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Tesla Marketing Strategies
  • 2

  • Course Code: BMMB7026
  • University:
  • Country: Australia

Part 1 – Group Presentation: Planning for Marketing Drivers of Change

•    Tesla and the Marketing Drive towards Sustainability
•    Subtitle: The Role of Climate Change in Shaping Electric Vehicle Marketing

Introduction

•    "Founded in 2003, Tesla, Inc. has taken the automotive world by storm with its innovative electric vehicles (Hom, 2020)."
•    "Central to Tesla's ethos is a commitment to a sustainable future, leveraging clean energy and technology."

Tesla's Vision

•    "Tesla's mission: To accelerate the world's transition to sustainable energy."
•    "Beyond vehicles: Solar products, energy storage, and a broader sustainable ecosystem."

The Issue: Climate Change

•    "By 2020, transportation accounted for 29% of total U.S. greenhouse gas emissions."
•    "Electric vehicles (EVs), like those from Tesla, offer a promising solution to reduce this significant carbon footprint."
Why It Matters for Tesla
•    "As of 2021, Tesla's fleet has offset over 5 million metric tons of CO2 (Meiners and Morriss, 2022)."
•    "Transitioning to EVs is not just environmentally sound but also economically beneficial as governments worldwide incentivize electric transportation."

Tesla's Unique Marketing Approach

•    "Despite its massive brand presence, Tesla's advertising spend is negligible."
•    "The buzz is generated through product excellence, high-profile events, and Elon Musk's influential presence on platforms like Twitter."

Sustainability as a USP

•    "Tesla's vehicles are synonymous with sustainability, offering high performance without environmental compromise."
•    "Beyond cars: Tesla's solar products and Powerwalls make homes energy-efficient, further emphasizing their dedication to a green future (Böck, 2023)."

External Drivers

•    "Governments globally are pushing for cleaner transportation, with tax credits for EV buyers and penalties for heavy polluters."
•    "The public's growing eco-consciousness drives demand for sustainable products."
•    "Competitors are entering the EV space, but Tesla remains a benchmark."

Challenges

•    "Tesla faces challenges like establishing a global charging infrastructure."
•    "Addressing 'range anxiety' – the fear that EVs do not have sufficient range to meet drivers' needs."
•    "Convincing sceptics about the net environmental benefits of EVs, considering battery production and electricity sources."

Change Management at Tesla

•    "Tesla's agility is evident in its rapid adaptation to market feedback."
•    "From addressing range concerns with extended battery life to innovating 'over-the-air' software updates."
•    "Tesla's shift to a direct-to-consumer sales model removed middlemen, offering a seamless buying experience." 

Part 2 – Individual Report: Future Developments in the Field of Marketing

Executive Summary

Tesla, Inc., a trailblazer in the electric vehicle industry, has seamlessly integrated its mission for sustainable energy into its marketing strategies. This report delves into the intricacies of Tesla's unique marketing approach, emphasizing the alignment with global sustainability trends.

Despite the brand's significant successes, certain challenges in their strategy have been identified, particularly their heavy reliance on organic marketing and the strong association with CEO Elon Musk's personal brand.

Recommendations have been proposed to diversify marketing channels, manage high-impact communications, and enhance regional outreach. Implementing these strategies can fortify Tesla's brand, ensuring its continued dominance in the EV market while championing a sustainable future. 

Introduction

Tesla, Inc., founded in 2003 by Elon Musk and a group of ambitious engineers, has rapidly ascended from a Silicon Valley startup to a global leader in the electric vehicle (EV) market.

With a mission to "accelerate the world's transition to sustainable energy," Tesla is more than just an automaker; it is a revolutionary force in the fields of transportation, energy, and technology (Sypko, 2022).

This report delves into Tesla's marketing activities, exploring how they align with global sustainability goals, tackle the challenges of a rapidly changing automotive landscape, and harness the power of innovation to shape the future of mobility.

Task 1: Evaluation of Tesla's Marketing Activity

  • Concept and Importance of Marketing: Tesla's approach to marketing is unlike traditional automakers. Eschewing conventional advertising, the company invests heavily in research and development, ensuring its products speak for themselves (Wang and Peng, 2020). Events, such as the unveiling of new models or features, create significant media buzz and public interest, generating organic marketing momentum.

  • Macro and Micro Marketing Environment: Globally, there is a growing concern for the environment. Governments are incentivizing electric vehicles, and consumers are becoming more eco-conscious. Tesla's marketing capitalizes on this macro trend. On the micro level, they address individual concerns like "range anxiety" and the feasibility of EVs as a primary vehicle, ensuring their messaging resonates on a personal level.

  • Change Management Strategies: Tesla's approach to change is dynamic. They have pivoted strategies, such as transitioning from a dealership model to direct sales, all while maintaining their core brand promise. Their ability to adapt and evolve their marketing strategies in response to external challenges and feedback has been a significant contributor to their success.

  • Target Markets: While initially targeting the luxury segment with high-end models like the Roadster and Model S, Tesla's marketing now also reaches the mass market, especially with the introduction of the more affordable Model 3 (Saxena and Vibhandik, 2021). Their segmentation, targeting, and positioning strategies have evolved, but the underlying theme of sustainable, high-performance vehicles remains consistent.

