Chapter 11: Developing and Managing Products.

Tesla was founded in 2003 it was a new product for the car market, they needed a new product strategy, what they did was explain to the consumers exactly how the car worked, how it helps the environment as well as how the car can save them money.Tesla main goal was to provide a Luxury electric car to the public, prior to this there was nothing like it available.

Creating a Tesla is a different process then other cars, one example of this is that there is more technology that goes into the newer Tesla models, including "Autopilot" this feature helps the driver avoid collisions, and give the driver more peace of mind when on the open road.


Prior to the release of any new car Tesla must conduct many concept tests in order to make sure that the car is safe and is ready for the road ahead.There is a lot of brainstorming, testing the product until 

The way the company manages the product is very simple, they oversee everything by not giving the product to 3rd parties to sell. This makes it better for them to manage the company, because they know that if there is a problem the way to solve it is to go directly into that department and fix it.

Chapter 8: Marketing Segmentation.

New Target Market for Tesla:

Target:

In order for Tesla Motors to keep growing now and into the future, it is going to be important to expand their target market to reach more consumers. Expanding our target market to the generation Y, mid 20’s to early 40’s, middle class working adults, Tesla will be able to utilize their facility while increasing production. This target market will be pinpointing the young professionals that are looking for an entry level luxury car. According to NADA DATA, the average selling price for a new car in 2011 was around $30,000 which shows that the majority of the consumers are not spending a lot of money on cars.

Segments:

We are going to segment the market for our new targets in three categories; eco-friendly consumers, tech savvy and entry level luxury cars. For the eco-friendly consumers, we will be able to reach them by offering a fully electric car that not only has more than double the driving range of the electric competitors, but also has the style and performance that Tesla is known for. For the tech savvy segment, we can reach them because the fully electric car is a growing technology which most consumers are not currently utilizing. Not only will the car itself be new technology, the interior of the car will really attract the tech savvy consumer with the basic options, as well as the add-ons, that will attract them as well. The entry level luxury car segment will attract the young professionals that are in the early stages of their careers and who will want to drive a luxury car. By having an entry level price, we will be able to attract more customers which will lead to future sales and brand loyalty.

Positioning:

We are going to position this car for the entry level luxury car that also has the added benefit of being fully electric while not losing any performance. Most electric cars are viewed as "unattractive" to younger buyers through lack of design and performance. By creating an entry level Tesla car, we can use our design and technology to change that image. By having an entry level luxury car that is in the $30,000 price range, that also has the benefit of being fully electric, will attract more buyers that are currently looking for electric cars or entry level luxury cars because of the added value of zero emissions, and by having this added value, it will position our brand to save consumers more money than the traditional entry level luxury cars.

For more info: http://www.slideshare.net/dpayne05/tesla-marketing-plan



Tesla and U.S.: In the first quarter of 2015, based on volume, the most popular EV/PHEV in the U.S. is the Tesla Model S, according to IHS.

Chapter 15: Marketing communications:

Tesla Marketing Plan ( mass communication):

Master Plan:

1. Build a sports car.

2. Use that money to build an affordable car.

3. Use that money to build an even more affordable car.

4. While doing above, also provide zero emission electric power generation options.

Mission Statement:

Our intent is to offer a compelling customer experience while gathering rapid customer feedback and achieving operating efficiencies, better control over the costs of inventory, warranty service, pricing, and the development of the Tesla brand.

Tesla’s Principal Marketing Goals are to:

· Generate demand for our vehicles and drive leads to our sales teams.

· Build long-term brand awareness and manage corporate reputation.

· Manage our existing customer base to create loyalty and customer referrals.

· Enable customer input into the product development 

Chapter 10: Product Concept

The specific strategy of Tesla's brand positioning: 

Rock Thompson, who is executive vice president at client opinions and also the leader of online marketing research, pointed that there were many definitions about brand positioning, but the distinct way to explain is “What people think about your brand, product or service contrasted to your competition. “He also said: “A powerful positioning must be relevant, exclusive, and credible.'' Relevant means that it must deliver on the significant, unmet customer need. Exclusive means it satisfies the customer’s need in the new and diverse ways than actual offerings. Crediblemeans that people believe that you can fulfill the promise. ” (Thompson, 2008) Tesla as a competitive brand arrived well positioning standards as follows (Roll, 2006):

Establishes the shareholder value and marketing partner.

