CRAIG

DURDICA

HAPPI

JOHN

MARC

RAHUL

Executive Summary

In 2003, a group of engineers from Silicon Valley established the

company Tesla Motors Inc. with the goal in mind to build electric
powered automobiles that would be better than gasoline powered
automobiles. In 2012 Tesla Motors did just that by releasing the Tesla
Model S, a sedan sized electric automobile, which will be our main
focus for todays presentation.

Mission Statement:
Our goal when we created Tesla a
decade ago was the same as it is today:
to accelerate the advent of sustainable
transport by bringing compelling mass
market electric cars to market as soon
as possible

http://www.quora.com/What-is-Teslas-mission-statement

AGENDA

Situation Analysis

Action Plan

Market Analysis

Budget

Macro-environmental Situation

Action Plan

Planning Calendar

SWOT

Marketing Strategy

Four Ps

Product offer

Channels

Price Plan

Customer Relations

Brand and positioning

Sales Relations

Life Cycle

Incentives

Survey

Managing Communications

Current Plug-In Vehicle Market

http://insideevs.com/cumulative-us-plug-electric-vehicle-sales-model-model-breakdown-market-share-data-december-2014/

Current Plug-In Vehicle Market

(15%)

http://insideevs.com/cumulative-us-plug-electric-vehicle-sales-model-model-breakdown-market-share-data-december-2014/

Customer Analysis and

Demographics

US map of Consumers who registered for a Model S looks

similar to...
http://my.teslamotors.com/sv_SE/forum/forums/where-can-tesla-sell-cars
http://www.edmunds.com/industry-center/analysis/drive-by-numbers-tesla-in-all-50-states.html

States where consumers commute for longest amount of time daily :

Geographic Target

Top commute cities:

1)

New York, NY

2)

Los Angeles, CA

3)

Chicago, IL

4)

Houston, TX

5)

Philadelphia, PA

Target: Business workers

http://www.census.gov

Principle Oriented

Status Oriented

Ex
p

er
ev

hi
c
A

PERSONAL
Factors

Fulfilleds

Action Oriented

eri
e

car represents
financial /
economic
success

nc
ers

want to
experience
an electric car

Vals Model
rs
e
v
ri

Ma

ker
s

St

Believers

http://www.strategicbusinessinsights.com/vals/ustypes.shtml

Financial
Belonging

more
practical/
Environmentally
concious

PERSONAL Factors>>> Age

Capture now, be remembered

later when millennials grow
into their economic potential
Focus of current sales

Mintel

Social Factors
Roles & Statuses
Higher income
Successful job (Dr, Lawyer, Athlete)
Luxury symbol
Showcases wealth
Showcases environmental concern,
encourages others
Celebrity endorsement

(clockwise)
Ben Affleck,
Morgan Freeman,
Steven Spielberg

SWOT

Strengths
Weaknesses
Opportunities
Threats

Inspired CEO : founded Paypal and SpaceX

Won Motor Trends Car of Year award in 2013,

truly a superior product

Innovative marketing strategy : market in

malls rather than streets

Already highly successful, over 750% sales

Highway Traffic Safety Administration

growth from (2012 - 2014)

Future-oriented product and business model

Highest safety rating according to National

Supercharge coverage is in plan to reach 98%

of US by 2015

All vehicles and parts are capable of being

built within same factory

http://www.mbaskool.com/brandguide/automobiles/4475-tesla-motors.html

Brand Ownership and awareness : Oct 2013

Strengths

Weaknesses
Opportunities
Threats

Higher cost of production due to lack of

economies of scale

Longer pickup time due to customization

Lack of manufacturing facilities : can it

sustain growth in foreign markets

http://www.mbaskool.com/brandguide/automobiles/4475-tesla-motors.html

Struggles with Lithium batteries

Developing strong brand recognition

Strengths
Weaknesses

Opportunities
Threats

Shared technology which has attracted

collaborators such as Toyota

Environmentally friendly is a growing

concern due to global warming

Unique and modern with not many other

competitors yet in the market place

Gigafactories in the making to increase

duration and strength of Lithium batteries

Forward-thinking product line with the goal

of revolutionizing the auto industry

http://www.mbaskool.com/brandguide/automobiles/4475-tesla-motors.html

Strengths
Weaknesses
Opportunities

Threats

More car companies (with economies of scale)

are attempting to join in with their own
electric model

Priced highly, putting the company at a

greater risk during times of recession.

