Global Marketing Report 1

SUMMATIVE ASSESSMENT 1: INDIVIDUAL INVESTIGATIVE REPORT

Name

Course

Professor

Due Date
 Global Marketing Report 2

Historical and Current Perspective on EV Consumption: Global and South African

Market

Green vehicles are not a new phenomenon in the automobile industry. However, the

biggest milestones have been achieved in the past three decades. According to Adnan et al.

(2016), one of the driving factors that has fuelled this growth is the socio-cultural change in

socio-cultural factors such as consumers' lifestyles, buying habits, education, religion, beliefs,

values, demographics, social classes, and attitudes that favor the suitability of electric vehicles to

emerging market needs. The growing inequality combined with the increasing frequency of

ecological disasters such as hunger, drought, and climate change has driven increased awareness

among different stakeholders about the inevitable link between unethical production and

consumption and environmental and social degradation (Charm et al., 2022). This social trend

has transformed all industries including the automobile industry. The growing awareness

concerning the impact of oil and gas products has fuelled the emergence of an eco-friendly

consumer segment, driving the acceptance and use of electric vehicles globally. From a

stakeholder theory perspective, sustainability, which is an extension of the stakeholder

perspective that links societal, ecological, and economic goals more explicitly, has influenced

sustainable consumption to become a driver of innovation and growth in the EV sector.

Electric vehicles offer various benefits over conventional fuel-based vehicles such as low

operational cost, zero carbon emission, and others as they source energy from electricity.

Consumers' changed attitude towards electric vehicles is augmenting the market growth as they

are more concerned about environmental pollution. As a result, beginning in 2010, the EV sector

has seen significant growth as EVs penetrated the mainstream market to reach 6.6 million units

in 2021, accounting for 8.6% of the global automobile market. This growth has propelled the
 Global Marketing Report 3

global EV market to a value of $280.2 billion, which is expected to remain on a growth

trajectory of 24% CAGR to reach $1.57 trillion in 2029 (Iea, 2022). This market growth is

concentrated in Asia (China), the US, and Europe which account for 87% of the global EV

market. However, the South African EV market presents unique characteristics as one of the

most promising emerging markets under BRICS, a grouping of five major economies. In the

same period, the EV market in South Africa is projected to grow by 30.27% (2022-2027)

resulting in a market volume of US$85.31m in 2027 (GreenCape, 2021). The exponential growth

pattern may be indicative that a paradigm shift is underway, highlighting the current

opportunities for electric vehicles.

Figure 1: Global EV sales between 2010 and 2021 (Iea, 2022)

Despite the size and growth opportunities in the EV segment, it is noteworthy to consider

the challenges facing the mass adoption of EVs, despite their suitability as a sustainable

alternative to fossil fuels. Undercoffler (2019) argues that a minuscule 8.6% market is a result of

two mutually acting factors: consumer acceptance and industry capabilities. These include
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factors such as the lack of charging infrastructure, concerns around EV performance, EV

availability, and affordability of EVs (Fortune Business Insights, 2022). From a theoretical

perspective, these factors can be explained using the Unified Theory of Acceptance and Use of

Technology (UTAUT). UTAUT explains that performance expectancy, norms, and effort

expectancy combined with individual difference variables such as age, gender, and income

moderate user acceptance resulting in different levels of acceptance (Sovacool, 2017).

Understanding these theoretical concepts is critical to determine the most sizable and actionable

target market to ensure Tesla’s success in South Africa.

Strategic Rationale: Opportunity Context for Marketing Tesla in South Africa

In the last decade, Tesla has been viewed as a market leader in the global electric vehicle

market. Nonetheless, the EV sector has seen dynamic changes fuelled by advancing client needs

and an expanded number of agile contenders that have affected the organization's market

situation. Despite its dominance, the growth opportunities in the EV market have not been

exclusive to Tesla. Therefore, despite growing its deliveries by 180% between Q3 2020 and Q3

2022, the company's share of the BEV market dropped from 25.1% in Q3 2020 to 15.6% in Q3

2022 (Patton, 2022). Firms facing market decline must leverage an offensive strategy to mitigate

the weakness from becoming a future threat to its business model (Lee & Park, 2021). This

requires Tesla’s expansion beyond its current market, to find growth opportunities in emerging

markets. Given its success in its existing markets, Tesla can create a sustainable business and

marketing campaign in South Africa.

As one of the leading emerging markets, there is an exponential growth pattern in its EV

market that may be indicative that a paradigm shift is underway, highlighting the current
 Global Marketing Report 5

opportunities for electric vehicles. The country has the most advanced EV mobility market in

Africa, with an estimated 1,000 EVs. Nearly 218 new EVs were sold in South Africa in 2021, a

137% increase from 2020 (Du Toit, 2022). Besides, more than 2,000 hybrid and plug-in hybrids

have been sold in 2022 (Du Toit, 2022). A summary of recent sales trends is provided in figure 2

below. These market factors and Tesla’s strategic positioning provide an overarching strategic

rationale for the investigative report.

