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Tesla Motors’ Electric Vehicles Marketing Research Paper

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Updated: Jul 21st, 2021

There is no use denying the fact that being a company that tries to capture the market, Tesla Motors devotes great attention to the strategy that could help to achieve the given purpose. First of all, one of the main points of the strategy is the attraction of customers. That is why, Tesla devotes its efforts to various advertisement companies (Ottaway, 2014), trying to increase the level of customers interest and attract more people. At the same time, the company tries to exclude dealers pressure from the process of sales by providing training for sales persons, who will be able to work with customers better.

It should also be said that resting on the fact that the sphere of EV could be taken as very cost-based, it is obvious that the strategy of the company implies large investment in the production of EV. It is also obvious that these investments could lead to the short-term profit loss. It is no wonder that the company reported about $184 million loss (Sparks, 2015). Besides, it is possible to state the fact that the company counts on the long-term character of the project and depends on the increase of the level of popularity of its products. Nevertheless, despite the fact that “Tesla’s vehicle unit sales are growing at about 50% year over year” (Sparks, 2015, para. 1) and that in managed to achieve the new record by delivering 11, 507 vehicles to customers (Tesla Delivers 11,507 Vehicles in Q2 of 2015, n.d.), the future of the company remains vague as the spending should be compensated for the company not to collapse.

Another important point of the marketing strategy is the price of Teslas products which is comparatively high. As it has already been mentioned, its products are bought mainly by people with high incomes. It is obvious that the price markdown could lead to the increase of the demand for products as the current price, which is about $50 thousand is taken as high for other layers of society (Sparks, 2015). However, the price could not become lower because of the peculiarities of the project and high prime cost of EV. That is why, the nonnegotiable price should be taken as a very important part of the marketing strategy of a company.

Besides, there are several important aspects that result from the price policy of a company. First of all, it serves as the method to help the company to offset expenses because of the great investments in the process. High price of the EV could also partially compensate losses on the production of the car and help a company to develop.

Secondly, the given price could satisfy potential customers of the company by giving them the feeling of exclusiveness. High price of the product, bought by a person, indicates his/her high social status, that is why the given strategy could help the company to promote its products as the part of the luxurious lifestyle.

However, high price also creates certain limits as the majority of customers are not able to buy the EV manufactured by Tesla. That is why, it is possible to outline the ambivalent character of the given price policy. Creation of the luxurious image of the EV is vital for the future of the company and could attract new potential customers. However, high-end clients are often taken as less sensitive and the EV, which costs $50 thousand, could not be exciting enough for them. At the same time, clients belonging to some other social groups could enjoy the given EV, however, the price is too high for them. That is why, a certain problem appears. The company is not able to make the price lower because of the high costs of production of EV and the image of the car, thus, at the same time, it suffers from the aftermath of this policy being not able to attract new customers.

Thus, it should also be said that another point of the companys marketing strategy should be mentioned. The fact is that Tesla provides a great number of possibilities for customization of the EV. There is a special tool on the website that helps a customer to choose all options that are needed, starting from the engine and ending with the color (Design, n.d). Due to this very fact a customer becomes involved in the process of creation of his/her own car which could not but result in the increase of the level of interest towards the vehicle. Moreover, this option could also be taken as the attempt to give a customer choice and determine the price of the EV by his/her own. It is obvious, that the given tool could be taken as a rather innovative step that promotes the increase of the interest towards the company.

Additionally, analyzing the strategy of a company, great attention given by it to the interaction with clients and their feedbacks should be mentioned. Tesla provides the opportunity for customers to try the vehicle by using the practice of test drives as it could help to obtain customers responses and analyze the given data. Thus, due to a great number of reports made with the help of drives, the trend of increased troubles was determined (White, 2015). That is why, it becomes obvious that some further work on the model is needed.

Finally, it is possible to say that the company aims at spreading its influence and capturing new markets. According to Teslas reports “orders went up 50% year-over-year in Europe” (OHara, 2015, para.1), while this number is about 30% in the USA (OHara, 2015). It is possible to state the fact that the attempt to introduce products of a company to a great number of various countries is the part of Teslas strategy as it tries to obtain the new stimulus for the development of a company.

Resting in these facts, it becomes obvious that the current strategy of a company is comprised of several main points, which are the promotion of the image of its products, certain price policy, customization of the EV, attention to potential customers and their response and attraction of new buyers. It is possible to say that some successes have been achieved. The company managed to create the attractive and luxurious image of the car and draw attention to it. Moreover, customers are able to choose various options and become involved in the process of creation of their own car. However, at the same time, some obvious failures should also be admitted. Fits of all, it is the price policy as the EV still remains unaffordable for the majority of people. This facts introduces some limits for the further development of the company as the absence of new customers could lead to the collapse of Tesla. Additionally, the future of the company depends on sales of its products greatly as the manufacturing of EV is very expensive and the large investment, made by the company, is not compensated.

Future

It has already been stated that the future of the company and the whole project remains vague because of several problems. First of all, it is connected with the price policy and investments of the company. One should admit the fact that the existence of any organization is guaranteed by the stable demand for its products, which results from price/quality ratio. Analyzing the functioning of the Tesla company, it is possible to say that one of the components of this correlation could be taken as ambivalent. The nonnegotiable price of the products leads to the decrease of the number of potential clients. At the same time, taking into account the long-term character of the project and great investments made by the company, it is possible to say that the future existence of Tesla could be determined by the stability and increase of the demand for its products. In other words, the existing price policy could become successful only in terms of stable interest towards EV.

Thus, at the same time, the future of the company could also be determined by the developing interest towards environmentally friendly vehicles. The fact is that in last several years the sphere of green technologies has been evolving and nowadays great attention is given to technologies that could replace traditional ones, which are supposed to have the negative impact on the state of environment. Under these conditions, governments of various countries could be interested in the development of green technologies and companies like Tesla. Due to this fact some governmental financing, which could help the company to develop, could be expected.

Additionally, the unique character of the company and its marketing strategy could also have a great impact on the future of the company. It is obvious, that Tesla is not the first company that deals with green technologies and there is a great number of other companies that proclaim their adherence to environmentally friendly technologies. However, these companies just try to make traditional vehicles less environmentally unfriendly, while Tesla tends to create an absolutely new electric vehicle that could reduce emissions to zero. That is why, it is possible to say that the unusual character of the company and usage of new technologies, which are taken as the technologies of the new era, could help it to evolve and attract more attention.

Moreover, the above-motioned marketing strategy could also be taken as the factor of success of the company. It becomes obvious, that it is aimed at the creation of the positive image of EV and attraction of a great number of prosperous people, who can afford this product and promote the growth of the interest towards it. The emphasis on the work with clients could also contribute to the development of the company attracting new potential customers. Finally, Teslas orientation on the international market could help it to obtain new outlets and compensate expenses.

Resting on these facts, it is possible to say that the future of the company could hardly be predicted as it depends on a great number of various factors, which could either promoted the growth of the company or influence its collapse. However, in case of the stable increase of the level of demand for EV, Teslas future seems relatively clear.

References

Design. (n.d.). Teslamotors.com. Web.

OHara, M. (2015).. Web.

Ottaway, L. (2014). . Web.

Sparks, D. (2015). . Web.

. (n.d.). Teslamotors. com. Web.

White, J. (2015). Consumer Reports criticizes reliability of Tesla Model S. Web.

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IvyPanda. 2021. "Tesla Motors' Electric Vehicles Marketing." July 21, 2021. https://ivypanda.com/essays/tesla-motors-electric-vehicles-marketing/.

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