Tesla project 2015

(Title of project, for example;

A study of Management)

Optional Photo or Logo

Submission date:

Submitted to:

Submitted by: Student Number only

This project / assignment is submitted in part fulfilment of the (Name of qualification, for example;

degree in business studies), part of the (Name of subject, for example; communications) subject in

(year of study, for example; second) year, at the xxxxxxxxxx.

Submission date: 08/02/2015

Submitted to: Joseph A. Egan

Submitted by: A00184840

This project is submitted in part fulfilment of the (Business and law), part of the (Customer

Relationship Management) subject in (4th) year, at Athlone Institute of Technology

Executive Summary

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Page ii

EXECUTIVE SUMMARY

This project is devoted on disclosing on how consumers have reacted toward electric cars

most specifically to Tesla’s models. As consumer become more tech-savvy their

consumer behaviour when purchasing deferent products constantly changes as they

become more exposed to the information out there on line.

Since we are all motivated by deferent elements when buying cars, a Survey, Focus group

and interviews with car dealerships were conducted in order to attain nonbiased

information and become more accurate in this project. Tesla’s consumer are not the only

people analysed in this project, the Silicon Valley based car manufacturer is also

examined, focusing mainly of their technology and store. Tesla’s competitive advantage

is also disclosed, in different topic, this includes the factors and products that differentiate

them from competitors.

Michael Porter’s Tools and Frameworks assisted in analysing the industry Tesla is in.

The project comprise of The PESTEL and SWOT of the auto Industry. Out of the four

generic strategies this project concentrates on the differentiation focus strategy because

this is the strategy implemented by Tesla.

Acknowledgements

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DECLARATION OF AUTHENTICITY

I hereby declare that this submission is my own work and to the best of my knowledge it

contains no plagiarised material. I declare that all material presented is my own work, or fully and

specifically acknowledged wherever adapted from other sources.

This work contains no materials previously published or written by another person, nor material

which to a substantial extent has been accepted for the award of any other masters degree, degree,

diploma or certificate at any other educational institution, except where the acknowledgement is

made in the work by means of the Harvard referencing system.

Any contribution made to this work by others, with whom I have worked with, is explicitly

acknowledged in the acknowledgements page.

I understand that if at any time it is shown that I have significantly misrepresented material

presented, any award to me on the basis of that material may be revoked.

(Signed)…………………………………………Date…09/02/2015…………………….

Acknowledgements

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ACKNOWLEDGEMENTS

This project was not as easy as cutting butter with a hot knife. A lot of people offered their valuable

information and time to assists and some even disclosed priceless information.

First of all I would like to thank Daniel Nealon for coming up with the idea of working together.

His kindness and generosity did not stop there; I would also like to offer my gratitude for providing

his car as a means of transport to all the car dealerships interview we both conducted.

Second, I cannot thank this group enough, all my friends that attended the focus group. There were

such helpful, providing valuable information and also coming up with ideas on how to better the

electric car. Rida Ghauri supplied here design skills making the cover page “so pretty”, in her own

words. Not forgetting the Survey participates and the interviewee, if it wasn’t for these people the

whole thing would have been a fiasco. I also want to thank Francesca Gaschino for allowing us to

“hijack” her interview with Audi and also provide a Mindup of the interview. Last but to least, I

wish I had something valuable in my life to give this man as a token of appreciation. I would like to

say “Thank u” to Joseph A. Egan for the support, constructive criticism and offering innovative

ways to do this project. Seriously Joe, it’s been one hell of an experience and privilege being your

student.

Dedication

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DEDICATION

Dedicate to…My family…………………………………………………………..for offering support and

love.

Glossary

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GLOSSARY

Marketer One that sells a good or service

Emerging Economies Countries that have some of the characterics of

a developed economy. China is a developing

economy

Abbreviations

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ABBREVIATIONS

LIB Lithium-ion Battery

mph Miles per hour

U.S. United States of America

EU European United

FT Financial Times

BCG Boston Consulting Group

EV Electric Vehicle

CRM Customer Relationship Management

Abbreviations Description

Table of Contents

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TABLE OF CONTENTS

Page

TITLE PAGE ................................................................................................... i

EXECUTIVE SUMMARY ............................................................................ ii

DECLARATION OF AUTHENTICITY ...................................................... iii

ACKNOWLEDGEMENTS ........................................................................... iv

DEDICATION ................................................................................................ v

GLOSSARY .................................................................................................. vi

ABBREVIATIONS ...................................................................................... vii

TABLE OF CONTENTS ............................................................................. viii

3) INTRODUCTION AND BACKGROUND - COMPANY PROFILE ..... 1

4) MOTIVES FOR SHOPPING .................................................................... 5

5) STORE CHOICE ..................................................................................... 11

6) CUSTOMER RETENTION .................................................................... 14

7) PSYCHOLOGY OF BUYING ............................................................... 18

8) BUILDING A CUSTOMER FOCUS ..................................................... 22

9) CONSUMER_BEHAVIOUR ................................................................. 26

10) EVALUATION AND ANALYSIS OF THE COMPANY ................... 36

11) RESEARCH & LINK FINDINGS TO OTHER RESEARCH .............. 40

12) REFERENCES ....................................................................................... 41

13) QUESTIONNAIRE DESIGN ................................................................ 46

14) QUESTIONNAIRE RATIONALE ........................................................ 49

15) SAMPLING / RE-CODING / VALIDITY ............................................ 51

16) PILOT TESTING ................................................................................... 54

17) OTHER RESEARCH ............................................................................. 56

18) CONCLUSION ...................................................................................... 58

19) THINK OUTSIDE BOX ........................................................................ 60

20) EXTRA ................................................................................................... 62

Customer Relationship Management Project

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Page 1

3) INTRODUCTION AND

BACKGROUND - COMPANY

PROFILE

Genesis

Tesla Motors was founded in

2003 by a group of engineers

in Silicon Valley who wanted

to prove to the auto industry

that electric cars could be

better than conventional cars,

combustion engine. With

features such as instant torque,

incredible power, and zero

emissions, Tesla’s products would be cars without compromise. Each new generation

would be increasingly affordable, helping the company work towards its mission which is

