Concepts of Marketing Marketing Managers

Question: Discuss about the Marketing for Concepts of Marketing for Marketing Managers. Answer: Introduction The concepts of marketing are widely used to describe the communication channels between the customers and the company. The study of the market and its trends provides detailed characteristics to the marketing managers. The deep analysis of the market is essential, especially when a company is opting for market penetration or stepping into a new market segment. In this report the marketing blueprint of Tesla Motors is discussed. The company is venturing into the Australian market and hence the marketing blueprint is prepared. The situational analysis of the company is done, from a marketing point of view. The objectives of the marketing promotion plan in the new target market, are laid down and detailed strategies for the penetration in the new market is carried out. The last part of the report deals with the media and the allocation of the budget. Background Tesla Motors is an automotive company, which manufactures, designs and sells electric vehicle power train, electric cars, and various battery products (Tesla Motors, 2016). The company started its operations in the year 2003 and the headquarters of the company is located in California, America (Tesla Motors, 2016). The net income of Tesla was US$-888 million in the financial year 2015 (Tesla Motors, 2016). The company generated annual revenue of US$4.04 billion in the year 2015 (Tesla Motors, 2016). The primary competitors of the company include Mercedes Benz, BMW, Jaguar and others (Tesla Motors, 2016). The market share of the company was and the gross profit of the company was in the year 2015 (Tesla Motors, 2016). Figure Name: Financial Performance of Tesla Motors Source: Tesla Motors, 2016 The widespread popularity of Tesla was possible due to the production of Tesla Roadster, which was the first fully electric car in the sports car segment (Liu et al., 2014). The second vehicle of the company was Model S, a luxury sedan, which was fully electric. The following cars of the company, which came on the market, was Model X and Model 3 (Tesla Motors, 2016). The cars of the company are highly successful and appeal to the super rich target audience. The global sales of Model S crossed the 100,000 milestone, in the financial year of 2015 (Tesla Motors, 2016). The Model S was the worlds best selling car in the plug-in electric vehicle in the year 2015 (Yilmaz Krein, 2013). The company has sold over 125,000 electric cars across the world, since the inception of the first Tesla Roadster, in the year 2008. The company is not only a manufacturer of automobiles, but also manufactures equipments for office battery charging and home battery charging (Tesla Motors, 2016). The company has installed a series of high powered Superchargers, which are spread all over Europe, Asia and North America. Tesla operates a unique program known as Destination Charging Program, which enables restaurants, shops and others to offer fast, custom made chargers to their esteemed customers (Stringham, Miller Clark, 2015). The vision of the company is the creation of the most compelling car company, in the 21st century, by the transformation of the world vehicles to electric cars (Tesla Motors, 2016). The mission statement of the company includes the safety of the customers as its highest priority and accelerates the transition of the world to electric cars (Tesla Motors, 2016). The company strives to offer a full range of affordable electric cars, for each and every customer (Tesla Motors, 2016). The CEO of the company, Elon Musk, wishes to see Tesla Motors, as an independent automaker. He has a dream of offering electric cars to the average customers, at an affordable price. Tesla has laid down certain marketing goals for the accomplishment of the companys objectives (Yurynets Tomyuk, 2014). The primary marketing goal is the generation of demand for its own vehicles and the creation of long term brand awareness among the target customer base. The company aims to manage its corporate reputation in the most efficient way. The company strives for excellent management of the existing customer base so that there is generation of sufficient customer referrals and the company enjoys customer loyalty (Yurynets Tomyuk, 2014). Tesla is a customer friendly company, which incorporates customer inputs into the mainstream process of product development. Situational Analysis The emergence of electric vehicles is rapid in the entire world. It is expected to occupy around 35% of the global car sales within the year 2040 (Forbes.com, 2016). There would be a dramatic revolution in the market of electric cars. There are various forms of electric cars like plug in hybrids, advanced gas electric hybrids and battery electric vehicles (BEV) (Pollet, Staffell Shang, 2012). The electric car industry is expected to grow phenomenally and the reason for this growth can be attributed to positive environmental impact of the electric cars (Verzijlbergh et al., 2014). The electric cars emit zero emissions into the space, unlike the emissions from gasoline powered vehicles. The power required to charge these vehicles are also produced from specific sources, which are zero emissions sources in nature. The various sources are hydrogen, geothermal, solar, wind and others. Market Demography of Australia Australia has committed to the global transition towards an environment of zero emissions, with a goal to achieve the decarbonisation strategies, by the year 2050 (Jotzo, 2015). The country strives to achieve this mission by an approach of continued economic growth as well as current technologies that are available. The government of Australia aims to focus on the transport sector for lowering the level of emissions (Byrnes et al., 2013). The demands of hybrid electric vehicles are increasing at a fast rate and the market of electric vehicles is bound to increase in the near future. The Australian automobile market is booming as the country spends the highest amount of financial funds in product launches and lead generations, as depicted in the below figure (Terada, 2014). Figure Name: Social Media Advertising Spending by Australia Source: Byrnes et al., 2013 Demand Analysis There is a growing market of electric cars, with a number of car manufacturers opting in (Johnson Rose, 2013). There are new electric cars by the car manufacturers like Chevrolet Bolt from General Motors, Nissan Leaf and others (Yilmaz Krein, 2013). The