Ch 7 Business Marketing

Tesla Motors is a business to consumer marketer at the time when it comes to the Model S. According to Forbes.com in order for Tesla motors to effectively sell cars they must start a dealership network.

"This “buy a car over the Internet” business is fine when you’re only trying to sell 20k luxury sedans a year, but it’s never going to move 1-2 million cars. Tesla needs a dealership network (something Musk has said himself) or a massive change in franchise laws in all 50 states in order to grow."

The car is relatively expensive and would not be bought for commercial use. The company is planning on making a affordable car that may be used to market for business use. Tesla also markets electric powertrain components, including lithium-ion battery packs, to other automakers, including Daimler and Toyota. Tesla has an alliance with a company called SolarCity. The Chairperson of Tesla Motors is the Same for Solar City. The company Manufactures solar panels and installs them in the models. They also install high powered outlets into a home before the Model S is delivered to the consumer. Tesla made a deal that Panasonic’s automotive grade lithium-ion battery cells will be used in Tesla’s premium electric sedan to build more than 80,000 vehicles over the next four years. the company says they have more supply problems then demand problems. The company continues to work out kinks in its factories, to get better deals from suppliers, and to try and improve gross margins by becoming more efficient overall. On the Tesla website it says they are careful of who they do business with and their suppliers are strictly screened.

"Tesla is committed to ensuring that its suppliers do not use slave labor or engage in human trafficking. Tesla does not, and will not, tolerate the use of slave labor in the manufacture of its products and does not, and will not, accept products or services from suppliers that engage in human trafficking in any form. Human trafficking and slavery are crimes under state, federal and international law. These crimes exist in countries throughout the world."

 

Ch. 8 - Segmenting and Targeting Markets

Tesla motors cannot engage in traditional segmenting because the Model S is a revolutionary vehicle.  this car is targeted at mainly men with a successful career, a high education level and who is conscious about the environment.

There are different types of segmenting that Tesla can use like.
 
Geographic segmenting: Tesla can market to people in places with high gas prices and environmental friendly policies. This way people have a choice to switch to a car that uses electricity only to power the vehicle and if they are already Eco friendly oriented they are more likely to make the switch to the alternative.

Demographic segmenting: Tesla will market the Model S to those who can afford it. males that are in their late thirties, and have high income.

Psychographic segmentation: Tesla can contact people and ask the questions according to their lifestyle like, are they satisfied with their current car and if they are looking for an alternative car? In doing this they will be informed of the Model S capabilities.

"According to GE Reports*, the (potential) buyers of electric cars can be divided into three main categories. The categories are based on the type of motives of people to buy an electric car. The three segments are (1) environmental conscious people who support sustainability, (2) technology and car driven people who are interested in cutting edge innovation and (3) frugal travellers whose main goal is to (permanently) reduce their travel costs. Based on the characteristics of the target group described above, buyers of the Tesla Model S could be mainly divided into the environmental conscious (1) and the technology and car driven (2) segments"

Ch. 11 Developing and Managing Products

 The Tesla Model S was first shown to the public in 2009, retail deliveries started in the United States in June 2012. The Model S was released in Europe in early August 2013, and the first deliveries was in, Switzerland and the Netherlands. Developing the Model S was a process because it was new and an alternative to internal combustion vehicles.  Elon has overseen product development and design from the beginning. Model S is unique as in the only car made the way it is. The chassis, body, motor and energy storage systems are unique to Tesla Motors. Tesla has told investors that Model S development would cost about $400 million. Model S is the top selling car in the electric car category. The company said it sold about 4,750 Model S sedans in the first quarter with, $383 million in revenue. Tesla CEO Elon Musk said, production will increase from about 400 cars a week to nearly 500 cars By the end of 2014. Tesla expects to be able to manufacture as many as 40,000 Model S units per year. According to Tesla, North America Model S demand is about 20,000 cars a year. European demand should be similar, and Tesla plans to set up distribution in China and Japan. The life cycle for the Model S is said to be long because they will constantly be upgraded over the years .

Ch 18 Social Media and Marketing

Tesla motors uses several forms of social media for marketing. they have profiles on pages like facebook, and Youtube. they have their own blogs and forums on the Tesla website. someone created a Tesla Club where they only speak about Tesla cars like the Model S. On the corporate forums the chairperson will address certain issues. on the corporate blogs people can be free to speak there mind. The main way Tesla markets is through what people say about them, so social media is a big weapon for them. Magazines market them and other websites and car spectators start conversations about the Model S. news sites keep up to date reviews about the Model S. Their consumer Ratings are high so this is a big advantage to there marketing scheme.


