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Transcript of Tesla
5 step Purchase Process
step 1: Problem Recognition:
ideal situation decided whether problem is large enough to move forward
step 2: Information Search
: seek information may try to recall personal experience with brand or product
step 3: Alternative Evaluation:
problems become somewhat clear
step 4: Purchase Decision
: we make our final decision.
step 5: Post-purchase Behavior:
compare it to our expectations decide satisfaction
Tension in the Distribution Channel
Group 2 Members:
Sara Bogovich, Megan Cearley,
Eduardo Camacho, and Jacob Christian
Channels of Distribution
and Direct Marketing
Advertising, sales promotion and public relations
“Move from a mine-and-burn hydrocarbon economy towards a sustainable solar-electric economy.”
& Sales Management
Tesla believes that their vehicles, electric vehicle engineering expertise and operational structure differentiates them from incumbent automobile manufacturers.
Tesla designs, develops, manufactures and sells high-performance fully electric vehicles and advanced electric vehicle power train components.
Position Within the Company
The Tesla Model S is currently a star.
Strengths, Weaknesses, Opportunities, & Threats
Knowledge of electronic transmissions and it is the fastest and most energy-efficient electric car currently on the market.
Cost of production is high and the sales volume is fairly low.
Many governments are offering incentives. As gas/oil prices increase, this gives Tesla an opportunity as well.
Their pricing strategy has not been used in the automotive industry before. Also, other automotive companies are researching/developing their own electric cars.
The Tesla Model S is a smart car that relies only on electricity.
With the Tesla, the customer has the option of financing, leasing, or paying with cash.
This company is known to have “no advertising, no ad agency, no CMO, and no dealer network” (McCarthy, 2013).
As of 2013, Tesla had “35 stores across the U.S., Europe, and Asia and plans to expand to 50 over the next few years” (McCarthy, 2013).
Environmental Scan and Social Responsibility
'Going Green’, technology, and safety
Prove that electric vehicles are good
Lessen global dependence on petroleum-based transportation while decreasing the cost of electric vehicles
Electronic Marketing Channel
Exclusive Distribution Strategy
Tesla only sells cars from company owned stores or online and require customers to order vehicles directly from them which shows that they are extremely exclusive when it comes to their product.
Involvement with the Product
Extended problem solving which consists of
5 stages of purchase process
Due to high price we search external information
Considered high involvement product when it involves 1 of 3 categories
Expense, Serious personal consequence, or reflection on social image
Influences on Consumer Behavior
First all electric vehicle
Driver environment friendly
Sign of wealth
Good word-of-mouth activity
Husband & wife both have an influence on purchase decision
Global Marketing Presence
Global presence in Europe:
Norway, Netherlands, Switzerland, Germany, Belgium, Denmark, Austria, France, and Italy
Importance of global sales
Chinese market will top U.S.
55% jump in global sales
Tesla believes in maintaining the same price, quality, and convenience globally.
Tesla prefers to sell their vehicles directly to the consumers so that they can keep their brand name clean and can also "pursue a company owned store and service center model" (CEO Elon Musk). Tesla even personally delivers their vehicles to the customer.
Market segments & Product positioning
If going into a Tesla show room in not an option for you, you can go online to teslamotors.com and completely customize your new electric car.
Direct Marketing Channel
Tesla Motors uses a pull strategy to sell the model S, everything they do is for the ultimate consumer.
Because Tesla Motors grew so quickly and the fact that all of their cars are made to order, the company is having some difficulty keeping up with consumer demand.
Tesla does very little in the way of advertising and mainly relies on its' consumers to advertise their products for them.
Tesla does not directly offer too many promotions but because their cars are fully electric, the government offers a $7,500 Federal Tax Credit. Also, if you live in California, consumers are able to receive a $2,500 California Incentive.
Public relations is very important for Tesla Motors because they are constantly becoming the victim of political backroom deals between state legislatures and
franchised auto dealerships.
Even though you can go to their website and order your vehicle completely online, you also have the option of going to one of their show rooms and talk with a representative who can help you with your purchase decisions.
In Tesla’s view on how they try to sell cars, they are order-takers. They see themselves as order-takers because they view franchised auto dealerships as order-getters and they do not in any way want to be positioned in the consumers mind like that.
Specialty: $$, Order Process
Product Line/Mix: Still To Come
Time Mag - 25 Best Inventions
Used Innovation to Market
Exceeded Expectations When Introduced:
Problems: Direct Selling - No Franchises, State Regulations
Growth Stage: Sales UP
Change/Differentiate (EV Market)
Innovators: High Price, Environmentally Friendly, Educated
Modifications for Customers:
Car Fires: Changed Clearance (Safety)
Strive to Exceed Expectations through Customer Service and Change
Creates Positive Response
Model S: Luxury and Electric
Field of its own
BMW i8 $135,700
Prestige Pricing: Tech, Style, Handling, Power, EV
Points of Difference:
Fully Charge Overnight
Lithium Ion Battery
Price Inelastic: High End EV
McCarthy, Michael. "Tesla Generates Small Sales, Big Buzz Without Paid Ads | News - Advertising Age." Advertising Age News RSS. N.p., n.d. Web. 17 Nov. 2014. <http://adage.com/article/news/tesla-generates-small-sales-big-buzz-paid-ads/241994/>.
"Model S." Tesla Motors. N.p., n.d. Web. 17 Nov. 2014. <http://www.teslamotors.com/models>.
Musk, Elon. "Resale Value Guarantee." Model S Design Studio. N.p., n.d. Web. 17 Nov. 2014. <http://www.teslamotors.com/models/design>.
Tingwall, Eric. "Tesla CEO Elon Musk’s Next Big Disruption Isn’t a New Car, It’s a New Battery." Tesla CEO Elon Musk's Next Big Disruption Isn't a New Car, It's a New Battery – Feature – Car and Driver. N.p., n.d. Web. 17 Nov. 2014. <http://blog.caranddriver.com/tesla-ceo-elon-musks-next-big-disruption-isnt-a-new-car-its-a-new-battery/>.
Kerin, Roger, Steven Hartley, and William Rudelius. Survey of Marketing. N.p.: McGraw Hill Companies, 2013. Print.
Tesla uses a market penetration strategy and a market development strategy.
Help accelerate the world's transition to electronic vehicles
Tesla would like to:
Continue to generate demand for vehicles
Drive a strong sales team
Build long-term brand awareness
Manage corporate reputation
Manage existing costumer base to create loyalty and referrals
Develop lower priced vehicles
Tesla model s segmented into Luxury sedan plug-in electric vehicle market
Tesla target market
middle and upper-middle class looking for electric luxury
Electric vehicle sales expected to grow to 1.8 million by 2023
Entry level luxury vehicle
8.4% first 6 months
Electric vehicles only account for .53% of new vehicle sold in 2013
Consumer Decision Process