Tesla Marketing Segmentation Targeting Differentiation Positioning Solution (2023)

What is Customer Value Driven Marketing Strategy? How Tesla can use Customer Value Driven Marketing Strategy in Auto & Truck Manufacturers sector?

The core purpose of Customer Value Driven marketing strategy is to build an engaging, right relationship with the right customer. The strategic choice of target customers is critical because Tesla can’t serve all the customers in the Auto & Truck Manufacturers industry. Tesla has to choose, who are the customers that it can best serve based on its resources and capabilities.

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What are the four major steps of designing a Customer Value Driven Marketing Strategy?

Tesla can use the following four steps to build a Customer Value Driven Marketing strategy in Consumer Cyclical industry –

Step 1 – Market Segmentation

Step 2 – Targeting

Step 3 – Differentiation

Step 4 – Positioning

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What is Market Segmentation and how Tesla can use market segmentation in Auto & Truck Manufacturers industry?

Consumers in the Auto & Truck Manufacturers industry vary in their needs, wants, demands, resources, locations, access to technology, cultural differences, buying attitudes, and end use of the products and services. Market segmentation is the process through which Tesla decides to segment the overall market in smaller segments and groups that have similar attributes, buying behaviour, socio economic background, etc. This is done to reach out to the group of consumers more efficiently and effectively.

Example of Different Types of Segmentation

Some of the most popular ways of consumer and market segmentation are –

Geographic Segmentation

Geographic segmentation is dividing the overall market based on different geographic units such as – countries, continents, zip codes, states, trading blocks, cities, and neighborhoods. Geographic segmentation is highly efficient for Tesla in the international markets because the prospective customers have different culture, preferences, and administrative systems. Secondly, if the cost of transportation is critical cost in the value proposition delivery then it is prudent to do geographic segmentation as the costs of serving customers in different locations will be completely different.

Demographic Segmentation – Example of Demographic Segmentation

Demographic segmentation is dividing the mass market into smaller segments and groups based on gender, income, occupation, age, life cycle stage, ethnicity, religion, and generation. As the products of Tesla provide a superior value proposition, it should segment the customers based on two main demographic criteria – income of the prospective customer and life cycle stage. One of the most widely used demographic segmentation frameworks in United States by various marketers is – PRIZM.

PRIZM® is the geo-demographic segmentation system that combines geographic data with various demographic, consumer behaviors, and other data to help marketers identify, understand and reach their customers and prospects. PRIZM classifies every U.S. household—assembled by zip code—into 66 demographically and behaviorally distinct segments.

Psychographic Segmentation – Example of Psychographic Segmentation

In the marketing world, lifestyle oriented interests, activities, and opinion, are categorized under psychographic variables. Tesla can use psychographic segmentation to divide the potential buyers into different segments based on – personality characteristics, buying patterns, consumption opinion, opinion on social issues, leisure activities, hobbies, and many other dimensions. Psychographic segmentations are effective because people in the same demography can have different psychographic characteristics based on individual life experiences and growing up environment.

One of the most widely used consumer behavior frameworks to do consumer psychographic analysis is –

VALS - A widely used segmentation method that classifies America’s adult population into eight distinctive subgroups: innovators, Thinkers, Achievers, Experiencers, Believers, Strivers, Makers, and Survivors.

Behavioural Segmentation / Use base segmentation – Example of Behavioural Segmentation / Use base segmentation

Behavioral segmentation divides buyers into groups based on their - attitudes, product knowledge, product uses, and other responses to a product. Many marketing experts believe that behavior variables are a good starting point to build consumer segments. For example for any service – Freemium model is a far more effective segmentation strategy than geographic, demographic, or psychographic. The behavior segmentation can help the organization to focus on key features, and provide the consumers with features that they are more likely to use. Continuous engagement leads higher customer satisfaction rates and high net promoter score.

What is Intermarket (Cross Market ) Segmentation

A lot of consumers have similar want, needs, and buying behavior even though they are located in different countries, cultures, and political systems. Tesla can use the principle of cross market segmentation – defining and targeting same type of consumers in different markets, strategy in this scenario.

Tesla marketing team shouldn’t confine itself to one segmentation strategy. In fact should strive to inculcate numerous features to better define and identify the target groups and segments.

What is Targeting and how Tesla can use Targeting in Auto & Truck Manufacturers industry?

After identification of various consumer segments within the marketplace, Tesla needs to target a specific market. The choice of target market is dependent on ten critical factors –

(Video) STP Marketing (Segmentation, Targeting, Positioning)

- Financial resources to target a specific segment – Does the organization has marketing capabilities, operational skills, and financial resources to target a specific segment of consumers.