 






 

 

Chapter 10 Product Concept

Tesla as a company is growing and becoming something more people know about and recognize. when I mention Tesla to a person they say, "oh the electric car". Their logo is recognizable and memorable. they are becoming not just a brand associated with cars but also striving to become a leader in technology, which improves their brand equity. Tesla and the Model S is Known for being a leader in electric car manufacturing. The Model S might be becoming more popular but that's not enough. The Model S is an amazing car but it is new, and it will take sometime for people to recognize its capabilities. Tesla is a car that requires shopping and a lot of  information because its different and expensive. The car starts at $79,000 and ends at $95,000 fully upgraded. The standard battery is 40 KWh with 160 miles and the premium performance battery is 85 KWh and 300 miles. You can fully customize the car to your preference from the paint to the rims. i comes standard with a 17 inch touchscreen monitor and a 200 watts 7 speaker stereo system. The standard charger for the car comes with the car, and the supercharger is 15,000. The warranty for this car is great and some say unbeatable. The trademark for Tesla is (TSLA). and is at $151 a share.

Chapter 17 Personal Selling and Sales Management

Tesla came to the conclusion on what target market they would enter by figuring out what group of people can afford the Model S, and who will want an Eco friendly vehicle. Tesla Model S meets the requirements of a personal seller but, only in two states. Tesla is prohibited to sell in  many states directly and face to face because they have no dealer network. This product is more likely to need personal selling because it is expensive, different, and requires convincing. although they make relationships through their showrooms with their very informative salesperson they are not allowed to close the deal or even let you test drive the car (in most states) the most you can do is get in the car and look at it. The Tesla websites collects feed back through the forum conversations, the blogs, and emails. Their customers find them by hearing about the company through the grapevine. like me I never heard of Tesla before until someone told me about them, then I became interested. After a company like Tesla collects certain knowledge they act on it and innovate. Tesla is vigorously fighting to get rights to sell direct across the United States.

Chapter 16 Advertising Public Relations and Promotion

            For a luxury car it is important to portray vanity and egoism. Also a luxury car like the Model S uses Fantasy advertising to attract their buyers. Tesla has done what it's done without any advertising to the general public. The only things that are contributing to the Model S buzz and promotion are, Word of mouth, viral videos, forums and blogs, Awards, great reviews by reviewers, bad reviews, and also The Tesla stores and showrooms. Some think Tesla has a bigger plan on how they will promote the Model S. Tesla motors addresses any public relation questions on the Tesla website and forums. Recently there was a Model S fire that happened on a highway that drastically effected their public relations.

"A video that went viral of a burning Tesla electric car has emerged as a public relations nightmare for the company, analysts said Thursday, as the “green car” maker lost as much as $3 billion in market value two days after the incident in Washington state.
Tesla Motors Inc (TSLA.O) has confirmed that the car caught fire after the driver ran over a large metallic object on Tuesday morning just south of Seattle, causing extensive damage to the front end of the Model S sedan. Emergency officials at the accident said the fire occurred in the electric vehicle’s lithium-ion battery."

        The person whom owned the vehicle stated that they will still want another Model S. Chair person Elon Musk states on the Tesla website, " you are 5 times more likely to experience a fire in a conventional gasoline car than a Tesla and it will be far more dangerous".

Chapter 14 Marketing Channels and Retailling

                 Tesla Motors uses a direct channel where producers sell directly to consumers. Tesla does not use any agents or brokers. which means there is no middle man.  Tesla Motors is an exclusive distributor, you can only buy a Model S straight from Tesla. The majority of states in the United States prohibits them to do so. .They are an independent retailer there is no chain and a person cannot own a part of their franchise. Tesla's marketing channels first consist of them marketing the car through the use of internet, showrooms and informative salespersons, and galleries. A person decides to buy a tesla then is able to customize the care the ay he/she wants it. last The Model S will be shipped to the person. Tesla motors has a cooperative relationship with the Tesla managed company SolarCity. SolarCity and Tesla works hand in hand by giving you an option to install solar panels to your Model S in order to save energy and money in the long run. tesla also deals with Toyota because they have a $50 million interest in Tesla. Tesla has a arms length relationship with Panasonic for them to produce Model S batteries for the time being. To my knowledge Tesla is the only auto dealers who use this method of direct sales but I know the way it is looking they are influencing other car makers to do the same.

