BUS7B8 Customer Continuity and Growth Assignment Sample

Introduction

Tesla is a clean energy and electric vehicle company based in ‘Palo Alto, California’, United States. The company manufactures and designs battery energy storage ranging from solar roof tiles, grid -scale, solar panels, and other associated products and services (Maughmer, 2021). Tesla employs quite a suitable method for marketing which includes ‘word-of-mouth. The company achieved maximum sales occupying more than 16% of the ‘plug-in-market and nearly 23% of the market handling battery electricity. The report will help in analyzing the different market approaches embraced by Tesla in boosting their market value and becoming of the leading electric vehicle companies globally.

Background

The fundamental vision of Tesla is to stimulate the transition of the world towards sustainable energy (Falát,2017). Tesla believes in a strategy that is solely focused on users involving owner club and customer forums which in turn enables the company to establish passion and loyalty for their brand. Besides, this approach also drives a solid foundation for content that develops on itself and is greatly available for potential buyers ( Holubčík,2017). Tesla had transformed the automotive industry and Elon Musk being the CEO also kept the same approach. Tesla has established a framework of superchargers, service stations, and battery swap stations. The company is on full track of delivering ‘fully autonomous driving capability’ prior to any other car manufacturers by strengthening the driving data that is worth billions of miles which Tesla has been collecting for quite some time.

 Despite his sensitive and controversial presence on social media platforms he managed to promote Tesla effectively (Handa,2020).  Tesla has a considerably high rate associated with customer satisfaction for any car manufacturer. The customers are greatly loyal and nearly 91% of them usually purchase or book another Tesla as their next car. Furthermore, they are so devoted to the brand that they even agreed to wait for the coming years for the upcoming model.

Considering the vision of the company, it seemed to relate with the brand’s audience and this transition is sustained over and over again (Thomas,2019). The social media channels Tesla promotes offer substantial awareness about the brand, and the company has also partnered with colleges to provide its ‘START program’. This program assists students in acquiring skills they would need for operating in the ‘electric car manufacturing industry’.

The trademark for the personalization attempts of Tesla is mainly its driver profiles (Kim,2020). There is a facility for changing the settings with just one push for each driver. There is an automated system developed for adjusting things including the mirror location, wheels depending on the driver. The driving profiles offered by the company are unimaginable and goes beyond the typical car customization for adjusting things like braking, suspension, radio presets, and even the style of driving for the preferred users.

Implementation of Marketing Methods

Tesla has a market share of more than 60 billion despite its failure to fulfill the production targets and the company spends over a billion dollars on a yearly basis (Toumi,2018). According to the 2020 Consumer reports based on a satisfaction survey, Tesla scored a 5 in the category for driving, a 4 for the comfort and for ‘in-car electronics’, a 3 out of 5 for cabin storage, and a 1 out of 5 for value (Akakpo,2019). However, the score for value does not affect the company as most of the premium automakers made a similar score for value.

Place- Tesla Motors serves a global audience with its headquarters located in Palo Alto in the United States. The company has a wide network for distribution and sales of its owned stores that includes South Korea, Dubai, North America, Asia, and Europe. The largest market of the company for electric vehicles resides in China and with an agreement with the Chinese Government in 2017 (Manna,2017). A manufacturing plant of the company was established in Shanghai. Later on, Tesla developed their retail outlets in Manhattan and Los Angeles. Several stores and galleries are set up in the United States for enhancing their brand value and exposure. Moreover, the company also offers its own website for the convenience of the customers and to increase their loyal customer base. The research and development department of Tesla Motors is located in Athens, Greece.

Tesla has embraced a ‘direct-to-consumer’ approach for sales through its stores and service centres. Services and inspections are provided at their service stations. The manufacturing facility is located at Fremont in California. The company has come to a decision to promote its vehicles through company showrooms and online portals.

Price –The revenue for Tesla Motors at the end of 2017 accounted for more than 11.76 billion dollars accompanied by the net income which is 2.24 billion US dollars and also the total assets for the company was about 28.66 billion US dollars (Dai,2020). The company developed a marketing strategy for targeting affluent buyers for relating to their constructive decision of occupying larger markets after with relatively lower prices. At the initial stage, the company embraced a ‘premium pricing strategy’ and conserved the high process for more premium products. This strategy was mainly allotted for a ‘niche market’ that was keen for products of high quality along with advanced technology despite the price range as they had no difficulty purchasing these products.

With that being said, the company also introduced products on the affordable side considering the ‘mid-scale’ general customers. Tesla wanted to occupy a considerable portion of the consumer market and therefore has embraced an affordable pricing strategy (Bhardwaj,2020). Consequently, this proved to be a major success as there was a huge sale in their products leading to greater revenues and profits.

