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Executive Summary
Tesla has put its share in the automotive market as one of the leading providers of innovative electric vehicles. This marketing plan is made in order to add electric motorcycles to the product list of Tesla. The company has the commitment to offer affordable electric vehicles to the public, and it makes the company able to move towards the advancement of the vehicles and reduction in their prices. The company has potential to compete at the level of electric and hybrid vehicles. This marketing plan includes different findings, which allow Tesla to find new target markets and launch new electric motorcycles. Various things are highlighted in this marketing plan including situational analysis, customer analysis, and competitor’s analysis.
Situation Analysis
Company Analysis
Tesla Motors is an American company that deals in automotive and energy storage products. It was founded in 2003 by Martin Eberhard, Marc Tarpenning, and others. It is famous manufacturer and seller of the electric vehicle and battery products. Producing its first electric car, Tesla Roadster, the company gained the attention of people. After the success of Roadster, it produced second electric vehicle named, the Model S. Following this, next two models are Model X and Model 3. In June 2015, Model S vehicle made a record of 75,000 unit sales around the globe. Tesla also deals in electric powertrain components such as lithium-ion battery packs. These components are built for vehicles from other automotive companies such as the Daimler, the Toyota RAV4 EV, the Smart for Two electric drive and more (Tesla Motors, N.p).
Company Objectives
Tesla is established with an aim to bring sustainable transport to the public as soon as possible by offering electric cars. The company intends to provide compelling customer experience by combining modern techniques, efficiencies and design and having better control over the costs of new products as reduced prices could be offered. The management at company describes that if they could have done it with their first product, they would surely have done it. The first product was expensive, and it could not make their aim completely successful; therefore, they have built a sports car that can be proved better than its gasoline alternatives. Its objectives further include providing affordable electric cars that average consumers can also buy. It will help them achieve their main aim. One of its objectives is to offer batteries like Tesla Powerwall that provided easiness to the life of common people.
Marketing Objectives
The company states its marketing objectives as:
Create and increase demand for electric vehicles and boost sales ratio.
Build high repute in electric vehicle market and create long-term brand awareness.
Achieve customers’ trust to increase customer referrals and eventually sales.
Acquire customers’ contributions in product development process.
Screening Criteria
Through an analysis of strengths and weaknesses, the company concluded its potential to face threats and welcome opportunities. Further, analysis of previous achievements, current goals and target markets and future objectives have provided the company with the criteria to screen opportunities (Valentin, N.p).
Investment in new target markets should focus generation Y, mid 20’s to early 40’s, middle class working adults
Investment in market that could increase the share by 5% in next five years by offering lower price electric vehicles
A strategy that could create and increase brand loyalty
An opportunity that could increase brand awareness
Maintaining the corporate reputation, the company could make records for sales in next year.
Current Marketing Strategy
Target market
Tesla does not focus just those who just want an upscale car, but those people who are environment-friendly and want a reliable electric vehicle. Due to expensive price, the circle of customers has become limited to those who are rich. The Model S vehicle is designed for a family with small children; therefore, people with a family also like it. Tesla is in the process of creating new models of vehicles as well as motorcycles to increase its target market (Mangram, pp. 289–312).
Product
The Tesla is a leading name in the electric vehicle industry. It is currently marketing two of its models that are Model S and Model X. These models are attractive in design, great in performance and quiet with respect to noise. The vehicles are designed for the family; therefore, four to five people can be accommodated. Depending on the battery, these vehicles can reach the high speed of 130 to 150 mph. The electric cars with ultra modern design contain a 17-inch large touch screen display and comfortable seating. In addition to that, Tesla is offering a wide range of powertrain components for various electric vehicle models (Tesla Motors, N.p).
Place
Tesla sells its products through their own stores, not affiliating with any other retailer, and it deals customers online. The company has more than 50 stores across the nation, and it strives to expand the target market. However, people can order customized electric car online from anywhere. Cutting the intermediary, Tesla wants to sell its car itself, but it has created some hurdles for the company. The company is still committed not to affiliate with any of the established car dealers.
