Tesla, Inc., formerly known as Tesla Motors, has produced over 600,000 cars in its lifetime as a company, and overall earned $2.2 billion in cash and cash equivalents, as of the first quarter of 2019. Tesla does spend some money on marketing; but it spends considerably less than its competition. For example, Tesla spent $58.3 million on marketing costs in 2015, while Audi and BMW spent $195 million and $196.6 million respectively. Tesla’s marketing strategy, then, goes against the trend of developing TV advertisements and pushing its products onto consumers. Instead, Tesla focuses on word of mouth advertising, and referrals. Essentially, Tesla markets to its customers by not directly marketing to them. It encourages others, namely customers, to do the selling for them. Before the end of October 2015, the referral program let the person referring others get $1,000 in credit towards a new Tesla, or a Tesla service or accessory, for every purchase made from their recommendation. Moreover, Tesla does not have dealerships—instead, it has sales centers, which are sometimes combined with Tesla service stations, and online sales. Also, Tesla developed the Tesla Rangers, a mobile service team that can meet you where you need a repair. This can be on the road, but it can also be at your home; pretty much wherever and whenever it is convenient for you. Additionally, Tesla made each Model S manage and report its own data in such a way that you may not even need to bring in an expert for a fix at all. You can call a Tesla technician, who can access a vehicle’s data remotely, and talk you through a repair. All of these approaches to service correct some long-held car frustrations, making the customer experience with Tesla second to none. Task: Identify Tesla’s entrepreneurial marketing attributes and pricing strategy with proper justification.
Tesla, Inc., formerly known as Tesla Motors, has produced over 600,000 cars in its lifetime as a company, and overall earned $2.2 billion in cash and cash equivalents, as of the first quarter of 2019. Tesla does spend some money on marketing; but it spends considerably less than its competition. For example, Tesla spent $58.3 million on marketing costs in 2015, while Audi and BMW spent $195 million and $196.6 million respectively.
Tesla’s marketing strategy, then, goes against the trend of developing TV advertisements and pushing its products onto consumers. Instead, Tesla focuses on word of mouth advertising, and referrals. Essentially, Tesla markets to its customers by not directly marketing to them. It encourages others, namely customers, to do the selling for them. Before the end of October 2015, the referral program let the person referring others get $1,000 in credit towards a new Tesla, or a Tesla service or accessory, for every purchase made from their recommendation. Moreover, Tesla does not have dealerships—instead, it has sales centers, which are sometimes combined with Tesla service stations, and online sales. Also, Tesla developed the Tesla Rangers, a mobile service team that can meet you where you need a repair. This can be on the road, but it can also be at your home; pretty much wherever and whenever it is convenient for you. Additionally, Tesla made each Model S manage and report its own data in such a way that you may not even need to bring in an expert for a fix at all. You can call a Tesla technician, who can access a vehicle’s data remotely, and talk you through a repair. All of these approaches to service correct some long-held car frustrations, making the customer experience with Tesla second to none.
Task:
Identify Tesla’s entrepreneurial marketing attributes and pricing strategy with proper justification.
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