TESLA
[Brand Paper]
[Ananya	
  Gupta,	
  Weihong	
  Chen,	
  Chen	
  Chen,	
  Guangyi	
  Song,	
  Prakarsh	
  Gupta]	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
FUTURE
IS
ELECTRIC
 
	
   2	
  
1.	
  Current	
  Situation	
  
Market	
  Status:	
  
The	
  US	
  auto	
  market	
  had	
  reached	
  17	
  million	
  unit	
  sales	
  per	
  year	
  before	
  the	
  2008	
  financial	
  crisis.	
  Whilst	
  since	
  2008,	
  
the	
  US	
  market	
  had	
  dropped	
  significantly	
  to	
  10.5	
  million	
  in	
  2009,	
  it	
  has	
  been	
  recovering	
  gradually	
  to	
  15.58	
  million	
  
unit	
  sales	
  in	
  2013.	
  
Within	
  this	
  market,	
  with	
  a	
  price	
  tag	
  ranging	
  from	
  $74,570	
  to	
  $	
  105,670,	
  Model	
  S	
  competes	
  in	
  the	
  large	
  luxury	
  
sedan	
  segment.	
  Its	
  main	
  competitors	
  consist	
  of	
  Mercedes	
  Benz	
  S-­‐class,	
  Audi	
  A7,	
  BMW	
  7-­‐series,	
  BMW	
  i8,	
  Porsche	
  
Panamera	
  e-­‐hybrid	
  and	
  Lexus	
  LS1.	
  However,	
  none	
  of	
  the	
  competitors	
  provide	
  a	
  full	
  electric	
  offering,	
  which	
  gives	
  
Model	
  S	
  a	
  unique	
  opportunity	
  to	
  create	
  a	
  white	
  space	
  for	
  itself	
  catering	
  to	
  needs	
  of	
  high	
  income	
  eco	
  conscious	
  
customers	
  seeking	
  performance	
  and	
  style.	
  	
  
This	
  sub-­‐market,	
  including	
  other	
  luxury	
  car	
  brands,	
  roughly	
  adds	
  up	
  to	
  less	
  than	
  10%	
  of	
  the	
  total	
  US	
  auto	
  sales.	
  
Tesla	
  occupies	
  around	
  1%	
  of	
  this	
  sub-­‐market	
  by	
  selling	
  18,195	
  Model	
  S	
  in	
  2013,	
  which	
  leaves	
  Model	
  S	
  a	
  great	
  
growth	
  potential.(Exhibit	
  4).	
  Model	
  S	
  is	
  the	
  leader	
  in	
  the	
  large	
  luxury	
  car	
  segment	
  but	
  there	
  is	
  a	
  clear	
  growth	
  
opportunity	
  in	
  crossover/SUV	
  and	
  mid	
  size	
  luxury	
  segment.2	
  (Exhibit	
  3)	
  
Brand	
  History	
  and	
  Developing	
  Plan:	
  	
  
Tesla	
  was	
  founded	
  in	
  2003	
  by	
  a	
  group	
  of	
  Silicon	
  Valley	
  engineers	
  who	
  set	
  out	
  to	
  prove	
  to	
  the	
  world	
  that	
  electric	
  
vehicles	
  could	
  be	
  awesome.	
  It	
  all	
  started	
  with	
  all	
  electric	
  sports	
  car-­‐	
  Roadster	
  in	
  2008.	
  The	
  company	
  went	
  public	
  in	
  
2010	
  and	
  introduced	
  the	
  all-­‐electric	
  luxury	
  sedan-­‐	
  Model	
  S	
  in	
  2012.	
  The	
  car	
  has	
  been	
  a	
  huge	
  success	
  and	
  has	
  won	
  
several	
  awards	
  since	
  its	
  launch.	
  Tesla	
  has	
  been	
  accelerating	
  its	
  route	
  of	
  building	
  sustainability	
  into	
  the	
  automobile	
  
world,	
   by	
   building	
   100%	
   electric	
   cars	
   with	
   excellent	
   performance	
   that	
   surpass	
   their	
   combustion	
   counterparts.	
  
Tesla	
  has	
  been	
  pioneering	
  cutting	
  edge	
  innovation	
  that	
  is	
  going	
  to	
  disrupt	
  the	
  whole	
  auto	
  industry.	
  
	
  “Our	
   goal	
   when	
   we	
   created	
   Tesla	
   a	
   decade	
   ago	
   was	
   the	
   same	
   as	
   it	
   is	
   today:	
   to	
   drive	
   the	
   world’s	
   transition	
   to	
  
electric	
  mobility	
  by	
  bringing	
  a	
  full	
  range	
  of	
  increasingly	
  affordable	
  electric	
  cars	
  to	
  market.3”	
  	
  	
  -­‐	
  Elon	
  Musk	
  |	
  CEO	
  
To	
   accomplish	
   this	
   mission,	
   Tesla	
   has	
   a	
   three-­‐stage	
   master	
   plan.	
   	
   First	
   is	
   a	
   high	
   price	
   and	
   low	
   sales	
   volume	
  
offering,	
  the	
  Roadster,	
  to	
  demonstrate	
  how	
  great	
  the	
  performance	
  a	
  fully	
  electric	
  car	
  can	
  achieve.	
  The	
  second	
  is	
  the	
  
medium	
  price	
  and	
  medium	
  volume	
  offerings,	
  the	
  Model	
  S	
  and	
  the	
  upcoming	
  Model	
  X,	
  to	
  prove	
  that	
  fully	
  electric	
  
cars	
  can	
  be	
  financially	
  successful	
  even	
  while	
  competing	
  with	
  global	
  renowned	
  auto-­‐elites.	
  And	
  the	
  last	
  is	
  low	
  price	
  
and	
   mass	
   volume,	
   the	
   Gen	
   III,	
   to	
   realize	
   the	
   transition	
   to	
   the	
   future	
   “electric”	
   mobility.	
   It	
   envisions	
   the	
   world	
  
without	
  gas	
  burning	
  cars	
  and	
  making	
  that	
  technology	
  obsolete.	
  	
  
Tesla’s	
  Marketing	
  Challenge	
  and	
  Opportunity:	
  
To	
  achieve	
  the	
  final	
  goal	
  of	
  mass	
  production	
  and	
  sales	
  of	
  Gen	
  III,	
  Tesla	
  needs	
  more	
  cash	
  to	
  expand	
  and	
  more	
  brand	
  
communication	
  with	
  the	
  majority	
  of	
  the	
  consumers	
  of	
  automobiles	
  to	
  establish	
  organic	
  brand	
  relationships.	
  These	
  
two	
  needs	
  ultimately	
  lead	
  to	
  one	
  marketing	
  challenge:	
  to	
  sell	
  more	
  Model	
  S	
  to	
  generate	
  sustainable	
  cash	
  flow	
  by	
  
enhancing	
  target	
  customer	
  engagement.	
  
Financially	
  speaking,	
  despite	
  of	
  the	
  negative	
  operating	
  profit	
  margin,	
  Tesla	
  has	
  been	
  investing	
  heavily	
  in	
  product	
  
development	
   and	
   capacity	
   expansion	
   to	
   grow	
   organically.	
   Clearly,	
   as	
   a	
   start-­‐up,	
   Tesla	
   is	
   leveraging	
   a	
   growth	
  
strategy	
  to	
  seek	
  solid	
  market	
  share	
  growth	
  in	
  the	
  future,	
  which	
  is	
  in	
  line	
  with	
  Tesla’s	
  long-­‐term	
  goal.	
  However,	
  this	
  
growth	
  strategy	
  requires	
  sustainable	
  cash	
  generation	
  from	
  revenue	
  growth	
  and	
  net	
  profit	
  growth,	
  and	
  therefore	
  
demands	
  more	
  sales	
  of	
  Model	
  S.	
  
Within	
  the	
  niche	
  market	
  of	
  large	
  luxury	
  sedans,	
  Model	
  S	
  has	
  a	
  great	
  potential	
  to	
  grow	
  since	
  its	
  market	
  share	
  is	
  only	
  
1%.	
  (Exhibit	
  4&5)	
  The	
  challenge	
  now	
  is	
  how	
  to	
  convince	
  the	
  other	
  potential	
  customers	
  to	
  switch	
  or	
  try	
  Model	
  S.	
  
Here	
  are	
  few	
  challenges	
  and	
  opportunities	
  before	
  the	
  company	
  that	
  needs	
  to	
  be	
  addressed.	
  
