GLOBAL MARKET OPPORTUNITY ANALYSIS

AND MARKETING STRATEGY

TESLA ELECTRIC CARS

GROUP 4
MADISON COEN
JINPENG MA
JENA NEWKIRK
HAYLEY SCHWARTZ
WEIHAO WANG

EXECUTIVE SUMMARY

Think about what the world will be like in five years, ten years, or even
twenty years. Will there still be cars driving around everywhere you look,
emitting a disturbing amount of pollutants? Reality is, there probably will be cars
just like what we see today. Its a way of life we have all grown accustomed to,
and its not going anywhere. Many people, ourselves included, are not willing to
give up the freedom of having a car, but there is a very apparent discussion lately
regarding whether or not our ecosystem can support gasoline fueled cars in the
long-run. By enhancing the marketing plan for the Tesla Model S, an electric car,
we believe that we could do something to make our environment a healthier
place to live in.
This analysis will focus first on the two countries that are the most logical
places to start our international marketing for the Model S. You will see that we
selected 10 indicators to grade a list of 10 or so different countries. Based on the
research we completed, we narrowed our choices down to China and Norway.
Although many different countries were able to support this product, we felt that
these were the two best options. The 10 indicators that were looked at were the
amount of cars per thousand people, geographic features, purchasing power,
government policies, GDP per capita PPP, culture of the country, car market,
environmental policies, average commute time to work, and technology in the
country. One of the most significant reasons we chose these two countries is

because both China and Norway have Green Policies. You will see those talked
about in Part II of our analysis in depth.
The second part of our analysis gives a very in depth look at our marketing
and strategic plan. It will show you our target market, segmentation, and
positioning as well as a few alternative advertising options we would implement.
It will also give a financial outlook at the cost of production and distribution of
the Model S. Since this is known as a luxury car, you will notice that the price tag
is rather high but all for good reasons. By purchasing a car like this in China and
Norway (other countries have these policies as well) you will receive tax breaks,
rights to bus lanes, free passes on toll roads, and other various perks.
If you take the time to read this report, we believe that you will truly see
that marketing this car is definitely something that we will be able to do in the
countries of China and Norway. It may seem like just focusing on two countries
isnt the answer, but with successful planning, we might see it turn into five, ten,
then twenty different countries within the matter of a few years. This is no small
feat, but we see it as an attainable project.

Part I

In todays world, society is continually becoming environmentally

conscious. Consumers are staying more in touch with what the products they use
every day are doing to the environment around them. For this marketing
analysis, we look at different countries to determine our overall selection for
where to market our chosen product, the Tesla Electric Car. After we chose those
countries, we chose ten indicators that we will look at to narrow the countries
down furthermore. The indicators are: Amount of cars per thousand people,
Geographic Features, Purchasing Power, Government Policies, GDP per capita
PPP, Culture of the country, Car Market, Environmental Policies, Average
Commute Time to Work, and Technology in the Country. From there, we
researched all the following information.
The first two of the ten indicators are the amount of cars that are driven in
the selected country per one thousand people and the countries geographic
features and whether or not an electric car, Tesla to be specific, would be a good

fit for that landscape and terrain. France, Germany, and the United Kingdom
were all around the mark of five to six hundred cars per thousand people so
thats around half of the population. Yes, thats a pretty decent amount but these
countries seem to be more about the pocket-friendly option and probably
wouldnt spend over fifty thousand dollars on a car like the Tesla runs . Australia
and the United States had an even higher number of cars per thousand people
but Teslas have already been incorporated heavily into their market and the
everyday consumer is familiar with them in these countries but is more than
likely not going to purchase a car like this. The average American, and Australian
from what I researched as well, wants a car that is very versatile and large
enough for a family to comfortably get around. Chile, Brazil, and Argentina had a
very low number of cars per one thousand people so you know by that statistic
alone that they are not as worried about the luxuriousness of their car and would
not be countries to spend their income on something like this. That can rule out
those three places. We found that China had a low number of cars per thousand
people as well but they also have public transportation and this car would be a
great addition to their everyday life since they are constantly running and
fighting the public transportation. Norway has 3.13 million drivers license
holders and 584 out of each one thousand people have cars as of 2010. They have
the perfect terrain and geographic features for marketing this car as well as an
economy that could support a car like this, much like China. If we looked at these
two indicators alone, we could conclude that that the Tesla Electric Car would be