 

 

Chapter 6 Consumer Decision making

In a Car company the consumers decision of buying a car is based on specific needs and wants, how it touches the senses, what persuades them to buy, their personality, lifestyle, and physicological factors. Since Tesla is marketing to the upper middle class green friendly baby boomer target market, the green friendly standard is met because the car has zero emission and is not harming the environment. This target market is most likely hard working, smar,t and feeling like they deserve something nice. The Model S is appealing to the eye, its quiet and FAST. People already know that its a electric car that looks good by now, but electric cars h a bad reputation in the sense of proformance, until now. I aveposted a Video that shows the electric vehicle proforming as it beats the high end sport car BMW M5 in a drag race. a person will learn alot about Tesla frome someone like me that is always talking about this car and the comapany. When you see the car at a showroom or on a test drive it speaks for its self in the sense of marketing. In a showroom there will a salesperson who knows everything about the car and the compant that will try to convince you on why a person should purchase this vehicle. The company markets mainly how much its going to save you in the long run, its proformance, how its safe for the environment, saftey, and how appealing it is. This car is an alternative to the sporty internal combustion vehicles because it matches them in all catorgories of proformance and saftey. When consumers are adopting the Electric car coulture It takes some time for a consumer to make the decision because it is an alternative and not traditonal. Some frequently asked questions are; how far can i go?, how long does charging take?, how is energy generated?, how much can i save ?. This car is kinda young in the industry so will take a while to go through the socialization process.

 

MODEL S BEATS M5 IN DRAG RACE    

Chapter 5. Developing a Global Vision

Model S is Norway's best selling car. It is currently being sold in North America, Europe, and soon Asia. European deliveries began last summer in july. Model S is being sold in other countries the same way it is sold in North America through company owned showrooms and dealers, and online. The Model S ranked as the top selling plug-in electric car in North America during the first quarter of 2013 with 4,900 cars sold, ahead of the Chevrolet Volt (4,421) and the Nissan Leaf (3,695). Model S has won several awards and recognitions like the 2013 World Green Car of the Year, 2013 Motor Trend Car of the Year, Automobile Magazine's 2013 Car of the Year, Time Magazine Best 25 Inventions of the Year 2012 award, Consumer Reports' top-scoring car ever, and the National Highway Traffic Safety Administration NHTSA top ranked 5 star safety rating. Tesla's first showroom in mainland China, scheduled to open later this year, will be in central Beijing at the Parkview Green mall. (Beijing's equivalent of Rodeo Drive)

China is the largest auto market in the world so, tesla must be exited on pushing sales there. analysis say china is big on luxury cars so they will market the Model S in China as a luxurious car that happens to be electric. Air pollution is a big problem in China, and the government is a strong supporter of electric vehicles. "Tesla will sell successfully in China because it is a very high quality and well engineered automobile, a luxury brand and it is foreign made," said Charlie Paglee, CEO of Brannan Auto Engineering in Shanghai. "I think we will see probably at least 10,000 units a year from demand in Europe, and then at least 5,000 in Asia," said Musk during the May 8 earnings call.  Tesla also states that,  if demand in Europe and Asia meets projections, the company could sell 40,000 Model S cars annually by next year. Tesla may even change the name of the company within china to Tuosule to avoid a trademark troll. Kingston Chang who worked at Bentley China for a decade will be Chinas general manager for Tesla. "Mr. Chang will help Tesla navigate its entrance into the Asian market," said analyst Andrea James. Tesla has competition globally just like any other car company. For example In Germany the main car company their is Volkswagen and they don't have a EV so it will be hard to have many opportunities in Germany, due to the politically powerful automobile company. Since model S is going global it has a Tesla Club online where owners of the Model S all over the world can post blogs and forums about the car asking questions an informing. in every country their taxes and laws are different so Tesla has different approaches in each region of the world. The Tesla website states, " Tax incentives are complicated and subject to change without notice. While Tesla does its best to keep this information up-to-date, it cannot guarantee the current accuracy. Tesla recommends consulting a tax professional to validate incentive availability and eligibility."

