Digital Marketing Strategies And Tactics For Tesla - An Essay.

This is a digital marketing unit so everything has to revolve around digital marketing.

Analyse and recommend Digital Marketing strategies and tactics. Also, please use theories and frameworks.

Details of Task:

For this assignment you are asked to select a company of your interest. The objective of the assignment is to provide senior management of a company with a detailed repor providing recommendations for appropriate digital marketing strategies for the future, based on thorough analysis of the company's market environment and current (digital) marketing strategie

Note: Please choose Tesla company

The report should contain the following elements:

• A brief description of the company, its core activities and the market(s) it operates in;

• An analysis of the macro, meso, and micro environment of the company, with an explicit focus on current and future general digital trends within the industry, as well as the compa s current use of digital technologies and platforms to support the overall strategy;

• Based on the above, an identification of the key areas where the customer experience can be improved using digital technologies and digital touch points;

• Evidence based recommendations for changes to the company's digital marketing approac explicitly linking it back to how this fits in the broader strategy of the company;

• A clear and realistic action plan, including time frames, responsibilities, and budgetary considerations.

You are required to use marketing models, theories, and frameworks to structure your analyses and recommendations (e.g. SWOT, customer journey maps, etc.).
All claims need to be supported by evidence from a variety of sources. The more evidence is provided and the richer the variety of sources, the better. Reports with less than five academic sources and five other sources (industry reports, company data) are extremely unlikely to be eligible for a pass.

Tesla is American clean energy and electric vehicle company based in California. Tesla specializes in battery energy storage, electric vehicle manufacturing, and solar roof tile manufacturing (Tesla, 2020). Tesla has multiple manufacturing plants and assembly lines such as Giga factories and Nevada plants.  As of 2020, the company sells Model X, Model 3, Model S, and Model Y (Tesla, 2020).   In 2019, the company awarded “the world’s bestselling plugin as well as best-selling battery electric passenger car manufacturer” because its plug-in cars covered 17% of market share and the electric segment covered 23 % of the market share across the world (Valentin, 2019). This report mainly focuses on digital trends in the automotive industry and digital technologies used by Tesla in order to promote its products and services.  Further, digital strategies are recommended considering the digital trends in the industry and keeping in mind the current digital strategy of Tesla. At last, the action plan is made followed by a conclusion.

External Analysis

In the present situation, the world economy is changing, being triggered by development in all industries.  The automotive industry affected the most by the digital transformation as it is the second most data-driven industry at the global platform.  This is all because of mobile technology and the internet of things. In the automotive industry, seeing this trend, tesla invested $82 billion to digitally enhanced customer experience when they are purchasing, researching, and operating a car (Newman, 2019).  Some of the trends are:

• Digital Sources while buying the car: Earlier customers buy cars when they influenced through a newspaper ad and the salesman. But nowadays, consumers are looking for online platforms before buying a car. Some websites are Edmunds and TrueCar as in these sites all information is available at a click and due to that actual showrooms transformed into digital market places equipped with VR (virtual reality capabilities) (Candelo, 2019). Through VR, customers get a 360-degree review and can hear the sound of potential models.  The impact of this is that companies started focusing on digital platforms for selling cars.
• Autonomous Driving:  Elon Musk, Tesla’s CEO predicted that the future will be an autonomous vehicle. The possibility that cars driving himself will be the future as from GPS to cameras to sensors to algorithm and connectivity. Due to self-driving technology, the growth of industry expected to double this can be seen in figure 1.

Figure 1: Growth of Automotive industry because of technology or digital trend

Source: (Candelo, 2019)

• Connected Supply Chain and advanced manufacturing plants:  The digital trends are valuable in the automotive industry because this helps to personalize the consumer experience. By using big data and digital tools, companies try to digitalize their supply chain, reduce costs, and try to engage customers by using data (Newman, 2019). Communication made possible by the internet of things and social media. This resultant decreased defect rates and increased productivity.
• Predictive Maintenance: The need for replacement and maintenance diagnosed by technology and artificial intelligence.  For that data is collected digitally and real-time information is used by companies  Due to that the automotive industry can provide better after-sales services to its customers
• Mobility as a service (MaaS): The trend of public and private ride-sharing becomes an essential part of connected living. Startups like Lyft and Uber disrupted the automotive industry. The concept of mobility as a service translates into big savings for customers (Newman, 2019). Hence, MaaS also becomes the trend in the automotive industry, and companies are focusing on getting advantage of it.