a great addition to China and Norway. Even though the other countries meet
some of our requirements, these two countries really stood out to us and we
believe we could successfully market them in these places, regardless of the
price.
The next two indicators were purchasing power and government policies.
These two indicators are of important consideration that influence consumer
behavior and decide whether to buy or not. We choose China and Norway rather
than some other countries like South America and European countries, as well as
Australia. China has become a fast-growing auto market over the past decade,
with sales surging tenfold to more than 5.0 million units in 2007. Growth has
been driven by rapid economic growth and increasing wealth- double-digit
average wage gains over the past decade and more than a three-fold surge in
equity markets. With a population of 1.3 billion people and a vehicle fleet of only
35 million, China will continue to experience rapid growth. While car sales
gained to 22% in 2007 and will likely increase by 15% in 2008 to 5.9 million units,
China is on target to overtake the United States and become the largest
automotive market by roughly 2020. For Norway, the government polices will be
better for electric cars sales and it has become the friendliest place in the world
for electric cars. Actually, the country is the most successful market for electric
car producers, with more electric cars per capita than anywhere else in the
world. One of the biggest sensations of the year, Tesla Model S, even managed to

be the best-selling car in September, while the Nissan Leaf climbed to the top
over all car models in October. There are several incentives that promote electric
cars choice in Norway. Availability of free public charging stations as well as tollfree roads, ferries and the ability of electric-car drivers to use bus lanes are
important factors for Norwegian drivers to choose electric cars over conventional
alternatives. Among the existing government incentives, all-electric cars are
exempt in Norway from all non-recurring vehicle fees, including purchase taxes,
which are extremely high for ordinary cars, and 25% VAT on purchase, together
making electric car purchase price competitive with conventional cars. Electric
vehicles are also exempt from the annual road tax, all public parking fees, and
toll payments, as well as being able to use bus lanes. These incentives are in effect
and promote more sales within their own economy.
We arent choosing some South American countries such as Brazil, Chile, and
Argentina because their automobile sales market is worse than ever and their
local peoples purchasing power has been declined. For instance, 2014 sales are
down 6.5%, and compared with April 2013, this past Aprils sales were down
13.9%. For Argentina trade with Brazil has been falling at an accumulated 22%
in the last year and this is because of a 24.5% drop in imports and 19.2% in
exports, said Abeceb, which also pointed out that during August Argentine
exports to Brazil were down 15.8% and imports 35.9%. Sales in Argentina, the
third largest market for new cars in South America, sank nearly 35% year-over-

year in April and nearly 19% for the first four months of 2014. The Chilean
government has proposed the additional tax on diesel vehicles to reduce air
pollution and to raise its tax revenues amid an economic slowdown. Actually, tax
has always hurt peoples purchasing power. For European countries, they erect a
lot of tax policies for automobiles like CO2 taxation, vehicle taxes, fuel taxes,
higher registration fees within the vehicle price, gas taxes, circulation taxes, a
vehicles tax is negatively correlated with its registrations. Car sales in Germany,
Europe's largest auto market, fell by less in June than the month earlier,
mirroring the trend in other major euro zone markets and adding to hopes that a
five-year slump may be bottoming out. French car sales at struggling PSA Peugeot
Citroen dropped a further 9.5 percent, while French rival Renault was able to
slow down the decline in June to 3.6 percent from a drop of 16.5 percent in May.
Even the European countries have their auto market in their countries, but their
sales volume and purchasing power is still behind China. While as of 2012 a
luxury car tax does exist in Australia, it also uses a significantly higher tax rate of
33 percent. Overall, tax can be another important indicator that influences the
consuming expense.
The following indicators that we will talk about is GDP and the culture of
the countries. GDP per capita PPP is gross domestic product converted to
international dollars using purchasing power parity rates. We use GDP per capita
PPP data to try to estimate the average purchasing power in each chosen country,

thus determining if the introduction of Tesla electric car is conducive to earning

