Marketing Plan
Upcoming SlideShare
Loading in...5
×
 

Marketing Plan

on

  • 6,425 views

Marketing Plan

Marketing Plan

Statistics

Views

Total Views
6,425
Views on SlideShare
6,424
Embed Views
1

Actions

Likes
9
Downloads
366
Comments
0

1 Embed 1

http://localhost 1

Accessibility

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Marketing Plan Marketing Plan Document Transcript

  • Summer 2012NEW YORK UNIVERSITY STRATEGIC MARKETING PLAN
  • Strategic Marketing PlanModel S Premium Electric Car, Tesla Motors IncAugust 20, 2012. New York University Author: Partha Mitra2 Strategic Marketing
  • Revision HistoryDate Version Description Author07/07/2012 1.0 Initial Draft – Purpose, company mission, company Partha Mitra overview, industry analysis, Appendix14/07/2012 1.1 Added Competitor Analysis, SWOT Analysis, Partha Mitra References22/07/2012 1.2 Added Segmentation, Appendix, References Partha Mitra04/08/2012 1.3 Added Positioning, Product, Price, References Partha Mitra11/08/2012 1.4 Added Place, Promotion, References Partha Mitra15/08/2012 1.5 Added Marketing Matrices Partha Mitra17/08/2012 1.6 Modified each section according to Prof. Gould’s Partha Mitra comment19/08/2012 1.7 Added References, images, Cover Page, Partha Mitra Formatted Table of content, other cosmetic changes 3 Strategic Marketing
  • Table of Contents1. Purpose of the Document...................................................................................................................... 82. Company Mission.................................................................................................................................. 83. Company Vision .................................................................................................................................... 84. Industry Analysis ................................................................................................................................... 8 4.1 Characteristics of Automotive Industry...................................................................................... 8 4.1.1 Stages of production...................................................................................................... 9 4.1.2 Global production chains ............................................................................................. 10 4.1.3 Ownership pattern ....................................................................................................... 10 4.2 Automotive Industry at a Glance ............................................................................................. 11 4.2.1 Market Size.................................................................................................................. 11 4.2.2 Customers and Target Market..................................................................................... 11 4.3 Electric Vehicle Industry Forecast ........................................................................................... 14 4.3.1 Battery Pack Costs Projections ................................................................................... 16 4.3.2 Charging Infrastructure................................................................................................ 17 4.3.3 Cost of Ownership ....................................................................................................... 17 4.4 Challenges facing the industry ................................................................................................ 17 4.4.1 Component complexity ................................................................................................ 17 4.4.2 Generational research ................................................................................................. 18 4.4.3 Powertrain technology ................................................................................................. 185. Competitor Analysis ............................................................................................................................ 18 5.1 Tesla Motor’s competitive Advantages.................................................................................... 18 5.2 Direct Competitor Analysis ...................................................................................................... 18 5.2.1 General Motors ............................................................................................................ 19 5.2.2 Toyota Motors.............................................................................................................. 20 5.2.3 BMW ............................................................................................................................ 21 5.3 Critical Success Factor Matrix ................................................................................................. 226. Company and Management Background............................................................................................ 23 6.1 History...................................................................................................................................... 23 6.2 Strategic Partnership ............................................................................................................... 23 6.3 Management............................................................................................................................ 247. SWOT Analysis ................................................................................................................................... 24 7.1 SWOT Analysis of Tesla Model S ........................................................................................... 24 7.2 SWOT Analysis of Tesla Model S Manufacturing Model ........................................................ 278. Market Segmentation .......................................................................................................................... 28 8.1 Demographics, Psychographics, Technographics Based Research ...................................... 29 8.2 EV Measurement Scales ......................................................................................................... 30 8.2.1 Innovativeness............................................................................................................. 30 8.2.2 Knowledge ................................................................................................................... 31 8.2.3 Environmental Concern ............................................................................................... 32 8.2.4 Relative Advantage ..................................................................................................... 32 4 Strategic Marketing
  • 8.2.5 Compatibility ................................................................................................................ 32 8.2.6 Complexity and Perceived risk .................................................................................... 32 8.2.7 Attitude towards Electric Vehicle ................................................................................. 32 8.3 EV Segmentation Research Results ....................................................................................... 339. Positioning ........................................................................................................................................... 34 9.1 Positioning Strategy................................................................................................................. 3410. Marketing Mix .......................................................................................................................... 35 10.1 Product Elements .................................................................................................................... 35 10.1.1 Tangible Product Elements ....................................................................................... 35 10.1.1.1 Dimensions..................................................................................................................... 35 10.1.1.2 Body ............................................................................................................................... 35 10.1.1.3 Additional Dimensions.................................................................................................... 36 10.1.1.4 Powertrain ...................................................................................................................... 37 10.1.1.5 Suspension, Steering, and Brakes................................................................................. 37 10.1.1.6 Charging......................................................................................................................... 37 10.1.1.7 Interior ............................................................................................................................ 37 10.1.1.8 Instrumentation .............................................................................................................. 38 10.1.1.9 Warranty......................................................................................................................... 38 10.1.1.10 Convenience ................................................................................................................. 38 10.1.1.11 Safety ............................................................................................................................ 39 10.1.2 Intangible Product Elements ..................................................................................... 40 10.1.2.1 EV Charger Installation .................................................................................................. 40 10.1.2.2 Instruction....................................................................................................................... 41 10.1.2.3 Product Line Membership .............................................................................................. 42 10.1.3 Brand ......................................................................................................................... 42 10.1.4 Package..................................................................................................................... 44 10.1.5 Warranty .................................................................................................................... 44 10.2 Price Elements......................................................................................................................... 45 10.2.1 Pricing Strategies ...................................................................................................... 45 10.2.1.1 Introductory Price of Model S......................................................................................... 45 10.2.1.2 Federal Tax Credit and allowances ............................................................................... 45 10.2.1.3 Geographic Pricing......................................................................................................... 45 10.2.2 Pricing Objectives ...................................................................................................... 46 10.2.2.1 Sales oriented ................................................................................................................ 46 10.2.2.2 Profit oriented ................................................................................................................. 46 10.2.2.3 Status Quo oriented ....................................................................................................... 46 10.2.2.4 Non-Price oriented ......................................................................................................... 46 10.2.3 Pricing Policies .......................................................................................................... 46 10.2.3.1 One-Price ....................................................................................................................... 46 10.2.3.2 Flexible Price.................................................................................................................. 47 10.2.3.3 Skimming Price .............................................................................................................. 47 10.2.3.4 Penetration Price............................................................................................................ 47 10.2.3.5 Reservation and refundable Policy ................................................................................ 48 10.3 Place Elements........................................................................................................................ 48 10.3.1 Direct Channel System.............................................................................................. 48 10.3.2 Channel System management .................................................................................. 49 10.3.3 Expectations of middlemen ....................................................................................... 49 10.4 Promotion Elements ................................................................................................................ 49 10.4.1 Define challenge type ................................................................................................ 49 5 Strategic Marketing