• Potential	
  customers	
  are	
  still	
  using	
  concepts	
  from	
  combustion	
  cars	
  to	
  judge	
  Tesla,	
  for	
  example,	
  they	
  would	
  
challenge	
  the	
  sales	
  man	
  by	
  saying:”	
  Call	
  me	
  when	
  your	
  range	
  reaches	
  400	
  miles.”	
  Whereas	
  in	
  fact,	
  people	
  
don’t	
   need	
   this	
   amount	
   of	
   range	
   in	
   the	
   daily	
   use	
   of	
   a	
   car.	
   This	
   indicates	
   Tesla	
   has	
   not	
   successfully	
  
addressed	
  this	
  concern	
  by	
  communicating	
  the	
  drastic	
  growth	
  in	
  Tesla’s	
  supercharger	
  network	
  in	
  last	
  one	
  
year,	
  which	
  reveals	
  the	
  need	
  for	
  better	
  communication.	
  	
  
• Some	
  customers	
  still	
  don’t	
  know	
  enough	
  about	
  the	
  features	
  of	
  Tesla	
  enough	
  to	
  trigger	
  a	
  purchase.	
  This	
  is	
  
hindering	
  customers’	
  physical	
  and	
  further	
  emotional	
  engagement	
  with	
  Tesla	
  brand.	
  Tesla	
  believes	
  that	
  
this	
  product	
  is	
  so	
  awesome	
  that	
  the	
  best	
  way	
  to	
  sell	
  this	
  car	
  is	
  to	
  get	
  a	
  potential	
  customer	
  behind	
  the	
  
wheels.	
  
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
1	
  Marketrealist.com,	
  Sizing	
  up	
  the	
  competition:	
  Is	
  Tesla’s	
  product	
  unique?	
  William	
  Lowry,	
  Jun	
  19,	
  2014	
  
2	
  www.goodcarbadcar.net	
  
3	
  Investor	
  Presentation,	
  Tesla,	
  Jan	
  2014	
  
 
	
   3	
  
	
  
• Some	
   perceive	
   Tesla	
   as	
   a	
   technical	
   gadget	
   rather	
   than	
   an	
   automobile.	
   Others	
   say	
   Tesla	
   is	
   a	
   toy	
   of	
   the	
  
wealthy	
   in	
   the	
   Silicon	
   Valley.	
   These	
   comments	
   reflect	
   the	
   chaos	
   in	
   delivering	
   the	
   right	
   message	
   to	
   the	
  
target	
  audience.	
  	
  
To	
  meet	
  the	
  challenge	
  above	
  and	
  to	
  gain	
  more	
  traction	
  in	
  the	
  luxury	
  car	
  market	
  Tesla	
  needs	
  a	
  strategic	
  IMC	
  plan	
  to	
  
communicate	
  Tesla	
  values	
  by	
  maximizing	
  both	
  physical	
  and	
  emotional	
  interactions	
  between	
  Tesla	
  and	
  the	
  target	
  
customers.	
  	
  
2.	
  Market/Consumer	
  Research	
  	
  
We	
   conducted	
   an	
   in-­‐depth	
   interview	
   with	
   a	
   customer	
   advisor	
   at	
   a	
   Tesla	
   store	
   and	
   also	
   took	
   a	
   test	
   drive	
   to	
  
understand	
  the	
  brand	
  and	
  its	
  customers	
  more	
  deeply,	
  and	
  we	
  generated	
  several	
  key	
  insights	
  out	
  of	
  it.	
  People	
  are	
  
buying	
  Tesla	
  more	
  for	
  its	
  high	
  performance,	
  design	
  uniqueness	
  and	
  cool	
  quotient	
  than	
  for	
  social	
  consciousness,	
  
efficiency	
   and	
   environmental	
   reasons.	
   A	
   lot	
   of	
   people	
   buy	
   it	
   for	
   the	
   reliability	
   reasons,	
   simple	
   mechanics	
   zero	
  
periodic	
  maintenance	
  and	
  running	
  cost	
  and	
  ease	
  and	
  convenience	
  of	
  never	
  having	
  to	
  go	
  to	
  a	
  gas	
  station	
  anymore.	
  
The	
   car	
   therefore	
   alleviates	
   a	
   paint	
   point	
   or	
   tension	
   in	
   their	
   busy	
   lives.	
   Tesla	
   is	
   an	
   American	
   car	
   company.	
  
Consumers	
   like	
   the	
   idea	
   of	
   supporting	
   a	
   brand	
   new	
   American	
   car	
   company,	
   which	
   is	
   born	
   out	
   Silicon	
   Valley’s	
  
innovative	
  culture.	
  Tesla	
  is	
  a	
  high-­‐tech	
  gadget	
  that	
  has	
  the	
  form	
  of	
  a	
  car,	
  instead	
  of	
  a	
  car	
  built	
  with	
  new	
  technology.	
  
People	
  resonate	
  with	
  the	
  “technology”,	
  not	
  the	
  car;	
  it	
  is	
  the	
  most	
  expensive	
  piece	
  of	
  gadget	
  that	
  one	
  can	
  buy.	
  Some	
  
of	
  the	
  customers	
  are	
  informed	
  about	
  the	
  car,	
  they	
  have	
  heard	
  about	
  it	
  in	
  their	
  social	
  circles	
  but	
  the	
  final	
  buying	
  
decision	
  is	
  highly	
  influenced	
  by	
  the	
  feeling	
  the	
  customer	
  gets	
  when	
  they	
  get	
  into	
  the	
  car	
  and	
  by	
  experiencing	
  the	
  
product	
   first	
   hand.	
   The	
   instantaneous	
   torque	
   the	
   car	
   delivers	
   once	
   they	
   set	
   their	
   foot	
   on	
   the	
   pedal	
   and	
   the	
  
exhilaration	
  of	
  driving	
  a	
  Tesla	
  transcends	
  them	
  into	
  the	
  future.	
  Based	
  upon	
  other	
  primary	
  and	
  secondary	
  research	
  
we	
  also	
  arrived	
  at	
  a	
  conclusion	
  that	
  a	
  lot	
  of	
  people	
  are	
  not	
  really	
  aware	
  of	
  the	
  true	
  benefits	
  and	
  features	
  the	
  car	
  can	
  
offer	
  and	
  there	
  is	
  a	
  knowledge	
  gap	
  that	
  needs	
  to	
  be	
  filled.	
  
	
  
3.	
  Marketing	
  Objective	
  	
  
Increase	
  the	
  market	
  share	
  in	
  the	
  US	
  luxury	
  car	
  market	
  from	
  1%	
  to	
  2%	
  and	
  double	
  the	
  revenue	
  by	
  December	
  2015.	
  
Tesla	
  is	
  a	
  high	
  growth	
  company	
  and	
  is	
  investing	
  heavily	
  in	
  new	
  products;	
  capacity	
  expansion	
  and	
  gaining	
  market	
  
share	
  are	
  pivotal	
  to	
  its	
  growth	
  strategy.	
  	
  
	
  
4.	
  Segmentation	
  
In	
  the	
  short	
  term,	
  Innovators	
  are	
  the	
  most	
  important	
  market	
  segment	
  for	
  Tesla.	
  They	
  have	
  social	
  resource,	
  which	
  
means	
  affordability.	
  They	
  are	
  also	
  open	
  to	
  changes	
  and	
  possibilities	
  in	
  life.	
  Innovators	
  are	
  successful,	
  take-­‐charge	
  
people	
   with	
   high	
   self-­‐esteem.	
   Because	
   they	
   have	
   such	
   abundant	
   resources,	
   they	
   exhibit	
   all	
   three	
   primary	
  
motivations	
  in	
  varying	
  degrees.	
  Being	
  change	
  leaders,	
  they	
  are	
  the	
  most	
  receptive	
  to	
  new	
  ideas	
  and	
  technologies.	
  
Innovators	
  are	
  very	
  active	
  consumers,	
  and	
  their	
  purchases	
  reflect	
  cultivated	
  tastes	
  for	
  upscale,	
  niche	
  products	
  and	
  
services.	
  Image	
  is	
  important	
  to	
  innovators,	
  not	
  as	
  evidence	
  of	
  status	
  or	
  power	
  but	
  as	
  an	
  expression	
  of	
  their	
  taste,	
  
independence,	
   and	
   personality.	
   Innovators	
   are	
   among	
   the	
   established	
   and	
   emerging	
   leaders	
   in	
   business	
   and	
  
government,	
  yet	
  they	
  continue	
  to	
  seek	
  challenges.	
  Their	
  lives	
  are	
  characterized	
  by	
  variety.	
  Experiencers,	
  Achievers	
  
and	
  Thinkers	
  are	
  also	
  segments	
  that	
  we	
  consider	
  in	
  the	
  long	
  term.	
  	
