Tesla Example 1.pdf - Tesla Report Beth Louise Bage Student Number 15021838 Word Count 2,198 MSc Digital Marketing Newcastle Business School Northumbria

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Unformatted text preview: Tesla Report Beth Louise Bage Student Number: 15021838 Word Count: 2,198 MSc Digital Marketing Newcastle Business School Northumbria University 13-01-2020 MK9700 Strategic Marketing in the Digital Era Kirk Dodds Introduction Tesla is an American automotive and energy company who specialise in manufacturing high performance electric cars. Tesla was founded in 2003 by a group engineers; Elon Musk, Martin Eberhard, Marc Tarpenning, JB Straubel and Ian Wright. They wanted to prove that they did not need to compromise to drive electric vehicles and wanted to show that driving electric can be better, quicker and more fun compared to gasoline cars (Tesla, 2020). Tesla strongly believes the quicker we stop relying on fossil fuels and move towards a zero-emission lifestyle, the better the world will be (Tesla, 2020). Elon Musk, current CEO, stated that he envisions Tesla as a technology company and independent automaker, aimed at eventually offering electric cars at prices which are affordable to the average customer (Therealzeitgeist, 2020). After ten years in the market, Tesla was ranked the world’s best-selling car manufacturer in 2018, as a brand, and an automotive group with 245,240 units and a total market share of 12% (Therealzeitgeist, 2020). Tesla currently dominates the U.S. electric car market as their Model 3 was the most sold electric vehicle of 2019, standing with Chevrolet Volt in second position (see Fig. 1) Fig. 1 (Tesla Swot Analysis, 2019) shows the number of electric cars sold in 2019 2 1 Theme & Trends The digital theme I have decided to base my analysis on is routes to market and multichannel strategy. Routes to market and multi-channel strategy describes the range of methods used by an organization so their product or service reaches their consumers. It means always being where your customers are, by using a variety of online and offline channels to effectively target and engage with your audience (Llewellyn, 2019). The digital trends I have selected are Influencer Marketing, Video Marketing and Artificial Intelligence. Influencer marketing is the classic celebrity endorsement but placed into a modern, content-driven marketing campaign. Influencers are individuals with refined personal brands who have trusted audiences. In recent years, influencer marketing has proven to be the fastest-growing method of influencing consumer purchases. It was a $2 billion-dollar business in 2017 and is forecasted to be a $10 billion-dollar business by 2020 (See Fig. 1). Video marketing is a forward-facing marketing strategy that integrates engaging content in marketing campaigns. It can be used to build brand awareness, promote a brand, product or service or to engage with customers (Stringfellow, 2017). The recent advent of 360-degree video content allows customers to control their perspective, creating a more immersive experience (Rinaldi, 2019). Artificial Intelligence is the sub-field of computer science and how advancing technology can be human-like. It is the theory and development of computer technology, allowing programs 2to perform activities that normally require human intelligence such as translation between languages, speech recognition, visual perception and decision-making (Marr, 2018). Chatbots and bot technology are playing a much larger role in customer experience, the combination of the two provides the ability to enhance service provision (Watson, 2019). Fig. 2 (Mediakix, 2019) outlines the influencer marketing spend from 2015-2020 3 3 Target Market Tesla owners are typically wealthy business executives and entrepreneurs who are between the ages of 35-50 (Pressman, 2016). They are early adopters in upper-middle class (Zucchi, 2015), in which consumers have a high level of income (Bevis et al, 2013). Many owners tend to be in California where the cost of living is above average (Tesla Owner Demographics, 2019). Individuals in this group are mostly males who are looking for a premium, luxury vehicle and are willing to pay more for an eco-friendly vehicle, to help reduce pollution (Bevis et.al, 2013). Customers in this segment view Tesla products as a prestige part of their lifestyle (KPMG, 2015) and they proudly support a company that is actively combatting climate change. They share similar values to Tesla as they are interested in being ecological and sustainable transport plays an important factor in their lives (Bevis et al, 2013). 