Principles of Marketing: Tesla Motors Innovative Company (Coursework Sample)

David W. Hankins
TUI University
Principles of Marketing
MKT 301, Module 3 Case Study
Dr. Frank Nolan
How do you think Tesla has developed its distribution strategy, i.e. what were the most important things to have been considered?
With the launch of the model S sedan due in 2012, how would you further develop the distribution strategy over the next five years, and why?
Tesla Motors is an innovative company that deals with car manufacturing in the USA. The main market for the company is producing and distributing premium electric sports cars. The company has a very interesting historical background. Tesla Motors was founded in Silicon Valley in 2003 by a group of encouraged and innovation-passionate engineers that strongly believed in the future of electric vehicles. The main model of the company is called the Tesla Roadster. The statistic demonstrates that only for the past year (2010) more than 1,500 Roadster cars were sold to more than30 countries.
One of the missions this company has is to help reduce the consumption of petroleum all over the Earth. The production is environmentally friendly and the ultimate product – Tesla car – is destined for making the vehicle system less harmful to the world. Tesla Motors deals with cars that need batteries instead of gas and when you are in the car designed and produced by Tesla Motors, you feel much more comfortable. Tesla Motors became a public traded company, (NASDAQ stock quote code: TSLA), earlier this year. As a hypothetic Channels Manager for the company, I would like to explain how Tesla Motors has developed its distribution strategy.
First, the most important thing that should have been considered is the power source of Tesla Cars. According to positioning, electric cars are the most outstanding unique trade proposal. Moreover, the sector that Tesla Motors deals with is the field of sports cars. Therefore, the real market of the production to distribute is quite narrow and definite.
Second, there are other issues to be considered while developing distribution strategy. The place (country) of distribution is an extremely important factor. It demonstrates us whether it is a good decision to use electric car in the region, are there local stocks of batteries and other peculiarities. However, the company is not living in the past doing everything for its further improving. One of the latest news is the news about the launch of a new Tesla Motors car – Model S sedan. This is a fundamentally new electric car. This model is a terrific combination of innovative technologies and classic style. It is fast, it is environmentally friendly, and it is elegant.
The launch of the Model S sedan is arranger on 2012. Thus, there is a question about the distribution strategy over the next five years. As a Channels Manager for the Tesla Motors company, I consider this question to be of very high importance. The development of distribution channels should be based both on strict logical conclusions and on creative marketing strategy.
First, we are to define the target audience for the Model S of Tesla Motors. It is obvious that this car is affordable for the certain amount of people whose income is enough for buying a Porsche. It is the same as a usual sports car market. However, the accent is made on the qualities that differentiate Tesla Motors from other car producing companies. These qualities are ecologic fuel, clean power source, environmentally friendly vehicles. Apart from that, Tesla Motors has all the advantages other companies have: unusual design, high speed, great technical characteristics.
Second, Model S sedan is quite different from what Tesla Motors has produced before. Thus, new positioning can be developed. The fact that this model look like a business class one is worth our attention.
This happens because the existing of a business class car with such outstanding technical characteristics can lead to the revolution in the whole market. The question of distribution channels, however, would be more urgent than a market revolution one. Nevertheless, it requires careful analysis on the base of data collected. This includes both data of Tesla Motors and other automobile companies.
After considering all the facts, we can gather about the company and the certain model (Model S) and all the qualities it possesses we can assure that there are several possible channels of distribution. Of course, while developing distribution channels we should consider the most developed regions – such as the USA, Western, and Central Europe (including UK), Australia, and some countries of Persian Gulf.
However, all the particularities of distribution channels should be carefully considered after a market research. Moreover, such decisions require strong marketing background as the situation is almost unique. There are not many electric cars on the streets nowadays. Despite the highly developed market in the sports car field, it is still extremely unusual and uncommon to drive an electric car every day.
There is too much myths to be destroyed about its absence of reliability, low battery charge, electric lights shining while your ride and so on and so force. The other direction for distribution channels in the course of a further development is collaborating investment. The Tesla Motors company is already trying this kind of approach. Within the framework of intercorporational collaboration there were several cars developed with the participation both of Tesla Motors and of other companies. To confirm this fact let us turn to some models realized by Tesla Motors before.
First, it is a Mercedes A-Class. For this car, Tesla Motors has developed and built electric power train components that allowed making this car an electric vehicle. This car is anticipated on the market during this year and will have a wide range of battery types. However, the distribution of this car is quite measure. It will be sold only within Europe.
Second, it is a Daimler Smart model. This model reveals the concept of a smart electric city car. Tesla Motors is producing battery elements for the vehicle but there is s...