Tesla Motors, Inc. is a car manufacturer, which polarizes like no other company in this industry. It is often said that with its business model and its special strategic moves, Tesla confuses competitors, utilities and marketing agencies.
Therefore, this assignment will focus on the analysis of the key aspects of Tesla’s business model in order to find out why it is considered to be different. Moreover, the objective of this assessment is to find out, whether this strategy is useful, or if it should be changed.
The market definition and analysis of the first assignment is hereby the basis for this evaluation of Tesla Motor’s current marketing strategy. Therefore, the focus will be again on the company’s domestic market: the United States of America. Furthermore, only Tesla’s automotive products will be taken into consideration – its recently launched home battery will not be object of this work.
Table of Contents
1. Introduction
1.1 Problem Definition and Objective
1.2 Structure
2. Current Market Position
3. Marketing Mix
3.1 Customer Value
3.1.1 Product Portfolio
3.1.2 Portfolio Analysis
3.1.3 Product Life Cycle
3.2 Customer Cost
3.2.1 Pricing Strategy of Tesla Motors
3.2.2 Pricing Strategy Competitors
3.3 Convenience
3.3.1 Distribution Levels
3.3.2 Channel Strategy
3.4 Communication
4. Conclusion and Outlook
Research Objectives and Core Themes
This assignment aims to evaluate the unique marketing strategy of Tesla Motors, Inc. to determine why its business model is perceived as distinct and whether this strategy remains effective for the company's future growth within the U.S. automotive market.
- Analysis of Tesla's unconventional "Four Cs" marketing mix approach.
- Evaluation of Tesla's product portfolio and market positioning using the BCG-Matrix.
- Examination of Tesla’s disruptive pricing and distribution strategies, including the elimination of traditional dealerships.
- Assessment of Tesla’s communication strategy, specifically its reliance on social media and word-of-mouth over traditional paid advertising.
Excerpt from the Book
3.3.2 Channel Strategy
This distribution approach leads directly to Tesla Motors’ channel strategy: While the trend goes to having a so-called omni-channel strategy (Deloitte 2014, p. 3), Tesla is going a step further into the digital world and reduces the potential sales channels to one: Online. Although Tesla has own showrooms, they are not comparable to traditional car dealerships. Without parking lots and salesmen, they are rather modeled on the Apple store principle in malls and other highly frequented areas: View the models, learn about the engineering process and schedule a test drive (Jones 2014).
Therefore, they are having the function of stimulating interest, building desire and impress the customer with the brand technology experience. But eventually, purchasing a Tesla can only be done directly on the company’s website (Jones 2014). With this system, Tesla is facing strong protests of the national auto dealer associations, as they fear that other car manufacturers also might adapt this approach. Thus, the situation in the U.S. is still critical: On the one side, some states are having laws forbidding the direct-to-consumer car sales while on the other side, various organizations signed petitions to allow those direct sales in all 50 states (Gilbert 2014).
Summary of Chapters
1. Introduction: Outlines the problem definition, the research objective regarding Tesla's unique business model, and the structural approach based on the "Four Cs".
2. Current Market Position: Summarizes Tesla's market analysis and defines its unique selling proposition as a high-performance, eco-friendly luxury vehicle manufacturer.
3. Marketing Mix: Details the transition from the traditional "Four Ps" to the "Four Cs" and applies this framework to analyze Tesla’s operations.
3.1 Customer Value: Evaluates Tesla’s product portfolio, utilizing a BCG-Matrix analysis and the product life cycle concept to assess its market position.
3.2 Customer Cost: Examines Tesla's hybrid pricing strategy, which combines high-end luxury positioning with long-term goals for mass-market affordability.
3.3 Convenience: Analyzes the company's distribution and channel strategy, highlighting the shift toward online-only sales and the disruption of traditional dealership models.
3.4 Communication: Discusses Tesla’s disruptive communication model, which eschews traditional advertising in favor of social media, CEO branding, and word-of-mouth.
4. Conclusion and Outlook: Synthesizes the findings and provides an outlook on future product launches like the Model X and Model 3, concluding that the current strategy remains highly successful.
Keywords
Tesla Motors, Marketing Strategy, Four Cs, Marketing Mix, BCG-Matrix, Product Life Cycle, Hybrid Strategy, Electric Vehicles, Innovation, Distribution Strategy, Social Media Marketing, Brand Positioning, Customer Value, Automotive Industry, Business Model.
Frequently Asked Questions
What is the primary focus of this work?
This work evaluates the marketing strategy of Tesla Motors, Inc. to understand its distinct competitive approach and its effectiveness within the U.S. automotive market.
What are the core thematic areas discussed?
The core themes include Tesla's product portfolio, its hybrid pricing strategy, the shift in distribution channels, and an unconventional communication strategy focused on social media rather than traditional advertising.
What is the primary objective of this assessment?
The objective is to identify why Tesla's business model is considered different and to determine if its current marketing strategy is sustainable or in need of adjustment.
Which scientific methods are applied in this analysis?
The assignment uses the "Four Cs" marketing framework (Customer Value, Customer Cost, Convenience, Communication) and the BCG-Matrix to analyze Tesla's market positioning.
What does the main body cover?
The main body systematically applies the "Four Cs" to Tesla, analyzing its product development, pricing, direct-to-consumer sales, and its reliance on word-of-mouth and public relations instead of paid advertising.
Which keywords characterize this paper?
Key terms include Tesla Motors, Marketing Mix, Four Cs, BCG-Matrix, Innovation, Hybrid Strategy, and Automotive Industry.
Why does Tesla deviate from the traditional dealership model?
Tesla skips the traditional franchise model primarily because it contradicts their philosophy of not profiting from service and allows them to maintain direct control over the customer experience.
How is the "Star" category in the BCG-Matrix applied to Tesla's Model S?
The Model S is categorized as a "Star" because it operates in a high-growth market (all-electric vehicles) and maintains a significant market share, requiring continued investment in research and development.
- Quote paper
- Dominic Birk (Author), 2015, Evaluation of the Marketing Strategy of Tesla Motors Inc, Munich, GRIN Verlag, https://www.grin.com/document/309706
