Marketing Plan - Tesla Motors

Marketing Plan: Tesla Motors Hampton Abbott Ellie Gray Heather Husse Taylor Tutton Mason White

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Table of Contents

Executive  Summary  ..............................................................................................................................  1   Meet  the  Team  ........................................................................................................................................  2   Situational  Analysis  ..............................................................................................................................  3   Objectives  &  Goals  ................................................................................................................................  4   Target  Markets  ......................................................................................................................................  5   Research  ...................................................................................................................................................  6   The  Big  Idea……………………………………………………………………………………………………………….8   Part  One  .......................................................................................................................................  8   Part  Two………………………………………………………………………………………………………..10   Part  Three  ................................................................................................................................  13   Budget  and  Timeline  .........................................................................................................................  16  

Executive Summary Tesla is a new innovative, luxury brand with a fast performance. However, the brand is recovering from a poor current perception of being unreliability and unsafe. The Tesla Model S suffered due to reports of spontaneous fires in the cars. However, recent safety ratings and awards have shown that the Model S is indeed a safe and reliable car, perhaps the best on the market. The Tesla Model S’s price point of $71,000 has allowed the emerging brand to capture 8.4% of the 400 billion dollar electric luxury vehicle market, which is expected to continue expanding. Also, Tesla’s unique approach, replacing pesky dealerships with informative stores and convenient online shopping, has intrigued the market. With a target market meant for successful upper class families who are tech savvy and green friendly, Tesla competes with brands such as BMW, Mercedes, Lexus, Audi, Volt, Prius, and SmartCar. Our marketing plan seeks to prove to our target market, specifically upper-class families, that the car has been re-engineered to be much safer and more reliable and that Tesla is a brand you can trust; thereby converting consideration of the brand into purchase. In doing so, we will also increase social media presence and Tesla’s market-share in the luxury car market. The campaign will include a commercial to be aired once at the Super Bowl and then pulsing on network television for the rest of the campaign. It will also include a cross-country tour, to allow consumers a hand-on experience to test Tesla cars and engage with the brand. Finally, we will rev up Tesla’s social media presence on Facebook and Twitter, complementing the other parts of the campaign.

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Meet the Team

Hampton Abbott Hampton Abbott about is originally from Charlotte, NC, coming to the University of South Carolina in 2011 in order to pursue a degree in Marketing at the Moore School of Business. Hampton has also worked in marketing for the University’s Athletic Department as well as State Farm, enabling him to bring an experienced perspective on sales and promotional awareness.

Ellie Gray Born and raised in Chicago, IL, Ellie came to the University of South Carolina to study marketing and management at the Moore School of Business. Although she has little background in the car industry, she brings a fresh perspective to the Tesla management team as well as a keen eye for marketing and communications strategy.

Heather Husse A South Carolina native from Greenville, SC, Heather is a senior at the University of South Carolina studying Marketing. With a background in marketing and event planning across various industries, she has the knowledge and experience to bring a solution to any challenge the Tesla management team has to offer.

Taylor Tutton Taylor Tutton came to the University of South Carolina in 2011 to study business. As a senior he is majoring in both management and marketing and brings customer service experience to the Tesla Marketing Team.

Mason White Born in Greenville, NC then moved to Fort Mill, SC after high school. Currently attending the University of South Carolina for Marketing, Management, with a concentration of Real Estate Investment. I bring industry knowledge and background to the team.

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Situational Analysis ● Strengths ○

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Tesla has been rated with the highest safety rating of any car by the National Highway and Traffic Association, along with other awards, such as Automobile Magazine’s 2013 Automobile of the Year. It is an electric car that is also a quality luxury product, offering sophisticated software and technology and quality performance. Tesla has over three hundred patents on in house technology. Tesla has a unique selling strategy that differentiates itself from other traditional car dealerships. By selling in stores instead of dealerships, Tesla allows the consumer to not feel as pressured to buy and actually enjoy the car buying experience. Because it is better for the environment, the United States Government offers up to $7,500 in tax credit and depending on the state it may offer $605 to $9,600 worth of incentives for purchasing a Tesla.

