Marketing Management Assignment
Marketing Management Assignment
Marketing Management Assignment
On Marketing Plan
Submitted To:
Date Submitted:
Dr Shalini Singh
Submitted By:
Rohit Pal
[JL12PGDM126]
Rohit Rastogi
[JL12PGDM127]
[JL12PGDM144]
Vatsal Sharma
[JL12PGDM173]
ACKNOWLEDGEMENT
We wish to express our sincere gratitude to Dr Shalini Singh (Marketing Area) for
mentoring us and providing us with immense help till the completion of this
project.
Here we also take opportunity to record a good team work which forms the basis
of this projects completion. We also thank our batch mates for being so
supportive. Last but not least, we wish to express a sense of gratitude to our
beloved parents.
Table of Contents
Executive Summary ................................................................................................................... 1
Introduction of Company .......................................................................................................... 3
Strategy Focus/Plan ................................................................................................................ 3
Corporate Goals...................................................................................................................... 4
Situational Analysis ................................................................................................................... 5
SWOT and Core Competencies............................................................................................... 5
Core Competencies ................................................................................................................ 7
Industry Analysis .................................................................................................................... 7
Competitor Analysis ............................................................................................................... 8
Market Product Information ................................................................................................... 10
Marketing Plan Objectives ................................................................................................... 10
Target markets ...................................................................................................................... 10
Point of Difference and Positioning ...................................................................................... 11
Marketing Program ................................................................................................................. 12
Product Strategy ................................................................................................................... 12
Pricing Strategy..................................................................................................................... 13
Promotional Strategy ........................................................................................................... 14
Place Strategy ....................................................................................................................... 15
Financial Data and Projections ............................................................................................... 16
Implementation and Control .................................................................................................. 17
Marketing Action Plan .......................................................................................................... 17
Post Hoc Marketing Research to assess Success .................................................................. 18
Conclusion ................................................................................................................................ 19
References ............................................................................................................................... 20
Executive Summary
Automobile Industry is a business of manufacturing and selling vehicles. It has
encouraged the expansion of road systems and allowing consumers to commute long
distances. It has also allowed other industrial product to contribute as well, such as
steel and thus is the key determinant for economic growth.
Indias car market has emerged as one of the fastest growing in the world. Following
the economic reforms of 1991 the Indian automotive industry has demonstrated
sustained growth as a result of increased competitiveness and relaxed restrictions.
The monthly sales of passenger cars in India exceed 100,000 units. The number of
cars sold domestically is projected to double by 2013, and domestic production is
skyrocketing as foreign makers are setting up their own production plants in India. It
is expected that, by 2020, the annual demand of passenger vehicles in India will be
10 million. The output of Indian automotive is targeted to reach $ 145 billion by 2016.
The demand for cars over time has increased a lot due to growth of economy and
stability of people economic condition. This has attracted a number of producers
towards the market. With increase awareness in consumers about potential hazards,
automobile industries are in constant competition with each other to produce a better
vehicle for the right consumer. It is estimated that the car industry will continue to
prosper to increasing trends as national economies and population increases.
Silicon Valley based Tesla Motors will be opening up its subsidiary in India Partnership
with Toyota Corporation. The company was founded in 2003 by a group of engineers
with a desire to develop an appealing fully electric vehicle. The company is
headquartered in Palo Alto, California. The company sees itself as a catalyst in the
personal transportation industry by demonstrating the market demand for luxury zeroemission vehicles and selling its patented technology to other automakers to kick start
their product lines. Tesla is a vertical manufacturer, meaning that they manufacture
and sell directly to end-users via company owned showrooms and website. Tesla is
extremely dedicated to the advancement of electric technology to keep atmosphere
clean. The market of Electric Vehicle in India is still untapped. Albeit, Bangalore-based
Reva, which currently is the only company actually selling EVs today, and overseas.
The opportunities for the Tesla in India are: India is a new market for Tesla, Huge
untapped market; the market for electric based vehicles is expected to grow to
approximately 2% to 7-19 % by 2020, Partnership with Toyota Corporation, Volatility
of oil market and industry.
The Tesla Model S is the most spacious sedan on the market; it offers a trunk in the
front and back because the battery and engine are underneath the vehicle. The Tesla
also has many high tech gadgets like touch screen panels and controls, as well as
touch handles to open the doors. Most notably, Tesla is one of the first companies to
come out with a fully electric vehicle and is one of the leading innovators in its industry.
This is a direct channel, because the product is sold directly from the producer to the
consumer. Our base price (Rs. 43.44 lakhs) rivals our competitors: Mercedes-Benz E
class (Rs. 39.30 lakh), BMW 5 series (Rs. 39.30 lakh), Audi 6 (Rs.40.86 lakh).