attractive profits (Data is from Dec 2013). As an emerging economic power, China
has GDP per capita PPP of $11524.57, which is the lowest among the ten chosen
countries because China has a big income disparity. Urban population on average
has 68% higher GDP per capita PPP than people living in rural areas have . Since
right now Tesla identifies itself as a niche market player (based on its annual
production), if we want to market Tesla electric car in China, the target market
would only be middle and wealthy classes living in urban cities . Therefore, China
scores 3 in this indicator. Norway has an attractive GDP per capita PPP of
$62448.02, which scores 10 and tops among the ten countries we choose.
Furthermore, Norway has a much healthier income disparity, which makes the
market even more tempting because its not necessary to segment the population
based on their income. Brazil is also one of the emerging markets in the world. It
has GDP per capita PPP of $14555.08. It scores 2 in the GDP per capita PPP
indicator. However, the market attractiveness suffers from the high-income gap
between rich and poor. Argentina has GDP per capita PPP of $17554.12, which
scores 3. It also faces the problem of income inequality. However, this could be a
compelling market if we can find out how many rich and middle class people
there are. Chile has GDP per capita PPP of $21714.03, which scores 4. Although
Chile enjoys a higher GDP per capita PPP than other developing countries, its
plagued by serious income inequality. When entering the market, we need to be

careful about where the wealthy and middle class population lives. France has
GDP per capita PPP of $35969.1, which scores 6. France has decent GDP per capita
PPP and healthy income disparity. From this perspective, its attractive to choose
France as a target market. Germany has GDP per capita PPP of $42045.25, which
scores 7. Germany surely has the advantage of being a target market given the
high GDP per capita PPP but there are issues to be concerned. The U.K has GDP
per capita PPP of $35013.27, which scores 5. U.K. is ranked among the middle
GDP per capita PPP, which could provide Tesla opportunities to earn sizable
profits. Australias GDP per capita PPP of $42809.93 scores it an 8. Australia
definitely presents a decent purchasing power. As a rule, we may need to
consider other factors that influence our decision-making such as long distance
travel for example.
Culture is another important factor in determining if the countries we
examine are profitable to enter. We employ Hofstedes four cultural dimensions
to find the answer. Hofstedes four cultural dimensions consist of Individualism
vs. Collectivism, Small vs. Large power distance, Masculine vs. Feminine, and
High vs. Low risk avoidance. First we collect data on what each of the countries
scores on each dimension and then briefly explain what the scores imply
regarding the opportunities of Tesla entering the market. China scores 80 in
power distance. China has a large gap between power and ordinary people.
Therefore, Tesla may need to adjust the design of the car to indicate the

prestigious statue of the person (CEOs, high level officials, ect.). China scores 20
for individualism, meaning China tends to be collectivistic and implies that
Chinese people may have the propensity to hang out together. A car with large
space is needed. Tesla offers a normal size sedan that could meet the need. The
masculinity is 66. Tesla electric car outperforms at its ability to accelerate,
which should meet the need. Uncertainty avoidance is 30, which is a weak
score. That means that people are likely to try new things. Therefore, it should be
easy for Tesla to make their cars acceptable in the market. Overall, China scores 8
in culture dimension. Norway scores 31 in power distance. So Tesla may not
need to adapt specifically to the car market. Norway scores 69 in individualism;
meaning Norway is a high individualistic country. Based on this, people may use
the car more often by themselves. Therefore, middle and normal sized sedans
may prosper in the market. Norway gets 8 in masculinity, which could imply
people are not concerned about the cars performance. Norway stands in the
middle of risk avoidance. This may not have dominant effect on the choices of
purchasing a innovative electric car offered by Tesla. Norway scores 6. Brazil
scores 69 in power distance. As what Tesla may need to do with the China
market, the car design may also need to be changed to show superiority. Brazil
scores a 38 in individualism indicating its more of a collectivism-oriented
country. Hence, family trips or driving with a couple of friends tends to be

preferential. Brazil stands in the middle of masculinity with a score of 49. This
means the average person may not care too much about the speed of the car .
People may be more likely to be attracted by traditional gasoline cars and may
take some time to get used to the new electric cars Tesla is offering. Based on the
analysis of cultural dimension, Brazil scores an overall 5 in the cultural
dimension. Chile scores 63 in power distance. Chile also has a high power
distance; so extra dollars may be used to change the car design. Chile scores 23 in
individualism and shows its a collectivistic country. They may prefer normal
size cars. Chile gets 28 in masculinity. This factor doesnt serve well Teslas
advantage. Uncertainty-avoidance is 86, which is a really high score. It basically
says people in Chile are very conservative. This is very likely to be an obstacle to
Tesla since people have the tendency to avoid new things. Based on the analysis
of cultural dimension, Chile scores 4 in the cultural dimension. Germany scores
35 in power distance. This means there should be not too much change
associated with the car. Germany gets 67 in individualism representing an
individualism country. With the way it works in Norway, people may prefer both
normal and middle size sedans. Masculinity gets 66, meaning people are drawn
to a faster car and matches Teslas electric car advantage. Germany scores 65 in
uncertainty avoidance. This indicates that the public will easily accept an electric
car. Based on the analysis of cultural dimension, Germany scores 7.