  	
  
For	
   Experiencers,	
   their	
   purchases	
   reflect	
   the	
   emphasis	
   that	
   they	
   place	
   on	
   looking	
   good	
   and	
   having	
   "cool"	
  
stuff.	
   	
  They	
   seek	
   variety	
   and	
   excitement,	
   savoring	
   the	
   new	
   and	
   the	
   offbeat.	
   Experiencers	
   are	
   people	
   who	
   are	
  
heavily	
   motivated	
   by	
   self-­‐expression,	
   are	
   sociable	
   and	
   trendsetters.	
   They	
   seek	
   variety	
   and	
   quickly	
   become	
  
enthusiastic	
  about	
  new	
  opportunities	
  but	
  are	
  quick	
  to	
  cool	
  off	
  too.	
  4	
  
For	
   Achievers,	
   image	
   is	
   important.	
   They	
   favor	
   established,	
   prestige	
   products	
   and	
   services	
   that	
   demonstrate	
  
success	
   to	
   their	
   peers.	
   Because	
   of	
   their	
   busy	
   lives,	
   they	
   are	
   often	
   interested	
   in	
   products	
   that	
   make	
   their	
   lives	
  
convenient	
   and	
   easy.	
   For	
   thinkers,	
   although	
   their	
   incomes	
   allow	
   them	
   many	
   choices,	
   they	
   are	
   conservative,	
  
practical	
  consumers;	
  they	
  look	
  for	
  durability,	
  functionality,	
  and	
  value	
  in	
  the	
  products	
  that	
  they	
  buy.	
  
Besides	
  the	
  four	
  segments	
  we	
  mentioned	
  above,	
  there	
  are	
  also	
  four	
  other	
  market	
  segments,	
  which	
  are	
  believers,	
  
strivers,	
  makers	
  and	
  survivors.	
  Because	
  of	
  the	
  income	
  level	
  is	
  comparatively	
  low	
  for	
  these	
  four	
  segments,	
  they	
  are	
  
beyond	
  the	
  company’s	
  consideration.	
  For	
  them	
  a	
  car	
  is	
  a	
  utility	
  item	
  that	
  enables	
  them	
  to	
  move	
  around	
  and	
  the	
  
current	
  product	
  line	
  at	
  Tesla	
  brand	
  will	
  not	
  resonate	
  with	
  them.	
  But	
  to	
  them	
  the	
  cost	
  saving	
  of	
  driving	
  an	
  electric	
  
car	
  is	
  an	
  attractive	
  proposition	
  and	
  they	
  could	
  be	
  potential	
  targets	
  for	
  future	
  products.	
  
	
  
	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  
4	
  http://www.strategicbusinessinsights.com/vals/ustypes.shtml	
  
 
	
   4	
  
5.	
  Targeting	
  
Our	
  priority	
  targets	
  are	
  Innovators	
  and	
  Experiencers.	
  	
  Innovators	
  are	
  successful	
  people	
  with	
  high	
  self-­‐esteem	
  and	
  
a	
  Tesla	
  product	
  may	
  be	
  the	
  apt	
  one	
  for	
  them	
  as	
  it	
  can	
  be	
  seen	
  as	
  a	
  reward	
  and	
  validation	
  of	
  the	
  success	
  and	
  heights	
  
that	
  they	
  have	
  achieved.	
  They	
  are	
  change	
  leaders	
  and	
  receptive	
  to	
  new	
  technology	
  which	
  makes	
  them	
  the	
  perfect	
  
target	
  for	
  a	
  futuristic	
  product	
  like	
  an	
  all-­‐electric	
  car.	
  	
  
Experiencers	
  are	
  a	
  relevant	
  segment	
  for	
  Tesla	
  not	
  just	
  because	
  they	
  can	
  afford	
  and	
  potentially	
  be	
  satisfied	
  by	
  the	
  
superior	
   technology	
   and	
   cutting	
   edge	
   product	
   but	
   have	
   the	
   capacity	
   to	
   influence	
   people	
   in	
   their	
   network	
   to	
  
positively	
  change	
  their	
  attitudes	
  towards	
  electric	
  cars.	
  These	
  people	
  are	
  well	
  established	
  and	
  have	
  a	
  social	
  media	
  
following	
   and	
   targeting	
   them	
   can	
   help	
   Tesla	
   achieve	
   the	
   long-­‐term	
   goal	
   of	
   being	
   perceived	
   as	
   an	
   electric	
   car	
  
delivering	
   a	
   superior	
   driving	
   experience.	
   Innovators	
   and	
   Experiencers	
   share	
   many	
   features.	
   They	
   are	
   both	
  
innovative	
  and	
  have	
  high-­‐income	
  level	
  (innovators	
  have	
  even	
  higher)	
  and	
  they	
  have	
  an	
  open	
  attitude	
  towards	
  new	
  
opportunities	
  and	
  the	
  positivity	
  to	
  embrace	
  change.	
  	
  	
  
We	
  chose	
  to	
  target	
  these	
  two	
  segments	
  because	
  they	
  would	
  find	
  highest	
  resonance	
  with	
  the	
  Tesla	
  brand	
  and	
  they	
  
are	
  thought	
  leaders	
  in	
  their	
  social	
  circles,	
  their	
  peers	
  admire	
  them	
  for	
  where	
  they	
  are	
  and	
  where	
  they	
  are	
  heading	
  
in	
  life.	
  They	
  could	
  be	
  great	
  brand	
  advocates	
  for	
  Tesla	
  and	
  influence	
  people	
  in	
  their	
  network	
  to	
  transition	
  to	
  electric	
  
vehicles.	
  They	
  value	
  efficiency	
  and	
  environment	
  but	
  not	
  willing	
  to	
  compromise	
  on	
  aesthetics	
  and	
  performance.	
  
Tesla	
  offers	
  the	
  perfect	
  product	
  that	
  matches	
  the	
  taste	
  and	
  aspirations	
  of	
  this	
  segment.	
  Following	
  are	
  the	
  typical	
  
profile	
  of	
  our	
  prime	
  prospects:	
  
a)	
  Our	
  primary	
  target	
  segments	
  are	
  people	
  in	
  the	
  age	
  group	
  of	
  40-­‐50	
  who	
  are	
  self-­‐driven,	
  entrepreneurial	
  and	
  tech	
  
savvy	
  with	
  a	
  preference	
  towards	
  cool	
  and	
  stylish	
  lifestyle.	
  They	
  really	
  value	
  the	
  efforts	
  of	
  high	
  technology	
  and	
  
design	
   of	
   Tesla	
   cars.	
   They	
   look	
   at	
   owning	
   Tesla	
   as	
   an	
   affirmation	
   of	
   them	
   doing	
   well	
   and	
   being	
   on	
   the	
   right	
  
professional	
   path.	
   They	
   mainly	
   buy	
   the	
   car	
   for	
   it's	
   excellent	
   performance	
   and	
   beautiful	
   artistic	
   outlook	
   and	
   to	
  
reward	
  themselves	
  for	
  the	
  hard	
  work	
  they	
  put	
  in	
  life.	
  	
  
b)	
  Affluent	
  City	
  Dwelling	
  DINK	
  (Dual	
  Income	
  No	
  kids.)	
  They	
  are	
  young	
  professionals	
  in	
  their	
  mid	
  30s	
  and	
  have	
  just	
  
stepped	
  into	
  a	
  high-­‐income	
  job.	
  They	
  have	
  a	
  promising	
  future	
  without	
  too	
  many	
  financial	
  liabilities.	
  They	
  are	
  tech	
  
savvy	
  early	
  adopters	
  who	
  need	
  to	
  own	
  the	
  latest	
  piece	
  technology.	
  They	
  want	
  to	
  tell	
  the	
  world	
  that	
  they	
  have	
  
arrived	
  and	
  have	
  made	
  it	
  big.	
  They	
  may	
  seek	
  to	
  upgrade	
  their	
  car	
  to	
  meet	
  their	
  raised	
  social	
  status.	
  
c)	
  HNI	
  (High	
  Net	
  worth	
  Individuals)	
  group.	
  They	
  are	
  people	
  above	
  the	
  age	
  of	
  50	
  have	
  a	
  great	
  focus	
  on	
  self-­‐esteem	
  
and	
   social	
   status,	
   which	
   they	
   try	
   to	
   communicate	
   through	
   the	
   objects	
   they	
   possess.	
   They	
   care	
   about	
   the	
  
environment	
  and	
  drive	
  Tesla	
  as	
  a	
  statement	
  and	
  symbol	
  of	
  their	
  eco	
  consciousness.	
  	
