Marketing Tesla’s Electric Vehicles to the Masses

Group 9

Cindy Yu
Luke Muller
Riley Falson
 Table of Contents

Executive Summary …………………………………………………………………...3

Expansion of Phase II ……………………………………………………………….4-6

Product Positioning Statement ……………………………………………………...7-8

Marketing Mix recommendations and Advertisement Campaign ……………….... 9-11

Appendix …………………………………………………………………………….. 12

Bibliography …………………………………………………………………………. 13
Executive Summary

Our group worked on Tesla, an American electric vehicle brand. Our group discussed and
made the position on Tesla that Tesla’s are luxury cars that may seem too expensive for
the average person. Consumers think that the advanced technology implemented in Tesla
vehicles is the future. With the advanced technology, consumers assume the price for
their vehicles to be out of reach for their budget. Tesla attracts people who are fascinated
by new innovative creations and those who are trying to be eco-friendly.

Our group is repositioning the consumers views, making Tesla’s worth buying. We plan
on showing the environmental benefits as well as the long-term technology advancements
the company displays. We want to also prove our points with statistics, data and
information on how Tesla and electric vehicles are the future. We want to expand our
research and look for the pros and cons, and what their current consumers think about the
products along with potential buyers.
 Expansion of Phase II

Tesla is the brand that we were analyzing, specifically their self-driving vehicles.
Everyone can assume that Teslas are nearly impossible to afford for someone who makes
under 50 grand, which in this repositioning proposal, we proved that statement wrong. As
you can see on Data 1, we asked how much do people think the Model X cost which is
around $80,000. A lot of people got that correct and moving to Data 2, we asked if
$80,000 is a reasonable price for the Model X. The majority did choose ‘probably yes’ as
their option for this question with some saying ‘definitely yes,’ along with quite a bit
choosing might/might not, and not. If we were to make an assumption, knowing that our
age group that was chosen the most was around the 16-25 range, a lot of them are still
students or working a job- but possibly not enough to afford a 80 grand car.

DATA 1- How much do you think Tesla Model X DATA 2- Is $80,000 a reasonable price for the
Cost? Tesla Model X?

Our idea of repositioning Tesla isn’t only to bring up why it’s a good investment to make
on a pricey car- but its benefits on why electric vehicles are better for the environment
and in the long run. As Palmer B said, “Electric car aficionados in Washington State can
make the best case for the big purchase. Over the anticipated 15-year life span of a
vehicle, the electricity required to run a battery-powered electric car can be as much as
$14,480 cheaper than fueling up an internal combustion vehicle. On the other end of the
spectrum is Hawaii. In a worst-case scenario, charging up your electric car could
ultimately cost $2,494 more than topping up a gas tank over 15 years.” This statement
just proves that you can save a lot more money when it comes to having an e-car which is
more beneficial and environmentally friendly than having a fossil-fueled car. In our
 survey, we asked if our audience agrees that Tesla is decreasing the effects of global
warming with their range of products. Looking at Data 3, you can see that majority
choose that they strongly/somewhat agree with the question. Now we have Data 4, where
we asked if our audience would be more inclined to buying a car if it was
environmentally friendly and 78.05% said yes to the question. And finally, we have Data
5, where we asked if it would be more convenient if you had an electric car compared to
a gas car and over half of the audience chose yes. This proves the point of energy saving
cars are better than fossil-fueled cars that can harm the environment.

DATA 3- Do you agree that Tesla is DATA 4- Would you be more DATA 5- Would it be more
decreasing the effects of global inclined to buy a car if it was convenient if you had an
warming with their range of environmentally friendly? electric car compared to a gas
products? car?

The biggest star to play in Tesla is their Model 3. As Tesla is seen as a high-luxury brand,
you would assume that the Tesla would be above 50 grand, but the starting price actually
being $38,190. The average price of a car is about $40,573 and Model 3 being a little
below that. With all the features that you receive in this car is worth the money. Teslas
and its innovative technology and high performances make the car one of the ‘green
energy favorites.’ The electric battery is one of the reasons why the cost is so high. The
maintenance of this car is easy to handle with its hundreds to thousands of charging
stations to make it an accessible charging booth. The battery pack has about 50% more
emergency density compared to any other E-vehicles making the car last a longer time
and perform higher with increase of mileage. You do have the ability to purchase other
e-cars which most likely means that the battery pack provided performs less than Teslas.
As numbers start to increase in the e-car industry, Tesla is owning a lot of the
countability. In 2019, the estimated electric vehicle sales in the U.S has come to about
250,000 and Tesla holds almost 80% of that figure. It’s expected by the Bloomberg New
Energy Finance (BNEF) article that there is the prediction of 26 million electric vehicles
that will be sold annually at the start of 2030. Backing its p with the International Energy
Agency that projects the global numbers of battery-powered/hybrid vehicles could
increase from 5 million to 140 million by 2030. The global sales for electric vehicles rose
a dramatic 65% from 2018-2018. It’s aid that e-cars will hit 10% of the global passenger
vehicle sales by 2025- rising to 28% in 2040. This is just more proof that electric vehicles
are the future.
Product Positioning Statement

