Electric Car and Tesla’s Expansion to China: An Exploratory Strategic Marketing Study International marketing plan of Tesla
Product Strategy
China is the largest passenger car market. The entry of Tesla in the largest passenger market specifically in the market, which is aggressively strategizing on reducing its carbon footprint will certainly aid in its sales. The product range of the company includes Model S, Model X, Future Consumer Electric Vehicles and Commercial Electric Vehicles. Tesla manufactures automobiles, batteries, Electric vehicle power-train components, and solar panels. Tesla is known for the eclectic vehicles.
The company Model S is the most popular electric vehicle. With the launch of the new Model 3, it is expected that more than 50 to 70 percent of the car sales in Hong Kong are expected to be of Electric Vehicles and most of these are expected to be that of Tesla. With China’s aggressive strategy of phasing out the financial subsidies until 2021, Tesla is expected to become stable enough by then for continuing its success in future. The less-priced model of the electric vehicle in China is expected to gain much popularity as it not only caters to their income level, but also provides the preferred alternative to gauge the strategy of carbon footprint reduction of China and for moving towards a sustainable environment.
Other than the cars, the company also produces Powertrain components for the automobiles of the other companies. The company fulfills its vision and mission by aiding in the world movement regarding the sustainable energy and electric vehicles. The company produces batteries for industrial and home use. By acquiring the SolarCity Corporation, the company has also expanded its product mix by including the solar panels and the related services of installation. The product strategy of the company is based on differentiation through which it is not only providing the product with competitive strength but also aiding the environmental sustainability strategy. Other than this, Tesla is also using market penetration in China by using lower prices through its Model 3 launch in China (Paraskova, 2017).
Distribution Strategy
The distribution strategy is based upon the venues of locations or the mediums through which the customers are accessed. It is considered as one part of the marketing mix. An organization distributes its products by using these venues. Tesla Inc uses thousands of purchasing parts of the building of its vehicles which are sourced globally from the suppliers. The company has developed strong relationships with its suppliers and distributors. The company has also established its distribution network in China with its production plant. Recently, with the worldwide concern over the environment, China is one of the highest emitters of carbon that has adopted an aggressive approach to reducing its carbon footprint.
The expansion of Tesla into China has been found to be largely successful. The launch of the new affordable model, the Model 3 which is about half the price of the Model S is also expected to gain much popularity in the automotive market. Furthermore, the company Tesla is also setting up its local production house in China, which shows a promising future for the company in China. The production costs are going to be reduced with its production in China. The company Tesla is expected to add more places as it expands through new ventures and acquisitions.
The company is accessing its market through Company-owned galleries, and stores, company-owned service centers, official company websites and through charging stations. The customers and visitors can check the automobiles, solar panels, energy storage and regarding products located in areas and malls. However, the vehicles cannot be bought through stores; the customers need to use the website or company to complete its transactions. Through the service centers, the company provides access to the maintenance and repair services to its customers, which are rendered as part of the contract. The cars can be charged by the company charging stations (Trefis Team, 2014).
Promotion Strategy
The marketing mix of Tesla also includes the promotion strategy. Tesla is based on the belief that development of the electric car is not needed to be a sacrifice of driving performance. Tesla has brought the key technology of 100% electric powered powertrain which accelerates the foundation for prospects. It is what it uses in its promotional strategy. With the use of this competitive edge for marketing and promotional activities, Tesla plays out using its strength against the competitors. The company has effectively targeted its target market through its marketing campaigns by promoting its image of high speed, style, and performance. It combined with the sustainability factor of the electric vehicle provides an impact to the promotional strategy. The use of the viral marketing has successfully complemented with this strategy.
The communication and marketing strategy of the company of Tesla is unusual as compared to the other automotive industry as it depends on the viral marketing. This type of marketing provides the biggest contribution to the promotional strategy of the company. The launch of the Model S for the Kids was promoted through the viral videos on various social platforms. Personal selling is also used by using sales personnel in its galleries and company-owned stores. Tesla has also used public relations for the promotion of its image and belief. The strategy of the company to include its patents in the open-source movement shows the commitment of the company with the transition of the world to a more sustainable energy source. The company also uses direct selling and direct marketing for selling of the power-train batteries and storage batteries to the businesses (Tesla.Com, 2018).
References
Paraskova, T. (2017, March 21). Here’s how Tesla tripled its earnings in China. Retrieved from https://www.businessinsider.com/how-tesla-tripled-earnings-in-china-2017-3
Tesla.Com. (2018). Tesla Investor Relations. Retrieved from http://ir.tesla.com/financial-information/quarterly-results
Trefis Team. (2014, May 1). Tesla Expands into China but Should Only Be a Small Player in the Luxury Segment. Retrieved from https://www.forbes.com/sites/greatspeculations/2014/05/01/tesla-expands-into-china-but-should-only-be-a-small-player-in-the-luxury-segment/#e5ac23a54b5a
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