Tesla Segmentation, Targeting, and Positioning (2022)

Tesla became the most appealing automobile firm of the twenty-first century by spearheading the global shift to electric cars by their segmentation.

Tesla Segmentation, Targeting, and Positioning (1)

1. Introduction

Tesla segmentation, targeting, and positioning is a series of processes that entails identifying a certain population segment(s) and designing goods to meet the requirements and desires of the segment's customers (s). Tesla, Inc., which was previously known as Tesla Motors, was created in 2003 and only became successful in 2013. The company's headquarters are in Palo Alto, California, and it specializes in solar panels, lithium-ion battery energy, and electric vehicles. Elon Musk, Tesla's CEO, sees the company as a technological corporation and an independent manufacturer to make electric cars affordable to the wider populace.

People and families who are conscious of environmental concerns and the unfavorable environmental consequences of CO2 emissions make up Tesla's target market sector. Tesla successfully caters to the target consumer segment's emotional demands to feel environmentally responsible by purchasing electric cars and installing solar panels.

Market Segmentation of Tesla

Segmentation is the process of categorizing people into groups based on their age, social position, psychological qualities, and other factors. Targeting refers to selling items to certain groups (segments) discovered through segmentation. Positioning is the process of choosing and implementing the marketing mix that is most suited to the target client group. Mono-segment positioning is used by Tesla. As a result, the alternative fuel carmaker is aiming at those who are concerned about the negative environmental consequences of oil and gas usage.

Tesla goods are thought to be too pricey for normal people; hence the company's primary market is rich individuals and families. Simultaneously, Tesla may go from mono-segment to multi-segment posture shortly. Elon Musk described Tesla's business model in a blog article in 2006, stating that the firm makes sports cars, then uses the money to develop a more inexpensive vehicle, and then uses the money to build an even more affordable car.

Market segmentation is a type of marketing strategy that involves breaking down a bigger target market into smaller groups of customers with comparable goals and wants. Target market segmentation is a powerful tool for identifying unmet client demands. Professionals defined the characteristics of an ideal market sector as being important enough to provide revenue and sufficiently steady to ensure the segment's longevity.

3. Targeting of Tesla

Tesla's targeting segmentation approach includes behavioral and psychographic segmentation. It is aimed at dedicated and aspiring middle and upper-class customers who want and are looking for prestige, the appearance of being environmentally friendly, and the long-term cost-effectiveness of automobiles. Because Tesla Inc.'s strategic goal is to capture the mass market, the major target markets should be sectors with characteristics that are comparable to those of mass markets. And purchasers who prefer automobiles that get them from point A to point B in a cost-effective and environmentally responsible manner without requiring other specialized attributes such as comfort or beauty.

Other consumer groups inside their target market acted and valued things differently from the group above, according to their marketing segmentation and targeting technique. They were dubbed "fad users" since they would quickly follow a trendy trend or connect with stardom.

(Video) Tesla Presentation on segmentation targeting and positionning : Popov, Bouilly, Beuvain, Gavagnin

4. Positioning of Tesla

In this competitive market, the burgeoning e-car industry faces various hurdles. These difficulties include a limited driving range and increased automobile prices. Companies in this area must generate value and must find a solution to these issues. Due to limited resources, cutting-edge technology, and growing demand for sustainability, several new automotive manufacturers are attempting to enter the market. The strategic positioning of Tesla Motors is investigated in this research through an analysis of its external factors and quality enhancement.

The whole automobile industry is undergoing a technological transformation. Tesla Motors Inc. is an American automobile and energy storage company that produces, develops, and distributes premium electric vehicles. It also has an electric vehicle powertrain and battery components. Elon Musk, the CEO of Tesla Motors, has stated that the business plans to develop and introduce a budget vehicle in 2017, which will be far less expensive and smaller than prior models. Tesla's competitive advantage stems from its ability to employ current technologies more efficiently.

5. Table

Type of segmentationSegmentation criteriaTesla target customer segment
Vehicles: Future Consumer and CommercialEnergy storageSolar energy systems
GeographicRegionAsia, Europe, and AmericaAsia, Europe, and AmericaAsia, Europe, and America
DensityUrban and RuralUrban and RuralUrban and Rural
DemographicAge30+25-6530-65
GenderMost males and some femalesMost males and some femalesMost males and some females
OccupationEmployees, professionals, managersenior manager, executivessenior manager, professional employees executives
Income levelsHighUpper and middle and highUpper middle and high
BehaviouralDegree of loyaltyHard and Softcore loyal with some Switchers'Hard and Softcore loyal with some Switchers'Hard and Softcore loyal with some Switchers'
Benefits soughtenvironmentally friendly with Long-term cost-effectivenessLong-term cost-effectiveness And environmentally friendlyLong-term cost-effectiveness And environmentally friendly
PersonalityDetermine and ambitiousDetermine and ambitiousDetermine and ambitious
Income levelsHighUpper and middle and highUpper middle and high
User statusNon-users, potential users, new usersNon-users, potential users, new usersNon-users, potential users, new users
Psycho-graphicSocial classMiddle class & upper classMiddle class & upper classMiddle class & upper class
LifestyleEnvironmental friendly, Explorer, and aspirerEnvironmental friendly, Explorer, and aspirerEnvironmental friendly, Explorer, and aspirer