Promotion
The company has followed a good approach by offering online selling. Most of the interested customers get entire information from its website. The website contains a section of how the electric car works. Providing all these things on one page, the company has made customers very convenient. Tesla has not approached to any advertising strategy yet; however, they are using social media to launch their promotional campaigns. Tesla also promotes its products through stores. The stores not only promote products, but their primary focus is to educate people about how actually the electric car works. The thing that makes the Tesla unique is it does not press sales; instead, its goal is to educate people about new vehicles
Price
The company offers various customized packages, and the price depends upon the selection of customers. The battery selection affects the car price in a big manner; it is the option to select while placing an order. The model with a battery of 60kWh starts from $70,000 and over and the model with a battery of 80P start from $90,000 and over. The price range can go up to $120,000 and over when selecting a complete range of options.
Customer Analysis
Tesla's products are expensive it does not mean that its customer are only rich people, but the products are environment-friendly too; therefore, the people who care for environment prefer Tesla. This marketing plan is made to help Tesla to launch electric motorcycles; therefore, the targeted customers are all people around the nation (Halliday, p.17).
Product market
In this marketing plan, product market includes following parts:
Product type: Generally electric vehicles but specifically electric motorcycles
Customer needs: After a great success of electric vehicles, customers feel the need for electric motorcycles. They need because they are the future of the automotive industry.
Customer type: All those people who want to remain updated with vehicles and care for the environment.
Geographic area: Primary focus for this marketing plan will be on the United States of America.
Demographic Data on the Target Market
Having a look at previous demographics will help concentrating future aspects. Demographics for the Model S show that 83.9% of the total customers were males and the rest 16.1% were females. Income of 5.7% of the total customers was under $50,000, 17.2% customers was $50,000 to $99,999 and the rest 77.3% customers was over $100,000. While considering the age factor, demographics show that 33.2% customers were 18 to 44 years old, 50.6% were 45 to 64 years old and the rest 16.2% were over 65 years.
Keeping these facts in mind, the company has set to educate more customers in order to make them understand how electric vehicles can change the future. The primary focus of the company has always remained on educating people not increasing sales. The target market include entire nation specifically people from 18 to 50 years that earn over $60,000.
Current Customers
Current customers are people with income over $50,000 and aging from 18 to 60 years around the nation.
Survey of Current Customers
The basic purpose of Tesla is to change the automotive industry completely by offering everyone an electric vehicle and motorcycle. Tesla is a manufacturer as well as the retailer itself, and this makes the price of the products become less. The longer the chain, the higher the price; therefore, Tesla has not appointed any commissioned sales people to come between the company and consumer. The electric cars are marketed at a good level, and the positive feedback from people is the reason to move forward in the same field. To provide customers with easier and fast shopping experience, the company offers online purchasing. Considering all economics facts in mind, the company has set a lowest possible price for the vehicles.
The survey for current customers generated Consumer Reports that declared a satisfaction score of 99 out of a possible 100. Tesla’s electric vehicles have satisfied owners at the highest level. The all-electric luxury sedans have become the first choice for the customers who have once used them. Customers expressed that they felt fun to drive with economic and environment-friendly high-tech luxurious vehicles. Further, the Consumer Reports provide views of 145 owners. More than 85% of those expressed that they would surely buy next car from Tesla only, and 25% of these 85% said that they would not even consider any other brand.
Competitor analysis
Tesla as a major automaker is focusing future electric vehicles, but there are a number of competitors in the automotive industry. Decrease in oil price has made the standard vehicles much cheaper to afford, and this is what, for sometimes, Tesla may be worried about. Along with the standard vehicle, the company also has to face new strategies of its competitors in the electrical vehicle market. The four major competitors including Detroit stalwarts Ford Motor Company, General Motors, Volkswagen AG and Nissan Motor Corp are planning to focus on drastically improving their electric-vehicle offering (Halliday, p.17).
The automakers are initially focusing to improve their fully electric vehicles to increase the driving range to about 200 miles. This strategy is, however, one-step behind Tesla's Model S variants, but it poses a threat to Tesla. Theses competitors have to manage their future costs of producing an electric vehicle with 200-mile-plus range because the range is not everything, the price is also something. In this regard, Tesla can be considered one-step ahead in terms of the competition. In 2016, Tesla has set to launch its new Model 3 and start selling in 2017 with a price tag of $35,000. In competition with that, General Motors has recently announced to launch Chevrolet Bolt concept car in 2017. GM has further described that the new electric vehicle would be efficient enough to offer more than 200 miles of range and that would be offered at a price tag of $30,000. Considering another competitor, Ford, is going to produce EcoBoost engine options that will enable standard internal combustion engine to have improved fuel economy. The Ford is further offering plug-in hybrids like Fusion Energi, which 95 miles-per-gallon-equivalent (MPGe) in city and 81 MPGe on the highway. The fully electric vehicle that Ford is planning to produce will be able to achieve MPGe of 110 in city and 99 on the highway.
