO of the company Elon Musk is extremely passionate about
engineering and an astute salesman. This makes equally proficient in the engineering
as well as the commercial side of the business. The CEO is backed by a team that is
highly spirited and as passionate about the cause as their leader. The leadership style
of Musk which is motivating and inspirational along with a highly self-driven team is
a success factor for Tesla. • Distribution channel: Tesla understand how critical
distribution may be for the business and this makes Tesla own their own distribution
channel. There are also some capacity expansion plans from Tesla which has been
triggered by Giga factory. Weaknesses in the SWOT analysis of Tesla Motors Some of
the key weaknesses of Tesla Motors are: • Poor liquidity: In comparison to
competitors like Ford which has USD 20 billion, General Motors with USD 25billion or
Fiat Chrysler Automobiles USD 40 billion which are cash rich from years and years of
operations. In comparison to this Tesla has only USD 3 billion which will not be
sufficient for it to survive. • Capacity Issues: Tesla manufactures cars in just one plant
which is located in Fremont, California. The plant has a capacity to make 500,000
vehicles and the maximum production of the company is limited to this figure
making it difficult for the company to target higher volumes. • Poor customer
awareness: Tesla makes very specialized products which are essential for the
environment because of their sustainability angle. But these products are highly
futuristic and most customers are still not sure about whether or not they need to
invest in these technologies which are expensive as well. Opportunities in the SWOT
analysis of Tesla Motors Some of the opportunities include: • Preference for new
technologies: Vehicle technology is taking a whole new turn and there are a host of
new technologies like hybrid vehicles, green cars, electric cars, battery operated cars
and self-driven autonomous cars. Tesla has researched and launched many products
in these emerging technology areas. Threats in the SWOT analysis of Tesla Motors
Threats are those factors in the environment which can be detrimental to the growth
of the business. Some of the threats include:
5. 5. 4 • Competition: Tesla faces a lot of competition from various car companies like
Ford, General Motors, Fiat Chrysler Automobiles, as well as technology companies
like Google. Tesla External Analysis (PESTEL) The PESTEL Analysis is a strategic
management tool that determines the effects of the industry’s remote or macro-
environment on the company. Tesla’s case involves the remote or macro-
environment of the automotive industry, the energy generation industry, and the
energy storage industry. These industries’ external factors influence other
determinants of the business, such as customers and community-based
organizations. For example, Tesla Inc.’s customer base and market share depend on
factors like the cost- effectiveness of technologies in the transportation sector. With
 a strong brand image and improving profitability, the company can enhance its long-
term success by including the results of its PESTEL analysis in strategic formulation.
Tesla, Inc.’s electric automobile, battery, and solar panel sales revenues are
increasing, despite competition with large firms, such as automobile manufacturers
like General Motors Company, Honda Motor Company, Toyota Motor Corporation,
Volkswagen, Nissan Motor Company, and BMW (Bavarian Motor Works). This
condition indicates effectiveness in addressing the external factors in the remote or
macro-environment of the business. Political Factors Affecting Tesla’s Business 1.
Governmental incentives for electric automobiles (opportunity) 2. New global trade
agreements (opportunity) 3. Political stability in the majority of major markets
(opportunity) Tesla, Inc. has the opportunity to strengthen its financial performance
through incentives from governments. This external factor directly relates with the
minimized carbon emissions of the company’s operations and products. In addition,
this PESTEL analysis determines that expanding free trade agreements open
opportunities for the company to expand its operations internationally. On the other
hand, the political stability of major markets makes the remote or macro-
environment favorable to Tesla’s generic competitive strategy and intensive growth
strategies, which include market penetration. In this part of the PESTEL analysis of
Tesla, political external factors present opportunities for growing the automotive
business. Economic Factors 1. Decreasing battery costs (opportunity) 2. Decreasing
renewable energy costs (opportunity) 3. Economic stability issues (threat) Tesla’s
business performance benefits from lower battery costs. For example, this external
factor translates to affordability of the company’s electric automobile products. This
PESTEL analysis also considers decreasing renewable energy costs as an external
factor that makes Tesla’s products more attractive. The business improves as
renewable energy solutions become more popular. However, economic stability
issues threaten the company’s financial performance, especially in Europe and Asia.
