Tesla Motors offers many different features and benefits that coincide with the price tag and overall cost of ownership. Take for example the Model S; the price tag starts at $95,000 with an extensive amount of product features and benefits. The car offers a luxurious interior, auto pilot and the touch screen that provides vast technology at the touch of a button are options that come with the hefty price tag. Tesla is a dominant service product; customers are willing to pay more in exchange for the service that they receive with the vehicle. The tangible factors include the battery supply chain, supercharge networks, and software that is far more advanced than the competitors. The intangibles elements are the reputation that provides a wow factor and the service that the company provides. Customers are not just investing in the product, but the company.
Type of Offering
Tesla Motor’s target market consists of the millennial group and baby boomers who have the residual income to spend on the luxury car. Tesla Motors does not belong to the convenience offering because their product is very different from the rest of the market; however, they do offer marketing convenience. “Marketing convenience items is often limited to only trying to get the product in as many places as possible where a purchase could occur” (Tanner and Raymond, 2016). Tesla Motors also offers specialty offerings, highly differentiating themselves from their competitors. Based on the target market the category of offerings would include the unsought offerings. Tesla brings many features to the table that would appeal to the market segment; however they may not know they want or need those amenities. The marketing strategy could change to highlight these features and show the customers they are getting more than just a reputable car.
Product Line Extensions
Tesla Motor’s current product line and development are far above their competitors. They have maximized their offerings to meet the demands of their new target market. “Simply put, Tesla has created, and now dominates, the market for luxury, long-range electric automobiles, a market that is distinct from both the market for less expensive electric vehicles and the market for luxury gas-powered vehicles” (Team, 2015). Because there are no recommended changes to the current product line, it is vital to examine how a change in marketing could appeal to the new target segment. The millennial group and baby boomers are willing to spend more money on innovative and distinctive products. Tesla’s new product line offers technology and amenities that have far surpassed their competition. By focusing on marketing these features, it could change the uncontested space on the perceptual map for the target market. Tesla’s position on functional was weak, and redefining the marketing strategy could allow them to capitalize on that feature and move their position significantly on the perceptual map.
Based on the product lifecycle, Tesla Motors is in the growth stage. The company is experiencing a rapid market acceptance and growth in revenue. Since there were no recommended changes proposed in the product line extension, the product lifecycle will continue to evolve to the next stage. The lifecycle of the growth stage provides Tesla Motors the opportunity to market their product based on reputation. The brand is popular, so marketing can appeal to the new features and innovation that distinguishes Tesla Motors from their competitors. The millennial group and baby boomers know the brands reputation, and marketing the extras will increase the appeal and desire to invest in Tesla Motors.
- Tanner, John F., and Mary Anne Raymond. (2016). Principles of Marketing. Retrieved from http://catalog.flatworldknowledge.com/bookhub/reader/5229?e=fwk-133234-ch06_s02
- Team, Trefis. (2015). Tesla’s Unique Position In The Car Market Is One Of Its BiggestStrengths. Forbes. Retrieved from http://www.forbes.com/sites/greatspeculations/2015/07/02/teslas-unique-position-in-the-car-market-is-one-of-its-biggest-strengths/#21c9eb9b22ec