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Final Project created for Strategic Marketing class with Jim Prost, UC Berkeley Extension. (August 28th, 2013)
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UC Berkeley Extension Strategic Marketing -Professor Jim Prost
August 28th, 2013
Byron Pittam / Laura DellaGuardia / Lisandra Maioli / Ryan Shi / Svetlana Fedorova
Introduction
Tesla Motors is an automobile company that strives to ween the industry off oil-‐based combus3on engines.
They seek to create cars that are fun, environmentally friendly, inspire others to do the same and drive the car industry forward.
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Per Elon Musk
h9p://www.teslamotors.com/blog/secret-‐tesla-‐motors-‐master-‐plan-‐just-‐between-‐you-‐and-‐me
§ Build sports car
§ Use that money to build an affordable car
§ Use that money to build an even more affordable car
§ While doing above, also provide zero emission electric power generaEon opEons
§ Don't tell anyone.
So, in short, the master plan is:
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Corporate Strategy
§ More EV’S! ² Company-‐owned dealerships ² License electric powertrain components ² Inspire other car manufacturers
§ Premium product (Roadster) ² Trickle-‐down technology ² Use of early-‐adopters (Silicon Valley)
§ Take it to the mass market! ² SUV-‐crossover and mini-‐vans ² Cargo vans for commercial &
government use. ² $30k target model
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2003 2008 2009
§ Founded
2006
§ Prototypes of the Roadster introduced to the public
§ Global Green product Design Award for Roadster
§ RecogniEon by Time Magazine -‐ “Best InvenEons -‐ TransportaEon
2007
§ Index Design Award for Roadster
§ Two batches of 100 Roadsters sell out fast
§ Full producEon begins on the Roadster
§ December -‐ 100th Roadster delivered
§ Opened first retail store in Los Angeles, second in Menlo Park
§ Unveiled the Model S, March 26, base price $57k
§ Opened European showrooms; London, Munich, Monaco
Milestones
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2010 2011 2012 2013 2014
§ Strategic Partnership announced with Toyota
§ IniEal Public Offering § Opened Japan &
Australia showroom § ConEnued with
European showrooms in Zurich, Copenhagen, Paris, Milan
§ Stopped taking Roadster orders
§ Opened Hong Kong showroom
§ Commercial deliveries of the Model S begin
§ Unveiled Model X § Began building
Supercharger staEons
§ Small price increase announced for Model S
§ Model S wins ² Motor Trend Car of
the Year ² Automobile
Magazine’s Car of the Year
² Time Magazine’s Best 25 InvenEons of 2012
§ Push to be profitable...SUCCESS!
§ Musk promises US to be covered with Supercharger staEons (18 today)
§ First parEal recall
§ Model X will enter producEon
§ 80% of US populaEon covered by Supercharger staEons
milestones
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Other Electric Cars
§ Chevrolet Volt § Nissan Leaf (75,000 as of August 2013) § Mistubishi i-‐MiEV (30,000 as of June 2013) § Honda Fit EV § RAV4 EV § Renault Zoe § Roewe E50 § Scion iQ EV § Chevrolet Spark EV § Smart ED § Tesla Model S (12,700 as of June 2013)
20 total models of highway capable EVs
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Other Electric Cars
§ Chevrolet Volt § Nissan Leaf (75,000 as of August 2013) § Mistubishi i-‐MiEV (30,000 as of June 2013) § Honda Fit EV § RAV4 EV § Renault Zoe § Roewe E50 § Scion iQ EV § Chevrolet Spark EV § Smart ED § Tesla Model S (12,700 as of June 2013)
More than 150,000 total vehicles have been sold since 2008
TOP Selling
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TOP Markets
Japan 28% USA 26%
China 16%
France 11%
Norway 7%
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Tesla Financials
§ $20 billion market capitalizaEon, August 2013
§ 10 year old company is worth more than Mazda, Suzuki and Fiat
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Target Audience
§ Wealthy and trendy early adopters, § Successful professionals/entrepreneurs, § Upper middle class city-‐dwellers, § Tech-‐savvy and green-‐friendly
(eco-‐hipsters)
"For that target audience (wealthy and tech-‐savvy niche group), the more exclusive, the more expensive, the more exo;c, the be=er,"
Phil Go9, senior director of long range planning
for IHS AutomoEve. h9p://news.naEonalgeographic.com/news/energy/2013/05/130522-‐tesla-‐motors-‐success/
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Target Audience
Mark, 27 years old, lives in the Silicon Valley, where created his own start-‐up when he was just 21.
