Overview
Tesla has relied on myth since Elon Musk began his zero-emission calling in 2003. For the California based company, Musk has prescribed to a “build it and they will come” ethos. Musk is well-known for despising advertising. The star engineer has big plans for Tesla including expanding the electric vehicle product lines to address all segments. How can Musk get his dogmatic message out to the general masses when Tesla famously mono-segments and does not advertise?
Analysis
Devoted Buyers (Model X)—Early adopters to all things tech, including cars. These clients are concerned about the environment and the effects emissions have on the world; wealthy, well employed, 40-75 years old.
Trend Buyers (Model S)—These customers have to have the latest and greatest. These drivers tune into Motortrend.com and popular Youtuber’s like The Straight Pipes for their car info. They are attracted to Tesla because of what the brand signifies: success, luxury and the appearance of caring about the environment, 30-60 years old, mid-career.
Shifting Buyers (Model 3)—With the Jaguar I Pace on the horizon, these buyers are easily swayed by price and competitors, they have limited loyalty to clean energy and the environment; post college.
Accessible
Tesla has a cult like following within Silicon Valley. Look at any Whole Foods parking lot and you’ll see at least five Tesla vehicles. The company has been able to mono-segment a small market of people (76,000 vehicles in 2016) but I wonder about the Model 3 for an accountant in Houston, TX? How would you quell his/ her range anxiety driving cross state? How many electric charging vehicles are available in the desolate space between Houston to El Paso? Tesla does not advertise and has only relied on influencers in Asia. How can Musk get his zealous electric car message out to the masses without targeted messaging? Both legacy media, social media and influencer marketing would be necessary to get baby boomers, Gen X, millennials and Gen Z to hear that message, otherwise Telsa could go the way of Thernos, a Silicon Valley myth with no mass-product.
Substantial
In 2016, the same year that GM sold 10 million vehicles, Tesla sold 76,000. Since the time of Henry Ford, the auto industry has been based on mass production. There are only 80 Tesla dealerships in the U.S. In comparison, GM has 4,500 dealerships in the U.S. The lack of dealerships makes it very hard for a car buyer to purchase a Tesla. Tesla generated $24.6 billion in revenue in 2019, compared to GM’s $137 million. In order for Tesla to become a major U.S. player, it must start servicing different demographics and make their cars more accessible for purchase.
Differentiable
The Model X and Jaguar I Pace drivers have more in common with the Toyota Prius customer than first meets the eye. The Model X/ I Pace customer is going to be interested in wealth, status while looking socially responsible. The differentiating factor is that the Prius driver has little interest in status. With the introduction of the Model 3, 2019 Prius unit sales were down to 69,718 from their 2017 high of 108,661. Chevy discontinued the Bolt in 2019, proving that Tesla’s pro-status, mono-segmenting is gaining market share using a pull marketing strategy.
Actionable
Model 3 sales are the highest of the three models and the most price accessible. There is room for a targeted campaign to millennials. This is a demo that is tailor made for Tesla’s message of an affordable, luxury EV. In April 2020, Viya, one of China’s biggest influencers did an hourlong Taobao stream, hyping up all the attributes of the Model 3. Viya’s stream had 4 million views. A similar stream could be done with Kim Kardashian West, not only to speak to a worldwide female millennial audience but also to the guys that lust after K.K.W.
Target Marketing Strategy
There are currently three car models that are serving to niche demographic(s) in this multi-segment strategy. Tesla has never invested money into researching what impacts their buyer’s purchasing decisions. To get Tesla’s business on par with the major U.S. automotive makers, a differentiated marketing plan needs to be developed for all three models. The R & D needs to dig deep into who the customer is and what drove them to make this purchasing decision. Then, a campaign should be developed based off the data for customers who will respond to the message. Tesla’s brand messaging and imaging must be repeated till it is absorbed into the general zeitgeist not the niche customer base of the 76,000 cars sold in 2016. In order for Tesla to grow, the company must dig deeper into the geographic, demographic, psychographic and behaviors of its customers, if Musk wants to address all major segments.
Position Template
For: electric vehicle devotees Who: love sports cars The: Tesla’s top models Is: completely electric That: confront your standard way of thinking about sustainable energy Unlike: Toyota’s Prius It: offers no compromises, longer battery life and will quell your range anxiety
Rationale: Tesla has created a niche with EV sports cars. Let’s face it the Prius is not the first car; I think of when pontificating luxury. Tesla is challenging the status quo but changing the perception of an EV vehicle. Telsa’s motto is not to skimp on amenities just because the brand produces EV vehicles. If Tesla solidifies their integrated battery storage and put out messaging quelling range anxiety, the sky is the limit for the segments that they can address. In addition, their portfolio has similar buyer personas, so their overall positioning is one of the lesser challenges Tesla faces.
Messaging Template
25 Words: In 2003, Tesla was founded by Elon Musk to develop an electric vehicle for fun drivers interested in sustainable energy, who were tired of settling.
50 Words: Tesla set out to advance worldwide cheer for electric vehicles. Established in 2003 by a group of engineers, who were tired of comprising style for sustainable energy. This group set out once and for all to prove that electric vehicles could be luxurious, fun and environmentally friendly.
100 Words: Electric cars, batteries and renewable energy generation are just a few things we are working on at Tesla. Founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to a drive an electric vehicle. We at Tesla believe EV’s are simply more fun than an old gas guzzler. In addition, we can stop relying on fossil fuels and shift into a zero-emission future. This impending future includes mass market electric cars for all segments of the population worldwide.
Sources
https://www.theverge.com/2020/1/29/21113987/tesla-q4-2019-earnings-results-profit-revenue-model-3
https://www.statista.com/topics/2480/general-motors/
https://mashable.com/article/tesla-electric-car-stans-fans/
https://electrek.co/2020/04/30/tesla-influencer-stream-advertising/
https://hedgescompany.com/blog/2018/11/tesla-owner-demographics/
https://www.jdpower.com/cars/expert-reviews/powersteering-2017-toyota-prius-review