● Weaknesses ○

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There are only 65 Tesla stores located throughout the country. Because consumers can only purchase Tesla’s in-store and online, this limits the company’s exposure to potential customers. Tesla’s have had malfunctions associated with their batteries, like catching on fire. Tesla’s are limited to the range of the battery charge. There is a lack of brand awareness because it is a relatively new company with a small marketing budget.

● Opportunities ○ ○ ○

Tesla is planning to open more stores and Superchargers throughout the United States. There is an opportunity to broaden Tesla’s social media presence. There is a growing market and increased acceptance for electric cars. Because of the inflation of gas prices, electric cars reduce the cost of ownership over time.

● Threats ○ ○ ○

States such as Texas and Michigan dealership lobbyists could start a trend of banning stores because they feel threatened by Tesla’s selling model. The infrastructure of Tesla’s charging stations cannot compete with amount gas stations that are currently around the U.S. Larger automobile companies are contributing more resources to engineering electric cars than Tesla can contribute.

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Objectives & Goals Objectives ● ● ● ● ● ● ●

Create awareness of our increased safety rating to regain target market trust in our brand and convince our identified targets to purchase our product. Increase awareness of the location of Supercharger stations and their convenience and ease of use for current and prospective Tesla owners. Directly reach our target audience of mothers and fathers looking for a safe, reliable and stylish luxury car for their families. Create a hands-on experience to allow consumers to see for themselves the benefits of driving a Tesla. Increase sales Increase market share in the luxury car market Increase social media presence

Goals ● ●

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Increase awareness of new safety ratings by 30% Double social media followers (Facebook ⇒1.5 mil; Twitter⇒ 1 mil) Increase sales by 5% Double share of luxury vehicle market to 3% (currently 1.4%)

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Target Markets The target market is successful upper-class business people who are tech-savvy and green friendly, with an annual income over $150,000. Since the Model S has an added seat feature and can seat up to 7 people, we want to focus on families. Included in the family category would be people who have not yet started a family but are looking to in the future. Families are concerned with safety and performance. Upper class families are also concerned with style and luxury when shopping for a car. By separating the target marketing into two segments, the father and the mother, we can clearly see how Tesla fits perfectly to solve their problems when shopping for a car. The two segments that we are focusing are: 1. Fathers a. Age 30 to 60 b. Middle to Upper Class c. Income over $150,000 d. Interested in the safety of his children and impressing his friends. The persona for this segment is middle to upper class men with children or about to have children. The father is responsible for driving them to school, picking them up, and bringing them to any extra curricular activities that they might have. He enjoys watching football and playing golf with his friends and coworkers. He is shopping for a new car to be able to fit his children comfortably and safely, and is struggling with sacrificing his desire for a luxury sports car for something more practical like a minivan. The Tesla Model S is a perfect solution to this problem as it provides him with the style and performance of a luxury car, is safe for the whole family, while providing the added benefit more cost efficient and better for the environment. Rather than giving up the sports car they like to show off to their friends, Dads can have it all with the Tesla Model S. 2. Mothers a. Age 30 to 60 b. Middle to Upper Class c. Income over $150,000 d. Biggest interest is the safety of her children The persona for this segment is a married woman with children, or about to have children. She is shopping with her husband for a new car. She is not worried about style or luxury when shopping for a car; rather her main concern is the safety of her children. She might think that a minivan is the best and most practical transition for her family. As the decision maker in the family, she must be convinced of Tesla’s superior safety rating, cost effectiveness, and practicality in order to forgo her preconceived notions of unreliability.

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Research Our research has found that Tesla is suffering from lack of awareness, as well as a negative brand image due to several fires in the Model S. With a price point of $71,000, Tesla should be rather competitive in the luxury car market. However, Tesla represents just 1.4% of the 400 billion dollar luxury car market, and 8.4% of the electric luxury car market. Our research has shown that the Model S is extremely safe, which should convert to an increase in sales. We have also found that Tesla offers a new selling strategy more fitting to the modern carshopper.

