Tesla Motors Inc. Current Marketing Situation

Green products have impacted significantly towards the manufacture of eco-friendly products. Notably, some of these products when being utilized, they help conserve energy, minimize carbon footprint, reduce the emission of greenhouse gasses and do not pollute the environment. Some of the companies such as Tesla Company have embarked on the production of eco-friendly products such as electric cars, solar panels among others. This paper reviews on the Tesla current marketing strategy regarding its competitors, distribution and products, a SWOT analysis to depict the company’s strengths, weaknesses, opportunities, and threats. Moreover, an overlook at the marketing strategy and implementation of the firm. Notably, the company has been profitable over the years, due to its rising profile in the production of all-electric cars and the high demand for the EV batteries, thus, maintaining its competitive advantage globally.

Launching a “Green Product”

Globally, there is a network of organizations manufacturing and marketing ‘green products’ in dyer efforts to designate a safe environmental alarm (Speer, 2011). The companies are manufacturing products that are eco-friendly; thus, they are not hazardous to the environment even in their disposal (Speer, 2011). As a result, the demand for these products is increasing amongst consumers. The ”green products” have numerous advantages. First, the products are energy efficient with minimal maintenance requirement (Speer, 2011). Secondly, they are free from ozone-depleting chemicals (Speer, 2011). Lastly, they are biodegradable; thus, they can be recycled either as a whole or in parts (Speer, 2011). Following the continuous demand for these products, the majority of the organizations have entered the green marketing forum in dyer efforts to meet the needs of their consumers. In recent years, green marketing has gained popularity due to the increasing inclinations in environmental appeals and attractiveness of the green products (Speer, 2011, p. 1).

On the other hand, the car manufacturing industry has been competitive, mainly due to the need for conserving the environment that has impacted significantly towards the production of eco-friendly motor vehicles. Some companies such as Tesla Motors Inc. has revolutionized the motor vehicle industry by the creation of eco-friendly electric cars that do not cause pollution of the environment unlike the gasoline cars (Yadav & Garg, 2016). This paper discusses Tesla Motors Inc. current marketing situation, SWOT analysis, marketing strategy, objectives and issues, and marketing implementation.

Current Marketing Situation

The Tesla motor has embarked on a segmentation that impacts significantly on building long-term and innovative motor vehicles. The company relied on a segment of choice that had lower volume, price-insensitive performance cars, which enabled the firm to create a long-term brand targeting the rich and affluent consumers to earn significant unit gross margin (Bhasin, 2018). Research shows that, since 2015, Tesla company has been selling all-electric luxury SUV, which has done comparatively well in the global market producing 100,000 vehicles by 2017 (Bhasin, 2018). Additionally, the firm has incorporated the BCG matrix in its marketing strategy which encompasses the design, style, convenience, and safety of the electric cars to its consumers (Bhasin, 2018). For instance, in 2018, the launch of the Model S luxury car impacted significantly on the popularity of the vehicles in the market due to their functionality, convenience, safety, and energy, thus, bursting the bubble of other luxury cars in the United States (Bhasin, 2018). The company has been at the forefront of the global market by selling not only cars but technology. As a result, its consumers rely on the automotive company, since it is more reliant on modern technological advancements. The firm has also embarked on the production of the infrastructure to support the operation of the electric cars by building superchargers, battery exchange and service stations (Bhasin, 2018). More so, the company has diversified its range of products and started producing solar roof tiles complimented with a rechargeable lithium-ion battery to provide storage of solar energy at homes (Bhasin, 2018).On the other hand, Tesla motor company is experiencing competition from the Detroit big three companies: General Motors, Ford, and The Fiat Chrysler automobiles (Jenkins, 2017). Despite Tesla’s CEO, Musk estimating the production to grow exponentially, the firm’s manufacturing rate has been deteriorated, with rival firms planning to take the advantage and increase their output (Jenkins, 2017). For instance, General Motors Company, the largest automaker intends to produce 20 new all-electric model car by the years 2023, while Ford is currently working on 13 new electrified vehicles by 2020 (Jenkins, 2017). As a result, the plans will intensify competition amongst the electric manufacturing automobile companies. Notably, distribution is a significant factor that impacts significantly to ensure that their products reach their destined consumers. Tesla Company majorly uses its online marketing platforms coupled with the firm’s owned stores to sell its cars without the use of a conventional dealer (Bhasin, 2018). The network of distribution of its vehicles is unique by implementing direct channel, where the company deals directly with the consumers (Yadav & Garg, 2016, p. 3). The method has enabled the company to monitor its sales force and performance in the global market. More so, the firm has specific suppliers where they obtain their raw materials and assemble their vehicles in one roof (Yadav & Garg, 2016, p. 4). Therefore, Tesla Company follows an exclusive distribution channel since they are the only retailers of their products, unlike other companies that have intermediaries such as dealers (Bhasin, 2018).

