Essay on Strong Marketing &Positioning Strategies Plan for Tesla Motor

Question: Write an essay on marketing plan for Tesla Motor. Answer: In this study, the marketing plan for Tesla Motor Inc is discussed. Tesla Motor is one of the largest automobile manufacturing companies in USA and EU countries. However, presently, the management of the company is planning to enter in to automobile industry in Australia. This step or strategy of the company needs a detail analysis on the Australian market, which is done in this report. As per the analysis made on the Australian automobile industry, it has been seen that there are different policies applied by the Australia government to control the business activities of the automobile manufacturing companies. However, the technological factors are very strong in Australia. In case of Tesla, the company has several strengths to fight against the weaknesses and threats. The company has to face a tremendous market competition in the Australian market. There are many giant organizations like Ford Australia, G M Holden and Toyota Australia those are operating in the Australian market very successfully. In order to compete with these companies Tesla needs to take strong marketing and positioning strategies. Introduction This study is based on the marketing plan for Tesla Motors. The company is presently operating in the USA and Europe markets. However, now the management of the company is planning to spread its business in Australia also. With the help of this report, the marketing planning has been shown by discussing different areas related to marketing management. Background Tesla Motors is an American company specialized on developing cars that runs on electric. Tesla first developed a powerful Sports car in 2008 that was named Tesla Roadstar. It sold approximately 2400 roadstar in almost 30 countries. In 2012, it first developed its premium electric model S that redefined the four-wheeler car concept in the modern market. In 2014, CEO of Tesla Motors revealed a new dual model of motorcar with great performance and design. There are almost 5000 vehicles of Tesla on the road all over the world. In 2015 it has launches Model X with high acceleration power and three seating capacity (Mangram, 2012). Mission of Tesla is to change the concept of electric motorcar and vehicles all over the world by developing new and powerful vehicles, which runs on electric. Its vision is to develop cars, which will take over the leading car manufacturing companies, which manufactures gasoline-based cars. Current marketing Objectives of Tesla are as follows: Develop its own network of distributing cars all over the world. It has launched local websites in Germany, Italy. There will be no dealers and no scheme of commission sale. There will be no negotiation of prices and all the transaction will be conducted online. Situation analysis The present market situation of Tesla Motors can be understood with the help of various analyses like environmental, PESTEL, SWOT. In case of environmental analyses legal and political factors, development of technologies, economic factors and changes in demography needs to be studied in depth (Clark, Stringham Miller 2015). The various political factors that affect an electric car manufacturing company are various relevant laws and regulation set by government of Australia can adversely affect the manufacturing and distribution of motor cars. Economic factors include the inflation or depression in the market that may affect the purchasing capacity of the individual. Demographic problems indicate any inter country barriers that may affect the marketing of the product worldwide (Motors, 2015). PESTEL analysis In PESTEL analyses various factors relating to economic, social, political and technology is to be assessed and analyzed in depth. These are discussed below: Political and legal factors- This factor focuses on the laws of employment, political stability, environmental laws and regulation like pollution control acts, tax policy of the government and restrictions in trade and business. It includes legal issues and regulation set by government that can affect the purchase and sale of cars in Australia. There are various laws that allow Telsa to sell cars to the consumers directly (Hasan, 2013). The government made many policies to advance loans to Telsa to facilitate its growth. Economic factor- In this factor the purchasing power of the buyer is one of the most deciding factors that decide the companys profitability and return on its investment. Various factors like inflation, foreign exchange fluctuation, changes in interest rate, currency exchange rates become a decisive factor on the growth of the company (Rachet, 2014). The company cost of capital and return on investment is dependent on these factors. It must also be aware of the fact that demand will fall during the regression period as the purchasing capacity of the buyer will decrease and demand for cars will increase during inflation as the purchasing capacity of the consumers will increase. Sales can also be benefited with the increase in lease agreement with the consumers (Yksel, 2012). Social and environmental Factors- Company should be aware of the climatic changes that can affect the production and sale of the car within the country and worldwide. It must promote its new technological policies and be aware of the fact that any governmental factors are not affecting the changes made by the company (Mkude Wimmer, 2015). It must be conscious about the consumers habits in Australia and demand as per their habits. Some of the purchaser can demand eco friendly products that will less affect or not affect at all the environment of the company. Company should take into account the fact that now a days preferences of people towards petroleum car are decreasing. Vehicles of Telsa contribute toward zero pollution emission (Grnig Khn, 2015). It also includes factors like distribution of age, attitude