As we get to the last few indicators, we look at the market for cars in the
countries in order for us to narrow down our search for the best place to
penetrate into the market and sell Tesla electric cars. For most countries such as
France, Germany, United Kingdom, United States, Norway, and China the
percentage of car sales from 2013-2014 was increasing anywhere from .6% in
Norway all the way to 10.7% in the United Kingdom. With the percentage of sales
decreasing in the countries of Brazil, Argentina, Chile and Australia, the decrease
in sales ranged between 2.4% in Australia to 23.8% in Argentina. With this
knowledge we decided that it would not be in our companys best interest to
penetrate into the market of the countries with a decreasing car sales market, in
order to avoid a loss in revenue. However, with the increasing car sales in the
remaining six countries we have a better idea as to who we should look closer at
to get into the country with Tesla cars.
This information pertains to the countries environmental policies. With the
South American countries we looked at, Brazil has the most hope for hosting
Tesla cars as it is environmentally conscious, that being said the main focus in
their country is on deforestation so car emissions is not as large of an concern to
the people so pushing electric cars in their country would not have much success .
In the European countries, Germany, France and the United Kingdom business
and people are looking to be more environmentally sound due and are doing so
by limiting greenhouse gas emissions and being more conscientious as to how
they operate day to day. Going into these countries to sell Tesla cars is a decent

possibility with how they are responding to the latest in environmental issues .
Lastly we looked at the environmental policies in China, Norway, the United
States and Australia. China is becoming extremely involved with their
environmental impact and Norway has such great benefits for citizens who drive
electric cars that selling Tesla electric cars in these countries is an idea to look
into further. The United States is just now starting to get more involved with
being green, but out of 18 countries in the Greendex Survey, issued by National
Geographic, Americans drive their cars the most which shows that being green
has not caught on with the entire population just yet. The Australian government
is working to make its country more environmentally sound and is implementing
multiple plans in order to do so. After looking into several countries, based on
green policies, the countries best for us to enter are Norway, China, Australia,
Germany, France and the United Kingdom.
The last factors to explore are Average Commute Time, and Technology.
These indicators when used cohesively with one another can be used to narrow
down market options for the sale of the Tesla Electric Car. Commuting is a task
every working adult has to deal with. However, depending on the amount of time
spent on the road and the main sources of fuel in the country, the two factors can
have a major effect on the environment. With one of the most severe commute
times, Chiles citizens spend an average of 90 minutes per day commuting to
work. This is largely due to a Chilean effort to decrease the amount of personal

cars on the road. Instead of reducing fuel emissions as planned, this effort
actually increased emissions. Had it not been for the countrys plan to reduce
emissions by increasing public transport, Chile would likely be a good candidate
for our campaign based on this factor alone. However, most of Chiles cars are
powered entirely by gasoline or diesel, and do not have the technology to support
Teslas plan for the electric car. In Europe, countries have a commute that usually
lasts around 40 minutes. France has a commute time of 37 minutes, the United
Kingdom has a commute of 40 minutes, and Germany has an average commute of
44 minutes. While these countries would have the technology to support Tesla
Electric Cars, the market share of cars that run on alternative fuel is less than 2%,
so it is not likely that they would sell as well in European countries . China has an
average commute time of 39 minutes, and there are a small number of electric
cars on the market there. The technology for advancing electric cars in China is
there, it just needs to be utilized by the country. China is the country with the
second most amount of cars with 240 million, trailing only the United States.
While their time to commute is much less than that of Chile, the damage done to
the environment is far worse because of the amount of drivers on the road.
Brazils average commute is around 35 minutes in its major cities. The cars there
are mostly flexible fuel vehicles that run on a blend of hydrous ethanol (E100)
and E20-E25 gasoline, so the country is already familiar with using alternative
fuel. However, major cities in Brazil have recently started to invest in creating

