Situation Analysis
Tesla Motors is an organization that has existed for 13 years already. Initially founded in North America, it soon reached Europe, Australia, and Asia, as it attracted the population with a new generation of vehicles that ensure zero emissions and sustainable energy (Tesla Motors, 2016a).
Not so long ago, the company produced its Model S four-door car that was claimed to be the safest vehicle with numerous advanced features such as autopilot, adaptive lighting, and all-wheel drive (Tesla Motors, 2016b). However, just several months ago, one of the Model S drivers crashed into a track while it was self-driven (Levin & Woolf, 2016). The organization explained that such a situation was an exception that happened as the car’s sensor system failed due to the particular weather and situational conditions. Still, the general public turned out to be greatly concerned. People who support Tesla can alter their decision because of safety issues.
SWOT analysis
- Strengths: belongs to the well-known and widely spread company; has superior transmissions and electrical technology, all-wheel drive, automatic steering, autopilot, adaptive lighting, air filtration system, and a wide range of additional advanced features (camera, navigation, phone, etc.).
- Opportunities: has environmentally-friendly features; does not need oil, which is more expensive than electricity; can turn the owner into an energy company, offering charging and swapping stations.
- Weaknesses: limited offerings; no infrastructure; short positive operating history; batteries require constant improvement.
- Threats: increasing competition; officially reported accidents related to electric vehicles in particular; the price is rather high; the lack of customer interest.
Marketing Goal
To ensure the growth and development of the market in Australia, regardless of the negative international publicity, by September 2017.
Marketing Strategy
In order to improve the current situation and provide Tesla with an opportunity to increase its market, it is critical to pay more attention to target customers and positioning of Model S.
Target Customers
From the very beginning, the company wanted to reach the upper-class business people, who were willing to obtain a luxury car that suited their status. These were mostly successful executives and entrepreneurs. Soon the emphasis was also put on technological advances and environmentally friendly features, but the segment did not alter (Zondag, 2011). To overcome the effects of negative publicity, Tesla Motors should expand its target market.
The company should try to reach individuals who are 20-40 years old because they tend to represent the majority of the driver population today. Middle class working Australians should have an opportunity to buy Model S, as there are many of them who may find it attractive but lack finances. Tesla Motors should target young professionals who are likely to become successful business people in the nearest future but are currently on the entry-level.
These individuals represent a vast segment of the market, and it is not beneficial for the organization to ignore them. It will not be difficult to attract them because the majority is already willing to be a part of Tesla Motors’ market. Taking into consideration the fact that such a population does not require extreme changes in the company’s offerings, it can reach its target without any complications.
Value Proposition
Considering the fact that the organization was initially willing to offer Model S to successful businesspeople, it seems to be reasonable that trying to add one more market segment, it will pay attention to the individuals who want to become those successful business people and are already achieving this goal step by step. In this way, Tesla Motors does not even implement many changes, it just looks in the future.
Young professionals are rather ambitious, as they are often led by example. Trying to act as executives and entrepreneurs, they are also likely to be willing to have the same luxury cars. It means that when having a financial opportunity to buy Model S, they are almost 100% sure to do it. In addition to that, young adults are very interested in technological advances and eco-friendly products today so they will be impressed greatly by the qualities of this vehicle. Moreover, its excellent performance should be underlined, as well as the visual component, which is also vital (Zondag, 2011).
Thus, to increase Tesla’s market in Australia, the company should position Model S as the entry-level luxury car that is environmentally friendly, technologically advanced, and visually elegant. Figure 1 (refer to appendices) reveals the position map of the product emphasizing that this car is to have an appropriate price that can be accepted by the segment. The company should not attract the public’s attention to previously enhanced safety features because of the accident.
Marketing Tactics
Product. Tesla Motors should enhance its position in the Australian market with the help of Model S. This vehicle is already full of numerous features that make it unique and attractive. Still, the organization can think of some improvements. First of all, they can try to improve the quality of the batteries. Longer life is a great feature that is highly valued by users. This part can be almost constantly enhanced, which is a great opportunity to impress the market.