  • 10.4.1.1 Regulatory limitation on internet selling ......................................................................... 49 10.4.1.2 Branding of Tesla Motors ............................................................................................... 49 10.4.1.3 Acquisition ...................................................................................................................... 50 10.4.2 Objectives .................................................................................................................. 50 10.4.3 Promotion Elements .................................................................................................. 50 10.4.3.1 Video Touting ................................................................................................................. 50 10.4.3.2 Mass Selling ................................................................................................................... 51 10.4.3.3 Sales Promotion ............................................................................................................. 51 10.4.4 Strategic direction...................................................................................................... 51 10.4.4.1 Push strategy ................................................................................................................. 51 10.4.4.2 Pull strategy ................................................................................................................... 51 10.4.5 Communication Tools................................................................................................ 52 10.4.6 Media Tools ............................................................................................................... 52 10.4.6.1 Tesla Motors Social Media............................................................................................. 5211. Marketing Matrices .................................................................................................................. 52 11.1 Profit and Loss Statement ....................................................................................................... 52 11.2 Breakeven Analysis of Model S............................................................................................... 53 11.3 Return of Investment Analysis................................................................................................. 54 11.4 RFM Analysis of Model S ........................................................................................................ 55 11.5 Lifetime Value Analysis ........................................................................................................... 56 11.6 Key Code Analysis .................................................................................................................. 5612. Appendix.................................................................................................................................. 57 12.1 Market Penetration Forecasts ................................................................................................. 57 12.2 The EV and PHEV Market....................................................................................................... 57 12.3 Fuel/ Energy Costs per Mile of Luxury Sedans vs. Tesla‘s Model S....................................... 58 12.4 Range, Battery Pack Costs, and Price/Mile For EVs .............................................................. 58 12.5 Tesla Strategic Partnership ..................................................................................................... 59 12.6 The attitude towards electric vehicles and its antecedents ..................................................... 59 12.7 Buying intention, attitude, and attitudinal antecedents regarding a state-of-art electric vehicle 61 12.8 Tesla Store Locations .............................................................................................................. 61 12.9 Tesla Executive Team ............................................................................................................. 62 12.10 Tesla Model S Product Features........................................................................................... 65 12.11 Tesla Enthusiasts .................................................................................................................. 71 12.12 Tesla Motors Social Media Brand Community ...................................................................... 7313. Reference ................................................................................................................................ 74 6 Strategic Marketing
  • Approver / Author / Distribution List Name Role ApprovalsProf. Myron Gould Professor, Strategic Marketing Dept. Marketing and Public Relations. Yes New York University, NYC, USA.Partha Mitra Author – Strategic Marketing Plan: Model S Premium Electric Car, Tesla Motors Inc. N/A Master of Science, Management & Systems New York University, NYC, USA. 7 Strategic Marketing
  • 1. Purpose of the Document The purpose of this document is to develop a strategic marketing plan for Tesla Motor’s premium electric car – Model S. The Model S is a four-door premium sedan electric car with a range of up to 300 miles on a single charge. Designed from the ground up as a complete electric car, the Model S combines superior vehicle engineering with Teslas advanced electric powertrain technology.2. Company Mission Tesla Motors designs and sells high performance, super efficient electric cars. Tesla Motors cars join style, acceleration, and handling with advanced technologies that make them the quickest and the most energy-efficient cars on the planet. (Tesla Motors, Mission)3. Company Vision At the core of Tesla Motors is the belief that an electric car need not be a driving sacrifice. Tesla Motors has brought the best of the automotive and technology worlds together to permanently bury the image of an electric car as a step backwards in performance, efficiency, or design. Tesla Motor’s key technology is the 100% electric powertrain, which propels us in the present and simultaneously establishes a foundation for our future models. They set out to forever alter perceptions of electric vehicles and to make electric cars a viable alternative. Tesla Motor has produced a car that is at once beautiful and exciting to drive, along with being the most efficient production automobile on the planet. (Tesla Motors, Vision).4. Industry Analysis4.1 Characteristics of Automotive Industry The automotive industrys complex product development and manufacturing process makes it one of the most knowledge-intensive industries. There are three distinguishing characteristics of the automobile sector. 8 Strategic Marketing
  • 4.1.1 Stages of production Production in the automobile sector is characterized by a high degree of segmentation between different stages in production, often involving different ownership and Geographical location. There are six different types of production activity within the automobile sector: assemblers; system suppliers; first, second and third tier suppliers; and aftermarket product suppliers  Assemblers: Increasing scale required to spread costs of vehicle design and branding. Innovation and design capabilities remain critical as first movers in new market sections can gain important rents while other companies catch up. Some companies, such as Ford, appear to believe that core competences lie more in branding and finance, and they therefore outsource parts of manufacturing. Others, such as Toyota, maintain an emphasis on manufacturing excellence and competence.  Global mega-suppliers: These firms supply major systems to the assemblers. They are sometimes referred to as "Tier 0.5" suppliers, because they are closer to the assemblers than the first-tier suppliers. These companies need to have global coverage in order to follow their customers to various locations around the world. They need design and innovation capabilities in order to provide “black-box” solutions for the requirements of their customers. Black-box solutions are solutions created by the suppliers using their own technology to meet the performance and interface requirements set by assemblers.  First-tier suppliers: These are firms which supply direct to the assemblers. Some of these suppliers have evolved into global mega-suppliers. First-tier suppliers require design and innovation capabilities, but their global reach may be more limited.  Second-tier suppliers: These firms will often work on designs provided by assemblers or global mega-suppliers. They require process-engineering skills in order to meet cost and flexibility requirements. In addition, the ability to meet quality requirements and obtain quality certification (ISO9000 and increasingly QS9000) is essential for remaining in the market. These firms may supply just one market, but there is some evidence of increasing 9 Strategic Marketing
  • internationalization.  Third-tier suppliers: These firms supply basic products. In most cases, only rudimentary engineering skills are required. A study by Leite (1997) of skills and training at different parts of the automobile value chain in Brazil showed that in the third-tier of the component chain, skill levels and investments in training were limited. At this point in the chain, firms compete predominantly on price.4.1.2 Global production chains A distinguishing feature of the automobile sector is the high degree of global integration in production activities. The value added chain is unbundled at the global level, with different stages in the production chain located in different countries (Dicken, 2006). With the lowering of trade barriers and advances in globalization, production location decisions are increasingly determined by the international competitiveness of production in a particular location, rather than as was the case historically, by the size and growth potential of the domestic market. As a result of this vertical disintegration of production across borders, international competitiveness is determined at the level of different tasks within the automobile sector, rather than at the level of the industry (Baldwin, 2006; Grossman and Rossi-Hansberg, 2006).4.1.3 Ownership pattern The globalization of automobile production has occurred as part of the strategic decision making processes of the small number of multinationals that dominate the industry. At the beginning of the decade, the largest 20 firms produced more than 95 per cent of the world’s vehicles. At present, some 529 plants located in 45 countries are owned by 27 automakers (Sturgeon and Florida, 2000). As for supplier plant location, 2211 plants located in 60 countries are owned by 150 automobile suppliers. With respect to engine production, 168 plants are located in 24 countries and owned by 16 companies. 10 Strategic Marketing