- Regulatory and other entry barriers - Are there any regulatory and technological barriers that Tesla will face if it decides to enter the market.

- Organization’s mission, vision, and the consumer segment fit – Is the targeting consistant with the vision, mission, ethos, values and strategic fit of the Tesla.

- The financial return potential of the target market – Tesla needs to decide whether the segment it is planning to target can be financially lucrative.

- Organizational technical capabilities to cater to a specific consumer segment in the Auto & Truck Manufacturers industry

- Product Life Cycle stage – It is highly relevant in the international scenario where the product life cycle is at different stages based on social, economic, regulatory, and political reasons. Tesla needs to find out at what stage of the product life cycle the target segment is.

- Competition in the target segment – What is the level of competition in the target segment. If the competition is fierce then there is less likelihood of sustainable margins in long term.

- Presence of appropriate collaborators to market successfully to the target market – Is there sufficient infrastructure available to target certain customer segment. For example everyone knows that there is an environment conscious segment in automobile industry who can pay premium prices for electric vehicles, but none of the major auto players successfully able to target that segment because there was no collaborators ecosystem. Tesla became successful by building that ecosystem.

- Organization’s comparative strengths and weaknesses to market successfully to the target market.

- Segment structural attractiveness - Presence of core infrastructure to market successfully to the target market.

What is Differentiation and how Tesla can use Differentiation in Auto & Truck Manufacturers industry?

Differentiation is essential in modern marketplace because of the ease with which organizations can either develop new products or source them from third party suppliers who are working with other big brands. One of the biggest examples of it is the growing emergence of private labels in the retail industry. Retailers find it extremely easy to get products manufactured from the suppliers in various industry, this helps them in sourcing products at lower prices and make them competitive against major brands which have to spend a huge amount of resources on promotion and marketing of the products. Tesla can differentiate its products in the Auto & Truck Manufacturers industry based on the quality of the products. The differentiation should be based not on premium-ness of the product but on the high quality features it packs in the current product and service offering.

What is Horizontal Differentiation? Example of Horizontal Differentiation

Horizontal differentiation is when the brand is bought by the customer based on personal preference irrespective of the price and quality features. For example, Harley Davidson bikes are priced at a premium with fewer features than modern bikes but people buy them for the emotion they bring.

What is Vertical Differentiation ? Example of Vertical Differentiation

Vertical differentiation is when two products of similar features are qualities are priced differently. Most of the Apple products are similar to equivalent products in the Android line but they are priced higher than the Android equivalent because of the brand premium

What is Mixed Differentiation ? Example of Mixed Differentiation

Mixed differentiation is when the products and services are differentiated based on numerous criteria that include both features of horizontal differentiation and vertical differentiation.

What is Positioning and how Tesla can use Positioning in Auto & Truck Manufacturers industry?

Brand positioning and value proposition positioning are critical to marketplace success in today’s competitive marketplace. Tesla needs to position its product in such a way that it creates a – distinct image, provides a specific identity / reference point of the product and services in the customer’s mind. Brand positioning and product differentiation have become increasingly critical because of the driving down of production costs in the Auto & Truck Manufacturers industry and the direct access to consumers using e-commerce and other online retailing strategies.

Factors determining the Positioning choices of Tesla are –

- Marketing resources with the firm – Does the firm have enough marketing capabilities and financial resources to position the product in the desired segment.

- Competition ability to imitate & replicate – If the competitors can replicate / imitate the products and services easily then Tesla will face strong challenges to defend its marketing positioning.

(Video) Principles of Marketing - Segmentation, Targeting and Positioning

- Corporate image of Tesla – Positioning of new products should be consistent with the brand image and core competency of the Tesla. As Tesla is a -best value for money -player in the Auto & Truck Manufacturers industry, it should position its product slightly higher than the market prices.

- Relevance of positioning to the customers – Is the positioning relevant to the customers. For example Blackberry tried to position itself as a provider of high end corporate security. Most consumers didn’t buy into that positioning because most were not using their phones for corporate purposes.

- Consumer ecosystem – If the positioning of the product is not consistent with the consumer ecosystem then consumers won’t accept the product or service.

- Ability to defend a differentiation and positioning – Can Tesla defends the differentiation it seeks to project. If Tesla can’t defend the new product / services positioning then it will be left to fend off competitive threats from new entrants.

- Threats of direct competition and competitors' response – If the competitors’ response is predicted to be strong then company shouldn’t strive for a positioning where competitors can easily counter attack the marketing strategy and marketing mix of the organization.