Promotion Strategy of Tesla

Tesla had considered a budget of 52 US dollars for their marketing objectives and employed ‘word of mouth’ and referral programs to engage more potential customers. Moreover, the company has also proposed an exceptional approach for the promotion of its products among loyal customers (Oduro,2019). Tesla has taken the assistance of media releases and its team handling the public relations for developing positive brand visibility and awareness. One of the most crucial PR activities is its introduction of surcharging stations at charging ports at malls, restaurants, hotels, and highways which have the name of the company written on them.

Social platforms were only of great help to the company as it enhanced it mass awareness. Tesla mainly handles mass awareness through its website, forums, blogs and therefore uses these online platforms for gaining a competitive advantage in terms of marketing. Most importantly, the company operated its marketing and promotional activities via its Facebook page which has over 2.2 million followers ( D.R, 2017) Several discussions associated with different techniques and products are held occasionally on the page and this, in turn, assists the company for comprehending customer purchasing patterns, and the changing trends related to technology in the market.

Elon Musk believes in supporting the brand competition after they have presented their progress in the electric vehicle industry. The company also strongly inclines towards the idea that healthy competition is directly proportional to its innovation which in turn generates suitable options for its clients (Pandey, 2020). Identifying the achievements of its competitors and encouraging positive initiatives for the company and supporting competitors are the most effective practices the company had undertaken to achieve a solid brand image among customers.

Recommendations

Considering the overall expenses and the major trends, Tesla would enhance their revenue and widen their product range in turn acquiring increased costs for the long run. However, to improve their customer continuity the company should develop some strategies for directly engaging with the customers as some of them feel comfortable conversing directly than on social media platforms (Sharma,2020). Tesla can also recruit more professionals for increasing their customer service experience. The company should also effectively manage costs for broadening their profit margins. Expanding their product change would also be a wise decision as it will be more convenient for a wide variety of customers, especially the middle-scale ones (Dana, 2018). With regard to the current position of the company, it has an increased ability to dominate the market and execute its desire for sustainability and innovation for a cleaner and safer world with the EV transition. The elasticity for electric vehicles is much more elastic as compares to that of ‘Hybrid and Internal Combustion Engines’. The EVs are greatly elastic as they come with unique specifications. Tesla has adequate projections associated with demand and capital for operation through losses that they face and continue to supply high-end and efficient vehicles to consumers.

Conclusion

The above discussions conclude that Tesla’s customer satisfaction strategy is greatly successful in gaining a loyal customer base and capturing a significant position in the market. The company is constantly on the lookout for driving innovation and transition the world to EVs. Moreover, it can be observed that the marketing strategies adopted by the company helped it to emerge as major global manufacturer of electric vehicles. Tesla has been evolving their promotional approaches for increasing its market value and staying true to its mission.

Reference List

Journals

Maughmer, T., 2021. Identifying Appropriate Strategies To Sell Tesla Automobiles in Ohio.

Falát, L. and Holubčík, M., 2017. The influence of marketing communication on financial situation of the company–a case from automobile industry. Procedia engineering, 192, pp.148-153.

Handa, M.B., Constant Rise of Tesla Inc.: Strategic Marketing Plan Leading To Company’s Colossal Growth in 2020.

Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle start-ups in the automotive industry–Lessons from Tesla Motors. Journal of Cleaner Production, 235, pp.653-663.

Kim, H., 2020. Analysis of How Tesla Creates Core Innovation Capability. International Journal of Business and Management, 15(6), pp.42-61.

Toumi, I., 2018. Exploring the success of tesla, Inc. ББК 65.290-2 я 73 П 78, p.319.

Akakpo, A., Gyasi, E.A., Oduro, B. and Akpabot, S., 2019. Foresight, organization policies and management strategies in electric vehicle technology advances at tesla. In Futures Thinking and Organizational Policy (pp. 57-69). Palgrave Macmillan, Cham.

Manna, D.R., 2017. Integrating Exploring Sustainability and Supply Chain Management in the Development of Smart Tiles by Tesla (p. 32).

Dai, R., 2020. The Analysis of Tesla’s Competitive Strategy for the Chinese Market.

Bhardwaj, S., Pandey, R., Sharma, S., Sejal, S., Iyer, G., Sharma, S., Ranjith, P.V. and Kulkarni, S., 2020. Problems Faced by Automobile Industries: Case Study on Tesla. International journal of Tourism and hospitality in Asia Pasific (IJTHAP), 3(2), pp.78-88.

Dana, C., 2018. A Strategic Audit of Tesla, Inc.: Electrifying our Future or About to Run out of Energy?.

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