Internal Analysis

The internal analysis includes strategies or direction that Tesla opted for and what are the strengths that the company has or developed using digital marketing strategies.  SWOT analysis is done that includes strengths, weaknesses, opportunities, and threats. In the below section, an internal analysis of Tesla is done in order to know the pillars that help the company to grow and succeed in the near future (Mangram, 2012).

Strengths:  Tesla is a leading player in the market and people take it as a synonym for an electric vehicle.  This is the result of strong branding that is done by Tesla.  The company only has $6 per car budget for advertisement. Most car companies such as Renault-Nissan invest nearly 50 percent more than Tesla invests in the advertisement. Most companies use paid mediums such as radio, print, television, and billboards (Carlson, 2015).  But Tesla's approach is different as the company uses an organic approach. As in 2018, 25 percent of the conversation on social media was about Tesla’s electric vehicle. Further, the company ranked third out of 29 of the world’s top brands of cars for social media visibility (Fisher et.al, 2019). With that social media is a powerful tool that Tesla uses to create a powerful international brand.

External Analysis

Weaknesses:  Many companies tie-up with influencers on social media platforms in order to promote products. But in the case of Tesla, the main influencer of the company is its CEO, Elon Musk. Musk is more powerful than any other CEO in the world as Musk has 35.5 million followers on Twitter and Tesla only has 3.6 million followers (Goala, 2019). This shows that the company has a presence on social media because of Elon Musk and not because of Tesla. It is a weakness because if Elon Musk retired or resigned the brand image of Tesla would vanish with it. So dependency on the brand image on one person is the weaknesses of Tesla’s digital strategy.

Opportunities: Tesla has the opportunity to create a personalized brand and that leads to the connection of consumers with the brand vision.  The trends such as the use of technology for improving customer experience prove to be an opportunity for Tesla to create a better image in the mind of customers.  The company can use social media to a greater extent in all its areas such as purchasing, after-sales services, and enhancing the experience of customers. By focusing on all these areas the company can engage and build with its community. Some tools like partnering with influencers on social media platforms, using different platforms for getting attention, and use of artificial intelligence such as chatbots, etc. can help the company to engage and build a loyal customer base (Valentin, 2019).  Through that Tesla can generate organic growth. Further, customers nowadays like spontaneous content that also becomes an important tool for attracting loyal customers to social sites. So it can be said that some of the opportunities that Tesla can take advantage of are attracting customers with spontaneous content and changing customer experience using technology.

Threats: The threats for Tesla in the social media marketing strategy could be the use of digital tools in each and every department and section by companies operating in the automotive industry. Further, Tesla invests less in the promotion and branding of its cars but its competitor invests more. After some time, Tesla would face stiff competition with its competitors that result in the failure of its current social media strategy. As all companies start formulating strategies to attract customers through the social media platform.  Tesla does not have other platforms to promote its products the company mainly prefers viral videos, word of mouth, and positive publicity for promoting products, and this is done through social media platforms (Valentin, 2019). Thus, threats for Tesla in the near future are the competitor’s effective promotion strategy and the company’s only way to promoting its product is social media.  

Internal Analysis

Tesla mainly has zero paid media strategy; the company has been able to grow through the organic reach of social media.  For instance, the Cybertruck; the company got publicity as Elon Musk streamed online show to unveil its brand.  Because of this launch people’s feeds flooded with memes and screenshots of Cybertruck's appearance. This resultant in the word of mouth publicity and was the implementation of zero paid media strategy. Tesla brands got the number one position in social media platform spite spending $0 on the advertisement (Kostelijk, and Alsem, 2020).