Market Share Our research has shown that Tesla’s main competitors in the luxury auto market are BMW, Mercedes-Benz, and Lexus. Each one of these companies has their own version of a hybrid or electric car. Because they are established brands with a loyal customer base, Tesla is having trouble penetrating the market. However, Tesla offers something none of these companies offer: an all-electric car that looks and feels like a sports car.

Safety Ratings and Rankings The Tesla Model S not only received five out of five stars in one category of the safety ratings, but in all three (frontal crash, side crash, and rollover). This is a rating that only 1% of cars receive. However, awareness of this statistic is alarmingly low. Our primary objective should be to make these ratings into public knowledge, therefore reversing the presumption that the Model S is unsafe.

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Along with these outstanding rating, based on the Consumer Reports Annual Auto Issue’s 1.1 million-person survey, the Tesla Model S was rated the top overall pick. It was rated the number one in quality, reliability, and satisfaction. The Model S was given a rating of a 99 out of 100, making it the highest model ever rated.

Social Media Voice Tesla also suffers from a lack of online presence. Our research showed that Tesla only had 710,000 facebook followers, with the markets leading brands showing an average of three to six million. In order to increase the brands awareness we will have to increase our brands online voice, beginning with social media.

Selling Strategy Research has shown that the car-buying industry in America is changing. No longer do customers want to visit multiple dealers to find their next car, instead preferring to do more advanced research online. The McKinsey report says the average buyer visits just 1.6 auto dealerships while car shopping, down from 10 years ago when buys visit an average of 5 dealerships. Most people buying a new car are looking for a good deal, no haggling, and no wasted time. According to a survey done by Cisco, almost half of the U.S. consumers said they would be content with shopping for a car at a mall kiosk rather than an auto dealership. By not having any dealerships around the country, Tesla is leading the way for this change in shopping experience. When shopping for a Tesla, there is no negotiating, you pay for what you get. Their model is very similar to Apple. Tesla stores are solely informational; you have to buy your Tesla online. Employees are paid on salary and benefits and do not get commission. They are trained to educate the population about Tesla motors, not to make a sale. This way, customers can go in store without fear of salesmen haggling or pressuring them to purchase, just getting more information about the benefits of the car.

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The Big Idea “Where Does Your Charge Take You?” Families are on the move. Sports practices, school, work, family road trips, you name it; families are driving there. When shopping for the vehicle to get them places, mothers are looking for safety for their children; fathers are looking for luxury and style to show off to their friends at the golf club. With seven seats to fit the whole family and the highest safety rating a car can get, Tesla has it all. “Where Does Your Charge Take You?” encompasses the benefits that Tesla has to offer - a cost efficient electric battery charged vehicle that takes the whole family places safely in style. You want to take your Tesla to work. You want to take your Tesla to soccer practice. You feel safe driving your newborn home from the hospital in your Tesla. Tesla is perfect for the whole family.

The Big Idea Part 1: Commercial We will kick off the campaign with a national commercial, first airing at the Super Bowl. The Story: A family is leaving the hospital after the mom just had a newborn baby. Mom (with newborn), Dad, Grandma, Grandpa, and two small children all are present. Dad has the keys and clicks them to unlock the car, a minivan is blocking the view and lights flash tricking the audience into thinking the family is getting in the minivan. However, as the family approaches the minivan, the minivan pulls away. Without the minivan blocking the view, the Tesla is revealed. Cue exciting music and the two kids run excitedly to the sleek car. All 6 people climb in the car, and the baby is put in a car seat in the back. Before they get in the car, Grandpa says to Dad, “How’d you talk the lady into letting you keep this one?” Mom says, “This is the safest car ever tested, I wouldn’t want him driving anything else.” Dad is shown driving away, the whole family safely in the back. The commercial cuts to a screen saying “National Highway Traffic Safety Administration 5 star safety rating, Better Than Any Car Ever Tested, Including all minivans and SUVs” Tagline: “Where Does Your Charge Take You?”