6. Mind Map

Tesla mostly caters to a single market. The luxury all-electric sports vehicle market, which they founded. They're now figuring out how to bring their Model X series into the mainstream market. However, it will take another couple of years to do this. And, if they can, a lot more private investment money. As a result, Tesla employs mono-segment placement. That is, they concentrate on a single part in great detail. Inside this one market segment, however, they pay particular attention to customer sub-group activity with this mind map that you can easily make in EdrawMind, which not only provides countless free templates but also give you a free hand in making your mind map from scratch with countless tools.

View, edit, and download this template in EdrawMind >>

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7. Key Takeaways

Tesla Motors Inc. is a company that creates, manufactures, and sells electric automobiles and electric vehicle components. The company's current approach is to manufacture pricey and high-end vehicles aimed towards affluent customers. Tesla Motors Inc. has to seek broad markets now that its customer and product acceptability is developing. Tesla Motors Inc. has to offer premium items for rich people since it uses innovative technologies in the vehicle sector.

(Video) 27.2 Tesla's segmentation problem

We spoke about how Tesla spends a lot of money on marketing segmentation and targeting to keep each pillar of their business plan informed and updated. We suggested that, rather than cost-based pricing, Tesla uses a data-driven marketing segmentation and targeting method to establish a prestige pricing strategy based on psychological and monetary value drivers. The evident inference of this piece is that Tesla is now dealing with the major business model and operational challenges. Their pricing, segmentation, and targeting strategies are no longer sufficient to address these concerns. You can also make one just like this within 5 minutes or even less with the help of EdrawMind. They have countless options for you to choose from their gallery and edit accordingly, and it's even beginner and user free.

8. References

FAQs

What market segment does Tesla target? ›

The Tesla target demographic is largely established families with kids, including younger children or teenagers, and they are mostly professionals, executives, senior managers or hold other high-income positions.

What type of targeting strategy does Tesla use? ›

Tesla uses mono-segment positioning. Accordingly, the alternative fuel vehicles manufacturer targets individuals concerned with negative environmental implications of oil and gas consumption.

How is Tesla segmented? ›

Tesla identifies four main types of segmentation, and these include; Geographic, Demographic, Behavioral, and Psychographic segmentation. The Tesla Geographic segmentation has to do with the region and population density. Demographic segmentation incorporates age, gender, occupation, and the life-cycle stage.

What is Tesla's positioning statement? ›

We're building a world powered by solar energy, running on batteries and transported by electric vehicles. Explore the most recent impact of our products, people and supply chain. We design sustainable systems that are massively scalable—resulting in the greatest environmental benefit possible.

What are Tesla marketing strategies? ›

Tesla works on an efficient and effective method of promotion i.e word of mouth. Its goodwill is driven from the customers to the potential customers. Tesla provided the best customer experience it could provide with the bucks, making its customers happy and enthusiastic about its product.

What makes Tesla different from its competitors? ›

Tesla's business model is based on direct sales and service, not franchised dealerships. Tesla's business model pays particular attention to rolling out charging stations.

How is Tesla's Model 3 car positioned in the market? ›

The volume for the first half of 2021 totalled 6.41 million units, up by 27% year-on-year from 2020, but 23% lower than in H1 2019. Low emissions cars (BEV and PHEV) continued to perform well, recording a new record total market share of 18.5% – up from 8.2% in June 2020.

Why is Tesla's mission statement effective? ›

For example, the mission statement can specify that Tesla aims to provide advanced automation and autonomous technologies to accelerate the world's transition to sustainable energy. Tesla's corporate vision statement effectively describes general strategic objectives.

Why is Tesla's strategy successful? ›

Tesla's success in reducing costs was to minimize risk by keeping very little inventory. Such inventory cost reduction was achieved by batch production after prepaid orders were obtained. Its order-production strategy offers a few advantages.

Why is Tesla marketing successful? ›

The entire marketing strategy of Tesla is done digitally, and very less or almost negligible amount is spent on traditional marketing methods. The entire promotion of the brand and its various products is done through the various online social media platforms like Facebook, Twitter, Instagram and YouTube.

What is Tesla's main competitive advantage? ›

For years in the electric vehicle kingdom, Tesla's competitive advantage was impossible to beat. Tesla's superior technology, futuristic design, and Mars-loving-CEO, all combined to solidify its position at the top of the EV hierarchy.

What challenges does Tesla face in its industry? ›

The most immediate concern: Tesla made over 22,000 more EVs than it delivered to customers in the third quarter, data released this week showed. That is the first time it has had to finance that many cars in inventory. For most of the past three years, Tesla has been selling more EVs in a quarter than it can produce.

