Tesla Electric

Car
Final Proposal
MARKETING PROBLEM
SELECTED:

To Understand consumer
preferences and expectations
regarding electric vehicles and their
willingness to purchase a Tesla car
 Ch-
01
Background about the
Industry
Industry sales, Market shares, Growth
rate, General Industry Information.
 General Industry Information.
1. EV market growing rapidly worldwide, 2M sold in 2018

2. Major automakers investing heavily in EV tech and production

3. Increased competition and innovation leading to affordable and efficient EVs for
consumers

4. Governments promoting of EVs through incentives tax credits, rebates, and

public charging infrastructure

5. Challenges to widespread adoption: range anxiety, high initial costs, limited

charging infrastructure

6. These incentives aim to reduce dependence on fossil fuels and combat climate
change.
China and Europe leading in EV adoption
1. China's electric vehicle market grew from 188k units in 2015 to over 3.2 million
units in 2021.

2. European sales increased from 175k units in 2015 to over 1.3 million units in
2020.

3. US electric vehicle sales increased from 116k units in 2015 to over 330k units
in 2020.

4. California is the largest market for electric vehicles in the US.

5. Factors driving growth: government incentives and regulations, improvements

in battery technology, and consumer demand for environmentally friendly
transportation.

6. More countries are setting targets for phasing out gasoline-powered vehicles,
indicating continued growth in the electric vehicle market.
EV sales in the US increased from over 17k units in 2011 to nearly 200k units in 2017.
1. Canada has seen a significant increase in EV sales over the past five years.
 Ch-
02

Company Background

Company sales, Growth rate, buying habits,

competition.
marketing and financial capabilities of the company.
 ALL ABOUT THE FOUNDER

Elon Musk is a South Africa-born, Canadian-American engineer, entrepreneur, and

inventor.
1. Received a Bachelor of Science degree

2. #52nd richest man with net worth of 7.5 bn US$ (Forbes).

3. CEO and CTO of SpaceX

4. CEO and chief product architect of Tesla Motors

5. Chairman of SolarCity

6. founder of SpaceX

7. Co founder of PayPal, Tesla Motors, and Zip2

8. Proposed a conceptual high-speed transportation system known the Hyperloop.

1. In 2021, Tesla's global sales grew by 87% compared to
the previous year
2. Tesla's revenue grew from $7.0 billion in 2016 to $31.5
billion in 2020, a compound annual growth rate (CAGR)
of 41%.
3. Tesla's gross profit grew from $1.6 billion in 2016 to
$6.0 billion in 2020, a CAGR of 41%.
4. Tesla's market capitalization grew from $53 billion in
January 2020 to over $1 trillion in November 2021, a
20-fold increase in less than two years.
TESLA MARKET GROWTH
 BUYING HABITS OF THE CONSUMERS
• 75% of Tesla customers order their cars through the company's website

• Nearly 20% of customers order through mobile devices

• Orders can be completed in less than 60 seconds

• Over half of Tesla's sales in some countries are completed without a test drive

• Tesla offers a returns policy of seven days or 1,000 miles with no questions asked and a full
refund

• Peak sales times in Europe are between 3pm and 6pm, with 4pm being the busiest time

• Tuesday is the most popular day for buying cars, followed closely by Wednesday

• Norway has the highest percentage of mobile device orders

TESLA MARKETING

Direct-to-
consumer Stores and service Innovative consumer
sales centers financing options

Technological
Innovations Competitive Position Strong presence in the
global market
Revenue growth: $7 billion in 2016 to $31.5 billion in 2020

FINANCIAL CAPABILITIES OF TESLA

Profitability: Became profitable in 2019 and reported net income of $721 million in 2020

Strong balance sheet: Over $19 billion in cash and cash equivalents at the end of 2020

Market capitalization: As of Feb 2023, market cap is around $1.2 trillion

Access to capital: Able to access capital from various sources to fund growth and
invest in new technologies and products.
 Ch-
03

Marketing Issues

1. Environmental context of the problem,

2. Management decision problem
3. Marketing research problem.
 Challenges for Tesla:
Limited advertising and dependence on word-of-mouth marketing.

Dependence on online sales, which limits potential customers who prefer to test drive before
purchasing.

High prices compared to traditional gas-powered cars.

Limited product range with few models available.

Production issues that can lead to delays in delivery and affect customer satisfaction.

Perception of being a luxury brand, which can limit appeal to customers looking for more
affordable options.

