1. 1
Lord Ashcroft International Business School
Marketing Planning
Department: Marketing Enterprise and Tourism
Module Code: MOD004454
Level: 7
Academic Year: 2015/16
Semester/Trimester/Session: SEM1
Module leader: Dr Nektarios Tzempelikos
Student: Danilo Valentino
SID: 1500554

2. 2
Contents
1. Introduction ....................................................................................................................... 2
2. Tesla’s Marketing and product objectives.......................................................................... 2
2.1 Objectives.................................................................................................................... 4
2.1.1 S.M.A.R.T. objectives............................................................................................ 6
3. Tesla’s Segmentation, Targeting and Positioning strategy ................................................ 7
3.1 Segmentation and targeting......................................................................................... 7
3.2 Positioning................................................................................................................. 10
4. Marketing Mix.................................................................................................................. 11
4.1 Product...................................................................................................................... 11
4.2 Promotion.................................................................................................................. 14
4.3 Price.......................................................................................................................... 15
4.4 Place ......................................................................................................................... 16
5. Financial data and projections......................................................................................... 18
5.1 Past/current sales and revenues ............................................................................... 18
Appendix............................................................................................................................. 23
References ......................................................................................................................... 24
1. Introduction
The following work represents the second and final part of a whole marketing plan
designed for Tesla.
2. Tesla’s Marketing and product objectives
In order to define Tesla’s marketing objectives for the brand and its new products in
the future, it is important to point out the current situation in terms of brand
awareness and existing products’ life-cycle, with relative strategies adopted (this
evaluation is carried on following a global market point of view, in order to have a
general idea of the brand).
According to a car-brand perception survey reported on ConsumerReports (2014),
Tesla jumped from 47 points of 2013 to 88 points in 2014. The Company was able to
increase its overall score by:
 Soaring stock prices
 Gaining magazine awards
 Sterling crash-test performance

3. 3
 Claiming the spot as the top-rated car by Consumer Reports
(ConsumerReports, 2014)
Figure 1, Tesla brand ranking 2014, (ConsumerReports, 2014)
In terms of product life-cycle instead, Tesla has two cars available in its portfolio,
Roadster and Model S, and it is planning to launch a new one in 2016:
Tesla roadster
Figure 2, Product life-cycle (Sales), Sources: Online and Company’s annual reports
As shown in the Figure 2, the life cycle for the very first model proposed by Tesla is
in its decline. This does not mean that it will be abandoned by the Company because
there is the possibility for them to re-propose it, as a part of a more furnished
portfolio of cars, with new features and improvements. Additionally, it is possible to
27
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ROADSTER GLOBAL SALES 2008-2014

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highlight a peak in the sales in 2013, similar to the one for Model S (later model) in
the same year. This can be explained by defining 2013, as the year in which the
brand has managed to have a great impact on the consumers worldwide.
Model S
Figure 3, Product life-cycle (sales), Sources: Online and annual reports
As Figure 3 shows, Model S, which is the latest model available on the Market by
now, is also on the road for the decline of its “life”. Therefore Tesla is now ready to
launch its new car, Model X, in 2016.
Figure 3, Model x
2.1 Objectives
Tesla objectives in terms of Marketing, are aimed to:
2650
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10000
15000
20000
25000
30000
35000
2012 2013 2014 Oct-15
MODEL S GLOBAL SALES 2012-2015

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 Raise brand awareness from 88 points of 2014 (ConsumerReports, 2014) to
95 in 2015 and enter in the Interbrand’s ranking of Best Global Green Brands
2016, which is now led by other automotive brands that in fact, are less green
than tesla:
Figure 4, Global Green Brands, (BusinessWire, 2014)
 Adapt its positioning strategy, according to the different models sold, in order
to make its segment wider, reach a larger number of sales and a differentiated
range of customers (start a mass production)
Therefore, Tesla’s product objectives regarding the new model (Model X) that is
going to be launched in 2016 are:
 Differentiate the product portfolio: two seat sport car (Roadster), luxury sedan
car (Model S), SUV luxury car (Model X), future city-car (Model 3)
 Increase the volume of sales for the new Model X, and bring the company a
step closer to the large economy scale type:
1. Reach 1,600 sales for 2015 (pre-sales)
2. Reach 15,000 sales for 2017
3. Reach 28,000 sales for 2017; looking at the numbers of the previous
models, this number looks reasonable if linked to the increase of brand
perception reported for the last years (ConsumerReports, 2014) and
Tesla’s aim of moving towards a large scale economy.
 In two-three years, subscribe a partnership with big companies such as
Toyota, can help Tesla to reach more consumers and improve its operating
platform working on the technological improvements to the cars