  • 4.2 Automotive Industry at a Glance4.2.1 Market Size The automotive industry is involved in the process of designing, manufacturing, and selling motor vehicles. However, it is not just about selling cars to consumers. The services required to maintain and distribute cars after the car’s initial sale are part of the automotive aftermarket, a 257 billion dollar market. These services include the car accessories and repairs vital for the automobile ecosystem to function4.2.2 Customers and Target Market The size and importance of the automotive industry have created many opportunities for people to get involved. According to the Franchise Business Economic Outlook 2011, automotive franchise establishments are expected to increase 3.9% from the previous year. General automotive industry trends and an improving economy are revealing opportunities for anyone with a passion in the auto industry to get involved. In some parts of the automotive aftermarket industry, there is a significant advantage through franchising versus starting a shop on your own. In the oil change and lubrication market, the top few companies reap in a significant amount of the entire industry’s profits. There are also other opportunities that exist where people can benefit from. Auto repair will continue to play a big role in the automotive industry. In addition to the routine car and repairs every car owner must go through, there is going to be higher demand for specialized parts and repairs required of hybrid and electric cars. Currently, there is a low supply of shops capable of fixing these hybrid cars despite its increasing demand. The auto accessories market is a $32 billion dollar market with data showing 92% percent of consumers are willing to buy auto accessories. With consumers holding their cars longer and disposable income increasing, auto accessories are beginning to look like a prudent investment for car owners. 11 Strategic Marketing
  • The car rental market, which puts 1.6 million cars on the road, is currently seeing a bounce back from the damage the financial crisis created. Companies such as Hertz and Enterprise had to drastically cut costs and keep older vehicles in order to deal with the decreased demand in rental cars. As the economy improves, these companies are hiring more and switching their old cars for newer, fewer mileage cars. The U.S. auto industry sold 1.28 million units in the month of June 2012. This was an increase of 22.2% from June 2011. The Seasonally Adjusted Annual Rate (SAAR) for the month was 14.1 million. Through six months, industry sales have climbed 14.9% over last year’s first half. US auto industry is full of competitive auto manufacturing companies, market share of couple of popular car companies are provided in below pie-chart. BMW Group, Chrysler/Dodge/Jeep, Ford Motors, General Motors, Honda/Acura, Hyundai/Kia, Mazda, Nissan, Suberu etc are the market compititors in US Auto market. Source: www.GoodCarBadCar.net In the past 10 years, growth in the emerging markets has accounted for most of the increase in global vehicle sales. Sales in the developed markets of U.S., Europe and Japan declined as shown in the chart below. However this does not mean emerging market sales will drive12 Strategic Marketing
  • automakers’ earnings higher in the coming years. Countries such as China give preferential treatment to domestic auto companies, thus adversely affecting western automakers trying to take advantage of the booming auto market there. In India, domestic automaker Tata (TTM) makes the $2,000 Nano, beating the competition on price. Ford (F) lags behind other foreign car companies in capturing a larger share of the Indian market. Source: JD Power and Bernstein High oil prices in the mid 1990s caused many consumers to shift away from high fuel dependent vehicles like SUVs and Hummer’s that the US automakers were producing to lighter and more compact cars. Sales dropped dramatically as more and more people preferred the smaller and more fuel efficient Japanese cars to the more high powered American ones. The financial crisis in 2008 made matters worse as car sales further plummeted and the Big Three needed billions of dollars in government bailout funds. As of 2010, the automotive market contributed to approximately 4% of the United States’ GDP and employed millions of workers. Sales have risen 11% since last year and is expected to maintain stable growth for the next few years.13 Strategic Marketing
  • These recent events have changed the landscape of the automotive market, but they have also created large amounts of opportunities for aspiring business owners to capitalize on the recent transformation of the automotive industry.4.3 Electric Vehicle Industry Forecast As fuel prices remain high and there is greater concern for the environment, more energy efficient cars are increasing in demand. Moreover, as part of their bailout specifications, the Big Three automakers are required to quickly release more energy efficient vehicles to the market. This increasing popularity for hybrid and electric cars are going to affect the industry in big ways as it will create a new market for businesses to cater to these new forms of vehicles. Below graph presents Tesla Electric Car - Model S demand in consumer marketplace. Global automobile sales forecasts project divergent market penetration rates of approximately 0.6 – 0.9% for plug-in hybrid electric vehicles (PHEVs) by 2015, 9% by 2020, and 22% by 2030 for Electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEV). Market penetration will depend on battery pack costs, charging infrastructure, competing technologies, oil prices, manufacturer investments in EV and PHEVs, and consumer skepticism of EVs and PHEVs. 14 Strategic Marketing
  • Market penetration forecast is provided in detail in Appendix 8.1. Electric Vehicle sales forecast by Type Based on US Sales for 2015. Source: JD Power and Bernstein Electric Vehicle Sales Forecast by Volume Range – 2015 EV Sales forecast in US by Type 2015 is provided in the below chat -15 Strategic Marketing
  • To facilitate growth, the U.S. government has invested $5 billion. through the American Recovery and Reinvestment Act and the DOE‘s Advanced Technology Vehicle Manufacturing (ATVM) Loan Program. The DOE aims to increase the public accelerated charging stations from 500 to 20,500 in 2012 and reduce battery pack costs by 70% by December 2015. Two predominant inhibitors of EV/PHEV market penetration are battery pack costs and range anxiety. Recent reported battery pack costs are as much as 30% lower than 2009/early-2010 projections, potentially reducing the costs of EV/PHEVs. Reduced battery pack costs may enable EV/PHEV manufacturers to produce vehicles with increased all-electric range, increasing EV/PHEV market penetration by making EV/PHEV all-electric ranges more competitive with ranges for internal combustion engine (ICE) vehicles. The EV and PHEV Market in USA is provided in Appendix 12.2. The increased capital invested in EV/PHEV technology and infrastructure has made electricity a more viable alternative fuel for vehicles in the near-term. However, even with the projection that battery pack costs will decrease rapidly and thereby enable manufacturers to develop EV/PHEVs with greater all-electric ranges.4.3.1 Battery Pack Costs Projections Electric battery manufacturers rarely release exact battery pack costs, but most estimates range from $500 - $1200/kWh depending on chemistry and cell-form factor.1 However battery pack costs have decreased faster than expected. In November 2009, Deutsche Bank analysts projected average battery pack costs reducing from $675/kWh to $500/kWh by 2015 and $325/kWh by 2020; but in March 2010 it cited industry reports of battery pack bids in the mid- $400/kWh for 2011/2012. Further evidence is Nissan reporting the battery pack in its economy EV Leaf costs only $375/kWh. In addition, Tesla CEO Elon Musk stated that the Model S battery pack will cost less than the Leaf’s pack3, a statement corroborated by calculations of battery pack costs given information in Tesla’s IPO. In 2008, the United States Advanced Battery Consortium, 16 Strategic Marketing
  • an umbrella organization of Chrysler LLC, Ford Motor Company, and General Motors, projected a reduction in price to $500/kWh by 2012, $300/kWh by 2014, $250/kWh by 2020 and $100/kWh in an undefined “long-term”. The DOE projects industry-wide battery pack costs to reduce approximately 70% (likely from an average of $700/kWh or $33,000/pack) by December 2015. Range, Battery Pack Costs, and Price/Mile For EVs 12.4.4.3.2 Charging Infrastructure In addition, the DOE is funding the development of the infrastructure for charging stations or electric vehicle supply equipment (EVSEs), with the goal of increasing the number of level 2 (400V) or level 3 (500V) EVSEs, which reduce charge times from approximately from 8 – 16 hours to 30 minutes to 4 hours, from approximately 550 to 20,550 by 2012.7For example, Telsa’s Quick Charge system is a level 3 charging system that can be installed at home. It can fully charge a battery in less than 45 minutes. The federal government offers subsidies for charging stations, covering half the cost of the home charging system.4.3.3 Cost of Ownership If battery pack costs reduce as the DOE projects, consumers will have further incentive to own EVs and PHEVs since costs are $0.02 - $0.04/mile to operate whereas a 25-MPH gasoline vehicle costs $0.12 - $0.15/mile to operate. In addition, maintenance costs will likely be lower for EVs and PHEVs. Fuel & Energy cost per mile of Model S is provided in Appendix 12.3.4.4 Challenges facing the industry The automotive industry is changing at a rapid pace, particularly in terms of in-car technology and the impact of next-generation batteries, “green” technologies and component complexity. Couple of the common issues that automotive industry is currently facing are discussed below.4.4.1 Component complexity The modern-day automobile is a highly complex machine with thousands of components all working in synchronism. The number of feature combinations can be in the thousands. But OEMs 17 Strategic Marketing
  • and suppliers need to develop a process that incorporates smart manufacturing and design decisions while not overcomplicating consumers’ buying options.4.4.2 Generational research Consumer needs change as they age and the automobile is one of the most personal buying decisions they will make. Historically many OEMs have manufactured to a general consumer audience regardless of age, but that is changing.4.4.3 Powertrain technology Governments around the country are placing requirements on original equipment manufacturers (OEMs) to adhere to strict environmental standards while asking them to produce cars that are more affordable to drive. Consumers want more fuel efficient vehicles for an affordable price. We work with clients to determine where the supply of consumer technology meets consumer demand.5. Competitor Analysis5.1 Tesla Motor’s competitive Advantages A central competitive advantage is the low cost of Tesla’s battery pack, which should allow it to sell the Model S (2012 launch) at a reasonable price but with a near-normal (up to) 300 mile range, a combination other EVs have yet to deliver. Tesla Model S battery pack costs will be at/below ~$300/kWh, well below what we hear from other OEMs/battery makers ($500-600/kWh for 2011-2012 timeframe, and $375-500/kWh mid-decade target). A key source of Tesla’s cost advantage is its ability to apply commoditized small cylindrical lithium cells (used in consumer electronics) to a car via proprietary thermal/power management.5.2 Direct Competitor Analysis GM, Toyota Motors, BMW are couple of best known competitors of Tesla Motors. Direct competitor analysis is provided in below table. 18 Strategic Marketing
  • GM = General Motors Company, Pvt1 = Pininfarina S.p.A., TM = Toyota Motor Corporation, Industry = Auto Manufacturers – Major, 1 = As of 2011 Source: Yahoo Finance.5.2.1 General Motors GM represents a significant future threat to Tesla, if, as planned, Tesla decides to enter the lower end of the market near the $30,000 price point.  The current development of the Volt, although it is not a true electric car, indicates that GM remains interested in the electric/hybrid car market, and will continue to pursue the market in the foreseeable future  A virtual waiting list surpassed 20,000 as of May 4, 2008, indicating that there exists a significant market for the Volt.  Designed for approximately 40 miles of battery powered driving before the 1.0L turbocharged gas engine automatically begins to recharge the battery, thus extending the range of the Volt to up to 640 miles of highway driving. This deviation from a strictly electric car solves the range problem of vehicles run purely on batteries, but advancements in battery technology could lead to the 19 Strategic Marketing