Cheaper gasoline prices could delay the

adoption of the electric automobile

Challenging the status quo is risky, especially

when the market isnt familiar with product

http://www.mbaskool.com/brandguide/automobiles/4475-tesla-motors.html

Marketing Strategy

Four Ps

http://www.usatoday.
com/story/money/cars/2014/09/06/why-tesla-has-themost-loyal-customers/15139377/

Dealers?

Tax incentives ($7,500 in US)

Focus on receiving press

coverage, reviews and
awards away from traditional
media means

Big on forum : focus of

website is to include
feedback from one buyer to
another

Service center marketing :

white and clean, no dealers

4 Ps

To buy : Orders can only be

placed through Teslas
website

Channel model : Tesla S can be

seen in select shopping
centers rather than at a
traditional car dealership

All assortments and parts are

assembled in one factory and
delivered :1000 per week

Away from
traditional

http://scienceofrevenue.com/2013/01/20/teslamodel-s-the-disruptive-marketing-of-an-electric-car/

4 Ps

Electric
Elegant
Efficient
Environmental

4 Ps

http://www.teslamotors.com/models

Dual Motor (front and rear)

digitally controlling wheels
for excellent traction
control
Strong focus on safety with
unique electric drivetrain
and eight airbags
Autopilot equipped
Quality material, such as
Nappa leather
240 miles range (for 70 kwh,
up to 270 miles with 85kwh)
Wall connector : 58 miles
per hour charge

Current buying price : from

$75,000 (70D kWh battery)$105,000 (P85D kWh battery)
(not including incentives)

Tesla hopes to decrease

vehicle price from production
of $100k toward $60k

4 Ps

Leasing :38 states, $6513

down at $818 per month (for
36 months for 70D model)

Start High,
Plan For Low

http://my.teslamotors.com/models/design

M
a
r
k
e
t
S
e
g
m
e
n
t
a
t
i
o
n

CUSTOMERIZATION

All orders are custom made by consumers online

Done through the Model Ss design studio

Select features of choice are shown at top

on image model

Extra options for status oriented consumers

Led accent lighting

Panoramic glass roof

and action oriented consumers

85 kWh performance battery

All-wheel drive dual motor

http://my.teslamotors.com/models/design

M
a
r
k
e
t
S
e
g
m
e
n
t
a
t
i
o
n

CUSTOMERIZATION
BODY COLOR

OPTIONS FOR CHOICE

ROOF COLOR
WHEELS
BATTERY
DRIVE

All wheel drive

CHARGING

Supercharger Enabled

INTERIOR

Front decor color and material

OTHER

Rear wheel drive

Dual Chargers

Subzero Weather Package

Wall Connector

Headliner color and material

Smart Air Suspension

Seat color and material

Rear Facing Seats

Etc.

http://my.
teslamotors.
com/models
/design

All Done
Online (or can
seek assistance at
our showrooms)

http://www.teslamotors.com/what-to-expect

Hybrid Service Mix

Price Objective
Sales Oriented
Product Quality Leadership
Maximum market share

Pioneering a movement of fuel-independent vehicles

Internal success leads to growth of this movement
Increased production, not changes in price
Structural price skimming
Release of less expensive models

Determining Demand

P E
rice

lasticity of

emand

<1

Demand is relatively inelastic

Luxury cars are a luxury good
Expenditure is relatively small to buyers
Distinctive product
Few competitors at level of quality
Price changes justifiable by consumers
Short Term Supply also inelastic, long term growth
Sales and factory output determine supply
Production cost of batteries to decrease