“to accelerate the world’s transition to sustainable transport,” in Elon Musk’s words

For this company to get humanity of Fossil fuel is was not going to be a walk in the park,

Tesla came up with the following steps in order to change the world:

1. Launch an ultra-luxurious car at low volume, the Roadster

2. Medium price car at medium volume, the Model S

3. Low priced car at high volume, the Model X

Step 1

Tesla’s engineers began by designing a powertrain for a sports car built around an AC

induction motor, invented and patented by Nikola Tesla in 1888, the electric and

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mechanical engineer who inspired the company’s name. The resulting Tesla Roadster

was launched in 2008. Accelerating from 0 to 60 mph in 3.7 seconds and achieving a

range of 245 miles per charge of its lithium ion battery, the Roadster set a new standard

for electric mobility. Tesla sold more than 2,400 Roadsters, now on the road in more than

30 countries, according to the Financial Times (Walters, 2006).

Step 2

In 2012, Tesla launched Model S, the world’s first premium electric saloon. Built from

the ground up to be 100 percent electric, Model S has redefined the very concept of a

four-door car. With room for seven passengers and more than 1.81228 cubic metres of

storage, Model S delivers the comfort and utility of a family saloon while achieving the

acceleration of a sports car, from 0 to 60 mph in about five seconds. Its flat battery pack

allows the car to have a low centre of gravity that enables outstanding road holding and

handling while driving 265

miles per charge. Named Motor

Trend’s 2013 Car of the Year,

the Model S also achieved a 5-

star safety rating from the U.S.

National Highway Traffic

Safety Administration.

In late 2014, Tesla CEO Elon Musk launched two

dual motor all-wheel drive configurations of Model S that further improve the electric

vehicle’s handling and performance. The 85D features a high efficiency motor both the

front and rear, giving the car unparalleled control of traction in all conditions. The P85D

pairs a high efficiency front motor with a performance rear motor for supercar

acceleration, achieving a 0 to 60 mph time of 3.2 seconds and according to Tesla it is the

fastest four-door production car ever made.

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Step 3

Now with more than 50,000 vehicles on the road

worldwide, Tesla is preparing to launch Model X, a

crossover vehicle that enters volume production in

2015. Featuring exhilarating acceleration, falcon wing

doors, and room for three rows of seating, Model X

defies categorization.

Gigafactory

The company is expanding its manufacturing footprint into other countries and states,

including in Tilburg, the Netherlands, where it has an assembly facility, and Lathrop,

California, where it

has a specialized

production plant.

The most expensive

part in an electric

car is the battery,

according to FT, “a

batteries in existing

electric cars can

account for as

much as 30 per cent

of the cost” (Clark,

2014). Tesla is

addressing this issue and there are now reducing the costs of lithium ion battery packs by

attaining economies of scale. Tesla and their key strategic partners such as Panasonic

have begun construction of a gigafactory in Nevada that will facilitate the production of a

mass-market affordable vehicle, Model 3. Tesla predicts that, “by 2020, the gigafactory

will produce more lithium ion cells than all of the world’s combined output in 2013”

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(Tesla, 2014). The gigafactory will not be established for electric vehicle, they will also

produce battery packs intended for use in stationary storage, helping to improve

robustness of the electrical grid, reduce energy costs for businesses and residences, and

provide a backup supply of power. Tesla is not just an automaker, but also a technology

and design company with a focus on energy innovation.

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5

4) MOTIVES FOR SHOPPING

As consumers why do we react differently to certain good and service? How come we prefer

different products and why do we react the way we do? These are question every marketer needs

to answer. Coming up with the solutions to these question is not as easy as cutting butter with a

hot knife. Marketers need to understand the principal of motivations behind each product

consumption in order to accurately target current and potential customers (Gemünden,

Trommsdorff and Jacob, 2009a).

“Motivation refers to the processes that cause people to behave as they do” (Gemünden,

Trommsdorff and Jacob, 2009b). Understanding the concept of costumer motivation assists

marketers that are eager to know the causes of consumer behaviour. From a marketing point of

view, understanding motivation answer the question why consumers do what they do. Study of

motivation represents search for principles that can help in understanding why, people initiate,

choose or persist in specific actions and in specific circumstances (Gemünden, Trommsdorff and

Jacob, 2009c).

Tesla knew that in order to

attract customers they had to

first convince the outliers. So

they launched the Tesla

Roadster, a purely electric

powered sports car that

competed with its counterparts

such the Ferrari. The

automobile industry was

astonished by this, those

affluent customers addicted to

ostentatious automobiles initiated and their money did

the talking for them. The then Chicago governor, Arnold Schwasnegger, bought one, George

Clooney and even Matt Demon got himself the green sports car. Tesla had reached a milestone;

The Roaster

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attracting and retaining customers that are established at the highest level of Maslow’s Hierarchy

of needs pyramid, the self-actualization level.