4 Influencer Marketing Although other automotive giants use influencer marketing, such as when Mercedes-Benz partnered with YouTuber Casey Neistat (Mediakix, 2019), Tesla use a more organic approach. They do this by leveraging popular social media accounts through their CEO, Elon Musk, in line with their strict $0 advertising strategy (See Fig. 3). Musk is very available on social media, especially Twitter, and utilizes communication with brand fanatics, often retweeting their posts about Tesla and answering questions to build hype of the release of new products and company expansion. The impact Musk has upon Tesla is massive due to his vast following of 30.6M (Twitter, 2020) compared to Neistat’s 2.06M (Twitter, 2020). This means that Tesla do not need to use paid advertising like most other car giants do, due to the high level of exposure they receive through Musk’s social channels (See Fig. 3). This trend is important to the target market identified in part two because, people have a difficult time trusting a brand, but when an influencer talks about the brand, people find it easier to believe them (Nieslen, 2015). 4 Fig. 3 (Mediakix, 2019) outlines average advertising spends in the automotive industry in 2015 Fig. 4 (Jovancic, 2018) shows the percentage of social discussion of electric vehicles, outlining that Tesla is the most popular In the past, brands like Toyota have used influencer marketing, like when they worked with Instagram influencer Kelly Lund and his influencer dog Loki to promote their 4Runner model (Mediakix, 2019). With deals netting $10 per thousand followers per post, with 1.3M followers, Loki was making $13,000 for a photo (Brookhart, 2016). In comparison to this, Tesla have a unique position in the market, as they have created a personal connection to the brand through 5 their CEO, who has created personal connections with its customers (Vann-Adibé, 2016). Tesla uses content marketing in a small-form media that is spread widely by Musk’s huge following, therefore they do not need to invest into paid advertising. Musk’s involvement as acting influencer of Tesla could prove to be harmful to the brand if he were to do or say something wrong. For instance, if an influencer did something wrong, a brand can publicly cut ties with them. However, Tesla cannot cut ties with Musk due to his superior position in the company. An example of this was when Musk smoked marijuana on a popular podcast with Joe Rogan, in which stock of Tesla dipped seven percent (Stemile, 2018) and chief accounting officer, Dave Morton resigned due to the level of public attention the company received (Wald, 2018). In another incident, Musk was forced to step down as chairman of Tesla although he maintained his position as CEO. This outlines a negative of having an influencer of a company who is so close to the brand. In relation to this trend, Tesla should continue to utilize Musk as an influencer, as his large social media activity proves to be crucial for the future performance of the brand (Folschette, 2019). His high celebrity status makes it easy for him to spread the word about anything interesting happening at Tesla across his social media channels, allowing for an effective no paid advertising strategy. Musk’s positive exposure helps to build trust in Tesla as a respected voice speaks out to the consumer base. 5 Video Marketing One trend that is on the rise and sure to stand-out is 360-degree filming, which is a concept that provides an immersive experience for the consumer. Videos at the awareness stage are said to help drive consumers towards a website and increase conversion rates, with 53% of consumers visiting a brand website after watching a video on social media (Carter, 2019). This trend is important to the target audience identified in part two, as individuals from this segment prefer video than any other channel as a means for collecting information on a product or service (Curry, 2016). Tesla opts for sharing videos through Instagram of their products in-action, either driving, or at events. Their candid Instagram account is best known for being authentic and open to connecting with their followers and consumers (Hogan, 2018). In comparison, Ford tends to post more conventional, staged images on their account. Although Tesla rarely utilise this type of content, there are many YouTube channels and podcasts devoted to Tesla. They make use of this free marketing from owners and fans online, which keeps in line with