Tesla: An Electric Marketing Strategy!

One of the toughest challenges that marketers face when marketing their product to the community is understanding who they want to attract, defining different group of consumers for their product, understanding their unmet needs and working around building a product or service that appeals to all the members of the group.

To achieve this successfully, it is important to understand the concept of segmentation, targeting and positioning process (STP) in modern marketing.

In segmenting the market, the business is acknowledging that different ‘types’ of buyers may require different products or marketing approaches / marketing mixes(1) . Once that is achieved, you strategically target that segment and position it appropriately in the market space.

To help understand this process better, let’s look at the marketing strategy of Tesla Motor,  “one of the leading producers in Electronic vehicles”.

What comes to the mind when one thinks of Tesla Motors?
• Futuristic? Elon Musk? Premium Electric luxury Cars?…
While these are appropriate, one of the most fitting descriptions would be the high end disruptors in the automotive industry. In other words, how one prefers an Apple over Samsung, Starbucks over local coffee shops, similarly Tesla is now considered as a preference over all other electronic vehicles (EV) in the automotive industry.
Now, let us view Teslas Marketing strategy through the STP lens.
Tesla started with Roadster with a base price of US $109000 in 2007, then in 2012 came with Model S priced US $85,000. Last week (April 2016) Model 3 was launched with a starting price of US $35,000(3).

Tesla’s former market focused on customers who were high end affluent consumers looking for a vehicle that was not only efficient and eco-friendly but also drove like a true luxury sports car.

However, with the release of their latest model (Model 3) a new segment of target audience has been added to their former consumer base. Their current target audience although not uber-rich, can still manage to afford an entry level premium luxury car. They have built on their brand loyalty by implementing a number of driver friendly marketing strategy such as booking the latest model with a $1000 US ($1500 AU) refundable deposit, Certified Pre Owned (CPO) program which allows Tesla’s consumers to return their car to Tesla after 3 years for 43-50% reimbursement of its initial price and their referral program where Model S customers had received a $1200 credit for installing a home EV charger.

Tesla from the beginning ensured to cut through the typical auto industry advertising strategy by providing their customers infinite mile warranty, direct customer sales and owning its own stores and service centres by being the only automaker that sells their cars directly to their customers all of which helped ignite both consumer and media loyalty.


Good marketing and good strategy are both about making choices that build and maintain a set of capabilities that enables the company to outperform its competitors with a particular set of customers(1).

Tesla entered the automotive industry with an expensive, high end product that focused on consumers who could afford luxurious automobiles that was ecofriendly and equipped with one of its kind technology offering a new level of convenience.

In order for Tesla Motors to keep growing now and into the future it was vital that they expand their target market to reach out to a variety of consumers. As the company’s product and their consumer’s acceptance matured they started to shift into a larger and more competitive market by lowering their price with the Model 3.


Tesla Motors market position is unique because it is not only selling cars but also selling technology. It has positioned itself in the market as a high end manufacturer and dealer of electric sports cars. With its initial pricey releases like the Tesla Roadster’s, Model S’s and Model X’s, Tesla built its reputation in the market space as a leader in electric automobiles. However, one of the long term goals of Elon Musk, mastermind of Tesla, as mentioned in his  2006 blog(4),  was to have a vast range of car models including their affordably priced family cars that speeds the world towards an eco-friendly, solar powered future. The announcement of Model 3 last week (April 2016) helped achieve that goal and position themselves to a mass market segment.

The added advantage that Tesla possesses is that the brand does not need its consumer interested in buying a Tesla, to fit all the needs of the brands market segment. The nature of the company is such that it allows Tesla to dip into the segments interested in either luxury cars or electric eco-friendly cars without alienating the consumers in either segments. This added advantage helps in both expansion, stability and safety in the automotive market.

When it comes to showrooms, well Tesla has one of the strangest car showrooms compared to any car maker in the world. They are not located on main roads or on a famous street as such, instead they are in shopping malls right next to your favourite Zara or Dior showroom. Nonetheless, Musk can be considered as a consummate marketeer by interacting with the community through Tesla blogs and providing his fan base with updates on the company which is important when it comes to positioning Tesla against the giants of the automotive industry.

Musk and his cohorts have succeeded in doing what almost everyone thought would be impossible: Make EVs cool and wildly desirable. With well over 300,000 (5) and up pre-orders in just about a week since it unveiled the Model 3, to be delivered by the end of 2017, it is irrefutable proof that the world is ready for Tesla.

But will they be able to deliver fast enough so that patience doesn’t run out. After all delivering the product too affects marketing strategy, doesn’t it?


  1. Kotler, P & Keller, KL 2012, Marketing management, Upper Saddle River, N.J. : Prentice Hall, c2012, 14th ed.
  2. Iacobucci, D 2013, MM4, Mason, Ohio : South-Western ; Andover : Cengage Learning [distributor], [2013], Student edition with package.
  3. Wikipedia, 2016, Tesla Motors, retrieved on 09th April 2016, <https://en.wikipedia.org/wiki/Tesla_Motors>.
  4. Elon Musk, 2006, The Secret Tesla Motors Master Plan (just between you and me),retrieved on 10th April 2016, <https://www.teslamotors.com/blog/secret-tesla-motors-master-plan-just-between-you-and-me>.
  5. Nick Jaynes, 2016, Tesla snapped up more than 325,000 Model 3 pre-orders in a week, retrieved on 10th April 2016, http://mashable.com/2016/04/07/tesla-model-3-pre-orders/#idF2BZVHXkqn

Username: kmbangera

Student number: 213335502



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