Dependence on government incentives, which can affect sales and revenue growth due to
changes in policy or expiration of incentives.
 Environmental Context

Environmental concerns and the need to reduce carbon

emissions have led to a growing interest in electric
vehicles as a sustainable alternative to traditional gasoline-
powered cars. However, the adoption of electric vehicles is
still relatively low due to factors such as high prices,
limited range, and lack of charging infrastructure.
 Marketing Research Problem

To understand consumer preferences and

expectations related to electric vehicles,
specifically Tesla cars, in order to identify factors
that influence their willingness to purchase. The
results of the research will help Tesla to tailor
their marketing mix and increase sales and
market share.
Management Decision Problem

The management decision problem for Tesla is to

determine if investing in the production and marketing
of electric cars is financially viable. They need to
understand the demand for their electric vehicles and
the prices consumers are willing to pay. This will
enable Tesla to make informed decisions on
production levels, pricing, and marketing strategies.
 Ch-
04
Describe in detail the marketing research

1. how was the sample selected,

2. what was the sample size.
3. Describe the findings of marketing research in detail
 Both qualitative and quantitative research was conducted.
1. Focus groups of current owners, owners of other brands, and target customers.

2. Online and mail surveys to develop psychological, sociological, and demographic

profiles.

3. Secondary research on the electric car market, consumer trends, and competitors.

4. Test drives and product demonstrations to gather feedback from potential

customers.

5. Social media monitoring to analyze conversations and sentiments around Tesla and
electric cars.

6. Sales data and customer feedback analysis to identify patterns and trends in
customer behavior and preferences.
 Sample Size and Findings of the research
• 47% of consumers said their budget would be the same for an EV as for a
conventional vehicle, while 18% said they would be willing to spend more.

• When asked for the maximum amount they would be willing to pay for an
electric vehicle, respondents’ median price was $25,000. The national
average for new vehicles is $40,000.

• To consider purchasing an EV, 23% of adults said they would require a

range of 500 miles or more; 7% said a range of less than 200 miles and 16%
said between 200 and 299 miles, options representing the bulk of the
current market.
 Ch-
05
Marketing Actions

1. Describe the marketing actions taken based on the

marketing research findings.
2. Summarize your conclusions
 • The marketing actions taken by Tesla

• Expansion of product line: Model S, Model X, and Model 3 vehicles were

introduced based on market research findings for premium electric vehicles
with luxury and performance features.

• Focus on sustainability: Tesla's marketing efforts focused heavily on

sustainability and environmentalism.

• Direct sales model: selling vehicles through their own showrooms and online
channels,

• Digital marketing and social media: Tesla leveraged digital marketing and
social media to reach its target audience, using platforms like Facebook,
Twitter, and YouTube to promote products and engage with customers.
 Ch-
06
Technical definition of the problem that you have selected
for research

(a) the environmental context of the problem,

(b) the management decision problem
(c) the marketing research problem.
1. Gasoline-powered vehicles have negative environmental impact,
and people are looking for alternatives to reduce it.

2. Tesla wants to determine the potential market for its electric

vehicles and design marketing strategies to attract customers and
differentiate its products from competitors.

3. The marketing research problem is to gather data on consumer

preferences and expectations regarding EVs and their willingness
to purchase a Tesla car, to develop effective marketing strategies
and increase sales.
 Ch-
07
Develop a pragmatic approach

(a) Identify the relevant theory, models, research

questions, hypotheses, and the information needed to
formulate a Research Design
1. Theoretical framework: The Theory of Planned Behavior (TPB) is a
relevant theory that can be used to understand consumer behavior
towards electric vehicles and Tesla cars.

2. Research questions: The following questions are:

What are the factors that influence consumer preferences towards electric
vehicles and Tesla cars?

What are the expectations of consumers towards electric vehicles and

Tesla cars?

What are the barriers to purchasing electric vehicles and Tesla cars?
1. Hypotheses: Based on the research questions, the following
hypotheses can be formulated:

2. H1: Attitudes towards electric vehicles and Tesla cars positively

influence willingness to purchase.

3. H2: Subjective norms positively influence willingness to purchase.

4. H3: Perceived behavioral control positively influences willingness to

purchase.

5. H4: Price is a barrier to purchasing electric vehicles and Tesla cars.

6. H5: Range anxiety is a barrier to purchasing electric vehicles and

Tesla cars.
 Information needed: To test the hypotheses, the following information is

needed:

1. Data on consumer preferences towards electric vehicles and Tesla cars.

2. Data on consumer expectations towards electric vehicles and Tesla

3. Data on barriers to purchasing electric vehicles and Tesla cars.

4. Data on drivers of willingness to purchase electric vehicles and Tesla

5. Data on prices of electric vehicles and Tesla cars.

6. Data on range anxiety among potential electric vehicle and Tesla car
buyers.
Research design: A survey research design can be used to
collect data from a sample of potential electric vehicle and
Tesla car buyers.

The survey can include questions that measure attitudes,

subjective norms, perceived behavioral control, willingness
to purchase, barriers to purchasing, and expectations
towards electric vehicles and Tesla cars.

Data analysis can include descriptive statistics, factor

analysis, and regression analysis to test the hypotheses.
 Ch-
08
What type of research design should be adopted

(a) Identify the different phases of the research design

 What type of research design should be adopted and why? Please
identify the different phases of the research design you recommend.

1. A mixed methods research design should be adopted, It combines both

qualitative and quantitative methods.

