it is 12- 15 page paper. i have all of ideas and draft, also prof have take look the draft and gave suggestion already. we also have two example. one of them is a 98% work from last semester, the other one is a example prof gave us. it is a second years course. i
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01_05_marketing_plan___tesla_model_c.pdf
02_02_final_report___uberhype.pdf
98__work_form_last_semester.docx
my_work.pptx
02_02_final_report___uberhype.pdf
98__work_form_last_semester.docx
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TESLA INC.
Ma ke ing Plan fo Te la s Model C Product Line Expansion
Daniel Badiei
1002522558
Alex Chen
999976888
Patrick Gil
1002371266
Daniel Stipic
1002522870
TABLE OF CONTENTS
Executive Summary
Situational Analysis
Segmentation, Targeting & Positioning
Marketing Strategy
References
3
4
7
13
19
2
EXECUTIVE SUMMARY
Since i ince ion in 2003, Te la fo nde fought an uphill battle
eo le ha he didn
proving to
need o com omi e o d i e an electric car. This fully
electric vehicle would be more modern looking, faster and enjoyable to ride than
your typical gasoline fuelled car. Te la s Secret Master Plan had the key
components to achieve its mission. It consisted of the following parts:
1) Building a sports car
2) Using that money to build an affordable vehicle
3) Using that money to build an even more affordable vehicle
Simple and brilliant. This plan has captured the attention of every major player
in he a omo i e ind
and ha
ie l
lid Te la in o he
o ld
4th largest
automaker by market capitalization. On November 16th 2017, Tesla announced
their new Roadster 2 sports car and electric semi-truck. Additionally, Tesla has the
capabilities and the opportunity to diversify its product line with an all-electric
cargo van
the Model C.
3
SITUATIONAL ANALYSIS
Particularly throughout North America, Europe and Asia, the electric vehicle
industry is one that is growing substantially year by year. This deviation away from
your typical fossil-fueled car, to a zero-emission electric vehicle is largely due to
Tesla Motors pioneering sustainability in transportation. Surprisingly, one of the
fastest growing vehicle market segments in the US through recent years has been
the cargo van segment. Always looking for constant market share growth and
product innovation, Tesla Motors will look to expand their product line by
introducing the Model C
a fully electric cargo van used for commercial use.
Although they have a strong brand image and recognition, they will be entering a
market segment dominated by likes of big name players such as Ford, Dodge,
Mercedes-Benz and Nissan.
MARKET TREND ANALYSIS
Increase in Small Businesses. As of May of 2017, small businesses (< 500
employees) accounted for 99.7% of all the business conducted in the states.
Furthermore, small businesses dominated the share of net new jobs created between
1993-2011 and 2009-2011 with 64% and 67% respectively. With a large percentage
of demand for cargo vehicles coming from small businesses across North America,
the increase year to year of smaller companies will directly increase the number of
cargo vehicles demanded a year.
MARKET GROWTH
Over the last decade or so, the cargo van market has been one of the fastestgrowing vehicle segments in North America. An approximate calculation of the
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sales growth of the cargo van market is derived by adding the sales generated by
the three dominant market forces: Ford Transit, Ram ProMaster and MercedesBenz Sprinter. Combining American and Canadian sales together, sales from
January to December 2016 reached 200,809 units, whereas, sales from January to
December 2017 dropped to 198,626 units. These sales figures from 2016 to 2017
represent a market decline of 1.087%. Over the years, specifically December has
been a strong sales month within this industry. For this reason, these small market
declines end up generally turning into market growth by the end of the calendar
year.
Table 1: Sales in Units for 2016 and 2017 Calendar Years
Model
US 2016
US 2017
CA 2016
CA 2017
Ford Transit
130,188
114,980
8,598
11,186
Ram ProMaster
Mercedes-Benz Sprinter
31,353
41,140
2,491
2,236
25,049
24,959
3,130
4,125
Total
186,590
181,079
14,219
17,547
S.W.O.T ANALYSIS
Strengths. Industry Pioneer, Brand Image and Reputation, Commitment to Quality
Weaknesses. Lack of Economies of Scale, Production Delays, Debt Leverage
Opportunities. Expand Product Line, Adaptable Battery Technology
Threats. High Threat of New Entrants, Dealership Regulations
DIRECT COMPETITION
With Tesla Inc. looking to expand their product line with the release of the Tesla
Model C, they are entering a cargo van market dominated by automotive giants.
