Tesla Repositioning Report

By: Nic Roti, Jake Wietting, Katie Picciola, & Joe Pacini

Buyer Behavior, Aaron Hurley

30 April 2018

Table of Contents

Executive Summary Page 3

Background Page 3

Phase 2 Page 4 - 9

Re-positioning Statement Page 9

Marketing Mix Recommendations Page 10

Appendixes Page 12

Executive Summary:

This report provides an in-depth overview of Tesla and how we are repositioning the brand to

the masses instead of their original demographic. First, we completed primary research on the

company. We also completed secondary research which was a questionnaire on Qualtrics. We

surveyed multiple demographics to determine what was best to market Tesla to the masses. We

received just under 100 surveys. The reports have helped us understand what the general

masses would like to see in Tesla and how we would reposition the brand.

Background:

Tesla is a company that is expanding the sustainable energy into the world through cars,

as well as other energy integrated solutions. Their main goal is to power you home and car

through clean energy day and night. Tesla is known for their sustainable vehicles that offer the

safest and quickest cars on the road. Tesla has four consumer electric vehicles: the Model S,

Model X, Model 3, and the Roadster. A huge feature to their Model X SUV is the Autopilot. This

is where the SUV can do a lane change, auto steer, and even park your vehicle. The benefit of

autopilot is that you don’t need to have your hands on the wheel, and that your car is driving

itself. Tesla was really the start of cutting edge technology for vehicles. Now other brands, like

Cadillac, are also starting to put autopilot into some of their vehicles. Another large feature of

the vehicles is the range of how far they can go with just one charge. This is a huge benefit

because some consumers think that you would have to stop a lot to recharge your electric

vehicle but that’s not the case for Tesla. Another feature is the safety of the vehicles. They all

have five stars from every angle and aspect of the vehicle. The vehicles are also quick, they

accelerate from zero to 60 mph in their model X SUV. This is a huge benefit because it shows

that it is the quickest SUV at responsiveness. Some consumers find that the interior of a vehicle

can be the most important part. Tesla does not disappoint in this aspect either. They have 17-

inch display screen where they have different media, and controls available to the driver. The

benefit to this is that a driver isn’t squinting to look at the radio and becoming a distracted driver.

They also have great storage and many other interior features. Every part of the Tesla vehicles

has features which is what makes them such a great investment.

Phase two:

Consumers currently use the Tesla products like most of the other vehicles they have

previously owned. The only difference is that it is electric. As I stated before, I believe that most

consumers view the Tesla vehicles as luxuries because of their high prices. The Model S

Standard is cheaper than the Chevy Bolt. However, their other models are more expensive than

any other electric vehicles. I do believe that they have the highest quality. Some of the customer

segments are fairly similar. Male, ages 45-60+, with an income of over 90,000. This segment

specifically enjoys the Tesla brand as well as the electric vehicles. The other segment is male or

female, ages 26-40, with an average income of over 50,000. This segment mostly just enjoys

Tesla electric vehicles and the sustainability that they provide along with the luxurious vibe.

The market for electric vehicles is growing steadily but still holds a very small percentage

of total car sales. The market share for electric vehicles globally sits around 3% of the total car

sales. Although this might seem like a very small percentage because it is, the market has seen

an increase every year with 2018 being no different. In 2017 every monthly record for electric

vehicle sales were broke, making it a record year in the U.S. The forecast for the next 25 years

looks extremely positive and seems to be increasing every year. A forecast produced by OPEC

which is a group of the leading oil producing nations has increase their electric vehicle forecast

by over 500% in the next 50 years. This is a young market and is just starting to get global

popularity but the forecasts look promising towards the electric vehicle industry.

Major competitors within Tesla’s market include car manufacturers who are releasing

lines of both hybrid and electric cars such as Nissan, Volkswagen, and General Motors. General

Motors released the hybrid Chevrolet Volt long before Tesla released the Model 3. The Model 3

has been criticized as a bait-and-switch from the Bolt but included features such as autopilot

and a longer-lasting battery.

Globally, China is the biggest competition, as they have the biggest market for electric

car manufacturers. It is home to six of the ten major electric car manufacturers worldwide.

The photo above is a Brand Map on a horizontal scale of conservative to modern, and a vertical

scale of technically regular to innovative. As one can see, among its competitors, Tesla is

extremely Innovative and extremely modern. This is how they’re marketing their brand against

its competitors. There aren’t too many spots that can be filled as competitors cover the spots

that are most accessible.