2. The qualitative methods will be used to explore in-depth consumer

preferences and expectations regarding electric vehicles and Tesla cars.

3. While quantitative methods will measure the magnitude of these

preferences and expectations.
 Different phases of the
research
Phase 3: Causal
Phase 1: Exploratory Phase 2: Descriptive
Research
Research Research
Conducting experiments
Conducting focus It involves conducting a to test the impact of
groups and in- depth survey to measure the various marketing mix
interviews with magnitude of consumer elements on consumer
potential customers to preferences and preferences and
willingness to purchase
gain an understanding expectations towards
Tesla cars.So Tesla can
of their attitudes, Tesla cars. use this phase to increase
beliefs, and demand for their electric
behaviour's towards cars.

electric vehicles and

Tesla cars.
 Ch-
09

Interviewing method

(a) survey is to be conducted. Please identify and justify

which interviewing method should be used
Please identify and justify which interviewing
method should be used

· There are several interviewing methods that could be

used for conducting the survey, including face-to-face
interviews, phone interviews, online surveys, and mail
surveys.

· However, the best interviewing method to use for this

survey would be an online survey.
 Ch-
10

suitable sampling plan

(a) Develop a suitable sampling plan for the survey

1. Define the population of interest : Those who are potential consumers of Tesla vehicles,

2. Determine the sampling frame: The sampling frame can be obtained from sources such as
electric vehicle dealerships, online forums and groups, social media platforms, and electric
vehicle associations.

3. Choose the sampling method: A probability sampling method would be ideal

4. Determine the sample size: The sample size can be determined using statistical formulas
and calculations

5. Select the sample: The sample can be selected randomly from the sampling frame, ensuring
that every member of the population has an equal chance of being selected.

6. Implement the survey: The survey can be administered online or in-person, depending on the
chosen method and the availability of resources.

7. Analyze the data: The data collected from the survey can be analyzed using statistical
software and techniques to draw conclusions about the consumer preferences and
expectations regarding electric vehicles and their willingness to purchase a Tesla car.
 Chapter XII The survey data, and present the
findings of TESLA
● Tesla collects large amounts of data from the vehicles' owners in its Full Self-
Driving beta test fleet.

● Tesla is releasing updates frequently to improve its Autopilot and Full Self-
Driving systems.

● Tesla collects data voluntarily from its customers to feed its neural networks
powering Autopilot and Full Self-Driving systems.

● Tesla can detect when drivers intervene during Autopilot operations and use the
data to improve its neural networks.

● Tesla owners can monitor their WiFi connection to know when and how much
data Tesla is pulling from their cars.
 Possible Responses
Consumer Demographics and

Behavior
Age 25, 35, 45, 55, 65, 75
Gender Male, Female, Other
Income $40,000, $65,000, $90,000, $120,000
Education level High school diploma, Bachelor's degree, Master's degree, PhD
Occupation Engineer, Teacher, Salesperson, Student
Car ownership status Yes, No
Type of car currently owned Sedan, SUV, Truck
Frequency of car usage Daily, Few times a week, Rarely
Preferred features
Environmental sustainability, Cost savings on gas,

Government incentives
Price sensitivity
Environmental sustainability, Cost savings on gas,

Government incentives
Electric Vehicle Preference Possible Responses

Preferred electric vehicle brands Tesla, Chevrolet, Nissan, Audi, BMW

Electric vehicle ownership status Own an electric car, Considering purchasing an electric car, Not
interested in electric cars
Likelihood of purchasing a Tesla car Likelihood of purchasing a Tesla car or not

Education level High school diploma, Bachelor's degree, Master's degree, PhD

Likelihood of purchasing a Tesla car Model S, Model 3, Model X, Model Y

$0, $1,000, $5,000, $10,000, $15,000

Willingness to pay for

additional options

Type of car currently owned Sedan, SUV, Truck

Frequency of car usage Daily, Few times a week, Rarely

Preferred options for Tesla car Autopilot, Enhanced sound system, Upgraded interior, Extended
warranty or Larger battery
 Ch-
13
Conclusions and
recommendations.
$81,462
tesla's total revenue in billion USD
• Survey results show high interest and willingness to purchase Tesla cars among consumers

• Concerns need to be addressed to increase consumer adoption of electric vehicles

• Need to improve charging infrastructure by increasing the number of charging stations and
making them more accessible

• Tesla should work with local governments and businesses to provide incentives for the
installation of charging stations

• Increase awareness about the environmental benefits of electric vehicles through advertising
campaigns and educational initiatives

• Tesla should continue to innovate and improve technology to meet changing consumer needs
and preferences

• Improve safety features of vehicles and develop new features to differentiate from competitors

• By addressing concerns and continuing to innovate, Tesla can increase consumer adoption of
electric vehicles and maintain their position as a leader in the market.
“The only way to do great work
is to love what you do.”

— SOMEONE
FAMOUS