Segmentation, Targeting and Positioning for Tesla (Research Paper Sample)

Segmentation, Targeting and Positioning for Tesla
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Abstract
This study attempts to develop market segmentation for Tesla cars in the UAE market. This project demonstrates how this market is divided into small distinct groups of potential buyers for this product mix. This paper employs marketing segmentation as a strategic tool in targeting and positioning Tesla cars to meet customers' diverse needs in the most effective and efficient manner. The competitors for the Tesla cars are also identified on the target segments selected. The procedures used in this study involve using marketing segmentation at the planning stages of product development and business markets. The paper initially identifies these segments by studying market behaviors of similar products in the past or current. The results of this study inform that Tesla cars are new products in the automobile market and whose costs are high and only the rich and affluent classes of people can be targeted. Also, for these cars to be competitive in the mass market, business strategies like reducing production costs, differentiation and integration need to be considered.
Contents TOC \o "1-3" \h \z \u Abstract PAGEREF _Toc382571746 \h 21: INTRODUCTION PAGEREF _Toc382571747 \h 41.1: A BACKGROUND STUDY ON AL-TAYER COMPANY AND ITS PRODUCTS PAGEREF _Toc382571748 \h 42: THEORETICAL REVIEW ON SEGMENTATION, TARGETING AND POSITIONING PAGEREF _Toc382571749 \h 63: A REVIEW USED TO SEGMENT CONSUMER MARKETS PAGEREF _Toc382571750 \h 84: AN INSIGHT INTO CONSUMERS THAT TESLA WILL TARGET PAGEREF _Toc382571751 \h 125: A BRIEF ANALYSIS OF TESLA COMPETITION PAGEREF _Toc382571752 \h 156: POINTS OF PARITY AND POINTS OF DIFFERENCE OF TESLA PAGEREF _Toc382571753 \h 167: A PERCEPTUAL MAP ANALYZING TESLA MARKET POSITION RELATIVE TO THAT OF ITS COMPETITORS PAGEREF _Toc382571754 \h 18References PAGEREF _Toc382571755 \h 20
1: INTRODUCTION
1.1: A BACKGROUND STUDY ON AL-TAYER COMPANY AND ITS PRODUCTS
Al-Tayer Group is a multinational firm which was established in 1979 and its headquarters are located in Dubai, UAE and with its branches located in different parts of the World. This privately owned firm has diversified its operations to include sales and service of automobiles, distribution of perfumes and cosmetics, contracting interior engineering and lifestyle and luxury retail. This company's portfolio demonstrates some of the leading brands in the world like Ferraru, Harvey Nichols, Armanum Banana Republic, Bylagari, Gap, Maseratim Ford and Gucci. In addition to these diverse operations, the company has managed to invest in commercial real estates, production of precision tools, travel agency services, contracting and supply chain management (Al-Tayar, n.d).
Al-Tayer Group which has over 7,900 employees is committed to ensuring excellence in their quality delivery and customer satisfaction. These employees are empowered and enjoy diversity of an ethical organizational culture. Al-Tayer also engages in corporate social responsibilities that support regional events like the athletics and charitable activities among others (Al-Tayar, n.d).
The automobile section of this company began in 1982 and sells motors manufactured from major countries like Europe and US. These brands not mentioned earlier include: Land Rover, Spyker, Lincoln, Jaguar and the DAF Trucks. In UAE, market segmentation for automobiles is observed to be increasing and thus improving satisfaction of customers' diversified needs (Al-Tayar, n.d). Comments given by business partner Tonny Harrison of Astrata informs that Al-Tayar Group is a company popularly known and with good reputations in UAE and therefore pooling resources together with it creates a bigger potential market.
2: THEORETICAL REVIEW ON SEGMENTATION, TARGETING AND POSITIONING
Palmer (2012) informs that today, customers' needs have greatly become diversified and their preferences to average products are very low or non-existent. Segmentation is said to play a critical role in the product development cycle since it identifies potential buyers whose response is expected to be the same in any given market. Variables such as age, geographical location, gender and others are used in market segmentation.
Bush & Hunt (2011) elaborate this crucial purpose of marketing segmentation using individualism and de-individualism theory applied in the science of marketing. This theory is said they explain some of the customer behaviors in response to promotions, pricing, adoption to new products, and product selection among others. Appreciating this theory also enables one to review the existing market segmentations to refine and to add more. Bush & Hunt educate that this theory states that consumers perception differ at some point when it comes to product identification and selection. Individualism-de-individualism theory is said to provide a framework where these consumer differences are taken care of by market segmentation.
Bush & Hunt (2011) also discuss about the impacts of this theory. It is revealed that: (1) the more individualism the lesser identification of the market segment and the lower the purchasing power of the targeted market (2) the more de-individualism the higher the degree of conformity or the more identification of the market segmentation and the higher the purchasing power of the targeted market. In this regard, Bush and Hunt informs that this theory enables marketers appreciate how the market selects products and identify the product classes that will aid in marketing strategies. That is, by identifying the target market, emphasis on preferred product features and assisting in creating new products in that particular product area.
Hunt (2010) elaborates that marketing segmentation involve: (a) identification of segments with demand (b) targeting particular segments and (c) developing particular marketing mixes for each of the targeted segments. Hunt discusses two theories which are: (1) differential advantage (D-A) theory and resource-advantage (R-A) theory that both argue that (i) competition is a dynamic phenomenon (ii) that competition is initiated and defensive action of two or more firms in the same industry (iii) that competition is a continuous struggle by similar firms to win a market advantage.
3: A REVIEW USED TO SEGMENT CONSUMER MARKETS
Tyagi, & Kumar (2004) informs that market segmentation procedures are not standard but certain variables are considered basic in segmenting consumer markets. These variables are: demographic segmentation, geographic segmentation, psychographic segmentation and behavioristic segmentation. Boone & Kurtz (2011) elaborates that marketers segment their target segments in different ways and the chart below is used to give an overview about these segmentations.
Geographic Segmentation

