Tesla Segmentation, Targeting, and Positioning (2023)

Tesla became the most appealing automobile firm of the twenty-first century by spearheading the global shift to electric cars by their segmentation.

Tesla Segmentation, Targeting, and Positioning (1)

1. Introduction

Tesla segmentation, targeting, and positioning is a series of processes that entails identifying a certain population segment(s) and designing goods to meet the requirements and desires of the segment's customers (s). Tesla, Inc., which was previously known as Tesla Motors, was created in 2003 and only became successful in 2013. The company's headquarters are in Palo Alto, California, and it specializes in solar panels, lithium-ion battery energy, and electric vehicles. Elon Musk, Tesla's CEO, sees the company as a technological corporation and an independent manufacturer to make electric cars affordable to the wider populace.

People and families who are conscious of environmental concerns and the unfavorable environmental consequences of CO2 emissions make up Tesla's target market sector. Tesla successfully caters to the target consumer segment's emotional demands to feel environmentally responsible by purchasing electric cars and installing solar panels.

Market Segmentation of Tesla

Segmentation is the process of categorizing people into groups based on their age, social position, psychological qualities, and other factors. Targeting refers to selling items to certain groups (segments) discovered through segmentation. Positioning is the process of choosing and implementing the marketing mix that is most suited to the target client group. Mono-segment positioning is used by Tesla. As a result, the alternative fuel carmaker is aiming at those who are concerned about the negative environmental consequences of oil and gas usage.

Tesla goods are thought to be too pricey for normal people; hence the company's primary market is rich individuals and families. Simultaneously, Tesla may go from mono-segment to multi-segment posture shortly. Elon Musk described Tesla's business model in a blog article in 2006, stating that the firm makes sports cars, then uses the money to develop a more inexpensive vehicle, and then uses the money to build an even more affordable car.

Market segmentation is a type of marketing strategy that involves breaking down a bigger target market into smaller groups of customers with comparable goals and wants. Target market segmentation is a powerful tool for identifying unmet client demands. Professionals defined the characteristics of an ideal market sector as being important enough to provide revenue and sufficiently steady to ensure the segment's longevity.

3. Targeting of Tesla

Tesla's targeting segmentation approach includes behavioral and psychographic segmentation. It is aimed at dedicated and aspiring middle and upper-class customers who want and are looking for prestige, the appearance of being environmentally friendly, and the long-term cost-effectiveness of automobiles. Because Tesla Inc.'s strategic goal is to capture the mass market, the major target markets should be sectors with characteristics that are comparable to those of mass markets. And purchasers who prefer automobiles that get them from point A to point B in a cost-effective and environmentally responsible manner without requiring other specialized attributes such as comfort or beauty.

Other consumer groups inside their target market acted and valued things differently from the group above, according to their marketing segmentation and targeting technique. They were dubbed "fad users" since they would quickly follow a trendy trend or connect with stardom.

(Video) STP Marketing Example: TESLA

4. Positioning of Tesla

In this competitive market, the burgeoning e-car industry faces various hurdles. These difficulties include a limited driving range and increased automobile prices. Companies in this area must generate value and must find a solution to these issues. Due to limited resources, cutting-edge technology, and growing demand for sustainability, several new automotive manufacturers are attempting to enter the market. The strategic positioning of Tesla Motors is investigated in this research through an analysis of its external factors and quality enhancement.

The whole automobile industry is undergoing a technological transformation. Tesla Motors Inc. is an American automobile and energy storage company that produces, develops, and distributes premium electric vehicles. It also has an electric vehicle powertrain and battery components. Elon Musk, the CEO of Tesla Motors, has stated that the business plans to develop and introduce a budget vehicle in 2017, which will be far less expensive and smaller than prior models. Tesla's competitive advantage stems from its ability to employ current technologies more efficiently.