He makes a bunch of money with his Tech business, loves luxury brands, he buys products by its
performance and design and is constantly a=en;ve to the new launchings in the tech area and is always the first person in his group buying the cuKng-‐edge
products. He is also concerned about having a healthy life and being green.
Persona:
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Penetration Strategy
“Tesla's strategy is similar to that pursued by
cell-‐phone and flat-‐screen TV makers, which
started off selling their products to wealthy
early adopters then cut prices to mainstream
levels as the technology developed.”
Rachel Konrad , Tesla's spokeswoman
h9p://www.nbcbayarea.com/the-‐scene/shopping/Abu-‐Dhabi-‐Joins-‐Feds-‐as-‐Tesla-‐Investor.html 13-28
Product attributes
§ “Design-‐performance-‐energy efficiency”
§ No dealers (the price is the price: no negoEaEon) or commissioned sales person
§ TransacEons being conducted online
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Models
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Model x
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Positioning B
ur
nin
g F
ue
l C
ar
s
El
ec
tr
ic C
ar
s
Luxury Cars
Valueable Cars
§ Tesla is posiEoned as a high-‐end green electrical car's company in a luxury market with a unique customer experience
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Product attributes
“More than any other company, Tesla has helped transform the popular image of electric cars as nerdy golf carts for do-‐gooder greens to something that can be fun and luxurious and packed with cuKng-‐edge technology. It pioneered a new genera;on of electric cars. Whether Tesla can rally mainstream consumers to the world of
electric mobility, however, remains to be seen.”
by Josie Garthwaite for NaEonal Geographic
h9p://news.naEonalgeographic.com/news/energy/2013/05/130522-‐tesla-‐motors-‐success/
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KSF
§ Quality and design of the cars; § Company operaEonal efficiency and costs; § Supply and distribuEon chain efficiency; § Flexibility; § MarkeEng; § Compliance.
for Automobile Industry
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SCA’s
§ Technology
§ Ecosystem
§ Excellent Performing Car
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Promotion
“Tesla Motors has no adver;sing, no ad agency, no CMO, no dealer network. And that's no problem.”
Michael McCarthy, AdverEsing Age
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Promotional activities
§ Social media; § Word of the mouth; § Website; § Trade/auto/motor shows; § Tesla brand communiEes; § Product reviews; § Customer events; § Blogs, forums; § Email newsle9ers; § Press releases; § CelebriEes.
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SWOT Analysis
Opportunities Threats
Strengths
§ Well known CEO with good track record § Uses Tesla Stores instead of tradiEonal
distribuEon through dealers § 1st company to produce a fully electric
luxury car § Proprietary technology § Based in SF Bay Area § Popular in younger age groups who are
likely to use social media
Weaknesses
§ CEO is also CEO/CTO of SpaceX § Infrastructure not yet developed for electric
cars § Customers are sEll wary of such new
innovaEons § Price
§ Increasing awareness and support for environmentalism
§ Large internaEonal market potenEal § New lower-‐price models appealing to a
wider range of customers § Advances in tech may increase ba9ery life;
spark other innovaEons
§ CompeEEon from established auto companies
§ Lawsuits could inhibit/delay innovaEons § Loss of government subsidies will drive up
prices
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Marketing Strategy Tesla the ‘Challenger and Rule Breaker’
§ Performance through technology
§ New sales model and distribuEon
§ No tradiEonal paid adverEsing
§ ExcepEonally good at creaEng buzz
§ Over achieving results
§ Technology needs charging staEons
§ Facing distribuEon difficulEes
§ CEO has split Eme
§ Supply and demand: ProducEon
§ Keeping up with compeEEon
Pros Cons
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Options
① Stay as is, conEnue on the revoluEonary path.
② Stay in line with their high end innovaEve strategy, build their own factories so they no longer rely on outsourcing producEon.
③ Get in the mass market family car game quickly before it’s too late.
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Tesla Summary Assessment
AlternaEves (RaEng)
RelaEve Weights OpEon 1 OpEon 2 OpEon 3
Technology .3 5 5 4
Emerging CompeEtors .2 1 2 5
New CEO .2 2 3 5
AdverEsing .1 2 3 4
ProducEon Outsourcing .1 3 1 4
Geographical Expansion .1 3 3 4
Rela3ve Weight x Ra3ng 1 2.9 3.2 4.4
Analysis
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Recommendations
§ Nissan Leaf is leading the market
§ CEO is crucial to new vision
§ AdverEsing to keep up with compeEEon
§ ProducEon outsourcing boost
§ Geographical expansion
Option 3 : Get in the mass market game quickly!
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Questions?
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Tesla Superchargers