This part of the PESTEL analysis of Tesla, Inc. highlights major opportunities for
growth, despite the threat of economic instability in the remote or macro-
environment of the automotive industry.
6. 6. 5 Social Factors 1. Increasingly popularity of low-carbon lifestyles (opportunity) 2.
Increasing preference for renewable energy (opportunity) 3. Improving wealth
distribution in developing markets (opportunity) This company analysis shows
opportunities to grow the multinational automotive business. For example, Tesla Inc.
has growth opportunities based on the rising popularity of low-carbon lifestyles and
increasing preference for renewable energy. In the PESTEL analysis framework, these
external factors improve market demand for the company’s electric vehicles and
related products. In addition, Tesla has an opportunity to boost its financial
performance based on the increasing wealth distribution in developing markets. This
wealth distribution trend increases the population of potential buyers of the
company’s relatively expensive cars. In this part of the PESTEL analysis, Tesla Inc. can
grow its business internationally, based on sociocultural opportunities in its remote
or macro-environment and it already started to enter global markets as well as
developing markets such as Egypt. Technological Factors 1. High rate of technological
change (opportunity & threat) 2. Increasing automation in business (opportunity) 3.
Increasing popularity of online mobile systems (opportunity) The high rate of
technological change is an opportunity and threat in this business analysis. The high
 rate presents opportunity for Tesla to enhance its products’ technologies. However,
the same external factor threatens the company in terms of the potential rapid
obsolescence of technologies used in its products. Nonetheless, increasing business
automation is a trend that creates opportunities in this PESTEL analysis case. For
example, Tesla has growth opportunities through further automation of its business
processes. In addition, the increasing popularity of online mobile systems should
prompt the company to increasingly integrate these systems in its automobiles. The
technological condition of the remote or macro-environment, as shown in this part
of the PESTEL analysis of Tesla, Inc. emphasizes opportunities for growth based on
technological enhancement. Environmental Factors 1. Climate change (opportunity)
2. Expanding environmental programs (opportunity) 3. Rising standards on waste
disposal (opportunity) This PESTEL analysis considers ecological factors as significant
forces on Tesla, Inc.’s industry environment. For example, the company has
opportunities to promote its electric vehicles based on concerns on climate change,
expanding environmental programs, and rising standards on waste disposal. The
company’s electric vehicles, batteries and solar panels are considered suitable in
directly addressing these external factors linked to business sustainability and
environmentally friendly products. This part of the PESTEL analysis shows that Tesla
has significant growth opportunities based on the nature of its products.
7. 7. 6 Legal Factors 1. Expanding international patent protection (opportunity) 2.
Energy consumption regulations (opportunity) 3. Dealership sales regulation in the
United States (opportunity & threat) Tesla has opportunities to safely expand its
business overseas, considering expanding international patent protection. In
addition, this PESTEL analysis identifies the opportunity to promote the company’s
electric vehicles and energy solutions products, based on energy consumption
regulations that client organizations must follow. Also, the business has an
opportunity to grow through direct sales, which is allowed in many states in the U.S.