Motivation is a goal-oriented driving process which consists of two major components namely

emotional component and cognitive component (Kroeber-Riel et al., 2009, p117). The emotional

component is a feature that triggers the action, while the cognitive component identifies the

direction and shows the way for the action to be realized. From Tesla’s perspective the emotional

component of a consumer are the features of all Tesla models that triggers an act of owning one.

For example, these features might be:

1. Range

2. Space

3. Shape

4. Zero Co2 emission

5. Performance

After the act is triggered, the cognitive component it then

initiated. The consumer is then driven,

finding ways to accomplish the act. In

this case, in order to purchase a Tesla, the

consumer will have to go to the website

or one of Tesla’s galleries. Order for their

new Tesla, a pin will be send to them so

that they can track the progress and then

the Tesla will be delivered to their house.

Mission accomplished.

According to the oxford dictionary motives are “a reason for doing something” (Oxford, 2015).

Motives are then subdivide into two categories namely primary and secondary motives. Primary

motives are caused by inborn needs such as hunger or thirst which each person has to satisfy in

order to exist (Gemünden, Trommsdorff and Jacob, 2009c). Maslow argued that when

physiological needs are satisfied the consumer can start acting on safety needs. One must satisfy

lower basic needs before progressing on to meeting higher level growth needs (Durmaz and

Diyarbakirlioglu, 2011). This is the reason why Tesla is only found in developed and emerging

economies, the reason is because most people in these region have reached the growth need

level. This means consumers in this region can afford to purchase Tesla’s electric cars. Whereas

Store, galleries and

charging stations

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people in developing economies will need to achieve the basic need and only after this Tesla can

penetrate their markets since they will be able to attract potential buyers. “… The person does

not feel the second need until the demands of the first have been satisfied or the third until the

second has been satisfied and so on” (Yahaya, cited in Durmaz and Diyarbakirlioglu, 2011).

When it comes to secondary motives the consumers aims to procure products that are not vital,

for example the Roadster, but are very important for the consumer’s self-esteem and also for

consumer to be recognised in society.

Motives can also be classified as:

1. Conscious motives

2. Unconscious motives

Conscious motives

Conscious motive refers to the individual’s conscious functioning (Gemünden, Trommsdorff and

Jacob, 2009d). Consciousness is involves the individual experience attained from both the

outside and inner world that evolves around us. Therefore it’s associated with a person’s identity.

The conscious process occurs when consumers are capable of noticing and reflect upon events in

their minds. For example, our addiction to fossil fuels has caused externalities and destroyed

animal habitats. Consumers reflect upon this message and decide to make a change. They will

start recycling, using sustainable energy and purchasing green cars. Consumers will feel good

about themselves and this intrinsic motivation will continue to drive them to use sustainable

clean energy.

Unconscious motives

Our brain is such a unique organ, it handle information we gather from our environment but

sometime we merely act without thinking. We call it instinct. Instincts are inborn and, therefore,

not learned behaviour patterns which are activated by basic, inner stimuli and automatically

results in certain actions (Gemünden, Trommsdorff and Jacob, 2009e). Unconscious motives are

associated with the consumer’s unconscious processing. Unconsciousness means the consumer

capability to quickly react to signs in his or her environment. A quite good modern example that

applies to most teenagers is signing into Facebook as soon as they get their hands on a computer

that is connected to the internet. Facebook might not be the primary reason why there are on the

https://www.youtube.com/watch?v=7F8cXHseMNc

8

computer but because somehow it has been biologically programmed within to go on Facebook

and see what is trending on that day.

Differentiate needs and wants from motives

Needs and wants might be on the same theoretical level but they are both different from motives.

Needs are basic good we must have in order to survive. However they are the elicitors of motive.

Since motives are goal-oriented, If you are are hungry your need becomes food. Your goal, in

this case, is to find your way to the canteen and

get food. As soon as you finish your meal the

need is satisfied.

Wants and needs are on the same theoretical

needs. However need are basic items that are

really needed for us to survive whereas wants are

wishes and desires, for example a person desires

to drive a Roadster one day. So what will that person do in order to buy one? S/he will

implement goals that in turn will motivate that consumer to buy that Roadster being driven by

Arnold Schwarzenegger driving on TV.

This topic illustrates that till now marketers still do not have the formula for purchasing motives.

Marketing started in the 50s but the consumer but the human being is still an enigma when it

comes to knowing what exactly makes us tick. What a marketer or influencer can do is to

implement some of the above theories and employ tools that can make them accomplish their

goal in finding how consumers will behave when they see the product.

Building customer behaviour in the premium car market

This section is devoted to analyse purchasing

behaviour toward premium cars most

specifically premium electric vehicles. In this

topic, premium and luxury automobiles will

be placed in the same strategic group since

they both come with a premium price, possess

similar qualities and are both higher on the http://tinyurl.com/nyl8dec

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auto industry strategic group map as compared to low-end vehicles. This in return also means the

consumer behaviour towards premium cars is completely different to the purchasing behaviour in

the low-end market. The objective is to disclose factors that attract consumer into the premium

market. By doing this we can determine the strength of this market.

In the premium market consumer use objective reasoning when they need to arrive at a

conclusion on purchasing an automobile. However, most existing consumers attracted into this

industry are the affluent in our societies. This means subjective reasoning plays a huge role when

they are buying cars in the market segment. The buyer obviously wants the prestige, social status

and the sexiness that comes with the vehicle.

The theory of Consumer motives

Consumer are motivated by all kind of things. Some times as consumer we do not know what

motivates us or what motivates our friends when they are shopping. Why it is my lecturer bought

an old 1990 Mercedes Benz? The answer is a negative one. Would it not be great if marketers

came up with an equation that know what motivates consumers? You never know, maybe by

coming up with this equation man will get to know what women want.

