Marketing+Project+317

7/27/2019 Marketing+Project+317

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The Tesla Model S

BA 317

Group 10

William Aksnes-Shanks

Dana Nicholson

JR Maffie

Megan Petrusich

Hannah Alley


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1. Purpose/IntroductionThe environment has been in turmoil and the changing global climate has been a political

topic in recent years. A major contributor to the changing environment is fuel emissions from

personal vehicles. With millions of tons of car emissions being released into the atmosphere, it

is obvious that the industry needs to make a change. Many car manufacturers have gone green

and produce hybrid or alternative fuel-powered products. Tesla Motors takes the green

movement in the personal transportation industry to a whole new level. The Model S is the

newest zero-emission product in Teslas line. The goal behind all Tesla products is to provide

customers with the luxury they desire from any other vehicle while still being socially and

environmentally responsible. The preceding marketing plan will provide a situational analysis,

product and target market descriptions, marketing objectives, marketing strategy and financial

data projections. The goal is to bring awareness and increase market share not only to the Tesla

brand but to the Model S specifically.

2. Company DescriptionSilicon Valley based Tesla Motors was founded in 2003 by a group of engineers with a

desire to develop an appealing fully electric vehicle. The company is headquartered in Palo

Alto, California and just acquired an out-of-business General Motors manufacturing warehouse

in Fremont, California. The new warehouse is designed to house a more efficient production

process dedicated to the Model S. Teslas first product, the Roadster, was released in 2008 and

has sold more than 1,500 products in more than 30 countries. Tesla is a vertical manufacturer,

meaning that they manufacture and sell directly to end-users via company owned showrooms

and website. The company sees itself as a catalyst in the personal transportation industry by


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demonstrating the market demand for luxury zero-emission vehicles and selling its patented

technology to other automakers to kick start their product lines. Tesla is extremely dedicated to

the advancement of electric technology to keep our atmosphere clean.

3. Strategic Focus/PlanMission/Vision

Teslas ultimate mission is to increase the number and variety of electric vehicles on the

roads. More specifically, Tesla strives to bring customers that want a sustainable car without

sacrificing the luxury they desire. Tesla refuses to accept that customers need to sacrifice their

physiological needs for functional needs. Tesla believes that through the innovation of the

personal transportation industry to include sustainable technology we can maintain our

environment for a much longer time.

Tesla Motors strives to bring its customers the premium driving experience they crave while still

providing a socially responsible product. Through innovation of technology, design and safety

we work to broaden the number and variety of zero-emission vehicles on International roads.

Corporate Goals

As a startup company we face some challenges when it comes to increasing brand awareness and

strong market share. Our ultimate goals are the following:

Increase brand awareness

Strengthen market share


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According to the Familiarity Mix, we should have a fairly difficult time achieving these goals

because we are implementing a new technology in a segmented target audience. There is a broad

market we are targeting, but we are specifically targeting a segment within that market. We feel

that since there is a strong demand for environmentally friendly products that our new

technology will fit nicely with the existing market to increase our market share.

4. Situational AnalysisSWOT and Core Competencies

Strengths

With the release of the Roadster in 2008, also came the first federally compliant highway

capable electric vehicle. This breakthrough ensured that Tesla would be the name that brought

the world its first fully electric vehicle. Not only is Tesla the first company to produce an

electric vehicle, but they also stand by their business model to partner zero emissions with

quality performance and design. This dedication has brought the Tesla Company many

accolades, such as 2009 Best Green Exotic by DuPont Registery, Best inventions 2008

Transportation Invention by Time, and Best Product Design of 2007, Ecodesign by

BusinessWeek.

Weaknesses

Tesla started in 2003, and has since mainly depended on the production of electric

vehicles for the majority of its revenue. With this being said, Tesla only has one electric vehicle

model currently for sale. As the Model S comes closer to production, the Roadster will start to

be phased out and will no longer be sold after this year. This means that revenues will be highly

dependent on the success of the Model S. With such low brand name recognition, it will be hard


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to convince customers that our car is superior to their preferred brands option. Another cause

for concern is that the Model S will not be available until 2012, which will allow competitors to

produce and market their electric vehicle before Tesla is ready to release the Model S, thus

taking up market share early.

