Marketing Management – Integrated marketing channels and

distribution system

1
 Table of Contents

Introduction ..................................................................................................................... 3
Brand positioning of Tesla Model 3 ................................................................................. 3
Market leaders ............................................................................................................. 4
Niche Market ................................................................................................................ 4
Product Categorization ................................................................................................ 4
Consumer adoption process ........................................................................................... 5
Pricing strategy for the product ....................................................................................... 6
Conclusion ...................................................................................................................... 7
Reference........................................................................................................................ 9

2
Introduction
The report shall be written by focusing upon the ways by which a company’s marketing
and distribution channel operate. Here, the study has been focused upon Tesla Motors,
which operates in the International market but also has a significant presence in
Australia. In the context of the company, the report shall be written. The company has
recently launched a new model with driverless features. Therefore, at the beginning of
the report, the brand positioning of the vehicle will be discovered. After that, the report
will analyze the market for self-driving cars in Australia. Following that, the report will
highlight the consumer adoption strategies will further discuss a relevant pricing strategy
of the product

Brand positioning of Tesla Model 3

Brand positioning in the retail sector can be regarded as the way a company thinks
about establishing a product brand in the market. Here, the goal of the company is to
increase brand value. Further, it is essential for the company to value distinctiveness to
gain competitive advantage (Yang et al., 2017). Positioning can be done by focusing
upon relevance, differentiation, and most importantly credibility of the product.

Tesla has launched its Model 3 in Australia and Driverless features in the form of
Autopilot. As the market for Driverless cars is at its inception, many established
automobile companies are foraying in the field. Tesla Motors stands apart among the
rest as a brand, for it is long known to be a pioneer in the field of creating high-end
electric cars (Badue et al., 2019). Being environmental friendly has been Tesla Motors'
slogan for a long time. Also, the company has an image of belonging to the next
generation of the environmentally conscious and futuristic company. This image has
already added to the Brand Value of Tesla Motors, which means any new launch from
them will have the consumers take notice.

The new product offered by the company should be credible enough, and promises
must be kept to achieve this positioning objective (Lasserre, 2017). Tesla Model 3 has
already been hyped even before its actual launch. But it comes to fulfill promises. It is
uniquely built and has a plethora of features. Other than its aerodynamic built, it has

3
excellent handling and a powerful engine. Tesla Model 3 comes with a quick pickup,
amazing speed, and the promise of trustworthiness and safety that comes together with
the brand of Tesla.

Customers nowadays have access to a multitude of appealing products; however, it is

essential for the company to offer products that are relevant and has an appeal as well
(Jary and Wileman, 2017). Tesla Motors seems to be staying relevant as they are open
to innovation and their products, including the new Model S, are frontiers of their
innovation.

Market leaders
The term “Market Leader” is given to the company that is capable enough of selling a
product in large quantities. Despite having competitors, a company can become a
market leader through its unique brand positioning and marketing strategies. Australia is
still relatively new to the electric car market. But 2018 has been a good year for
electronic vehicles as sales have been reported to be on the rise. In Australia, electric
car sales have been reported to be an all-time high. But as compared to the worldwide
standard, the rate of sales is pretty low (Palin et al., 2012).

Niche Market
The niche is regarded as the subcategory within a market that is specifically focused
upon meeting the needs of the market and sustaining the quality of a product. In other
words, it is the smallest segment of the market. The Driverless car industry is at its start
at the moment. Fully automated cars are still a thing of the near future, but cars with
driverless facilities are available. Tesla motors seem to be at the forefront of the
companies that are looking to utilize the market (Olson, 2017). The niche of the
driverless car market will comprise of environmentally conscious affluent people, who
can shell out an otherwise big amount.

Product Categorization
It is essential to categorize a product because it can help the company in searching the
products and workflow will be ensured. Tesla Motors, like all other players in the field,
are categorizing their offering as add on feature (Kessler, 2015). For instance, buyers

4
can buy the whole of Tesla Model 3, but they will have to pay an additional amount to
have the Autopilot or self-driving feature available.

With having this add on feature of their most prized offering in the form of Autopilot and
other maintenance features, Tesla seems to have hit the masterstroke. As the market is
relatively new and there are few competitors around, by providing the perfect to the
buyer and adding the eco-friendly feature, Tesla motors can be miles ahead of its
nearest competitor.

Consumer adoption process

As said Earlier Tesla Motors already has a great and enviable brand value and
recognition attached to it. But as in with any other brand, Tesla motors will have to be
constantly on the path of innovation and perfection, to thrive in the market. With each
passing day, newer companies and technology firms are getting patents for newer
applications for driverless cars. Other giants like General Motors, Uber, Ford, Audi,
Hyundai and many more are on the constant lookout and are carrying out extensive
researches in the field of driverless cars (Liu et al., 2019). With Model S, Tesla Motors
seems to have a lot to cover to win over the environmentally-conscious speed lover.