As consumers sometimes we are conscious when we are shopping and on some day we are not

even conscious. What really motivates us when we are in the processes of buying is what

marketers are still trying to figure out.

11

5) STORE CHOICE

In auto industry there is fierce competition. Every auto maker is fighting for that number one

sport. This industry does not take kindly of new comer and the major player usually go out of

their way to eliminate any kind of competition. Tesla now there have to be a step ahead than

their competition. So what did they do in order to be ahead? Knowing that everything is online

and thanks to Tesla, with touch of a button you can order for your own Model S.

Process of ordering

Benefits of On-line store

Having a store on-line benefits the sellers as well. Tesla is capable of gaining access to new

markets and new customers with minimal incremental investment in marketing. They have the

opportunity to sell direct, many for the first time, eliminating one or two middlemen such as car

dealerships. Tesla maintains relatively simple software development and IT operations geared to

delivering product descriptions, images, and videos, since the website provides the rest of the

commerce platform. In other word, Tesla is also receive fulfillment services that reduce the need

for investment in a direct-to-consumer distribution network. A company based in California,

such as Tesla, is gaining access to millions of German consumers through the Tesla website

without having to hire a lot of employees in Germany.

https://www.mindmup.com/#m:new

12

Location and Store Experience

Inspired by Apple’s store design, Tesla Motors, the Silicon Valley Based electric car

manufacturer, has concepts of the new luxury plug-in electric car to popular shopping centers in

all the areas they operate in, expanding a small network of their stores and galleries across the

globe.

This is an unorthodox way of

marketing a car but ironically it

works as one the companies

spokesman, Alexis Georgeson, said,

“We get a ton of foot traffic in the

galleries, and this builds awareness

of the Tesla brand” (Box, 2014).

Tesla’s main objective for using this unprecedented strategy is to educate consumers. Shoppers

come into the store, sit in a Model S, look over the vehicle's stripped-down powertrain and hold

up sample blocks of paint and trim to the indoor and outdoor light. That’s not all, Tesla coffee

mugs and baby onesies are also available for sale. Flat-screen televisions on the walls are

constantly broadcasting Tesla videos and the store sells Tesla fashionable brands such as T-shirts

and hats.

Tesla’s strategy of deliberately opening its stores and galleries at high traffic retail locations

helps them connect the world with their products, services and platforms that definitely

transforms the consumer’s experience. This approach allows them to interact with and educate

potential customers in a less formal, more experiential environment.

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13

An orchestrated experience

Lean

The interactive station

close to the door are

designed to catch

consumer’s eyes with

visual and content

that answer most

question about EVs.

The main intention is

to move buyers from

general interest to

real consideration.

(Barber, 2010)


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ex

per

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in

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Configuration

Shoppers can customize

their Model S by

choosing paint colour,

interior, wheels and roof

type. Potential buyer can

visualize their selves

owning a Tesla by doing

this.

(Barber, 2010)

Purchase

If the potential

consumers are

satisfied, they

will head to the

back ready to

purchase an EV.

The finished

design can be

altered before

the transaction

is complete.

(Barber, 2010)

Store Design

14

https://drive.google.com/file/d/0B6RCHDaf7LnncjdaR1hDeURQNkk/view?usp=sharing

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6) CUSTOMER RETENTION

Nowadays the customer wants it all from being informed when researching on the product, better

price, and post-sales service. Tesla knows if this is not supplied to their customer, customer

loyalty is lost and their customer turn to switch to another brand.

So what does tesla do to retain its customer? Obviously keep them satisfied. How do they do

that? Since their just a baby in a market that has a lot of

barriers to entry, Tesla has provided a number of incentives.

All of Tesla’s supercharging station are free to all Tesla car

drivers. They not going to be free for just first month, no

they’re not like Netflix, but Free for life. This is

unprecedented, customer will have to forget about the cost of charging.

The switching cost in the auto industry is high because a consumer can get cars from websites

such as Donedeal or sale their car and buy a new one from another car dealership. Especially for

a new comer that intents to revolutionise the auto industry and kill of the combustion engine.

Elon Musk, the co-founder of Tesla, is constantly on twitter, a social media platform, advertising

all of Tesla’s cars. The left pictures is a link to video of a Tesla’s

dual motors. The dual motor allows all-wheel drive. “Main goal of

dual motors was actually insane traction on snow. Insane speed was

a side effect” (Tesla Model S P85D to Get Even Quicker with Over-

the-Air Update, 2015). Customer to Customer commercials are also available on their website.

It’s quite a given that if a customer is putting up video on the Tesla website he or she is a loyal

one. This is more like word of mouth advertisement and the website is just helping to spread the

word.

Creation of Consumer loyalty

Consumers that continue to purchase products from a company because there is no alternative or

the switching cost is high are not loyal one. This kind of consumer is just trapped and they

http://cars.donedeal.ie/find/cars/for-sale/Ireland/

16

should be identified as loyal as they wills defect to another product soon as opportunity presents

itself. Creating this profit generator, loyalty, a company has to have what we call competitive

advantage. According to Investopedia competitive advantage is “an advantage that a firm has

over its competitors, allowing it to generate greater sales or margins and/or retain more

customers than its competition” (Investopedia, 2007). What Tesla has that most cars do not have

is:

1. Space

2. Unique Design

Space

In the car industry were competition is fierce, car manufacturers are always fighting for new

consumers and retain them for life. Fierce competition makes it hard for new comers to even

penetrate the market. Not only that the 60% plunge in oil prices itself might compel existing

