Assignment 2 - 103987397

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Swinburne University of Technology *

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MKT20025

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Marketing

Date

Feb 20, 2024

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docx

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19

Uploaded by BarristerCoyotePerson920

Report
1 Social Marketing Report - Assignment 2 2023 May 9th SWINBURNE UNIVERSITY OF TECHNOLOGY Published By: NICHOLAS DOBIE CLIENT NAME: TESLA
Executive Summary Purpose of the report: The purpose of this report is to analyse the impact of internal factors on consumer behaviour in Tesla Model 3 purchases and to evaluate Tesla’s current marketing efforts and recommend enhanced marketing strategies. Consumer behaviour in the context of purchasing a Tesla Model 3 is influenced by various internal factors such as an individual’s values, thus, to develop effective marketing strategies, that align with preferences from the target market, one must fully understand these factors. The Tesla Model 3 has gained significant popularity in the market, driven by the Tesla's ability to leverage psychological factors associated with electric vehicles, and their functional dominance over the conventional fuel powered automobile. This has resulted in strong demand from environmentally- conscious and tech-savvy consumers. Popularity in the market towards the Tesla Model 3 is motivated by the company’s ability to utilise different internal factors to influence consumers’ opinion on the company. After conducting thorough research and analysis, it is evident that Tesla has successfully capitalized on peoples internally driving factors associated with electric vehicles, such as their internal needs & motivations as well as value- expressive attitude formation, to establish a compelling brand image (Kabadayi et., al, 2017). These ideas have driven strong popularity amongst progressive consumers and has taken triumph over the conventional fuel-powered vehicle in many aspects. However, there are opportunities for Tesla to further optimize their marketing strategies. Personal factors, such as individual motivations and needs, should be considered to tailor marketing messages to different consumer segments (Kabadayi et.al 2017). Tesla can design more tailored marketing strategies that resonate with certain client groups by studying the different interests and aspirations of potential Tesla model 3 purchasers. Enhancing Tesla's social marketing initiatives might also offer major benefits. Strengthening brand advocacy among existing Tesla owners and introducing referral programmes can capitalise on the power of word-of-mouth to double the effect of Tesla's marketing operations. (Hoyer & MacInnis, 2018). Based on these insights, several recommendations are proposed to enhance Tesla's marketing approach for the Tesla Model 3. These include providing an enhanced test drive experience by providing individualised demos to improve the test drive experience for potential consumers, as well as developing an interactive online configurator and virtual showroom which would involve making a virtual showroom and interactive online configurator so that potential buyers may explore and customise their own tesla model 3. Finally, our research emphasises the necessity of examining internal aspects that impact customer behaviour when analysing and developing Tesla Model 3 marketing efforts. Tesla can optimise their marketing approach and heighten demand for the Tesla Model 3 in a competitive market by utilising varying internal appeals, addressing personal motivations and attitudes, and enhancing social marketing activities. 2
TABLE OF CONTENTS Executive Summary………………………………………………………………………………2 Introduction…………………………………………………………………………………………4 Target Market Selection……………………………………………………………………………6 Internal Factors………………………………………………………………………………………9 Recommendations……………………………………………………………………………………12 Conclusion…………………………………………………………………………………………14 References…………………………………………………………………………………………15 Introduction The client for this report is the industry leader in electric vehicles, Tesla. The goal of this study, as a marketing consultant, is to use expert knowledge of consumer behaviour and internal influencing elements, such as needs/motivation and value expressive attitude formation, to investigate how these aspects might shape an electric car purchase choice. Tesla has hired a marketing consultant to design successful marketing techniques that would accelerate the uptake of their EV brand, with a particular focus on the Tesla Model 3. The study will guide the creation of marketing strategies that Tesla should consider applying as a result of this investigation. N. Dobie, a marketing expert has been hired by Tesla to address their desire for an uptake in EV sales, more specifically the Tesla model 3. I have been commissioned by Tesla to increase the market acceptability and adoption of their EV brand thanks to his in-depth grasp of consumer behaviour and his capacity to recognise the driving forces behind purchasing decisions. Tesla is a player in the fiercely competitive and quickly growing electric vehicle market. Due to rising customer demand for environmentally friendly transportation choices, the EV industry has experienced rapid expansion in recent years. Industry statistics collected by the International Energy Agency (IEA) claim that from 2021-2022, global EV sales had increased by 58.7%, reaching an astonishing 7.3million units sold and is projected to grow by 119.18% by 2025 (IEA, 2023). Tesla and its model 3 face an array of rising competitors that are spread over several automotive categories. The electric vehicle market is filled mainly by brands like BYD Auto, Tesla, Volkswagen, Wulling and BMW, with Tesla falling second in total market share with 12%, which is 8% short of the industry leader BYD auto, as Counterpoint data analytics suggests in Q4 of 2022 (see figure 1) (Investopedia 2021). 3
