Published by Group 168: Chi S Siu (211274448) & Mazharul Islam Sujan (215305696)
Tesla Motors has no advertising, no ad agency, no CMO, no dealer network. And that’s no problem.
In 2014, electric-car maker Tesla Motors (NASDAQ:TSLA) delivered 41% more vehicles than it did in 2013. In 2015, Tesla expects to sell 55,000 vehicles, 74% more than it did last year. To sustain this type of growth, the company will need demand for its vehicles to continue to grow. Fortunately for Tesla, demand seems to be the least of its concerns — even as it refuses to spend a dime on advertising.
Tesla is a young company, but it’s already made history. Bloomberg’s Sam Grobart takes a quick look back at some of Tesla’s milestones since its founding in 2003.
Despite the fact that Tesla (NASDAQ:TSLA) spends no money advertising, does not employ an ad agency or a chief marketing officer, and has no dealership network, the company’s founder Elon Musk is building an auto brand whose reputation far exceeds the 10,000 cars it has sold in the past 10 years.
Instead of utilizing dealership as major automakers like Ford (NYSE:F) or Toyota (NYSE:TM) do, Tesla sells its electric vehicles through “stores” in upscale shopping malls and through the Internet. Currently, the company has 35 stores across the United States, Europe, and Asia, and has plans to open an additional 15 in the next few years, according to a filing made with the Securities and Exchange Commission.
Test driving also helps sales. “If you’re driving a Tesla, it changes your life. This thing is an incredible wonder,” said CNBC’s Jim Cramer on “Squawk Box” at the end of May 2013, regarding his test drive. “I’m not talking about the stock, I’m talking about driving the car.” Consumer Reports is in agreement. The iconic ratings magazine gave the vehicle a near-perfect score of 99 out of 100 in its May 2013 issue, citing the electric car’s power, “pinpoint” handling, and its quiet, well-crafted interior.
Communication Strategy
With Tesla only focusing on online sales, site traffic begins to be a major concern. Increasing site traffic is essential to the overall health of the company. The company’s communication strategy concentrates on three main media sources: Google’s Ad Words, major newspapers or magazines, social media outlets and company sponsored events.
The Tesla Motors website will be the main hub of all announcements and advertisements. The company will use this platform to announce new car, promote the campaigns, and give complete details
Social Media Platforms
Tesla also use the Social Media platforms, such as Instagram, Twitter, Facebook, YouTube, etc to make announcement and promote the events taking place.
Google Advertising
To help promote Tesla on the internet, the Company will use targeted advertising through Google Ad Words. The targeted advertising would be focused on those who are looking at electric vehicles or hybrid cars. Tesla will use Google’s specialised program to increase site traffic.
Media
Newspaper will be used to reach a certain demographic area that will increase site traffic. The New York Times, Wall Street Journal, Forbes magazine and Motor Trend magazine will be used.
Incentive Program
The online program is also a “guerrilla tactic” against car dealers in states where the automaker is not legally allowed to sell cars through physical stores, Tesla CEO Elon Musk said.
Tesla Motors introduced an incentive program on June 2015 to encourage owners of its electric vehicles to convince their friends to buy cars, even as the company spurns traditional marketing tactics such as advertising.
Tesla CEO Elon Musk described the incentives as an effort to ascertain whether the company can rely on social marketing tactics more heavily and open fewer retail locations.
Personal Experience on how Tesla does it differently:
The incomparable Tesla Model S, the ground breaking electric vehicle, which has taken the world by storm, has won the top prize at this year’s prestigious Good Design Awards.
The Model S is considered a leader in disruptive design and technology and is the world’s fastest four-door vehicle. It’s also earned the title of safest vehicle ever tested in the USA. It is changing the way the world thinks about transport.
Another judge commented, “Every aspect of this entry is amazing and truly deserves to be recognised at this level”. The Tesla Model S is described as delivering “supercar performance in a sedan”.