Tesla is part of the electric vehicle category. They design, manufacture and install
products that help preserve energy. Their automotive category is something that they’re
very well known for. With the innovative minds behind their unique features, Tesla has
found success in the automotive industry. The idea of “self-driving” cars has grabbed the
attention of many people as it has never been done before. With the Electric vehicle
industry being relatively new, it is hard to get a grasp on consumers attitudes toward the
brand, but with the help of Elon Musk, the CEO of Tesla, many people are fond of the
brand since they are fans of his work and himself alone. With Millions of followers on
Twitter, Elon is constantly putting out information regarding Tesla, which intrigues his
fans and ultimately causes them to create a sort of loyalty to the brand.

There is a popular perception on the topic that Tesla owners care about the environment.
As energy sources become cleaner in the future, Tesla's will already be doing their part to
reduce the greenhouse gases that contribute to global warming. So, if you're passionate
about this environmental issue, then buying a Tesla is a satisfying decision (DeBord, M).
By purchasing a Tesla vehicle, the consumer is using an electric powered vehicle instead
of a gasoline powered vehicle.

Tesla is seen as a luxury car that may seem too expensive for the average person. Many
consumers see Tesla and its advanced technology for the future. We want to make sure
everyone is aware of electric vehicles as we will most likely go in that direction for the
future with how beneficial and eco-friendly electric vehicles are. By 2040 Electric
Vehicle sales will rise to nearly 60% of the global auto market (Cohen, A). The auto
industry on its own is already booming with how a lot of people use their cars as more
than just a transportation method. With Tesla’s, it’s not surprising that some might be
unwilling to purchase or even consider it as it would be perceived as too expensive with
its innovative features that separate themselves from their competitors. We are
positioning Tesla to be worth the purchase as it could save money and help the
environment.

With our research and analyses, we found some interesting information involving our
customer behavior and their point of view. We found that there is a general understanding
of Tesla as we found trends in our data. From our questionnaire, we asked “do you think
electronic vehicles will be popular in the future?”. From that question, nearly 90%
(87.80) of answers said “Yes''. They are correct especially since annual sales for electric
vehicles grow every year and are predicted to keep growing.

Do you think electronic vehicles will be popular in the future?

Although customers see the growth and potential in electric vehicles, there is still a
concern about the price and perception of being an unaffordable luxury car. History
shows that convincing even the most enthusiastic customers to pay a more significant
premium is difficult (Baik, Y). Consumers are unaware that Tesla vehicles can save them
money on gas and maintenance costs long term.
Marketing Mix recommendations and Advertisement Campaign

Our product strategy for Tesla is promoting the savings you gain from the car overtime,
compared to the consumer's first initial purchase that is viewed as an expensive initial
investment. Our Goal is not necessarily to recreate the model of the car to make it more
appealing to the consumer, but rather show that the consumers money will go a long way
as the Tesla vehicles save them money on gas, and maintenance. That's the problem we
noticed in phase two as many consumers have a set outlook on Tesla as being a “Luxury
Vehicle”, but in reality with the money you save on intangibles such as gas and car
maintenance with the Tesla vehicle, the consumer is realistically saving money over time
to accommodate for that initial purchase. Some might ask why not buy a cheaper electric
vehicle or gas that can do the same thing, but the simple fact is “Tesla’s Model S is
holding its value 2 times better than the average gasoline car and 3 times better than the
average electrical car”(Lambert). With the world pushing towards an E-Vehicle world,
gas cars are slowly becoming replaced with electric cars. While there are other options
regarding E-Vehicles, we want the consumers to realize that by Buying a Tesla Vehicle
they will have an asset that holds its value 3 times higher than other electric Vehicles.

