Extended Marketing Mix - Tesla
Tesla Stores are usually located in places with high circulation of people, such as large malls, for example. Thus, they are able to reach a greater number of people, even if they are not there with the intention of buying a car. After all, people still need to be educated about electric cars as the market is still unknown to some people.
Another advantage of having its own stores is that rather than working like a franchised dealership, Tesla skips the middle man and sells directly to its customers, also increasing its profit margin. According to the company, their objective is to reach people who have not yet decided what they want: "Tesla, as a new carmaker, would therefore rarely have the opportunity to educate potential customers about a Model S if we were positioned in typical auto dealer locations.”
Imagine the situation where a salesperson makes a sales pitch about the advantages of having an electric car and then goes on to present a car that runs on fuel. It wouldn't make any sense, as the proposal of both cars is totally different. Not to mention that dealers sell a lot of after-sales services and electric cars need much less maintenance.
This sales model from Tesla has been a success and clearly the competitors are not happy. Most consumers nowadays enter the store already knowing what they want, because at least they have already done a previous research on the internet. The fact that Tesla invests so much in digital marketing further increases its advantage over competitors and makes it more aligned with the changes in the current consumption mode.
Now that we know more about how Tesla exploits "Place" in its Marketing Mix, let's take a quick look at all seven:
Tesla, one of the pioneers in the electric car industry, knew that its first product would be expensive, so they started launching a sports car. From the start, its objective was to bring electric and cool cars to the market as quickly as possible, contributing to sustainable consumption with high quality. Over the years and with the advance of technology, it became possible to produce affordable products for mass consumption, helping to drive the global market.
Timeline:
Fig 1: tesla.com (2021), Models of the vehicles [screenshot]Tesla also sells more products in its portfolio, such as solar panels and roofs, batteries, trucks and pickups, some of which will be launched in 2021.
Price
Teslas are getting more expensive by the day, but now it is possible to find a model starting at £40,000. The most affordable one, the Tesla Model 3, is also the leading and best-selling electric car on the market. Nowadays, Tesla sells four models — the Model S, 3, X, and Y — which cost roughly $40,000 to $130,000.
According to Investopedia, all together had 64.6% of the market during the second quarter of 2021.
Fig 2: Insider (2021), Tesla's models [photograph]
Place
One example of a Tesla Stores inside a shopping center, where they gives consumers access to cars and detailed information.
Remembering that they only sell their products through their website, which is easily found as tesla.com.
People
It's impossible to talk about Tesla without associating the brand with the billionaire, Elon Musk. In 2004, he joined the company as chairman and product architect, becoming its CEO in 2008.
He also founded SpaceX in 2002, an aerospace manufacturer and space transport services company, of which he is CEO and CTO, and other companies.
Musk is a great reference in the business world and is a big influencer on social media as he has over 60 million Twitter followers.
Tesla today has more than 70,000 employees and this exponential growth is due to the great expansion of giant factories around the world.
Promotion
One of the reasons why Tesla is so successful is because of the way they market their brand. Contrary to what most companies do, spending millions on advertising in all available media, Tesla chose to focus its efforts on digital marketing.
Browsing Tesla's YouTube channel, for example, it is possible to have access to all kinds of information available about cars, curiosities, ways of use, experiences with real consumers, and technological innovations, not only about cars but also about renewable energy.
They also have a large presence within other social networks such as Instagram and Twitter.
Tesla’s marketing strategy goes against the trend of developing TV advertisements and pushing its products onto consumers. Instead, Tesla focuses on word-of-mouth advertising and referrals. Essentially, Tesla markets to its customers by not directly marketing to them. It encourages others, namely customers, to do the selling for them.
One of the exceptions, of course, happens during the launch of some new product, in which case they like to make a lot of noise.
Process
Tesla is very proud to show all its gigafactories. They are happy to open the doors of their factories to show how the process of manufacturing cars and batteries, assembly and distribution is done.
The company is also changing automotive Service. With over-the-air and remote diagnostics, 90% of issues can be identified, but if service is needed, they can send the Tesla Range wherever the car is to solve the problem.
Physical Evidence
Fig 7: Electrek (2020), Tesla Store in Boston
Tesla's visual language from the start has been luxurious but at the same time simplistic. The cars, the stores and the website make you immerse yourself in a super attractive universe of technology, with a futuristic feel.
As mentioned before, since Tesla has its own stores, it can offer an extremely high-quality service, making customers feel comfortable and delighted.
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