  
6.	
  Behavioral	
  Objective	
  	
  
Increase	
  test-­‐drives	
  by	
  15%	
  and	
  the	
  social	
  media	
  engagement	
  measured	
  by	
  positive	
  social	
  mention	
  score	
  by	
  10%	
  
in	
  the	
  US	
  market	
  by	
  December	
  2015.	
  The	
  focus	
  here	
  is	
  to	
  get	
  the	
  innovators	
  and	
  experiencers	
  to	
  test-­‐drive	
  the	
  car	
  
to	
   educate	
   the	
   them	
   about	
   the	
   product	
   and	
   increase	
   positive	
   word	
   of	
   mouth	
   publicity	
   by	
   sharing	
   of	
   these	
  
experiences	
  in	
  their	
  social	
  network.	
  	
  
7.	
  Mental	
  Objective	
  	
  
We	
  aim	
  to	
  increase	
  the	
  customer	
  acceptance	
  of	
  electric	
  vehicles	
  to	
  10%	
  by	
  2015(measured	
  by	
  consumer	
  perception	
  
studies)	
  for	
  Tesla	
  to	
  be	
  perceived	
  as	
  the	
  future	
  of	
  mobility	
  and	
  the	
  preferred	
  choice	
  of	
  people	
  who	
  are	
  seeking	
  
technologically	
  superior	
  products.	
  	
  
8.	
  Brand	
  Positioning	
  
Classic	
  Positioning:	
  To	
  the	
  tech	
  savvy	
  innovators	
  Tesla	
  is	
  a	
  technology	
  company	
  that	
  makes	
  100%	
  electric	
  cars,	
  
one	
   that	
   offers	
   highest	
   level	
   of	
   style,	
   performance	
   and	
   efficiency	
   in	
   its	
   category	
   because	
   of	
   its	
   cutting	
   edge	
  
technology,	
  design	
  and	
  its	
  innovation	
  driven	
  culture.	
  
Brand	
  Positioning	
  using	
  Ladder	
  Model	
  
Value:	
  Stand	
  out	
  from	
  the	
  crowd	
  by	
  embracing	
  the	
  change	
  over	
  status	
  quo.	
  
Emotional	
  Benefit:	
  The	
  feeling	
  of	
  being	
  environmentally	
  responsible	
  and	
  part	
  of	
  greater	
  purpose-­‐	
  driving	
  a	
  social	
  
change-­‐	
  without	
  having	
  to	
  compromise	
  on	
  social	
  status,	
  aesthetics	
  and	
  performance.	
  
 
	
   5	
  
Functional	
  Benefit:	
  Not	
  only	
  cleaner	
  and	
  efficient	
  but	
  also	
  has	
  stunning	
  looks,	
  is	
  faster	
  and	
  more	
  fun	
  to	
  drive	
  than	
  
conventional	
  cars,	
  all	
  this	
  with	
  the	
  convenience	
  of	
  never	
  having	
  to	
  go	
  to	
  a	
  gas	
  station.	
  
Attributes:	
  	
  
• Stylish	
  yet	
  minimalistic	
  design	
  and	
  17”	
  touch	
  screen	
  dashboard	
  renders	
  it	
  a	
  sleek	
  and	
  futuristic	
  look.	
  
• Cutting	
  edge	
  battery	
  and	
  supercharging	
  technology	
  that	
  offers	
  highest	
  range	
  in	
  the	
  electric	
  car	
  segment	
  
and	
  lowest	
  charging	
  time.	
  
• Low	
  centre	
  of	
  gravity	
  enables	
  better	
  handling	
  and	
  control	
  on	
  turns;	
  Instantaneous	
  motor	
  torque	
  delivers	
  
silent	
  yet	
  quick	
  acceleration.	
  	
  
• Lightweight	
  aluminum	
  body,	
  aerodynamic	
  design	
  and	
  regenerative	
  braking	
  maximize	
  efficiency.	
  
9.	
  Key	
  Consumer	
  Insight	
  
There	
  is	
  a	
  general	
  perception	
  that	
  Tesla	
  is	
  a	
  car	
  for	
  elites	
  who	
  use	
  the	
  product	
  as	
  an	
  expression	
  of	
  their	
  social	
  
status	
  and	
  eco	
  consciousness.	
  Tesla	
  has	
  revolutionized	
  the	
  entire	
  industry	
  by	
  challenging	
  the	
  established	
  mindset	
  
that	
  electric	
  cars	
  are	
  clean	
  but	
  dorky	
  and	
  low	
  performance.	
  By	
  designing	
  a	
  car	
  that	
  is	
  100%	
  electric	
  they	
  have	
  
proven	
  it	
  to	
  the	
  world	
  that	
  electric	
  is	
  not	
  only	
  cleaner	
  but	
  a	
  better	
  than	
  the	
  existing	
  technology.	
  From	
  the	
  moment	
  
you	
  enter	
  the	
  car	
  and	
  set	
  your	
  foot	
  on	
  the	
  pedal	
  every	
  thing	
  about	
  the	
  car	
  is	
  futuristic	
  and	
  it	
  beats	
  a	
  gasoline	
  car	
  on	
  
every	
  performance	
  metric.	
  This	
  is	
  the	
  car	
  not	
  for	
  a	
  few	
  technology	
  enthusiasts	
  but	
  it	
  is	
  the	
  future	
  of	
  mobility.	
  The	
  
product	
  is	
  so	
  awesome	
  that	
  it	
  sells	
  itself	
  as	
  long	
  as	
  we	
  are	
  able	
  to	
  get	
  the	
  target	
  customer	
  behind	
  the	
  wheels.	
  
10.	
  Creative	
  Idea	
  
In	
  line	
  with	
  our	
  mental	
  objective,	
  our	
  communication	
  strategy	
  is	
  based	
  on	
  the	
  tagline	
  –	
  “Future	
  is	
  Electric.”	
  We	
  
want	
  our	
  target	
  audience	
  to	
  believe	
  the	
  world	
  would	
  drive	
  only	
  fully	
  electric	
  cars	
  in	
  the	
  future.	
  Tesla	
  is	
  the	
  car	
  for	
  
those	
  seeking	
  change	
  and	
  thinking	
  that	
  they	
  need	
  to	
  be	
  on	
  the	
  cutting	
  edge	
  of	
  technology.	
  	
  We	
  need	
  to	
  get	
  these	
  
people	
  into	
  our	
  stores	
  and	
  behind	
  the	
  wheels.	
  
The	
  print	
  ad	
  creative	
  (Exhibit	
  7)	
  symbolically	
  compares	
  conventional	
  internal	
  combustion	
  engine	
  technology	
  with	
  
obsolete	
  products,	
  such	
  as	
  CRT	
  television,	
  alarm	
  clock	
  and	
  black	
  and	
  white	
  desktop	
  computers.	
  Driving	
  gasoline	
  
cars	
  would	
  be	
  a	
  thing	
  of	
  the	
  past	
  while	
  driving	
  Tesla	
  is	
  the	
  future.	
  The	
  copy	
  would	
  also	
  emphasize	
  that	
  Tesla	
  is	
  a	
  
100%	
  electric	
  car	
  with	
  no	
  tradeoffs	
  or	
  compromises	
  that	
  make	
  it	
  unique,	
  which	
  differentiates	
  it	
  from	
  the	
  other	
  
plug	
  in	
  hybrids	
  available	
  in	
  the	
  market	
  today.	
  The	
  call	
  to	
  action	
  would	
  be	
  -­‐	
  Text	
  the	
  word	
  “DRIVE	
  THE	
  FUTURE”	
  at	
  
56565	
  to	
  test-­‐drive	
  the	
  car.	
  	
  
The	
  banner	
  ad	
  creative	
  (Exhibit	
  8)	
  would	
  have	
  dynamic	
  GIF	
  images	
  of	
  products	
  such	
  as	
  floppy	
  disks,	
  computers,	
  
and	
  cars	
  evolving	
  over	
  time	
  and	
  ending	
  up	
  with	
  a	
  question	
  –	
  "Wondering	
  what	
  next?"	
  There	
  will	
  be	
  a	
  clickable	
  
button	
  that	
  says	
  –	
  "Drive	
  the	
  future."	
  That	
  would	
  redirect	
  the	
  target	
  audience	
  to	
  test	
  drive	
  registration	
  page	
  of	
  
Tesla	
  website.	
  We	
  would	
  like	
  to	
  integrate	
  social	
  media	
  with	
  this	
  campaign	
  by	
  asking	
  people	
  to	
  share	
  their	
  favorite	
  
Tesla	
  feature	
  on	
  social	
  media,	
  such	
  as	
  Twitter,	
  for	
  a	
  chance	
  to	
  win	
  a	
  free	
  tech/premium	
  interior	
  package	
  upgrade	
  
on	
  their	
  Model	
  S,	
  once	
  they	
  have	
  test	
  driven	
  the	
  car.	
  