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 Reach a broader utilization of the battery pack for both the old and the new
models issued:
1. No loss in performance
2. Long battery range
3. NOT degrade with use
2.1.1 S.M.A.R.T. objectives
Chaffey (2015) argues that defining SMART objectives helps to support long-term
goals. Thus the following table shows how specifically Tesla’s objectives can be
SMART, referring to the company’s objectives pointed out in the paragraph 2.1:
Specific
1. Raise brand awareness to 95 points
2. Increase the sales of the new Model X
3. Differentiate product portfolio (launch Model X in 2016, and
a city-car in the next 4-5 years)
4. Technological Improvements (improve the battery back
performance through a collaboration with another big
company such as Panasonic)
Measurable
1. Number of sales of Model X for 2015-2016-2017
2. Brand score (95 points in 2015)
3. Battery performance (reach a larger mile range such as 600
miles, in order to promote the use of Tesla cars even for
longer trips)
Actionable
1. The number of sales will improve the company
performance and transform it into a large scale economy
company selling between 60,000 and 90,000 Tesla cars
until 2017
2. Branding will communicate the effective value of the
product and allow the brand in the top 100 Global Green
Brands from Interbrand in 2016
3. The battery improvements will assure consumers about the
purchase of a car alimented “differently”

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Relevant
1. Tesla objectives are contextualized in a difficult, crowded
and monopolistic market, in which surviving is dictated by
many different factors: sales, brand awareness, market
share, effective segmentation and positioning
Time-bounded
1. Tesla’s objectives are aimed at gaining points of brand
awareness and hitting sales target for 2016-17.
2. In the long-term, the Company wants to reach a large scale
economy and maximize the potential of its technological
assets
Table 1, SMART objectives, (Chaffey, 2015)
3. Tesla’s Segmentation, Targeting and Positioning strategy
3.1 Segmentation and targeting
“A market segment consists of a group of customers who share a similar set of
needs and wants” (Kotler, et al., 2012)
For tesla, the suitable segment is defined as follows:
Figure 5, Tesla Segmentation

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Thus the gender identified is male, because of the interest of men about cars. In this
category, the income required for now is medium-high, because of the luxury
features of the product. This sub-group contains three other smaller groups:
1. People interested in sport cars
2. People who like luxury cars
3. People concerned about the environment
Obviously, these three small groups can intersect each other and form even smaller
groups with common features. In particular, the red area of intersection between the
three groups, includes the category of Tech savvy consumers who are looking for a
high technology car that is eco-friendly and luxurious.
Therefore, as figure 5 shows, Tesla’s segmentation follows this process:
Base Male, because of the higher interest towards cars
Identification Medium-High income, because of the price set for a luxury car
Attractiveness
As already argued in the part 1 of this work, in the UK and in
Europe, there has been a growing trend in the car market in terms
of purchases and new car registrations
Profitability
The high level of engineering behind Tesla cars, therefore the high
cost, is balanced by a fair price set by the company for its luxury
cars. Thus, a segment characterized by high income consumers,
represents a profitable part of the market.
Positioning
For the different groups of sub-segments, Tesla offers a different
value proposition:
1. Sport car: eco-friendly, the performances are
highlighted (0-60 mph in 3.9 seconds)
2. Luxury car: includes
 Model S: eco-friendly, elegance, style,
technology and performance
 Model X: eco-friendly, elegance, style,
technology, comfort of seven seats as a family
car