Opportunities

The Model S looks to jump out of the Roadsters shadow. By making the Model S a

sedan style configuration will give it a larger market appeal. The Roadster was mainly focused

at performance enthusiasts who might be environmentally focused. Whereas the Model S

supports three seats in the back, with an option of two child seats in the rear, while not

sacrificing quality or performance. As gas prices start to rise, people will be looking for

alternative ways to travel. With performance vehicles usually guzzling gas faster than a

commuter car, Tesla is in a prime position to show the benefits of its products while being cost

friendly to the consumer.

Threats

As the Model S production date gets getting pushed farther and farther back, this will

allow our competitors, such as General Motors (Volt) and Audi (E-Tron), to gain valuable time

for advertising, marketing, and product placement. This time difference, accompanied with the

financial leverage that our competitors have, could have a negative effect on our revenue if we

persist to sit on our heels. Also, if gas prices do not rise as expected, customers will not have a

need to change their purchasing preferences.


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Core Competencies

Tesla Motors operates to create an integrated company which successfully

commercializes electric vehicles without compromising on range, performance, or styling.By

selling and servicing the cars through our own sales and service network, we are able to directly

interact with the customer rather than franchising and each store be independently operated.

This approach to continuity helps us to operate more cost effective, give the customer a better

service experience, and allows consumer feedback to be processed fast and efficient.

The Roadster, which has a battery pack capable of storing 53 kilowatt-hours of usable

energy on a single charge, set a world record of 313 miles in a rally for production electric cars

across Australia, further staking our claim that our advanced electric vehicle powertrain

components are superior to other fully electric vehicles. Performance has not lagged, for the

Model S goes from 0-60mph in 5.6 seconds with a top speed of 125 mph. This is contributed

through aerodynamics and styling of the car. Its shape allows air to flow smoothly around the

body, further enhancing efficiency and range. The interior boasts leather seats and trim, along

with a 17-inch infotainment touch screen which will be standard in every Model S, making Tesla

competitive in the luxury car market. The attention to detail in our cars allows us to produce a

high quality vehicle that is competitive in price, performance, and experience.

Industry Analysis

Tesla Motors competes in the automobile industry, more specifically the green car

market, which includes electric vehicles (EV), plug-in hybrid electric vehicle (PHEV), and

hybrid vehicles.


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The market for fully electric cars has not been around for very long. Plug-in EVs have

been around since the mid-19th century. Although they have not been around for that long, no

EV has been mass produced until the Chevrolet Volt, which debuted in 2010. Great strides are

being made to ensure that zero-emission vehicles will become commonplace. President Barack

Obama announced that electric vehicle projects will receive $2.4 billion in funding under the

Stimulus package. This is sure to persuade more companies into producing quality electric

vehicles for a reasonable price. With this funding, Obama wants to have one million plug-in

vehicles on the road by 2015. Seeing as that there have been over 1.6 million hybrid electric

vehicles sold in the past 6 years, the market for fully electric vehicles is expected to expand

rapidly. A shifting consumer preference from combustion engines along with increasing

government incentives will result in an accelerated growth in the electric vehicle market.

According to Frost & Sullivan, the market for electric vehicles will grow to 10.6 million units

worldwide, or 14% of all new vehicles sold by 2015, up from 1.75 million units (3%) of all new

vehicles sold in 2008. While incumbent automobile manufacturers may see the advantage of

switching to a line of fully electric vehicles, we believe that due to their limited knowledge in

batteries, software, and electric powertrain technology, the transition from combustion engines to

fully battery electric will take lots of time, funding, and research & development efforts before a

viable option is able to be produced at an affordable cost.

Main competitors in the luxury or high-end electric vehicle market are Audi (E-Tron),

Fisker (Karma), Nissan (GT-R) and Mercedes (SLS AMG E-Cell). All of these vehicles are still

in manufacturing phases, but the Fisker Karma is scheduled to be released in September 2011,

and the Audi E-Tron will be released next year to compete with the Model S. However,

competitors within the plug-in hybrid electric vehicle category are Nissan (Leaf) and Chevrolet


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(Volt); each company has a PHEV model on the road with both were released in December

2010.