The company has 2 million organic engagements mainly on Instagram where 55 percent of activities take place and along with that 11 percent of activities take place on Twitter (Kostelijk, and Alsem, 2020). All these platforms have organic reach.

From figure 6, it is clear that Tesla has zero aid media strategy as compared to its competitors. The strategy of the company is successful because the focus of the company is on “turning customers into fans” and they have succeeded by using this approach (Rimmer, 2018). The pillars of the social media strategy of Tesla are authenticity, controversy, and building relationships. The authenticity of Elon Musk helped to connect with the audience and controversy help to multiply the audience. Tesla’s competitors spend thousands of dollars for a 30-second ad on basketball game but Tesla sits back and watch their fans make these videos for them and that resultant in 6.9 million views*1/5000 conversion that means $75 million from just 1 video (Kostelijk, and Alsem, 2020).

The key areas where the customer experience can be improved by Tesla include at the time of purchasing as Tesla can provide a much better experience to its customers by improvising the purchasing process.  The digital steps can be added such as the use of virtual assistance, virtual reality, and providing multiple platforms so they can get a better experience.  The customer experience can affect all the areas of business so it is essential to think about customer experience first in a digital marketing plan (Bruijl, 2017).

In the case of Tesla, the area where customer experience can be included is purchasing, after-sales services, or maintenance and at the time of understanding the product-related requirements of customers. Tesla sells electric vehicles; the company customizes and improves its products on the basis of customer experience.  Firstly, Tesla focuses on improvising the car buying process and that includes the hassle-free purchase of tesla cars through Tesla’s website or in-store digital design center.  Then the company has a delivery team that takes care of document signing, payment, and delivery (Rimmer, 2018). But the area where Tesla can improve is after-sales service and maintenance and repair.  Further, the feedback mechanism area can be improved in order to get genuine feedback. Higher customer experience leads to a better and loyal customer base.  

Areas of Customer Experience Improvement

From the analysis, it is known that Tesla is using Zero paid media strategy and focus on getting organic reach. The company has a huge following across all social media platforms such as Instagram, Facebook, Twitter, and the company’s website.  Tesla is a leader in social media marketing in the automotive industry but the only area of concern is that the brand is more dependent on the image of Elona Musk.  Musk represents Tesla in the mind of its customers.  It is recommended that the company should use more social media influencers to promote its product and not solely depend on Elon Musk's image. It is analyzed that with one tweet of Musk, Tesla gets popularity in the market. This indicates that sales, revenue, brand image, and promotion in all areas mainly depend on Elon Musk's image. Hence, there is a need to diversify social media strategy and for that, the company can use influencer marketing such as partnering with influencers of Facebook and Instagram in order to promote products (Bughin et.al, 2018).

Tesla can promote itself in the market by focusing on its social values that the company is creating in the market.  Tesla should start an online campaign in which the company can position and build its image by spreading the message of its activities such as using eco-friendly products in its production, using different renewable sources of energy, and many more. Tesla can run a campaign on this in order to get positive publicity through the social media platform.  Further, it is recommended that the company should build its image by focusing on enhancing its customer experience mainly by emphasizing on the purchasing process and after-sales services (Kotler et.al, 2016). Tesla should not solely depend on word of mouth and publicity rather starts using email marketing and search engine optimization, and content marketing.

The digital marketing strategy for Tesla includes firstly target audience; the target audience of Tesla is men who are interested and keen for styling and driving performance.  On the other side, women are not likely to prefer Tesla as they perceive Tesla as quite a luxury brand but women like it because of its ecofriendly concept and initiatives.  Further, people still doubt the safety and reliability of Tesla electric cars.

Target Audience:  Women, Men, afford luxury cars,

Paid Search and Retargeting Campaign: Google ad words; keywords (safe affordable family car, ecofriendly car, time to upgrade family car)

Tesla's Social Media Strategy

Facebook Advertisement:  The advertisement on social media platforms will run in mind keeping things such as the value of family, college graduate, Bravo network, Luxury FB page, and Mon Blogs.  Further, in order to attract women, campaigns can be run on mobile apps, mommy bloggers as influencers, and targeted websites. Mommy bloggers can be engaged through banners ads, podcasts, by offering mommy bloggers test drive and positing in detail about their experience this could work as video content on the social media platform.