Psychographic Segmentation

Behavioristic Segmentation

Demographic Segmentation

Zip-Code
Population Density
Region

Attitudes
Lifestyles
Opinions
Personality
Behavior patterns
Values
Self image

Economy
Comfort
Durability
Brand loyalty
Convenience
Luxury

Age
Income
Occupation
Lifecycle
Family size
education

Figure 1: Basics of segmentations of consumer markets (Tyagi & Kumar, 2004)
Lamb, Hair & McDaniel (2011) argues that segmentations are used by marketers to characterize markets. These segmentations procedures are found to be essential and very critical to marketers since placing a product in the wrong segmentation may lead to serious losses and missed opportunities of making good profits. Segmentations like those listed above are said to enable marketers find out the various responses the market has to the product and marketing mixes.
Geographical segmentation involves dividing the market into various geographical units like States, countries, regions, cities or neighborhoods. In this segmentation, an organization may chose to operate in certain geographical location and/or focus on market needs and preferences of markets in one or more geographical locations (Tyagi & Kumar, 2004). Lamb et al. (2011) adds that different climatical conditions, market size and population density are major factors that characterize geographical units and marketers have much interest in and eventually determine product mix. These characteristics that differentiate geographical units are said to boost innovation efforts of organizations involved in competitive environments.
Demographic segmentation like shown in Figure 1 on this paper, involves variables like income, gender, age, gender among others. These variables are observed to influence purchasing powers of the market and therefore concern marketers. To their advantage, demographic information is easily accessed from the authorized national data providers and is easier to work with. Behavioral patterns of the consumers in terms of preferences, usage rates, and needs are highly influenced by these demographic variables (Tyagi & Kumar, 2004; Lamb et al. 2011). Boone & Kurtz (2011) adds that this form of segmentation is one that is popularly used that is adopted on the basis of social-economic concepts. Variables like age, is said to affect the rate of purchasing powers of the market. Also, family cycle variable involve predictable phases of life that also concern marketers. Gender is also another common segmentation factor that defines product development. Income trends of population or a country greatly determines affordability capacity of a market is among others.
Psychographic segmentation as shown in Figure 1 on this paper, it involves personal opinions, interests, values and attitudes that influence their purchasing behaviors (Maringe & Gibbs, 2009). Maringe & Gibbs explains about this segmentation by discussing...