Trends have been seen in the electric car industry. One of these trends include the

recent peak of sales. Sales records have been set for North American and around the world and

the bar continues to grow. Along with Sales, as you can see in the image above, charging

stations have been exponentially expanding. The above photo shows Tesla’s charging stations

in North America. The red points depict charging stations that are open now and the gray point

show charging stations that are opening soon. Between Asia, North America, Europe, and the

Middle East, Tesla has 1,191 Supercharger Stations with 9,184 Superchargers. This number is

only going to increase in the future.

Among our consumers’ consideration set includes GM’s Chevy Bolt, Toyota’s Prius

Prime, The Nissan LEAF, the Chevy Spark, the Fiat 500E, the Toyota RAV4, and the BMW i3.

Tesla takes the lead in EV sales as a company, but the car market is slowly but surely switching

to eventually become EV only car companies.

Important brands and product attributes towards Tesla’s brand images is important.

Tesla is wanting to prove to their customers they’re getting the best value for their dollar while

also getting the best products. This belief exists because of how if they’re unable to provide top

of the line products, their company mission is not being completed and they could also lose their

dominance in the market. The salient attributes will be impacted since the brand image of being

the best car is strong, changing judgment could significantly impact their company and change

its course for the worst. Consumers when purchasing Tesla’s brand feel “empowered and

motivated” considering they’re going above and beyond to complete their tasks of creating

innovative technology to out beat competitors. Tesla gives its consumers the loyalty of

constantly expanding and growing while making sure their consumers are well taken care of.

They also do not let themselves get out beaten. If Tesla were to see their competition coming

out with similar products, they will take immediate action to out beat their competitors.

Tesla’s internal and external research comes from a strong understanding of industry

trends from their consumers and the media. As stated before, Tesla is constantly innovating its

own products while also helping advance the market of themselves. They take information they

receive from their users to better understand themselves and act upon it, improving themselves

and making their brand loyalty for enhanced.

Consumers will likely learn about our product from our stock price and our brand image.

Exposure is more likely to be intentional because of Elon Musk becoming a household name.

With more and more Tesla’s being purchased and the amount of exposure in the stock, it is very

likely someone knows another that has our product. Exposure can also be accidental from viral

videos being uploaded online about our product or from the news. Comprehension of our brand

and vehicles will at first be shallow because of our innovation but this will spark a deep interest.

People love to be at the forefront of technology and this will spark an interest in our vehicles and

company. There can be many inferences made about our product but I hope first they infer our

vehicles are intriguing and stylish with a healthy output on the environment. Their involvement

and knowledge in our product will be our environmentally friendly vehicles. Our consumers will

value luxury and our product breathes luxury. Our modern interior and all electric vehicle will

help them realize that.

The general lifestyle of our consumers is modern, upper middle-class consumers looking

to lowering their carbon footprint. Symbolic meaning is important to our product since it is the

leading electric car manufacturer. Tesla stands by its products and is making it not only

luxurious but affordable to own an electric vehicle. The futuristic nature of this company is what

distinguishes it from competitors. Using a Tesla vehicle will tell others that not only does the

environment mean a lot to you but also luxury and comfort. It will let others know you are at the

forefront of innovation and comes with the status of possibly being wealthy.

Some issues with one's personality that might affect purchasing is how our vehicles are

all electric. Although one would think this would make our vehicles more attractive some people

are “old fashioned” and set with their ways of buying gas cars. The image of possibly being not

reliable since we are electric is a thought in many consumers minds. We strive in reversing this

thought with bringing more electric charging stations and the lifetime of our products is far

superior to your gas vehicle.

Consumer psychographics affect our vehicles usage. From our marketing research

survey, it showed 11 of the 19 people who owned a Tesla make over $100,000 a year. 13 of the

19 Tesla owners were between the ages of 45-55 compared to only one Tesla owner between

the ages of 18-25. So, these consumers are typically middle aged and have an income of over

$100,000, they are also predominantly male with 15-4 male to female ownership. Most of the

surveyors who own a Tesla responded they bought it because it was electric and to save money

from their being no gas expense. 17 of the 19 surveyors who own a Tesla have either their

bachelor degree or a master’s degree from college. It was almost split with the owners living in

the city or rural areas.

Well the decision that had to be made is if they wanted to buy an electric vehicle. Our

research survey showed that 8 of the 19 buyers chose this vehicle because there would be no

added expenses for gas. The Tesla models that were purchased are the Model S(14), and the

Model X(5). 6 of the 19 buyers chose to purchase a Tesla because of the technology the vehicle

offers. This was a decision that was made, if they wanted to have one of the most tech savvy

vehicles on the market or not.