Keeps the sustained increasing operating incomes and profits.
Formulates the higher but affordable prices when its market is steady growth.
Builds customers fidelity, giving them satisfied service and product.
Provides resistance to competitive attack and a source of pride for employees in order to improve the brand effect and business confidence.

Tesla product line:

Most companies vehicle lined up with gasoline model with a couple number of hybrid models. But Tesla model lined up In all of its fully electric high end sports car models. Company main concept consist of developing a fully electric powered vehicles which would be an alternative to gasoline fuel, by keeping in mind for well being of and environment as well as future.

Chapter 17: Personal Selling and Sales Management

The secret behind Tesla’s phenomenal sales strategy:

Tesla’s sales tactics are ultra modern, fast, digital and ultimately causing shock waves because they level the playing field by putting the buyer firmly in the driving seat. What are they? Simple. No middleman. No dealerships. No extra hurdle. In other words, they’ve made it quicker, easier and more enjoyable to buy a car. No wonder the dealers are up in arms.

So what are these tactics?

Tesla showrooms are nothing like traditional car dealerships. They’re modeled on Apple stores – located in large shopping malls and surrounded by state of the art technology. Instead of parking lots and pushy salesmen, Tesla showrooms are a place to experience the vehicles rather than buy them.

In fact, you can’t buy one even if you want to. You can view the models, learn about the engineering process and schedule a test drive, but purchasing a Tesla happens online – direct from the company’s website. As such, the bricks and mortar element of the process is more about stimulating interest, building desire and wooing the customer with an enjoyable brand technology experience while the digital aspect secures the sale.

Leapfrogging dealers

Those opposed to Tesla’s business model cite the protection of traditional car dealerships and thousands of jobs as their chief motivation. And since Tesla’s model cuts out the dealership, and once you get past the price tag (some $80,000), it allows a new generation of technologically-savvy, environmentally-aware customers to avoid dealers altogether.

Revolutionizing the sales process

So it’s a case of Tesla revolutionizing the car sales process while traditional dealerships remain unwilling to adapt or embrace change.

.

Unfortunately, with the latest generation of car buyers preferring to browse online rather than heading to a dealership, the dealerships will need to change their attitude if they want to remain a relevant part of the sales process.

And as Tesla starts to work on models that cater to the middle market sales will surely only grow further, so it’s high time dealerships evolved their attitude and approach to selling EVs or risk becoming extinct

Chapter 16: The Effects of Advertising

Tesla Generates Small Sales, Big Buzz Without Paid Ads:

 Tesla Motors has no advertising, no ad agency, no CMO, no dealer network. And that's no problem. The Palo Alto, Calif., company is breaking all the rules of automotive marketing, eschewing dealers in favor of selling through "stores" in upscale shopping malls and the internet.

Tesla has no plans to hire agencies or run ads in the near future. The in-house marketing team has only seven staffers and an internal team runs the website, where customers order directly.

"Right now, the stores are our advertising. We're very confident we can sell 20,000-plus cars a year—without paid advertising," Ms. Georgeson said. "It may be something we'll do years down the road. But it's certainly not something we feel is crucial for sales right now."

But Tesla still has hurdles. It's legally battling dealer associations in several states for the right to sell cars directly to consumers. The Model S starts at $69,000 and goes to $120,000, giving some consumers sticker shock.

Tesla Motors doesn’t just makes electric cars, it sells a slice of the future.

The cars are so good that they’re winning all the awards that gasoline cars used to win. They’re literally a better kind of car, according to both experts and regular drivers. As William Gibson would say, “The future is already here – it’s just not very evenly distributed.”