  • removal of this system in the future.  The engine can be configured to run on gasoline, E85 or biodiesel.  The E-Flex drive system being designed for the Volt represents an attempt to standardize many components, which would allow GM to take advantage of large economies of scale for possible future electric vehicles. In the case of significant battery technology improvement and increasing demand, GM would be able to quickly increase its production of electric cars and introduce new models with significantly less development.  The Volt, with four passengers seating and a relatively attractive price of approximately $35,000, appeals to a broad customer base, in contrast to the current niche market of Tesla.  If Tesla were to enter the lower end market, it would without doubt face strong competition from GM. According to Tesla CEO, Elon Musk, The only way for Tesla to compete effectively would be through differentiation, which would focus mainly on technology.5.2.2 Toyota Motors Tesla Motor’s response to Toyota Motor Company’s longstanding hybrid technology and possible entry into the plug-in hybrid and fully electric car market:  Toyota’s Prius first took the road in Japan in 1997, arrived in America in 2000, making it the most prevalent hybrid car.  As of September 2007, 430,000 have been sold in the US alone  Toyota’s hybrid technology has been applied to a wide range of cars, ranging from the $21,000 Prius to the Lexus flagship LS600h with a starting price of $104,000.  The LS600h, which is a large executive luxury car, falls in the same price range as the Tesla Roadster, though they serve very different purposes. 20 Strategic Marketing
  •  The LS600h is meant to be a comfortable luxury sedan and still uses 20 miles per gallon because the hybrid power train is mated to a 5 liter V8 engine, which is far from fuel efficient. As a result, the LS600h is targeted at a completely different market than the Tesla Roadster.  Tesla should be wary of Toyota offering a larger battery pack and a home charging station as options for the Prius, as this could eventually lead to Toyota offering a full electric version of the Prius.  This would cut into Tesla’s plans to offer fully electric sedans at different price points, the WhiteStar, priced at around $50,000-$70,000, and a more affordable BlueStar at around $30,000 down the line.  At those price points, Toyota can offer a fully electric sedan under Lexus to compete with the WhiteStar, and another fully electric version of the Toyota Camry, their bread and butter car for many years, to compete with the BlueStar.  As a response, Tesla should focus on improving their technological advantage in fully electric cars so that by the time Toyota enters the electric car market, Tesla has a technological advantage. (Tesla Motors CTO, JB Straubel)  Also, Tesla with their first mover advantage should build their brand name to become as prevalent a name in the electric car market, as Toyota Prius, is in the hybrid car market.5.2.3 BMW Tesla’s one of the potential competitor is BMW, which continues to put effort into entering the luxury, high-performance, low-emissions, low-consumption auto market.  Efficient Dynamics - “Mild hybrid" technology - Uses many of the energy-saving elements of hybrid technology without electric motor assist - Small 4-cylinder gas and diesel engines, 21 Strategic Marketing
  • Regenerative braking, "Start-stop" system, shuts the engine off when not needed. - BMW avoids marketing as "hybrid" since there is no electric motor - Used on the 1 and 3 series, which are BMWs lower-cost, small sedans/coupes - Lower cost, easily integrated into existing cars  Hydrogen technology - A dual hydrogen/gasoline powered version of their luxury 7 series sedan - Only 125 miles on hydrogen, 300 miles on gasoline - "Worlds first hydrogen-drive luxury performance automobile"  Hybrid technology - BMW demoed an X5 Diesel Hybrid SUV at Geneva Motor Show in 2008 - BMW Vision Efficient Dynamics – A prototype 36 mpg SUV, utilizing a solar panel roof and hybrid technology - 5 & 7 series hybrids on the horizon5.3 Critical Success Factor MatrixCritical Success Factors Matrix General Toyota Critical Success Factors Weight BMW Tesla Motor Motors Motor Price 0.10 3 3 3 5 Quality 0.15 2 3 4 5 Customer Service 0.10 3 3 3 2 Branding awareness 0.10 3 5 4 2 Variety 0.10 5 2 2 2 Distribution 0.10 2 3 3 3 Loyalty 0.10 5 2 3 3 Segmentation 0.10 2 3 4 5 Global Expansion 0.05 2 4 3 2 Advertising 0.05 2 4 4 3 Warranty 0.05 2 4 4 5 TOTAL 1.00 2.9 3.15 3.35 3.55 22 Strategic Marketing
  • Note: 1 being the worst and 5 being the best. Based on the above critical success factor matrix we can see Tesla Motor has an opportunity to improve brand awareness and Global expansion. It will bring total score better couple of years down the line.6. Company and Management Background Tesla Motors, Inc. is a Silicon Valley-based company that designs, manufactures and sells electric cars and electric vehicle powertrain components. Tesla Motors, founded by Elon Musk, Marc Tarpenning and Martin Eberhard in 2003, is a company that produces a high-performance electric car and is backed by a number of high-profile investors.6.1 History la was founded in 2003 with the idea that the same lithium-ion technology used in laptops would be used to create a fully electric vehicle that is not only eco-friendly but also attractive and fun to drive. The company began raising venture capital in the spring of 2004 and by the end of that year had designed its first vehicle. Tesla produced the first Roadster in 2008 and has sold approximately 1,350 of these vehicles as of September 30, 2010. In January 2010, Tesla secured a long-term Department of Energy (DOE) Loan Facility to finance development of EVs, powertrains, and manufacturing facilities. The DOE loan facility, along with cash generated from the IPO has allowed for the continuing development of the Model S, the purchase and retooling of a manufacturing facility in Fremont, CA, and the expansion of the powertrain facility in Palo Alto, CA6.2 Strategic Partnership In March 2008 Tesla entered into a relationship with Daimler AG to develop battery packs and chargers for Daimler‘s Smart Fortwo EV program. Subsequently, Tesla entered into an additional TESLA MOTORS development agreement with Daimler for the Class-A EVs, as well as agreements with Toyota to develop a powertrain system for an electric RAV4 prototype. Tesla also maintains a relationship with Panasonic for joint development of battery packs. Panasonic, 23 Strategic Marketing
  • Toyota, and Blackstar Investco (an affiliate of Daimler) all have stock ownership in Tesla. (Appendix 12.5)6.3 Management Tesla‘s management team is led by Chairman, Product Architect, and CEO Elon Musk and an upper management team selected from top automotive and technology firms. Musk is a visible champion for the company and is almost a symbol of the brand, as well as being a primary shareholder. Tesla‘s strategic partnerships and their DOE Loan Facility are dependent on Musk remaining in his role at Tesla and retaining a percentage of ownership in the company until at least a year after the conclusion of the Model S Facility Project.(Appendix 12.9)7. SWOT Analysis7.1 SWOT Analysis of Tesla Model S Strengths WeaknessesFirst-to-market: Tesla’s Roadster was the first Model S will not launch until 2012: There isfederally-compliant highway-capable electric vehicle currently a lot of hype surrounding EVs, andlaunched in both the U.S. and Europe, setting Tesla other than Roadster sales and the Model Sup to be known as the electric vehicle company. waiting list, Tesla is unable to turn this hype into sales. Additionally, the delay of the Model S allows competitors to launch more affordable EVs before Tesla.Partnerships: Tesla’s partnerships with Toyota, Lack of Brand Name Recognition: ComparedDaimler AG, and Panasonic have allowed the to most of its competitors, Tesla is a not a well-company the opportunity to support their battery known brand in the auto industry. As Teslatechnology research and development. Additionally, attempts to sell EVs to a more mainstream targetTesla believes that cooperation with other car market, name recognition will become moremanufacturers advances the electric vehicle cause. important. 24 Strategic Marketing
  • Focus on design, performance, and efficiency: Consumer behavior changes required for EVTesla is the only automaker that places equal purchase: EVs require greater consumeremphasis on zero emissions and the performance behavior changes than hybrid or plug-in hybridand aesthetics of the car. This allows Tesla’s cars to vehicles. For instance, it can take several hoursappeal to a large segment of consumers. to recharge an EV battery, whereas it only takes a few minutes to fill a car with gas.Battery Technology: Tesla has superior batterytechnology to other manufacturers in the industry. Opportunities ThreatsSales outside of the U.S., particularly Europe, Continued economic downturn: If theAsia, and Canada: Tesla has been very successful economy does not improve, Tesla will havein European markets, particularly Germany, and the difficulty selling the Model S which could severelycompany sees great potential in Asian and Canadian impact the success of the entire company.markets. 25 Strategic Marketing
  • Government regulations and economic Delays in the launch of the Model S: Anyincentives: Since 2008, the DOE has invested $5B further delay of the Model S could erodein EV/PHEV technologies. The DOE objectives consumer confidence and allow moreinclude reducing battery pack costs 70% by 2015 competitors to enter the market before Tesla.(this estimate assumes average battery pack cost of$600 - $700/kWh around 2008/2009), improving thepublic charging infrastructure from 550 level 2 orlevel 3 charging stations (of which 426 are inCalifornia) to 20,550 nationwide by December 2011,and reducing the retail price to consumers by offeringa $7,500 subsidy to consumers purchasing EV/PHEVs. The government intends to accelerate consumeradoption of EVs/PHEVs by reducing prices andmaking owning EVs/PHEVs more convenient toconsumers.Source: United States Department of Energy.The Recovery Act: Transforming America’sTransportation Sector Batteries and ElectricVehicles. July 14, 2010 TESLA MOTORS 14The Tesla Brand Community: Tesla has a strong Consumer preference for hybrids and plug-inand established brand community of owners and hybrids: Tesla only sells electric vehicles. Ifhopeful owners who are very enthusiastic about the consumers prefer hybrid technology rather thanbrand. Tesla should manage and leverage this EV technology, Tesla is likely to fail.community to drive sales of the Model S. 26 Strategic Marketing
  • Innovative Sales Channel Model: If implemented Termination of strategic partnerships orproperly Tesla’s “Apple store model” will provide a inability to establish new partnerships:unique Tesla’s R&D has depended on revenue provided by strategic partnerships. Without this revenue, Tesla may not be able to fund future R&D.Source: (Tesla Tomorrow, University of Wisconsin)7.2 SWOT Analysis of Tesla Model S Manufacturing Model Tesla Model S SWOT Analysis of Manufacturing Model Suppliers Production & Information Finance Manufacturing Management 1.Less reliant on 1.Easy to control Easy access to 1.Cuts the shippingStrength the quality reliable inventory, cost of ordering most performance of and enhance product demand, and components from suppliers 2.Relatively easy to other around the world 2.Reduces the enlarge manufacturing important 2.Reduce the risk of cost of capacity by further loss from foreign information managing investments currency exchanges supplier 3.Improve production 3.Will be able to efficiency by allowing reduce the cost of relationships engineers and the Model S when manufacturing team to reaching economies work closely of scale Lose 1.The production of the Merger of two 1.Have to hold moreWeakness relationships with Model S will be different ERP inventory and suppliers who dramatically impacted system will require present it on the may be by NUMMI’s tremendous balance sheet needed if New manufacturing ability investments of 2.Have to bear more United Motor 2.May lose capable time, labor and inevitable Manufacturing, engineers who now are obsolescence of money Inc. (NUMMI) working in the Lotus inventory capacity can’t facility located in meet demand England 27 Strategic Marketing
