Target Market of Tesla - Essay Example

? Tesla (Electrocar) of the of the Introduction In the current epoch, it is not possible for a business firm to achieve success in business without the benefits of efficient product marketing. Product marketing is the process that deals with the marketing of the product of a company to the customers, prospects and other stakeholders in the market. In the recent times, the degrees of competition among the business firms have increased significantly. The consumers in the market have access to various types of goods and services in the marketplaces. Thus, in order to popularize the product of a company among the consumers, the product marketing has turned out to be an indispensible business task. This essay will focus on the marketing method for a special product of the famous automobile company named Tesla Motors Inc (Marchionne, 2009). Product Identification The company of Tesla primarily engages in the production and sales of hybrid or electric cars. The researcher would introduce the brief marketing strategy of the Model S electric car for the company. This car is basically an electric car with seven seats manufactured by the company. The car is characterized with a rigid body structure. The weight proportion distributed in the car is 50-50. It is claimed that this car has a low centre of gravity. The company claims that the features of the car qualify it to be an efficient sports car. However, the external appearance of the car looks like a top class Sedan (Teslamotors, 2013). Figure 1: Model S (Source: Teslamotors, 2013) It is claimed by the company that the acceleration of the car is instantaneous owing to the inbuilt power train technology used for manufacturing the car. The form of energy used in the car is gasoline. The car also has a multilink suspension system that provides complete comfort to the users. The smooth power steering of the car is found to react automatically to any changes in the driving conditions (Teslamotors, 2013). Target Market The above context clearly shows that the Model S of Tesla is an efficient car that is well equipped with a lot of advanced technical features. However, while formulating its product marketing (Model S), the company needs to strategically focus on the target customers. All the marketing activities would be then formulated on the basis of the needs and preferences of the consumers. Market Opportunities After the emergence of globalization in 1990, the developing economies in the world have significantly grown up by enjoying the benefits of industrial revolution in the developed economies. The company through its marketing strategies should grasp the growing market demand in the emerging economies of the world. It is found that the countries like, Russia, India, China and Brazil, are enjoying the fruits of economic development in the form of rise in their per capita income levels. The rise in per person income has increased the level of luxurious demand that is created by the individuals in these economies. The Tesla company must try to grasp the growing market demand of individuals in these economies (Mom, 2004). Today, the consumers are highly conscious about the protection and preservation of environment. This is the reason due to which the electric vehicles are now on high demand in the market. Model S of Tesla comprises of all the good features that a modern electric car should possess. Thus, the growing market demand of the electric cars provides an excellent opportunity for the company to sell its desired product in the market. Rather, the degree of urbanization in countries across the globe is improving and has significantly increased the demand for cars in the market. The gross revenue generated by the entire automobile industry has increased in the last few years. So, the rising living standards of the individuals, growing consciousness about environmental protection and the booming aggregate demand in the automobile industry are the primary market opportunities for Tesla’s electric car. Trends in the Environment As stated in the above context of the essay, the demand for electric cars in the market of automobile industry has increased significantly. This is because the individuals are growing more interested to make green investments in the market. Companies that used to manufacture general luxury cars like, Ford Motors, Mercedes and BMW, are now taking interests in manufacturing the electric cars. Thus, the environment in which Model S of Tesla would be marketed is highly competitive in nature. The sales of electric cars had been highest in 2012 in U.K. The sales of the cars had increased by almost 25%. The government had granted about ?5000 to the companies for manufacturing electric cars in U.K. (Gerbeau, 2002). Figure 2: Rising Electric Cars Sales The above diagram shows the rising sales of electric cars in U.K. (Source: Vaughan, 2013) Figure 3: Charging Pump for Electric Cars (Source: Wald, 2013) As shown in the above picture, the number of electric car charging pumps has increased significantly in the last few years in Washington. Figure 4: Forecast of Electric Car Sales (Source: Leviakangas, Tarkiainen & Kivento, 2012) As shown in the above graph, the sales of the electric vehicles in the market are assumed to increase in all business scenarios. Market Segmentation The above analysis clearly states that there is a wide base of customers for electric cars in the contemporary marketplaces. Thus, while targeting the potential clients, Tesla must adopt the method of market segmentation to target its prospective customers. The company can adopt the demographic method of market segmentation strategy. This process would use the demographic factors or attributes to focus on the most potential car buyers. The demographic factors selected by the company can be income and age (GOV, 2010). Income: As the electric cars involve high cost of manufacturing, the selling price of Model S is also high. Actual demand for an expensive electric car can only be created by the rich affluent customers. The company can target the affluent customers whose income is almost 70% above the