Although our price may be slightly higher, it will convey the message of being
environmentally responsible. The vehicle offers customers the opportunity to satisfy
both their physiological and functional needs. It is representative of the companys
overall commitment to innovation and mission of increasing the number and variety of
electric vehicles on the road.
Introduction of Company
Silicon Valley based Tesla Motors was founded in 2003 by a group of engineers with
a desire to develop an appealing fully electric vehicle. The company is headquartered
in Palo Alto, California and just acquired an out-of-business General Motors
manufacturing warehouse in Fremont, California. The new warehouse is designed to
house a more efficient production process dedicated to the Model S. Teslas first
product, the Roadster, was released in 2008 and has sold more than 1,500 products
in more than 30 countries. Tesla is a vertical manufacturer, meaning that they
manufacture and sell directly to end-users via company owned showrooms and
website. The company sees itself as a catalyst in the personal transportation industry
by demonstrating the market demand for luxury zero-emission vehicles and selling its
patented technology to other automakers to kick start their product lines. Tesla is
extremely dedicated to the advancement of electric technology to keep our
atmosphere clean.
Strategy Focus/Plan
Teslas ultimate mission is to increase the number and variety of electric vehicles on
the roads. More specifically, Tesla strives to bring customers that want a sustainable
car without sacrificing the luxury they desire. Tesla refuses to accept that customers
need to sacrifice their physiological needs for functional needs. Tesla believes that
through the innovation of the personal transportation industry to include sustainable
technology we can maintain our environment for a much longer time.
Tesla Motors strives to bring its customers the premium driving experience they crave
while still providing a socially responsible product. Through innovation of technology,
design and safety we work to broaden the number and variety of zero-emission
vehicles on International roads.
Corporate Goals
As a start-up company we face some challenges when it comes to increasing brand
awareness and strong market share. Our ultimate goals are the following:
According to the Familiarity Mix, we should have a fairly difficult time achieving these
goals because we are implementing a new technology in a segmented target
audience. There is a broad market we are targeting, but we are specifically targeting
a segment within that market. We feel that since there is a strong demand for
environmentally friendly products that our new technology will fit nicely with the
existing market to increase our market share.
Situational Analysis
SWOT and Core Competencies
Strengths
With the release of the Roadster in 2008, also came the first federally compliant
highway capable electric vehicle. This breakthrough ensured that Tesla would be the
name that brought the world its first fully electric vehicle. Not only is Tesla the first
company to produce an electric vehicle, but they also stand by their business model
to partner zero emissions with quality performance and design.
Other strengths of the company are:
Fastest and most energy efficient car electric car on the market.
Strong Website
Weakness
Tesla started in 2003, and has since mainly depended on the production of electric
vehicles for the majority of its revenue. With this being said, Tesla only has one electric
vehicle model currently for sale. As the Model S comes closer to production, the
Roadster will start to be phased out and will no longer be sold after this year. This
means that revenues will be highly dependent on the success of the Model S. With
such low brand name recognition, it will be hard to convince customers that our car is
superior to their preferred brands option. Another cause for concern is that the Model
S will not be available until the early mid of 2013, which will allow competitors to
produce and market their electric vehicle before Tesla is ready to release the Model
S, thus taking up market share early.
Other weakness of the company are
Opportunities
The Model S looks to jump out of the Roadsters shadow. By making the Model S a
sedan style configuration will give it a larger market appeal. The Roadster was mainly
focused at performance enthusiasts who might be environmentally focused. Whereas
the Model S supports three seats in the back, with an option of two child seats in the
rear, while not sacrificing quality or performance. As petrol prices start to rise, people
will be looking for alternative ways to travel. With performance vehicles usually
guzzling petrol faster than a commuter car, Tesla is in a prime position to show the
benefits of its products while being cost friendly to the consumer.
Other opportunities for the company are:
According to Frost and Sullivan, the market for electric based vehicles is
expected to grow to approximately 10.6 million units worldwide
Threats
As the Model S production date gets getting pushed farther and farther back, this will
allow our competitors, such as General Motors (Volt) and Audi (E-Tron), to gain
valuable time for advertising, marketing, and product placement. This time difference,
accompanied with the financial leverage that competitors have, could have a negative
effect on our revenue if we persist to sit on our heels. Also, if petrol prices do not rise
as expected, customers will not have a need to change their purchasing preferences.
