The year of 2003, saw the foundation of the company Tesla Motors, which was later renamed as Tesla Inc. It became profitable for the first time, ten years later, in the year 2013.
Based in the state of California in the United States of America, the speciality of the company lies in the manufacture of Solar Panels, energy from lithium-ion batteries and of course, electric vehicles.it only started being profitable in 2013. Elon Musk, as it’s CEO, Tesla has a vision to be the company that leads the world to a cleaner tomorrow.
|Pros and Cons of Tesla Marketing Strategy|
|The company is technology driven||Their presence in the market is limited|
|The market strategy as a whole is based on attributes||Restricted Supply Chain|
|Using Brand Value||They keep their prices high|
|Diversifying the business||Owning and operating everything|
|A clear mission in mind||The world transportation has not gone completely green yet|
|Always true to themselves||They face serious competition|
|Using controversy to their advantage|
|Special feeling associated with owning a Tesla|
|Intelligently segmenting the market|
|Not spending on advertising|
Advantages of Tesla Marketing Strategy
- Technology driven –
Tesla is more so a technology company than just an automotive company, focusing it’s maximum efforts on the construction of technology platforms. This reflects in the company’s marketing which clearly shows Tesla having built the infrastructure to support the operation of the cars that are manufactured by the company along with selling them.
- Attribute based –
The whole approach of Tesla towards marketing, is attribute based. So basically the company focuses mainly on informing the potential buyers about the different aspects of the products that the company has put up for sale. These attributes can include the size, weight, colour, price, functionality, etc. of the product.
- Brand Power –
Tesla has taken electronic vehicles from being slow paced and small vehicles to extremely alluring vehicles with an enviable amount of speed. All while keeping the price of the vehicles in an affordable range. This excellent reputation has given a huge boost to the brand power, which the company makes good use of.
- Business Diversification –
This is one of the biggest advantages of Tesla’s marketing strategy. The company realised the untapped potential of venturing into the markets associated with the products Tesla was already manufacturing. An example being venturing into the Solar Roof Tile market as it compliments the rechargeable lithium-ion battery market, which Tesla already used to manufacture.
- Mission Statement –
Tesla’s mission is to put an end to the world’s reliance on fossil fuels, to create a cleaner world. Tesla’s aim is to create cleaner transportation and cleaner energy products(eg. electric cars) more easily available and affordable to the general public, so that the world can transition to clean and sustainable energy.
- Authenticity –
This is a feature of Tesla’s marketing strategy that really sets the company apart. The whole company and every single person directly associated with it, are unabashedly themselves. This leads to Tesla being one of the world’s most carefree brands while still taking as one of the world’s most ambitious ones.
- Controversy –
Especially in the digital age, where news reaches every corner of the world in a matter of seconds, controversy can easily multiply the audience base. For Tesla, their CEO Elon Musk uses controversy to his advantage, getting caught in quite a number of them, keeping the spotlight shining bright on him and his company.
- Exclusivity –
Tesla, with no dealerships, eliminates any salesman, bargaining, etc. The price listed is always final. A buyer can only configure and buy the car online, but without ever actually laying eyes on the actual model. Around a few weeks later, the buyer finally gets the car. This process associates a special feeling of exclusivity with owning a Tesla.
- Segmenting –
During market segmentation, instead of anything else, Tesla focused all of their attention on the segment that gave them the opportunity to build model vehicles that are innovative as well, over the longest period of time. Their intelligent choices allow them to now command a huge brand identity, with premium pricing and earn substantial profit(s).
- Word of Mouth –
Tesla, by their own admission, do not spend any amount of money on advertising. The belief of the company lies in the fact that the buyers of their products will in turn spread the word about the advantages of Tesla’s products, which will in turn lead to other potential buyers to purchase Tesla products.
Disadvantages of Tesla Marketing Strategy
- Market Presence –
Tesla generates the maximum amount of the company’s total revenue from within the United States of America. The company does not at all target the developing parts of the world and China. This strategy actually limits the company’s growth from the standpoint of speedy economic development in the markets overseas.
- Supply Chain –
Tesla has a very limited supply chain. One of the major factors contributing to this is the decision taken by the company to manufacture every single part of their products, on their own. This resulted in the company facing a loss in excess of 650 million US dollars for the third quarter of 2017.
- Price –
The cars that are manufactured by Tesla are more costly in comparison to those of their competitors, especially the cars that run on an internal combustion engine. This problem severely hinders the rate at which Tesla can grow their customer base while at the same time bringing down their market share.
- Vertical Integration –
This is a huge challenge for Tesla, as they have taken the decision to own and operate every part of the process of producing cars on their own.The biggest problem for this is that slowly the number of enterprises to work with goes down as companies that are globally dominant emerge in all the market segments.
- Limits –
Owing to the fact that the world has not yet turned towards fully electric transportation, Tesla’s decision to manufacture only electric cars, often turns away potential buyers. This is because there can be several challenges in the present scenario with owning an electric car, like the scarcity of charging stations.
- Competition –
Tesla has several competitors in the segment of electric cars and they have started to decrease the prices of their vehicles to sell more units. They can recoup their losses in this segment with sales in the other car segments like those with internal combustion engines. Selling only electric cars, Tesla does not have that advantage.
A marketing strategy is adopted by a company after serious analysis and extensive debates to iron out any problems. The marketing strategy of Tesla, definitely has a number of problems, but no one can deny that Tesla has now become a brand to be reckoned with and if they are successful in achieving their vision, the whole world might be happier for it.