As for the luxury vehicle market, the tesla model 3 stands at the highest number of sales as of May 2022, totalling at 4469, a 2813 sale increase from teslas closest competitor in sales, the Volvo XC40 (Car Expert, 2022) The most recent autonomous vehicle market share statistics by brand are not publicly available as the market is fairly juvenile, and these leading brands such as Waymo (subsidiary of Alphabet) and Cruise Automation (owned by General Motors) are limited to certain geographic regions. Tesla is said to be a rising competitor in this space (Schoppa, 2023) This report will primarily entail discussion about 2 key internal influencing factors relevant to consumer behaviour: needs/motivation & value expressive attitude formation. By delving into the theory surrounding these factors, suggestions for increasing the uptake of EV sales can be uncovered, identified and presented to Tesla, to accelerate their sales. To achieve this, a systematic inclusion of analysis, recommendation, research and drawing conclusions will be implemented into the body of this report and will involve uncovering insights about consumers that provide a foundation for progression into innovative marketing solutions. 4 Figure 1: Global Electric Vehicle Model Sales Tracker: Q1 2018 – Q4 2022 https://www.counterpointresearch.com/global- electric-vehicle-market-share/
Target Market Selection The marketing manager uses market segmentation as a tool for decision-making when it comes to choosing a target market for a particular product. Market segmentation is a decision-making tool for the marketing manager in the crucial task of selecting a target market for a given product and designing an appropriate marketing mix (Dolnicar et al. 2019). By utilising market segmentation, businesses can customise their services to better meet the needs of their target market. Understanding the customer guarantees that the company can continuously provide for individuals, which can reflect in profits, customer loyalty and positive brand reputation. If there is an absence in select elements to this process, companies might create a strategy for ALL their target markets, which is a waste of marketing resources. (Joshi, 2022) ‘The Model 3 market at Tesla segmented by benefit sought.’ 5 Benefit sought Age/Generation Occupation Attitude towards product Luxury 60s+ CEO of a company Values luxury and comfort, enjoys the prestige associated with owning a luxury vehicle Performance 30s-50’s Car enthusiasts Have an appreciation for the high speeds Tesla cars produce. Extensive long-distance travel 30s-50s Travel blogger/adventure seeker Values the extended range and fast charging capabilities for long journeys and exploring new places Owner of advanced technology 30s-50s Engineer/Technologist Appreciates the advanced technology, features, and innovation of the vehicle Optimal urban commuting 20s-40s Office Employee/manager Seeks a practical and efficient commuting solution within the city Environmental impact 20s-40s Environmental activist Values the positive impact on the environment and supports sustainable transportation solutions
Segmentation step 1: Selecting a base is an extensive process by which a marketer selects a means of differentiating consumers who are active in a particular market, based on varying commonalities. Means of grouping can come in the form of differentiation by behavioural, demographic, geographic and psychographic factors. Dividing into groups is the next phase of this step, which is essentially a dissection of the chosen base, into mutually exclusive categories that divides consumers. I chose to segment based on ‘attitude towards product’ which falls under the psychographic category (Udoagwu, 2022). This has been chosen due to its ability to differentiate consumers in the sustainability industry when dividing into groups, as well as its ability to allow its subcategories to be mutually exclusive, which is important for the base in this context, as it is intended for each row to be a varying level of environmental concern. Benefit sought Size/Growth Structural attractiveness Fit with organisational objectives/resources Luxury Small = ✖✖ Many competitors = ✖✓ ✓✖ Performance Small = ✖✖ Several competitors = ✖✖ ✓✓ Extensive long- distance travel Medium = ✓✖ Several competitors = ✖✖ ✓✓ Owner of advanced technology Small = ✖✖ Few competitors = ✓✓ ✓✖ Optimal urban commuting Large = ✓✓ Many competitors = ✖✓ ✓✓ Environmental impact Large = ✓✓ Several competitors = ✖✖ ✓✓ Segmentation step 2: By adding additional columns to the right of your base column and gathering information relevant to the industry, you can develop a profile with the intention of revealing key characteristics of the base segment you've selected. We will be able to decide whether or not to target a segment's consumers more effectively if we have more information about them (Camilleri, 2017). Evaluating each segment is essentially discerning the attractiveness of each segment, as an eventual means of making a decision about who your target market is. Criteria such as size, growth, and the ability to be profitable for the client to reach (structural attractiveness) (Yi, 2018). Segmentation step 3: Selecting a target market is reasonably self-explanatory in the sense that you are identifying/targeting the most optimal subgroup of people based on the segmentation previously completed. By utilising the evaluation of attractiveness, one must logically determine where implementation is most feasible, relative to the market’s consumer base. PERSONA: Seeker of optimal urban commuting Name: Adam Stevenson 6
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