Other threats for the company are:
Had to invest largely in market to educated people about the car and company
Core Competencies
Tesla Motors operates to create an integrated company which successfully
commercializes electric vehicles without compromising on range, performance, or
styling. By selling and servicing the cars through our own sales and service network,
we are able to directly interact with the customer rather than franchising and each
store be independently operated. This approach to continuity helps us to operate more
cost effective, give the customer a better service experience, and allows consumer
feedback to be processed fast and efficient.
Performance has not lagged, for the Model S goes from 0-60mph in 5.6 seconds with
a top speed of 125 mph. This is contributed through aerodynamics and styling of the
car. Its shape allows air to flow smoothly around the body, further enhancing efficiency
and range. The interior boasts leather seats and trim, along with a 17-inch infotainment
touch screen which will be standard in every Model S, making Tesla competitive in the
luxury car market. The attention to detail in our cars allows us to produce a high quality
vehicle that is competitive in price, performance, and experience.
Industry Analysis
Tesla Motors competes in the automobile industry, more specifically the green car
market, which includes electric vehicles (EV), plug-in hybrid electric vehicle (PHEV),
and hybrid vehicles.
The market for fully electric cars has not been around for very long. Plug-in EVs have
been around since the mid-19th century. Although they have not been around for that
long, no EV has been mass produced until the Chevrolet Volt, which debuted in 2010.
Great strides are being made to ensure that zero-emission vehicles will become
commonplace. As Government of India supporting electric mobility efforts in the
country, the department of Heavy Industry, being the nodal centre for automotive
sector has been funding for research, design and demonstration and also
spearheading the electric mobility initiative in the country. In recent past Ministry of
New and Renewable Energy has also incentivized the purchase of electric vehicles
through its Alternate Surface Transportation Programme(ASTF) which had an
outlay of Rs 95 crore. In addition Department of Science and Technology has a funding
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scheme for all industries including automotive industry. This is sure to persuade more
companies into producing quality electric vehicles for a reasonable price. With this
funding, the market for fully electric vehicles is expected to expand rapidly. A shifting
consumer preference from combustion engines along with increasing government
incentives will result in an accelerated growth in the electric vehicle market.
According to Frost & Sullivan, the market for electric vehicles will grow to 10.6 million
units worldwide, or 14% of all new vehicles sold by 2015, up from 1.75 million units
(3%) of all new vehicles sold in 2008. While incumbent automobile manufacturers may
see the advantage of switching to a line of fully electric vehicles, we believe that due
to their limited knowledge in batteries, software, and electric powertrain technology,
the transition from combustion engines to fully battery electric will take lots of time,
funding, and research & development efforts before a viable option is able to be
produced at an affordable cost. Main competitors in the luxury or high-end electric
vehicle market are Audi (E-Tron), Hyundai i10 EV and Mercedes (SLS AMG E-Cell).
All of these vehicles are still in manufacturing phases.
However the main concern for producing an electric vehicle is finding or producing an
affordable and efficient battery which doesnt take up a bunch of space.
Competitor Analysis
Since the market for mass produced electric vehicles has just started expanding, with
many EV start-up companies trying to penetrate the industry, the Tesla Model S has
few established competitors. Albeit, the Model S has many competitors in the luxury
vehicle category, such as Audi and BMW. These companies, along with the Toyota
Prius, will be looking to take market share away from our Model S. Since the Model S
target market will already be purchasing hybrids and plug-in hybrids, the decision to
purchase our car will not take a large consumer behaviour change? The Audi brand,
owned by Volkswagen, delights their customers with their outstanding, modern design,
high build quality and technological innovations. Its brand values sportiness,
sophistication, and progressiveness, so it is easy to see why Audi is a large competitor.
In 2012, their revenue for the year was $35 billion, significantly larger than ours at
$413 million in 2012. Their market share for 2012 was 11% for the luxury car market
while our market share was practically nothing. With the expected release date of the
E-Tron in the end of 2012 or early 2013, Audi will have a competitive product to the
Model S. The electric motor will be capable of 0-60mph in just 4.8 seconds,
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significantly faster than the Model S. Also, the battery in the E-Tron will rival our battery
with a range of approximately 154 miles compared to our base battery of 160 miles.
BMW, which has been making vehicles since 1928, define themselves as being the
worlds leading provider of premium products and premium services for individual
mobility. This idea has helped them grow their revenue to 76,848 million euros. Not
only does BMW make luxury cars, but they also produce motorcycles along with MINI,
allowing them to diversify their product range. BMW is planning on launching two fully
electric vehicles the ActiveE (2011) and the Megacity Vehicle (2013). The ActiveE,
which will be based on the BMW series coupe, only has a range on 100 miles, thus
making it more of a city/short trip vehicle. The Megacity Vehicle is said to use a carbon
fibre-reinforced plastic to lower the body weight of the car, allowing a smaller battery
to take it the same distance.