5. Table

Type of segmentationSegmentation criteriaTesla target customer segment
Vehicles: Future Consumer and CommercialEnergy storageSolar energy systems
GeographicRegionAsia, Europe, and AmericaAsia, Europe, and AmericaAsia, Europe, and America
DensityUrban and RuralUrban and RuralUrban and Rural
GenderMost males and some femalesMost males and some femalesMost males and some females
OccupationEmployees, professionals, managersenior manager, executivessenior manager, professional employees executives
Income levelsHighUpper and middle and highUpper middle and high
BehaviouralDegree of loyaltyHard and Softcore loyal with some Switchers'Hard and Softcore loyal with some Switchers'Hard and Softcore loyal with some Switchers'
Benefits soughtenvironmentally friendly with Long-term cost-effectivenessLong-term cost-effectiveness And environmentally friendlyLong-term cost-effectiveness And environmentally friendly
PersonalityDetermine and ambitiousDetermine and ambitiousDetermine and ambitious
Income levelsHighUpper and middle and highUpper middle and high
User statusNon-users, potential users, new usersNon-users, potential users, new usersNon-users, potential users, new users
Psycho-graphicSocial classMiddle class & upper classMiddle class & upper classMiddle class & upper class
LifestyleEnvironmental friendly, Explorer, and aspirerEnvironmental friendly, Explorer, and aspirerEnvironmental friendly, Explorer, and aspirer

6. Mind Map

Tesla mostly caters to a single market. The luxury all-electric sports vehicle market, which they founded. They're now figuring out how to bring their Model X series into the mainstream market. However, it will take another couple of years to do this. And, if they can, a lot more private investment money. As a result, Tesla employs mono-segment placement. That is, they concentrate on a single part in great detail. Inside this one market segment, however, they pay particular attention to customer sub-group activity with this mind map that you can easily make in EdrawMind, which not only provides countless free templates but also give you a free hand in making your mind map from scratch with countless tools.

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(Video) Tesla Market Segmentation - Sugar 1
(Video) Tesla Presentation on segmentation targeting and positionning : Popov, Bouilly, Beuvain, Gavagnin

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(Video) 27.2 Tesla's segmentation problem


7. Key Takeaways

Tesla Motors Inc. is a company that creates, manufactures, and sells electric automobiles and electric vehicle components. The company's current approach is to manufacture pricey and high-end vehicles aimed towards affluent customers. Tesla Motors Inc. has to seek broad markets now that its customer and product acceptability is developing. Tesla Motors Inc. has to offer premium items for rich people since it uses innovative technologies in the vehicle sector.

(Video) STP Marketing Explained (Segmentation, Targeting & Positioning Examples)

We spoke about how Tesla spends a lot of money on marketing segmentation and targeting to keep each pillar of their business plan informed and updated. We suggested that, rather than cost-based pricing, Tesla uses a data-driven marketing segmentation and targeting method to establish a prestige pricing strategy based on psychological and monetary value drivers. The evident inference of this piece is that Tesla is now dealing with the major business model and operational challenges. Their pricing, segmentation, and targeting strategies are no longer sufficient to address these concerns. You can also make one just like this within 5 minutes or even less with the help of EdrawMind. They have countless options for you to choose from their gallery and edit accordingly, and it's even beginner and user free.

8. References


What is Tesla's segmentation method? ›

Tesla uses mono-segment positioning. Accordingly, the alternative fuel vehicles manufacturer targets individuals concerned with negative environmental implications of oil and gas consumption.

What positioning strategy does Tesla use? ›

Tesla has positioned themselves as the premier all-electric automobile brand dedicated to providing sustainable energy alternatives. And they create buzz not by buying media, but by earning it through car reveals, stunts, word-of-mouth and their charismatic and controversial leader.

What are the key segments of Tesla? ›

Tesla operates through two main business segments: automotive and energy generation and storage.

