Tesla’s Product Strategy Within Their Extended Marketing Mix
A product is an item that satisfies a need or a desire of a consumer. This can be a physical item, a service or a virtual offering.
Introduction
A product is an item that satisfies a need or a desire of a consumer. This can be a physical item, a service or a virtual offering. The product has a vital role in developing the strategy for the overall marketing mix. Through a definition of the product features and benefits, the rest of the marketing mix elements are determined and agreed upon. Each product item will have three main elements that need to be focused on. These are the brand, the packaging, and the associated services. (Luenendonk. 2020)
An overview of Tesla’s product strategy
Tesla’s products include electric vehicles, electric vehicle parts, batteries, energy storage, and solar panels. The company also adds new products gradually. Tesla has stated that its mission is to speed up the world to sustainable energy, Tesla have entered the market with a high-performance roadster where customers are prepared to pay a premium. They then use the profit from the sale to research and develop better or more efficient technology for all their products. For example, batteries are one of the most important and most expensive components in an electric vehicle. Being able to produce these more energy and cost-efficient allows Tesla to produce a lower cost vehicle, which in turn will extend the range of potential consumers to include those who are unable to afford a high-end luxury vehicle. The decision to enter the market at the top end also has the benefit of giving Tesla the reputation of being a premium product. How Tesla has adapted their product strategy over time Since the production of the first Tesla Roadster in 2008 priced at US$109,000 (Schreiber et al., 2013) Tesla have produced the Model S at $89,990, the Model X at $99,990, the Model Y $53,990 and Model 3 at $51,490 (Tesla Inc, n.d.). According to (Lambert, 2021) Tesla are intending to release a new model priced at $25,000. This clearly demonstrates that Tesla are in fact following the simple 4-step strategy of: 1. Build high-end sports car 2. Use the profit to build an affordable car 3. Use the profit to build an even more affordable car 4. While doing above, also provide zero emission electric power generation options The Last step to provide zero emission electrical power generation options is another important aspect of the product strategy. As the electric vehicle buyers are usually concerned about climate change and pollution, Tesla needs to have in place an alternative to traditional fossil fuel power generation and does this with supercharger stations and solar panels. According to (Furrier, 2021) Tesla is playing the long game with Research and Development, focusing on Automation, Material Costs, and Software Updates. This includes the building of Tesla's mega factories around the world to bring all production in house and reduce reliance on outside suppliers, which would drive up costs.
In Conclusion
To conclude, Tesla has a unique leading position in the electric vehicle and green energy market which has so far been very effective, they have not needed to adapt their product strategy drastically over the years because of this.
Reference List
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