Tesla consumer to defect back to conventional car. Tesla, in order for them to retain consumers

and create customer loyalty they know that they have to be better than the petrol-fuelled

automobile. To be better than their counterparts tesla has

Franz von Holzhausen, Tesla’s chief designer, believe

that the Model S had to have a conversion appeal,

“something that people can relate too” (National

Geographic channel, 2014). The Model S is a high-end

saloon and the shape is designed in a way to conserve the

battery energy, maximising the battery’s range. Since

there no fuel tank or transmission, the Model S has what

Holzhausen calls “opportunity space” from the floor up wards (National Geographic Channel,

2014). The vast amount of space is so huge you can even put two rear facing child seat in the

back. Since there is no engine, the Model S has what they call the frunk, basically it’s just an

empty bonnet in front of a car and that more space for those who need. Not many conventional

cars come with this vast amount of space which is required by most consumers when purchasing

a car. The Model S is an unprecedented electric vehicle. It is capable of sending petrol and diesel

run car to history. It has the shape, the size, cutting edge technology and most of all it powered

The Model S

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17

purely by electricity. A revolutionary car like this one has not been seen in a while in the auto

industry and thanks to Elon Musk the electric car has come of age.

Unique Design

Design is unique because the owner gets to pick the colour, alloys and decorates the interior of

their own car. Now that is what most car owners always dream about.

Interior Design

Luxurious is not even the word to describe the Model S’s design. Seats are fitted tan, blue or

piano black interior, matte obeche décor.

Touchscreen Tablet

Gone are the days of pressing and pushing buttons, Tesla’s has introduced big screens into our

cars. The in-built 17 inch touchscreen controls most of the Model S functions. Opening the all

glass panoramic roof, customizing the automatic climate control, and changing the radio station

all happen with a swipe or a touch. The touchscreen, digital instrument cluster, and steering

wheel controls seamlessly integrate media, navigation, communications, cabin controls and

vehicle data. “Driving a gasoline car is gonna feel like yesterday. Driving this car is the future,”

said Elon musk (National Geographic Channel, 2014). Now Elon Musk is living his dream.

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7) PSYCHOLOGY OF BUYING

When companies start battling for customers, Price is their main weapon. We can see this in the

oil industry, OPEC is going to leave the prices low because they want to eliminate the United

States out of the oil industry. “The power of pricing as a competitive weapon is so strong that

price movements on the part of one competitor usually bring very rapid response actions on the

part of other competitors”( Zakon, 1971).

Premium Pricing

Companies employ different type of pricing policies for reason such as; first, establishing a high

enough price so that your company will have enough margin for profit and reinvestment; second,

introduce low price in order to discourage competitors from gaining more market share. Third;

firm usually establish their selves in a market below their competitors so that they gain market

share. The very first saloon electric car, the Model S, was first priced at €62,058.324. The car

took the world by storm and almost everyone was demanding it since Tesla’s strategy of

converting the outliers worked. Tesla’s competitions such as BMW and Nissan launched the i3

and Leaf, respectively, as retaliation. Both of these electric cars were launched at a low price in

order to erode Tesla’s sales. The left graph illustrates how the Tesla Strategy is working. Despite

the fact that their sales were second best they

were still able to overtake the old comers such as

BMW. Since the price was a premium one, driver

demanded it more especially those who are

addicted to ostentatious product. They want to

own these type of car because of the prestige that

comes with it.

Promotion

Sometimes consumer they do not know what to they want or a bit sceptical about a product so it

is up to the marketer to inform and transition the public into demanding the new product. Elon

http://www.ft.com/intl/cms/s/0/a034cbae-ad4a-11e4-a5c1-00144feab7de.html#axzz3QxFpxjT2

http://markets.ft.com/research/Markets/Currencies

19

Musk, the face of Tesla, has been able to do this on social Medias such as twitter, on Tesla’s

website, at car shows and on television broadcaster such as Bloomberg.

Recharging incentives

Janet Jackson and Luther Vandross once sang the best things in life are free. Assuring consumer

that free charging at supercharging station for Tesla own will really increase demand for Tesla

since there will be no more charging expenses incurred when they are in possession of the Model

S. Not only do you get free charging you can get a battery swap at any Tesla station which is

quicker than filling Audi A4 tank. In the auto industry this is a good competitive advantage.

State of the art Technology

The Technology that comes with the Model S promotes itself. For instance, regenerative braking

or regen braking. The Model S comes with traditional brakes but there is no need to use them. As

you ease of the accelerator and the car brakes itself. This is truly an evolution in the way motorist

drive. When active the regen system magnetically resist the motor’s rotation, slowing the car and

harvesting electric current. The energy recovered recharges the battery and extends the range of

the battery.

Upgrades

Tesla's design and engineering teams have always go extraordinary lengths to ensure that their

costumer are satisfied. The original Roadster battery was the very first lithium ion battery put

into production in any vehicle. The Roadster first battery in 2008 was state of the art but battery

technology has improved substantially since then. The Roadster 3.0 package applies what Tesla

has learned in Model S to Roadster. According to the Financial Time “enable its original

Roadsters to travel more than 400 miles on a single charge” (Waters, 2014). Tesla managed to

identify a new cell that has 31% more energy than the original Roadster cell. Using this new cell

they have created a battery pack that delivers approximately 70kWh in the same package as the

original battery. This constant innovation motivates consumer to continue demanding Tesla’s

products because of the upgrades that will make the consumer’s life easier. Customers for life are

also built this way. The Law of Diminishing Marginal Utility, according to Investopedia starts

“as a person increases consumption of a product - while keeping consumption of other products

constant - there is a decline in the marginal utility that person derives from consuming each

20

additional unit of that product” (Investopedia, 2004). Basically, the utility a consumer derives

when you consume your Mars chocolate bar is nothing as compared to the satisfaction derived

when that consumer when the consumed their very first Mars chocolate bar. Hence diminishing

marginal utility. This is the reason why Tesla constantly upgrade their model so that their cars

become exempt to this law and consumers demand will continue to grow.