However the main concern for producing an electric vehicle is finding or producing an

affordable and efficient battery which doesnt take up a bunch of space. Deutsche Bank analysts

in 2009 projected average battery pack costs reducing from $675/hWh to $500/kWh by 2015 and

$325/kWh by 2020; Nissan is reporting that the battery pack in its economy EV Leaf costs

$375/kWh, and our CEO Elon Musk stated that the Model S battery pack will cost less than the

Leaf battery pack.1

Competitor Analysis

Since the market for mass produced electric vehicles has just started expanding, with

many EV start-up companies trying to penetrate the industry, the Tesla Model S has few

established competitors. Albeit, the Model S has many competitors in the luxury vehicle

category, such as Audi and BMW. These companies, along with the Toyota Prius, will be

looking to take market share away from our Model S. Since the Model S target market will

already be purchasing hybrids and plug-in hybrids, the decision to purchase our car will not take

a large consumer behavior change.

The Audi brand, owned by Volkswagon, delights their customers with their outstanding,

modern design, high build quality and technological innovations. Its brand values sportiness,

sophistication, and progressiveness, so it is easy to see why Audi is a large competitor. In 2009,

their revenue for the year was $24,339 million1, significantly larger than ours at $116 million in

20102. Their market share for 2010 was 9.4%1 for the luxury car market while our market share

was practically nothing. With the release of the E-Tron in 2012, Audi will have a competitive

product to the Model S. The electric motor will be capable of 0-60mph in just 4.8 seconds,


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significantly faster than the Model S. Also, the battery in the E-Tron will rival our battery with a

range of approximately 154 miles3 compared to our base battery of 160 miles.

BMW, which has been making vehicles since 1928, define themselves as being the

worlds leading provider of premium products and premium services for individual mobility.

This idea has helped them grow their revenue to $4635 million4. Not only does BMW make

luxury cars, but they also produce motorcycles along with MINI, allowing them to diversify their

product range. They have also announced that they will be hiring 2,600 new employees to

manufacture electric vehicles, hybrid powertrains and cleaner combustion engines5. BMW is

planning on launching two fully electric vehicles the ActiveE (2011) and the MegaCity Vehicle

(2013). The ActiveE, which will be based on the BMW 1 series coupe, only has a range on 100

miles, thus making it more of a city/short trip vehicle. The MegaCity Vehicle is said to use a

carbon fiber-reinforced plastic to lower the body weight of the car, allowing a smaller battery to

take it the same distance6.

Toyota is another strong competitor to Tesla, with a 13.8% market share8.Toyota Prius

has been on sale since in Japan since 1997, making Toyota the first car company to mass produce

a hybrid vehicle. It has been on sale worldwide since 2001. As of September 2010, Toyota has

sold over 2 million Prius units worldwide7. This market penetration gives Toyota a large head-

start on the hybrid/electric vehicle category. Being introduced in 2012, the first plug-in hybrid

Prius (PHV) will hit the market. This model will not differ from the hybrid Prius, except for that

it can be plugged into an outlet. Although the Prius boasts a 0-60-mph time of 11.3 seconds, it

has never been a car for driving delight, but for maximum fuel efficiency.


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5. Market-Product Description

Marketing Plan Objectives

We created four marketing plan objectives for the Tesla Model S. We have two

qualitative and two quantitative marketing objectives. Our first Qualitative goal is to increase

awareness and buzz towards our target market, especially in international markets. We plan to

do this by hosting events and advertising similar to how we market in the United States. Our

second goal is to increase variety of zero emission vehicles on the market. Tesla is the leading

solely electric vehicle company, and the first luxury full size electric car on the market.

Our first quantitative goal is to bring awareness to our product as well as our brand image

to increase market share. Our second goal is to increase sales revenue. Teslas Chief Financial

Officer, Deepak Ahuja, states: We project revenue to increase about 40 to 50 percent in 2011, to

$160 million to $170 million... revenue this year may rise as much as 50 percent because of

higher demand for [Teslas] rechargeable vehicles and battery packs. Since fully electric

vehicles are a new market, there is a lot of room for expansion. Tesla is one of the leading

producers in electric cars, which makes a large increase in sales revenue promising.

Target Markets

The first car Tesla Motors produced was the Roadster. The Roadster was marketed

towards an upper class thrill seeker; someone who is interested in cars and wishes to drive a high

performance electric car. The Model S will be marketed similarly to the Roadster, but with a

slightly different Target Market.

The target market for the Model S would be people residing within the upper economic

class, because the price rage of the car is $50,000 to 77,000. This price is cheaper than the

Roadster whose price range was between $109,000 and $130,000. The Model S is a family


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oriented car, specifically for a working parent who wishes to drive a luxury sedan. The Model S

is a family car because it offers third row seating for small children. The consumer would most

likely be someone who is interested in an electric car and is environmentally friendly. The target

market would be for someone who has a garage or parking garage because the Model S requires

a plug to recharge the battery. The target age market is business class individuals ages 27-50.