  • Being able to Largely improve quality Largely improve 1.Reduce cost ofOpportunities focus on and manufacturing inventory Model S building close management to 2.Make Model S efficiency relationship with more reduce cost most price appealing important suppliers Harder to find The loss knowledge 1.Failure to merge Possible tremendousThreats capable from talented the two ERP future investments suppliers when employees who are systems are needed to facing a working for suppliers - successfully develop NUMMI shortage of Fail to complete 2.Ability to facility internally necessary training for complete manufactured employees without the ERP merger delaying the launch of without delaying components the launch of the Model S Model SSource: (Tesla Tomorrow, University of Wisconsin)8. Market Segmentation The process of marketing segmentation involves the identifying of variations in customer needs and the determining of how these needs can be fulfilled. Customers may differ in many ways; wants, purchasing power, geographical location, attitudes, personality, knowledge, benefits sought, and/or habits. Hence, by identifying specific groups within a market, a market campaign for a product or service can be more fine-tuned to fit specific segments. Besides usual socio- demographic variables psycho-graphic and behavioral variables were included to identify specific market segments. According to recent research in EV sector below figure it is expected that consumer traits as well as demographic and background variables might influence the attitude towards an innovation both directly and indirectly, the indirect effects being mediated through attribute perceptions. 28 Strategic Marketing
  • Source: EV Market Segmentation by Anita Garling - Direct and indirect determinants of the attitude towards electric vehicles8.1 Demographics, Psychographics, Technographics Based Research To study perceptions of electric vehicles, and to find volunteers for the experimental studies, mail-back questionnaires were administered to a random sample of current car owners in the greater Gothenburg area, Sweden ( Below Table ). Wave 1 was administered in September 1998 to 300 car-owners and their spouses and wave 2 in December 2008 through January 1999 to 1,600. A total of 165 fully completed questionnaires were returned in wave 1, 787 in wave 2. The response rate of targeted car-owners was 38.0 % and 34.3 %, respectively. 29 Strategic Marketing
  • Source: EV Market Segmentation by Anita Garling. Separate analyses of variance were performed including the between subject factors age, marriage, number of children, education, income, number of cars, driving range to work, driving cost to work, driving range per week, and interest in further participation. The results indicate that the subjects differed significantly on number of children and on estimated driving range per week. More subjects in wave 2 had children while subjects in wave 1 estimated their driving range per week as longer.8.2 EV Measurement Scales8.2.1 Innovativeness GM Goldsmith and Hofacker (1991) define domain specific innovativeness as a trait reflecting "the tendency to learn about and adopt innovations/new products within a specific domain of interest." Furthermore, they also thoroughly develop and test an instrument for measuring domain specific innovativeness and demonstrate empirically that the instrument is adaptable to different 30 Strategic Marketing
  • domains (rock music, designer fashions, household electronic product area than others” was removed from the original instrument and another was added, “Of my acquaintances I am one of the least interested in TV programs like "Motor Journal" to better go with the domain of alternative-fuelled vehicles. The instrument was adapted to the domain of "alternative fuels vehicles" and translated to Swedish (Below Table). A five-point agree disagree scale was used. Item Innovative Items No 1 I am among the last in my circle of acquaintances that would use a car fuelled by an alternative fuel. 2 When I hear about cars fuelled by alternative fuels I become interested in using one. 3 I would not like to use a car fuelled by alternative fuel. 4 Of my acquaintances I am one of the least interested in TV programs like "Motor Journal". 5 If a friend of mine has a car fuelled by alternative fuel I am interested in trying it. 6 I am among the last in my circle of acquaintances that would know about new alternative fuelled cars. 7 I would prefer to use a car fuelled by alternative fuel. 8 I can imagine buying a car fuelled by alternative fuel without test-driving it first. 9 If I should buy a car fuelled by alternative fuel it had to be of a well-known brand. 10 I know the terms of cars fuelled by alternative fuels before others do. 11 I like to drive cars with new and unusual technique.8.2.2 Knowledge It has been argued that a consumer’s confidence in own knowledge about a risky new product may influence the person’s attitude towards the product, its strength, and its ability to influence behavior. If knowledge has such effects, the practical implications for marketing are important. In this study knowledge about the state-of the- art in electric vehicles is measured by means of a battery of five multiple-choice questions allowing calculations of two knowledge measures; objective knowledge (e.g. number of correct answers reflecting how much a person actually knows about electric vehicles) and subjective knowledge. The knowledge items were; maximum speed, driving range, external and internal noise, electro-magnetic radiation, price, fuel costs, and 31 Strategic Marketing
  • insurance costs.8.2.3 Environmental Concern Environmental concern is in this study defined as a disposition to do the (environmentally) “right thing” even when it conflicts with one’s own interests. Hence, we follow the tradition of emphasizing its moral, altruistic nature. In measuring environmental concern the point of departure is taken in an instrument developed by Biel & Dahlstrand, 1997. A nine-point agree- disagree scale was used.8.2.4 Relative Advantage The relative advantage of the electric vehicles is measured by means of speed, acceleration, driving range, recharge time, loading capacity, operating costs, price, ease of maintenance, and environment-friendliness. A nine-point important-unimportant scale was used.8.2.5 Compatibility Compatibility with ones lifestyle is measured by means of five items rating describing electric vehicles’ usability for work trips, shopping, chauffeuring, vacation trips, and irregular short trips (e.g., to the doctor, to sport). A five-point agree-disagree scale was used.8.2.6 Complexity and Perceived risk A number of items were included in the questionnaire in order to measure the perceived complexity and some aspects of the perceived risk of driving an EV. These items were ease of maintenance, ease of driving, traffic safety, noise level, risk when recharging, and risk of radiation from the batteries. Again, a five-point agree-disagree scale was used.8.2.7 Attitude towards Electric Vehicle The attitude towards electric vehicles is measured by means of attractiveness, feelings of luxury, and intention to buy an electric vehicle rather than a conventional vehicle of the same make and model. Again, a five-point agree-disagree scale was used. In wave 1 buying intention a simple yes-no scale was used. 32 Strategic Marketing
  • 8.3 EV Segmentation Research Results It is obvious from the presented analyses that not all will respond equally favorably to attempts to the marketing of an electric vehicle. Presented with the characteristics described in this study, some consumers respond with a positive attitude towards the electric vehicle and interest in buying, while others do not. The most likely early adopters of electric vehicles are those responding most favorably in terms of attitudes and buying intention. Below Table presents a summary of a cross-tabulation of the responses to the summed attitude items and to the intention to buy item. As shown, attitude responses can be used to divide the consumers into groups with widely differing buying intention. Particularly, it shows that among the 16% that hold the most favorable attitudes towards electric vehicles, 88% express buying intentions, compared to 58% of the total sample. It seems reasonable to expect that this is the group where the innovative and early adopters should be recruited. Source: EV Market Segmentation by Anita Garling. The ability of consumer traits and perceived product attributes to predict the attitude towards electric vehicles is analyzed by means of structural equation modeling. Because of computational problems when the number of items and variables grow big, the full structural analysis was preceded by exploratory steps checking the ability of groups of demographic and background characteristics, of consumer traits, and of attribute perception variables to predict the attitude. Only variables showing a significant path to the attitude in the exploratory steps were 33 Strategic Marketing
  • included in the final structural analysis. It is expected that consumer traits as well as demographic and background variables might influence the attitude towards an innovation both directly and indirectly, the indirect effects being mediated through attribute perceptions. Since no hypotheses existed about which traits or background variables would influence which attribute perceptions, all possibilities have been checked. The ability of demographic and background variables to predict consumer traits is also included in the structural analysis as is hierarchical relationships among trait variables (from the point of view of predicting the attitude towards EV’s). However, According to Anita Garling published in her research report, in order not to clutter the picture and to free some degrees of freedom in the structural analysis, all non-significant paths have been removed in the analysis reported in Appendix 12.5. Hence, the table reports the hierarchical structural model for predicting the attitude towards EV’s that maximizes the dual criteria of fit and parsimony. The attitude towards electric vehicles and its antecedents.9. Positioning9.1 Positioning Strategy Knowing details such as demographics, psychographics, and the lifestyles of a brand’s target market is a huge key to the success of any retail product. These “vital statistics about populations such as age, sex, and income” can then be placed into segments, which will allow this automotive business to research is customers and find the best means by which to draw in their customers (Weitz, 635). Because Tesla’s main product is a sports car, their target market consist mainly of the male sex. Due to their currently high price point these males must be businessmen who have yearly disposable incomes of possibly $100,000 and higher. Tesla’s Roadster is marketed to consumers who enjoy traveling via their vehicles. Its numerous claims of being an all weather vehicle clearly illustrate this lifestyle of its consumers. The males included in this target market live stylish lives, are car enthusiast, and follow trends, such as going green. 34 Strategic Marketing
  • Tesla’s main form of communications with its consumers is through its extensive website. Teslamotors.com includes everything from all of Tesla’s vehicle specs to each of its appearances in the press and magazines. Magazine articles have also been a successful form of communication globally for Tesla. Many of the surveys showed that Magazine articles were the most popular way in which consumers have heard of Tesla Motors.10. Marketing Mix10.1 Product Elements10.1.1 Tangible Product Elements 10.1.1.1 Dimensions  Overall Length: 196.0”  Weelbase: 116.5”  Ground Clearance: 6.0”  Height: 56.5”  Width (Mirrors Extended): 86.2”  Width (Mirrors Folded): 77.3”  Track: 65.4”Front, 66.9 Rear 10.1.1.2 Body  Lightweight aluminum body reinforced with high strength, boron steel elements  UV and infrared blocking safety glass windshield  Rain sensing, adjustable speed windshield wipers  Frameless, tempered safety glass front windows  Solar absorbing, laminated safety glass rear window with defroster 35 Strategic Marketing