Toyota is another strong competitor to Tesla, with a 26.0% market share. Toyota Prius
has been on sale since in Japan since 1997, making Toyota the first car company to
mass produce a hybrid vehicle. It has been on sale worldwide since 2001. As of
December 2012, Toyota has sold over 3 million Prius units worldwide. This market
penetration gives Toyota a large head start on the hybrid/electric vehicle category.
Being introduced in 2012, the first plug-in hybrid Prius (PHV) will hit the market. This
model will not differ from the hybrid Prius, except for that it can be plugged into an
outlet. Although the Prius boasts a 0-60-mph time of 11.3 seconds, it has never been
a car for driving delight, but for maximum fuel efficiency.
Target markets
The target market for the Model S would be people residing within the upper economic
class, because the price rage of the car is Rs.25 lakhs to Rs 43.44 lakhs. The Model
S is a family oriented car, specifically for a working parent who wishes to drive a luxury
sedan. The Model S is a family car because it offers third row seating for small children.
The consumer would most likely be someone who is interested in an electric car and
is environmentally friendly. The target market would be for someone who has a garage
and parking lot because the Model S requires a plug to recharge the battery. The target
age market is business class individuals ages 27-50. However, the cars high tech
appliances and classy appearance appeals to all ages. In the VALS framework, the
most widely used psychographic tool, our target market would fall under Innovators.
This is because the target market for the model is includes people interested in high
resources and high innovation.
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Marketing Program
Product Strategy
The Tesla Model S is a pioneer in the car industry, going places where no other car
has gone before. This purely electric-powered luxury sports sedan offers top of the
line accommodations without any compromise. The Model S provides limitless beauty,
innovation and efficiency in all aspects of its design and technology. The Model S is a
product between unprecedented teamwork and aerodynamics. Every millimetre of the
body has been repeatedly evaluated by computer simulations and wind tunnel testing
to ensure second to none quality in aerodynamics. The innovative design has offered
the wind resistance more commonly expected in upper echelon race cars. Air flows
smoothly around the Model S, increasing efficiency and range. The Tesla motor is
nearly three times as efficient has any gasoline powered engine. This efficiency does
not compromise any power or capabilities of the car itself. It can accelerate from 0 to
60 mph in less than 6 seconds. With the motor integrated into rear axle, the Model S
provides about twice the storage space of any car in its class; yet another advantage
of having a completely fuel independent vehicle. In the midst of all of the amazing
innovations, Tesla has not lost sight of what matters most to the company. Safety has
not been compromised in the slightest bit. The Model S is predicted to achieve a 5Star safety and crash test rating.
The Model S offers superior luxury in all of its features. From its interior design, space
and comfort to its in-car technology and performance. With the Model S you can enjoy
comfortable seating for five adults with the option of two rear facing child seats. The
Model S is a premium, full-size sedan slightly larger than BMW 5 Series, Mercedes EClass, or Audi A6. Tesla's unique powertrain packaging frees up space for passengers
and cargo. The interior design of the seats and upholstery has been compared to that
of Maserati and Lamborghini. As far as energy efficiency goes, Tesla offers three
different battery packs to suit your typical driving needs: 160, 230 and 300 miles per
charge. The Model S is engineered to plug into nearly any outlet in the world. With the
ability to recharge in 45 minutes, the car begs to be driven everywhere you want to go.
This amazing fuel efficiency also offers performance that is second to none. The Model
S powertrain offers instant torque at the driver's request. Though designed for comfort,
safety, and utility, the desirable Model S does not sacrifice performance. Power,
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acceleration and precise handling of a sports car come standard with a top speed of
120 mph. The Model S powertrain features a liquid-cooled, floor-mounted battery pack
and single-speed gearbox. The body design is of stamped aluminium and provides
top-notch aerodynamics, style, and safety. The Model S also offers a complete glass
panoramic roof that makes for the ultimate driving experience. The 17-inch touch
screen with in-car 3G connectivity means quick access to streaming radio, GPS
navigation, restaurant recommendations, and movie show times. The rear facing child
seats and panoramic roof are expected to be optional upgrades. However, the 17inch infotainment touch screen is planned to be standard in every Model S.
Pricing Strategy
Entering the market as one of the first Electric vehicles to be mass-produced gives
Tesla a definite advantage in pricing. We need to communicate value and prestige
through our price. While our Model S is set to compete with the BMW 5 series,
Mercedes E class and Audi 6, we offer more than just another luxury sedan. Our price
(Rs. 43.44 lakhs) rivals our competitors: Mercedes-Benz E class (Rs. 39.30 lakh),
BMW 5 series (Rs. 39.30 lakh), Audi 6 (Rs.40.86 lakh). Although our price may be
slightly higher, it will convey the message of being environmentally responsible. On
average, a Model S driver will save Rs.65000 on petrol/diesel each year. A value
based price model is our approach to this product. Our price communicates luxury
without compromise.