  • Selection of Media: Digital channels, especially social media, play a pivotal role in Tesla's marketing. Elon Musk's active presence on Twitter, where he directly communicates about product launches, updates, and addresses concerns, has been a game-changer, providing both transparency and direct engagement.

  • Measuring Success: Tesla gauges the success of its marketing activities not just through sales figures, but also through metrics like brand recognition, customer satisfaction, and the growth of its Supercharger network, which enhances the usability and appeal of its vehicles (Reichfield et al., 2021).

Task 2: Conclusion Addressing the Shortcomings of Tesla's Marketing Strategy

Despite Tesla's innovative approach to marketing and its substantial successes, no strategy is without its shortcomings. Tesla's emphasis on organic marketing, while powerful, also means they may miss out on opportunities to target potential customers more proactively (Sweezy, 2020).

Their reliance on Elon Musk's personal brand, while a significant strength, carries its risks. Musk's candidness on platforms like Twitter, although refreshing, can sometimes result in volatility or misconceptions. For instance, his tweets about Tesla's financial situation or production challenges have, at times, caused concerns among investors and stakeholders.

Additionally, while Tesla's direct-to-consumer model offers a streamlined buying experience, it has faced resistance from traditional dealership associations in various states and countries (Weiss, 2023). This resistance has sometimes hindered Tesla's market penetration.

Lastly, Tesla's rapid pace of innovation, while commendable, has led to occasional challenges with product rollouts. The aggressive timelines can sometimes result in perceived compromises in build quality or delays – aspects competitors are keen to highlight.

Task 3: Recommendations for Improving Tesla's Marketing Strategy

Diversify Marketing Channels

o    While organic marketing has served Tesla well, exploring targeted advertising campaigns can help reach potential customers unfamiliar with the brand or those on the fence about transitioning to electric vehicles (Barker, 2022).

Manage Musk's Media Impact

o    Elon Musk's influence is undeniable. However, a more structured approach to official announcements can help avoid unnecessary controversies. Media training or a review protocol for high-impact communications might be beneficial.
Engage with Traditional Dealership Models Where Necessary

o    In regions where the direct-to-consumer model faces legal challenges, Tesla might consider hybrid approaches or partnerships, ensuring they do not miss out on potential markets (Jha, 2023).

Enhance Quality Control and Communication

o    To address concerns about product quality or rollout delays, Tesla should invest further in quality control measures. Moreover, transparent communication about product timelines, potential delays, and the reasons behind them can help manage customer expectations.

Localized Marketing Strategies

o    Tesla operates globally, and a one-size-fits-all approach might not resonate in every market. Localized marketing strategies, taking into account regional preferences, concerns, and cultural nuances, can enhance Tesla's appeal in diverse markets (Liu et al., 2023).
Engage in Educational Campaigns

o    To combat misconceptions about electric vehicles, Tesla could launch educational campaigns highlighting the benefits of EVs, the advancements in battery technology, and the positive environmental impact.

Leverage User Testimonials

o    Tesla has a passionate user base. Encouraging satisfied customers to share their experiences can be a powerful marketing tool, offering authentic insights to potential buyers.

Conclusion

Tesla, with its revolutionary approach, has reshaped automotive marketing. While immensely successful, refining its strategy can ensure Tesla's continued leadership in promoting a sustainable, electric future in transportation.
 

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References

Barker, T., 2022. Driving the Switch: Promoting the Benefits of Electric Vehicle Usage (Doctoral dissertation, Lancaster University (United Kingdom)).
Böck, J., 2023. Solar Electric Vehicles with Distributed Energy Storage in the European energy transition: A socio-technical system analysis (Master's thesis).
Hom, G.J., 2020. Charging Ahead: How the Army Can Learn from the Past to Prepare for Electric Vehicles in the Future.
Jha, C., 2023. DIRECT-TO-COMSUMER MODEL IN THE AUTOMOTIVE INDUSTRY The impact of transition to a direct-to consumer business model by an incumbent manufacturer on its retailers: a case study of Volvo Cars (Master's thesis).
Liu, Z., Wang, Y., Yang, H., Du, M. and Lai, S., 2023, September. Analysis of Cross-Cultural Marketing Strategies for International Brands: The Example of Canon’s “Digital Preservation of Intangible Cultural Heritage” Project. In 3rd International Conference on Economic Development and Business Culture (ICEDBC 2023) (pp. 301-310). Atlantis Press.
Meiners, R.E. and Morriss, A.P., 2022. Ethical and Strategic Issues in Decarbonization Policy. Ga. St. UL Rev., 39, p.969.
Reichheld, F., Darnell, D. and Burns, M., 2021. Winning on Purpose: The Unbeatable Strategy of Loving Customers. Harvard Business Press.
Saxena, N. and Vibhandik, S., 2021. Tesla's Competitive Strategies and Emerging Markets Challenges. IUP Journal of Brand Management, 18(3).
Sweezey, M., 2020. The Context Marketing Revolution: How to Motivate Buyers in the Age of Infinite Media. Harvard Business Press.
Sypko, D., 2022. Time-Based Competition in Tesla´ s Supply Chain in the Era of Industry 4.0.
Wang, J. and Peng, X., 2020. a study of patent open source strategies based on open innovation: The case of tesla. Open Journal of Social Sciences, 8(07), p.386.
Weiss, A., 2023. Sentient Strategy: How to Create Market-Dominating Strategies in Turbulent Economies. CRC Press.

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