What is Tesla's unique selling proposition? ›

They have developed a unique selling proposition that revolves around the fact that their cars are the only ones that can be driven without gasoline. Tesla's strategy revolves around two main points: 1) creating an amazing driving experience and 2) incentivizing people to switch to electric cars.

What segment is Tesla Model 3? ›

The Tesla Model 3 is a compact executive sedan that is battery powered and produced by Tesla.

Does Tesla have a platform strategy? ›

How Tesla Has Succeeded (So Far) with a Platform Strategy. Tesla has so far succeeded in the platform game by adopting a fully integrated approach, building and selling cars as well as deploying a (relatively) large network of fast-charging stations that are available only to Tesla vehicles.

When did Tesla change its mission statement? ›

Mission Statement

However, under Elon Musk's leadership, the business's objective was altered to "accelerate the expansion of sustainable and renewable energy" in mid-2016. This new statement denotes a little but important adjustment in the company's business strategy to capitalize on renewable energy market potential.

› Strategies ›

Tesla, Inc. which was formerly known as Tesla Motors was founded in the year 2003 and it only started being profitable in 2013. It is based on Palo Alto, Califo...
Tesla did not invent the electric car, but it invented the first successful business model for bringing electric cars to the market.

How Tesla Sets Itself Apart

https://hbr.org › 2020/02 › how-tesla-sets-itself-apart
https://hbr.org › 2020/02 › how-tesla-sets-itself-apart
Tesla and its flamboyant, and sometimes erratic, innovator Elon Musk have turned the more than a century old industry upside down in a mere 16 years. Traditiona...

What market sector is Tesla in? ›

The company operates through the following segments: Automotive and Energy Generation and Storage. The Automotive segment includes the design, development, manufacture, sale, and lease of electric vehicles as well as sales of automotive regulatory credits.

What markets does Tesla compete in? ›

Tesla has managed to see success by focusing on premium electric vehicles (EVs). There is more competition, however, now entering the higher-end electric and self-driving car market. Ford, General Motors, Nissan, Nio, and Honda are some of Tesla's main competitors.

What age group does Tesla target? ›

70% of the Tesla drivers in the data set were 34-years-old or younger — meaning the majority were Millennials or Generation-Z. Only about 32% of licensed drivers in the US are 34 or younger, according to the FHWA. Tesla drivers are also more educated on average, per Jerry's analysis.

What type of market is Tesla in? ›

Tesla's work in an oligopoly market which have a limited competition in which a few producers control the majority of the market share and typically produce homogenous products.

What is Tesla market strategy? ›

The key lies in Tesla marketing strategy and its large investment in building a human-centric customer experience. This includes human-centric marketing, marketing aligned with the company's goals, and word-of-mouth marketing.

How does Tesla market its products? ›

Tesla uses direct sales, unlike other automakers who sell through franchised dealerships. A global network of company-owned showrooms and galleries has been established, most of which are located in well-known urban areas.

Does Tesla control its market? ›

For years now, Tesla has dominated the electric auto market in its home country. It is expected that Tesla's hold on the market will erode as more EV options hit and help grow the US market, but for now, the US EV market is still extremely dependent on Tesla's production and deliveries.

What is Tesla's main competitive advantage? ›

For years in the electric vehicle kingdom, Tesla's competitive advantage was impossible to beat. Tesla's superior technology, futuristic design, and Mars-loving-CEO, all combined to solidify its position at the top of the EV hierarchy.

What makes Tesla different from its competitors? ›

Tesla's battery-powered vehicles are significantly simpler than their internal combustion competitors. By some estimates they have significantly fewer parts per vehicle — around 20 — versus the 2,000 in internal combustion engines. This simplicity dramatically reduces the consumers total cost of ownership.

How much is a Tesla at Target? ›

Many of these charging stations are ChargePoint stations (Level 2) or Tesla Supercharger stations with 250 kW. To charge your car at a Level 2 (6.6 kW) Chargepoint, you can get the first two hours for free. After that, it costs $2 per hour.

What demographic is buying Teslas? ›

Tesla buyers in general are very wealthy

EV buyers are more likely to be wealthy, especially with the price of most Teslas, by far the industry leader, significantly above the price of the average gas-powered car. Buyers of electric vehicles have been able to claim a federal tax credit of up to $7,500.

Videos

1. Product Positioning: The Story of Tesla
(NxtStep Consulting)
2. Tesla Market Segmentation - Sugar 1
(Giulio Ramazio)
3. MAR101 - CH6 - Segmentation, Targeting, & Positioning
(R. J. Birmingham)
4. Segmentation, Targeting & Positioning
(Bizconsesh)
5. MARKETING 101: Marketing Segmentation, Targeting, and Positioning
(Adam Erhart)
6. Marketing(16) Positioning STP process كورس التسويق(حلقة 16) استراتيجية تسويقية
(5 minutes tablet)

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