However, the cars high tech appliances and classy appearance appeals to all ages. In the VALS

framework, the most widely used psychographic tool, our target market would fall under

Innovators. This is because the target market for the model is includes people interested in

high resources and high innovation.

Points of Difference and Positioning

The Tesla Model S is superior to its competitors, other luxury sedans. The Tesla Model S

is the most spacious sedan on the market; it offers a trunk in the front and back because the

battery and engine are underneath the vehicle. The Tesla also has many high tech gadgets like

touch screen panels and controls, as well as touch handles to open the doors. Most notably,

Tesla is one of the first companies to come out with a fully electric vehicle and is one of the

leading innovators in its industry. The Model S is the first full size, fully electric vehicle to hit

the market. The Model Ss marketing is specifically unique because Tesla is not going through a

dealership to sell the cars. This is a direct channel, because the product is sold directly from the

producer to the consumer. We have chosen to promote the Model S in art galleries, restaurants

and trendy locations, instead of car dealerships. The car is displayed as a piece of artwork, and

not allowed to test drive. The car cannot be purchased today. A $5,000 down payment is

required to reserve a spot on the wait list for the purchase of the Model S when it comes out 2nd

quarter 2012.


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6. Marketing ProgramProduct Strategy

The Tesla Model S is a pioneer in the car industry, going places where no other car has

gone before. This purely electric-powered luxury sports sedan offers top of the line

accommodations without any compromise. The Model S provides limitless beauty, innovation

and efficiency in all aspects of its design and technology. The Model S is a product between

unprecedented teamwork and aerodynamics. Every millimeter of the body has been repeatedly

evaluated by computer simulations and wind tunnel testing to ensure second to none quality in

aerodynamics. The innovative design has offered the wind resistance more commonly expected

in upper echelon racecars. Air flows smoothly around the Model S, increasing efficiency and

range. The Tesla motor is nearly three times as efficient has any gasoline powered engine. This

efficiency does not compromise any power or capabilities of the car itself. It can accelerate from

0 to 60 mph in less than 6 seconds. With the motor integrated into rear axle, the Model S

provides about twice the storage space of any car in its class; yet another advantage of having a

completely fuel independent vehicle. In the midst of all of the amazing innovations, Tesla has

not lost sight of what matters most to the company. Safety has not been compromised in the

slightest bit. The Model S is predicted to achieve a 5-Star safety and crash test rating.

The Model S offers superior luxury in all of its features. From its interior design, space

and comfort to its in-car technology and performance. With the Model S you can enjoy

comfortable seating for five adults with the option of two rear facing child seats. The Model S is

a premium, full-size sedan slightly larger than BMW 5 Series, Mercedes E-Class, or Audi A6.

Tesla's unique powertrain packaging frees up space for passengers and cargo. The interior design

of the seats and upholstery has been compared to that of Maserati and Lamborghini. As far as


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energy efficiency goes, Tesla offers three different battery packs to suit your typical driving

needs: 160, 230 and 300 miles per charge. The Model S is engineered to plug into nearly any

outlet in the world. With the ability to recharge in 45 minutes, the car begs to be driven

everywhere you want to go. This amazing fuel efficiency also offers performance that is second

to none. The Model S powertrain offers instant torque at the driver's request. Though designed

for comfort, safety, and utility, the desirable Model S does not sacrifice performance. Power,

acceleration and precise handling of a sports car come standard with a top speed of 120 mph. The

Model S powertrain features a liquid-cooled, floor-mounted battery pack and single-speed

gearbox. The body design is of stamped aluminum and provides top-notch aerodynamics, style,

and safety. The Model S also offers a complete glass panoramic roof that makes for the ultimate

driving experience. The 17-inch touch screen with in-car 3G connectivity means quick access to

streaming radio, GPS navigation, restaurant recommendations, and movie show times. The rear

facing child seats and panoramic roof are expected to be optional upgrades. However, the 17-

inch infotainment touch screen is planned to be standard in every Model S.

Pricing Strategy

Entering the market as one of the first Electric vehicles to be mass-produced gives Tesla

a definite advantage in pricing. We need to communicate value and prestige through our price.