demands for the electric cars are fair in Australia, as the country strives for addressing the issues of increasing fuel security. The country is vulnerable to disruption to the fuel supplies of the transport industry. The country believes that the increased use of electric vehicles as well as biofuels, would reverse the import issues of transport fuels (Johnson Rose, 2013). It would also lower the costs, improve the air quality, reduce greenhouse gas emissions and reduce the IEP compliance gaps (Johnson Rose, 2013). There would also be increased employments and an increase in the demand of locally produced electricity, which results in increased economic benefits. SWOT analysis The SWOT analysis is an effective tool for the formulation of suitable marketing strategies (Ayub et al., 2013). It helps the marketing managers to decide the marketing pathway he should follow in order to get the best results. The suitable marketing strategy would help the company capitalize the opportunities available to them, using all its strengths. Strengths There are some major positive characteristics of Tesla in the electric car industry (Weiller et al., 2015). The company has cutting edge recent technology like battery technology, vehicle design and power train technology. The company offers exceptional products and excellent performance of the vehicles. Tesla has a progressive corporate leadership strategy and strong brand name reputation in the market (Weiller et al., 2015). The company enjoys good reputation among its customer base and is fortunate enough to receive positive feedbacks from the press. The company has an innovative business model as well as innovative sales network. Tesla enjoys a strong access to the capital markets and a strong capital base (Weiller et al., 2015). Weakness There are several weaknesses of Tesla (Park et al., 2014). The product ranges of the company possess a high cost structure as there are no economies of scale. The brand recognition of the company is limited and the electric vehicle market is in a nascent stage. There is a wide range of customer concerns revolving around the electric vehicle market like scanty charging stations. Opportunities Tesla has got welcoming Australian market, which is ready to embrace the electric car industry, with open arms (Rimmer, 2014). The Australian electric car market has significant barriers for entry in the electric car industry, which inhibits the entry of the new companies. This minimizes the level of competition of Tesla (Rimmer, 2014). The country has rising customer awareness regarding the environmental benefits of electric cars. The rising cost of gasoline products makes the consumer opt for alternative sources of power. There are global concerns for energy means and dependency on fossil fuels, which makes the electric cars, an attractive alternative (Rimmer, 2014). The Australian Government is favorable for the electric car manufacturers and support the adoption of electric vehicles, by tax breaks, grants, low interest loans and others (Rimmer, 2014). Threats The management of Tesla should take into account the threats that could arise, when they start their operations in Australia (Barmore, 2013). There can be a significant increase in the number of competitors operating in the same industry. The competitors can be large automobile manufacturers and may provide major breakthrough products, which make use of vehicle battery technologies (Barmore, 2013). There can be an increasing number of substitutes in the Australian market such as ethanol fueled vehicles, natural gas vehicles and other non-electric vehicles, which are fuel efficient. Current competition Tesla would be facing stiff competition from both direct as well as indirect competitors operating in the electric car market (Porter Heppelmann, 2014). The areas in which the company enjoys competitive advantage are the luxury sedan markets and premium sports car category. The competitive advantage of Tesla includes superior technology, brand recognition, first mover market and innovative product lines (Porter Heppelmann, 2014). The indirect competition comes from car manufacturers like Jaguar, Mercedes Benz, BMW and others. These competitors enjoy a loyal clientele. Tesla should concentrate in focussing on its competitive advantage and perform aggressive marketing activities to capture a considerable portion of this market share. Marketing Promotional Budget of Tesla Tesla holds less belief for incurring expenditure for advertising in print ads and commercial ads. They are more inclined towards road shows and events like car shows, for the purpose of promotion of their products (Perrin, 2015). The company believes in educating the customers about the unique products of the company in order to create a buzz all around. The customer believes the positive word of mouth to bring all kinds of customers. Figure Name: Promotional Budget Plan of Tesla Source: Tesla Motors, 2016 Competitors marketing promotional budget and sales analysis The competitors adopt a wide mix of marketing promotional activities for their products. They have well defined budget plans for the smooth functioning of their products. The luxury car manufacturer Jaguar, spent a whooping $8m for an advert featuring British actors Mark Strong, Tom Hiddlestone and Sir Ben Kingsley (Forbes.com, 2016). The duration of the advert was one minute and it was considered as a mini movies named British Villains Rendezvous (Forbes.com, 2016). Figure name: Promotional Budget of BMW Source: Forbes.com, 2016 The above figure shows the promotional budget allocation of BMW. It shows that BMW allocates the major chunk of the budget to TV promotions followed by promotions in the radio channels. The company also utilizes other promotional media like magazine, outdoor medium the direct mail channels. Target markets The initial target market of Tesla comprised of upper class business executives and aristocrats who were looking for a high value luxury car (Hardman, Shiu Steinberger-Wilckens, 2015). The target market included males, who was looking for sports cars in the luxury car segment. They preferred to try a new genre of cars- motor car. The current target audience in Australia includes successful entrepreneurs and high end business executives, who are green friendly and tech savvy (Hardman, Shiu Steinberger-Wilckens, 2015). They are early adopters and wealthy, whose income bracket puts them in the upper class segment. Market positioning analysis Tesla should strive to position itself in