Marketing for Tesla Model SCompetitive Analysis Paper Example

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Vanderbilt University
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The players in the automotive industry face a lot of competitions due to technological changes and shifts to high-end cars by consumers. Tesla Model S is a modern full-size all-electric car that is produced by Tesla Motors, and it was introduced in 2012. The vehicle has a unique design with five doors and luxury liftback and has received my accolades since its introduction. Tesla model S faces enormous competition from other emerging car models from other companies such as Mercedes-Benz S-Class and BMW 7 Series. Having this view, the research will aim at determining the competitive analysis for automotive industry and Tesla Model S. Additionally; the study will analyze the marketing strategy for the model.

American, Asian and European carmakers dominate the car-manufacturing market around the world. The major stakeholders in the industry are Volkswagen, Hyundai, Ford, General Motors and Toyota. Ideally, the automotive market is oligopolistic because the business is dominated by a substantial number of small carmakers thus an action by one company is likely to bring considerable impacts to other players. Besides, a recent research of the industry revealed that only ten famous car firms globally control over 72% of the market (Rimmer, 2014).

Moreover, the car industry is very competitive mainly because it heavily depends on consumer tastes and trends. The companies that seriously takes into account consumer needs and preferences experience high sales of their cars. For instance, Mercedes S Class and BMW 7 Series are two types of vehicles that have almost same features with Tesla model S. However, a consumer will choose one of the products because of his/her specific features that ensure his/her satisfaction. The industry has been undergoing challenges due to the threat of new entrants, the power of buyer and suppliers, competitive rivalry, and availability of substitutes (Rimmer, 2014).

Tesla Motors came up with Tesla Model S after close study of the industry market. The car was modified to have best and unique features that make have a competitive advantage in the market. This model has gained colossal rating and tributes since early 2014. Although the car is so expensive as it costs more than hundred thousand dollars, it has various impressive details that attract the consumers. Firstly, the speed of the vehicle is high as it can accelerate to over 60 miles per hour in less than 3 seconds (Chen & Perez, 2015). This makes it one of the fastest cars in the world. Secondly, the vehicle can cover over 250 miles on one charge thus making it so economical.

Other than charge, the car has cool safety features that include partial auto-pilot functions. This unique feature helps in enabling automatic driving in highway and while stopping. It further detects parking spot and automatically parks itself. Notwithstanding, the electrical, mechanical barking system makes it very superior to other related products. Additionally, the car has a 17pinch LCD touchscreen which acts as an impressive control. This feature is arguably not available in other cars. Lastly, the car does not require frequent auto dealer for software upgrade since it is capable of receiving its updates wirelessly. These features and much more makes Tesla model S best choice for consumers (Chen & Perez, 2015).

To extensively examine its power in the market, the research will scrutinize the features of its two major competitors in the market. These are Mercedes S Class and BMW 7 Series. These two models have close features with Tesla Model S and have frequently been compared by buyers before making conclusions on which model is best. The study will survey their specific strategies, objectives strengths, and weakness.

Mercedes S Class

Mercedes S Class in 2016 had a solid year due to its unusual strategy. The car stresses on safety over luxury as their marketing campaign, and this has attracted a wide range of customers lately. Essential safety standards feature in the car includes the ability of night view, lane-keeping assist, and blind spot detection. Moreover, an additional feature of attention assist helps the drivers to be aware while driving (Cheong, Song & Hu, 2016). This unique strategy resulted in an increase in sales of Mercedes S class in recent years.

Mercedes S Class has four primary objectives. The primary aim is technology and innovation by aiming at producing a product which uses modern technology. Secondly, the model seeks to create added value product for their customers. The outstanding quality of the car ensures customers satisfaction. The other objectives are making best teams with different Mercedes models and enhancing their profitable growth.

Moreover, the car has unique strengths that make it competitive in the market. Its high speed of up to 100km/hr. in 6 seconds makes it highly valued. The car has cool features such as being warm, adjustable cruise control and having full beam always. Moreover, the car performance is outstanding due to efficient engines with turbos and new 9-speed. Lastly, the safety features such as crosswind assist, active blind assist, and steering assist make it robust model. However, the model has several weaknesses. The model is costly compared to other cars with almost similar features. Secondly, the model requires high maintenance cost even when it has covered less mileage. Lastly, its spare parts are so expensive for an ordinary buyer (Cheong, Song & Hu, 2016).

BMW 7 Series

The model recently launched a new tag-line termed Driving Luxury to target luxury consumers to buy its products. Other than the tag, the model has implemented their strategy of developing new technologies such as remote-control parking and gesture control. Moreover, the model has brand equity and useful BCG Matrix that compares the model with other competitors. The BMW 7 Series aims at producing a high-performance car with a powerful engine that can deliver in every terrain. Another objective is to come up with a high-speed model that is accelerating faster than their competitors (Mangram, 2012). Moreover, the car objective is to have relaxed and spacious interior design with high-quality material. This will be likely to attract customers and increase their demand in the market.