Over the years in North America, this market segment has been largely dominated
by the Ford Transit, closely followed by the Mercedes-Benz Sprinter. Furthermore,
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another direct competitor to our model is the Nissan e-NV200, the only fully
electric cargo vehicle on the market exclusively sold in the United Kingdom.
Ford Transit:
Strength. Established leader in cargo van market internationally.
Weakness. Relatively low cost efficiency.
Opportunity. Develop a hybrid model to increase market share.
Threat. All other cargo vans looking to take its position as market leader.
Mercedes-Benz Sprinter:
Strength. High-end brand image and recognition.
Weakness. Significantly more expensive than most of its competitors.
Opportunity. Develop a hybrid model to increase market share.
Threat. Eventual demand shift to a sustainable alternative.
Nissan e - NV200:
Strength: First fully electric cargo van on the market.
Weakness: Only offered in one size minimal cargo space.
Opportunity: Expanding production and sales internationally.
Threat: Market share expansion of the Model C
losing potential international
market opportunities.
INDIRECT COMPETITION
It is important to acknowledge certain indirect competitors such as pickup
trucks with capsule attachments as they are also a potential threat to Tesla s
market share.
Pickup Truck with Capsule Attachment. People look to purchase multi-purpose
vehicles
one that is practical for personal use while also including reasonable
cargo space for work purposes. To fulfill the needs of these certain customers, a
pickup truck with a capsule attachment is the way to go. Despite the Tesla Model
C not being practical for personal use, it is however advantageous when looking
to haul large and bulky equipment given its substantial cargo space.
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SEGMENTATION, TARGETING & POSITIONING
MARKETING OBJECTIVE
By analyzing the product life cycle of the Tesla C, it is clearly in the introductory
stage of its life cycle. Our objective is to create a product with the intention to
maximize its market share. We want to maximize its market share rapidly because
the electric commercial vehicle market is still in the introductory phase and Tesla
can capitalize on this opportunity by creating a valuable product that would benefit
businesses.
There are two marketing objectives for Tesla as they continue their expansion:
1. Continue making innovative products that are affordable to consumers that
provide them with long term cost and sustainability benefits.
2. Capture a large portion of the electric vehicle market and steal customers
away from the traditional petrol and diesel engine competition.
To achieve these goals, Tesla should build an affordable electric commercial
van with an emphasis on providing value to businesses that will entice them to
purchase the Tesla cargo van. Tesla should capitalize on the brand extension as
their company is already recognized as the leader of the electric vehicle initiative.
Increasing ale i a
io i
o inc ea e Te la
ma ke
ha e in he elec ic
commercial cargo van segment. Through creating a reliable and cost effective
electric cargo van, Tesla can win new business and build loyal relationships that
will yield returns for the company in the future. By increasing their market share,
Tesla can further boost their profits, this ultimately enabling them to either create
more innovative products or make further improvements to existing products. This
helping them maintain their dominant position in the automobile industry.
7
SEGMENTATION
For Regular Operations (Usage Rate). Businesses purchase commercial cargo vans
because it plays a crucial role in the operation of their business. A commercial van
is the perfect size vehicle for many businesses to deliver goods or services around
the city. These vans also very versatile and businesses are not restricted to using
them only for one purpose. These vans tend to be more durable than personal
vehicles and are intended for heavy use which is attractive to businesses as they
value reliability. Cargo vans also provide the ability to maneuver freely within
densely populated areas of the city which makes it a very favourable choice for
metropolitan areas.
To Protect Goods (Benefit). Businesses purchase a commercial cargo van to protect
their cargo from external factors that could affect the condition of their products.
Additionally, having the cargo safely secured and locked in the vehicle is a good
preventative measure against theft. This segment includes businesses that deliver
goods locally or within the city and want to ensure that their cargo arrives at their
destination safely.
To Save (Benefit). Businesses may want to purchase a commercial van if it would
be more cost effective compared to alternative methods. Moreover, a cargo van is
a cheaper alternative to a semi-truck because it simply costs less. For firms trying
to grow in scale, a fleet of cargo vans may be the most efficient way to conduct
their business. An electric vehicle incentive program exists through government
agencies in terms of purchasing and leasing rebates and carpool lane access. These
incentive programs provide businesses with further cost savings. Businesses are
8
always looking for areas where they can save money by evaluating their operating
costs.