After all of the benefits of owning an electric car is realized by the consumer it will be
clear that you are paying for much more than just a car.
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Promotional Strategy
In order for Tesla Motors to expand and be successful promotional strategies are
important to engage prospective owners. Tesla Motors can offers several promotional
strategies such as events, websites, and advertising. Tesla Motors campaigns their
product to a diverse target market, such as all ages of people. Their promotions
primarily focus on the efficient and fun benefits of purchasing their car. Events are an
effective and fun way to promote products. Events are held in eclectic atmospheres
were prospective owners can gather in a relaxing environment while making their
decision to purchase a car. For example events are held in places such as art galleries,
restaurants, hotels, etc. At these venues Tesla Motors products are show cased in
local places allowing for a friendlier, stress-free environment than how it would be at
a dealership. Dealerships will often times presser curious, prospective customers and
scare them away. Dealership environments can be a lot more intimidating than a local
coffee house or restaurant. Events are open to all prospective customers and owners.
Websites are also a successful way of promoting a new product. It allows customers
to experience Tesla Motors products in a virtual manner. The website acts as a global
database
that
attracts
diverse
target
market.
Tesla
Motors
website
successful advertisement for the company. Tesla Motors website displays images of
their products in many diverse scenarios such as in the city, on the countryside, in the
mountains, etc. This tactic engages people to relate to the images and get a feel for
what it would be like to own their very own Tesla Motors car.
Place Strategy
Tesla Motors is growing at a rapid pace by internationally selling electric cars to
mainstream customers. Already reaching over approx. 50 countries, Tesla's mission
is to increase their output of electric cars and to produce a large variety of electric cars
to become available to mainstream customers. They want to make an impacting
change in the automobile industry. EVs powered by Tesla are environmentally friendly
and they are a fun ride.
The Company currently has a total of 18 stores across North America, Europe, and
Asia Pacific. Tesla cars are on the road in over 50 countries and expanding promptly.
Online (www.teslamotors.com) there is a contact information section available to
schedule an appointment. In order to purchase a car from Tesla Motors there is an
ordering form online at (www.teslamotors.com) that takes down the customers
information.
In India Tesla Motors can tie up with the Mahindra Motors, as they had recently opened
their own manufacturing plant for the production of electric car, this plant has an
capacity of manufacturing up to 30,000 units in an year.
The company also looking for the popularizing the electric car in India and providing
infrastructure like installing charging points and encourage sales and use of electric
car. This type of bonding of giant will really benefited both the companies in
establishing their brands and usage of EV cars.
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Units
20000
15000
10000
5000
0
2013
2014
2015
2016
2017
Assuming that 2000 Model S reservations are placed by the time the car is set for
production in the last quarter of 2013. From there sales will grow each year of the
upcoming years until 2017.
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and involved experience. The manufacturing of the Model S will be done in Bangalore
at Mahindra plant (expected). We are looking into opening more dealers as soon as
we receive our first quarter results. The dealerships, however, will be more than just a
dealership. We offer more of an art gallery experience with our products being the
masterpieces. We want to create the feeling of luxury from top to bottom. We will also
be accepting orders through our online service which will significantly keep our costs
down if we decide to not open more stores. As far as servicing the vehicle, we plan to
offer home visits at a reasonable and affordable price. We expect the routine check
up to be the only thing needed to service on the vehicle with the rare but possible
hiccups.
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Conclusion
Tesla Motors Model S is the first vehicle of its class. As a zero-emissions luxury sedan
the vehicle offers customers the opportunity to satisfy both their physiological and
functional needs. It is representative of the companys overall commitment to
innovation and mission of increasing the number and variety of electric vehicles on the
road. As a start-up company there still is a lot to learn about the product, the target
audience and the market. We truly believe that the Model S has what it takes to
transform the industry to include multiple varieties of fully electric vehicles.
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References
http://gigaom.com/cleantech/tesla-ceo-nissans-leaf-battery-is-primitive/
http://www.bmwgroup.com/e/o_o_www_bmwgroup_com/investor_relations/co
rporate_news/news/2013/geschaeftsbericht_2012.html
www2.toyota.co.jp/en/news/13/02/0205.html
techcrunch.com/2011/04/11/audi_releases_details_of_the_A3_e_tron
teslamotors.com/go electric/incentives/US
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