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Acid-test
Tesla is concerned to test the attractiveness of its segment through
a storyboard, before opening the factory in Europe and after
Marketing Mix
The 4ps, as it is going to be pointed out in the paragraph 4., will be
adapted from the American model, in order to better meet the
needs of the English and European consumers
Table 2, Segmentation process, (Kotler, et al., 2012).
In terms of targeting, the consumers identified by the company as potential
customers, are:
Upper class business
executives (70-100K)
Because of the luxury characteristic of the
product
Sport car lovers
In order to sustain the sales of the very first
model, Roadster
Young professionals willing to
start using a luxury car (30K)
In order to penetrate a particular section of the
market. In fact, a young professional using a
Tesla car, represents a potential consumer for
the future, when he will need a family car, or
perhaps a city-car;
High income luxury car lovers
willing to use an eco-friendly
car for their family
A target that will help sustaining the sales for the
latest Model X, which will cost around 65K.
Table 3, Targets
Thus, according to what has been argued, Tesla’s strategy is characterized by a
selective specialization (Kotler, et al., 2012) within a large segment that
encompasses different type of consumers. As a consequence, Tesla aims to offer
basic features in its car (eco-friendly and technology), plus added features according
the model chosen (Sport, luxury, luxury-family).

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3.2 Positioning
In order to maximize the impact of the brand on the segment chosen, Tesla adopts
an efficient and highly communicative positioning strategy:
Figure 6, Tesla Positioning
As we can see, Tesla keeps a balance between high price and performance among
its main European competitors. At the same time, looking at design and charging
time, the distribution is quite “clustered”, with very similar features for the
competitors. Thus, in terms of positioning, Tesla provides great performances with a
fairly high price, which give the brand unique attributes (Points-of difference) (Kotler,
et al., 2012), because it manages to reach the same performances of other luxury-
sport cars with the unique attribute of being full electric/zero emissions.
On the other hand, points-of parity (Kotler, et al., 2012) are given by the fact that
other brands offer luxury design and competitive charging time.
As a consequence, Tesla needs to improve the performance of its battery pack:

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Figure 7, Tesla battery pack
Something that the company is already doing in a very clever way, co-operating with
Panasonic (Shahan, 2015). Therefore, the company needs to communicate this
added value through the promotion, as we are going to see in the next paragraph.
4. Marketing Mix
4.1 Product
The Tesla’s products are all focused on innovation. They present a fundamental
common point, which is being 100% electric. In the short term the Company is
focused on two cars: Model S and Model X, two luxury cars that provide high
performances.
Model S is a five seat car characterized by a luxury design both internal and external
such as:
 Leather refinements
 17” touch screen control panel
 Different size wheels

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Figure 8, Model S, (TeslaMotors, 2015)
It is available with different battery packs according to the price that the customer is
willing to pay:
Figure 9, Model S versions, (TeslaMotors, 2015)
Model X instead, represents a further innovation and differentiation for Tesla. In fact,
although it maintains the luxury and technological features typical of Tesla, it is built
to transport up to seven adults. The new messages that the company aims to deliver
are comfort and high level of security of an SUV combined with the technology of
a Tesla car and its luxurious design:
 High level of customizability
 Large entrance for the back seats

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Figure 10, Model X, (TeslaMotors, 2015)
Thus, TeslaMotors (2015) defines the Model X as the “SUV uncompromised”
because of its incredible speed: from 0 to 60 mph it takes 3.2 seconds. In addition,
the concept of security is deeply communicated on Tesla’s website, where the word
“safe” is used more than once:
Figure 11, Model X description, (TeslaMotors, 2015)
These descriptions reinforce the presentation of the new features of the product, a
part from what its appearance can do already. A very detailed presentation of these
new characteristics is what the Company has to provide in order to differenciate and
properly communicate its new product’s value. In fact, after consumers understand

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the value of Tesla’s products and its uniqueness in being the only luxury “zero
emission” vehicle on the market, they also need to understand that some key/classic
features, typical of luxury cars, are not sacrificed but improved by the engineers’
experitse.
4.2 Promotion
Compared to its competitors, such as BMW and Audi, Tesla reserves its budget for
technological investments and improvements at the moment. However, as
BrandInsider (2012) shows, Tesla is getting in touch with consumers through Tesla
Points in the shopping centers, where there are no other competitors and the staff
can deliver a high level service aimed to raise the brand awareness and attachment.
This type of approach can have a positive impact on the spread of the word of
mouth, but at the same time it is a slow process and really time consuming.
Therefore, in order to be consistent with its future objectives to reach a large scale
economy production, Tesla has to invest part of the budget in the “expensive
advertising” such as TV and Posters. Nonetheless, using these channels, the
company could underline the importance of its slogans: “Zero emission, Zero
Compromises” or “All American, All Electric” (TeslaMotors, 2015).
Additionally Tesla creates an event each time they launch a new car and this creates
mystery and high expectations about the product. The following Figure 12 shows the
event in which the company launches the new Model X on the 29th September 2015:

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Figure 12, Model X launch, (TeslaMotors, 2015)
4.3 Price
As mentioned in the first part on this marketing plan, Tesla adopts the top down
approach to launch its new cars on the market saying that they “would begin with
the high-end market and eventually work their way down to cheaper mass market
cars” (Badkar, 2013). As a consequence, their launching price is usually high, typical
of a skimming strategy (Kotler, et al., 2012). Therefore, in order to achieve a higher
initial number of sales, Tesla uses pre-sales, which allow the Company to get the car
known earlier in the Market. In addition, as argued in BrandInsider (2012), the
company is quite rigid abut its prices, justifying this position with a campaign aimed
to communicate the high value of the car and the latest technology behind it. Thus,
the fair high price set for the Tesla car, not only derives from the high level of
engineering, but it is also due to the simple nature of the car, which is “sport-luxury”,
“utility-luxury” or just “luxury”.

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Figure 13, Model S price, (TeslaMotors, 2015)
Figure 13 shows the minimum price set for Model S, the actual best seller product by
now. For the future, Tesla plans to launch a city-car, in order to push the company
toward the mass market. Thus, due to the high competition and the wide choice that
consumers have, the price for this model should be lower, around 15-20K. A fair
price for a non-luxury car, built with the latest technologies and 100% eco-friendly.
The Tesla purchaser in fact, rather than just thinking about the price of the car, will
be able to evaluate the benefits related to it, represented by Government incentives
and less amount of taxes to pay.
4.4 Place
Tesla’s distribution requires a different approach from the other competitors,
according to the product provided. In fact, Tesla does not have large showrooms, but
shops with just one car inside, shown as a sample. Therefore, the company owns its
distribution channel, not having space for franchising and authorized sellers. Clearly,
Tesla is really concerned about protecting its unique products and making sure that
the real value is communicated to consumers. Thus, in order to create more touch
points with customers the company provides:

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1. A really well developed a functional website, which delivers a great virtual
experience and gives the possibility to customize every part of the car before
the purchase, as we can see in the following Figure 14:
Figure 14, Tesla website, (TeslaMotors, 2015)
2. Selling points in the shopping centres, where there is no competition and
where people, who are there for shopping, are attracted and get in touch with
the brand, whose first aim is to raise awareness rather than sell car in that
moment (BrandInsider, 2012):
Figure 15, Tesla in a mall store, (Activerain, 2014)

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5. Financial data and projections
5.1 Past/current sales and revenues
As the following figure 16 shows, Tesla hits the market in 2008 with its Roadster
model. Since then, the sales have been characterized by a constant growth. In 2012
Tesla introduces its new Model S and, for the next year, due to a better brand
management done online and face-to-face with consumers in mall stores, it records
an increase of cars delivered for both its models. From 2014, the decrease of
Roadster sales, points out that the Company has been mainly focusing on its latest
model, Model S, improving technology, features of the car and focusing on the
marketing strategy. As a result, Tesla jumps to a relevant number of global sales for
Model S for 2014 and 2015.
Figure 16, Tesla sales, Sources: Online and annual reports
In terms of revenues, Tesla’s annual reports point out the data from 2008 to 2014:
Figure 17, Tesla Revenues, (TeslaMotorInc, 2012)
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2008 2009 2010 2011 2012 2013 2014 2015
Roadster
Model S
Tesla Sales

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The total revenues are composed by Automotive sales, which is the main part, and
Development services.
Therefore the chart in Figure 18, shows the company evolution and improvement
from 2008, when It recorded very few revenues, to 2014:
Figure 18, Revenues Chart, (TeslaMotorInc, 2012; TeslaMotorInc, 2014)
It is evident, how the sudden rise reported, is the result of a strategy carried on in the
best way, from the product development to the brand management strategy, in fact,
the company reports $ 14,742 of revenues in 2008 and a really important
$ 3,198,356 in 2014. Tesla’s success is also confirmed by the following chart,
reporting the Total Return for the company stocks, which has registered a rearing
from 2013, when the company has got its brand well known in US and outside:
$14,742.00
$3,198,356.00
$0.00
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
$3,500,000.00
2008 2009 2010 2011 2012 2013 2014
Tesla Total Revenues

