Tesla Inc: Pioneering Electric Vehicle Tech and Clean Energy - Research Paper

Introduction

Based in Palo Alto, California, Tesla Inc is an American clean energy and electric vehicle company, dealing with electric vehicle manufacturing, battery energy storage, solar panel, and solar roof tile manufacturing. The company might be the majority's favorite due to its technology incorporation, which makes it competitive in the electric vehicle market. For instance, the company has incorporated a technology known as Roadster which is the fastest road car (Berdichevsky et al., 2007). Moreover, Tesla is my favorite brand because of the thoughtful innovation of vehicles, for instance, the cars allow people to watch and stream online from the car seats in channels such as YouTube and Netflix as well as play video games in the car. The depicted features allow people to treat their vehicles as electronic devices. Thus, the Tesla brand is associated with high profile as it is ranked as the most expensive automobile American company. The paper, therefore, expounds on Tesla's pricing examples that influence the promotional strategies, the organization's pricing strategy and its effectiveness, and whether the pricing strategy is aligned with the messaging strategy in the promotions.

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Tesla Motors Company uses a marketing mix that stands out in the automotive industry. The marketing mix or rather the 4p's (product, place, promotion and price) is the set of strategies that a company uses for market plan. Concerning promotion, Tesla's marketing communication strategies are used to enable it to fulfill the customers' expectations also boost the growth of the brand name. Promotional mix components include; viral marketing, personal selling, public relations, sales promotions and direct marketing (Moritz et al., 2015). Tesla has managed to be competitive in the automotive business because of viral marketing. Viral marketing is the most significant and has made the biggest contribution. For example, Tesla Model S for kids is primarily promoted through viral videos on social media platforms (Moritz et al., 2015).

There is also personal selling that is implemented through sales personnel in the company's stores and galleries. Public relations is also used by tesla motors to promote the brand name also the products produced. Tesla spends less on advertising as the company incorporates public relations tactics such as the use of media. Tesla motors company have taken advantage of their co-founder Elon Musk who has millions of followers in twitter hence uses his platform to make promotions (Mangram, 2012). Additionally, sales promotion involves selling some products at a discount. Direct marketing, Tesla lacks dealership networks unlike other competitors. The buyer of Tesla products usually books and complete payment online (Mangram, 2012).

Prices and pricing strategies are other elements in the marketing mix. The strategic focus for tesla is to acquire and increase the market share in the electric vehicle market. The action is achieved through price and pricing strategies. Tesla has adopted a premium pricing strategy to retain its high-profile customers also to associate the brand name with uniqueness and good quality. Tesla also uses a market-oriented pricing strategy for solar panels and related products and services (Moritz et al., 2015).

Pricing Strategies

Some of the pricing strategies include premium pricing, penetration pricing, economy pricing, psychological pricing, and promotional pricing. Premium pricing is the setting of a price of products or services higher than other similar products and services. Premium pricing strategy is usually associated with companies such as Apple, Gucci, et cetera as they set their prices high hoping to create an impression of good quality and luxury. When customers buy the products, they feel that the products are unique and that is why they are expensive (Mangram, 2012). For instance, Nike company products are preferred by many despite the high prices they sold at. People associate themselves with big brand names especially brands associated with high profile people such as celebrities. Nike Company is associated with known basketball players and teams as well. Apple's electronic devices sell at relatively high prices compared to other electronic devices from different companies (Mangram, 2012).

Penetration pricing another pricing strategy involves the sale of a product at a lower price to expand the market share. The companies usually associated with this pricing strategy are the new entrants to compete effectively in the market place since they hope after lowering the price the customers will opt for the cheaply available products.one of the most prevalent penetration strategy way that is used by most companies is price reduction also product differentiation (Moritz et al., 2015). Some of the situations where penetration strategy works effectively include when there is little product differentiation when demand is price elastic also where the product is suitable for a mass market-for example, Amazon prime delivery. Amazon has aimed at penetration pricing in many aspects of its business.it has offered discounted delivery rates. Services like amazon prime which includes free TV programs sold at a substantial discount to attract customers to sign up and get used to amazon's way of shopping.