11.	
  Media	
  plan	
  and	
  Measurement	
  
Tesla’s	
  target	
  audience	
  is	
  Internet	
  savvy	
  and	
  reads	
  a	
  lot	
  of	
  business,	
  lifestyle	
  and	
  technology	
  magazine.	
  The	
  media	
  
plan	
  would	
  include	
  print	
  ads	
  and	
  banner	
  ads	
  on	
  digital	
  apps	
  and	
  websites	
  such	
  as	
  Tech	
  Crunch,	
  Business	
  Insider,	
  
Fast	
  Company,	
  Wall	
  Street	
  Journal,	
  Economist.	
  We	
  also	
  plan	
  to	
  encourage	
  current	
  owners	
  and	
  bloggers	
  to	
  share	
  
their	
   Tesla	
   road	
   trip	
   stories	
   which	
   could	
   later	
   be	
   published	
   as	
   advertorials	
   on	
   auto	
   magazines	
   and	
   the	
   Tesla	
  
website.	
  We	
  also	
  plan	
  to	
  measure	
  the	
  effectiveness	
  of	
  the	
  different	
  creative	
  using	
  A/B	
  Testing	
  on	
  digital	
  platforms.	
  
We	
  also	
  plan	
  to	
  display	
  Model	
  S	
  and	
  to	
  have	
  billboards	
  at	
  all	
  major	
  domestic	
  business	
  airports	
  to	
  spread	
  the	
  word	
  
and	
   get	
   people	
   to	
   test-­‐drive	
   Model	
   S.	
   The	
   efficacy	
   of	
   twitter	
   #DriveTheFuture	
   hash	
   tag	
   campaign	
   would	
   be	
  
measured	
  by	
  social	
  media	
  tools	
  such	
  as	
  Twitalyser	
  and	
  Social	
  Mentions.	
  We	
  plan	
  to	
  measure	
  banner	
  ads	
  through	
  
Click	
  Through	
  Rate	
  (CTR)	
  and	
  conversion	
  rates	
  in	
  terms	
  of	
  test-­‐drive	
  registrations.	
  The	
  effectiveness	
  of	
  our	
  print	
  
ads	
  will	
  be	
  measured	
  by	
  amount	
  of	
  test	
  drive	
  requests	
  received	
  via	
  text	
  messages.	
  	
  
The	
  overall	
  success	
  would	
  eventually	
  be	
  tracked	
  on	
  the	
  basis	
  of	
  conversion	
  rates	
  of	
  the	
  test	
  drives	
  and	
  how	
  it	
  
impact	
  sales	
  during	
  the	
  campaigns.	
  Tesla	
  would	
  have	
  to	
  periodically	
  invest	
  in	
  similar	
  campaigns	
  to	
  reinforce	
  the	
  
positioning	
  so	
  competition	
  cannot	
  stake	
  a	
  claim	
  to	
  it.	
  This	
  positioning	
  would	
  play	
  a	
  critical	
  role	
  in	
  the	
  success	
  of	
  its	
  
future	
   products	
   and	
   will	
   help	
   to	
   achieve	
   its	
   long-­‐term	
   mission	
   to	
   accelerate	
   the	
   world’s	
   transition	
   to	
   electric	
  
mobility	
  with	
  a	
  full	
  range	
  of	
  increasingly	
  affordable	
  electric	
  cars.	
  
	
  
	
  
	
  
 
	
   6	
  
Appendix	
  
Exhibit	
  1:	
  SWOT	
  
	
  
Strength	
  
• Strong	
  Management/Celebrity	
  CEO	
  
• Brand	
  loyalty	
  &	
  Equity	
  
• Blue	
  Ocean	
  strategy	
  
• Vertical	
  integration	
  of	
  Channel	
  
• Innovative	
  culture	
  
• Earned	
  media	
  and	
  PR	
  buzz	
  
• 	
  
Weakness	
  
• Production	
  constraint	
  
• Lack	
  of	
  economies	
  of	
  scale	
  
• Financial	
  strength	
  
• Limited	
  to	
  early	
  adopters.	
  
• Skepticism	
   about	
   the	
   range	
   of	
   full	
  
electric	
  vehicle	
  
Opportunities	
  
• New	
  segments	
  –Fleet,	
  company	
  car	
  	
  
• Growing	
  eco	
  consciousness	
  globally.	
  
• New	
  products-­‐midsize	
  sedan,	
  SUV,	
  
Trucks	
  
• New	
  Markets	
  -­‐International,	
  
emerging	
  markets	
  
Threats	
  
• Competition	
  from	
  hybrids	
  
• Political	
  regulations	
  in	
  states.	
  
• Discontinuation	
   of	
   government	
  
incentives	
  could	
  impact	
  cost.	
  
• Dealer	
   lobbying	
   against	
   direct	
  
distribution	
  model	
  
	
  
Exhibit	
  2:	
  PEST	
  
	
  
Political	
  
• Department	
   of	
   energy	
   has	
   huge	
  
grants	
   and	
   incentives	
   to	
   promote	
  
sustainable	
  mobility	
  
• Several	
  states	
  have	
  imposed	
  ban	
  on	
  
Tesla	
  from	
  directly	
  selling	
  its	
  cars	
  to	
  
its	
  customers.	
  
Economic	
  
• Recovery	
  in	
  macro	
  economic	
  factors	
  
has	
  boosted	
  consumer	
  confidence.	
  
• Easing	
  of	
  inflation	
  and	
  interested	
  
rates	
  and	
  easier	
  leasing	
  options.	
  
• Low	
  maintenance	
  and	
  running	
  cost	
  
and	
  tax	
  rebates	
  make	
  it	
  attractive.	
  
Socio-­‐cultural	
  
• Tesla	
  brand	
  is	
  perceived	
  as	
  a	
  driver	
  
of	
  a	
  social	
  change.	
  
• Increasing	
  environmental	
  
consciousness	
  and	
  demand	
  for	
  fuel-­‐
efficient	
  cars.	
  
	
  
Technical	
  
• Tesla	
  offers	
  highest	
  range	
  in	
  the	
  
electric	
  vehicle	
  segment.	
  
• Need	
  to	
  develop	
  a	
  huge	
  
infrastructure	
  network	
  of	
  charging	
  
stations.	
  
• Instantaneous	
  torque	
  is	
  unique.	
  
	
  
Exhibit	
  3:	
  2013	
  Market	
  share	
  –	
  Large	
  Luxury	
  Segment	
  
	
   	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
 
	
   7	
  
	
  
Exhibit	
  4:	
  2014	
  US	
  Luxury	
  Auto	
  Market	
  Share	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
Exhibit	
  5:	
  2013	
  US	
  Electric	
  Car	
  Market	
  Share	
  	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
Exhibit	
  6:	
  Twitalyser	
  Status	
  
	
  
	
  
	
  
	
  
	
  
 
	
   8	
  
	
  
Exhibit	
  7:	
  Print	
  Ad	
  
STILL LIVING IN THIS AGE? WHY LIVE IN THE PAST WHEN FUTURE IS HERE
TEXT “DRIVE THE FUTURE” AT 56565 TO TAKE THE MODEL S FOR A SPIN TODAY*.	
  
ZERO EMISSIONS | ZERO COMPROMISE | 100% ELECTRIC
*Tweet you favorite Model S feature with #DriveTheFuture for a chance to win tech/interior package upgrade.
	
  
Other	
  print	
  creative	
  would	
  use	
  following	
  products:	
  
	
  
	
  
Future is Electric
 
	
   9	
  
	
  
Exhibit	
  8:	
  Banner	
  Ad	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
Other	
  banner	
  creative:	
  	
  	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
	
  
Waiting for what next?
 
	
   10	
  
	
  
	
  
Exhibit	
  9:	
  Twitter	
  buzz	
  
	
  
	
  
	
  
Here	
  are	
  a	
  couple	
  of	
  other	
  ideas	
  that	
  can	
  be	
  considered	
  for	
  future.	
  
• Product	
  placement	
  in	
  the	
  movie	
  Iron	
  Man	
  4	
  	
  	
  
• Youtube	
  video	
  contest	
  to	
  create	
  user	
  generated	
  content	
  for	
  next	
  Tesla	
  TVC.	
  
• Instagram	
  photo	
  contest	
  -­‐	
  Tesla	
  Smile	
  is	
  Infectious.	
  Share	
  it	
  with	
  #LoveAtFirstDrive	
  
• Create	
  Formula	
  –E	
  racing	
  event	
  property	
  with	
  annual	
  calendar	
  of	
  events	
  all	
  over	
  the	
  world.	
  	