However, based on the SWOT Analysis of Tesla, Inc., this external factor is also a
threat, considering that other states do not allow direct sales and, instead, require
dealerships to transact with customers in the automotive market. The legal
conditions of the remote or macro-environment shown in this part of the PESTEL
analysis point out that Tesla can expect growth opportunities. Competition Analysis
The global EV market is predicted to grow at a compound annual growth rate of
21.4% between 2018 & 2026 according to ReportBuyer. Tesla still rules the EV
market in the USA, Tesla sold three of the country’s five best-selling EV’s first four
months of 2018. Tesla’s competitors are Toyota’s Prius Prime plug-in hybrid and
General Motors’ Chevy Volt. Both lack Tesla’s brand appeal, however, Tesla is
struggling with a production bottleneck. According to McKinsey Research, China has
increased its lead in EV production and the country has the largest fleet of EV on the
road and has overtaken US market for the first time. China now accounts for half of
the EV sold worldwide. Even though Tesla is not able to meet its production goals it
is predicted to account for over 605 of all EV sales in the US. In order to understand
the volume of competition and its effects on TESLA Inc its urgent to discuss Porter’s
Five Forces Analysis. Porter’s Five Forces Analysis Michael Porter developed the Five
Forces Analysis model as a strategic management tool to understand the impact of
external factors on firms and the competitive landscape of their industry
environment. This Five Forces analysis of Tesla looks into the external factors
 significant in the automotive industry and the energy solutions industry, and how
such factors affect the company. As one of the biggest players in the electric vehicle
market, Tesla must effectively address such external factors to ensure its long-term
competence and resilience in the face of competitive rivalry involving automakers
like Honda Motor Company, General Motors Company, Ford Motor Company,
Volkswagen, Toyota Motor Corporation, Nissan Motor Company, and BMW
(Bavarian Motor Works). Tesla must ensure that it addresses external factors
according to the intensity of the forces impacting the business, as shown in this Five
Forces analysis: 1. Competitive rivalry or competition (Strong Force) 2. Bargaining
power of buyers or customers (Moderate Force) 3. Bargaining power of suppliers
(Moderate Force) 4. Threat of substitutes or substitution (Moderate Force) 5. Threat
of new entrants or new entry (Weak Force)
8. 8. 7 Competitive Rivalry or Competition with Tesla, Inc. (Strong Force) Tesla, Inc.
operates in a highly competitive market. This aspect of the Five Forces Analysis
outlines the influence of competition on the automotive and energy solutions
industry environment. In this case of Tesla, the external factors and their intensities
responsible for the strong force of competitive rivalry are as follows: • Small number
of firms (weak force) • High aggressiveness of firms (strong force) • Low switching
costs (strong force) There are only a small number of firms operating in the
automotive market. In Porter’s Five Forces analysis framework, this external factor
limits the effect of competition on companies like Tesla, Inc. However, these firms
are generally aggressive in innovating and promoting their products. For example,
large automotive companies have aggressive marketing campaigns. Tesla’s
marketing mix or 4Ps partly meets such aggressiveness, which strengthens the
effects of competitors against the business. Also, the low impediments for customers
to buy cars from other manufacturers (low switching costs) further strengthen the
force of competition. This aspect of the Five Forces analysis of Tesla Inc. points to
competitive rivalry as a high-priority strategic management consideration in the
automotive and energy solutions industry environment. Bargaining Power of Tesla’s
Customers/Buyers (Moderate Force) Tesla’s customers are a direct factor that
determines the company’s sales revenues. The following external factors and their
intensities maintain the moderate force of the bargaining power of customers on the
company: • Low switching costs (strong force) • Moderate substitute availability
(moderate force) • Low volume of purchases (weak force) Low switching costs
reduce barriers for Tesla customers to purchase cars from other providers. In the
context of this Porter’s Five Forces analysis, this external factor imposes a strong
force against the company and other players in the automotive industry
environment. However, the availability of substitutes is only moderate in many
cases, thereby limiting customers’ bargaining power against Tesla Inc. For example,
many customers in suburban areas have limited access to public transportation,
making it more practical to drive their own car. In addition, the low volume of