Economy pricing sets prices at the bare minimum by minimizing their production costs. In most cases, high rates are associated with the high cost of production. Before considering applying economy pricing strategy, one needs to oversee the prices offered by competitors also the ability to capture a broad market also the costs used during production (Mangram, 2012). For example, big companies such as Walmart can compete favorably by using economy strategy compared to small companies who will struggle to stay in business (Moritz et al., 2015).

Psychological pricing is a pricing and marketing strategy based on the theory that absolute prices have a psychological impact. The goal of this tactic is to incite an emotional response to the customer whether excitement through low price or satisfaction (Mangram, 2012). The psychological strategy is used to persuade customers who use emotional rather than rational responses to pricing strategies-for example. They are setting prices slightly than a whole number, the setting of a price at $19,000 rather than $ 20,000 (Berdichevsky et al., 2007).

The promotional pricing can also be termed as sales promotion, which involves selling products and services at a lower price in the short term to attract customers and increase the sales volume. The advantage of using the program is that it makes sales and wins new customers that could not have made regularly (Mangram, 2012). For example, when launching a particular product, promotional pricing acts as a sales incentive. Also, in supermarkets where it is written, buy one get one free.

Pricing Strategies and its Effectiveness

Tesla Motors Company uses both a premium pricing strategy and a market-oriented pricing strategy. Premium pricing strategy involves high price points based on the uniqueness of the high value attributed to the company's products (Moritz et al., 2015). For example, customers are willing to buy relatively expensive tesla automobiles, since they are considered advanced in terms of technology and ecology. Premium pricing agrees with the differentiation, which emphasizes the uniqueness of products. Concerning the market-oriented pricing strategy, it is used in the sale of solar panels and related products. Premium pricing is valid since people still want to purchase Tesla products despite their price (Mangram, 2012). Many people prefer Tesla products because of the cost of fossil fuels. The electric vehicles are more energy efficient also tesla luxury branding of the automobiles attract many customers.

Alignment of the Pricing Strategy With Messaging Strategy

Premium pricing involves keeping prices with the primary objective of ensuring that customers have favorable perceptions regarding the product and the company. Tesla's high-end eco-friendly cars are expensive which the company has associated with the high cost of production also the luxury aspect of Tesla's cars (Moritz et al., 2015). In this regard, the price of the electric vehicles needs to be retained to ensure that the perceived favorable perception of high-end buyers is not eroded by the penetration pricing strategy. Many people will still purchase the high price electric vehicles from tesla since they associate high price with uniqueness, quality and are luxurious (Mangram, 2012).

Conclusion

In conclusion, from both market and company analysis, Tesla is among the competitive companies in the production of electric vehicles. The company has become the biggest company in America and competing favorably with other companies worldwide. The success of Tesla Company is driven by its stable marketing strategies, creativity, and innovativeness that attracts different customers.

References

Berdichevsky, G., Kelty, K., Straubel, J., & Toomre, E. (2007). The Tesla Roadster Battery System, Tesla Motors Inc. Retrieved from www.batterypoweronline.com/images/PDFs_articles_whitepaper_appros/TeslaRoadsterBatterySystem.pdf

Mangram, M. E. (2012). The globalization of Tesla Motors: a strategic marketing plan analysis. Journal of Strategic Marketing, 20(4), 289-312. DOI: 10.1080/0965254X.2012.657224

Moritz, M., Redlich, T., Krenz, P., Buxbaum-Conradi, S., & Wulfsberg, J. P. (2015, August). Tesla Motors, Inc.: Pioneer towards a new strategic approach in the automobile industry along with the open-source movement? In 2015 Portland International Conference On Management Of Engineering And Technology (picmet) (pp. 85-92). IEEE. Retrieved from https://ieeexplore.ieee.org/abstract/document/7273032