Green Car

The younger generation these days is more environmentally conscious. In fact, According to the

Boston Consulting Group “about two-thirds of our survey participants—especially those in

France and Italy—said they believed that the environment is in bad shape that the environment is

in bad shape” (Boston Consulting Group, 2008). The shows how environmentally conscious the

consumer has become. Tesla, according to Elon musk “is about the consumption of sustainable

energy” (Bloomberg, 2014). Tesla are not just making profits but their reducing our addiction to

fossil fuel and preserving the atmosphere for future beneficiaries. In the words of Elon Musk “we

should not play

Russian Roulette

with the

atmosphere. We

only have one”

(National

Geographic

Channel, 2014).

Most consumer

now know that most problem faced in their societies are environmental ones. They want to see

Companies stepping and working hand with the community in order to eradicate environmental

problems we face such as pollution. Tesla is proud of making electric cars that can compete with

their counter parts, the combustion engine. Their transparent on their websites and disclosing

how the driver will be saving the earth by driving the Model S while also enjoying the comfort of

being in one of their Models. A company that makes purely electric cars proves to consumers

that they are addressing the environmental issues the world is facing. Their models competing

with the likes of BMW shows the consumer that an electric car is not a compromise car but the

ideal car and the future of motoring.

21

The above information illustrates what happens in consumer’s mind when there are thinking of

purchasing products in nowadays. For some reason price is a big factor that always differentiate

the high-middle-low income earners. Obviously consumer that bought the Roadster had that

prestigious feeling when they drove it, owning the first sport electric car really build the drivers

esteem when s/he is among his/her peers. Seeing a car on television that drove on ice so

smoothly leaving the big SUV behind really promotes it a consumer will demand it more. Not

having to worry about recharging cost is a motivating incentive especially in these hard

economic times. The true evolution in the way drivers drive is the regenerative brakes system,

truly innovative and making driving easy. The upgrade made by Tesla allows their products to be

immune to the law of diminishing marginal utility. Today consumer is aware of the

environmental problems caused by major companies in various industry. Green matters to most

consumer on this planet. Tesla making automobile that run purely on electricity shows how they

are addressing the environmentally issues this planet is facing.

.

22

8) BUILDING A CUSTOMER

FOCUS / CONSUMER_BEHAVIOUR

This section is devoted to analyse purchasing behaviour toward premium cars most specifically

premium electric vehicles. In this topic, premium and luxury automobiles will be placed in the

same strategic group since they both come with a

premium price, possess similar qualities and are

both higher on the auto industry strategic group

map as compared to low-end vehicles. This in

return also means the consumer behaviour towards

premium cars is completely different to the

purchasing behaviour in the low-end market. The

objective is to disclose factors that attract

consumer into the premium market. By doing this we can determine the strength of this market.

In the premium market consumer use objective reasoning when they need to arrive at a

conclusion on purchasing an automobile. However, most existing consumers attracted into this

industry are the affluent in our societies. This means subjective reasoning plays a huge role when

they are buying cars in the market segment. The buyer obviously wants the prestige, social status

and the sexiness that comes with the vehicle.

Types of consumer purchasing behaviour

“The aim in this topic is to categories consumer purchasing behaviour according to the degree of

cognitive buyer involvement” (Gemünden, Trommsdorff and Jacob, 2009). It involves

measuring and comparing the degree in decision making when consumers are purchasing goods

or services. The following two types of purchasing behaviour are likely to be implemented by

Tesla customer when purchasing their automobile:

1. Limited decision making

2. Extensive decision making

Limited decision making

23

Limited decision making is implemented by consumers when their purchasing goods such as cars

and laptops. In this case consumers are more familiar with the product but not quite acquainted

to the brand. The consumer’s emotional attachment to the good or service is low and “hence as

an alternative satisfies the need, the consumer terminates the decision making process and

purchase the alternative” (Gemünden, Trommsdorff and Jacob, 2009). Tesla main goal was to

create reputation and then worry about profits later. The Model S is a revolutionary in the

electric car industry, a greener car that can compete with a petrol fuelled automobile. They knew

if the model S was going to be a golf cart consumer would have switched to its counterparts, for

instance, BMW and Ford.

Extensive decision making

“Extensive decision-making is a term used in marketing to describe a highly involved consumer

decision regarding whether or not to purchase a product” (Vogt,2010). This involve the

consumer investing a long period of time searching information about the product their

demanding for. Extensive decision making is related to expensive products that are out of the

ordinary, for example a car. Tesla has managed to supply all the information you need regarding

the Model S. This kind of transparency has assisted tesla in attracting consumer that adopt

extensive decision making increasing their sales.

This process of decision making can vary by demographics and income levels. For example,

consumers in the lower- and middle-class bracket may employ extensive decision-making

because most of them are striving to maximize their utility. In other words, they want to stretch

their financial resources as much as possible. However, the affluent consumers, those with more

disposable income, might use extensive decision making when the purchasing luxury vehicles,

for example Tesla Roadster.