Complimentary Advertising (Benefit). Businesses may want to purchase a
commercial van because it serves many purposes and acts as a moving
advertisement. By having the company logo and information on a cargo van,
con me
ma be mo e a a e of he b ine
b and o he good and e ice
they provide.
Corporate Social Responsibility. Good publicity through showing the business
cares about the environment in which it conducts its operations.
TARGETING
Tesla should place their focus on businesses that are looking to purchase
commercial vans that are reliable for everyday use, able to safeguard cargo from
theft and damage, and looking to cut costs for a sustainable business. The segments
for advertising and corporate social responsibility are not the key segments to
target, ho e e , Te la
od c c
omi abili
can bring added benefits that are
valuable to these segments.
Tesla is a well-regarded brand internationally, recognized as the industry pioneer
of electric vehicles and are known to create reliable products for consumers. Tesla
should target the businesses that use commercial cargo vans on a regular basis to
conduct their operations. Tesla can build up its market share by offering a product
that provides value to the business and entices them to switch over from their
current commercial vehicle.
9
Tesla must create a product that helps businesses lower costs over the long
term to help businesses grow and become sustainable. Understanding that theft and
damage of goods can be costly to businesses, it is another segment that Tesla can
target. An example would be persuading pick-up truck users to purchase a
commercial cargo van for their operations instead of keeping their cargo open in
the back of a pick-up truck. By targeting these segments, it will allow Tesla to build
up a bigger portion of the market share and further establish relationships with
businesses that will benefit Tesla in the long run.
POSITIONING
The positioning analysis provides our target customers a clear and distinctive
offering for the Model C. The first step is to understand the Model C
o o i ion o o
ecific a ge ma ke
and he
ni
e a ib e
al e
ha
differentiate it from your average commercial vehicle. We accomplished this
through doing a points of parity vs. points of difference analysis between the
Model C and the average commercial van. We list the common features in everyday
cargo vans along-side the unique features you can find in the Model C. This gives
us an understanding of where the customer value lies and how to use that to our
advantage. Through our research of popular commercial vans in the market we were
able to find the common attributes that make the Model C ordinary and the key
features that differentiate the product.
Points of Parity: Cargo Space, 4-Wheel Drive, Heavy Duty Interior
Points of Difference: Less Maintenance, Automatic Doors, Battery, Customizable
We identified that the market for cargo vans lacks customizability and
technology advancement. We designed our product to be specifically tailored to
10
meet each consumers needs through different options in cargo space, battery power
and seating. In our goal to move away from your average heavy duty cargo van we
created the Model C to be a very tech-friendly vehicle, through its touch screen
interface and its automatic door. By focusing on our points of difference, we can
effectively position the Model C in our specific market segments to outperform our
competitors.
The next step in our positioning strategy is to create a perceptual positioning
map. This map helps us clearly identify where the Model C is positioned in
comparison to our leading competitors in the commercial vehicle industry. We
arranged our competitors according to the two variables we deemed to be most
important to consumers in the buying decision process. First, cost efficiency which
we measured by cost efficiency per mile. Second, cargo space which we measured
in cubic metres, is a key feature that businesses consider usually in comparison with
other commercial vehicles.
From the vehicle specifications of our competitors we noticed a negative
relationship between cost efficiency and cargo space. Where vehicles with poor
fuel economy tend to have larger cargo capacity. With the Model C we break this
relationship through our 100% electric-powered vehicle while still being able to
provide substantial cargo space (10.3 m3) in comparison to the Dodge ProMaster
(13.1 m3). B foc ing on he Model C
ignifican co -savings and cargo
11
capacity, we can avoid product similarity and uniquely distinguish our self in the
market.
The final step of our positioning strategy was to formulate our positioning
statement. The purpose of this statement was to identify our specific market
segments and inform them of the common cargo van attributes while delivering our
main message of what makes the Model C unique.