  •  Flush mounted door handles  Manual folding side mirrors  19" aluminum alloy wheels with all-season tires (Goodyear Eagle RS-A2 245/45R19). Note: optional 21" wheels come with Continental Extreme Contact DW 245/35R21 high-performance tires  Aluminum roof  Halogen headlights with automatic on/off and LED daytime running lights  Backlit side turn signals, front side marker lights and rear reflex lights  LED rear taillights and high-mounted LED stop lamp 10.1.1.3 Additional Dimensions  40, 60, and 85 kWh battery options  Head room (front/rear): 38.8/35.3"  Leg room (front/rear): 42.7/35.4"  Shoulder room (front/rear): 57.7/55.0"  Hip room (front/rear): 55.0/54.7"  Seating capacity: 5 adults  Total cargo volume: 31.6 cu ft  Rear cargo volume (seats up/down): 26.3/58.1 cu ft  Frunk cargo volume: 5.3 cu ft  Turning circle: 37 ft  Curb weight: 4,647.3 lbs  Weight distribution (%, front/rear): approx. 48/5236 Strategic Marketing
  • 10.1.1.4 Powertrain  Model S is a rear wheel drive electric vehicle. The liquid-cooled powertrain includes the battery, motor, drive inverter, and gear box.  40 kWh microprocessor controlled, lithium-ion battery  Three phase, four pole AC induction motor with copper rotor  Drive inverter with variable frequency drive and regenerative braking system  Single speed fixed gear with 9.73:1 reduction ratio 10.1.1.5 Suspension, Steering, and Brakes  Double wishbone, virtual steer axis coil spring front suspension and independent multi-link coil spring rear suspension  Variable ratio, speed sensitive, rack and pinion electronic power steering  Electronic Stability Control  Traction Control  Anti-Lock disc brakes (ABS) with ventilated rotors and electronically actuated parking brake; front: 355 mm x 32 mm; rear: 365 mm x 28 mm 10.1.1.6 Charging  10 kW capable on-board charger with the following input compatibility: 85-265 V, 45-65 Hz, 1-40 A (Optional 20 kW capable Twin Chargers increases input compatibility to 80 A)  Peak charger efficiency of 92%  10 kW capable Universal Mobile Connector with 110 V, 240 V, and J1772 adapters 10.1.1.7 Interior  Eight way, power adjustable front seats37 Strategic Marketing
  •  Hand wrapped microfiber and synthetic leather interior surfaces in black  Piano black décor accents  Center armrest with two cup holders  Open center console storage area  Metal interior door handles  60/40 split fold-down second row seats  200 watt, seven speaker stereo system with AM/FM/HD radio. Supports MP3, AAC, and MP4 music formats. System includes four speakers, two tweeters and one center channel speaker. Flash memory storage for up to 500 songs. 10.1.1.8 Instrumentation  17" capacitive touchscreen with media, communication, cabin, and vehicle controls  Bluetooth wireless technology for hands-free calling and streaming music  Three spoke, multi-function steering wheel with tactile controls  Tire pressure monitoring system 10.1.1.9 Warranty  4 year or 50,000 mile, whichever comes first, new vehicle limited warranty  40 kWh battery has a 8 year or 100,000 mile, whichever comes first, warranty 10.1.1.10 Convenience  Keyless entry  Driver seat detection sensor for start/stop functionality  Cruise Control  Standard definition backup camera38 Strategic Marketing
  •  Manual rear liftgate  Power tilt and telescopic steering column  Power windows featuring one-touch up and down with resistance reversing to protect against pinched fingers  Micro-filter ventilation system with replaceable filters  Front LED map lights and rear LED reading lights  Front sun visors  Fully trimmed frunk and rear cargo area with keyless open  12 V power outlet  Automatic climate control with dual zone temperature settings, air distribution controls and recirculation  Glove compartment  Wi-Fi ready  Dual front USB ports for media and power 10.1.1.11 Safety  Eight airbags: head, knee and pelvis airbags in the front plus two side curtain airbags  Driver and front passenger seat sensors  Driver seat position sensor  Three point driver and front passenger safety belts with retractor pretensioners and secondary lap anchor pretensioners and load limiters  Three point second row safety belts for all three seats39 Strategic Marketing
  •  Acoustic front row safety belt warning  Rollover crash sensor  Crash sensor for high voltage disconnect  Three second row LATCH attachments for child seat installations (accommodates three child seats simultaneously: two with LATCH and one with top tether and belt)  Rear door child safety locks  Interior, manual release mechanism for all doors, frunk, and rear cargo area  Anti-theft alarm and immobilizer system  Horn. Beep. Beep. Addition Product features with diagrams are mentioned in Appendix 13.910.1.2 Intangible Product Elements 10.1.2.1 EV Charger Installation  Model S plugs into any standard outlet. 240 volt outlets, similar to the ones used to power a dryer, charge Model S more quickly than a standard 110 volt outlet.  The Charge Port is hidden in the driver side taillight.  The cord used to plug Model S into a power source is called a Connector, not a Charger. The Charger is on-board the car. We may opt for Twin Chargers if we plan to take a lot of road trips and want to charge as fast as possible.  Model S can be equipped with a Single Charger (10 kW) or Twin Chargers (20 kW).  The Mobile Connector comes standard with two outlet adapters: one for a standard 110 volt outlet and one for a 240 volt. We may purchase additional adapters at any time. If we’re not sure which 240 volt outlet to select, we recommend a NEMA 14-50; 40 Strategic Marketing
  • it provides more power than other 240 volt outlets. Model S also comes with a J1772 Adapter for use at public charging stations.  We recommend outfitting garage with a 240 volt outlet or a High Power Wall Connector before Model S arrives. We will need the help of an electrician. Download a summary sheet: 240 Volt Outlet Summary Sheet orHigh Power Wall Connector Summary Sheet  Tesla recommends plugging Model S in each night or when convenient to maintain optimum driving range and battery health. If we go on an extended vacation, plug in Model S and set it to “Storage Mode” before we leave.  If we leave Tesla off charge for a significant period of time it will slowly lose its charge. If left at a 0% state of charge for period of time, we may need a battery replacement.  We do not need to run battery to a 0% state of charge to maintain its health. This is an antiquated practice for a different kind of battery.  Many utilities offer low rates for off-peak energy usage. If we plan to charge at night, we recommend speaking with we utility company about options.  if we’re interested in installing a home solar system to charge Tesla, we recommend working with a local solar installer to develop and install a system that supports total daily energy demand. Assume average energy usage per mile is approximately 300Wh/mile (188Wh/km). Learn more about residential solar installations from our friends at SolarCity. 10.1.2.2 Instruction Specification and owners manual of Model S will be available in over webarchive.teslamotors.com download Brochure section. Hard copy of the brochure would also be available with the vehicle. Image library and FAQ section also will41 Strategic Marketing
  • include sufficient information about the product specification and instructions. Few quick facts about the brochure are provided below.  It will be hardbound and printed on recycled paper.  It will in be a CDROM to be downloaded on our computers.  It will be a DVD in which videos explain the operation and functioning of the model S.  It can be downloaded as a PDF file from TMs webarchive.teslamotors.com.  It can be installed on the model S hard-drive. It would be accessible via the APPS "button" on the infotainment screen. Source: http://webarchive.teslamotors.com 10.1.2.3 Product Line Membership Tesla Motors Model S Club is a comprehensive platform that will provide customers an open forum to address any questions, issues, reviews, news of the product and also events. It will have FAQ which provides fundamental knowledge about the product features, information about Grid Capacity, Engine noise, battery life, replacement cost, performance, range, solar panel and credibility. Product line membership will help customer to address issues/doubts in Wiki. Tesla Motor also provides an online membership that can be accessed webarchive.teslamotors.com. This area is reserved exclusively for Tesla owners and reservation holders. Its a private place to keep tabs on your car, connect with other owners, and ultimately manage maintenance. (Tesla Motors, webarchive.teslamotors.com)10.1.3 Brand Tesla Motors has been successfully enhancing its brand positioning with its innovative approach to vehicle engineering and battery technology, superior aerodynamics, stability and handling, unique refusal to compromise beauty or efficiency, and sustainability. Tesla has also 42 Strategic Marketing
  • been recognized as an innovative, “all-weather super car”, with more than fifteen hundred Roadsters sold in more than thirty-one countries, making Tesla’s brand an important source of equity. In Tesla’s case, equity is contributed by the functional features and benefits provided to the user such as instant torque, superior handling, elite construction, and zero emissions. As an additional source of equity, its innovative high-voltage car, sleek design, as well as the emotional benefits, are important attributes of owning and driving a Tesla. Tesla Motors is on the fourth version of its pioneering Roadster and currently competing with a host of other EVs brands already being sold in the United States. Nissan LEAF and Chevrolet VOLT, for example, are offering a much lower price compared to Tesla for its electric cars. Prices range from $32,700 – $41,000 after the federal EV tax credit. The design and some of the features such as horsepower and mile range make these automobiles better for commuting than for road trips. On the other hand, Tesla Motors refuses to compromise its efficiency and beauty. It offers a sleek front end, fancy wheels, an elegant interior, incredible range and high performance. Price ranges from $109,000 - $159,195 after the EV tax credit, depending on the models.  Originality Innovative, Creative  Sustainable Environmentally Friendly, Fully Electric  Efficiency Electric Technology, Energy Efficient  Personality Cool, Modern, Stylish  Forward-looking Constantly Evolving43 Strategic Marketing
  • Source: Tesla Motors Positioning: http://issuu.com10.1.4 Package Packaging is not applicable for Tesla Model S cars.10.1.5 Warranty Model S will come with a 4 year or 50,000 mile, whichever comes first, new vehicle limited warranty. An additional warranty covers the battery and varies by kilowatt hour capacity. Battery warranty for 40 kWh will be 8 years or 100,000 miles, for 60 kWh 8 years or 125,000 miles, for 85 kWh/85 kWh performance will be 8 years, unlimited miles. 44 Strategic Marketing
  • 10.2 Price Elements10.2.1 Pricing Strategies 10.2.1.1 Introductory Price of Model S Tesla Premium EV Car Price Model S Model S Signature Model S Model S Signature Signature Performance Performance 1.40 kWh - Starting 1. 85 kWh - $84,900 1. 85 kWh - 1. 85 kWh - $97,900 $49,900 Price after $87,900 Includes upgraded $ 7,500 2. 60 kWh - interior, suspension, Federal Tax $59,900 and wheels Credit 3. 85 kWh - $69,900 Source: TeslaMotors.com 10.2.1.2 Federal Tax Credit and allowances Electric vehicles (EVs) purchased in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle. (Fuel economy, 2010) To qualify for the US Federal Tax Credit, the new vehicle must be purchased by the taxpayer, and not purchased for resale. The credit is applied when the taxpayer completes their annual tax forms. Qualification is contingent on Adjusted Gross Income. It qualifies to claim a 100% writing down allowance against capital expenditure in year one. Depending on the tax rate, the corporation can save a minimum of 26% of the total vehicle purchase price 10.2.1.3 Geographic Pricing Tesla Motors Premium EV Model S is delivered to US and Canada. Pricing of Model S for US customers are provided in Section 9.1.1. In a blog on the Tesla website, George Blankenship, the company’s vice president of worldwide sales, wrote: “Due to volatility in currency rates around the world, we are not able to announce pricing outside the United States at this time. We expect to announce pricing about six months prior to the start of deliveries in those areas.” (George Blankenship, VP Tesla Motors, December 20, 2011). Tesla Model S is expected to reach the UK 45 Strategic Marketing