  
• Electric	
  car	
  rally	
  from	
  coast	
  to	
  coast	
  using	
  the	
  nationwide	
  network	
  of	
  Tesla	
  super	
  chargers.	
  
	
  
	
  
	
  
	
  
	
  

IMC Plan - Tesla

  • 1.
      TESLA [Brand Paper] [Ananya  Gupta,  Weihong  Chen,  Chen  Chen,  Guangyi  Song,  Prakarsh  Gupta]                                                                           FUTURE IS ELECTRIC
  • 2.
        2   1.  Current  Situation   Market  Status:   The  US  auto  market  had  reached  17  million  unit  sales  per  year  before  the  2008  financial  crisis.  Whilst  since  2008,   the  US  market  had  dropped  significantly  to  10.5  million  in  2009,  it  has  been  recovering  gradually  to  15.58  million   unit  sales  in  2013.   Within  this  market,  with  a  price  tag  ranging  from  $74,570  to  $  105,670,  Model  S  competes  in  the  large  luxury   sedan  segment.  Its  main  competitors  consist  of  Mercedes  Benz  S-­‐class,  Audi  A7,  BMW  7-­‐series,  BMW  i8,  Porsche   Panamera  e-­‐hybrid  and  Lexus  LS1.  However,  none  of  the  competitors  provide  a  full  electric  offering,  which  gives   Model  S  a  unique  opportunity  to  create  a  white  space  for  itself  catering  to  needs  of  high  income  eco  conscious   customers  seeking  performance  and  style.     This  sub-­‐market,  including  other  luxury  car  brands,  roughly  adds  up  to  less  than  10%  of  the  total  US  auto  sales.   Tesla  occupies  around  1%  of  this  sub-­‐market  by  selling  18,195  Model  S  in  2013,  which  leaves  Model  S  a  great   growth  potential.(Exhibit  4).  Model  S  is  the  leader  in  the  large  luxury  car  segment  but  there  is  a  clear  growth   opportunity  in  crossover/SUV  and  mid  size  luxury  segment.2  (Exhibit  3)   Brand  History  and  Developing  Plan:     Tesla  was  founded  in  2003  by  a  group  of  Silicon  Valley  engineers  who  set  out  to  prove  to  the  world  that  electric   vehicles  could  be  awesome.  It  all  started  with  all  electric  sports  car-­‐  Roadster  in  2008.  The  company  went  public  in   2010  and  introduced  the  all-­‐electric  luxury  sedan-­‐  Model  S  in  2012.  The  car  has  been  a  huge  success  and  has  won   several  awards  since  its  launch.  Tesla  has  been  accelerating  its  route  of  building  sustainability  into  the  automobile   world,   by   building   100%   electric   cars   with   excellent   performance   that   surpass   their   combustion   counterparts.   Tesla  has  been  pioneering  cutting  edge  innovation  that  is  going  to  disrupt  the  whole  auto  industry.    “Our   goal   when   we   created   Tesla   a   decade   ago   was   the   same   as   it   is   today:   to   drive   the   world’s   transition   to   electric  mobility  by  bringing  a  full  range  of  increasingly  affordable  electric  cars  to  market.3”      -­‐  Elon  Musk  |  CEO   To   accomplish   this   mission,   Tesla   has   a   three-­‐stage   master   plan.     First   is   a   high   price   and   low   sales   volume   offering,  the  Roadster,  to  demonstrate  how  great  the  performance  a  fully  electric  car  can  achieve.  The  second  is  the   medium  price  and  medium  volume  offerings,  the  Model  S  and  the  upcoming  Model  X,  to  prove  that  fully  electric   cars  can  be  financially  successful  even  while  competing  with  global  renowned  auto-­‐elites.  And  the  last  is  low  price   and   mass   volume,   the   Gen   III,   to   realize   the   transition   to   the   future   “electric”   mobility.   It   envisions   the   world   without  gas  burning  cars  and  making  that  technology  obsolete.     Tesla’s  Marketing  Challenge  and  Opportunity:   To  achieve  the  final  goal  of  mass  production  and  sales  of  Gen  III,  Tesla  needs  more  cash  to  expand  and  more  brand   communication  with  the  majority  of  the  consumers  of  automobiles  to  establish  organic  brand  relationships.  These   two  needs  ultimately  lead  to  one  marketing  challenge:  to  sell  more  Model  S  to  generate  sustainable  cash  flow  by   enhancing  target  customer  engagement.   Financially  speaking,  despite  of  the  negative  operating  profit  margin,  Tesla  has  been  investing  heavily  in  product   development   and   capacity   expansion   to   grow   organically.   Clearly,   as   a   start-­‐up,   Tesla   is   leveraging   a   growth   strategy  to  seek  solid  market  share  growth  in  the  future,  which  is  in  line  with  Tesla’s  long-­‐term  goal.  However,  this   growth  strategy  requires  sustainable  cash  generation  from  revenue  growth  and  net  profit  growth,  and  therefore   demands  more  sales  of  Model  S.   Within  the  niche  market  of  large  luxury  sedans,  Model  S  has  a  great  potential  to  grow  since  its  market  share  is  only   1%.  (Exhibit  4&5)  The  challenge  now  is  how  to  convince  the  other  potential  customers  to  switch  or  try  Model  S.   Here  are  few  challenges  and  opportunities  before  the  company  that  needs  to  be  addressed.   • Potential  customers  are  still  using  concepts  from  combustion  cars  to  judge  Tesla,  for  example,  they  would   challenge  the  sales  man  by  saying:”  Call  me  when  your  range  reaches  400  miles.”  Whereas  in  fact,  people   don’t   need   this   amount   of   range   in   the   daily   use   of   a   car.   This   indicates   Tesla   has   not   successfully   addressed  this  concern  by  communicating  the  drastic  growth  in  Tesla’s  supercharger  network  in  last  one   year,  which  reveals  the  need  for  better  communication.     • Some  customers  still  don’t  know  enough  about  the  features  of  Tesla  enough  to  trigger  a  purchase.  This  is   hindering  customers’  physical  and  further  emotional  engagement  with  Tesla  brand.  Tesla  believes  that   this  product  is  so  awesome  that  the  best  way  to  sell  this  car  is  to  get  a  potential  customer  behind  the   wheels.                                                                                                                   1  Marketrealist.com,  Sizing  up  the  competition:  Is  Tesla’s  product  unique?  William  Lowry,  Jun  19,  2014   2  www.goodcarbadcar.net   3  Investor  Presentation,  Tesla,  Jan  2014  
  • 3.
        3     • Some   perceive   Tesla   as   a   technical   gadget   rather   than   an   automobile.   Others   say   Tesla   is   a   toy   of   the   wealthy   in   the   Silicon   Valley.   These   comments   reflect   the   chaos   in   delivering   the   right   message   to   the   target  audience.     To  meet  the  challenge  above  and  to  gain  more  traction  in  the  luxury  car  market  Tesla  needs  a  strategic  IMC  plan  to   communicate  Tesla  values  by  maximizing  both  physical  and  emotional  interactions  between  Tesla  and  the  target   customers.     2.  Market/Consumer  Research     We   conducted   an   in-­‐depth   interview   with   a   customer   advisor   at   a   Tesla   store   and   also   took   a   test   drive   to   understand  the  brand  and  its  customers  more  deeply,  and  we  generated  several  key  insights  out  of  it.  People  are   buying  Tesla  more  for  its  high  performance,  design  uniqueness  and  cool  quotient  than  for  social  consciousness,   efficiency   and   environmental   reasons.   A   lot   of   people   buy   it   for   the   reliability   reasons,   simple   mechanics   zero   periodic  maintenance  and  running  cost  and  ease  and  convenience  of  never  having  to  go  to  a  gas  station  anymore.   The   car   therefore   alleviates   a   paint   point   or   tension   in   their   busy   lives.   Tesla   is   an   American   car   company.   Consumers   like   the   idea   of   supporting   a   brand   new   American   car   company,   which   is   born   out   Silicon   Valley’s   innovative  culture.  Tesla  is  a  high-­‐tech  gadget  that  has  the  form  of  a  car,  instead  of  a  car  built  with  new  technology.   People  resonate  with  the  “technology”,  not  the  car;  it  is  the  most  expensive  piece  of  gadget  that  one  can  buy.  Some   of  the  customers  are  informed  about  the  car,  they  have  heard  about  it  in  their  social  circles  but  the  final  buying   decision  is  highly  influenced  by  the  feeling  the  customer  gets  when  they  get  into  the  car  and  by  experiencing  the   product   first   hand.   The   instantaneous   torque   the   car   delivers   once   they   set   their   foot   on   the   pedal   and   the   exhilaration  of  driving  a  Tesla  transcends  them  into  the  future.  