SRAS

AD

Estimating Costs

Fixed Costs

Variable Costs
Color

Metal
Wheels
Suspension

Glass

Plastic

Delivery
Battery size

Motor
Interior

Fiberglass

The look or style of the

Model S
...the battery for the Model S that I drove should cost
between $42,500 and $55,250, or half the cost of the car.
[Model S batteries are] way less than half, actually, he says.
Less than a quarter in most cases.
http://insideevs.com/tesla-battery-in-the-model-s-costs-less-than-a-quarter-of-the-car-in-most-cases/

The internals of
the Model S

Estimating Costs

Average costs growing

Musk invested between $680 and $850 million last year

New Gigafactory will minimize risk of delays

arising after groundbreaking" -Elon Musk

Lithium ion batteries lower cost

European/Hong Kong versions add to cost

Right hand side steering

http://money.cnn.com/2014/05/07/autos/tesla-earnings/

Select Pricing Method

Most automobile manufacturers utilize

Cost-Plus
They add together labor, material,
and overhead costs
Consumer is overpaying

Tesla is more value-based

Focus on estimated value, not our
cost to produce
ex. our 4 core packages
Consumer gets the best for what
theyre paying
Auction-type pricing for special events
Charities, benefits, etc

Analyzing Competitor Price Mix

$21,500
2015 Nissan Leaf S

$26,670
2015 Chevy Spark

Features when considering price

$41,350
2014 BMW i3

2014 Mercedes BClass

http://www.teslamotors.com/models

$41,450

Custom made and unique

based on order
Luxury + High Tech
Company name : first fully
electric car company
Up to 691 horsepower
Option of up to 85 kWh battery

PACKAGE
Options

$75,000

$79,900

$85,000

$105,000

*Autopilot feature comes standard with 2015 Model S P85D. Can be added for $4,250 for other models
http://www.consumerreports.org/cro/news/2014/11/updated-2015-teslas-mean-black-friday-discounts-on-2014s/index.htm

Facilities

Teslas main manufacturing plant is located

in Fremont, California. It is a 5.3 million ft
building used as the primary manufacturing
center for the company.

In April 2014, Tesla leased a 431,000 ft facility in

Lanthrop, CA, which is expected to become the
companys second large manufacturing plant.
http://www.teslamotors.com/factory

Brand Roles
Door handles are
made from hand
polished zinc, the
leather trim uses
premium Nappa
leather, and dcor
pieces are minimally
finished to preserve
their natural
beauty.

The Tesla Model S falls into the High End prestige category.
Luxury car with a luxury car price point
Built to look like other luxury cars (i.e Jaguar)
Quality engineering, servicing, & performance
Extremely quiet ride matched with premium stereo system

http://www.teslamotors.com/models

Value Proposition:
We promise the Tesla Model S will be the best luxury electric car on the market and it will be serviced both
quickly and painlessly whenever need be.

Cars made to order

Very minimal stock/inventory
Pre-made cars sold at a slight discount
Small stock of variants of each model (70, 85, 85D, P85D) pre-made
Good for impulse buyers
Shipped to your nearest Tesla service center for pick up
Can also be shipped to your front door

http://www.teslamotors.com/support/estimating-your-delivery-date
http://www.teslamotors.com/support/service-plans

The Model S is in the Growth phase

Rising Sales & profits

Early adopters are main customers

Rapidly growing competition

Our objective: Maximize market share

Adjust prices

Retain our infinite mile warranty

New ad campaigns

Increase production and adoption

Product Life Cycle

Incentives and
Rebates

Electric vehicle Savings for Tesla

Nationwide Incentive in US

Foreign Incentives

-- $7,500 Federal Tax Credit

AUSTRALIA: except from vehicle

Free Parking in certain cities

stamp duty (saving $6,770) in

(New Haven (CT), Sacramento,

Australian capital territory

Santa Monica, etc)

FRANCE: 6300 Euro Eco-

-- $2,500 rebate from Clean

bonus at time of purchase

Vehicle Rebate Project (CA)