purchases (each customer buys and keeps only one or a few cars) reduces the
influence of customers on Tesla. Thus, the intensities of the external factors in this
aspect of the Five Forces analysis reflect the bargaining power of customers as a
moderate force and a secondary management priority. Bargaining Power of Tesla’s
Suppliers (Moderate Force) Tesla Inc.’s business depends on the reliability of
suppliers. This aspect of the Five Forces Analysis shows how suppliers shape the
 industry environment by influencing the availability of materials that firms need. The
intensities of the external factors that create the moderate force of the bargaining
power of Tesla’s suppliers are as follows: • Moderate forward integration (moderate
force) • Moderate size of suppliers (moderate force)
9. 9. 8 • Moderate supply level (moderate force) Tesla Inc.’s suppliers have a low level
of forward integration. This external factor refers to suppliers’ limited control in the
distribution and sale of their products. For example, some suppliers use third parties
to sell their materials to Tesla, while others directly transact with the company. In
the framework of Porter’s Five Forces analysis, this external factor imposes a
moderate force on the corporation. In addition, most of these suppliers are
moderately sized, thereby having limited influence on the automotive industry
environment. Another external factor is the moderate level of supply, which
empowers suppliers to affect Tesla, but only to a limited degree. This aspect of this
Porter’s Five Forces analysis of Tesla Inc. indicates the bargaining power of suppliers
as a secondary strategic management priority. Threat of Substitutes or Substitution
(Moderate Force) Tesla, Inc. experiences the impact of substitutes on the
automotive and energy solutions industry environment. In this aspect of the Five
Forces Analysis, the intensities of the external factors that lead to the moderate
force of the threat of substitution against the company are considered, as follows: •
Low switching costs (strong force) • Moderate substitute availability (moderate
force) • Moderate performance of substitutes (moderate force) As pointed out in
the other aspects of this Porter’s Five Forces analysis of Tesla Inc., low switching
costs enable competition. In this external analysis case, the low switching costs
enable substitutes, such as public transportation, to easily attract customers. This
external factor imposes a strong force against Tesla’s industry environment.
However, the moderate availability of substitutes limits such influence of suppliers.
For example, customers have only a moderate and limited number of substitute
options in the market. In relation, many substitutes have only a moderate level of
performance in satisfying customers’ practical needs. For instance, public
transportation is not as versatile as a private car. This condition further limits
substitutes’ force against Tesla. In this aspect of the Five Forces analysis of Tesla,
Inc., the external factors point to the threat of substitution as a secondary
management consideration in the company’s strategies. Threat of New Entrants or
New Entry (Weak Force) New entrants are new firms, which impact the industry
environment and determine the performance of companies like Tesla Inc. This
aspect of the Five Forces analysis identifies the intensities of the external factors that
create the weak force of the threat of new entry, as follows: • High cost of brand
development (weak force) • High cost of doing business (weak force) • High
economies of scale (weak force) Tesla’s business is difficult to compete with,
especially because of the high cost of brand development, along with the popularity
of Elon Musk. For example, it is difficult for new entrants to match the company’s
strong brand, which is one of the strengths enumerated in the SWOT analysis of
Tesla Inc. This external factor is an entry barrier in the context of Porter’s Five Forces
analysis. In addition, automobile manufacturing has high costs, which impose a
barrier to new firms. Also, established players like Tesla
10. 10. 9 benefit from increasing economies of scale, which new entrants can only
achieve upon exceeding a production threshold. Based on the external factors in this
 aspect of the Five Forces Analysis, the threat of new entry is only a minor strategic
management concern in Tesla Inc.’s industry environment. Competitive advantage in
the marketing strategy of Tesla: 1) Driven by Technology: More than an automotive
company, Tesla is a technology company building technology platforms. Betting on
Tesla technology is betting on new technology. The company not only sells cars but
has also built the infrastructure necessary to support the operation of those cars. It
has built the network of superchargers, battery swap stations, and service stations.