Based  upon  other  primary  and  secondary  research   we  also  arrived  at  a  conclusion  that  a  lot  of  people  are  not  really  aware  of  the  true  benefits  and  features  the  car  can   offer  and  there  is  a  knowledge  gap  that  needs  to  be  filled.     3.  Marketing  Objective     Increase  the  market  share  in  the  US  luxury  car  market  from  1%  to  2%  and  double  the  revenue  by  December  2015.   Tesla  is  a  high  growth  company  and  is  investing  heavily  in  new  products;  capacity  expansion  and  gaining  market   share  are  pivotal  to  its  growth  strategy.       4.  Segmentation   In  the  short  term,  Innovators  are  the  most  important  market  segment  for  Tesla.  They  have  social  resource,  which   means  affordability.  They  are  also  open  to  changes  and  possibilities  in  life.  Innovators  are  successful,  take-­‐charge   people   with   high   self-­‐esteem.   Because   they   have   such   abundant   resources,   they   exhibit   all   three   primary   motivations  in  varying  degrees.  Being  change  leaders,  they  are  the  most  receptive  to  new  ideas  and  technologies.   Innovators  are  very  active  consumers,  and  their  purchases  reflect  cultivated  tastes  for  upscale,  niche  products  and   services.  Image  is  important  to  innovators,  not  as  evidence  of  status  or  power  but  as  an  expression  of  their  taste,   independence,   and   personality.   Innovators   are   among   the   established   and   emerging   leaders   in   business   and   government,  yet  they  continue  to  seek  challenges.  Their  lives  are  characterized  by  variety.  Experiencers,  Achievers   and  Thinkers  are  also  segments  that  we  consider  in  the  long  term.       For   Experiencers,   their   purchases   reflect   the   emphasis   that   they   place   on   looking   good   and   having   "cool"   stuff.    They   seek   variety   and   excitement,   savoring   the   new   and   the   offbeat.   Experiencers   are   people   who   are   heavily   motivated   by   self-­‐expression,   are   sociable   and   trendsetters.   They   seek   variety   and   quickly   become   enthusiastic  about  new  opportunities  but  are  quick  to  cool  off  too.  4   For   Achievers,   image   is   important.   They   favor   established,   prestige   products   and   services   that   demonstrate   success   to   their   peers.   Because   of   their   busy   lives,   they   are   often   interested   in   products   that   make   their   lives   convenient   and   easy.   For   thinkers,   although   their   incomes   allow   them   many   choices,   they   are   conservative,   practical  consumers;  they  look  for  durability,  functionality,  and  value  in  the  products  that  they  buy.   Besides  the  four  segments  we  mentioned  above,  there  are  also  four  other  market  segments,  which  are  believers,   strivers,  makers  and  survivors.  Because  of  the  income  level  is  comparatively  low  for  these  four  segments,  they  are   beyond  the  company’s  consideration.  For  them  a  car  is  a  utility  item  that  enables  them  to  move  around  and  the   current  product  line  at  Tesla  brand  will  not  resonate  with  them.  But  to  them  the  cost  saving  of  driving  an  electric   car  is  an  attractive  proposition  and  they  could  be  potential  targets  for  future  products.                                                                                                                     4  http://www.strategicbusinessinsights.com/vals/ustypes.shtml  
  • 4.
        4   5.  Targeting   Our  priority  targets  are  Innovators  and  Experiencers.    Innovators  are  successful  people  with  high  self-­‐esteem  and   a  Tesla  product  may  be  the  apt  one  for  them  as  it  can  be  seen  as  a  reward  and  validation  of  the  success  and  heights   that  they  have  achieved.  They  are  change  leaders  and  receptive  to  new  technology  which  makes  them  the  perfect   target  for  a  futuristic  product  like  an  all-­‐electric  car.     Experiencers  are  a  relevant  segment  for  Tesla  not  just  because  they  can  afford  and  potentially  be  satisfied  by  the   superior   technology   and   cutting   edge   product   but   have   the   capacity   to   influence   people   in   their   network   to   positively  change  their  attitudes  towards  electric  cars.  These  people  are  well  established  and  have  a  social  media   following   and   targeting   them   can   help   Tesla   achieve   the   long-­‐term   goal   of   being   perceived   as   an   electric   car   delivering   a   superior   driving   experience.   Innovators   and   Experiencers   share   many   features.   They   are   both   innovative  and  have  high-­‐income  level  (innovators  have  even  higher)  and  they  have  an  open  attitude  towards  new   opportunities  and  the  positivity  to  embrace  change.       We  chose  to  target  these  two  segments  because  they  would  find  highest  resonance  with  the  Tesla  brand  and  they   are  thought  leaders  in  their  social  circles,  their  peers  admire  them  for  where  they  are  and  where  they  are  heading   in  life.  They  could  be  great  brand  advocates  for  Tesla  and  influence  people  in  their  network  to  transition  to  electric   vehicles.  They  value  efficiency  and  environment  but  not  willing  to  compromise  on  aesthetics  and  performance.   Tesla  offers  the  perfect  product  that  matches  the  taste  and  aspirations  of  this  segment.  Following  are  the  typical   profile  of  our  prime  prospects:   a)  Our  primary  target  segments  are  people  in  the  age  group  of  40-­‐50  who  are  self-­‐driven,  entrepreneurial  and  tech   savvy  with  a  preference  towards  cool  and  stylish  lifestyle.  They  really  value  the  efforts  of  high  technology  and   design   of   Tesla   cars.   They   look   at   owning   Tesla   as   an   affirmation   of   them   doing   well   and   being   on   the   right   professional   path.   They   mainly   buy   the   car   for   it's   excellent   performance   and   beautiful   artistic   outlook   and   to   reward  themselves  for  the  hard  work  they  put  in  life.     b)  Affluent  City  Dwelling  DINK  (Dual  Income  No  kids.)  They  are  young  professionals  in  their  mid  30s  and  have  just   stepped  into  a  high-­‐income  job.  They  have  a  promising  future  without  too  many  financial  liabilities.  They  are  tech   savvy  early  adopters  who  need  to  own  the  latest  piece  technology.  They  want  to  tell  the  world  that  they  have   arrived  and  have  made  it  big.  They  may  seek  to  upgrade  their  car  to  meet  their  raised  social  status.   c)  HNI  (High  Net  worth  Individuals)  group.  They  are  people  above  the  age  of  50  have  a  great  focus  on  self-­‐esteem   and   social   status,   which   they   try   to   communicate   through   the   objects   they   possess.   They   care   about   the   environment  and  drive  Tesla  as  a  statement  and  symbol  of  their  eco  consciousness.     6.  Behavioral  Objective     Increase  test-­‐drives  by  15%  and  the  social  media  engagement  measured  by  positive  social  mention  score  by  10%   in  the  US  market  by  December  2015.  The  focus  here  is  to  get  the  innovators  and  experiencers  to  test-­‐drive  the  car   to   educate   the   them   about   the   product   and   increase   positive   word   of   mouth   publicity   by   sharing   of   these   experiences  in  their  social  network.     7.  Mental  Objective     We  aim  to  increase  the  customer  acceptance  of  electric  vehicles  to  10%  by  2015(measured  by  consumer  perception   studies)  for  Tesla  to  be  perceived  as  the  future  of  mobility  and  the  preferred  choice  of  people  who  are  seeking   technologically  superior  products.     8.  Brand  Positioning   Classic  Positioning:  To  the  tech  savvy  innovators  Tesla  is  a  technology  company  that  makes  100%  electric  cars,   one   that   offers   highest   level   of   style,   performance   and   efficiency   in   its   category   because   of   its   cutting   edge   technology,  design  and  its  innovation  driven  culture.   Brand  Positioning  using  Ladder  Model   Value:  Stand  out  from  the  crowd  by  embracing  the  change  over  status  quo.   Emotional  Benefit:  The  feeling  of  being  environmentally  responsible  and  part  of  greater  purpose-­‐  driving  a  social   change-­‐  without  having  to  compromise  on  social  status,  aesthetics  and  performance.  
  • 5.