SWOT Analysis

Tesla Motors Inc. is growing very fast and has made massive revenue in recent years through the sales of its new car models. Moreover, the manufacturing and marketing sectors have realized tremendous success as far as cost efficiency is concerned. Thus, the company has room even to improve further. However, some factors may threaten the expansion of the company both locally and internationally. Below is a SWOT analysis that will shed light on the company’s strengths, weaknesses, opportunities, and threats.

Strengths

Strengths are internal business factors that enable the organization to compete against other companies to make sure it realizes reasonable profits, particularly on a long-term basis. Some of the strengths possessed by Tesla include robust management, recognized brand (Model 3), technology expertise, and located to the proximity to its primary consumers among others (Dalvagas, 2016).

Weaknesses

Tesla Company’s weaknesses include limited market and supply problems when the demand is high since it sells most of its vehicles in the United States and has a small presence in third world countries (Dalvagas, 2016). Moreover, the firm has a high debt loan which might hamper its future growth (Dalvagas, 2016).

Opportunities

The company has immense opportunities since the market for eco-friendly vehicles is set to expand. People are now becoming more aware of the importance of conserving the environment. Legal authorities and government agencies are emphasizing establishment of measures that will mitigate pollution of the environment (Dalvagas, 2016). As a result, people are willing to buy vehicles that lower emission of greenhouse gases. More so, the economies of developing and developed countries are proliferating (Dalvagas, 2016).

Threats

The main threat facing Tesla Motors is competition from other automobile companies. Consequently, other companies are now considering to start manufacturing electric vehicles as a result of pressures from legal and government authorities (Dalvagas, 2016). Some of these companies may decide to sell the potential electric cars at lower prices, which will decrease Tesla’s customer base as most individuals prefer vehicles sold at lower prices (Dalvagas, 2016).

Marketing Strategy

Tesla Company uses the broad differentiation generic marketing strategy. The goal of the firm here is to ensure that it remains different from other vital all-electric cars players in the market. The differentiation strategy creates a difference in the manner in which Tesla motors operates right from production to consumption, and it is this difference that makes the company stand out from its competitors (Karamitsios, 2013, p. 13). The corporation’s emphasis on the design style, convenience, and safety of it electric cars different from other companies in the United States (Bhasin, 2018). Moreover, the firm has emulated technological products by entering the automobile market to produce high all-electric cars to target affluent buyers (Yadav & Garg, 2016, p. 2). Tesla Motors has been using the marketing mix that has enabled the firm to stand out in the automotive industry (Kissinger, 2018). The company has been using the 4P’s (Product, Price, Place & Promotion) asset of strategies in its marketing plan. More so, the firm’s 4P’s have impacted significantly to its competitive advantage over other rivals companies such as General Motor Company, Honda Corporation among others (Kissinger, 2018).

Product

The market mixing element identifies the company’s output sold to its destined customers. Thus, Tesla motor products revolve around automotive, energy generation and storage (Kissinger, 2018). The company uses technological advancements to develop its products to meet the corporate objective of the 4P variable (Kissinger, 2018). Thus, the resulting outputs are profitable due to their actual value; hence, customers pay for the products. The company’s range of products includes solar panels, automobiles, electric cars powertrain components, energy storages and batteries (Kissinger, 2018). The brands have expanded the firm’s product mix supporting profitability form its strategies.