Meet the Model C:
The Model C i he ideal choice fo an
i e b ine
looking fo a co efficien
way to transport day-to-day cargo while upholding their eco-friendly
responsibilities. This ultimate commercial vehicle provides you the ability to run
leaner operations while not sacrificing sufficient cargo space needs. Tesla Model C
will revolutionize the commercial vehicle industry with its innovative battery
technology and its ability to meet the needs of technologically saavy business
o ne .
12
MARKETING STRATEGY
TESLA MODEL C
The Model C - a fully electric commercial van that comes with a standard 75kWh
battery with a 350-kilometre cruising range. Notable features that are standard with
this vehicle is active lane assist, parking sensors and pre-collision system. These
three features ensure that the driver and cargo both arrive safely at the
predetermined destination. All these features are calibrated through true depth
cameras that are incorporated within the front grille and the rear bumper. These
features assist the driver on a regular basis and eliminate potential human errors
that may arise when the driver is fatigued. Another feature that caters to the needs
of businesses is the cargo temperature control, which allows the operator to ensure
that temperature sensitive cargo arrives at the destination under favourable
conditions.
Tesla Model C offers premium add-ons for an additional cost. Potential features
that should be considered are autopilot, assisted parking and battery upgrades. Tesla
13
has already developed these technologies, along with battery upgrades, and
incorporates them within the Tesla S and X Models. It would be in Te la in e e
to synergize their battery and software production and transfer the system based on
the size and dimensions of the Model C. Tesla will offer a variety of sizes for their
cabin sizes so that businesses are able to customize the space based on their needs.
PRICING
The Tesla Model C is trying to establish its presence in a new market segment
so we will implement a competition-based pricing approach by assessing the
competitive environment. This approach incl de ga he ing com e i o
co
,
prices, and market offerings. The Tesla Model C s MSRP will start at 40 thousand
Canadian dollars before government incentive plans apply. The Model C
al e
proposition can be determined relative to the competition and from that value gap
an optimal price can be derived.
A competitor within the electric cargo van market is the Nissan E-NV200 electric
ca go an. The Ni an
ba e
ice a
a a
oximately 30 thousand Canadian
dollars. It is important to note that the Model C offers more value to consumers
through its points of difference, therefore, a higher price can be justified. The
Mercedes Benz Sprinter is prominent in the premium cargo van market and prices
start from 50 thousand Canadian dollars. The biggest advantages the Model C can
leverage against the Sprinter is its 100% reliance on electricity providing
sustainability benefits and less maintenance costs because no oil changes are
necessary. However, Sprinter owners may not be entirely convinced by these
benefits alone which is why we are employing a price penetrating strategy by
14
undercutting the Sprinter. The goal is to induce adoption of the Model C and gain
market share from competitors.
Other Considerations
A consideration to the benefits listed above is the electric vehicle incentive
program which is offered through governments to attract people into purchasing
electric transportation options. These incentives include purchase or lease rebates,
carpool lane access, and wall charger installation discounts. For example, Ontario
offers up to $14000 rebate on purchases of eligible electric vehicles. A business can
utilize these benefits to further save on the Tesla Model C, dramatically increasing
its value proposition.
PROMOTION
Personal Selling. Personal selling is going to be the main focus for promotion and
we conduct this by sending teams of sales representatives to visit large scale
corporations. The focus for these teams is to design a comprehensive report that is
tailored around the needs of the specific business that they are targeting. The sales
team will focus on conveying the cost-saving benefits and transportation efficiency
that the Model C will provide for them. Ultimately, the goal from personal selling
for Tesla would be to acquire mass distribution contracts with these major
companies along with onsite charging stations.
The advantages of personal selling is through its flexibility, being able to
specifically design a pitch that directly shows the company how we plan to save
them money. What may be problematic for this approach would be the endowment
effect, where a company may already have some felt-entitlement towards the
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commercial vehicles they presently use to conduct their business. We plan to
overcome this situation by offering a free trial for one unit of the Model C. With
this we provide the business with some sort of sensory experience that will
hopefully demonstrate the benefits of the Model C and persuade management to
eventually sign with us. We also plan to construct personal selling to smaller
businesses through our dealerships located around the world. For example, if a sole
proprietor or small business were to walk into one of our storefronts, our sales teams
will give expert advice on the important features that the Model C will provide and
its implications towards their business.
Digital Marketing. Marketing statistics through HubSpot.com a e ha
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