        5   Functional  Benefit:  Not  only  cleaner  and  efficient  but  also  has  stunning  looks,  is  faster  and  more  fun  to  drive  than   conventional  cars,  all  this  with  the  convenience  of  never  having  to  go  to  a  gas  station.   Attributes:     • Stylish  yet  minimalistic  design  and  17”  touch  screen  dashboard  renders  it  a  sleek  and  futuristic  look.   • Cutting  edge  battery  and  supercharging  technology  that  offers  highest  range  in  the  electric  car  segment   and  lowest  charging  time.   • Low  centre  of  gravity  enables  better  handling  and  control  on  turns;  Instantaneous  motor  torque  delivers   silent  yet  quick  acceleration.     • Lightweight  aluminum  body,  aerodynamic  design  and  regenerative  braking  maximize  efficiency.   9.  Key  Consumer  Insight   There  is  a  general  perception  that  Tesla  is  a  car  for  elites  who  use  the  product  as  an  expression  of  their  social   status  and  eco  consciousness.  Tesla  has  revolutionized  the  entire  industry  by  challenging  the  established  mindset   that  electric  cars  are  clean  but  dorky  and  low  performance.  By  designing  a  car  that  is  100%  electric  they  have   proven  it  to  the  world  that  electric  is  not  only  cleaner  but  a  better  than  the  existing  technology.  From  the  moment   you  enter  the  car  and  set  your  foot  on  the  pedal  every  thing  about  the  car  is  futuristic  and  it  beats  a  gasoline  car  on   every  performance  metric.  This  is  the  car  not  for  a  few  technology  enthusiasts  but  it  is  the  future  of  mobility.  The   product  is  so  awesome  that  it  sells  itself  as  long  as  we  are  able  to  get  the  target  customer  behind  the  wheels.   10.  Creative  Idea   In  line  with  our  mental  objective,  our  communication  strategy  is  based  on  the  tagline  –  “Future  is  Electric.”  We   want  our  target  audience  to  believe  the  world  would  drive  only  fully  electric  cars  in  the  future.  Tesla  is  the  car  for   those  seeking  change  and  thinking  that  they  need  to  be  on  the  cutting  edge  of  technology.    We  need  to  get  these   people  into  our  stores  and  behind  the  wheels.   The  print  ad  creative  (Exhibit  7)  symbolically  compares  conventional  internal  combustion  engine  technology  with   obsolete  products,  such  as  CRT  television,  alarm  clock  and  black  and  white  desktop  computers.  Driving  gasoline   cars  would  be  a  thing  of  the  past  while  driving  Tesla  is  the  future.  The  copy  would  also  emphasize  that  Tesla  is  a   100%  electric  car  with  no  tradeoffs  or  compromises  that  make  it  unique,  which  differentiates  it  from  the  other   plug  in  hybrids  available  in  the  market  today.  The  call  to  action  would  be  -­‐  Text  the  word  “DRIVE  THE  FUTURE”  at   56565  to  test-­‐drive  the  car.     The  banner  ad  creative  (Exhibit  8)  would  have  dynamic  GIF  images  of  products  such  as  floppy  disks,  computers,   and  cars  evolving  over  time  and  ending  up  with  a  question  –  "Wondering  what  next?"  There  will  be  a  clickable   button  that  says  –  "Drive  the  future."  That  would  redirect  the  target  audience  to  test  drive  registration  page  of   Tesla  website.  We  would  like  to  integrate  social  media  with  this  campaign  by  asking  people  to  share  their  favorite   Tesla  feature  on  social  media,  such  as  Twitter,  for  a  chance  to  win  a  free  tech/premium  interior  package  upgrade   on  their  Model  S,  once  they  have  test  driven  the  car.   11.  Media  plan  and  Measurement   Tesla’s  target  audience  is  Internet  savvy  and  reads  a  lot  of  business,  lifestyle  and  technology  magazine.  The  media   plan  would  include  print  ads  and  banner  ads  on  digital  apps  and  websites  such  as  Tech  Crunch,  Business  Insider,   Fast  Company,  Wall  Street  Journal,  Economist.  We  also  plan  to  encourage  current  owners  and  bloggers  to  share   their   Tesla   road   trip   stories   which   could   later   be   published   as   advertorials   on   auto   magazines   and   the   Tesla   website.  We  also  plan  to  measure  the  effectiveness  of  the  different  creative  using  A/B  Testing  on  digital  platforms.   We  also  plan  to  display  Model  S  and  to  have  billboards  at  all  major  domestic  business  airports  to  spread  the  word   and   get   people   to   test-­‐drive   Model   S.   The   efficacy   of   twitter   #DriveTheFuture   hash   tag   campaign   would   be   measured  by  social  media  tools  such  as  Twitalyser  and  Social  Mentions.  We  plan  to  measure  banner  ads  through   Click  Through  Rate  (CTR)  and  conversion  rates  in  terms  of  test-­‐drive  registrations.  The  effectiveness  of  our  print   ads  will  be  measured  by  amount  of  test  drive  requests  received  via  text  messages.     The  overall  success  would  eventually  be  tracked  on  the  basis  of  conversion  rates  of  the  test  drives  and  how  it   impact  sales  during  the  campaigns.  Tesla  would  have  to  periodically  invest  in  similar  campaigns  to  reinforce  the   positioning  so  competition  cannot  stake  a  claim  to  it.  This  positioning  would  play  a  critical  role  in  the  success  of  its   future   products   and   will   help   to   achieve   its   long-­‐term   mission   to   accelerate   the   world’s   transition   to   electric   mobility  with  a  full  range  of  increasingly  affordable  electric  cars.        
  • 6.
        6   Appendix   Exhibit  1:  SWOT     Strength   • Strong  Management/Celebrity  CEO   • Brand  loyalty  &  Equity   • Blue  Ocean  strategy   • Vertical  integration  of  Channel   • Innovative  culture   • Earned  media  and  PR  buzz   •   Weakness   • Production  constraint   • Lack  of  economies  of  scale   • Financial  strength   • Limited  to  early  adopters.   • Skepticism   about   the   range   of   full   electric  vehicle   Opportunities   • New  segments  –Fleet,  company  car     • Growing  eco  consciousness  globally.   • New  products-­‐midsize  sedan,  SUV,   Trucks   • New  Markets  -­‐International,   emerging  markets   Threats   • Competition  from  hybrids   • Political  regulations  in  states.   • Discontinuation   of   government   incentives  could  impact  cost.   • Dealer   lobbying   against   direct   distribution  model     Exhibit  2:  PEST     Political   • Department   of   energy   has   huge   grants   and   incentives   to   promote   sustainable  mobility   • Several  states  have  imposed  ban  on   Tesla  from  directly  selling  its  cars  to   its  customers.   Economic   • Recovery  in  macro  economic  factors   has  boosted  consumer  confidence.   • Easing  of  inflation  and  interested   rates  and  easier  leasing  options.   • Low  maintenance  and  running  cost   and  tax  rebates  make  it  attractive.   Socio-­‐cultural   • Tesla  brand  is  perceived  as  a  driver   of  a  social  change.   • Increasing  environmental   consciousness  and  demand  for  fuel-­‐ efficient  cars.     Technical   • Tesla  offers  highest  range  in  the   electric  vehicle  segment.   • Need  to  develop  a  huge   infrastructure  network  of  charging   stations.   • Instantaneous  torque  is  unique.     Exhibit  3:  2013  Market  share  –  Large  Luxury  Segment                      
  • 7.
        7     Exhibit  4:  2014  US  Luxury  Auto  Market  Share                               Exhibit  5:  2013  US  Electric  Car  Market  Share                             Exhibit  6:  Twitalyser  Status            
  • 8.
        8     Exhibit  7:  Print  Ad   STILL LIVING IN THIS AGE? WHY LIVE IN THE PAST WHEN FUTURE IS HERE TEXT “DRIVE THE FUTURE” AT 56565 TO TAKE THE MODEL S FOR A SPIN TODAY*.   ZERO EMISSIONS | ZERO COMPROMISE | 100% ELECTRIC *Tweet you favorite Model S feature with #DriveTheFuture for a chance to win tech/interior package upgrade.   Other  print  creative  would  use  following  products:       Future is Electric
  • 9.
        9     Exhibit  8:  Banner  Ad                             Other  banner  creative:                                                   Waiting for what next?
  • 10.
        10       Exhibit  9:  Twitter  buzz         Here  are  a  couple  of  other  ideas  that  can  be  considered  for  future.   • Product  placement  in  the  movie  Iron  Man  4       • Youtube  video  contest  to  create  user  generated  content  for  next  Tesla  TVC.   • Instagram  photo  contest  -­‐  Tesla  Smile  is  Infectious.  Share  it  with  #LoveAtFirstDrive   • Create  Formula  –E  racing  event  property  with  annual  calendar  of  events  all  over  the  world.     • Electric  car  rally  from  coast  to  coast  using  the  nationwide  network  of  Tesla  super  chargers.