Introduction
The heart of marketing is the product or the offering. Everything starts with having a great
product because if the product is wrong, there is no amount of marketing, logistical experience,
or pricing strategy that can make it successful (Marshall & Johnston, 2023). Today, marketers
are not just focused on the tangible product, but on the total customer experience with the brand,
product, and the experience. In the following paragraphs we will dive deeper into the value
offering of the product. Customers will never become repeat or loyal customers until they have
experienced value from the offering (Marshall & Johnston, 2023). We have been taking a
journey through the marketing strategy of Tesla over the last few projects. In this installment we
will continue to dissect how Tesla builds out their product plan and how they have successfully
built their brand.
Q1. Explain the organization’s product plan. (Ch. 8)
Elon Musk, the CEO of Tesla and major investor, joined Tesla to change the economy
from a mine-and-burn hydrocarbon economy to a solar electric economy (Musk, 2006). Tesla
launched the Roadster in 2006 as a luxury all electric battery powered vehicle, but Musk knew
that to truly revolutionize the economy, and the automobile industry Tesla would need to provide
more models and family friendly vehicles. Tesla decided to enter the high-end market first to
raise funding and perfect the high-tech nature of its product and then slowly start the shift to
more affordable models (Musk, 2006). Musk aimed to introduce a four-door family model Tesla
with a price tag around $40 thousand (Musk, 2006). Tesla was focused on increase the product
line of Tesla linked to their different customer profiles, leveraging multiple price points, and
driving different satisfaction needs (Marshall & Johnston, 2023).
Q2. Explain the product’s/service’s current life cycle stage (introduction, growth, maturity
or decline). Select one stage to discuss and omit the others. (Ch.8)
Tesla is currently in the growth stage of the product lifecycle. The growth stage is when
companies begin to recoup their initial costs and begin to realize a return on their investments
(Marshall & Johnston, 2023). Tesla has built a solid customer base with excellent brand loyalty.
They have seen an increase in orders for their Model 3 and Model Y while sales of the Model S
and X are beginning to plateau (Marshall & Johnston, 2023). Tesla has also continued to show
loses on their balance sheet and analyst believe that these loses will continue for some time. The
stock continues to rise and interest and orders in the product offerings continue to rise. Telsa is in
the early stages of the growth stage, and it will be some time before they move into the maturity
stage.
Q3. Discuss viable techniques of building the equity of the brand. (Ch.9)
Brand equity is made up of Brand awareness, brand loyalty, perceived quality, brand
association, and brand assets (Marshall & Johnston, 2023). Tesla has taken the predominant
leadership of the electrical vehicle space. The brand has almost become the descriptor for the
category. Like Kleenex of Xerox, Tesla is the brand and the term most used to describe a battery
powered vehicle. Interestingly, Tesla has spent very little on brand awareness marketing
campaigns opting for leverage free media and social media platforms (Musk, 2006). Tesla has
done a great job of becoming the dominant player in the electric car space which has driven both
the brand loyalty and brand association (Otani, 2023). Tesla has also become recognized as a
high-quality brand with very high-quality products and services. Tesla is also recognized for
their unique intellectual property that allows for autonomous driving and an individualized
performance. These are just a couple items of the Tesla brand asset portfolio.
Q4. Discuss several branding decisions recently made or appropriate to make. (Ch.9)
Recently, Tesla COE Elon Musk decided to fire his content marketing team. He cited
poor growth performance and extremely generic ads stating, “The ads could have been for any
car” (Keegan, 2024). Musk had decided to construct the team in 2023 and leverage paid
advertising for the first time in Tesla’s history. The experiment failed and Musk acted swiftly to
shift. It is believed that Musk will leverage both artificial intelligence and data to drive new
targeted and highly personalized advertisements (Keegan, 2024). Tesla will continue to use
Musk as a brand asset and his tweets and interviews as marketing campaigns.
Q5. Discuss organizational efforts at customer satisfaction, loyalty, and retention. (Ch.10)
According to a recent Experian study, Tesla is the number one car brand for brand loyalty
with 74.7% of previous Tesla owners repurchasing a Tesla when disposing their old car
(Tessitore, 2024). The brand loyalty has had a major impact on growth with Tesla seeing a
revenue increase over 70% in 2021 (Tessitore, 2024). Tesla has built a cult like following and
leverage their in-car experience to drive loyalty and community. Tesla owners tend to connect
with other Tesla owners and become natural brand ambassadors for the company. Recently Tesla
provided their autonomous driving feature as a monthly service fee allowing for customers to try
out the service and pay month to month. This garnered even more brand loyalty as customers no
longer were forced to pay a large fee for the type of feature. “According toDa Bloomberg study,
99% of Tesla customers would recommend the Model 3 to friends or family” (Tessitore, 2024).
References:
Keegan, M. (2024, May 13). The tesla trial: Can brands thrive without a traditional marketing
team?. US. https://www.campaignlive.com/article/tesla-trial-brands-thrive-without-
traditional-marketing-team/1872367
Marshall, G., & Johnston, M. (2023). Marketing Communications. In Marketing Management
(4th ed.). essay, McGraw Hill Education LLC.
Musk, E. (2006, August 2). The Secret Tesla Motors master plan (just Between you and me).
Tesla. https://www.tesla.com/secret-master-plan
Otani, A. (2023, January 24). Tesla is still loved by wall street. Wall Street Journal.
Tessitore, S. (2024). Tesla’s NPS score: What’s driving Tesla’s customer loyalty? NPS
Benchmarks. https://customergauge.com/benchmarks/blog/tesla-nps-score
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