their zero-dollar advertising strategy. However, regarding the electric car market, Tesla is facing increasing 6 competition from auto giants, all of whom spent an estimated $9.3 billion in 2018 (Isidore, 2019). Nissan capitalized on this video marketing trend by creating a 360-degree ad to promote their Rogue model. Since the ad, sales increased by fifty per cent in 2017 compared to the previous year (Shuttershock, 2017). Most recently, Facebook has made 360-degree technology available (Calero, 2015), which is likely to be an upcoming social media trend. Tesla could be an early adopter of this trend which would be strategically advantageous for attaining their innovative positioning in the marketplace. Utilising 360-degree filming where customers can view models online would effectively engage customers through the purchase funnel (Coppola, 2018) due to the decision of Tesla closing half their retail stores in Chicago, Brooklyn, New York and Tampa (Hern, 2019), as they move towards an online-only sales model. 360-degree filming will create realistic comparisons of the real thing, where consumers have an immersive experience to see what the product really looks and feels like, connecting them closer to the product (Caffyn, 2016). Although this will be expensive and does not keep in line with their $0 advertising strategy, this will allow Tesla to remain competitive in the long-term as advancing technologies could set to replace physical showrooms in the near future (O’Hare, 2016), eliminating costs such as rent and wages. However, this would need to be optimised for mobile use as 52.5% of consumers use mobile versus desktop when online (Broadband, 2019). It is predicted that by 2021, 75% all mobile traffic will come from video content (Marshall, 2016), therefore video content must be optimized for smartphone use to improve the user experience and overall satisfaction. Fig. 5 (Carter, 2019) outlines the online video viewing and ad spending forecast in 2021 7 6 Fig 6. (Koetsier, 2019) shows the budget allocation for paid media among major car brands 7 Artificial Intelligence As online communication continues to evolve rapidly, Artificially Intelligence chatbots are growing in popularity and 80% of businesses aim to implement a chatbot by 2020 (Apurv, 2019). Chatbots are the future of marketing and customer service, which will present new opportunities in customer service for Tesla. This trend is particularly important to the target audience identified in part two as typical individuals from this segment prefer a chatbot for discussion than any other channel (See Fig. 7). Fig. 7 (Tidio, 2019) shows that the 35-50 target audience tend to use chatbots as their preferred channel of communication 8 8 With Tesla’s current employee policy stating that calls and emails should be answered under five minutes (Tesla, 2020), this could prove to be expensive or may not be viable in the future, as they continue to increasingly grow and expand their consumer base. If the customer has to wait for a response, this may hurt the brand image. 87% of customers said that their online interactions with a brand made a positive influence on purchase decisions (Social Report, 2017). Although no other car giant has adopted this trend into their customer services yet, it is still in the early days (Kim, 2019). Tesla previously introduced the ‘TeslaBot’, the virtual assistant that lets you interact with your car on a desktop (Chang, 2017). In order to remain competitive in the market, Tesla could look to be a leading adopter of online AI chatbot to converse with 9 consumers. In terms of customer service, the implementation of a chatbot service will allow Tesla to communicate effectively with customers whilst eliminating the need for labour during the interaction, saving costs in terms of wages. It will provide a personalized experience where the customer will receive responses in a speedy service, providing solutions to their queries. Although chatbots may require significant investment in the short term, Tesla previously announced their shift towards an online-only sales model (Ferris, 2019). It would be beneficial in the long run as it looks to replace human customer service and will allow Tesla to streamline their ability to service customers in relation to the increased demand, providing a seamless customer experience. As chatbots work from a limited database, it is possible for the bot to become confused if a customer query does not relate to something it has previously learnt. This may result in the customer query not being answered and the customer not gaining the results they hoped for, leading to frustration and a lack of trust and loyalty in the brand. 