Tesla is on track to deliver full autonomous driving capability earlier than many cars
manufactures by leveraging the billions of miles’ worth of driving data that Tesla has
been gathering. 2) Tesla’s reputation: This can be considered as one of the intangible
strengths of the company. Tesla’s Roadster transformed the image of electronic
vehicles from small slow vehicles, into blindingly fast vehicles of desire. It provided
an acceleration with a 0 to 60 mph that could beat superior cars. Tesla then
produced the cheaper Model S sedan that ended up winning just about every big
auto award. With the reputation for excellence, it has created an impressive brand
image. 3) Diversifying its business: Tesla seems to be diversifying its business and
entering into the market of Solar roof tiles as it complements with the business of
rechargeable lithium-ion battery which provides homes with the storage of solar
captured energy. BCG Matrix in the marketing strategy of Tesla: Model 3 is the
combination of design, style, convenience, and moreover safety. It has been priced
as the least expensive model developed. The official launch and delivery of the first
30 cars said to be on July 28, 2018. So, the Model 3 belongs to the question mark
category of the BCG matrix. Model S is a beautiful model which is packed with
functionality, convenience, and safety along with style and energy. It is said that it
has crushed large luxury car competition in the USA. Out of 10 large luxury car
models, the Tesla Model S gobbled up a notable 34% of sales. Thus, it belongs to the
star category of the BCG Matrix.
11. 11. 10 Model X is a long-range SUV. It has unique designs with falcon wings that give
the vehicle a unique and luxurious look and feel. Tesla is said to be pushing back its
production schedule for the Model 3. The sales for Model X and Model S sales are
soaring but Tesla is still struggling with Model 3 production. This puts the Model 3 in
the Dog category of the BCG matrix. Tesla Segmentation, targeting, positioning While
segmenting the market Tesla didn’t ask which segment is the most fuel-conscious
but which segment enabled the company to build long-term and innovative model
vehicles. It didn’t choose the small car segment. The segment of choice was the
lower volume, the price-insensitive performance-car segment which enabled them
to create a brand identity, establish premium pricing and earn significant unit gross
margins by targeting the rich and affluent who are willing to spend more compared
to their vehicles. Since 2015, Tesla has been selling an all-electric luxury SUV, which
has done relatively well in the market and has delivered the record of 100,000
vehicles for 2017. Tesla’s unique positioning in the car market is one of its biggest
strengths. Tesla not only sells cars but also sells technology. It positioning statement
was “the only stylish car that can go from 0 to 100 in 3 seconds without a drop of
oil”. Customer analysis in the marketing strategy of Tesla: The typical customers of
the brand are business executives and entrepreneurs who are tech-savvy, green-
friendly and wealthy. The customers are mostly males looking for luxury cars.
According to Investopedia, the buyer’s profile are around 83.9% male and 16.1%
 female. 77% of the buyers have income over $100,000. According to the registration
data of Model X, it tells that wealthy and younger customers are buying Tesla’s
crossover SUV. It is predicted that the Model X, will have even wider consumer reach
due to its affordability factor. Marketing mix of Tesla Motors Tesla Motors, currently
known as Tesla Inc is a public limited company of American origin. It deals in energy
storage products and is associated with the automotive industry. Tesla Motors was
founded in the year 2003, 1st July by its esteemed co-founders JB Straubel, Elon
Musk, Ian Wright, Marc Tarpenning and Martin Eberhard. The company faces stiff
competition in automobile sector from several rival companies and some of them
are as follows- GM, Nissan, Volkswagen, SAIC, FAW Group, Dongfeng, BAIC, NIO,
Federal Signal, and WBC. 1. Product in the Marketing mix of Tesla Motors Tesla
Motors is an independent automaker that offers a wide range of products made
from the latest technology. It adheres to a B2B model which encourages partnership
with other companies by supplying products as well as services and also the B2C
model by offering luxury, family and mass market vehicles. It is a well-known
distributor, manufacturer, developer and designer of eco-friendly products and also
offers related services to other automotive companies. Major product manufactured
by this international corporation is electric-sedan powered by the battery. Besides
this, it also produces sustainable-energy technologies and supercharging stations.
12. 12. 11 2. Place in the Marketing mix of Tesla Motors Tesla Motors caters to a
worldwide audience via its headquarters based in Palo Alto in the United States. It
has a wide sales and distribution network of its own that includes stores in Asia,
Europe, Australia, South Korea, Dubai and North America. One of the largest markets
of Tesla for electric vehicles is in China and in October 2017 in an agreement with
the government of China, a manufacturing plant was to be opened at Shanghai. By
May 2017, this international company operates via eight outlets in Canada including
cities like Montreal and Ontario. Tesla laid its foundation from San Carlos in
California and later built retail outlets in Los Angeles and Manhattan. By October
2016, there were two hundred and sixty retail locations in the United States alone.
