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.