YouTube Advertisement:  Firstly, uploading teaser to get the attention of the audience with links such as ad encouraging pre-orders and ad encouraging “learn more”.  That some of the options could email with features, test-drive options and saving calculators (Kotler et.al, 2016).  Other options can be mail pop up events that include providing virtual test drive experience, social sharing using hashtags, and conducting test drive events.

Time: This type of campaign would be run before launching the car model. For example, the launch date of the car is on 10 June 2020 so the company should start promoting it from 25 Jan 2020 such as campaign on YouTube describing key features of the new car, teaser video, and virtual car experience and later on test drive and reservations with keywords such as Tesla, safety car, electric car, and affordable car. All these hashtags and strategy is for before launching of the car with the motive of bringing awareness, consideration, and decision.

Measure and Control: The control measures include weekly monitoring of social feedback, a survey of events via email and text, and checking Tesla product review. As the objectives of this campaign are to convert leads into pre-orders, higher social media engagement, ad effectiveness, website, and preorders.

Conclusion 

From the above analysis of Tesla in the automotive industry, some findings are that the automotive industry is having many digital trends such as online sources for buying cars, autonomous driving, predictive maintenance, and mobility as a service.  From the internal analysis of Tesla, it is known that the company is working as per the digital trends and using technology and digital platforms to improve. The company uses zero paid media strategy and mainly depends on Elon Musk influencing, word of mouth, and positive customer feedback.  It is concluded that the current digital marketing strategy of Tesla is impressive but for the future, the company needs to improve its strategy. Some of the recommendations are not depending too much on Elon Musk rather developing Tesla as a brand for that the company should use email marketing, run campaign targeting the right audience and by using the strength of Tesla that is its eco-friendly products and electric cars with the motive of developing social value along with the economic value.  All these hashtags and keywords should be used by the company in order to promote the name of Tesla.  The campaign should be run before six months of any new launch. Hence, Tesla is the brand that is using social media platforms effectively but further areas can also be improved.

References 

Bruijl, G.H.T., 2017. Tesla Motors, Inc.: Driving Digital Transformation and the Digital Ecosystem. Inc.: Driving Digital Transformation and the Digital Ecosystem (October 14, 2017).

Bughin, J., Catlin, T., Hirt, M. and Willmott, P., 2018. Why digital strategies fail. McKinsey Quarterly, 1, pp.61-75.

Candelo, E., 2019. How Platforms are Reshaping Automotive Marketing Management. In Marketing Innovations in the Automotive Industry (pp. 131-140). Springer, Cham.

Carlson, W.B., 2015. Tesla: Inventor of the electrical age. Princeton University Press.

Fisher, M. and McCabe, M.B., 2019. Tesla: Accelerating to Market. Journal of Strategic Management Education, 15.

Kostelijk, E. and Alsem, K.J., 2020. Brand Positioning: Connecting Marketing Strategy and Communications. Routledge.

Kotler, P., Kartajaya, H. and Setiawan, I., 2016. Marketing 4.0: Moving from traditional to digital. John Wiley & Sons.

Mangram, M.E., 2012. The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20(4), pp.289-312.

Newman, D., 2019. Top 9 Digital Transformation Trends in Automotive for 2020. Accessed From: https://www.forbes.com/sites/danielnewman/2019/12/20/top-9-digital-transformation-trends-in-automotive-for-2020/#1223586b59b8

Goala, G., 2019. Customer Strategies in the Face of New Technological, Social and Environmental Challenges. Augmented Customer Strategy: CRM in the Digital Age, pp.1-21.

Rimmer, M., 2018. Elon Musk’s open innovation: Tesla, intellectual property, and climate change. In Intellectual Property and Clean Energy (pp. 515-551). Springer, Singapore.

Tesla, 2020. About Us. Accessed From: https://www.annualreports.com/Company/tesla-motors

Valentin, M., 2019. The Tesla Way: The disruptive strategies and models of Teslism. Kogan Page Publishers.