One of our group members was lucky to attend the Good Design Australia Award 2015 where Tesla won the award. The winners of various awards in that event whether a company /person had spoken in front of the audience on their work. But in case of Tesla they did not have any company representative for that speech, they had a customer there who recently bought Tesla to speak about the design of the car. It was really out of the box experience and that’s how Tesla does it differently.
Tesla believes in best product which will satisfy the customer needs and which will provide them the best possible advertisement.
Watching the success of Tesla, I think that’s about to change.
References:
http://adage.com/article/news/tesla-generates-small-sales-big-buzz-paid-ads/241994/
http://www.cheatsheet.com/automobiles/heres-why-tesla-doesnt-need-traditional-
Marketing Management Blog 
Hi there,
Great topic, Telsa certainly does do things differently and that’s attributed to the companies DNA and its strive to be innovative and different. You are correct in that it doesn’t actively market its product via traditional marketing channels (Well not in Australia anyway)….
But it does use motoring journalism as a form of marketing… Most car companies as part of their communication/marketing strategies provide vehicles to motoring journalist to review and critique their product. While we may not see this as the traditional “paid” advertising, it does promote brand awareness whether good or bad.
thanks
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Hi, nice post. A very nice strategy used by Tesla to promote their wheels. And adding to it they are selling their cars in a very different way. I think it is because of its electric engine and the aerodynamic shape it is on high demand. Otherwise, for a combustion engine it is not that easy to create a market, which Tesla did, without spendings millions on advertising.
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This blog is one of the best I have read in days, so well done guys. This company is my personal favorite. The way they do business and handle every aspect of market equilibrium is just so simple and easy. Clearly we can see why the company is so confident about what it is making and how they are making it. They Just proved that, to market a product which has everything desired by a customer, you do not need to shove it up mentally into the customers head by advertising it on every single platform possible. The basic concept of marketing products that all company abide by is – ‘We know people will not use our product, but we have to influence them in all way possible in buying these products.
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Great blog, we can mention that Tesla Marketing strategy is influenced by Apple . Tesla is the first company to have the possible to become the Apple computer of the car industry. Like Apple, they are selling a product that is very different than what has come before. Great products and innovation are the points that both company invest on. They are both building their own network (Tesla’s super charger network is similar to Apple’s build-out of iTunes and the Apple Store) and both are challenging traditional sales models with their own direct distribution system. In fact, Tesla hired Apple’s previous retail chief to build out the new distribution model. Although it’s early and many many risks remain.
Source: http://scienceofrevenue.com/tag/tesla-marketing-strategy/
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I can not agree that with the notion that Tesla does not spend on advertising. In fact it does, but not in the traditional way. They use more of their customers to promote their products. Though we spend on billions of dollors on advrtising at the end of the day what really matters is the customer perception. If we are planning to buy an expensive item like a car in the pre purchasing stage we make sure to get an opinion of an existing customer. This fundamental reality is the core objective of unorthodox marketing strategy of Tesla
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This post is provides information in best possible way guys, great job. This company is my favourite choice. The way they work together and handle each part of business sector with proper management is just so basic and simple. Plainly we can see why the organization is so certain about what it is making and how they are making it. They Just demonstrated that, to market an item which has everything sought by a client, you don’t have to push it up rationally into the clients head by publicizing it on each and every stage conceivable. The fundamental idea of showcasing items that all organization keep is – ‘We know individuals won’t utilize our item, however we need to impact them in all path conceivable in purchasing these commodities.
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Quite a different perspective towards marketing. Great blog guys!
Its interesting to look at marketing strategies other than traditional IMC mixes we’ve been facing since forever. Creating a buzz without spending a penny sounds like the most ideal marketing approach by far as it saves you the time and cash. However, any company using their consumers as the advertisers has to be highly confident about their product’s credibility and performance.
Tesla has it all figured out but I believe with the weightage social media has in current times even companies like this one have not been able to stay away from the online marketing. A reason for Tesla not investing on traditional advertising could be an initial slow inflow and maybe once established just as the bigger names like Ford and Toyota, we may be seeing Tesla cars on billboards or on our television screens. Who knows?!