- Marketing Resources with competitors – If Tesla competitors have huge financial resources to deploy for marketing, then Tesla will face stiff competition.

- Strategic fit of Tesla – As Tesla already have numerous products and services, the new products and services need to fit into the strategic fit of the already prevalent value chain delivery model.

- Current product portfolio – Tesla needs to assess whether the new product is filling a vacant gap in the product mix or creating a new product line.

What are the 4Ps of Marketing Mix? How Tesla can use the 4P of Marketing Mix to build a successful Customer Value Driven marketing strategy?

The 4 P’s of Marketing Mix are – product, price, place, and promotion. The marketing mix is the way a firm design and execute a combination of – product strategies, pricing strategices, distribution channel options, and promotion vehicles.

For a successful Customer Value Driven Marketing Mix, Tesla needs to put the customer at the center of the decision making process and then make decisions based on the customer needs and wants, firm’s financial and technical resources to develop products at certain price. Finally it has to choose both distribution and promotion channels to effectively and efficiently reach to those customers.

For a detailed Marketing Mix and 4P analysis of Tesla please go to the Marketing Mix and 4P page of Tesla

Marketing Segmentation, Targeting, Differentiation, Positioning relative terms

Strategic planning

Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities, and its fast changing marketing opportunities.

Marketing Strategy

The marketing logic by which the company hopes to create customer value and achieve profitable customer relationships.

Marketing implementation

Marketing implementation is the process through which marketing strategies and plans are executed into marketing actions to accomplish strategic marketing objectives.

Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes.

Market Segment

A group of consumers who respond in a similar way to a given set of marketing efforts.

Market Targeting

Evaluating each market segment’s attractiveness and selecting one or more segments to serve.


Differentiating Tesla value proposition from that of the competitors, thus providing a market offering to create superior customer value


Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

(Video) Segmentation, Targeting & Positioning

Predictive analytics

Measures designed to predict consumers’ future purchases on the basis of past purchase information and other data, and also evaluate the impact of personalized promotions stemming from these predictions.

Product involvement

The degree of personal relevance the product holds for the consumer.

Intermarket (cross-market) segmentation

Forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries

Target market

A market segment of buyers who share common needs or characteristics that the firm decides to serve

SWOT Analysis

An overall evaluation of the company’s strengths (S), weaknesses (W), opportunities (O), and threats (T).

Marketing mix

The set of tactical marketing tools product, price, place, and promotion that the firm blends to produce the response it wants in the target market.

Tags :: Market segmentation, Market segment, Market Targeting, Positioning, Differentiation, Marketing mix, SWOt analysis, Marketing implementation, Marketing control, Marketing return on investment (Marketing ROI)

PESTEL / STEP / PEST Analysis and Solution of Tesla

Porter Five Forces Analysis of Tesla

SWOT Analysis / SWOT Matrix of Tesla

Organizational Resilience of Tesla

McKinsey 7S Analysis of Tesla

BCG Matrix / Growth Share Analysis of Tesla

References Books on Tesla Marketing Segmentation, Targeting, Differentiation, Positioning Analysis

Tesla (2021), "Tesla Annual Report", Published in 2021.

Euromonitor (2020), "Consumer Cyclical Sector Analysis ", Published in 2020.

Michael R. Solomon (2014), Consumer Behavior, 11th ed. (Upper Saddle River, NJ: Prentice Hall, 2014), pp. 132–134

Molly Soat (2016), More Companies Require Revenue-Focused Marketing ROI Measures, Study Finds, Marketing News Weekly, 2016

E. Jerome McCarthy (1960), Basic Marketing: A Managerial Approach - 4P Marketing Classification(Homewood, IL: Irwin, 1960).

Michael E. Porter (1996), What Is Strategy?, Harvard Business Review, November–December 1996, pp. 61–78.

H. Igor Ansoff (1957), Strategies for Diversification, Harvard Business Review, September–October 1957, pp. 113–124

Philip Kotler & Kevin Lane Keller (2016), Marketing Management, 15th ed. (Hoboken, NJ: Pearson Education, 2016), p. 5

Nancy Lee and Philip Kotler (2015), Social Marketing: Changing Behaviors for Good, 5th ed. (Thousand Oaks, CA: SAGE Publications, 2015)

Boston Consulting Group (1968), BCG Matrix / Growth Share Matrix, www.bcg.com

Maslow (1987), Motivation and Personality, 3rd ed. (New York: Harper Collins Publishers, 1987)

Michael E. Porter (1985), Competitive Advantage: Creating and Sustaining Superior Performance (New York: Free Press, 1985)

(Video) STP Marketing Example: TESLA


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