  • in right-hand-drive form in mid-2013.10.2.2 Pricing Objectives 10.2.2.1 Sales oriented Tesla Motors mostly focus on increasing market share pricing strategy for Model S. Unlike other car companies Tesla Motors is quite confident about Model S quality and has an objective of maintaining the present market share or increase its share depending upon its stature. The pricing goal is to achieve the rapid growth in EV sector and discourage other car companies in automotive industry to enter the EV market.Tesla Motors will provide base model which is quite affordable to the middle class within couple of years down the line, this is an objective to be adopted by Tesla for a transition from other EV sports car to Model S pricing strategy. 10.2.2.2 Profit oriented In the long run cost of production of Model S will decrease and profits will increase. Tesla Motor’s long term pricing strategy would be price oriented. Because this strategy helps to achieve a target return – a specified percentage return on its sales or on its investment. It covers anticipated operating cost and provides a desired profit. This return Tesla plans to invest in research and development to come up with a new product line in luxurious EV segment, i.e. Model X. 10.2.2.3 Status Quo oriented Status Quo oriented pricing strategy is not applicable for Tesla Model S. (LEAF, VOLT, MODEL S: COMPARISONS AND FINANCIAL VIEWS, 2011) 10.2.2.4 Non-Price oriented Non-Price oriented pricing strategy is not applicable for Tesla Model S.10.2.3 Pricing Policies 10.2.3.1 One-Price At the base price of $49,900 (after US Federal Tax Credit), Model S comes equipped with the 40 kWh battery, 19" all-season tires, interior surfaces of black textile and synthetic leather, the 17" 46 Strategic Marketing
  • touchscreen, a 200-watt, seven-speaker stereo system with AM/FM and HD radio tuners, a Mobile Connector and J1772 adapter. Base model will be sold over the internet with a one-price strategy across North America (USA and Canada). (Motors, 2012) In 2012 and 2013 Tesla Motors would be focusing on USA EV market with a same base price of Model S, mentioned above. 10.2.3.2 Flexible Price Tesla Model S will be launched with a one price across USA. Tesla is planning to launch same product in other demographics like Europe or Asia in 2014 and 2015. Flexible Price model would be followed in other demographics. 10.2.3.3 Skimming Price Tesla will also follow Price skimming as a pricing strategy in which it will set a relatively high price for a Model S ‘Performance model’ at first than the base model of Model S, then will lowers the price over time. The objective of a price skimming strategy is to capture the consumer surplus. If this is done successfully, then theoretically no customer will pay less for the product than the maximum they are willing to pay. Tesla Motors will continue to invest in R&D sector to improve the quality of rechargeable betray technologies and this investment comes from number of high profile investors and government support. Hence, more improvement they make in terms of technological innovation and incorporate them in Electric Vehicle like Model S, it will help to lower introductory base price gradually in consumer market. 10.2.3.4 Penetration Price Penetration pricing is not applicable for Tesla Model S. This pricing model is applicable when a company is trying to make profit in the short term, set a low price at the first launch of a product and continue to increase the price after certain timeline to make more profit. Tesla Motor’s goal is to get a long term market share and continue to improve quality in EV sector, especially in battery technology. Hence initial base price of the Model S car will come down gradually, making the product affordable to consumer space. Penetration pricing strategy will not be applicable for Model S.47 Strategic Marketing
  • 10.2.3.5 Reservation and refundable Policy  The reservation payment is 100% refundable.  Reservation payments vary by country: $5,000USD / $5,000CAD. The reservation payment for Model S Signature is $40,000USD / $40,000CAD.  Reservation Holders will be invited to configure their Model S about three months before its production date.  Tesla vehicles are designed and built to meet the unique requirements of each market and are physically different country to country as required by law. Customers should reserve Model S in the market they intend to register and drive their vehicle. Exporting cars into different markets is not supported by Tesla Motors.10.3 Place Elements10.3.1 Direct Channel System Unlike other automobile manufacturers, Tesla sells vehicles over the internet and at Tesla-owned stores in 31 cities worldwide. Tesla plans to have a total of 50 stores, opening the additional stores to coincide with the Model S rollout. (Appendix 13.7) In 2010, Tesla hired George Blankenship, formerly of Apple, as its vice president of design and store development. "This is about technology, innovation, and a great pipeline of products that need to be explained to the customer" he told Fastcompany.com.47 Blankenship‘s strategy is to put Tesla showrooms in the middle of popular retail districts, mimicking the strategy of high-tech companies like Apple, and completely revolutionizing the typical dealership model. This retail model will allow Tesla to control the customer experience in each of its stores, providing the necessary customer service for a high involvement purchase such as an EV. TESLA MOTORS 11 Furthermore, the in-store experience can confirm the emotional appeal of a Tesla vehicle, making customers already feel part of a cool, hip, and exclusive brand community. However, this unproven model is not risk 48 Strategic Marketing
  • free. Tesla will not be able to utilize existing franchise sales systems from dealers, and this model will make it more costly and time-consuming for Tesla to expand distribution.10.3.2 Channel System management Tesla‘s management team is led by Chairman, Product Architect, and CEO Elon Musk and an upper management team selected from top automotive and technology firms. Musk is a visible champion for the company and is almost a symbol of the brand, as well as being a primary shareholder. Tesla‘s strategic partnerships and their DOE Loan Facility are dependent on Musk remaining in his role at Tesla and retaining a percentage of ownership in the company until at least a year after the conclusion of the Model S Facility Project.6 (Appendix 13.8).10.3.3 Expectations of middlemen Tesla will not support Middlemen for Model S Car sell in the market in 2012 and 2013. Hence this section is not applicable for Tesla Model S Car Model.10.4 Promotion Elements10.4.1 Define challenge type 10.4.1.1 Regulatory limitation on internet selling Tesla sells vehicles from Tesla stores as well as over the internet. Tesla may not be able to sell vehicles through this sales model in each state in the United States as many states have laws that may be interpreted to prohibit internet sales by manufacturers to residents of the state or to impose other limitations on this sales model, including laws that prohibit manufacturers from selling vehicles directly to consumers without the use of an independent dealership or without a physical presence in the state. (REGISTRATION STATEMENT - Tesla Motors, Inc.) 10.4.1.2 Branding of Tesla Motors One of the greatest challenges of the Tesla is branding. Tesla has a community which is known as enthusiasts, directly and indirectly promotes it’s brand value to consumer space. Tesla brand enthusiasts will include Model S across 50 states consumers who aspire to own a Tesla car. These enthusiasts connect with each other electronically and in person at Tesla events around the world. (Appendix 13.9) 49 Strategic Marketing
  • 10.4.1.3 Acquisition Tesla is looking forward to launch Model S in Europe and Asia in 2013. Currently Model is only delivered in North America, mostly in USA. Tesla’s next year 20,000 goals likely include at least some deliveries to European and perhaps Asian customers as well. Tesla will surely hard at work getting the Model S certified for sale in European Union countries and other markets. Taking into account the competition and possible cooperation with other companies in the same industry in Europe and Asia is considered to be one of the challenges that Tesla may face in EV sector in future. (GREENCARREPORTS.COM, JUNE 26, 2012)10.4.2 Objectives Promotion technique of Tesla Motor Model S is usually designed to last for a relatively long time. Common sales promotion techniques will include special staging events, pricing, and advertisements to gain publicity. Tesla will make use of sales promotions to achieve a number of specific business objectives like increased brand awareness, reaching new market, new product launch, keep existing customers, inventory clearance. As Model S is one of the cutting-age models in automotive industry first three objectives will be most important to achieve and promotional events are designed to address them.10.4.3 Promotion Elements 10.4.3.1 Video Touting Video Touting is one of the self promotional events that Tesla normally follows before every product launch to increase customer awareness. For the product Model S Tesla Motors will be releasing a new video touting the upcoming Model S. Just a few minutes long, the video features Teslas chief designer, Franz Von Holzhausen, and George Blankenship, Teslas VP of sales and ownership experience (and former Apple retail strategist) will be speaking no evil about the all- electric vehicle. The two men talk about how the Model S takes the idea of a car decades into the future, filled with close-up shots of the car and clips of it running down the road, we will hear how great the car drives and how the company will be growing more excited every day to deliver this revolutionary car to customers. (Blanco, Jan 31st 2012) 50 Strategic Marketing
  • 10.4.3.2 Mass Selling 10.4.3.2.1 Advertising Tesla Motor normally doesn’t invest much in advertisement. Rather than depending on conventional advertising, Tesla has relied on the quality of its product and word-of-mouth recommendations from early customers to promote the company. 10.4.3.2.2 Publicity Tesla Motors will be looking to clog up traffic a bit more along Santa Monica Boulevard, company will plan to kick off a 2,700 mile road trip starting at its Los Angeles store. Customers and employees will gather to kick off a road trip to the North American International Auto Show in nd Detroit in coming 2 week of Oct 2012. The promotional event is part of a series of events from Los Angeles to Detroit to promote the firms electric cars. Tesla, which is based in Silicon Valley, will send 16 employees along on the ride. 10.4.3.3 Sales Promotion Tesla Motors couple of popular Sales Promotion will be contests, special pricing during Holiday season, car show or exhibition, F1 Contests; coupons are the popular sales promotions that Tesla Motors will adapt for Model S.10.4.4 Strategic direction 10.4.4.1 Push strategy Sales strategy of the Tesla Model S will be designed keeping push strategy in mind where main objective of sales force will be to encourage consumers to buy the product, increase brand awareness, product features, performance, cost effectiveness, federal tax-cut and long term saving in terms of maintenance. 10.4.4.2 Pull strategy Tesla sales force will be focusing on limited sales service after Model S is sold to the consumer. Most of the product defects (if any) or maintenance issues of the car would be chandelled by customer care department and Pull strategy will not be too much applicable for Model S. Tesla 51 Strategic Marketing