June 2016 saw a store-within-store in Los Angeles. In the United States, several
galleries and stores are set up at shopping malls to gain maximum brand exposure.
Tesla Motors has its own website for selling products to interested customers. The
company has followed a direct-to-consumer sales approach via its service centers
and stores. Inspections and services are offered at their own service stations. Its
manufacturing facility is at Fremont, situated in California. Other assembly plants are
spread far and wide like Gigafactory 1in Nevada and Giga factory 2 in Buffalo at New
York. Instead of using a typical dealer system, Tesla has decided to market its
vehicles through online portals and via company showrooms. One of its important
R&D department is at Athens in Greece. 3. Price in the Marketing mix of Tesla
Motors At the end of the fiscal year 2017, Tesla Motors posted revenues of 11.76
billion US$ with its net income at -2.24 billion US$ and total assets of 28.66 billion
US$. Tesla Motors initially decided to target wealthy buyers making a conscious
decision to capture larger markets later on with lower-pricings. Hence at its onset, it
adopted a premium pricing strategy and maintained high prices for its premium
products. This was for a niche market that was more interested in high-quality
products with the latest technology irrespective of its price range because they could
easily afford such products. Later on, the company launched affordable products
 keeping in mind the mid-scale general consumers. It wanted to capture a large part
of the consumer market and hence adopted a reasonable pricing strategy. This was a
huge success as it was able to sell a greater number of products and this resulted in
higher profit margins and greater revenues. 4. Promotions in the Marketing mix of
Tesla Motors In the year 2017, Tesla Motors approved a budget of 52 US dollars for
marketing purposes and used word of mouth and referral program to attract buyers.
It has adopted a unique strategy for promoting its products amongst customers. This
multinational company also takes the help of media releases and its PR team to
create positive brand awareness. As part of its PR activities, its surcharging stations
on highways and charging ports at malls, hotels, and restaurants have brand name
Tesla written over them. In order to create mass awareness, Tesla has taken the help
of social platform. It deals highly via its website, blog, forums and hence uses online
platforms for marketing purposes. It always creates a viral buzz at the
13. 13. 12 launch of any new product. More than one hundred and fifty videos are
uploaded on its official channel via YouTube with nearly 364k followers showing
great features of their vehicles. Latest information along with features,
specifications, safety measures, warranty, new software is updated at regular
intervals on its official website for interested customers. Tesla uses its Facebook
page for maximum benefit and has more than 2.2 million followers. Discussions are
held periodically on this social medium about various products and technology. The
company also connects with its fans via Twitter successfully as it has more than 1.73
million followers on its Twitter account. CEO Elon Musk is the public face of the
company and he actively participates in several interviews and talk shows. This helps
in gaining positive visibility and recall value of the brand name. Brand equity in the
marketing strategy of Tesla: Tesla has a market cap of nearly 60 billion even though
it consistently failed to meet production targets and spends billions of dollars a year.
Tesla as a brand is more than just a car manufacturer, it is a vision of the future. The
face of the brand for Tesla is the CEO himself, Elon Musk, who is a noted
entrepreneur and an influencer. Part of a reason why it is impossible to separate
Elon Musk’s brand from Tesla is that of how responsive he is to the Tesla users who
reach out to him and his presence is largely felt on the social media. Tesla has
consistently proven to care about user experience which has helped shape a public
perception about the brand. Word of mouth has been a powerful driver for Tesla’s
growth with fervent supporters who don’t even own a Tesla but support the idea
and vision of Tesla. Tesla used several channels to reach its customers and make
them aware of the TESLA brand. These are examples of channels and strategies used
by Tesla which include: Mobile Videos, Mobile Apps, Social Media, and Showrooms.