Figure 2: EV sales trend (Du Toit, 2022)

Target Market

Based on the IMC process model, the first step in developing an IMC strategy is

identifying the target market. The identified target market for Tesla in South Africa has been

identified as male and female business executives aged between 25 and 44 earning more than

$3,500 monthly (R63,000). According to Lambley (2022), there are an estimated 462 000 people

(2.9%) earn more than R63, 000 and 242 000 people (1.6%) earn more than R83, 300. Nearly

90% of these employees work in white-collar jobs in the country’s high-growth private sector

which is supported by a blend of large domestic and multinational firms. This target market is

spread across the country’s three most populated cities: Durban, Johannesburg, and Cape Town

(Lambley, 2022). This demographic size presents an actionable market that can sustain Tesla in
 Global Marketing Report 6

South Africa. Besides, its distribution across unique geographic locations can maximize

marketing efficiency and effectiveness.

With the cheapest Tesla starting at $40,000, this upper-income segment provides an

actionable market for Tesla that can afford this premium product in emerging markets. This

market segment comprises 46% of the country’s high-income population at the growth or peak

periods of their careers (Lambley, 2022). It is less price-sensitive with a luxurious buying

behavior using Tesla to express its style and prestige. According to Raghu (2013), modern luxury

vehicle consumers are characterized by unique psychographic traits that mostly include

aspiration, success, exploration, and environmental consciousness. This is well reflected in this

target market comprising successful professionals and high-income earners. These behavioral

and psychographic characteristics of luxury car consumers in South Africa show positive

prospects of developing a highly engaged and loyal market share among South Africa’s affluent

male and female business executives.

Competitor Analysis

According to Redda et al. (2021), the government’s incentives have supported foreign

direct investment in its automobile industry making it a relatively competitive industry in the

global market. As a result, the country has one of the most competitive markets with a wide

range of manufacturers targeting similar markets, giving it a wild choice to market-size ratio.

Tesla faces direct and indirect competition from global manufacturers such as Toyota, Nissan,

Volkswagen, and Ford, JSE-listed groups Motus, Mercedes, and BMW. A critical analysis of this

market shows it exhibits characteristics of an oligopolistic market, whereby a handful of

interdependent companies dominate large market share (Krugman & Wells, 2021). As shown in
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figure 3, Toyota and Volkswagen control nearly 40% market share (MarkLines, 2022).

Oligopolistic markets are characterized by intense competition from manufacturers that produce

almost homogenous products and services (Nava, 2015). Therefore, Tesla must differentiate its

products and aggressively market to change consumer perception and take customers from

conventional automakers.

A closer analysis of its direct competition shows a similar competitive trend as illustrated

in figure 4. A recent survey by BusinessTech (2022) shows the top EVs in this market were

BMW, Porsche, Audi, and Jaguar. These are strong direct competitors to Tesla that focus on

similar differentiation strategies involving safety, performance, and other luxury aspects.

However, Tesla’s brand equity, product range, and superior technology provide unique

competitive advantages to compete favorably. Besides, a starting price of $719,264 ($40,000)

means Tesla is relatively affordable to other luxury brands Jaguar, BMW, and Volvo.

Figure 3: Top five passenger and LCM brands in South Africa (MarkLines, 2022)
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Figure 4: Top 10 listed EVs in South Africa (BusinessTech, 2022)

IMC Creative Approach

Creative Message and Objectives

The third stage of the integrated marketing communication process model is creating and

delivering the message. According to Kitchen & Tourky (2022), developing a successful

message requires leveraging consumer insights to understand how to create a message appeal

that will stimulate the required action. From this analysis, the South African market is in its

nascent stage. However, it presents significant opportunities in its high-growth EV market.

Regardless, the adoption of EVs remains low. Based on UTAUT theory, performance

expectancy, norms, and effort expectancy combined with individual difference variables such as

age, gender, and income moderate user acceptance leading to a typology of acceptance. In this

case, the resistance to adopting EVs in the South African market is due to the high purchase

price, high battery price, and high likelihood of the need to own another car due to limited

infrastructure (Moeletsi, 2021). Therefore an effective marketing campaign for Tesla must

acknowledge and remedy these consumer concerns.

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Based on these issues, the most creative approach is to market Tesla by making

sustainability desirable in the form of a socially accepted luxury. This strategy is well-suited to

institute a change in the market perception that EVs are unaffordable and influence a shift in

consumer patterns from traditional petrol and diesel-powered vehicles to EVs. An IMC strategy

allows the development of a unique campaign that incorporates multiple primary marketing

objectives. In this strategy, the primary objectives are to launch the new brand in the market,

generate quality leads, and increase engagement.