  • also provide a significant support through social media such as Twitter, Blogs etc, it would be used for Model S in similar way.10.4.5 Communication Tools Message New Car, the media TV, direct mail, Brooks Brothers etc will be major communication tools for Tesla Model S. Motorsports is the time-honored way for automakers like Tesla to showcase the performance capabilities of their cars, and that presents an interesting conundrum for high-performance BEVs (Battery Electric Vehicles).10.4.6 Media Tools 10.4.6.1 Tesla Motors Social Media Tesla Motor uses social media like other car companies to ramp up customer base and branding purpose. Twitter, Facebook, linkedin, Blog are one of the important social media tools for Model S promotions. Video uploading in Youtube and touring product upcoming product features is another most important media tool Tesla will follow for Model S product promotion. (Appendix 12.12)11. Marketing Matrices11.1 Profit and Loss Statement Profit and Loss Statement for a Marketing Effort Tesla Motor Model S Gross Income Sales (4 Car / Month X 50 Different States X $ 57,400 / Car X 12 Months) $137,760,000 Shipping and Handling collected $900,000 Gross Income $138,660,000 Variable Cost Cost of the Goods Sold $47,400 Shipping Cost $2,600 Variable Cost for each Car Sold $50,000 Total Car Sold 2400 Total Variable Cost $120,000,000 Gross Profit Gross Income - Total Variable Cost $18,660,000 Fixed Cost 52 Strategic Marketing
  • Operating cost $500,000 Administrative Cost $105,000 Insurance Cost $100,000 Research & Development $3,000,000 Inventory Maintenance $120,500 Promotional Events $2,500,000 Total Fixed Cost $6,325,500Profit Gross Profit - Fixed Cost $12,334,50011.2 Breakeven Analysis of Model S Breakeven Analysis Tesla Motor Model S Selling Price Price for Unit EV Model S Car $57,400 Fixed Cost Operating cost $500,000 Administrative Cost $105,000 Insurance Cost $100,000 Research & Development $3,000,000 Inventory Maintenance $120,500 Promotional Events $2,500,000 Total Fixed Cost $6,325,500 Variable Cost Cost of the Goods Sold $47,400 Shipping Cost $2,600 Total Variable Cost for Unit $50,000 Contribution Per Unit Selling Price - Variable Cost $7,400 Breakeven Point Total Fixed Cost % Contribution Per Unit 855 Breakeven Sales Figure Breakeven Point * Selling Price $49,065,365 53 Strategic Marketing
  • 11.3 Return of Investment Analysis Return of Investment Analysis of a 10500 Model S Tesla EV Car Quantity Produced 2,000 # Orders Received 2,400 Item Cost of Goods $57,400 Cost of Goods $137,760,000 Cost of Shipping & Handling $600,000 Total Variable Costs $138,360,000 Sales Revenue $204,200,000 Shipping & Handling Revenue $900,000 Total Revenue $205,100,000 Promotion Costs Operating cost $500,000 Administrative Cost $105,000 Insurance Cost $100,000 Research & Development $3,000,000 Inventory Maintenance $120,500 Promotional Events $2,500,000 Total Fixed Costs $6,325,500 Response Rate 120.00% Average Order Size $85,458 Quick Cost Per Order $57,650 Total Cost Per Order $60,286 Quick Cost/Revenue Ratio 67.46% Total Cost/Revenue Ratio 70.54% Quick Promotion Profit $66,740,000 Total Promotion Profit $60,414,500 Return on Investment 41.76% 54 Strategic Marketing
  • 11.4 RFM Analysis of Model S Recency Frequency Money (RFM) Analysis Customer total total recenc frequenc mone Customer name Last order ID orders spent y y y 178 Zoey Ziff 8/8/2011 5 289000 1 1 1 828 Dodi Dunlop 8/1/2011 3 177200 1 1 2 33 Yoko Yokomi 8/3/2011 3 172200 1 2 2 28 Ron Remson 8/24/2011 2 114700 1 3 3 87 Xiu Xuan 8/24/2011 2 112800 1 3 4 43 Heda Hoppa 8/16/2011 1 57500 1 4 4 20 Wes Waylan 7/8/2011 5 288000 2 1 1 16 Ike Isaacs 5/28/2011 5 287500 2 1 1 602 Ursulla Ulian 6/6/2011 4 229200 2 1 2 11 Aaron Arpes 7/24/2011 3 172100 2 3 3 85 Debra Darby 6/16/2011 2 114500 2 4 4 1004 Coco Collins 7/9/2011 1 57200 2 5 5 402 Edie Edsel 4/12/2011 5 289000 3 1 1 14 Sam Sampson 3/12/2011 4 229700 3 2 1 8 Nora Nelson 2/10/2011 4 229100 3 2 2 19 Quito Quimby 5/19/2011 3 172200 3 3 3 1 Perry Peary 4/25/2011 2 114200 3 4 4 5 Olga Orca 2/19/2011 1 57300 3 5 5 1297 Bebe Barnes 12/12/2010 4 229700 4 2 2 570 Colen Colon 12/22/2010 3 172200 4 3 3 204 Bart Bellum 2/8/2011 2 114700 4 4 3 123 Amy Abel 1/10/2011 1 57400 4 5 5 192 Greg George 1/18/2011 1 57200 4 5 5 7 Twana Tyler 1/10/2011 1 57200 4 5 5 356 Fred Fink 2/15/2004 5 289000 5 1 1 4 Mike Makem 9/12/2010 4 229500 5 2 2 35 Len Lyons 8/24/2010 3 172200 5 3 3 35 Len Lyons 7/22/2010 2 114700 5 4 4 2 Joe Jones 5/12/2010 2 111800 5 4 4 193 Vicki Voss 2/10/2010 1 57200 5 5 5Best customers are ranked 1 for Recency, 1 for Frequency and 1 for Money. Worst customers are ranked5 for Recency, 5 for Frequency and 5 for Money. As per above RFM Analysis we can conclude that ZoeyZiff is the best/most loyal customer, followed by Dodi Dunlop, Yoko Yokomi. Vicki Voss, Joe Jones, Len 55 Strategic Marketing
  • Lyons are interested in purchasing product based on above RFM analysis.11.5 Lifetime Value Analysis Lifetime Value Analysis Lifetime Value Calculator Year 1 Year 2 Year 3 # Customers 2000 900 405 Retention rate 40% 45% 50% Spending Rate $57,400.00 $67,400.00 $77,400.00 Total Revenue $114,800,000 $60,660,000.00 $31,347,000.00 Value Cost % 60% 50% 45% Value Cost $68,880,000.00 $30,330,000.00 $14,106,150.00 Acquisition cost (marketing assistant wage 34000 x 12 month) $408,000 0 0 Total cost $69,288,000.00 $30,330,000.00 $14,106,150.00 Gross Profit $45,512,000.00 $30,330,000.00 $17,240,850.00 Discount Rate 1 1.1 1.2 Net Present Value profit $45,512,000.00 $27,572,727.27 $14,367,375.00 Cumulative NPV profit $45,512,000.00 $73,084,727.27 $87,452,102.27 Lifetime Value $22,756.00 $36,542.36 $43,726.0511.6 Key Code Analysis Key Code Analysis Cost Cost/ Promotion Promotion Promotion Offer Key Response Average Per Revenue Lifetime ID Name Date Code Code Rate Order order Ratio Value 100 Advertising 4/13/2012 Promo_001 1001 80% 600 $57,000 0.298 75853.33 101 Road Trip 6/17/2012 Promo_002 1002 75% 350 $57,000 0.174 130034.3 Social 102 Media 2/12/2012 Promo_003 1002 90% 1050 $57,000 0.521 43344.76 56 Strategic Marketing
  • 12. Appendix12.1 Market Penetration Forecasts EV: Electric Vehicle, PHEV: Plug-in Hybrid Electric Vehicles, HEV: Hybrid Electric Vehicles, ICE: internal combustion engine. Source: Data From CSM Auto (Global Insight), Sourced From JP Morgan Report Sources: Anson M. Retrieved from http://www.examiner.com/auto-in-los-angeles/estimates-vary- on-electric-vehicle-sales Data from CSM Auto (Global Insight), Sourced From JP Morgan Report12.2 The EV and PHEV Market 57 Strategic Marketing
  • EV: Electric Vehicle, PHEV: Plug-in Hybrid Electric Vehicles12.3 Fuel/ Energy Costs per Mile of Luxury Sedans vs. Tesla‘s Model S12.4 Range, Battery Pack Costs, and Price/Mile For EVs 58 Strategic Marketing
  • 12.5 Tesla Strategic Partnership Source: Tesla Motors Inc. (2010, September 30). 10-Q. Retrieved from http://ir.teslamotors.com/sec.cfm12.6 The attitude towards electric vehicles and its antecedents 59 Strategic Marketing
  • Source: EV Market Segmentation by Anita Garling.60 Strategic Marketing
  • 12.7 Buying intention, attitude, and attitudinal antecedents regarding a state-of-art electric vehicle Source: EV Market Segmentation by Anita Garling.12.8 Tesla Store Locations 61 Strategic Marketing
  • 12.9 Tesla Executive Team 62 Strategic Marketing
  • 63 Strategic Marketing
  • 64 Strategic Marketing
  • Sources:About/Executive Bios. (n.d) Retrieved from http://www.teslamotors.com/about/executive-biosTesla Motors Inc. (2010, February 3). Tesla Hires Toyota Manufacturing Expert. [Press Release]. Retrieved fromhttp://www.teslamotors.com/about/press/releases/tesla-hires-toyota-manufacturing-expertTesla Motors Inc. (2009, October 1). Tesla Motors Announces Senior Engineering and Manufacturing Executives. [PressRelease].Retrieved from http://www.teslamotors.com/about/press/releases/tesla-motors-announces-senior-engineering-and-manufacturingexecutives12.10 Tesla Model S Product Features 65 Strategic Marketing
  • 66 Strategic Marketing
  • 67 Strategic Marketing
  • 68 Strategic Marketing
  • 69 Strategic Marketing
  • Source: http://www.teslamotors.com 70 Strategic Marketing
  • 12.11 Tesla Enthusiasts 71 Strategic Marketing
  • 72 Strategic Marketing
  • 12.12 Tesla Motors Social Media Brand Community 73 Strategic Marketing
  • 13. Reference 1. Nada : http://www.nada.org/Publications/NADADATA/default.htm 2. Franchise Help : http://www.franchisehelp.com/industry-reports 3. Trade Europe: http://trade.ec.europa.eu 4. Search Program: http://search.proquest.com/docview/213082564/fulltextPDF? source=fedsrch&accountid=12768 5. Yahoo Finance: http://finance.yahoo.com/q/co?s=TSLA+Competitors 6. EV Market Segmentation and Communication Strategy by Anita Garling 7. Golob, T. & Gould, J. (1998). Projecting use of electric vehicles from household vehicle trials. Transportation Research B, 32, 441-454 8. Power, J. D. & Associates (1993). Automotive consumer profile study. The Power Report, USA. 9. Tesla Motor Specification and Standard Features http://www.teslamotors.com/models/specs 10. Auto Car: http://www.autocar.co.uk/car-news/new-cars/tesla-honour-model-s-pricing 11. Model S Update: (December 20, 2011) Pricing and Options : By George Blankenship, Vice President, Worldwide Sales and Ownership Experience URL: http://www.teslamotors.com/blog/model-s-update-pricing-and-options/ 12. Fueleconomy, http://www.fueleconomy.gov/feg/taxevb.shtml 13. Blanco, Jan 31st 2012, Tesla shows off Model S in new promo video: http://green.autoblog.com/2012/01/31/tesla-shows-of-model-s-in-new-promo-video/ http://idealab.talkingpointsmemo.com/2012/06/tesla-launches-2012-model-s-how-many- will-it-sell.php 14. Tesla Motors, Mission from http://webarchive.teslamotors.com/learn_more/our_company.php 15. REGISTRATION Tesla Motors from http://www.sec.gov/Archives/edgar/data/1318605/000119312510017054/ds1.htm 74 Strategic Marketing
  • 16. LEAF, VOLT, MODEL S: COMPARISONS AND FINANCIAL VIEWS, 2011 http://www.teslamotors.com/de_AT/forum/forums/leaf-volt-model-s-comparisons-and- financial-views 17. Tesla Motors, Vision. About out Company, published in webarchive.teslamotors.com http://webarchive.teslamotors.com/learn_more/our_company.php 18. Model S Option and Pricing - 2012, Published by Tesla Motors Inc. from http://www.teslamotors.com/models/options 19. Tesla Motors Inc. (2010, June 29). Form 424B4. Retrieved from http://ir.teslamotors.com/sec.cfm 20. Davis, Joshua. (2006, August). Batteries Included. Wired Magazine. Retrieved from http://www.wired.com/wired/archive/14.08/tesla.html 21. Tesla Motors Inc. (2010, September 30). 10-Q. Retrieved from http://ir.teslamotors.com/sec.cfm 22. Tesla Motors Inc. (2010, June 29). Form 424B4. Retrieved from http://ir.teslamotors.com/sec.cfm 23. Tesla Motors Inc. (2010, September 30). 10-Q. Retrieved from http://ir.teslamotors.com/sec.cfm 24. JP Morgan. Tesla Motors: Electrifying Luxury; Initiate With Overweight. August 9, 2010 25. Tesla Motors Inc. (2010, September 30). 10-Q. Retrieved from http://ir.teslamotors.com/sec.cfm 26. Audi (2009, December 31). Annual Report. Retrieved from http://www.audi.com/com/brand/en/company/investor_relations/financial_reports.html#s ource=http://www.audi.com/com/brand/en/company/investor_relations/financial_reports/ annual_reports.html&container=page 27. BMW Group (2009, December 31). Annual Report. Retrieved from http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/investor_relations/corporate_e vents/hauptversammlung/2010/_pdf/BMW_AG_Jahresabschluss_engl.pdf 28. Quantum Fuel Systems Technologies Worldwide. (2010 April 30). 10-K. Retrieved from 29. http://www.sec.gov/Archives/edgar/data/1166380/000119312510157610/d10k.htm 30. Toyota Motor Corporation (2009, March 31). FORM 20-F. Retrieved from http://www.sec.gov/Archives/edgar/data/1094517/000119312509136292/d20f.htm 31. Tesla Motors, webarchive from www.webarchive.teslamotors.com 32. Tesla Tomorrow, University of Wisconsin from http://business.library.wisc.edu/resources/kavajecz/10_Fall/TeslaMotors_Presentation.pdf 33. http://webarchive.teslamotors.com/users/login.php?frompage=/owners/yourcar.php 34. United States Department of Energy. The Recovery Act: Transforming America’s Transportation Sector Batteries and Electric Vehicles. July 14, 201075 Strategic Marketing
  • New York UniversitySchool of Continuing Education and Professional Studies70 Washington Sq South, New York City, New York, 10012Partha Mitra, Management & Systems, ppm246@nyu.eduImage credit: Tesla Motors 76 Strategic Marketing