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Hello,
In my opinion Tesla uses a different approach towards marketing their product instead of the everyday general traditional method. They have designed their marketing process around online information, commerce, and community as they have notice that there’s a changing trend in how consumer look for information and purchase.
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Nice blog. Tesla caught my interest not long ago when Elon Musk was interviewed on 60 minutes, obviously a very driven individual who has absolute belief in his product, hence his own investment. As noted by other, its not that Tesla doesn’t spend money on advertising they don’t spend money on traditional advertising, that other car manufacturers do. Instead using low cost online marketing to engage opinion leaders and market mavens to generate word of mouth or viral marketing to help activate the process of diffusion of innovation.
The other reason for the current marketing approach is that Tesla electric cars are reliant on the recharge station infrastructure being in place, and if the demand were too high, they may not currently be able to meet this demand in terms of production and there not be the infrastructure in place to support this as well. I imagine in time as Tesla’s continues to grows that their market matures, they may indeed use traditional marketing.
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Hi,
This blog explain in depth about the giant in the car industry and their marketing strategy. Good one guys.Tesla hired Apple’s previous retail chief to build out the new distribution model.They are all set to be the Apple in the car industry. And this seems to be very much possible in near future, though there are challenges.
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Thankyou for the bolg.
TESLA has come out with a good solution for being Eco Friendly by manucturing Eco friendly cars keeping in mind the future.TESLSA with the use of internet has reached millions of people around the globe to create awarness about their product by providing infirmation online as people are being advanced in terms of technology.Using traditional marketing techniques it has reached the customers and also convienced them enough. It is a good strategy used by TESLA to grow their market using customers as their adverstiment by providing them with good service and after sales service.
overall a good blog.Thankyou
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I really liked the blog post and the comments surrounding it. I was doing my own research on the Tesla marketing strategy and read a very interesting article by Forbes, saying “Why you should copy Tesla’s way of marketing”. Here are some interesting points.
Tesla unlike another car brands docent have a shop located along main roads like every other car dealer, they are in shopping malls – right alongside brands like Zara, Bloomingdales and Sees Candy.
Secondly the showrooms are only the size of a small shop, often only squeezing in a single vehicle into the space. This radical departure from car marketing norms completely changes the traditional customer math.
Most cars dealerships would be lucky to get a hundred potential customers perusing the cars on their lot each day. But because of their location, Tesla gets tens of thousands of people walking right past their car, every single day.
Most of Tesla sales have some from people who had come to that mall to buy a dress or watch a movie.
Tesla has been a master at driving press coverage, reviews, and awards for its cars. It’s clear that the company has worked hard to position the brand with the media and to make sure the right messages come through. The company’s #1 message is that they are trying to build the best car ever made and not just the best electric car.
Reference:
http://scienceofrevenue.com/tag/tesla-marketing-strategy/
http://www.forbes.com/sites/siimonreynolds/2013/09/01/why-you-should-copy-teslas-way-of-marketing/
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Hi guys, seems Tesla has been the hot topic of late.
My first thoughts about Tesla and their marketing strategy is how well they fit. The brand is receiving so much recognition in the media in relation to its innovation that it is selling itself!
The heavy social marketing presence targets a younger audience in line with what you would expect to be Tesla’s target segment. This strategy can be effected cost efficiently, leaving cash to be spent on the source of Tesla’s comparative advantage….R&D
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Awesome write up and a great topic … To be a company that is unconventional in its methods and thinks out of the box to find new and innovative methods to promote their products and still achieve such high year on year figures.
However, it is not true that Tesla doesn’t spend a buck on advertising as even for using google’s advertisements, they need to spend money, albeit miniscule.
Selling their cars on shopping malls is advertisement in itself as that is right where the consumers are and right where people see the products. Having cars in showrooms would need people to be in the mood for being interested in buying the car, which is again a pull concept but having the car where the customers are is a push strategy which I believe is helping Tesla.
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Nice post!