73% of customers stated they would not use a chatbot again after just one bad experience (Kannan, 2019). Tesla is associated with being a technological company, in which the customer would expect a high level of expertise regarding AI due to their implementation of autonomous driving in their products. Therefore, any problems with chatbots online would have a bigger impact and potentially be scrutinised more than any other autocar giant in the market. 10 9 References Apurv, V. (2019). Brand Experience: How Powerful AI Powered Chatbots Have Transformed Customer Engagement BroadbandSearch (2019) Mobile Vs. Desktop Usage. Retrieved from Brookhart, T. (2016). How to Turn Your Dog into an Instagram Star. Retrieved from Calero A. (2015). How to Use 360-Degree Video in Your Social Media Marketing. Retrieved from Caffyn G. (2016). 5 ways UK brands are using 360-degree video. Retrieved from Chang, L. (2017). SmartCar Wants to Help You Talk to Your Tesla with TeslaBot. Retrieved from Carter, J. (2019). Retrieved from Coppola, J. (2018). Important Videos for Every Stage of the Marketing Funnel. Retrieved January 11, 2020, from Wistia website: Curry, L. (2016). What Marketing Content Do Different Age Groups like to Consume? Retrieved from Ferris, D. J. (2019). Tesla shifts to online-only sales, will close stores to drive vehicle costs down. Retrieved from Folschette, C. (2019). Tesla's marketing strategy shows that it's time for CEOs to get social. Retrieved from 10 Hogan, M. (2018). Social Media Highlight: Tesla and Elon... Retrieved from Stunning Strategy website: Isidore, C. (2019). How Tesla made electric cars sexy. Retrieved from CNN website: Jovancic, N. (2018). Retrieved from Kannan, P. V. (2019). Three chatbot fails and what they teach us about customer service. Retrieved from Kim, L. (2019). 10 Real Examples How Brands are Using Chatbot for Customer Service. Retrieved from Koetsier, J. (2019). Tesla Spends Zero On Ads. Here's Where BMW, Toyota, Ford, and Porsche Spend Digital Ad Dollars. Retrieved from Llewellyn, G. (2019). How to structure an effective multichannel marketing plan. Retrieved from Marketing Report on "Tesla Motors". (2015). Retrieved from Mediakix. (2019). Case Study: How Top Auto Brands Are Doing Social With Influencers. Retrieved from . Mediakix. (2019). How Car Brands Market With Social Media Influencers. Retrieved from 11 Mediakix. (2019). The 2019 Influencer Marketing Industry Ad Spend [CHART]. Retrieved from Nieslen. (2015). Recommendations From Friends Remain Most Credible Form of Advertising Among Consumers; Branded Websites Are the Second-Highest-Rated Form. Retrieved from O'Hare, R. (2016, November 29). Could virtual reality replace high street shopping? Retrieved from Rinadli J. (2019). Where is Video Marketing Going in 2019 and Beyond? [Infographic]. Retrieved from Pressman, M. (2016). Tesla Owner Survey Results. Retrieved from Social Report. (2017). How To Build Customer Relationships Using Social Media. Retrieved from Steimle, J. (2018). Should Your CEO Be The Face Of Your Company? – Josh Steimle. Retrieved from Stringfellow, A. (2017). What is Video Marketing? Benefits, Challenges, Best Practices. Retrieved from Shutterstock. (2017). Immersive Advertising: How Brands Are Using 360-Degree Video The Shutterstock Blog. Retrieved from The Shutterstock Blog website: Tesla. (2019). About Tesla. Retrieved from Tesla SWOT Analysis (2019). Retrieved from 12 Tesla Owner Demographics (2019). Tesla Owner Demographics by Age, Income, Gender, Home Value. Retrieved from Therealzeitgeist. (n.d.). Tesla, Inc. Retrieved from . Tidio. (2019, December 20). Chatbot Trends and Stats 2019's Customer Service Report. Retrieved from Vann-Adibé R. (2016). View From The Boardroom - How Tesla uses Influencer Marketing to "go do the Voodoo that it do" I Traackr. Retrieved from Watson P. (2019). The Future of Customer Experience: Chatbots and AI? Retrieved from 13 Comment Summary Page 2 1. Detailed introduction Page 3 2. Consider link this back to Tesla 3. Source of this chart Page 4 4. Nice range of variables Page 6 5. In what way does it speak to the consumr base? Page 7 6. Good justification from research Page 8 7. Source of tabble 8. sources? Page 9 9. God aplication 10. missing aconlcuson ...
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  • Spring '11
  • Tripathy
  • Marketing, Tesla Motors, Electric car

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