While our Model S is set to compete with the BMW 5 series, Mercedes E class and Audi 6, we

offer more than just another luxury sedan. Our base price ($49,900 with tax credit) rivals our

competitors: Mercedes-Benz E class ($49,400), BMW 5 series ($45,500), Audi 6 ($45,200).

Although our price may be slightly higher, it will convey the message of being environmentally

responsible. On average, a Model S driver will save $1300 on gas each year. A value based price

model is our approach to this product. Our price communicates luxury without compromise.


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After all of the benefits of owning an electric car is realized by the consumer it will be clear that

you are paying for much more than just a car.

Promotional strategy

In order for Tesla Motors to expand and be successful promotional strategies are

important to engage prospective owners. Tesla Motors offers several promotional strategies such

as events, websites, and advertising. Tesla Motors campaigns their product to a diverse target

market, such as all ages of people. Their promotions primarily focus on the efficient and fun

benefits of purchasing their car.

Events are an effective and fun way to promote Tesla Motors products. Events are held

in eclectic atmospheres were prospective owners can gather in a relaxing environment while

making their decision to purchase a Tesla Motors car. For example events are held in places

such as coffee houses, art galleries, restaurants, hotels, etc. At these venues Tesla Motors

products are show cased in local places allowing for a friendlier, stress-free environment than

how it would be at a dealership. Dealerships will often times presser curious, prospective


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customers and scare them away. Dealership environments can be a lot more intimidating than a

local coffee house or restaurant. Events are open to all prospective customers and owners.

Websites are also a successful way of promoting a new product. It allows customers to

experience Tesla Motors products in a virtual manner. The website acts as a global database

that attracts a diverse target market. Tesla Motors website (www.teslamotors.com) possesses a

large variety of promotional incentives that are attractive to people across the world that have

gained an interest in Tesla Motors.

Incentives are an eminent tactic used to intrigue customers into buying the companys

product. Tesla Motors has electric vehicle incentives around the world. They are currently

collecting incentives in regions of every country.

Tax credits, rebates, free parking, and unrestricted access to high occupancy commuter

lanes on major roadways are some common EV incentives included. For example, nationwide

incentives in the United States include $7,500 federal tax credit. The United States government

offers a $7,500 federal tax credit with the purchase or lease of a new Tesla Roadster that is

obtained for personal use prior to January 1, 2012. Another example of an incentive the United

States offers is Federal Charging Infrastructure tax credit. A Federal Tax Credit is available, up

to 30% of the purchase and installation costs of qualified electric vehicle charging infrastructure

acquired in 2011, with a maximum credit of $1,000 for Individuals and $30,000 for Businesses.

For infrastructure acquired in 2009 and 2010, a tax credit can be claimed for up to 50% of

infrastructure cost with a maximum credit of $2,000 for Individuals and $50,000 for businesses

(http://www.teslamotors.com/goelectric/incentives/US/).

Advertising is a key component of the promotional strategy. Tesla Motors pays for

advertising rather than only relying on free marketing such as the word-of-mouth strategy. For


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example in the Los Angeles store, LA Lifestyle magazines with full page advertisements of the

Tesla Motors car and store rest on the countertops of many shops and in widespread locations

around the Los Angeles area.

Although Tesla Motors mainly pays for their advertising, YouTube videos, blogs, and

reviews swarm the Internet with information about Tesla Motors. People enjoy giving their

opinions and Tesla Motors has benefited off of the good reviews people have given Tesla

Motors brand name.

Other ways Tesla Motors uses advertising is through the Press. Executing the

promotional strategy of using the press includes media images, online image galleries for the

Roadster and Model S, media coverage, investors, executives, and press releases.

Tesla Motors advertising tactics for the promotional strategy plays a large role increasing

success for the company. Knowing the target demographic is vital for appropriately advertising

Tesla Motors to customers and Prospective owners. The diverse group of owners and potential

owners can be difficult entities to execute a successful advertisement for the company. Tesla

Motors website displays images of their products in many diverse scenarios such as in the city,

on the countryside, in the mountains, etc. This tactic engages people to relate to the images and

get a feel for what it would be like to own their very own Tesla Motors car.

Place Strategy

Tesla Motors is growing at a rapid pace by internationally selling electric cars to

mainstream customers. Already reaching over 31 countries, Tesla's mission is to increase their

output of electric cars and to produce a large variety of electric cars to become available to

mainstream customers. They want to make an impacting change in the automobile industry. EVs

powered by Tesla are environmentally friendly and they are a fun ride.