Satisfaction

The main aim in product consumption is to satisfy a certain consumer need. Utility is an

economic term that will explain why consumers demand or choose a certain product. According

to Investopedia Utility is “an economic term referring to the total satisfaction received from

consuming a good or service,” (Investopedia, 2003). The Concept of utility was developed by

http://www.teslamotors.com/models

24

Vershofen and he assumed that the overall or total product utility is comprised of attribute level

or partial utility. For a marketer to attract this consumer, s/he needs to understand the partial

utilities that are attributed by the products, for instance, with regards to an electric car, this can

be range and space. These partial utilities put together will make up the product utility.

The following are the types of utility:

1. Basic utility

2. Additional utility

Basic utility

Basic utility refers to the satisfaction derived when a consumer uses the product for its intended

purpose. For example, a tesla car’s main purpose is to take you from point A to B, therefore a

consumer will be satisfied if the car is able to accomplish that task.

Additional utility

With additional utility the satisfaction derived exceeds the actual use of the product. “Essentially,

utilities of a product are designed to satisfy the craving for social recognition of the owner”

(Gemünden, Trommsdorff and Jacob, 2009). The Roadster, an electric sports car is viewed as a

socially remarkable electronic vehicle and in turn means additional utility is extremely

important.

(Own interpretation from Vershofen, 1940 cited in Jacob, 2009)

Satisfaction

http://tinyurl.com/q8nhc6q

http://tinyurl.com/q8nhc6q

25

As you can see from the above diagram that additional utilities is sub-divided into edification

and esteem utilities. Edification utilities serve to satisfy the need for personal emotional use

images such as aesthetic, self-realisation and well-being. Esteem utilities will provide the social

oriented emotional use images, for example prestige, recognition and social distinction. The

product satisfaction derived by consumers will come from the total of all product utility elements

According to Elon Musk, founder of Telsa, “Our mission is fundamentally to transition the world

to electric cars” (Sharman, 2015). This was not going to be a walk in the park, their first target

was to convert the rich, the people that seek prestige and are constantly in need of additional

utility. So they first start by making a high priced car at low volume, the Roadster. The roadster

was then followed by Model S, a medium priced car at medium value and until the third quarter

of this year, according to the Financial Times (FT), we are expecting the launch of the Model X,

the first electric sports utility vehicle (SUV)

(Bloomberg, 2014).

Tesla new that people are not going to buy their

models just because they are electric, they had to

change the way the world viewed electric cars and

make them attractive and desirable. “Let us convince people that driving an electric car is not a

compromise” said Martin Eberhard, former CEO of Tesla (Bloomberg, 2014b). They want

consumers to be satisfied altering their consumer behaviour when it comes to buying any Tesla

model. For example, all the information you want to know about your Tesla is on their website

so you do not need to look up other website. When you book for your knew tesla it will arrive at

your door step in six months and a technician is there to teach you about everything you need to

know. With this kind of one to one induction,

Tesla is definitely build a customer for life. Last

but not least, the consumer-centric and tailored

service tesla is offering it is possible that their

able to penetrate the auto market and transition the consumer behaviour when purchasing electric

vehicle.

http://www.ft.com/intl/cms/s/0/181dcaee-6543-11e4-ab2d-00144feabdc0.html?siteedition=intl#axzz3Ozv4lesO

26

9) TECHNOLOGY

This topic is for disclosing the type of technology used by Tesla in showing the world that the

electric vehicle has come of age. So far the company has launched two model The Roadster and

Model S. Both come with world-class acceleration, handling and design.

The Roadster

So what so good about an electric sports car? The answer is simple, it is the technology of the

future. The Roadster is a very advanced car; made from carbon fibre and the motor is a compact

one with a single speed transmission, one gear. In relation to the Roadster, this topic is devoted

to dive into the innovative technology that made it such as

1. Software

2. Battery

Software

The biggest advantage of being based in the Silicon Valley is that you we attract the best

computer engineers in the world. The advanced software that runs the Roadster is known as

Firmware. It is developed putting much emphasis on rapid, agile innovation. Voltage

management and motor control to diagnostics, door looks and touchscreen interaction are all the

functions run by this software. Various operating system are employed by the Tesla Roadster and

together with the programming language each processor is capable of completing is task. All

http://tinyurl.com/poemvao

The Model S and Roadster

The

two m

odel

lau

nch

ed b

y T

esla

http://tinyurl.com/poemvao

27

processor work hand in hand, “monitoring the status of components throughout the car, share

information to coordinate action, and react to changing external condition.” (Advanced Software,

2015)

The above diagrams illustrates how the firmware processors accomplishes their tasks.

Development of firmware

The software is developed in-house at Tesla headquarter, California, by a team of world-class

software engineers. Having it built in-house than out-sourcing it is a major advantage to Tesla.

Think about it, what usually takes major manufactures approximately three months to upgrade

since they have to negotiate with the other supplier will only take tesla, according to their

website, three hours because it is not out-sourced. This innovative software allows Tesla

technicians to be agile when servicing the car. The only thing they have to do is to plug in the car

to a computer and the software is updated.

The Vehicle Management System (VMS)

Now this is state of the art technology, the VMS is basically the drivers very own secretary

because it performs essential task for the owner. The following tasks are done by the VMS:

1. Managing the security system

2. Opens the doors

http://tinyurl.com/l6vno

Cutting edge Technology

The

Model

S s

oft

war

e


28

3. Communicates warning such as fasten your seatbelt

4. Manages the owner’s PIN

5. Initiates Valet Mode

All the information from the different parts of the roadster is accumulated and compiled by the

Vehicle Management System. As soon as he driver inserts the key into the car, the VMS

automatically turns on the touchscreen in-built tablet. “When the key is switched to the ON

position, the Vehicle Management System readies the

car for driving by instructing other processors to

initiate their functions” (Advanced Software, 2015b).