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Television Commercial Breakdown CNN ● ● ● ● ● ESPN ● ● ● ● ● ●

Median Age: 61 Median Household Income: $53,000 Viewers ages: 25 - 54 More than 2 million primetime views Morning and Evening slots on weekdays

Median Age: 45 Median Household Income: $48,000 Currently covers 99.1 million households Delivers more men that are in the 25-54 age group who are in upscale households than any other cable network Weekend slots during important sporting events Average $150,000 per 30 second slot

CBS ● ● ● ●

Median Age: 53 Viewers ages: 18 - 49 Sunday night slots Average is $100,00 per 30 second slot

FOX ● ● ● ● ●

Median Age: 53 Median Household Income: $63,000 72% Males Viewers Buy Evening slots during the week Reach is 15 million per month

Golf Channel ● Median Age: 54 ● Median Household Income: $86,300 ● Buy slots on weekends and during tournaments such as the Masters

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The Big Idea Part 2: Cross Country Tour What is it? As part of the awareness campaign, we are designing a five city tour. This tour is parallel with the “Where does your charge take you?” social media campaign. Tesla would be stopping at five different cities throughout the country to host very elaborate events. These events would contain semi-permanent structures that include lighting, audio, and HVAC. At these events we would have information presentations to educate the attendees about all aspects of Tesla motors, as well as different simulators and driving experiences. The goal of these events would be to show potential customers why Tesla Motors is different and better. These events will also help increase our social media presence by posting pictures and videos. Not to mention that a huge part of the guest list will come from the people that “like” the Tesla Facebook page. When attendees arrive at the event we will encourage them to post pictures and use hashtags like #wheredoesyourchargetakeyou and #Tesla. To increase our Facebook followers we would offer an incentive to like our page for a chance to win tickets to one of these events. The rest of the invitees would come from potential customers that drive competitor car and also people that currently drive Tesla Cars. We will plan to have around 500 people at each event for a very exclusive experience. They will be treated with gourmet catering and the ultimate Tesla experience. Informational Presentations We are not talking about the boring presentations, during which people just listen to statistics and features about a car. This will be an interactive presentation in which people of the crowd will be asked to come on stage, play games, and text-in for the chance to win a Tesla. These events will follow suit with the current Tesla strategy that strays away from the typical car companies. They are not designed to sell cars but instead to educate and inform the population so they choose Tesla over any other brand. Simulators The events will contain simulators so the attendees can get in and test what the automatic brakes are like. Since the technology for this is so new people are concerned about the reliability and safety of this system. Once leaving the event, the guest will have a new appreciation for this technology and a desire to purchase Tesla of their own.

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Driving Experiences We will have several tracts in which the guest will be able to drive as well as ride passenger. Through these test drives the guest will be able to see how fast the pick-up on the car is, and test how well the car handles. After this driving experience the guest will know they can have it all! Event Locations In each of the following cities we will host one of our events. We choose these locations because we believe they have a huge percentage of people that fall into our target population. Below each are some facts and demographic information about the area. ●

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Beverly Hills, CA ○ Median Age: 48 ○ Median Income: $105,500 ○ Suburb of Los Angeles ○ Close proximity to several Tesla galleries and Super Charger stations Denver, CO ○ Median Age: 39 ○ Median Income: $74,600 ○ 15 miles from a Tesla Gallery Atlanta, GA ○ Median Age: 39 ○ Median Income: $66,900 ○ 17 miles from a Tesla Gallery McLean, VA ○ Median Age: 46 ○ Median Income: $167,100 ○ 55% of the population makes at least $150,000 per year ○ Suburb of Washington, DC ○ This city is currently home to one of the Tesla galleries Darien, CT ○ Median Age: 38 ○ Median Income: $154,700 ○ 48% of the population makes at least $150,000 per year ○ 25 miles from a new Tesla store