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The Company currently has a total of 18 stores across North America, Europe, and

Asia/Pacific. Tesla cars are on the road in over 31 countries and expanding promptly. The Tesla

Roadster began to roam the streets in early 2008 as a truly unique and innovative car. Only two

years later, in more than 30 countries over 1,500 Roadsters drive emissions-free. Available in a

variety of locations, Tesla Motors offers their prospective owners the option to test drive a new

Roadster. The Model S is not available to test drive yet. In order to test drive a scheduled

appointment is mandatory. Online (www.teslamotors.com) there is a contact information section

available to schedule an appointment. Also, making an appointment in a store at a local event, or

if special arrangements are made, a representative can schedule an appointment for the

prospective owner to test drive a new Roadster.

If the prospective owner is satisfied with the test drive, then the next step to owning one

of Tesla Motors cars is to put in an order for one. In order to purchase a car from Tesla Motors

there is an ordering form online at (www.teslamotors.com) that takes down the customers

information. Also, going into the Tesla Motors store or a local event and ordering a car is an

option. At a Tesla Motors Event, prospective owners are given the option to test drives, view

the cars, and gain personal experience with Tesla Motors products.

7. Financial Data and Projections

Since there is no financial data on the Model S, since it has not come out yet, the

following will consist of previous company revenue. For the 5 year projection, a linear increase

is assumed in company revenue, and the Model S financial data will be included to company

revenue to give an overall picture of how the company is doing in regards to the Model S launch.


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2010 2009 2008

Revenue (in thousands)

Automotive Sales $97,078 $111,943 $14,742

Development Services 19,666 N/A N/A

Total Revenue 116,744 111,943 14,742

The large jump in revenue from 2008 to 2009 saw the continued market penetration from

the Roadster. Through the implementation of the Model S, we should see an increase of returns

in the upcoming year.

This trend accurately describes the 40-50% increase in revenue as described by CFO Deepak

Ahuja1. Expecting about 5,500 preorders by the time the Model S goes into production, the

following year should see a large boom in Model S sales, especially if gas prices continue to rise.

If the Model S production grows at 50% per quarter until 2015 when production drops to 20%

production growth in each quarter of 2015.

97078

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2008 2009 2010 2011 2012 2013 2014 2015

CashRevenue

Year

Projected Company Revenue (in

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Revenue of Company (in

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Projected Revenue---Avg. ProjectedRevenue


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Assuming that 5,500 Model S reservations are placed by the time the car is set for production in

the last quarter of 2011. From there sales will grow 37.5% each quarter of the upcoming years

until 2015, where we predict sales will drop to 30% each quarter.

8. Implementation and ControlMarketing Action Plan

Our marketing action plan will highlight every feature of our product from production to

distribution. We will focus on showcasing the quality, luxury and unique benefits we have to

offer. Marketing our brand simultaneously with our product will be our main objective. We need

to raise customer awareness of the Tesla Brand while trying to sell the Model S. The roadster has

opened the door for Tesla motors to enter the market and the Model S is what we will use to

exemplify our name and our products. Our marketing mix outline, (product, place, promotion

and place- distribution), will define our action plan. All of these areas are critical and will be

executed as professionally as possible.

Our pricing strategy reflects the value our product will provide or be perceived by the

consumer. Therefore, a majority of our consumers will be higher-class individuals and or

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2011 2012 2013 2014 2015

Projected Sales (units)

Projected Sales

(units)


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families with reasonable disposable income. These same consumers would have typically owned

a BMW, Lexus, Mercedes or any other mid-size luxury sedan. Our product will match all of

these makers in style, luxury and prestige with the dominating efficiency as its highlight. Since

this is our first sedan model we will not have any research of our own to calculate into the

pricing strategy. We will be using researched statistics from our competitors to give us a general

idea of where our price range will be. Customer behavior and consumer feedback will be looked

at as soon as our product hits the market to add further information about how consumers are

responding to our product. We do not see this type of information influencing our price too much

seeing how we have set our price to show the same prestige as our competitors. However, if

demand for the Model S rises substantially we could explore the options of raising the price.

Our promotion and advertising aspect will be crucial in the success and acceptance of the

Model S into this huge American market. We will outsource the work for a strong advertising

and promotional campaign. We will not settle for anything short of amazing when it comes to

any type of advertising done for Tesla or the Model S. The agency will assist in every aspect of

the promotional campaign. Tesla will have a voice in every strategy or campaign put in place by

the agency. We will stress the unique features offered by our product and how we are looking to

revolutionize the industry.

