Tesla Motors Case Study

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Management Study Guide (2016), Defined a set of key steps for market positioning to take place. In order for a product to be successfully positioned in the market, below are 6 steps (ManagementStudyGuide, 2016).

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Figure 3 Steps for Product Market Positioning (ManagementStudyGuide.com, 2016)

Step 1: Know the target audience: Tesla motors have set the company’s main market identity to be a product which shall be known as the pioneers in creating highly effective cars with the advantage of no fuel emission, but electricity as the substitute (TeslaMotors.com, 2016). Ahead of positioning their image as such, Tesla motors also targeted an audience that they felt would be the perfect fit for the product. Konstantinides (2015), defines Tesla’s target market as the upper middle to higher income individuals, the main reason behind this due to the difficulty of sales that Tesla may face when dealing with countries with lower general income (Konstantinides, 2015). This is also further exemplified by the enterprise resources, product attributes and the corporate brand positioning brought forward which led to the selection of the target market. Through selecting such a feasible target market, Tesla are able to successfully build on consumer interest and access, thus providing the consumers with the best that the product can offer (Kotler et al, 2009).

Step 2: Identify the product features: Tesla motors cars throughout the years of development have presented the world with unique features in comparison to the custom gas powered cars (Rinkesh, 2016). Tesla have placed subtle emphasis within their designs and features for their product in relation to the company’s main goal, a great example of product relation is when you relate the similarities between the model S and model X both being high tech electric cars with strong emphasis on performance which were created using cost effective techniques, it is evident that Tesla want their products feature to be identified as the aforementioned (Morris, 2015; Tesla Motors, 2012; Bullis, 2013).

Step 3: Unique Selling Propositions: Aside from defining product features, to reach the goal of dominating over the electrical vehicles market tesla has also prioritized the tendency to have products that emulate uniqueness within them. This is noteworthy through looking at the design specifications of their company. Such evident examples runs in Tesla Motors being the only company that produces only electric cars which makes it unique from many companies who started out by producing gasoline based cars also, the amount of mileage per given charge that Tesla brings forward is 265 miles which was all a result of substantial research (Florea, 2014). Tesla motors is also the first company to produce a fully electric SUV, the model X which received 23,000 preorders in 2015 and is sold out until mid-2016 (Muoio, 2015; Lambert, 2016). It has even been reported that by 2014 Tesla have spent $81.5 million on research and development within the first quarter (Ross, 2014).

4. Know your competitors: As far as competition goes Tesla motors entered the automobile industry as a new brand with an innovative idea. In order to stay relevant in the market, which consisted of competitors such as Chevrolet, BMW, Ford, and Nissan the idea Tesla worked on was processing complete electric cars which were rated among the best in the top tier league by providing statistics such travelling over 250 miles with over 370 horse power. Through evaluating the comparison table it is pretty clear that Tesla fares better in comparison. (Davies & Nudelman, 2013;Gould & Muoio, 2015)

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Figure 4 Comparison with Tesla and competitors (Gould & Muoio, 2015)

The success illustrated by Tesla not just played a critical role in defining the product, but gave Tesla the edge over competitors by showing competitors what Tesla is all about (Kapferer, 2008; Kotler and Keller, 2012;Villacrez, 2014)

5. Ways to promote your brand: In terms of brand promotion, Tesla have chosen to promote their brand through the use of a disruptive business model that allows the buyers to advertise for them for free (Zart, 2014). What this simply means is that Tesla deliberately positions their stores and galleries in areas which constitute high visibility which allows the potential customers to learn about the car. This consequently, leads to high pre-sale rates which are made by reservations by the customers (Musk, 2012). Tesla also does not have dealers, it only utilizes self-owned retail stores. Their main tactic is to engage individuals who are not thinking about buying a car and most of the sales normally happen online. This is the strategy Tesla uses in order to avoid sale restrictions (Chambers, 2011). This has led to high sale capacity (O’Hara, 2015). This technique implemented in brand promotion and marketing has made the cars produced by Tesla both unique and stable in comparison to its competitors (Lien, 2016).

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Figure 5 Detailed chart of Tesla's performance track (O’Hara, 2015)

6. Maintain the position of the brand: Tesla have maintained their brand position successfully throughout the years in terms of delivering a high quality product and maintain a stance as an electrical power efficient car. Tesla’s position has been so well maintained to the point that even people would place a pre-order on a new Tesla model without even knowing what the car would look like, due to trust in the technological and design capabilities of the car. To date 325,000 model 3 cars have been sold which broke the automotive industry sales record (Chen, 2016). This subsequently, illustrates that Tesla have lived up to their goal of being the leaders in electric car production (Klubnikin, 2015).

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Figure 6 illustration of Model 3 against the standards of the car industry (Chen,2016)

2.2 Launch Activities

The Model X was launched on September 25th 2015 in Los Angeles, California by the CEO himself, Elon musk who played the role of the demonstrator of the car’s features (TeslaMotors.com, 2016). The launch event was hosted on a stage with a brief discussion on the product and a live display of role plays and case scenarios on the stage which illustrated the degree of reliability that the product had to offer (Ramsey, 2015; TeslaMotors.com, 2016).

2.3 Brand Management Strategy

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