For our Groups First Promotion, We choose to run an Advertisement through a Social
Media site, that being YouTube. We chose this route due to the fact that 77% of the
people who took the Survey originally found out about Tesla through Social Media. Our
plan is to pair up with Barstools YouTube channel to give away a Tesla during one of
their Episodes. This allows for a large amount of consumers to stumble across our
product and the benefits that can come out of buying the vehicle. Our plan of action
would be that Barstools Youtube would explain to the winner that they would be
spending half the price on gas a year as they only have to deal with their electric bill at
home. They would then go on to demonstrate how simple it is to charge the vehicle and
all the fascinating features that come with our vehicles, which will grab the audience's
attention. Secondly, they would explain that although this is an expensive vehicle in the
long run it really doesn't come out to be that way. Explaining that the engine isnt a
combustion engine, so there's less moving parts which will cause less issues with the car.
Ultimately saying that the car saves you money as the years pass compared to using a
regular gas powered vehicle that they would have to put a lot of money into.
For our second Advertisement, we plan to run a commercial normally during national
sporting events. This is because usually the older/other demographic we also are trying to
reach out to usually don't use Social Media as Much. Not only that, but as of right Now
Tesla does not promote their vehicles through any Advertisements via a TV commercial,
and we feel that platform can get the message across that Tesla isn't just a “Luxury
Vehicle”. Some channels that we plan to collaborate with are Fox, ESPN, Comcast and
CBS. These are the biggest platforms regarding sporting networks on television, so that's
where we aim to grab the consumers attention. For this commercial, we plan on it being
more of an infographic really getting the statistics out. Instead of using a random actor for
our commercial, we plan on using the CEO himself, Elon Musk. This is because so many
people are big fans of the man, and when they see him in a commercial they will instantly
have some sort of connection or interest. The biggest aspect of this commercial is getting
the numbers out there regarding savings. The statistic we plan to stress is “With 100 miles
using 34kWh (about 100 MPG) and electricity costing an average of $0.12/kWh, the
yearly cost to drive a Tesla Model S 15,000 miles is $612. Compare that to Toyota (TM)
Camry’s 30 MPG and an average cost of gas of $2.40 per gallon. At 15,000 miles per
year, the Camry will cost $1,200—almost double what the Tesla Model S costs”(Page).
Musk will speak out about this statistic explaining that if the consumer were to buy a
Tesla they would be spending half of what they spend a year on gas. He will then bring
out a random person in the commercial and ask how much they've spent a year on their
Camry and how many years they've driven the vehicle. After that the commercial flashes
that a tesla would save a certain amount of money (say the person drove the car for 8
years and spent 1,200 a year, the tesla would have only costed them 4,800 on electricity
compared to 9,600 in total on gas) This shows the consumer that the Tesla is saving them
money in the long run, and makes up for the steep initial investment. Not only that, but
Teslas have a long life, so they would be able to continue and save as the years pass.

The last Advertisement we are creating is a collaboration with “Clean Air Task Force”
which is an organization based out of the US that has had the goal of reducing Air
pollution since the year of 1996. With their already proven success, we would like to pair
with them as the public already sees them as a credible source, which would cause the
consumers in the E-Vehicle market to take a look at our products before any other in the
industry. What makes them credible is that they have already “led a successful campaign
to reduce the pollution caused by coal-fired power plants in the US, helped limit the US
power sector’s CO2 emissions, and helped establish regulations of diesel, shipping, and
methane emissions”(Samuel). We plan to run simple Ads on Facebook and google that
pop up showing our two companies collaborating together. Sort of like a pop up ad, but
they will be more of a banner showing that “Clean Air Task Force” backs our battery
powered technology for the environment. This will grab the consumers attention as they
will see that we are one of the only E-Vehicle companies already earning praise from
organizations whose sole goal is to improve the environment. We chose to run these ads
on google and facebook since these two sources both hold the widest range of
demographics possible as basically everyone uses google and most check facebook to
keep in touch with friends and family.

Overall, those are our 3 Promotional strategies to get the word out that Tesla isn't just a
“Luxury Vehicle” but rather an asset that might come off as an expensive first purchase
but has benefits of saving you a lot of money overtime. Not only does the car save you
money in the long run, but is also a top notch E-Vehicle within the industry that would be
reliable for a consumer to consider to purchase.
Appendixes

Survey Public Report Link: https://ql.tc/8arRuA

Password: clrmkt231
Bibliography

● Baik, Y. (2019, March 8) Making Electric Vehicles Profitable. Retrieved on March

30, 2021, from
https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/maki
ng-electric-vehicles-profitable
● Cohen, A. (2020, November 10). Plugging Into The Future: The Electric Vehicle
Market Outlook. Retrieved from
https://www.forbes.com/sites/arielcohen/2020/10/26/plugging-into-the-future-the-
electric-vehicle-market-outlook/?sh=9354c5e98121
● DeBord, M. (2017, January 21). It isn't hard to understand why Tesla owners love
their cars so much. Retrieved March 29, 2021, from
https://www.businessinsider.com/why-tesla-owners-love-cars-2017-1
● Lambert, F. (2019, June 17). Tesla holds its value 2 times better than average
gasoline car, study says. Retrieved on April 23rd, from
https://electrek.co/2019/06/17/tesla-holds-value-better-than-average-car-study/
● Page, V. (2021, April 16). How much does a Tesla Cost? Retrieved on April 26th,
from
https://www.investopedia.com/articles/active-trading/041515/economics-owning-t
esla-car.asp
● Samuel, S. (2020, September 17). Want to fight climate change effectively? Here’s
where to donate your money. Retrieved on April 20th, from
https://www.vox.com/future-perfect/2019/12/2/20976180/climate-change-best-cha
rities-effective-philanthropy
● Fehrenbacher, P. G., Gaurs, P., & Analyst, K. F. (2020, December 02). The race to
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https://www.greenbiz.com/article/race-mainstream-electric-vehicles-2030
● Palmer, B. (2020, July 31). Electric vs. GAS: Is it cheaper to drive an EV?
Retrieved March 30, 2021, from
https://www.nrdc.org/stories/electric-vs-gas-it-cheaper-drive-ev