1. Mobile Videos While Tesla does not currently "advertise" their products in the
tradition sense, they have done a marvelous job marketing their vehicles. Through
viral videos, word-of-mouth, their unique storefronts, and their overall superior
product, Tesla has quickly placed its name amongst the luxury automotive titans. 2.
Mobile Application Tesla's mobile application is just another example of the
innovative technology coming out of this company. With the application in your
mobile you have the full control over Tesla Car and can track every small info which
is not available with other competitors and that gives Tesla a competitive edge over
their rivals a Tesla is not only selling cars but Technology. 3. Social Media An example
of unique marketing is CEO Elon Musk's twitter page, and the massive amount of
 support he receives and awareness he creates there. After a string of mysterious
tweets about the new "D" Tesla, Musk sat down to discuss the innovations they are
bringing to the auto market in the coming years.
14. 14. 13 4. Showrooms Tesla is the only major car producer in the world who does not
sell their cars through third party vendors (this is one of the ways they keep cost
down). Instead of selling their vehicles to dealerships who then in- turn sell them for
a profit, Tesla are exclusively purchased from their online store. For those potential
customers who want to look at the product in person, Tesla has reached an
alternative. Across the country in malls, and various retail locations, Tesla has set up
show rooms to showcase their vehicles. Here there are trained Tesla employees that
will answer any questions about their products. Here is the analysis of Tesla Brand
Equity Factors: Brand Associations: Tesla is concerned to the environment to go
green and committed to preserving the energy for the future through producing
energy efficient electric automobiles. It manufactures cars which do not pollute the
environment. If anything goes wrong with the electric vehicles, all you need to do is
to upgrade the software which is less time-consuming. Although Tesla has no brand
ambassadors, many of its vehicle owners include the celebrities who are Leonardo
DiCaprio, Brad Pitt, Matt Damon. Brand Awareness: Tesla has no advertising
department and does not spend any money on the promotional campaigns. It uses
social media platforms to connect with the customers on deeper levels. The
company creates a buzz among the people through its blogs and social media pages
using minimal cash flow. Tesla depends on word-of-mouth marketing and this
method tremendously increased the brand awareness among the people. Tesla has
declared partnerships with Toyota and Daimler. It also started working with
Panasonic as partners in the battery and solar panel R&D department. Brand Loyalty:
Tesla Inc., founded by a group of engineers to prove that people can drive electric
vehicles in a better and quicker manner than the gasoline cars. The company is
emotionally connected with its consumers by manufacturing the electric
automobiles to solve the earth’s energy problems. In fact, Tesla got the highest
owner satisfaction score in Customer Reports. Tesla shows transparency to the world
which is a key to create lasting brand loyalty. The company communicates with its
consumers through various mediums and has built a great relationship with them.
Brand Assets: Tesla, Inc., previously called Tesla Motors, is an American company
that deals in electric automobiles, solar panel production, and energy storage. It was
founded in 2003 and headquartered in California, US. In 2016, Tesla’s total assets
were recorded to be of $22.66 billion. The company also specializes in lithium-ion
battery energy storage, domestic photovoltaic panels, and sells Tesla Powerpack and
Tesla Powerwall batteries. In 2015 and 2016, Tesla’s Model S was the world’s best-
selling plug-in electric car. The company passed 300,000 vehicles production in 2018.
Tesla operates multiple factories and plants for making vehicles and their parts.
Some of the Tesla subsidiaries are SolarCity, Tesla Finance LLC, Silevo LLC, Tesla
Motors Leasing, Inc, and Arpad Solar Borrower LLC.
15. 15. 14 References: 1) https://www.tesla.com 2) https://www.brand-equity.net 3)
www.finance.yahoo.com 4) www.marketwatch.com 5) www.marketing91.com 6)
www.warc.com 7) www.statista.com 8) www.brandastic.com 9)
www.teslabrand.weebly.com 10) www.forums.tesla.com 11) www.studylib.net 12)
www.research-methodology.net 13) http://panmore.com