 

Chapter. 4 The marketing Environment

Tesla Motors manufacturing headquarters is located in Palo Alto California. Governor Schwarzenegger supports a manufacturing future for Tesla cars in California. The Governor expresses his feelings about the company by saying,  “Today’s announcement is incredible news for California’s economy and its environment. If California was a baseball team this would be like winning the first round draft pick and recruiting a player who is a perfect fit on our roster because Tesla Motors and its all-electric cars belong in California,”. the state has given Tesla a $10 million. grant and is also eligible for $1 million in Employment Training Panel Workforce Development Funds to train employees. The state is clearly big on green marketing and improving the environment. According to Examiner.com The company Tesla Motors is marketing Model S to upper middle class green-friendly 'Baby Boomer' generation. Tesla has internal strengths like having the 1st fully electric sports car, they have the ability to manufacture vehicles in house, and they have Strong technological expertise in the area of electric transmissions & drive train. their main weaknesses are their ability to produce enough money to achieve production goals, and their prices compared to competitors who used gas driven cars. Tesla has the support of the governments across the globe in the sense of going green to help the environment. Tesla motors is competing against very wealthy and politically powerful auto dealers. Forty-eight states forbid Tesla to sell cars directly to consumers. The company charges a single flat price for its cars, but couldn’t if middlemen got involved. independent automobile dealers are fighting furiously to keep Tesla out of their backyards.  “Tesla believes it should be allowed to sell cars without licensed dealers. This can’t be,” wrote Gerard Murphy in The Washington Post. Murphy is president of the Washington Area New Auto Dealers Association. “If Tesla won’t have a dealer network, it doesn’t belong in the automobile business.” Tesla motors is also competing with a technology that has been used for hundreds of years and it may take a long time to switch peoples tradition unless it becomes illegal to drive gas powered cars. the concept and technology for the electric car has been around for a large number of years and the mainstream electric car is still far from a reality.

 according to Prof. Evens if we ran out of gas today the they have enough money to have a charging station everywhere that there is a gas station!.

Ze’ev Drori, President and CEO of Tesla Motors, remarked, “Tesla has achieved an extraordinary accomplishment. We are the only automobile company today delivering full performance battery-electric vehicles to our customers. Make no mistake - we are not a niche player with a car only for the rich and famous. As our agreement with the state so clearly demonstrates, we are building a high volume ZERO EMISSION VEHICLE, manufactured in California for mid-range family use. And we aren’t going to stop there. We will continue on and build even more affordable cars. You are witnessing the debut of a new car company, a company unlike all others, a company with a disruptive technology, a company dedicated for the exclusive production of Zero Emission Vehicles.”  

Chapter 3 Ethics & Social Responsibilty

Tesla Motors says if you want zero emissions switch to electric vehicles that can be powered from a hundred percent renewable energy. An electric car is far more efficient than a gasoline car, the amount of pollution generated by producing the electricity to drive an EV a given distance is much less. Many Tesla motors have already installed solar panels this helps reduce dependence on foreign oil. Their Vehicles Batteries and tires are  safely recycled by the company and the cost of recycling is built into the purchase price of the car, so there‘s never a reason “why not” to recycle.". the company says that they are trying to create the worlds best service and warranty program for costumers. they have a unconditional warranty for Model S battery, even for user error. costumers have the option to take home the more expensive sports car, the tesla roadster while their car is in the shop for service, free of charge. "our goal is not just to fix things, but to make the car better than it was." The company says it ensures that it respects human rights and that its suppliers do not use slave labor or engage in human trafficking. the website states, "Tesla does not, and will not, tolerate the use of slave labor in the manufacture of its products and does not, and will not, accept products or services from suppliers that engage in human trafficking in any form. Human trafficking and slavery are crimes under state, federal and international law. These crimes exist in countries throughout the world." Tesla suppliers ensure that their operations and the products and services comply with all national and all applicable laws and regulations".  Their are many laws against them and are stoping them from doing business but they are still fighting. the company gives back to society by offering Jobs and internships to students. Tesla states, " If you are a builder and a creative problem solver then this is the place for you! ". Tesla's Social responsibility statement is, “It probably comes as no surprise that a forward-thinking company like Tesla Motors thinks a lot about the future. We do.”   There site has some more information on frequently asked questions about ethical issues, recycling and, social responsibility.

 

http://www.teslamotors.com/about/legal#human-rights

The Link Above is Tesla's page to : Human Rights and Conflict Minerals Policy

 

 