Furthermore, the BMW 7 Series has numerous strengths. The model offers customization for their customers thus enhancing customer satisfaction. Another significant advantage is its broad wheelbase that offers stretched rear legroom space. Additionally, the model has excellent design and a good cruiser that boosts handling at high speeds. Lastly, the model has a positive brand identity because of effective marketing strategies. However, the model has two significant weaknesses. Firstly, the model faces massive competition from Mercedes S Class and Tesla Model S. The competition arises because they have small segment hence having a limited market share. Another great weakness is its costly nature of spare parts and maintenance costs. Several customers may not purchase the car because of fear of spending in servicing and maintain because it is a premium car (Mangram, 2012).

Tesla Model S Marketing Mix

Tesla Model S is a brand that has one of the highest brand equity in the automotive industry. The model has faced colossal competition in the industry to achieve its currents position in the market. The models marketing mix has continuously been modified to conform with changes in technology and other factors in the market. Tesla Motors had to practice diversification to have a competitive advantage. To understand their marketing strategies lets analyze their strategy regarding product, place, promotion, and price.


Tesla Model S is a well-known electric car, and recently it became worlds most famous electric car. The car is a premium model and is eco-friendly since it can be driven in various terrains. Additionally, the model has several neat features that attract the customers. These include the self-driving autopilot feature and powerful engine that can accelerate up to a speed of 60 mph in just 3 seconds (Moritz, Redlich, Krenz, Conradi & Wulfsberg, 2015). Moreover, another exciting feature is the over the air software update that minimizes maintenance costs.

Interior design is another feature that makes the model outstanding. The car is designed to be spacious with five-door which can accommodate up to five passengers. The car has comfortable and attractive seats and their headroom that is sufficient for each type of occupant. The touchscreen at the center of fascia and iPad that controls the air conditioning and ride height of air suspension. Regarding media devices, the car has AM/FM/DAB tuner which enables one to stream music via USB or Bluetooth. Lastly, it has Tech Pack that comes with a 3G data connection to feed information to the audio system and sat-nav (Moritz, Redlich, Krenz, Conradi & Wulfsberg, 2015).

Regarding the safety features, the car has eight airbags, 5-star crash rating and traction control that prevents impact in case of accidents. The automatic brake enables the care park itself when in a parking place. Additionally, its aluminum body makes it light and prevents rust damage. Lastly, Tesla Model S can supercharge by getting a range of 150 miles in around 25 minutes for free (Moritz, Redlich, Krenz, Conradi & Wulfsberg, 2015).


The Tesla Model S categorized in a premium pricing strategy in the entire companys marketing mix. This is because the product is coming from a highly sophisticated technology that is common in the majority of Tesla Motors products. Moreover, the company set a high price for the product because of the massive research and development as well as materials used in its production. The analysis included marketing research of related products in the market.

Therefore, the Tesla Model S price ranges from $70,000-$140,000 which is a fair and competitive price in the market. Although it seems to be expensive, the price is low when compared to BMW 7 Series and Mercedes S Class models. The product deserves the price because it can result in large savings because of fuel saved. Precisely, the car saves gasoline worth $8 for every 100 miles hence it is sustainable and enhances environmental protection. Besides, the model is a Hybrid car thus the owner will save up to $700 yearly (Moritz, Redlich, Krenz, Conradi & Wulfsberg, 2015).

Due to this pricing strategy, Tesla Motors in 2016 managed to sell over 90,000 Tesla Model S which almost surpassed automaker Ford in market capitalization. Customers bought the product because they are sustainable and they are made of high technology and have a fantastic quality design. Furthermore, the research by the company found that Tesla Modes S drivers save up to a third of fuel compared to competitors that are non-electric (Moritz, Redlich, Krenz, Conradi & Wulfsberg, 2015). Lastly, the product has long-lasting battery hence minimizing the costs of major engine repairs.


The place is an essential aspect of the market of a product. Tesla Motors is headquartered in Palo Alto, California in the United States. The product and other related products are developed in a 5.4 million square feet large manufacturing store that contains modern, sophisticated technologies that aid the process. In fact, the company is planning to double the space of the facility in near future due to their objective of producing more Tesla models (Liu, Kang, Wu, Chen & Hon, 2014). This move is likely to increase the production of Tesla Model S in the market and subsequent increase in its supply.

Due to the excellent positioning of their manufacturing facility, the company attracts huge demand from customers worldwide, and they can deliver the product in tim...

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