Delivery: Tools and Channels

An effective IMC strategy required a hybrid strategy incorporating traditional and digital

channels available in the IMC wheel (Oliver & Rosen, 2010). This campaign will leverage each

channel and IMC tools’ strengths to achieve unique objectives.

1. Media Channels

The primary traditional marketing channels used in this campaign will be the media,

which like the rim of a when will be used as the contact point with all stakeholders in the market.

These will include electronic and non-electronic media such as television, radio, and print media,

whose main objective will be to increase brand awareness building up to the launch of the new

brand.

2. Digital marketing channels and tools

A blend of digital marketing tools will be used in the IMC mix. These tools’ primary

objectives will be to increase engagement and generate high-quality leads. For Tesla to maximize

customer engagement it must position itself as an innovative brand on various social media
 Global Marketing Report 10

platforms such as Twitter, YouTube, Facebook, and Instagram, which are the most used social

media platforms in South Africa. Here the firm will center on building a community around its

shared values. Make real satisfying encounters for its followers to get them involved in its

content. Keep steady patterns and news that its audience is interested in, integrating them into the

campaign. The firm will also engage popular podcasts and blogs that will feature guest

employees for one-to-many communication.

Campaign Timeline

3-Month Promotion Calendar

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10
Release
of the
product

Start and stop of the first social media campaign: Start and
Theme:
run 2 facebook 5 facebook videos, 3 youtube ads, stop of
promote
and 2 instagra ads every week thesecon
the
d social
launch of
media
Tesla
campaign
and
: Run all
Increasin
pending
g public
advertise
awarene
ments
ss

Serch for publications and outlets to contact

Theme - To generate high quality leads
Reach out to outlets (magazines, blogs, e.t.c) and retailers with article pitches, request for review

References
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Adnan, N. et al., 2016. A comprehensive review of theoretical framework-based Electric Vehicle

Consumer Adoption Research. International Journal of Energy Research, 41(3), pp. 317–

335.

BusinessTech., 2022. The most searched-for electric vehicle in South Africa -, BusinessTech.

Available at: <https://businesstech.co.za/news/motoring/613383/the-most-searched-for-

electric-vehicle-in-south-africa> [Accessed: October 27, 2022].

Charm, T., Dua, A. and Robinson, K., 2022. Rise of the inclusive, sustainable consumers,

McKinsey & Company. McKinsey & Company. Available at:

<https://www.mckinsey.com/featured-insights/sustainable-inclusive-growth/future-of-

america/rise-of-the-inclusive-sustainable-consumers> [Accessed: October 27, 2022].

Du Toit, A., 2022. How many electric cars have been sold in South Africa in 2022, TopAuto.

Available at: <https://topauto.co.za/news/54800/how-many-electric-cars-have-been-sold-

in-south-africa-in-2022> [Accessed: October 27, 2022].

Fortune Business Insights., 2022. Electric vehicle market size worth USD 1,318.22 billion,

globally, by 2028 at 24.3% CAGR: Fortune business insights™, GlobeNewswire News

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%20market%20is%20forecast%20to,the%20forecast%20period%202021%2D2028>

[Accessed: October 27, 2022].

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GreenCape., 2021. 2022 ELECTRIC VEHICLES MARKET INTELLIGENCE REPORT,

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<https://www.westerncape.gov.za/110green/files/atoms/files/EV_MIR_29_3_22_FINAL.p

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Iea., 2022. Global electric car sales have continued their strong growth in 2022 after Breaking

Records last year - news, IEA. Available at: <https://www.iea.org/news/global-electric-car-

sales-have-continued-their-strong-growth-in-2022-after-breaking-records-last-year>

[Accessed: October 27, 2022].

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market and deduction of development strategies: Focusing on SWOT and TOWS models,”

KBM Journal, 5(2), pp. 131–142.

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MarkLines., 2022. South Africa - Flash report, Automotive sales volume, 2022 -, MarkLines

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month [Accessed: October 27, 2022].

Moeletsi, M.E. 2021. Socio-economic barriers to adoption of electric vehicles in South Africa:

Case study of the Gauteng Province. World Electric Vehicle Journal, 12(4), p. 167.

Nava, F., 2015. Efficiency in decentralized oligopolistic markets,” Journal of Economic Theory,

157, pp. 315–348.

Oliver, J.D. and Rosen, D.E., 2010. Applying the environmental propensity framework: A

segmented approach to Hybrid Electric Vehicle Marketing Strategies. Journal of

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for-tesla-in-ev-market/?sh=604ea8633423> [Accessed: October 27, 2022].

Raghu, G., 2013. Car market and consumer behavior - A study of consumer perception,” SSRN

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Automotive Industry. EURASIAN JOURNAL OF BUSINESS AND MANAGEMENT, 9(3),

pp. 208–216.
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Sovacool, B.K., 2017. Experts, theories, and Electric Mobility Transitions: Toward an integrated

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Science, 27, pp. 78–95.

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