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Chapter 2 : Strategic Planning for a competitive advantage

the company states, "We believe our operational infrastructure provides us with a competitive advantage compared to traditional automobile manufacturers." Tesla motors is informing consumers by the masses about electric cars and their company being the first to manufacture fully electric car. Tesla Motors uses proprietary technology, world-class design and state-of-the-art manufacturing processes to create a new generation of highway capable electric vehicles. There website and company own dealerships and showrooms are attracting new customers everyday. They are a fairly new company to the automobile market and are adapting to a market that is constantly changing. One of Tesla's stated goals is to increase the number and variety of Electronic Vehicles available to mainstream consumers in three ways: Tesla sells its own vehicles in a growing number of company owned showrooms and online; it sells patented electric power train components to other automakers. Toyota and Daimler AG, teamed up with Tesla to help develop batteries for their electric cars, and both invested in Tesla. I visited a showroom in Roosevelt field mall and they have a employee there that tells you all about the car and why you should purchase it. According to the sales representative they have sold 4,750 units of the Model S in 2013. Tesla employs under 3,000 people and for it to deliver 4,750 sedans is impressive. Model S even outsold similarly priced luxury BMW and Mercedes models in the first quarter. Tesla is marketing to upper middle class green friendly baby boomer generation. Model S is fashionable, environmentally safe, and looks better than the Prius. Elon Musk chairman, architect and CEO of Tesla has been a major factor in the company's strategic planning, including the design, engineering and manufacturing of more and more affordable electric vehicles. Right now these cars are pretty expensive and new. Elon has a plan to make it affordable to an average family. His plan is to enter the market at the high end where people are willing to pay the premium and when someone buys the Tesla Model S, they are actually helping pay for development of the low cost family car. the mission statement for Tesla is , "Tesla’s goal is to accelerate the world’s transition to electric mobility with a full range of increasingly affordable electric cars. We're catalyzing change in the industry. Tesla vehicles and EVs powered by Tesla are fun to drive and environmentally responsible."  

http://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me

Overview of Tesla Motors Model S

 Model S

Tesla motors was founded in 2003 by Elon musk and Martin Eberhard, they have been building a relationship with customers ever since. their first production car was the Tesla Roadster and now they've made the Model S.  Elon Musk took an active role within the Company and invested $7.5 million dollars with his personal funds to start up the company. in January 2010 they received a $465 million loan from the Energy Department and they received a third of that from private investors. the company was named after Nikon Tesla an American electrical engineer physicist and inventor. Tesla produces an effective and efficient alternative to gas driven vehicles. they manufacture and sell Sporty looking, environmentally safe, fully electric powered cars with zero emissions by using automobile power train technology. The charging of the vehicle is simple you can charge the car anywhere there is an outlet. if you leave the car in the garage over night plugged in it will be ready for you in the morning. A fully charged Tesla can go up to 300 miles. Depending on how far you will travel a day the charging time varies. Lets say you drive 30 miles everyday it will take 5 hours to charge your vehicle for those miles on a standard wall outlet. .The Company insists that you install a super powered wall connector before the vehicle is delivered through their partners Solar City. it will only take 30 minutes with a super powered wall connector to charge the Tesla for 30 miles. on average it will only cost about $10 to fully charge a Tesla that will take you 300 miles. Model S has something called battery swap, exchanging your battery for a fully charged battery in less than half the time it takes to refill a gas tank. This offers Model S drivers another, even faster option when recharging. They have there own free charging stations that are located near amenities like roadside diners, cafes, and shopping centers. Road trippers can stop for a quick meal and have their Model S charged when they’re done. Compared to a vehicle like the BMW 535i, Model S will save its owners approximately $8,000 over five years in fuel costs alone.

 "Tesla Motors cars combine style, acceleration, and handling with advanced technologies that make them among the quickest and the most energy-efficient cars on the road." Basically Tesla motors is trying to be swift in making the world switch from a gas powered car to a fully electric car and making it affordable. Tesla is using different methods and strategies to change the way the car industry makes and sells vehicles. I have chosen to blog about the marketing of Model S, because it is Tesla most talked about invention With a 0 to 60 mph acceleration of 5.6 seconds. it was first shown to the public in 2009 as a prototype. it was first delivered in Europe and became Norway's  best selling car. The car cost about $80,000. The Model S ranked as the top selling plug-in electric car in North America during the first quarter of 2013 with 4,900 cars sold, ahead of the Chevrolet Volt (4,421) and the Nissan Leaf (3,695). Model S has won several awards and recognition's like the 2013 World Green Car of the Year, 2013 Motor Trend Car of the Year, Automobile Magazine's 2013 Car of the Year, Time Magazine Best 25 Inventions of the Year 2012 award, Consumer Reports' top-scoring car ever, and the National Highway Traffic Safety Administration NHTSA top ranked 5 star safety rating. In March 2013 Tesla reported they produced on average more than 500 Model S EVs per week. Model S is currently being sold in North America, Europe, and soon Asia.

"Burn Rubber Not Gas"

Every Tesla with an infotainment screen offering applications like weather and Internet browsing is also running on AT&T