What is Tesla target audience age? ›

Tesla owners are also typically younger; around 70% of drivers are 34 or younger, falling primarily into the millennial and gen Z generations. They also found that Tesla drivers were also more educated on average and earned a higher income. One-third of all Tesla drivers have either a master's degree or a Ph.

Does Tesla use image segmentation? ›

Our per-camera networks analyze raw images to perform semantic segmentation, object detection and monocular depth estimation. Our birds-eye-view networks take video from all cameras to output the road layout, static infrastructure and 3D objects directly in the top-down view.

What are the 4 market segmentation methods? ›

Demographic, psychographic, behavioral and geographic segmentation are considered the four main types of market segmentation, but there are also many other strategies you can use, including numerous variations on the four main types. Here are several more methods you may want to look into.

What is Tesla target customer segment? ›

The Tesla target demographic is largely established families with kids, including younger children or teenagers, and they are mostly professionals, executives, senior managers or hold other high-income positions.

What is Tesla's secret strategy? ›

In his original master plan, Musk said Tesla's strategy was to start by building a sports car (the original Tesla Roadster), then use the money to build an affordable car (that was the Model S), then use that money to build an even more affordable car (that was the Model 3).

How is Tesla positioned in the electric car industry? ›

Tesla's share of the US market for electric vehicles has been comfortably north of 60% since 2018. But its lead has been slipping. Though still the dominant player, Tesla's market share is down from 70.5% in 2021 to 63.5%, according to data from S&P Global Mobility, which tracks registrations of new EVs.

Who is the target audience for electric vehicles? ›

The EV industry mainly targets those in higher income brackets who are able to afford them and also may view the vehicle as a status symbol. Another target market is those interested in social change.

What segment is Tesla Model Y? ›

The Model Y is based on the Model 3 sedan platform. It shares an estimated 75 percent of its parts with the Tesla Model 3, which includes a similar interior and exterior design and electric powertrain. The Model Y fills a smaller and less expensive segment than the mid-sized Tesla Model X.

How does Tesla market their products? ›

Tesla relies on word-of-mouth advertising as its primary technique of spreading the word about its products. Customers spread the word about it to others who may be interested. Tesla offered the greatest customer experience it could afford, making its consumers pleased and excited about its product.

What are the demographics of Tesla company? ›

22% of Tesla employees are women, while 78% are men. The most common ethnicity at Tesla is White (52%). 24% of Tesla employees are Hispanic or Latino. 11% of Tesla employees are Asian.

How does Tesla satisfy customer needs? ›

The company sells the cars directly to its customers, without any third parties being involved, meaning they have complete control over the messaging and relationship to offer a consistent experience.

How does Tesla differentiate itself from competitors? ›

There are 3 areas Tesla is increasing expertise in that are creating a wide moat against its competitors. The ability to apply machine learning and AI via rapid iteration allows Tesla to target large markets with products and services that could end up being larger than its EV.

Does Tesla operate in a niche market? ›

To move with the changing times, Tesla focuses on launching new offerings that target a wider range of consumers. To stay competitive in the niche market, Tesla Motors has expanded its operations globally with locations in the U.S. and China.

How does Tesla use direct marketing? ›

Tesla's marketing strategy, then, goes against the trend of developing TV advertisements and pushing its products onto consumers. Instead, Tesla focuses on word of mouth advertising, and referrals. Essentially, Tesla markets to its customers by not directly marketing to them.

What is model based image segmentation? ›

The Model Based Segmentation Framework provides you with the infrastructure for the fully automatic segmentation of organs and their substructures in multi-modal images. This is achieved by applying a generic organ model to the images of a specific case.

How to do segmentation targeting and positioning? ›

How to create an STP model for your business: Implementation strategy
  1. Step 1: Define your market. ...
  2. Step 2: Create audience segments. ...
  3. Step 3: Identify the more attractive segments. ...
  4. Step 4: Evaluate your competition. ...
  5. Step 5: Fix your positioning. ...
  6. Step 6: Determine your marketing mix.
Mar 9, 2022

What is target market segmentation examples? ›

Dividing a target market into segments means grouping the population according to the key characteristics that drive their spending decisions. Some of these are gender, age, income level, race, education level, religion, marital status, and geographic location.