Some typical decision strategies in this type of product category are similar. How much

would the consumer be saving on gas? How does that compare with how much a consumer is

spending on the vehicle? How often does a consumer need to charge their vehicle for? Most

things that influence buyers are current customers and how they enjoy or do not enjoy their

Tesla. Something else that influences buyers is the famous Elon Musk and his public

statements. For example, on April fool’s day Elon made a public statement that Tesla was going

bankrupt, of course it was a joke. The following day the Tesla stock fell 7%. That instance

shows the kind of power Elon has and how even small mistakes can really impact Tesla and

consumers position on their company. Word of mouth can be an important factor for purchasing

a Tesla vehicle. There is a lot of negativity in the media about the brand, but if a possible

consumer were to talk to someone who owns a Tesla and has enjoyed the experience, then it

would change the negativity they have in their minds. Word of mouth flows through connections,

whether that is social media friends or even real-life friends and family.

Consumers can buy the Tesla once being on the waiting list, or at a Tesla dealership. I

think the waiting list is something that can improve because not everyone has the time to wait

for a new vehicle. The sales environment is so important, no one wants to buy a vehicle when

they have a negative experience. It sets the tone for the brand as well as the vehicle. In a

business world almost everything matters and influences the consumers decision.

Re-positioning statement:

We are moving Tesla, a brand containing modern and innovative electric vehicles that is

thought of as luxurious, expensive, and too futuristic, away from solely high income receiving

consumers. We are moving Tesla, a car company who capitalize on energy saving, safety

testing, and advances in technology to produce an electric vehicle with the some of the highest

quality in the market, to the masses.

Marketing Mix Recommendations

Our product strategy is to keep Tesla’s original vehicle’s while allowing a better price.

We also discussed introducing a hybrid vehicle. All packaging and brand features for the electric

vehicles will be staying the same. However, we will be introducing a more advanced product

testing prior to releasing the vehicles to consumers. From the recent car problems, we decided

that the company should focus on their vehicle maintenance. The pricing strategy for our brand

revolves around the feedback we received from our questionnaire. We found that possible

consumers would be more interested in purchasing a Tesla if the price was lowered. We also

found that most consumers weren’t aware of the actual cost of the vehicles. We decided to

lower the more expensive models like the Tesla X around $60,000 instead of $80,000. We did

this because it was closer to the competitor’s price while still being a part of the luxury cars.

Consumers need transparency and we feel it would be more valuable to the company if Tesla

was more transparent about their pricing.

Tesla really does not do too much promotional currently. They are more word of mouth

and popular throughout some social media platforms. We really wanted our promotional to be

successful throughout all demographics. One promotional idea that we had is to have

commercials with the use of different celebrities that are popular throughout different age

groups. It would be similar to the Lincoln commercials with Matthew McConaughey. We would

have different celebrities like Migos, George Clooney, GiGi Hadid, etc. This will create

consumer awareness because each celebrity is reaching a different demographic throughout a

series of commercials. We would also recommend increasing their social media platforms

presence.

Tesla’s overall promotion mix is reached by all their consumers or potential consumers

across any social media platform, personal selling, over even word of mouth. Tesla is proud of

their customer and brand loyalty in which has stayed consistent over the last two decades. This

is all triggered by our advertising objectives, which is to not only reach out to an older

generation, but millennials who are able to afford the product and appreciate it. The way our

tactics generate this recognition is the general substance of our message.

Our main message to our consumers is that we are a reliability, luxury, environmental

friendliness while still being affordable like other energy efficient vehicles. After all this, we have

happy consumers who then see others with a Tesla and help inspire those to get one. We have

various commercials, ads, and online campaigns. We stream our commercials through various

social media such as Facebook or YouTube, two of the biggest media platforms on the internet.

The advancements in social media movements continue to grow our brand stronger and more

efficient.

Appendixes

1. How old are you?

2. Male or female?

3. How much is your individual income?

4. Are you married or single?

o If you are married do you have children? How many?

▪ 3 people - 1 child

▪ 14 people - 2 children

▪ 7 people - 3 children

▪ 3 people - 4 children

▪ 1 person - 5 children

5. Highest level of school/degree achieved?

6. Do you live in a rural or city area?

7. Do you currently own a Tesla?

If yes, what kind?

Why did you buy it?

How is the customer service?

8. Are you satisfied with the Tesla experience?

9. Why don’t you own one?

Just about every response that we’ve gotten included the fact that Tesla’s are too

expensive and that people don’t have enough money to purchase one.

10. How do you feel about Tesla as a brand?

11. How do you feel about electric vehicles?

12. Which Tesla Model do you like best and why?

o The majority of the responses we’ve received indicate that our survey takers

aren’t too knowledgeable about the different models that Tesla has to offer.

13. How do you feel about the price range of the Tesla vehicles?

14. What would make you more likely to purchase a Tesla?

o The main responses that we received talk about lowering the price of the car,

whether their answer is having a higher salary, more affordable costs, or winning

the lottery.

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