Metro Lines for commuters, so a new electric vehicle would not do well
competing in a market with a new public transport system that will both cut costs
and emissions. In Norway, the average commute time is 32 minutes and there a
large number of all-electric, or hybrid electric cars on the market; making it a
great contender for Tesla to expand into. In Australia, the commute is around 27
minutes on average; however cars are fueled primarily by gasoline and do not yet
have the technology to support the Tesla electric car.
Based on this indicator analysis, as a group and using our research as
evidence, we have concluded that the two best countries to market the Tesla
Electric car would be Norway and China. We believe that these countrys markets
would be the most supportive of our product. Though these countries were not
the highest ranked in each of the individual categories, overall they appear to be
the best fit. Tesla Electric Cars are the future for a healthier and more sustainable
environment and entering them into the market in Norway and China will be a
terrific first step.

PART II

The next aspect of this study that we must look at is the marketing plan for
how we will enter into China and Norway. These markets are fairly different so it
is important that we alter the strategies for the different marketing
environments. Using strategies such as Segmentation, Selected Target Markets,
and Positioning, we will be able to compile a well thought out marketing plan. We
will also look at a financial evaluation of the product, and our pricing strategy
based on the distribution costs to ship the cars to China and Norway. Once all this
is researched, we will be able to show our customers an in depth analysis of the
marketing plan for Tesla Electric Cars.

One of the most important items to figure out before a creating a marketing
plan is creating the STP (Segmentation, Selected Target Markets, and Positioning).
For the Tesla Electric Car, the segmentation portion is China and Norway, which
is based off of the Part I segment of this paper. In Part I we looked at the different
indicators regarding what country would best support our product, the Model S.
The selected target market is the consumers who are environmentally conscious
and who are willing to spend more money for a higher quality and innovative
car, such as the Tesla Model S. In terms of positioning, we will be placing our
product in the eyes of the middle to upper class consumers, mainly businessmen
and women, of China and Norway. To do so, we will be playing on their
environmental consciousness.
Tesla Motors is an American company that produces 100% electric luxury
sedans that can be made to order or purchased at the Tesla Dealers. They are
primarily targeting customers who are upper middle class (earning an income of
over $100,000 annually, based on U.S standards). However, the positioning of the
same product in different countries with different average incomes may vary. In
this case, China has a much lower average income compared to that of Norway so
the positioning of the Tesla car in China may be the car for upper class whereas
the positioning of Tesla car in Norway could be the car for middle to upper
classes.
There are multiple ways to segment the market. First we can separate our
market demographically. They seem to be the most generalized. Demographics
segment the market based on age, family size, income, gender, race, and/or

ethnicity. For our purpose, it will be helpful if we segment the market by age and
income because it makes sense to understand what age groups are likely to be
interested in the Tesla electric car and who is able to afford it. Since the Tesla
Model S electric car is a relatively new product, and it is considered one of the
higher-end electric cars among China and other countries, it is especially
attractive to young millionaires and elites who are prone to try new things
(technology for example) and young people who are able to afford them. Two age
groups, roughly 20-29 and 30-39, are particularly interested in Tesla electric cars,
thus they are the group we need to focus marketing strategies on. In terms of
income, Beijing, Shanghai, Fuzhou, Guangzhou, and Hangzhou are the provinces
in China in which residents make the highest income ($17,811-$28,838). Those are
the provinces Tesla should start their marketing for the Model S. Whereas, people
in Norway make higher income and the income disparity is much less than China.
According to the data, the ratio of the 10 percent richest group to the 10 percent
poorest group in China is 21.2 whereas the same ratio in Norway is merely 6.1.
Also, in Norway, unlike in China where the rich population tends to live in one
spot, the population of the rich and poor consumers are more evenly distributed
throughout the country. Thus, ferreting out our higher income earners and
consumers doesnt seem necessary in Norway.
Now we shift our focus onto marketing mix (The 4 Ps):
Price: Tesla Motors will sell its battery-powered Model S sedan in China
from $121,280. In Norway, the Model S goes for over $100,000. Because there is no
car dealer that sells the Tesla car, the price of Tesla car is virtually lower than