towards career, growth rate of population, consciousness towards medical and health issues. Technological Factor- This is the most important factor on which company must focus primarily as the recent market structure is likely to absorb new technologies. Habits and demands of the consumers are changing drastically as they want new technology cars to support their life styles of people in Australia. They should also keep in mind that there is a lot of competition in the market and if they are not able to deliver new technology vehicles in the market then other company can easily take over the market by supplying new and innovative technology vehicle (Xingang, Jiaoli Bei, 2013). For this, they need to research and develop new technology by innovation and learning process. Telsa is also required to develop proper infrastructure for charging stations on highways. SWOT analysis Under this heading Strength, Weakness, Opportunity and Threat of a company are being analyses, assessed and studied in depth that are as follows: Strength-In this point the strength of a company are identified and analyzed in depth. The CEO of the company has known that it has high values and its tract record it very good. If they can maintain this then their growth rate will increase in near future (Sevkli et al. 2012). The company had high research and development facilities by the help of which it can develop high-speed innovative sports and luxury car. It has already developed a chain of dealership within the country and in various countries. To penetrate in the market of Australia they have to set a dealership agreement in Australia. Tesla has already developed a fully electric car and is now popular within the younger age group. Its capacity to manufacture vehicles that consumes electricity as a power is the most important strength of the company. Even though the car runs on electric, the vehicles are very powerful, innovative and have flawless design (Hollensen, 2015). The cars are also environmental friendly as they immerse less or no pollution and protects environment. Weakness-In this point weakness of the company are discussed and analyzed in detail. Generally, weakness of a company is its employees strength, innovation and learning facilities, and infrastructure facilities of a company. Weakness of Tesla includes its lesser development of infrastructure for its electric cars; consumers do not easily accept its innovation and its prices are too high that is a reason why middle class people (Niederwieser et al. 2016). This factors need to be kept in mind while entering into the market f Australia. It needs to into account the political factors of Australia that can put some barriers to its progress in Australia. Opportunity-In this point the opportunity of Tesla in Australian Market is discussed. As the cars developed in by Tesla in environmental friendly, it will help to penetrate its market in Australia by arranging a distribution chain in Australia. The Standard of living of people in Australia is very high so it will not be a problem for Tesla to market its product in Australia since the prices of the vehicles of Tesla is very high (Ayub et al. 2013). Tesla is now focusing on manufacturing cars with lower price for which it has done extensive research and innovative learning which will help them to target the low-income group of Australia. The Australia government can also support Tesla in marketing its product in their country if proper agreement is entered into. Threat-In this point the various threat faced by Tesla is discussed like threats it faced from its competitors in Australia who are already developing electric cars in Australia. The government may impose some restriction on the entrance and marketing of its product in Australia to protect its domestic companies. Various lawsuits of Australia may restrict Tesla to distribute its product in their country (Yuan, 2013). If government of Australia doesnt give any subsidy than the price of the vehicles will unnecessary rise which can affect the demand of the products in Australia. Current competition Automotive industry in Australia includes many giant international organizations like, Ford Motor, GM Holden Ltd, Iveco Australia etc. As per the current scenario of the Australian automotive industry, the production has started to decrease. As per the industry data in 2014, the total production was 174986, which has decreased from 2013. The results of several researches have shown that the companies in this industry are started to move in the other sectors. However, according to Hasan (2013), the current market scenario of the automotive industry indicates that the technological advancements are taking place in the industry and the companies are trying to cope up with the advanced technologies. In support of this Hollensen (2015) also mentioned that though the production has decreased but the market competition is increasing within the industry because the companies are utilizing the new technologies in their production system. Therefore, it is obvious that if Tesla Motors wants to spread its business in Australia, then it will face a high level competition. The management of the company needs to take advanced strategy in order to compete in the market. However, the brand name of the company will help the management in this situation. Product and competitors marketing promotional budget It has been stated above that there are many large organization in the automotive industry in Australia. If the company that is Tesla Motor enters into this industry in Australia, then the major competitors of it will be Ford Australia, GM Holden Ltd and Toyota Australia. The products or the cars of all of these companies are quite good in quality. Therefore, in order to compete with these companies, Tesla Motor needs to focus on the quality of its products. The engines of the cars must be good enough to minimize the pollution (Asllani Halstead, 2015). At the same time, the