Tesla’s Where Does Your Charge Take You Tour 11

Event Images

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The Big Idea Part 3: Social Media Strategy One of the major weaknesses of the Tesla brand is awareness - of the product, the features, and the brand. Social media is a great way to increase awareness of product offerings and engage consumers with the brand. Right now, Tesla is lagging behind other well-established luxury car brands in social media presence. Telsa currently has around 700,000 likes on Facebook and 400,000 followers on Twitter. Mercedes and BMW both have more than 15 million likes on Facebook and nearly 1 million followers on Twitter. Tesla has a lot of catching up to do. We believe that in addition to informing consumers about Tesla’s features and product benefits, Tesla should use Facebook and Twitter to interact with consumers on a deeper level. We will incorporate the “Where Does Your Charge Take You?” campaign into social media, as well as add one more interaction We have created two interactive strategies to be introduced using Facebook and Twitter over the four-month campaign: “How close are you to a charging station?” and “Where does your charge take you?”

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“How Close Are You To a Charging Station?” Because the electric car technology has yet to be fully adopted into the market, many consumers are reluctant to purchase. They believe that electric cars do not last as long as gasoline-powered cars and charging is inconvenient, especially for long trips outside of your home. However, Tesla proves on its website that nearly 80% of the country is within a 200 mile radius of a Tesla Supercharger Station and the car can be half-charged in as little as 20 minutes. Each Supercharger is strategically placed throughout the country to provide minimal stops for Tesla drivers. In this social media strategy, Tesla will encourage their Facebook and Twitter followers to find out for themselves how close a charging station is to them. By posting a picture or the station or commenting with their answer, Tesla consumers will not only debunk the myth of inconvenience, but also feel connected and closer to the brand itself. Tesla, after posting the post prompting followers to engage, will also post maps locating current Supercharger Stations and their plans for expansion. It could post statistics about the speed of charging, or tips for what to do while your Tesla charges for 20 minutes.

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“Where Does Your Charge Take You?” Many car brands have successfully executed social media campaigns asking current carowners to post pictures of themselves with their car, encouraging brand loyalty. We want to take a modern spin on these types of campaigns, specifically tailored to electric cars. One of the main attractors of the Tesla brands is the environmental and cost benefit of Tesla cars – electric cars are the future. Tesla is the only brand that has successfully integrated style and luxury with an all-electric car. Tesla wants to reward current owners and intrigue potential customers. The “Where Does Your Charge Take You?” campaign asks current customers to post pictures or comment about where they drive with their Tesla. Owners engage with the brand, while potential customers can see real life pictures of how far Tesla’s can travel and how satisfied real life owners are with their cars. This campaign will also be in conjunction with our Cross Country Tour events. Tesla will post where the next stop will be on the tour, using the hashtag #wheredoesyourchargetakeyou. It will post contests for tickets to the events, only to Facebook or Twitter followers, to encourage more people to like the page. We will feature the most popular or interesting posts from Tesla customers on our page, to encourage more people to post.

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Budget and Timeline Budget ●

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Commercial Expense - $15 million ○ Super Bowl ■ Production = $400,000 ■ TV Spot (30 seconds) = $4,000,000 ○ Network TV pulsing = $10,600,000 Cross Country Tour Expense - $10 million ($2 million per city) ○ Production ■ Includes: Semi-permanent Structures Labor Transportation Lighting & HVAC Catering Cars Giveaways ○ Invitations ■ Research on guest list will be outsourced to an outside company ■ Printed invitations ○ Social Media ■ Event Sweepstakes ■ Post about the event ■ Video and Image posts Allocated Social Media Expense- $ 5 mil ○ Sponsored Facebook Ads = Pay-Per-Click ○ Sponsored Twitter Ads = Pay-Per-Click

Total Budget = $30 Million

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Timeline February ● Launch Commercial during the 2014 Super Bowl ● Air Commercial nationally on CBS and ESPN ● Start Tesla Cross Country Tour in Los Angeles, CA ● Move tour to Denver, CO ● Launch Social Media Campaign March ● Air Commercial on FOX and Golf Channel ● Move Cross Country Tour to the East Coast starting in Atlanta, GA April ● ●

Air Commercial on CNN and Golf Channel Cross Country Tour Event in McLean, VA

May ●

Finish Cross Country Tour Event in Darien, CT

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