that of other similar cars. Compared with other comparably priced cars in the
U.S, the BMW X6 for example, is priced roughly $90,000 in the U.S and $360,000 in
China. However, Tesla Model S is priced $90,000 in the U.S and $121,000 in China
(although the actual price is currently a bit higher because Teslas having
difficulty meeting demand). This could be attractive to buyers who consider their
purchase decisions rationally. It is not necessary to make price deductions since
Teslas has the most efficient battery-driven car in the industry (according to
Efficiency-Frontier Theory).
Product: Tesla will offer three range options. Those options are: Model S: 260km, 370-km, or 480-km. Model S can be recharged using any conventional outlet
and also the companies Supercharger, and get 70% charged in as little as 40
minutes. The Supercharger can provide conventional electric outlets to charge
batteries and charging stations for charging the Tesla Model S. Inside the car, the
large-size LCD screen allows easy reading and added luxury, along with the
leather interior. Based on our cultural dimension analysis, drivers in China tend
to be pleased with the car that has spacious interior and presents superiority of
status. Therefore, Tesla may consider slightly lifting the back seats of the car or
enlarging the interior space if possible. Whereas in Norways market, the
situation is much easier. Tesla does not need to adjust the car to meet drivers
need because in terms the culture dimension in Norway and the U.S are similar.
Place: The sales model of Tesla in China is the direct-sales model. They only
have one store in China. They will not license any distributor, dealers or third
party either. They believe in quality customer service, which is a huge pro for this

company. We believe disintermediating is a good way to catch on to competing

with other existing similar products as it brings on an edge on lowering price.
Tesla currently has four dealers in Norway, including two in Oslo and two more
on the west coast of the country. At times, when a Tesla is special ordered on the
internet though, you do see some indirect sales methods.
Promotion: Look at the Halo effect- Lei Jun, the CEO of Chinese smartphone
maker Xiaomi, had ordered two Model Ss. News of the purchases rippled through
the media and helped to establish Teslas credibility. On top of that, the company
has cultivated stronger and more favorable relationships with journalists who
have the power to dictate the tone of their reports and ensure the carmakers
desired messages resonate in the printed media and the Internet. Another
feasible approach to disseminating positive information is through opinion
leaders on social networks. For example, in China there is an Internet site called
Weibo (Chinese version of Twitter). It is heavily utilized and liked by several of
Chinas largest celebrities. If Tesla is willing to let beloved celebrities test drive
the Tesla Model S and make positive comments regarding the car and create
hashtags, it is very likely that people who follow the celebrities Weibo will buy
into their opinions on the car and start to be interested in the car, leading to a
high possibility of them purchasing the Model S. In Norway, however, we can just
do the same thing based primarily on Facebook. Further, advertising is the mostly
used technique. In this case, we could try to advertise the Tesla car by focusing on
both internal reward and external reward. For instance, we can evoke
environment awareness of people (internal reward), or financial reward

(external reward). One promotion method we can utilize is the word of mouth.
Actually, the people who will statistically be buying the Tesla in Norway will be
the middle-upper class group, and most of them are doing business. They will
have more opportunity to touch a lot of people on a daily basis. Once they bought
a Tesla, if sales personnel could provide all satisfied pre-sale services and postsale services for this consumer group, consumers will be more inclined to talk
with other people around them about how good Teslas services are and
recommend more and more customers to buy the Model S. Therefore, Tesla will
win a good reputation from consumers mouth, which in turn will stimulate more
purchases in Norway. The last method to promote Tesla car is through printmedia like magazine (for example, Se og Hr in Norway) and newspapers.
Provided that the buyers of Teslas car tend to be high income earners, who have
received higher education and are capable of making rational decisions by
gaining detailed information. Print media, unlike multimedia, is easier and
cheaper to convey information of a product in details. It can be more widely
used strategy than the social media promotional strategy for targeting various
audiences in different groups. They can disseminate information with some
pictures through newspapers or magazines to introduce how beautiful their cars
interior is, how large their LCD screens is, advantages of Tesla compared to other
types of car, or what are some of the favored policies or discounts from the Tesla.
It can be more effective to attract large numbers of people in different public
places.