the high value luxury sedan market, which is considered as a niche market (Pinkse, Bohnsack Kolk, 2014). The company should highlight its competitive advantages and use them rigorously in their promotion campaigns. The marketing manager of Tesla should identify the cars unique sales proposition (USP) (Pinkse, Bohnsack Kolk, 2014). The USPs should be well communicated to the customer so that the customer can feel the true worth of the products. The customers in Australia should perceive Tesla as attractive, reliable, high tech and environmentally friendly mode of transportation (Pinkse, Bohnsack Kolk, 2014). The price of the cars is not cheap yet it was cheap as compared to other high value sports car in the market. Marketing Plan The primary objective of Tesla for the period 2016-2017 should focus on increasing the number of vehicles, which are available to the customers (Wills, 2014). The company should strive for the creation of consistent, focussed and suitable marketing promotion strategy. The company should address the four main groups, which includes the companys customers, industry analysts, press and the inhouse retail sales team (Wills, 2014). Tesla should create a robust global advertising strategy as well as an advertising strategy suitable for the Australian market (Wills, 2014). It should focus on modern advertising strategies like pay per click advertisements on various websites, applications of media suitable for the target demographic population and others (Wills, 2014). It should also consider the traditional advertising methods like product placement in various automobile outlets. Tesla should also focus on out of the box specialized advertising strategies like Car Expo (Wills, 2014) . The company should engage in events where they can display their innovative vehicles. The events may include road shows, public events and others (Wills, 2014). The company can partner with the influential car journals or magazines like Motor Trend, Wheels Magazine or Car and Driver (Wills, 2014). The company can initiate partnerships with the green energy corporate campaigns so that they can promote the benefits of electric driven vehicles and promote the concept of driving green. Tesla should engage in partnerships with various governmental programs for encouraging the adoption of electric driven vehicles as well as reinforcement of various local and regional incentives, which are available to the buyers of electric vehicles (Wills, 2014). The marketing tactics of the company should focus on the quality of the cars. The company should make the customers visualize the high value of the cars. The high end car manufacturers should give their customers enough reasons to brag (Wills, 2014). The company should strive to make innovative products with better designs. The company should focus on the development of highly selective advertising strategy. The advertisements created by the company should be memorable and should focus on quality rather than quantity (Wills, 2014). Media and Budget Allocation The social media is a powerful tool for the purpose of lead generation and customer engagement. The use of social media platforms like Twitter, Facebook, Instagram should be utilized fully for the purpose of promotion of the high end cars (Rodrik, 2014). There is a tendency of the premium customers to scroll through the social media platform several times a day. They often share their purchase experience on the social media platforms. The potential buyers also consults the social media platforms before their car purchases. Tesla can make use of this and extensively promote their car brand in the social media platforms (Rodrik, 2014). The company can keep a significant amount of funds for the social media marketing. Tesla can make use of the budgeting methods for better allocation of the budgets. The various budgeting methods include Unit of sales method; Objective and task methods and Percentage of Sales (Rodrik, 2014). The percentage of sales method is the most commonly used methods and it relates the advertising expenses directly to the quantity of products sold. Figure name: Budget Allocation of Tesla Source: Rodrik, 2014 The marketing budget allocation should be preceded by the alignment of the marketing goals with the strategic goals of the company. The predetermined growth of the company should be directly proportional with the amount of investment for the marketing activities. It is also important to have written documentation of the marketing strategies, which would make the allocation of marketing budget easier. The companys budget allocation for marketing purpose should be identified before developing a detailed budget allocation plan. The complexity of the budget would depend on the identified marketing budget. The marketing managers should determine the amount of budgets to be allocated in each marketing activity. The above diagram gives a sample idea of the budget allocation of the company. The budget allocations shows the highest amount of budget allocation in the website design and maintenance, which presents a first impression of the company to its potential customers. The highest amount of the funds is also provided to two other marketing modes like tradeshows/events and email marketing. The other modes of marketing in which the budget allocation is done, starting from highest to lowest, are Search Engine Optimization (SEO), Pay per click, Direct mail, public relations, telemarketing, social media, automation, print advertising and virtual events or webinars. Conclusion The marketing is an important function of an organization as it deals with important components of a product like brand image, market positioning, profit making and the brand value of the product. It is the duty of the marketing manager to develop, plan and implement a suitable marketing plan, which would be best suited to the target market. A marketing function performs an important job role, who looks after a variety of product related features such as market segmentation, market positioning, budget allocation, demand analysis, analysis of the competitors and others. The manager also looks after the strengths and weaknesses as well as opportunities and threats of a product. Tesla is venturing into the Australian market and has taken initiatives to promote its products well in the new market. This report helped in the preparation of the marketing plan after studying the market demographics of Australia, the new market of Tesla. 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