 Tesla  ad that cost only $ 1,500:

www.youtube.com/watch?v=KKbRAazkiWc

Chapter# 14: Marketing Channels and Retailing

Tesla is creatively using marketing to upend the auto industry business model:

• There are no Tesla dealers
• There are no commissioned sales people
• Tesla cars are marketed and not aggressively sold
• Tesla transactions are conducted online
• The price is the price: no negotiation
• There is no inventory: the Tesla Model S is built to order
• You can’t test drive a Tesla unless you put down a $5,000 deposit
• In many parts of the country, you can’t see or drive the car before you buy even if you place a deposit
• You have to wait in line for months or years to get a car

And the marketing challenges are incredibly difficult:

• They are building a new luxury brand from scratch
• They are evangelizing a new type of vehicle: an electric car
• They are selling a $60,000 – $100,000+ car that can’t go on a road trip
• They must sell an entirely new model of buying and owning a car

So what can we learn from Tesla marketing?

(1) Start with a great product 

(2) Start high and work your way down 

(3) Turn auto industry strengths into weaknesses

(4) Create a new multi-channel model

(5) Build the community & focus on the experience

(6) Leverage the media and traditional press

Tesla Marketing: Likely more lessons to come

While it’s early and many many risks remain, Tesla is the first company to have the potential to become the Apple computer of the car industry. Like Apple, they are selling a product that is very different than what has come before. Both companies focus on great products and innovation. They are both building their own ecosystem (Tesla’s super charger network is akin to Apple’s build-out of iTunes and the Apple Store) and both are challenging traditional sales models with their own direct distribution system. In fact, Tesla hired Apple’s previous retail chief to build out the new distribution model.

Chaper # 6 Consumer Decision Making

How Tesla is changing consumer behavior, the world and the way we buy cars:

Tesla’s story is one that’s difficult to not fall in love with. Its vision of the future is enchanting. Per Elon Musk, Tesla’smission is to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible. Tesla goals:

1. Build a (electric) sports car that everyone wants (Roadster)
2. Use that money to build an affordable car (Model S)
3. Use that money to build an even more affordable car (Model 3)
4. While doing the above, also provide (via owned or partnered solutions) zero-emission electric power offerings to build out the infrastructure to support the cars and a new standard of energy (Supercharger network, Powerwall, offering a modestly sized and priced solar panel from SolarCity, etc.)

Why Tesla has the most loyal customers:

Tesla Motors' (TSLA) cult-like following has catapulted the electric-car upstart into a global market flush with adoring fans. Unlike traditional automakers such as Ford and GM, Tesla doesn't have a massive advertising budget, nor does it conduct multinational marketing campaigns. Instead, Tesla relies on word-of-mouth marketing and mall showrooms for selling its cars. This works because of Tesla's tremendous brand loyalty.

In fact, Tesla Motors received the highest owner satisfaction score in Consumer Reports' annual survey last year. According to the magazine, "Owners of the Tesla Model S gave it the highest owner-satisfaction score Consumer Reports has seen in years: 99 out of 100.

Make an enemy

Tesla's enemies, on the other hand, are vehicles with internal combustion engines and big automakers. Many EV drivers today derive an emotional attachment from driving something that isn't your typical gas-powered car. 

Another advantage for Tesla is the fact that it offers customers something different: new tech from a new company.

Tesla has also created an enemy out of auto dealer associations, which are fighting Tesla's disruptive model of selling its cars directly to consumers through its own company-owned retail stores.

Scores of Tesla drivers have expressed their loyalty to Tesla by showing up in person at state capitols to protest dealer suits against the EV maker in various states such as Texas and Missouri.According to various psychological studies, this outpouring of support and loyalty wouldn't be nearly as strong without an enemy, so perhaps the ongoing dealership battles are a blessing in disguise.

Establishing an emotional connection

Another way that psychologists explain brand loyalty is through emotional connection. All of the most recognizable brands today have one thing in common: They make an emotional connection with consumers. One of the easiest ways for a brand to do this is by standing for something. 

Tesla wins major points in this regard because it is passionately dedicated to promoting mass adoption of electric vehicles in hopes of one day solving our planet's energy problem. People feel good about driving a Tesla because they no longer need to buy gas, and as a bonus, they're helping the planet in the process.

Many Tesla drivers have launched meet-ups or social gatherings for fellow owners and enthusiasts to connect with one another.

Consumer reports

In today's increasingly social world, transparency is key for creating enduring brand loyalty. Companies want to build lasting relationships with their customers, and one way to do so is through open communication. No automaker does this better than Tesla Motors.

Tesla in recent years has built its reputation for quality and customer support by communicating with consumers on social media and its own blog.