poverty thresholds. Age: The technology used in Model S is highly advanced in nature. The young individuals will be able to use the advanced technologies more easily than old people. Thus, the target customers of Model S must be the rich customers whose age falls between 25 and 55 years. The approach of geographic segmentation can also be adopted by the company. For instance, the company should try to focus on the customers of the rich economies in the world. The countries like, Dubai, U.S., U.K. and Scotland, depict high standards of living for most of the individuals. Thus, Tesla’s potential customers must be targeted from these rich economies. Buyer Behavior According to theories of the Standard Economic Model, buyers undertake their purchasing decisions on the basis of rational expectations. However, the concept of rational expectations fails in the real economic world in many situations. It should be realized that the buyer’s intentions to purchase an expensive car is indirectly related to their psychological perspectives (Livegreen, 2013). The consumers would buy electric cars as they would feel that such an initiative made by them would not be harmful to the environment. The high tech features in Model S can be easily compared with the features of any other famous luxury car in the market. However, the marketing strategies framed by the company should primarily focus on the eco-friendly facts of the car. The underlying driving force that manipulates the buyer’s behavior to create the demand for the car is the rising concern for environmental protection. These buyers are the environmental conservationist buyers who would go beyond a budget to purchase an electric car. Summary of the Target Market Needs The table below focus on the target market needs of the company to market its product, Model S. Target Market Needs The company should grasp the growing market demand for high end cars in the emerging economies. However, it should not remove its focus from the rich developed nations in the world. Considering the rich economies, the company must target the rich customers whose income is almost 70% above the poverty thresholds. These individuals with a high income must be young and between 25 to 55 years. The target customers must be only those rich young buyers of the affluent or growing nations in the world, who are eco-conscious and is interested to make eco-friendly investments. Marketing Mix In order to make the marketing mix strategies, the firm must introduce strategies related to the product, place, price and promotion for Model S. Product The features in Model S are unique and attractive. In 5.4 seconds, the car travels a distance of about 60 miles per hour. The car has an inbuilt battery of 85 Killowatt-hour power (Teslamotors, 2013). The rear tires of the car are about 20 mm wide which enhances the acceleration of the car. The marketing strategies of the company must focus on these quality features of Model S that makes it different from the rest of the high end cars in the market. Place The strategies of the company must focus on the primary business markets of Tesla car as a whole. (Source: Vaughan, 2013) The above pie diagram states that North America, Europe and China are major markets of Tesla electric cars. So the company must widen its marketing strategies in these nations. Price Though the target customers of Model S are the rich consumers, yet the company needs to consider the current market conditions in most of the economies in the world. It is found that the global market recession in 2009, has reduced the real value of currencies. Thus, the per person disposable income level of the consumers has also fallen. So, the company should try to provide price discounts or introduce deferred payment facilities to the buyers (Cain, 2012). Promotion For the purpose of promotional activities, the company may promote its desired product (Model S) through various means of media like, internet, television, radio and newspapers. The company can also introduce efficient commercials for the product with celebrity endorsement. Conclusion It should be realized by the modern individuals that if production and consumption activities are not environment friendly, then in future the ecological balance would depreciate drastically. Model S is an exclusive electric car and its worth goes beyond its economic price. The low pollution technology of the car is in itself a unique rating factor for the product in the market. However, the company should try to manufacture more versions of Model S with lesser luxury features and a lower price level. By doing so, the company would be able to capture the large base of the middle income buyers in the market. The brief above mentioned marketing strategies of the product would help the company in augmenting the aggregate sales of Model S. References Cain, T. (2012). October 2012 United States Auto Sales by Brand. Retrieved from http://www.goodcarbadcar.net/2012/11/usa-october-2012-auto-sales-brand-rankings.html. Gerbeau, P. (2002). Lifecycle of the car industry. Retrieved from http://www.open.edu/openlearn/money-management/management/business-studies/lifecycle-the-car-industry. GOV. (2010). Demographics. Retrieved from http://www.fin.gov.on.ca/en/economy/demographics/ Leviakangas, P., Tarkiainen, M. & Kivento, T. (2012). Electric Vehicles Marketoutlook –Potential Consumers, Information Services and Sites Test. IJTech. Refrieved form http://www.hermiagroup.fi/@Bin/1195656/VTT_julkaisu_07_2012.pdf. Livegreen. (2013). Electric Car Update Spring 2013. Retrieved from http://www.livegreen.cc/blog/. Marchionne, S. (2009). Prospects for the auto industry: From chapter 11 to chapter 1. Retrieved from http://www.iie.com/publications/papers/marchionne1209.pdf. Mom, G. (2004). The electric vehicle: Technology and expectations in the automobile age. Maryland: JHU Press. Teslamotors. (2013). The safest car in America. Retrieved from http://www.teslamotors.com/. Vaughan, A. (2013, November 11). Electric car sales at record high in UK, figures show. The Guardian. Wald, M. (2013, November 12). A Recharging Industry Rises. The New York Times. Read More