I like the fact that some companies like you discussed, tesla, don’t have any marketing strategy or ad agency.. According to my understanding, these companies tries to make fad amongst their customers by the features of the product or more..which generally induce customers to buy the product. Companies like Tesla are big fish in the ponds..their goodwill is their marketing..the more they perform the more benefit they get.
Thanks.
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Interesting post..
According to me , innovation has triggered the company to achieve huge success , without even spending on advertising. Other factors which drove this company to achieve success are its radical marketing strategy which is very unique compared to other companies, convenient store location has encouraged many potential customers to visit the store each day, concentrating on development of the product to make it first fully electronic car which will surely be very appealing for the customers, conducting campaigns and programs to improve brand loyalty, which will give an opportunity for the customers to go for a free test drive and place a reservation after experiencing it, lastly the comapny has the ability to match the supply with the demand in the market.
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Interesting post..
According to me , innovation has triggered the company to achieve huge success , without even spending on advertising. Other factors which drove this company to achieve success are its radical marketing strategy which is very unique compared to other companies, convenient store location has encouraged many potential customers to visit the store each day, concentrating on development of the product to make it first fully electronic car which will surely be very appealing for the customers, conducting campaigns and programs to improve brand loyalty, which will give an opportunity for the customers to go for a free test drive and place a reservation after experiencing it, lastly the company has the ability to match the supply with the demand in the market.
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I think you have a great view on Tesla’s marketing strategy. Actually I think they seemed to spend less but gain reputations from its general facts or word of mouth. It’s biggest advantage of marketing is showing their car facts to the public, such as low-energy costs, Eco-friendly and high technology performance. Also, before they entered the Chinese market, they promised the price would be as same as they would be in the western market, which was different from other car brands (they charge 1.5 or double). I think they are offering a “feminism” strategy to land their products.
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This is a really interesting post.
This touches a little bit on the old saying that there is no advertising like word of mouth. However it is a very gutsy move by Telsa to choose not to significantly invest in advertising. Especially considering the market they compete in is so driven by advertising. However it seems to be working for Telsa Motors who keeps growing.
It appears that Telsa have differentiated themselves so successfully from their competitors that it is creating a competitive advantage even without advertising.
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Thank you for this informative blog. Tesla, like Apple, is bringing to the customers what the customers could not even imagine themselves. The car includes all the features that we have all been dreaming off and even more. This is exactly the strategy that Apple used to build the current Apple empire: “Think Different”- and “The Power of Simplicity”. Like Apple, Tesla does not advertise the Model S on traditional ads – the company uses the traditional and highly effective word-of-mouth. Tesla invites journalists for a test drive and they then most of the time contribute to brand awareness by publishing very positive reviews. The second way of advertisement that Tesla uses are Tesla stores where highly trained staff members answer prospective customers’ technical questions. The last key point to the success of Tesla Model S is its CEO, Elon Musk, a very charismatic person who has been often compared with Steve Jobs for his passion for technology, his excelling ability to sell great ideas and his visionary thinking.
http://www.freshdialogues.com/2014/02/05/is-elon-musk-the-next-steve-jobs/
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What s great post. Thanks for this and good to see a variety in the replies. My thoughts are that when buying a car in the pre purchase stage the research is significantly higher by the consumer, particularly for a non “standard” product like an electric car, hence there is a strong pull by the consumer for this information. The market segment being targeted by Tesla also appears to be well thought out and I would describe them as technology savy, early adopters, white collar professionals living in urban locations based on recharging needs of the car, cost etc. In short a market segment that can be reached by non traditional marketing means (TV, radio, print) and instead use a social media pull approach.
I do think that this approach does cost money so in effect it is a form of advertising. For example if money is spent building a software platform incorporating social media so consumers can get the latest news updates this capital cost is designed to build market share via selling more cars so broadly can be described an a non traditional marketing approach.
It does rely strongly on the product quality as other replies have mentioned but presently Tesla appears to be exceeding customer expectations and creating a strong brand.