Analysis of Market Context
PESTEL Analysis
Political
Environmental protection law is one of those political factors that the company has to follow in order to produce more environmental friendly vehicles and motorcycles. Another one is the U.S. government energy loan programs, which may be a hurdle as well as a help for the company to introduce new products.
Economic
In the economic perspective, Tesla has to face economic growth in the alternative energy industries and increase the cost of using the cars mainly due to the rise in fuel prices in the short period.
Social
In the social perspective, the company would face people’s taste that can be changed due to increase or decrease of price as well as their income. Concept and beliefs of the buyer also affect the marketing strategies, as buyers are losing their faith in gasoline and want to acquire electric vehicles.
Technological
Technological factors seem in the favor of Tesla because they offer the company to produce more luxurious and ultra-modern cars. Advancement in technology leads to decrease in the price of the raw material to produce technological products.
Environmental
Producing eco-friendly vehicles, Tesla would be preferred by most of the customers who care for the environment. Petrol, diesel, gasoline and other fuels have harmed the planet on a big level; therefore, people welcome new electric vehicles.
Legal
Legal factors are also in the favor of Tesla because they offer energy loan programs. Almost all legal factors focus to help production of eco-friendly cars. The legal bodies of all countries are planning to include new taxation methods to promote the green energy vehicles.
SWOT Analysis
Marketing objectives
Future marketing objectives include educating customers about new electric vehicles and establishing customer loyalty. These two objectives will lead the company to achieve the ultimate goal. Further, the company is considering reducing the price of products to be launched in future (Valentin, N.p).
Marketing Strategy
The marketing strategy is build to face the marketing challenges that the company is facing now. Building a new luxury brand from scratch is not a simple task. It requires target market and demand; therefore, to create new demand various campaigns have been launched.
The company is making efforts to generalize the new type of car that is an electric car. The main challenge is the price of the cars that range from $60,000 to $100,000+, and the company is working on it to reduce the price and make it available for average consumers.
No matter, if the company is starting from offering expensive vehicles, with a firm commitment, the company will surely make low-priced electric vehicle. Everything that was first introduced in the world was expensive, but as days passed, their prices became lower. The company is going to contribute in the history of vehicles by building a big car company.
Implementation and Control
Special Implementation Problems to overcome
The company would need to set a new manufacturing plant to produce electric motorcycles and obviously, hire new employees for that. Setting up a new plant is not very simple; the company would have to plan for it separately. Hiring new staff may include more than thirty employees for the entire plant to run and manage.
Control
The main objective of this marketing plan to introduce a new range of electric motorcycles and for that a separate team would be formed to control and manage the plan.
Sales forecast
Tesla is planning to introduce the new range of motorcycles as soon as possible, and the company forecasts to sell about 100,000 motorcycles in the following year. This is all because people feel a real need for electric motorcycles, and as they would be allowed to buy, they would not make any late. The motorcycles are expected to be priced at around $10,000 initially.
Marketing plan related expenses
Conclusion
Tesla is leading provider of electric vehicles around the United States as well as the world. It currently offers Model S and Model X electric vehicles. The company is now planning to introduce electric motorcycles, in that connection, this marketing plan is designed to help the company plan strategies. The company is far ahead from its competitors such as Ford and General Motors. Focusing on more sophistication, the company also considers offering lower priced vehicles in future. With so many external opportunities, the company has the potential to achieve its desired goals.
Work Cited
Halliday, Jean. “TESLA MOTORS.” Advertising Age 80.39 (2009): 17. Print.
Mangram, Myles Edwin. “The Globalization of Tesla Motors: A Strategic Marketing Plan Analysis.” Journal of Strategic Marketing 2012: 289–312. Web.
Tesla Motors. “Tesla Motors - Gigafactory.” Blog. N.p., 2014. Web.
Valentin, E. K. “SWOT Analysis from a Resource-Based View.” Journal of Marketing Theory and Practice 9.2 (2001): 2001. Print.