GERMANY: Except from annual

-- Unrestricted access to high

circulation tax for 10 years

occupancy commuter lanes on

JAPAN: Except from acquisition

major roadways in certain

tax (saving between 381,019 -

states (New Jersey, etc)

500,000 yen)

http://my.teslamotors.com/incentives/US

survey: results
Australia(4) Austria(1) Brazil(1) Canada(3) Croatia(1) Germany(2) Norway(1) UK(5) USA(39) TOTAL:
57

survey: results

survey: results

(friend/coworker/family member)

survey: results

Marketing Strategy

Determining Profit & Marketing

Budget
Fiscal year is January-December. All values USD millions.

Sales/Revenue

2010

2011

2012

2013

2014

116.74M

204.24M

413.26M

2.01B

3.2B

74.95%

102.34%

387.23%

58.85%

86.01M

142.65M

383.19M

1.56B

2.32B

COGS excluding D&A

75.39M

125.73M

354.36M

1.45B

2.08B

Depreciation & Amortization Expense

10.62M

16.92M

28.83M

106.08M

231.93M

65.84%

168.63%

306.39%

48.77%

30.73M

61.6M

30.07M

456.26M

881.67M

100.43%

-51.19%

1,417.48%

93.24%

845.89M

1.91B

Sales Growth
Cost of Goods Sold (COGS) incl. D&A

COGS Growth
Gross Net Profit
Gross Income Growth
Cash and Cash Equivalents

.5% of income spent on marketing = 4.4M

http://www.marketwatch.com/investing/stock/tsla/financials

Current Market Situation

http://finance.yahoo.com/echarts?s=TSLA+Interactive#%7B%22range%22%3A%225y%22%2C%22scale%22%3A%22linear%22%7D

Consolidated Balance Sheet

(in thousands, except share and per share data)

December 31,
2014

December 31,
2013

Assets
Current assets
Cash and cash equivalents

Restricted cash and marketable securities

1,905,713

845,899

17,947

3,012

Accounts Receivable

226,604

49,109

Inventory

953,675

340,355

94,718

1,905,713

3,198,657

1,265,939

766,744

382,425

1,829,267

738.494

Restricted cash

11,374

6,435

Other assets

43,209

23,637

Prepaid expenses and other current assets

Total current assets
Operating least vehicles, net
Property, plant and equipment, net

Total assets

5,849,251

2,416,930

Car Industry: 2015 Projections

http://www.strategyand.pwc.com/perspectives/2015-auto-trends

Setting the
Budget

MARKETING GOAL

Sales-driven funding
to Develop Creative
Marketing Projects
in order to further
boost production and
scope of operations

Currently Existing
Commercials:

Fan made

Advertising

by Jordan Bloch

205,974 views

by Calvin
Everdream
Wan

by Ajar Pictures

http://www.teslarati.com/top-10-fan-made-tesla-commercials/

Magazines
Advantages: long life,

credibility, good pass-along

readership.
Concerns to work on:

long lead time, no guaranteed

position
Which individuals to target:

Newspapers

Advantages: flexible,

broad acceptance, high

believability

Concerns to work on:

short life, poor reproduction

quality

Suburbians, preferably commuting to

work >30 minutes daily
magazines + newspapers
popular in top commuting US
cities, including NYC, LA etc
age: mid 30s - 55
Higher income individuals (such as
business workers, lawyers, etc.)
Invested oriented: spend to save

The Economist

AUDIENCE DEMOGRAPHICS

North American buyer

statistics
mean reader is of
target age group
(between mid 30 and
50)
mean reader makes
high average personal
income
Total readers in north
america:

US: 803,528
Canada: 80,343
http://www.economistgroupmedia.com/research/audience-profile/demographics

THE ECONOMIST
Region : North America
Color : Black and White

(vs $62,875 for color)

Format : Page
amount : 1x
$4 1 , 7 5 0
*Tax not included

$2 0 8 , 7 5 0 (for 5)
http://next.srds.com.ezproxy.lib.uconn.edu/nmp/datacard/show/41/4