How do you identify market segments and targets? ›

Market Segmentation
  1. Identifying the market according to what they need and want.
  2. Analyse their usage pattern, likes and dislikes, lifestyle, and demographic.
  3. Note the growth potential of your market as well as your competition and the potential risk they may represent to your company.
Oct 30, 2022

What attracts customers to Tesla? ›

It specializes in creating high-quality electric cars for the general public around the globe and clean, renewable electric energy. They are known for their vehicle's incredible on-road performance. What may come to you as a shock is that Tesla is renowned worldwide for its $0 marketing approach.

Why do consumers prefer Tesla? ›

Tesla's brand recognition and perceived elite status increase demand for these vehicles. The key factors that drive demand for all EVs involve the cost of gasoline, the available features (all-wheel drive, sedan versus larger vehicles), availability of battery charging stations, and the appeal of the “green” movement.

Who is Tesla's biggest customer? ›

The nation at the top of the list of Tesla sales by country is the United States. This is probably of little surprise to those who own electric vehicles or follow the electric vehicle industry closely. The popularity of electric vehicles has increased notably in recent years.

How does Tesla beat its competitors? ›

First-mover advantage: Tesla has been around the EV industry a lot longer than its competitors. It enjoys brand recognition, word-of-mouth advertising, and a much more expansive charging network thanks to its time in the market.

What is Tesla's mission statement? ›

Tesla's mission is to accelerate the world's transition to sustainable energy through increasingly affordable electric vehicles in addition to renewable energy generation and storage. Tesla is accelerating the world's transition to sustainable energy.

What is Tesla's unique selling proposition? ›

They have developed a unique selling proposition that revolves around the fact that their cars are the only ones that can be driven without gasoline. Tesla's strategy revolves around two main points: 1) creating an amazing driving experience and 2) incentivizing people to switch to electric cars.

What type of market structure is Tesla? ›

Tesla's work in an oligopoly market which have a limited competition in which a few producers control the majority of the market share and typically produce homogenous products.

Who is Tesla's competitive rivalry? ›

Ford, GM, NIO, and Volkswagen are four of Tesla's main competitors. In 2022, the Chinese manufacturer BYD sold more than 1.85 million plug-in electric cars, more than tripling its 2021 result of 593,745.31 Another Chinese company, SGMW, surpassed 1.6 million units the same year, so both companies should be considered.

What are consumers looking for in electric vehicles? ›

Among their reasons: More than 3 in 10 U.S. adults say that it costs less to charge an EV than to refuel a gas car (33 percent), overall lifetime costs are lower (31 percent), and maintenance costs are lower (28 percent).

What age group buys electric cars? ›

According to the survey, Millennials (ages 25-40) are most eager to go electric, followed by Gen Z (ages 16-24). Boomers (ages 57-75) are the least likely to show an interest in buying an EV. Yet, they were the only generation to first cite concern for the environment as a purchase reason.

What is the market for electric vehicles? ›

Electric Vehicles - United States

Revenue in the Electric Vehicles market is projected to reach US$61.18bn in 2023. Revenue is expected to show an annual growth rate (CAGR 2023-2027) of 22.79%, resulting in a projected market volume of US$139.10bn by 2027.

What segment is Tesla Model 3? ›

The Tesla Model 3 is a compact executive sedan that is battery powered and produced by Tesla.

What are the segments of the EV market? ›

India Electric Vehicle Industry Segments

Commercial Vehicles, Passenger Vehicles, Two-Wheelers are covered as segments by Vehicle Type. BEV, FCEV, HEV, PHEV are covered as segments by Fuel Type.


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