The distribution process has been something Tesla also wanted to revolutionize about the

market. Tesla has a vision in making the car buying experience a more personal and involved

experience. The manufacturing of the Model S will be done in Silicon Valley (San Jose, Ca).

Tesla has 15 stores across the United States but mainly focused on the west coast. We are

looking into opening more dealers as soon as we receive our first quarter results. The

dealerships, however, will be more than just a dealership. We offer more of an art gallery


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experience with our products being the masterpieces. We want to create the feeling of luxury

from top to bottom. We will also be accepting orders through our online service which will

significantly keep our costs down if we decide to not open more stores. As far as servicing the

vehicle, we plan to offer home visits at a reasonable and affordable price. We expect the routine

check up to be the only thing needed to service on the vehicle with the rare but possible hiccups.

Post-hoc marketing research to assess success

The effectiveness of our pricing will be measured by consumer feedback and the

performance of our sales compared to our competitors. We will be able to more readily identify

how the consumers will respond to different features and battery options offered with the

vehicle. We will be following up with each and every customer to rate the service and product

of company. This will give us an insight into what we can do better at our stores and with our

product. Our goal is to maintain a relationship with our customers that will promote brand

loyalty and give our customers an experience far above the rest.

Another great tool that will be used is evaluating the success of our advertising campaign.

We will analyze our consumer awareness and brand placement to see what our return on

advertising is. We will either be able to increase our exposure with more advertising or be able to

let the brand take flight on its own and decrease advertising. Our campaigns will be adjusted to

best suit our first quarter results.

Our final assessment will be in our distribution methods. Depending on the amount of

sales, we can determine whether or not opening more locations would be of great use to us. If

not, we can downscale a bit and explore other options such as Internet only sale or higher end car

boutiques to take our orders.


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9. ConclusionTesla Motors Model S is the first vehicle of its class. As a zero-emissions luxury sedan

the vehicle offers customers the opportunity to satisfy both their physiological and functional

needs. It is representative of the companys overall commitment to innovation and mission of

increasing the number and variety of electric vehicles on the road. Our marketing plan will help

guide Tesla Motors to achieve its goals of increasing brand awareness and market share. As a

start-up company there still is a lot to learn about the product, the target audience and the market.

Our plan will help Tesla understand all three aspects to achieve its corporate goals. We truly

believe that the Model S has what it takes to transform the industry to include multiple varieties

of fully electric vehicles.


23/23

Works Cited

Industry Analysis1.Garthwaite J. Retrieved from http://gigaom.com/cleantech/tesla-ceo-nissans-leaf-battery-is-primitive/

Competitor Analysis1.http://www.audiusa.com/etc/medialib/ngw/company/investor_relations/pdf/finanzberichte/geschaeftsberichte4.Par.0002.File.pdf/audi_ag_lagebericht.pdf

2. http://ir.teslamotors.com/releasedetail.cfm?ReleaseID=550352

3. http://www.audiusa.com/us/brand/en/exp/progress/Concept_Vehicles/audi_e_tron.html4. http://www.bmweducation.co.uk/coFacts/view.asp?docID=398

5. http://www.bloomberg.com/news/2010-12-06/bmw-seeks-2-600-new-employees-by-end-of-2011-on-electric-

hybrid-systems.html

6. http://www.cleantechblog.com/2011/01/bmw-megacity-ev.html

7. http://www.greencarcongress.com/2010/10/worldwide-prius-cumulative-sales-top-2m-mark-toyota-reportedly-

plans-two-new-prius-variants-for-the-.html#more

8. http://online.wsj.com/mdc/public/page/2_3022-autosales.html

Points of Difference and PositioningO h n s m a n , A l a n . " T e s l a T a r g e t s 5 0 % R e v e n u e G r o w t h A m i d R i s i n g

E l e c t r i c C a r , B a t t e r y D e m a n d . " B l o o m b e r g 1 6 F e b 2 0 1 1 : n . p a g . W e b . 2 5 M a y

2 0 1 1 . < h t t p : / / w w w . b l o o m b e r g . c o m / n e w s / 2 0 1 1 - 0 2 - 1 5 / t e s l a - l o s s - w i d e n s - t o - 5 1 -

4 - m i l l i o n - o n - m o d e l - s - c o s t s - u p d a t e 1 - . h t m l > .

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