From the positioning mentioned, we can further evaluate Teslas financial

outlook based on the market share in Norway and China. Electric powered
vehicles held a market share of 12.8% for the first three quarters of 2014 in
Norway. The Tesla Model S just alone controlled 3.3% of the market in Norway for
these quarters. However, the market for energy efficient cars is rapidly
expanding in Norway because of the benefits offered by their government. This
change will greatly increase Teslas control of the market. During these quarters,
they sold around 522 vehicles per month. In Norway, the Tesla Model S sells for
72,600 which is around $89,400 in the United States. Distribution costs are
estimated at $26,820 per vehicle from Palo Alto, CA to Norway. Although Tesla
does not offer direct promotions from their company, there are many promotions
and incentives provided by the Norwegian government. In China, electric
vehicles reached an all-time high market share of .22% for the first three quarters
of 2014. Although the first Tesla Model S did not ship to China until April 2014,
Tesla had sold between 1,000 and 1,300 units from April to June. At this time, they
had control of around .004% of the market in China. The Model S is priced at
CN734,000, which is around $121,200 in US dollars. Distribution costs are
around $36,360 from Palo Alto, CA to China.
For marketing something like the Tesla Electric car, it takes a very well
thought out strategic plan. Not any country is suitable to maintain a stable market
for these cars. As the previous part has stated multiple times, the target market
countries are China and Norway. These were chosen based upon certain criteria
that we came up with. Before anything can be determined, you have to decide

what way you see best fit for the advertising and marketing of the Tesla, which is
also known as product positioning. With this being a luxury car, professional
business magazines and television networks with many middle to upper class
viewers is the desired method. It may also be a good idea to do some
advertisements on the Internet because millions of people are on that daily, with
the primary audience being businessmen/women. If those methods are not
receiving the feedback we would like to see, we would have to look into
something else but to start these will be the best ideas for our product.
The Tesla Electric Car is by no means a small investment. If you purchase
this product you either really want to help the environment or simply look savvy
driving down your car in your luxury car. Although, there will of course be
people that are buying this just because they are able to. This car is the least
expensive luxury car between the Porsche and Audi. Due to the price of this car,
there will be no trade discounts. The prices will stay the same in any currency;
depending on which country it is in of course. The process of getting your Tesla if
you ordered it is a little complex. If there is not a Tesla dealer within 160 miles of
you, you may get it shipped to your house. If there is, you must go to the dealer.
The cost of finally having your car arrive to you is fairly large and time
consuming.
In terms of the distribution channel, you will see both direct and indirect
distribution. An indirect channel will be used when you walk into a dealership
and buy a car that is on the floor. The car you have purchased went from the
manufacturer to the dealership (the middleman) and then to your driveway. You

will not see this used as much for Teslas since many of them are special, made to
order cars. There is something a little different about each different Tesla. A
direct channel will be used when you go online to their website and put together
a car and have it shipped to your nearest dealership or home. This is the method
that you see used more often than not. Before the car is shipped to you, the car
must be paid in full, whether it is financed through a company or via cash or
credit card. They certainly arent going to ship a car to someone who has not
shown any promise that they will pay for it.
Due to this being an electric car, one of the largest advantages of it is the
promotion that different countries offer for the purchase of it. In Norway, people
who buy a Tesla are given a $135,000 tax break. If this car was made with a gas
engine, that means it would cost roughly $250,000 US Dollars in Norway. This tax
break is given because of the fact that you are helping out the environment by
driving an electric car since it is not emitting pollutants. This policy is set to
expire in 2017 though so it is something that it would be important to fight for in
the upcoming years. Also in Norway, you are given the right to utilize bus lanes
and not pay any tolls on the highways. In China, they will wave a 10% purchase
tax on cars like this. This promotion is also set to expire in 2017, but hopes to
raise the amount of electric car purchases significantly by then. Although these
are not direct promotions, it is the most promotion that one will get out of the
purchase of an electric car. Teslas are not typically ever marked down or put on
sale because they are not worried about demand for their cars. Right now Tesla
possesses the most advanced technology in electric car (Toyota is ranked second

place in the electric car market). However, at various dealerships, there could
potentially be a promotion going on like a free tablet, TV, or something along
those lines. If we were coming up with a promotion to offer, I would have to
think that a free tablet or laptop would be a decent incentive. That is definitely
something to consider. The Tesla Electric Car is clearly a special car. It is helping
the environment and giving people various incentives in China and Norway.
While working with Tesla cars it is apparent who marketing should be
directed towards middle to upper class citizens as well as those who are
environmentally conscious. With that in mind we chose to market our product in
high end business magazines, television networks and the internet. By utilizing
these outlets we can reach an optimum amount of clients and increase our brand
awareness in our target countries, China and Norway.
We can blast the internet with advertisements targeting those who have
looked into green practices, and those looking at cars. With our online
advertisements we will showcase the convenience of owning an electric car as
opposed to a gas powered vehicle as well as the green benefits incurred from
driving a green vehicle. We can also stress that the Tesla is able to be customized
to however you desire. In China, electric cars are exempt from the sales tax
which is 10%. By pushing the benefits of owning an electric car, especially a Tesla
Model S electric car our product can be brought to the forefront of consumers
minds and hopefully be an incentive to make that big purchase. Moreover, it is
helpful to negotiate incentive policy with government. For example, in Shanghai
China, Tesla car owners are given a free car plate that is worth $12000. If Tesla is