Secondly, some improvements can be made in the car’s sensor system, which failed and led to the death of a man. Showing its customers that the organization cares about them and is willing to meet all their needs and demands, Tesla Motors will attract new buyers. In addition to that, the company should consider various branding strategies. For example, it can introduce some customer stories and then add how Model S affected them. As a rule, the representatives of the general public do believe such evidence and spread it very quickly (Srinivasan, 2005). Due to such alterations, the organization is likely to make the market forget about the accident and focus on those great steps forward Tesla Motors continue taking.
Price. Model S is a rather expensive car that costs almost $57,500. On the one hand, setting it, the company identified its targeted market. On the other hand, it puts itself in poor condition because the competitors tend to have much lower prices (Cheong, Song, & Hu, 2016). Maybe initially people were ready to pay more as they expected to receive unique features. Today the issue that has happened recently is likely to change their decisions. But as electronic vehicles become more and more popular, Tesla Motors has a chance to restore its name if it lowers the price.
Distribution. Tesla Motors cooperates with dealers who assist the buyers as they want to purchase a car. It allows them to maintain negotiations. Still, the company realizes now that traditional auto dealer locations are not good enough to ensure that potential customers will reach them because they are not just ordinary individuals who would look for a unique vehicle among simple ones. In addition to that, franchise dealers tend to face problems when they work with both traditional and electronic cars (Tesla Motors, 2016a).
They need to underline the advantages of two-vehicle types at the same time, which seems to be impossible. As a result, dealers fail to sail all items they could, which has an adverse influence on them and on the organizations with which they cooperate. Tesla Motors is willing and should open a range of its personal store and gallery locations. In this way, it will overcome this main problem with dealers, attract more clients, improve electric vehicle infrastructure, and develop its market.
Promotion. Having $50,000, Tesla Motors can implement advantageous strategies that will promote Model S and increase market share. For example, it can attract the public with loyalty programs. The company can focus on clients with families who want to buy a new car. Those who are already Tesla users can receive a particular discount or free service during some period of time. The money will be returned in this way, as people will continue buying new items instead of searching for other alternative vehicles.
In the same framework, the organization can just lower the price for some time, speaking about New Year discounts, for example. The interest will be renewed, and Tesla Motors will have an opportunity to continue operating successfully until it produces a new model. Advertising can also be improved. First of all, the company should refer to traditional media that appeal to the adult population. Newspapers and journals can describe customer stories that were positively influenced by Model S or just reveal their features. In this way, both promotion and branding can be maintained at the same time, which is advantageous for the company.
Moreover, Tesla Motors should pay attention to social media because it is used by almost everyone. The organization can have its personal account and use it to announce some news and vital things. It is also possible to increase site traffic and attract those individuals who are searching for something with the help of Google. When constantly getting on the company’s website, the clients are likely to become interested in the offerings even if initially they had another opinion.
Thus, utilizing these strategies, a new population of customers is expected to enter the market, which will make it larger for sure. What is more, it will have a chance to focus on those opportunities that can provide benefits for many years. The infrastructure of electric cars will develop, and people will value Tesla regardless of the accident that has recently happened.
References
Cheong, T., Song, S., & Hu, C. (2016). Strategic alliance with competitors in the electric vehicle market: Tesla Motor’s case. Mathematical Problems in Engineering, 1(1), 1-10.
Levin, S., & Woolf, N. (2016). Tesla driver killed while using autopilot was watching Harry Potter, witness says. Web.
Srinivasan, S. (2005). Storytelling: Branding in practice. South Asian Journal of Management, 12(3), 92-95.
Tesla Motors. (2016a). About Tesla. Web.
Tesla Motors. (2016b). Model S. Web.
Zondag. (2011). Tesla Model S. Web.
Appendices