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Figure 19, Tesla total return, (TeslaMotorInc, 2014)
With the introduction of the new Model X in 2016, we can assume that the company
will be able to confirm its increasing trend for sales because of different factors:
Assumption 1: Branding
Tesla’s branding strategy has
demonstrated to be winning so far
Assumption 2: Partnership
Tesla’s aim to subscribe a partnership
with a big company, such as Toyota, will
lead the company to achieve better
product developments in terms of supply
chain, distribution and engineering
Assumption 3: Social and
Environmental Responsibility
Tesla product is aligned to the general
society’s concern about the protection of
the environment. Automobiles are one of
the most used asset in the world,
therefore they contribute to the air
pollution with their emission gasses.
Tesla vehicles are zero emission and can
contribute to the principle stated by
Mintzer (1992): “not to reduce the
prospects for future generations to enjoy
a quality of life at least as good as our
generations”.

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Assumption 4: Tesla supercharging
points
Instead of gas stations, Tesla provides its
own charging points, which are free to
use at the moment. As we can see in the
following Figure 20, the company plans
to increase the number of these green
stations available through the roads in
Europe (where it has great sales
objectives for the future) in the period of
time 13 Oct 2014-Dic 2015, literally
building new stations every week
Table 4, Assumptions
Figure 20, Tesla supercharger points evolution, (InsideEvs, 2014)
These four factors, lead us to assume that, for the period 2016-2018, the global
sales will be the following:

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Figure 21, Sales Forecast
Where model S gains and extended life-cycle due to the “free-charge campaign”
for this particular model undertaken by the company and Model X hits the market for
the first time in 2016. Therefore, Model S will experience a new growing trend and a
new record sale:
 2016: 29,000
 2017: 30,000
 2018: 35,000 (record for this model)
While Model X will experience its first life-cycle registering the following sales:
 2016: 15,000
 2017: 28,000
 2018: 40,000, which not only will represent a new record sale for the
company, but it will also determine the point in which Model X sales overtake
the older Model S sales. Moreover, at this point the company will be ready to
start planning and implementing an organization model more oriented on the
large scale economy. The further step will be to design and sell a product that
slightly differs from the previous ones in terms of price, in order to make the
Tesla cars available to many more consumers and achieve a higher number
of sales.
In conclusion the gross profit forecast for three years, will still report a growth trend,
but it also has to take into account some expenses/investments, such as the
subscription of a partnership (a fundamental step to achieve a large scale economy
29000 30000
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Model S
Model X
Tesla sales
3 years
forecast

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organization), which will restrain the profits for the 5-6 following years. Therefore, the
orange line in Figure 22, shows which is the operating profits forecast for the
company after taking off the costs before mentioned:
Figure 22, Profit forecast (in $)
Appendix
Monitoring and control
Overall, Tesla represents sustainable innovation and high quality design. For the
future, Tesla has already set strategic short and long-term objectives. Its entering in
the European market, surely will concern more strong competitors, such as BMW
and Audi. In order to be effective, Tesla will have to monitor its activities, evaluating
the outcomes of the initiatives undertaken. For example, Rankingthebrands (2015)
reports the results of the Company in different fields of its sector:
900,000
1,000,000
1,200,000
700,000
800,000
900,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
$1,300,000
2016 2017 2018
gross profit
operating profit

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Figure 23, 2015 Tesla scores, (Rankingthebrands, 2015)
In conclusion, Tesla is now focused on providing luxury electric vehicles, for which it
set a premium price. Part of this decision is justified referring to the high quality of
the material and engineering skills used for the production. In addition, the possibility
to set a high price is also linked to the high level of brand recognition, according to
which consumers are happy to pay a premium price also because of their sense of
belonging to the brand and their feeling of “security” when they “purchase the brand”
(Keller, 2013). Thus, the company has the potential to gain this level of brand impact
on consumers due to its environmental concern blended with the luxury design.
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