Tesla has kept it's Model S feature-rich and visually stunning to acquire and retain
customers all over Australia. Tesla Model 3 is easily changeable, which a must for
electric cars nowadays (Endsley, 2017). Also, its batteries provide great back up, which
acts as a bonus. Other than having an alluring and equally innovative product in Model
S, Tesla can do much more to retain customers. Customers can go to the Tesla website
to get to know about the accurate feature and specifications. Tesla Motors can also
highlight their prized feature in Driverless Car technology, Autopilot, through their
website and other advertising channels (Kaur and Ramparsad, 2018). Social Media
seems to be another option to spread out the word among environmentally conscious
customers, who comprise the niche. Early adopters and late majorities both will be a
focus on Tesla Motors' marketing plan to adopt new customers. As still, the technology
is in its infancy, full-fledged applications will take time. Driverless and the fully

5
automated car industry will need to spend about 5 to 6 more years to realize its sales
potential.

Pricing strategy for the product

A brand can establish itself only when it is competitive enough to create a good pricing
strategy. Before creating the strategy, it will be necessary to consider factors such as
demand of the product, the demography of the region where the product shall be
launched and most importantly tracking down the companies that are offering similar
products at a lower value. Pricing can be categorized into multiple types, such as
Bundle pricing, Competition pricing, Psychological pricing, Cost-based pricing,
Penetration pricing, Value pricing, and so on (Wen et al., 2018). Pricing is regarded as
the ultimate trigger that would influence buyers to make purchase decisions.

Figure 2: Types of pricing strategies

(Source: Marketing Mix, 2014)

6
In the case of Tesla Motors, it would be necessary to provide cars with full safety
mechanisms in place, along with affordable pricing. Contrarily, it would be essential to
maximize revenue generation and increase market share so that the company can
maximize its profit in the Australian market. Hence, the company would adopt the Value
pricing strategy to attract a loyal base of customers. It would be beneficial to make
pricing related decisions based upon the value of the product because the needs of the
customers shall be taken into consideration and prices would be set accordingly
(Liozuet al., 2015). Potential customers are likely to come back if they find a product
worthy and reliable. Therefore, the customer’s goals should be in harmony with the
company’s values. Simply raising prices will never drive and attract potential customers
to the company’s site. Again cheap pricing will further make the customers feel
suspicious of the product (Nagle and Müller, 2017). Hence, the company would turn
towards ensuring the quality of the product so that they might not suffer from the risk of
losing loyal customers. Also, prices may seem a bit high as the market is at its infancy,
and the technology is relatively new (Kienzler and Kowalkowski, 2017). Nevertheless,
as the market will grow, Tesla motors will have to look forward to having a competitive
pricing scheme.

Conclusion
The report has been written by focusing on Tesla Motors, which is one of the biggest
automobile brands for electric cars. After completing the report, it was understood that
to position the brand, and it will be necessary for the company to offer credible and
reliable eco-friendly and safe self-driving cars. Moreover, the niche market has been
studied, and it can be concluded that despite having to compete with top brands in
Australia, the new product has the scope of establishing itself and become of the market
leaders in Self-driving electric car. Lastly, the pricing strategy has been studied, and it
has been established that value-based pricing would be beneficial for the organization.

7
8
Reference
Badue, C., Guidolini, R., Carneiro, R.V., Azevedo, P., Cardoso, V.B., Forechi, A., Jesus,
L.F.R., Berriel, R.F., Paixão, T.M., Mutz, F. and Oliveira-Santos, T., 2019. Self-driving
cars: A survey. arXiv preprint arXiv:1901.04407.

Endsley, M.R., 2017. Autonomous driving systems: A preliminary naturalistic study of

the Tesla Model S. Journal of Cognitive Engineering and Decision Making, 11(3),
pp.225-238.

Kaur, K., and Rampersad, G., 2018. Trust in driverless cars: Investigating key factors
influencing the adoption of driverless cars. Journal of Engineering and Technology
Management, 48, pp.87-96.

Kessler, A.M., 2015. Elon musk says self-driving tesla cars will be in the us by summer.
The New York Times, p.B1.

Kienzler, M. and Kowalkowski, C., 2017. Pricing strategy: A review of 22 years of

marketing research. Journal of Business Research, 78, pp.101-110.

Lasserre, P., 2017. Global strategic management.Macmillan International Higher

Education.

Liozu, S., Boland, D., Hinterbuber, A. and Perelli, S., 2015. Mindful Pricing:
Transforming Organizations Through Value Based Pricing. In Marketing Dynamism &
Sustainability: Things Change, Things Stay the Same… (pp. 412-421). Springer, Cham.

Liu, P., Du, Y. and Xu, Z., 2019. Machines versus humans: People’s biased responses
to traffic accidents involving self-driving vehicles. Accident Analysis & Prevention, 125,
pp.232-240.

Olson, E.L., 2017. Will songs be written about autonomous cars? The implications of
self-driving vehicle technology on consumer brand equity and relationships. Int J
Technol Mark, 12, p.23.

9
Palin, R., Johnston, V., Johnson, S., D'Hooge, A., Duncan, B. and Gargoloff, J.I., 2012.
The aerodynamic development of the tesla model s-part 1: Overview (No. 2012-01-
0177). SAE Technical Paper.

Yang, X., Cai, G.G., Chen, Y.J. and Yang, S.J.S., 2017. Competitive retailer strategies
for new market research, Entry and positioning decisions. Journal of Retailing, 93(2),
pp.172-186.

10