On a side note I wonder if using a Skinner box approach for tesla owners who persuade friends to purchase a tesla car (instead of the current fixed reward) would provide more incentive. Just saying. ……….
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Great blog! Tesla motors is one to look forward to in the future.For the present, Tesla has various showcasing apparatuses that are driving considerable interest: a strange retail method, fulfilled clients, informal, and free test-drives. Why burn through cash to produce request when you don’t need to?I would not say it needn’t bother with promoting. They in the long run will on the off chance that they anticipate offering autos in the many thousands every year.Keeping in mind I can’t think about any off the highest point of my head, I’m certain there have been items like this some time recently, at any rate to some degree, where they first take off without conventional promoting and it’s generally informal/individuals seeing different proprietors.
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Great blog with lot of information. Tesla has a long term plan to build a wide range of models, including affordable priced family cars which is great news for all people.To support the sustainable environment, the move by Tesla to concentrate on solar electric is highly appreciable. In achieving all this, the marketing strategy without any cost is unbelievable. The dream of sports stars can be the dream of every common man one day when Tesla achieves its long term goal. I am one of them.
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Good and very interesting blog.
It is good to know that tesla is using the new and modern technologies to advertise there products. They are reaching to people very easily by targeting social medias such as Facebook, twitter etc for there promotion.
The looks of tesla has made the company to grow higher compared to other car industries. It is quite expensive compared to other car manufactures but the luxury and comfort will not be the same as the other cars provide. Tesla is growing rapidly since they are using modern technologies and also giving electric charge station to charge their cars unlike its competitors. This has made them unique compared to others.
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Tesla is seen as an innovative brand, co- founded by one of the greatest visionaries, Elon Musk. Musk’s investment in futuristic, high speed travel has resulted in the brand increasing its perception as a first in class technology firm. Tesla certainly doesn’t have conventional advertising mediums, but the history behind the company strengthens brand equity. Tesla is currently the fastest growing car company in the world, with consistent and increasing operating incomes and profits.
Tesla has a high perception of brand affinity associated, they are the first company to mass produce electric vehicles, it’s only a matter of time before they are known as a leader of the electric vehicle market over their indirect competitors such as Nissan and Toyota.
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Interesting Blog.
Obviously, Tesla has used the innovations as the most advanced strategy to promote the development of company. The successful experience has shown the high values due to the advanced technology involved. Although the influences of advertising does not implement comprehensively, Tesla still can take advantage of the qualified design and well-crafted design of their cars. This form create a new competitive advantage which focus on the real products that does not need to use the advertising to build the image of the cars, whereas, lack of the advertising does not reduce the benefits and customers’ attentions to their products as well. Sometimes, customers prefer to try to drive the cars or compare the functions of the cars with other companies, these activities need to touch the products in person rather than get the induction information from the advertising. This unconventional promotion method also raise the fresh experiences among the customers and increase interests of customers instead.
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Good on Tesla for using word of mouth and new owners as the centre pieces for the way they get the word out about the product. I for one like to here what real people who have coughed up real money think about products as apposed to over paid “celebrates” who have probably been given a car and of cause are only going to give good reviews. I have organized many industry award presentations and the audience are a lot more interested on what the work team members have to say about what they have done towards the companies success than listening to a CEO or guest speaker sell a companies successes. This is where social media and blogs can be good genuine advertising mediums where consumers can tells their stories about a certain product and not just the paid for good comments.
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Well written! Tesla’s advertisement campaigns are well created and appealing. They have promoted their innovations mostly in every ad campaign. You have mentioned two advertisements which were on top of the list for their creativity and showing off the brand image. This advertisements have helped the company and its one of the growing automobiles brand which have earned huge profit.
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This is by far the most interesting blog I have read and it is true to the topic. Tesla has indeed been very creative with its marketing strategy and that is well explained by the marketing personnel from Apple being hired.
The distribution model is new innovative and again close to what Apple focussed on, that is, being a class apart. To begin with Tesla hasn’t launched ma y retail outlets but I believe it does have that in store.
Eventually, consumers will need a real feel of the car before purchasing.
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