THE ECONOMIST

TESLA

ADVERTISEMENT EXAMPLES

Model S
All electric luxury

TESLA

Model S
No emissions luxury

Bloomberg Businessweek

Audience of 980,000 in North America

Published - 48x year

International Rate - $31,200 for 4 Color 1

page spread ($156,000 for 5 times)

http://www.bloombergmedia.com/assets/pdfs/specs/BBG_Businessweek_2015rates_print.pdf
http://images.bwbx.io/cms/2013-07-18/cover30_304inline.jpg

As of Fall 2014
in North America

Adult Readers

Female

Male

662

1,108

Median Age: 48

Avg Income: $106,324

Median Age: 50

Avg Income: $121,171

http://next.srds.com.ezproxy.lib.uconn.edu/nmp/datacard/show/38/4

BLOOMBERG BUSINESSWEEK

Potential Ad Examples

WALLSTREET JOURNAL

Journal readers spent $21 billion on new

vehicles in the past year

Journal readers bought 639,750 vehicles in the

past year

average net worth of household : $2,161,200

median household income: $127,895

https://classifieds.wsj.com/ad/Car-Ads

WALLSTREET JOURNAL
Region : National
Format : 8 columns x10
Region : North America
amount : 3x
$135,274.56
*Tax not included

https://classifieds.wsj.com/ad/GetEstimate.jsp

In-Stream Advertising through Youtube TrueView

Ability to market to specific demographics

Only pay
when
30 online
seconds
or more of
an ad is watched ($0.10 to $0.30 per view)
slide
about
advertising
: rahul

Ads can be skipped, so uninterested viewers will not be disturbed

google.com

Unique way to advertise

Sponsor a Buzzfeed article on

electric cars and their
significance on growing
technology and helping the
environment
Cost: $20,000
digiday.com
buzzfeed.com

Experimenting with the

corporate fleet
Limited Release of AT&T
Corporate Tesla Fleet

Mobile marketing vehicle,

highly recognizable brand
association
Easy performance
monitoring, Seamless
software adaptation

Production and Servicing

of 25 Fleet Vehicles
Cost: $1.4M

Auto shows & expos

New York
Paris
Tokyo
Shanghai
Geneva
Detroit
Chicago
Los Angeles
Frankfurt
Atlanta

Combined 2014 attendance of

over 7 million people for these
events alone

Major industry auto shows will provide Tesla with the

opportunity to showcase the superior design and
performance specs of our vehicles. This is exactly what
makes the showroom experience so effective.

Capacity to reach out to millions of car enthusiasts and

spread the word at the average cost of $250,000 per
showcase.

Major auto industry show entrance fees are private, $250k is what we consider a safe estimate. Attendance data on each website.

Budget
Marketing strategy

Rates per

Amount

Total Cost

Economist

$41,750

5x

$208,750

Bloomberg

$31,200

5x

$156K

WSJ

$45,091.52

3x

$135,274.51

Youtube

(.1 to .3) $0.2

1K views

$200

Buzzfeed

$20K

2x

$40K

Auto Shows + Expos

$250K

10x

2.5M

AT&T Corporate Fleet

$55K

25x

1.36M

TOTAL:

$4,400,224.51

- ads created,
proposed,
authorized and
ready to be
published by May
1st

A.S.

W
A.S.

W
buzz

A.S.

A.S.

buzz

A.S.
A.S.

A.S.

A.S.

A.S.

Managing
Personal
Communications

Direct Marketing Channels

online ads

Email newsletters

Short video ads

Company

External
Marketing

Internal
Marketing

Employees

Customer Relations
Management : Marketing
Strategies

Interactive
Marketing

Customers
http://my.teslamotors.com/forums

Marketing & Sales

Cooperation
Marketers can use sales info to
better place ads
Sales force will have a more exact
demographic due to the
responses to ads
Results in more sales and ultimate
brand growth

THE END