VII) Promotional Strategy analysis
Below-the-line
With a Forbes article I identified multiples below-the-line techniques that were used by Tesla in 2020.
Below is what I found:
Customer Experience
Tesla’s connection with its customers
referral program
Customer experience
In the car industry, Tesla stands on top in terms of customer satisfaction. Tesla’s customers tend to be very loyal because 91% are planning on having a Tesla model for their next car. Their fanbase reached such a level of fanaticism that clients are willing to wait years for the new models. Their customer experience is one of the top reasons for their customer’s loyalty and satisfaction reaching these high rates. (Morgan)
Tesla utilizes two methods in order to optimize their customer experience:
Personalized Driver Profiles
Tesla offers you the possibility to create a personalized account by pushing a button. This allows you to change your preferences and settings in order to have the most comfortable driving experience possible. Accordingly, in function of who is driving, the car will adjust to respect all your settings such as mirror location. In addition to it, your personalization choices go beyond what any other car manufacturer can propose on the market. Tesla allows you to adjust things like suspension, braking, lights, radio presets and even driving style to match each user. The personalized account demonstrates to the customer that his satisfaction and content matters for the organization because he is recognized as a particular individual not one of many clients.
2. Data-driven design
Tesla also leads the market in terms of integrated data. (Morgan)
Multiple sensors combined to the software record all the data related to your driving experience to create a full picture of your personal utopian driving experience. All the data is also used in the elaboration of a performant navigation system that will maybe one day reach the auto-naviguation (self-drive) level. Tesla’s data collection provides some original insights that the personalized accounts can’t give because Humans tend to have a hard type to quantify that information such as the seats’ temperature. “By understanding each customer, what they are looking for in a driving experience and why they chose Tesla, the company can tailor the experience and change how the car drives to best meet their needs. A busy professional with a long commute will have different needs and therefore a different driving experience than a mom driving her kids around town.”(Morgan) Data-Driven design also allows the experience to constantly improve, preventing any customers from being unsatisfied.
By tailoring someone’s driving experience in terms of his needs, Tesla recognizes their clients more as family members, they grew up with because of them knowing all the customer’s preferences if the ones they didn’t formulate. Tesla gives the recognition the customers needs like Maslow hierarchy of needs stated. Consequently, they enhance the statement that their customers’ satisfaction is their main focus because everything is arranged to give you your dream experience leading to a higher satisfaction and customer loyalty.
Tesla’s connection with its customers
A brand’s success depends on its ability to build relationships with the public. Tesla has a strong user-centric strategy that includes owner clubs and customer forums. This allows the company to foster passion and loyalty to the brand. This strategy also supports a robust information base that is accessible to potential customers and builds upon itself.
The companies that seem to be most connected to their communities during the pandemic are those that have done more than promote their products and services. These companies also engage with their communities in a variety of ways, such as fundraising and donating to local hospitals and promoting social isolation in a responsible manner.
Tesla’s referral program
It has been proven that monetary incentives do motivate people to complete a task. As a Tesla owner (confirmed you have been delivered your car) you are able to promote Tesla’s products and receive commissions on your services for the brand. Tesla is implicitly trying to push its actual customers to read more and reflect on their vehicles. Knowing more about their vehicles in order to promote it to other people, can bring them to realization of the huge impact a Tesla vehicle or equipment can have on their life, more precisely which of them are simplified and facilitated. In consequence, Tesla ensures to have clients that are aware of the reason behind their purchase. Awareness of the reasoning behind your purchase is essential to customer loyalty and satisfaction. People are more likely to buy products they are more cultivated on and more satisfied with those they can evaluate the impact. They were also increasing brand recognition by raising awareness about their brand because the referral program members will need people to buy a Tesla product through their links.
Above-the line promotion
Social Media Marketing
When talking about Social Media Marketing, most people think it is about running advertisements on a social media platform such as instagram or twitter in order to reach a bigger audience and gain a higher conversion rate. This method usually requires financial resources because you are promoting your products and services on a platform you don’t own. (something Tesla didn’t plan in their marketing strategy). Taking into consideration Tesla’s disdain for traditional methods, they took another branch of social media marketing called influencer marketing (where you pay an individual with a high following to promote your goods or services on his page) and reinvented the concept. Except for outsourcing the promotion to an external individual with a large following, they decided to delegate that task to an internal stakeholder who fortunately has a large following, Elon Musk. Mr. Musk, because he is an internal stakeholder, is interested in higher profitability rates leading to his strong engagement in promoting Tesla regularly and freely.
Comparison to a competitor
In order to illustrate that Tesla caused its boom using their special promotional strategy, we have to make sure it is different from its competitors, eventually making an argument that it is their Unique Selling Point that caused that increase.
Ford is the closest competitor as they started manufacturing some fully-electric cars like the Ford Focus EV in December 2018.
Ford has historically marketed its vehicles to consumers using a range of promotional techniques. These tactics have included conventional forms of advertising like television and print ads as well as more contemporary ones like social media campaigns and digital marketing. Ford has recently concentrated on experiential marketing, collaborating with events and groups to allow customers to test drive and personally feel its automobiles.
Credit: UEFA
Tesla, in contrast, has mainly shunned conventional advertising strategies and relied heavily on word-of-mouth promotion. The business has instead concentrated on developing a strong brand recognition and generating attention through its cutting-edge goods, prominent collaborations, and sponsorships. Ford and Tesla have both achieved success with their respective marketing campaigns, but in a congested car market, Tesla has stood out thanks to its more innovative strategy.
VIII) The other 3Ps strategies analysis
This essay is supposed to evaluate the impact of promotional techniques on the sales. In order to have an accurate evaluation, a comparison has to be done between the other elements ( the 3 other P’s) of the marketing plan because we need to establish where the credit is due. It could have been the price, product or place strategy that could have been behind this fluctuation. The tool used to analyze that impact is a survey I ‘ve created for Tesla owners in order to understand how they did get in touch with Tesla and what made them buy the product.
Product Strategy
Tesla basically is a good seller. They are car manufacturers, they sell electric cars. Their product is a star (BCG metric) due to the #1 electric car manufacturer in the world and is in a market that is constantly growing because of the world’s attempt to transition to cleaner energies. Tesla’s cars also have a strong branding because their design is unique, as it is a materialization of a paradox with its simplistic exterior and the most sophisticated and spacious interior. Their product will attract new technology heads and also the environment activists. The strong branding is a way to increase brand awareness as no other car manufacturer has such an uncommon design.
Price Strategy
Tesla is selling goods that are expensive due to the impressive tech and eco-friendly system , making them luxury goods. They follow the price leadership strategy as they also charge a high price as an attempt to display their products as quality ones (a complete success).
Place strategy
Tesla has no franchises. Tesla is selling goods on an online-based shop, they eliminated the need for third-party interaction. Accordingly, they intentionally make their goods more difficult for their customers to get their vehicles. This choice adds an exclusivity dimension to Tesla’s products due to the limited supply, improving their brand image at the same occasion. Having an online-based shop also communicates to the customers that they are dealing with a modern manufacturer that is willing to adapt to its time (during the pandemic no one could go to physical shops). This degree of adaptation ensures the customers of Tesla’s will to constantly improve increasing customer’s loyalty.