able to do what is done in Shanghai in other provinces in China, it will promote

car sales. The incentives can be various. A discount subsidized by local
government on buying house or apartment may be another example.
In the magazine advertisements we will bring about the same facts but in a
more business savvy manor to get the middle to upper class businessmen seeing
our product as a good investment for themselves. We envision the typical
businessman/woman sitting in an office reading magazines such as Forbes,
Business Weekly, Entrepreneur Magazine, and The Economist. When they open
the page to the Tesla advertisement, we want it to pop and to really make an
impact.
Lastly, for the television advertisements we will compare the Tesla Model S
to a basic gasoline powered car to show the differences between the two and the
benefits the Model S has to offer. Another commercial could be comparing the
Tesla electric series cars to other electric cars such as the Audis and Porsches.
Benefits include lower emissions, convenient and energy efficient fill ups, and
many more. Ultimately, all showing that owning a Model S would benefit the
consumer in a way that the basic gasoline powered car could never achieve. We
would make sure to throw in the incentives that are included with electric cars
similar to what Tesla offers.
We plan to expand on our advertising by implementing more
Superchargers into the countries and covering the gap between the areas that
already have the opportunity to purchase electric with those who have yet to gain
the opportunity, such as parts of China. In order to increase our brand awareness

and spread the opportunity for consumers to purchase electric cars, our goal is to
improve the opportunities consumers have in utilizing the economic options they
have available to them. We plan on making the Tesla electric car more accessible
to consumers by placing Superchargers throughout the countries we are trying to
increase sales in. Superchargers are charging stations created by Tesla that can
charge a car to 80% capacity in 40 minutes or fully charge a vehicle in 75
minutes.. Tesla places Superchargers in convenient places such as roadside
diners, along major highways and even near shopping centers. Here in the United
States, many of our Supercharger stations are located across Interstate 70 and
then throughout the East and West coasts. Superchargers are free to owners of
the Tesla Model S car, once the supercharger option is enabled.
Our advertisements will focus on the green elements our products have to
offer as well as what China has been focusing on, to become a more green
economy and part of that has been transportation efficiency. On top of that, we
will advertise that Tesla electric cars would help in reaching the goals of their 12

th

Five Year Plan. In their 12FYP they discuss how they would like to increase
beneficial environmental practices. Based on this information we can push our
advertisements to show how our car is more beneficial to a healthy environment
as opposed to other cars, along with our Supercharging stations being beneficial
to all users since they locations have spots for all electric cars as opposed to just
Tesla cars. Superchargers are also implementing canopies over the charging
stations that are covered in solar panels to help reduce the impact on the
environment even more. For how economically conscious Norway is, our car

should be able to spread into the market and throughout the country fairly easily
without spending an arm and leg on advertising. With the efforts in place to have
a green economy, the Tesla Model S should be a prominent figure in the minds of
Norwegian consumers and with the addition of more Superchargers, consumers
do not have to go to specific routes to reach their desired destination. They can
maintain the same freedom that is provided by gasoline cars and the abundance
of gas stations with this marketing plan that we have created.
Norway and China would not be the only country to benefit from more
Superchargers placed in slightly less traveled areas for the consumer who enjoys
driving the route with the best view as opposed to the route with the best time.
Tesla can make up for having more Superchargers with the fact that they are
adding solar covers over the charging stations. Within the next 5 years, we would
love to see the amount of European charging stations to go from 108 to 200 and
the Asian charging stations to go from 40 to at least 100. We see that as an
attainable goal within the course of 5 years. With the help of the governments in
these countries and the Tesla company, we believe that this marketing plan will
enhance the knowledge of the Tesla Model S within China and Norway.

APPENDIX

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