Analysis of Tesla Motors’ Marketing Communications Strategy

Marketing Report


Term Paper, 2015
9 Pages, Grade: 1,3

Excerpt

Table of contents

Introduction

1. Social media marketing

2. Word-of-mouth marketing

3. TM’s own sales and service network and direct selling strategy

4. Auto shows

5. Conclusion

References

Executive Summary

Tesla Motors (TM) employs a range of marketing communication tools and strategies in order to target current and potential customers. TM’s marketing communication tools and strategies involve social media marketing, word-of-mouth marketing, TM’s own sales and service network and direct selling strategy, and TM’s participation in international auto shows.

TM’s social media marketing strategy enables TM to increase brand recognition and to improve brand loyalty. Social media platforms such as Twitter or blogs boost TM’s popularity, credibility and brand recognition. Social media marketing is important for TM as social-media platforms may affect customers’ feelings and attitudes. However, using social media marketing is also risky for TM as negative events can be spread easily, harming TM’s brand reputation.

The use of word-of-mouth marketing increases TM’s sales, brand recognition and competitiveness. This marketing strategy is also an important cost-saving factor for TM’s marketing budget. Savings can be invested in R&D and production which are vital for TM’s competitiveness and brand recognition. However, word of mouth marketing can also spread bad experiences about TM which may negatively affect TM’s sales and brand reputation.

TM’s own sales network, stores and galleries are major contributors to increase brand perception among customers. Direct selling through TM’s company-owned stores and galleries worldwide enables TM to receive customer feedback rapidly. This strategy combined with TM’s own sales network, stores and galleries delivers a differentiated buying and unique customer experience which strengthen the relationship with customers. However, direct selling is expensive which shrinks TM marketing budget.

TM’s participation in auto shows has a great impact on potential customers’ attitude towards buying a car. Test drives and direct contact with potential customers may increase demand and thus sales and revenues. However, the pressure and expectations of visitors for TM is very high, which sometimes led to disappointment of visitors and potential customers.

TM’s marketing communication strategies are an important foundation for TM’s competitiveness in the EV market.

Introduction

This marketing report presents TM’s range of marketing communication tools and strategies and their importance for TM. TM’s marketing communication strategies predominantly consist of social media marketing, word-of-mouth marketing, TM’s own sales and service network, stores and galleries, TM’s direct selling strategy and TM’s participation in international auto shows.

1. Social media marketing

TM’s media coverage involves TM’s digital communication strategy by utilising social media marketing such as using Twitter or blogs instead of purchasing TV spots in order to reach its customers and to boost brand awareness (AdvertisingAge, 2014). Using social media has been a major driver towards saving TM’s marketing costs and being directly connected with potential customers (Tesla Motors, 2014). Twitter enables TM to spread news rapidly within people’s network, enabling TM to increase brand recognition and to improve brand loyalty. Tweets of TM’S CEO Elon Musk attract attention among customers and fans, boosting popularity, credibility and brand recognition. Social media marketing is important for TM as brand and product references in social-media platforms may affect customers’ feelings and attitudes. Moreover, purchasing decisions of friends within social networks are also influenced.

illustration not visible in this excerpt

Figure 1: A tweet of TM’S CEO Elon Musk (Charles, 2014)

However, using social media marketing also involves risks for TM. Bad news like the recent incident where a Model S caught fire can also spread rapidly which harmed TM’s reputation. Moreover, it caused financial losses due to a drop in share prices and thus TM had less money for marketing activities (Tesla Motors, 2014).

TM’s social media marketing strategy seems to be an efficient marketing communications strategy in today’s hyper-connected and globalised world , targeting and attracting young potential customers more in future (Charles, 2014).

2. Word-of-mouth marketing

Word-of-mouth marketing is essential for TM’s brand recognition and competitiveness. This marketing strategy is also an important cost-saving factor for TM’s marketing budget. As TM does not have such a big marketing budget like major competitors e.g. General Motors, TM has to invent new efficient marketing strategies to save costs, being important for a young firm like TM. Word-of-mouth marketing also boosts demand and thus TM’s sales. These savings can be invested in TM’s R&D and production which are vital for TM’s competitiveness and brand recognition (Sparks, 2013). It has successfully contributed to a boost in sales of the Model S without traditional advertising, hence TM decided to further employ this marketing strategy. Further, it has helped to achieve sales of other models without high marketing costs (Tesla Motors, 2014).

However, word of mouth marketing can also spread bad experiences about TM which may discourage potential customers from buying TM’s products or making use of TM’s services (Wood, 2013). This would negatively affect TM’s sales and brand reputation.

3. TM’s own sales and service network and direct selling strategy

TM’s owned service network with 95 service locations worldwide creates an extraordinary customer service, leading to an increase of brand perception which is an important component of TM’s unique brand reputation. TM’s own sales network, stores and galleries are major contributors to increase brand perception among customers. TM offers special repair services, possibilities of making reservations and orders or even customisations of vehicles. TM’s high qualified and trained sales and service staff deals directly with customers through its company-owned stores and galleries worldwide which enables TM to receive customer feedback rapidly. This strategy delivers a differentiated buying and unique customer experience which strengthens the relationship with customers (Tesla Motors, 2014). This strategy also enables TM to achieve efficiency in operations which TM would not achieve when joining a traditional franchised distribution (Fung, 2014). Furthermore, it enables TM to have superior control over costs of inventory and to manage pricing and warranty service more efficient (Tesla Motors, 2015). However, direct selling is expensive as costs of training for staff are high which may shrink TM’s marketing budget for other potential marketing projects (Wood, 2013).

[...]

Excerpt out of 9 pages

Details

Title
Analysis of Tesla Motors’ Marketing Communications Strategy
Subtitle
Marketing Report
College
Kingston University London
Grade
1,3
Author
Year
2015
Pages
9
Catalog Number
V341486
ISBN (eBook)
9783668315273
ISBN (Book)
9783668315280
File size
691 KB
Language
English
Tags
Marketing Communications Strategy, Tesla Motors, Word-of-Mouth Marketing, Social Media Marketing, Direct-Selling Strategy, Kommunikationsstrategie, Marketing, Elektrofahrzeuge
Quote paper
Aylin Kadriye Tansel (Author), 2015, Analysis of Tesla Motors’ Marketing Communications Strategy, Munich, GRIN Verlag, https://www.grin.com/document/341486

Comments

  • No comments yet.
Read the ebook
Title: Analysis of Tesla Motors’ Marketing Communications Strategy


Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free