product of the company must be stylish and good looking. However, in order to capture the market, Tesla needs to focus on the promotional activities and for that it needs to invest a good amount of money. These can be understood if the promotional budgets of the competitors are identified. According to the data available regarding the promotional expenses of the competitors, it can be said that in the year 2014 Ford Australia spent $80 million just for promoting its product through media. On the other side, if the promotional budget of GM Holden Ltd is seen, then it can be identified that they has increased their spending in promotion and marketing of their products (Motors, 2015). In 2014, the company has spent $3 billion just for promotion and marketing. At the same time, the reports disclosed that GM Holden spends $400 million in each year for advertisement. On the other side, Toyota Australia has spent $109 billion in marketing in 2013, which has again increased in 2014. Therefore, from this discussion, it can be said that the decision taken by the management of Tesla Motor to invest $1 billion dollar for promotional budget is right for the company. Sales analysis Sales are the most important part of a business organization. In case of Tesla, the management of the company has decided to sale 20000 units in Australia is not a very easy task. If the current market scenario of the industry is seen, then it can be identified that compete with the giant companies like Ford Australia or G M Holden is not so easy. The current market share of Ford Australia is 38.2% and the market share of C M Holden is 8.9% and the market share of Toyota Australia is 18.3%. Therefore, from these data, it can be said that it will be very tough for Tesla Motor to grab a market position in Australian market. In order to capture the market, the company needs to produce and provide a higher quality product and service along with the right price level (Mangram, 2012). Target market and Market positioning In case of Tesla Motor, the management of the company has a plan to target the upper middle class and higher class people as their future customers in Australia. The company has decided to position it in the market with the help of media. In order to position itself in the market, the company will take a unique position strategy by focusing on the product quality, price and brand image (Tesla Motors 2016). Marketing promotion (Objective and strategies) Tesla Motors marketing strategy is completely different from that of the other automobile companies. Tesla motors provide destination charging in resorts, shopping mall and restaurants. The battery of the product can be charged in any big resorts or restaurants. This is an added advantage for Tesla Motors. Main promotional objective of the organization is to increase the sale of the product with the help of the new vehicle. To create a brand loyalty To increase the brand awareness of the product on the road. To increase the target customers of the product Initially Tesla Motors made products which are of premium qualities and mainly target the rich people. The new luxurious products are cheap and can be affordable by the young professionals. The price of the product is near about 40,000 US dollars and will also have a tax rebate of $7500. The product does not emit and harmful substance in the nature and is environment friendly. The user of the product will save near about 200 US dollars on energy fuel (Asllani Halstead,2015). With the help of the young professionals Tesla is planning to create a brand with Zero carbon emission. The battery of the car is made on latest technology and provides a tough challenge to the competitors. Tesla Motors is planning to attract the new generation between the age group of late twenties and early forties. The new car is eco friendly and attract person who are tech friendly. According to Donlan Crowther, (2014), Tesla motor is attracting the eco friendly groups by providing electric cars. The interior of the car is also decorated with latest devices like wifi facility, power steering and auto play mode to attract new customers. The car will be an entry level luxury car with fully accommodated with latest technologies. Website and social media is also used by Tesla motors to promote its product. The website of the organization is the main hub where the latest information about the product is loaded. Social media is also used by the organization to create a viral advertisement of the product (Lee et al. 2015). People now are tech friendly and social media like Face book and twitter will help Tesla Motors to promote its new product. Newspaper and digital marketing is also used by the organization to promote its product. Media and Budget allocation Media and Budget allocation of the organization is made completely on the basis of assumption of the author. Tesla Motors is a financially strong organization and the budget is for the financial year 2016 and 17. Conclusion The study has thoroughly analyzed the economic condition of the organization. The purchasing power of the people in Australia is high enough which encourages Tesla Motors to start its business in Australia. The new car of Tesla Motors runs on battery and therefore it is eco friendly. The organization has used technology to make the car stylish, attractive and speedy. The main target customer of the organization is rich people but the price of the new product is quit cheap to attract the young professionals. The marketing strategy of the organization is to create a new image of the brand in the mind of the customers. Tesla Motors is trying to become an organization who produces cars for all age groups. Reference list Asllani, A., Halstead, D. (2015). a multi-objective optimization approach using the rfm model in direct marketing.Academy of Marketing Studies Journal,19(2), 65. Ayub, A., Razzaq, A., Aslam, M. S., Iftekhar, H. (2013). 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