Place

The element involves the locations of the company’s outlets used to meet its respective consumers. Despite Tesla motor expanding its products, the place element remains the same. Nevertheless, the firm may expand its locations as it grows either through acquisitions or new markets (Kissinger, 2018). Tesla Inc. uses the following places in its distribution network: the company’s official website, stores and galleries, services centers, and charging stations (Kissinger, 2018). Customers often check the company’s products from its stores and galleries located in malls and other areas (Kissinger, 2018). Nevertheless, the consumers have to use the company’s website to complete their transactions and the corporation’s service station for their repair and maintenance (Kissinger, 2018). As a result, the place element has impacted significantly on the firm’s sales and distribution of its products (Kissinger, 2018).

Promotion

The element impacts on the company’s communication strategies that enable the global automotive company to influence its customer’s expectation and the development of their products (Kissinger, 2018). The firm’s promotional mix involves; direct marketing, sales promotion, public relations, and viral marketing (Kissinger, 2018). Viral marketing has contributed to the firm’s promotional communication to its consumers (Kissinger, 2018). For instance, the launch of the Tesla Model S for the kids has promoted the company’s product mix through the viral videos created on social media (Kissinger, 2018). The public relations are used by the company to enhance its popularity, while sales promotion involves discounts on their products on consumer referral programs (Kissinger, 2018). Thus, in the promotion element, viral marketing determines the firm’s effectiveness to promote their brands.

Price

The element covers the prices strategies to support their premium brand to influence their profits and consumers discernments, with Tesla Motors having two pricing strategies: the premium and market-oriented (Kissinger, 2018). The premium pricing involves a high price on the company’s products due to their uniqueness in the market (Kissinger, 2018). On the other hand, the company uses the market-oriented pricing strategy for other products such as solar panels (Kissinger, 2018). The price mix helps the firm to maintain its competitiveness in the global market.

Marketing Implementation

Tesla Motor Company intends to continue with the production of sustainable electric vehicles and make its products accessible and affordable to most of its consumers. The company focusses on bringing masses of electric cars that are eco-friendly into the global market.  According to the ReportBuyer, the firm intends to grow its EV market by 16.4% by 2026 (Bhasin, 2018). Moreover, the high demand for EV batteries in the global market (DeBord, 2018). As a result, the company has partnered with Panasonic to build a ”GigaFactory” to meet the demands of its consumers by 2020 (Elrayes, 2016, p. 6). Additionally, the company intends to build more supercharging stations in most countries globally by 2020 to enable the Tesla cars, and other electric automobiles utilize the stations (Elrayes, 2016, p. 8).

Conclusion

Conclusively, Tesla motor has been the leading company in the production of electric cars. The company has diversified its range of products to the creation of solar panels, charging components among other to increase its competitiveness in the global market. More so, the company has embarked on some marketing strategies by using the 4P’s (product, price, promotion, &place) mix to target its consumers. Consequently, the elements have helped the firm to distribute its products, thus, impacting significantly on its profitability. The firm intends to expand its market by building more charging stations in most of the countries globally and partnering with other companies such as Panasonic to create a ‘GigaFactory’ to meet the growing demand of the EV batteries. Successful implementation of the above ideologies will impact significantly on the firm’s competitiveness and profitability in the global market.

Appendix

Exhibit 1: Basic Revenue Forecast for Five Years

Ending Year

Expected revenue (%)

2018

6.23

2019

91.73

2020

93.34

2021

89.38

2022

35

Source: (NASDAQ, 2018)

Exhibit 2: Product Details (Attributes and Packaging)

Product

Attribute

Packaging

Electric cars

Tesla Inc.

Tesla Roadster, Model S, Model X  and  Model  3

Solar panels

Tesla Inc.

Tesla solar tiles

Electric power train components

Tesla Inc.

Tesla Model S power train

Energy storage

Tesla Inc.

EV batteries

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