Introduction
Tesla Inc. first burst into the scene of the electric automobile in 2003. But since then, it has contributed to the growth of the blossoming alternative fuel vehicle industry in the US and indeed the entire world. Tesla has led the way with pioneering inventions and innovations that have transformed the industry from a great space-age idea into a 21st-century technological reality.
Apart from employing the world's most intelligent and skilled automobile engineers, Tesla has also ensured that other divisions in its organizational framework are equally matched with professionals in their fields of endeavor.
The Sales and Software division of Tesla is a very active one and a key reason why the brand has gained popularity and acceptance in both the US and abroad. The unique Tesla marketing mix has revolutionized the electric vehicle industry and set the pace for other brands to follow. Consisting of the Tesla 4Ps of Product, Price, Place, and Promotion, the marketing mix forms the basis for Tesla's marketing plan.
It may interest you to know that, unlike many other corporations that delegate one or more of their 4Ps to external firms, Tesla keeps a firm grip on the entirety of its marketing mix. This is done by Tesla in order to maintain consistency in the quality of product and service delivery to Tesla's target audience while at the same time ensuring the minimization of costs and optimization of profit margins.
Tesla fully understands the importance of its complete control of the 4Ps in its expansion, diversification, and market penetration efforts in the US and overseas. And market penetration as a strategy is one that is very important to the short and long-term growth of Tesla. It is one of the key competitive advantages that Tesla has over other rival alternative fuel vehicle producing firms, including the likes of Bavarian Motor Works (BMW), General Motors Company (GMC), Honda Motor Company, Nissan Motor Company, Toyota Motor Corporation, and Volkswagen.
Tesla Product Strategy
Product is one of the 4Ps in the marketing mix Tesla implements in its overall marketing plan. This aspect of the marketing mix acknowledges all the products manufactured by this leading electric vehicle producer. Tesla's range of products comprises energy generation, energy storage systems, and electric-powered automobiles. The product mix is not static but rather consists of other new products in the pipeline, including those that are in the conceptualization and developmental stage.
While Tesla is widely known for producing top-of-the-range electric-driven vehicles, such as the popular Model S sedan electric car, this company is also known for producing many other sustainable energy products.
Some of the other products include;
- Powertrain components are needed by the electric vehicles produced by other competing automobile brands. You might be wondering why Tesla would produce powertrain components for other competing brands. The answer is simple. It's because it is in line with their mission statement of promoting the quick global acceptance of sustainable, renewable, environmentally-friendly energy in the production of vehicles.
- Tesla produces batteries to meet both industrial and household demands.
- The acquisition of SolarCity Corporation led to the expansion of Tesla's product mix, which now includes a variety of solar energy equipment as well as associated installation and maintenance services.
Although Tesla has expanded its product mix to include energy generation, the production of solar energy systems, and batteries, the manufacture of alternative fuel vehicles still remains its premium product and the source of most of its revenue.
Tesla Price/Pricing Strategy
Pricing is a very important element in the Tesla Marketing mix. Typically, pricing is a reflection of the production cost and acceptable margin. Tesla is no different from any other corporation with preconceived profit margin targets. The pricing strategies of Tesla are designed to meet its targets to both influence consumers' buying decisions and achieve profitability. To this end, Tesla implements a couple of price strategies, namely, Premium and Market-oriented price strategies.
The premium price strategy is one where the prices of Tesla products, particularly its electric vehicles, are deliberately fixed on the high side to reflect the exquisite nature of their products. Consumers know that they need to pay big bucks to own a Tesla electric vehicle. Tesla's premium pricing strategy also reflects the company's technological advancement in producing environmentally-friendly and innovative products.
Tesla also adopts a market-oriented price strategy mainly for other products and services, including its solar energy systems. This pricing strategy streamlines the prices of Tesla products to be competitive in their respective markets. Tesla solar panels, for example, are priced in line with the prevailing market prices and not by virtue of the company or customer's perception of the quality or uniqueness of the products.
In the future, it is expected that Tesla will adopt other types of pricing strategies to meet the demands of both the alternative energy solutions and the electric automobile market.
Tesla Place & Distribution Strategy
The locations where Tesla products can be purchased are equally as important as the product and pricing. Customers need to be able to have access to view, feel, and test-run products. This can greatly influence their buying decision, and Tesla does not compromise on this element of the marketing mix. Tesla has a well-structured and steadily expanding distribution network. There are different ways by which Tesla distributes its products as well as reaches out to existing and/or prospective customers. Currently, these venues include;
- Galleries, showrooms, and stores are owned by Tesla.
- Service centers are owned and managed by Tesla employees.
- Designated charging stations.
Tesla-owned galleries and stores are spread across different locations, including popular shopping malls. At these showrooms, prospective and existing customers can view and inspect electric vehicles, energy storage, and solar-powered systems. While these stores offer customers a chance to experience Tesla products firsthand, the company still requires customers to conclude all sales transactions on its official website.
For customers wishing to service their Tesla energy storage, electric-powered automobile, or solar system, there are designated service centers available across the US and in different parts of the world. These centers provide maintenance and repair services for the Tesla range of products. Charging stations are also available to customers wishing to fully charge their electric automobiles in the shortest possible time.
Tesla Promotion & Advertising Strategy
Promotion is the fourth element of Tesla 4Ps. The promotional mix of this alternative fuel automobile firm involves all the marketing activities geared towards promoting the brand. It also involves activities to attract and influence target customers into deciding to buy Tesla products. The five main marketing mix of Tesla consists of;
- Direct marketing,
- Personal selling,
- Sales promotions,
- Public relations, and
- Viral marketing.
Vital marketing plays a very important role in promoting Tesla products. Tesla relies on social media to provide viral messages and videos of products. The Model S electric automobile toy for children is a typical example of how viral marketing via social media has helped Tesla promote and boost the sales of a product. Personal selling is another highly favored way that Tesla sells its products to a target audience in its galleries and stores. Tesla is also known for enhancing the popularity of its brand through a well-orchestrated public relations plan.
The company offers attractive special discounts and a customer referral program with sales promotions. This program rewards existing customers for referring Tesla products and services to other buying customers. From time to time, Tesla engages in direct marketing activities. A typical example of this is the business-to-business (B2B) sale of their batteries and powertrain components.
Mind Map
Key Takeaways
Tesla's marketing mix consists of the 4Ps of Product, Price, Place, and Promotion. Tesla offers electric automobiles, energy storage, and solar energy system products. They also adopt market-oriented and premium pricing strategies while their products are available at designated stores and galleries.
In terms of the promotional mix, Tesla relies on direct marketing, personal selling, sales promotion, public relations, and, last but not least viral marketing.
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References
Tesla, Inc.'s Marketing Mix (4Ps) Analysis
UPDATED JUNE 25, 2018, BY DANIEL KISSINGER
http://panmore.com/tesla-motors-inc-marketing-mix-4ps-analysis
Tesla Marketing Strategy & Marketing Mix (4Ps) by MBA Skool Team, Last Updated: August 14, 2021
https://www.mbaskool.com/marketing-mix/products/17308-tesla.html