The VMS computes the range available and informs

the Power Electronic Module to convey electric

energy to the motor from the car’s battery. The

complex algorithm that is manipulated by the VMS makes it capable to:

1. Consider battery age

2. Capacity

3. Driving style

4. Energy consumption rate

Battery

In the auto industry green means “go” but most drivers

have complained about these greener cars saying “they

don’t even go anywhere.” Tesla took this into

consideration when they made the Roaster. They knew in order to draw some oohs and aahs,

performance and range had to be priority. The Silicon Valley based electric car manufacture

29

knew, “increasing energy density means increasing range” (Advanced Software, 2015c). Made

up of Lithium- ion cells, the Roadster battery pack is a “result of innovative systems

engineering” (Advanced Software, 2015d). The battery in this automobile is an “ingenious

battery pack architecture enables world-class acceleration, safety, range and reliability”

(Advanced Software, 2015e). The energy stored in

Tesla’s battery packs is the highest in the industry. In

order to make this energy density possible, the

California based company assembles the Lithium-ion

cells into a liquid-cooled battery pack and it is

wrapped in a strong mental enclosure (Advanced

Software, 2015f). Tesla assured its customers that their batteries are optimized for performance,

safety, longevity and cost.


https://www.youtube.com/watch?v=R8PEnK3aoFQ


30

Recycling

Now it would be, according to Elon Musk, “a sustainable energy consumption company,” if all

the material used to build the car was not recyclable (Bloomberg, 2014).

Tesla has introduced a recycling strategy that will allow the reuse or recycle over 60% of the

battery. That is not all, if the pack production increases this means recycling steps are more

profitable and the recycling percentages increases to 90%

Technology has taken us further, helping man kind to become more innovative and reducing our

addiction to fossil fuels. Tesla wants us to feel cool, derive that marginal utility and change the

way we view electric vehicles. This might take a few years but with time driving conventional

cars is going to feel like yesterday

The Model S

Tesla Batteries

http://tinyurl.com/2azpfue

Bat

tery

mat

eria

l re

cycl

able

http://tinyurl.com/2azpfue

31

At first glance it looks like its counterparts, a high-end saloon, but that is where the similarity

ends. This greener automobile is made from aluminium, 19 inches alloys and a €62,122.287

price tag.

Dual Motors

An all-wheel drive system on a car shows that the industry is evolving. The dual motor all-wheel

drive basically means two motors, one in front and one in the rear, allowing the Models S

“digital and independently controls torque to the front and rear wheels”( Advanced Software,

2015g). This advantage allow, in all conditions, unparalleled traction control. According to Elon

Musk, “the main goal of dual motor was actually insane traction on snow. Insane speed was a

side effect” (posted Twitter, cited onTesla Model S P85D to Get Even Quicker with Over-the-

The

Model

’s i

nsa

ne

trac

tion

on a

ll c

ondit

ions


http://markets.ft.com/research/Markets/Currencies


32

Air Update, 2015). A typical conventional all-wheel drive, for example Toyota 4x4, car employs

a complex mechanical linkage for it to distribute power from a single engine to all four wheels.

This result in poor efficiency in the winter when the roads are icy. On other hand, the Model S is

made from stamped light weight material, smaller and more efficient than the rear wheel drive on

most conventional cars, in turn it provides both range and faster acceleration. The dual motor

allows high performance and the results is supercar acceleration from 0 to 60 miles per hour in

3.2 seconds.

Autopilot

Elon Musk believes Tesla is five to six years away from an autonomous vehicle. Unfortunately

self-driving cars are not legal in most jurisdiction but this does not stop Tesla from developing

cutting-edge technology. The Model S comes with sophisticated sensors making the driver be

more aware of his/her surroundings. This will reduce the number of crushes in our roads. The

following are the four components of the Autopilot system:

1. Long Rage Radar

2. Image Recognition Camera

3. 360 Degree Ultimate Sonar

4. GPS Data Integration W/Real-Time Traffic

Long Range Radar

This allows the Model S to look ahead, identify its present surroundings, travelling directions

and the relative speed of other cars. The Model S is capable of seeing beyond the headlights and

the light can penetrate through fog, rain or visual impairment.

Image Recognition Camera

This camera also looks ahead of the car, acknowledge and read traffic signs, lanes and

pedestrians.

360 Degree Ultrasonic Sonar

https://www.youtube.com/watch?v=m_Fvlm3XbPQ&feature=youtu.be

33

Observing and identifying everything happening around the car, the sensor an excellent example

of modern technology capable of detecting any object around the cars in the drivers blind spot to

a pet about to run into the road, to a child playing behind as the car reverses.

GPS Data Integration W/Real-Time Traffic

This GPS accumulates the data based on your geographical location. In forming the driver the

speed limits and road conditions such as informing the driver about traffic conditions in certain

roads.

Elon Musk has sometimes described as the Henry T. Ford of electric cars. Judging from the

above facts he really has revolutionised the auto industry and assembled the eletric cars in an

innovative way.

Charging system

Innovation is all about something new that makes people lives easier. Although Tesla is the 7th

most innovative company, according to Boston Consultancy Group, it still doesn’t cease to

amaze the car industry. When it comes to charging the Model S at any Supercharging Station, the

driver will have two option, either free charging or a battery swap which is faster that filling an

Audi A4 fuel tank.

The Internet of Things (IoT)

According to WhatIs.com, The Internet of Things (IoT), “is a scenario in which objects, animals

or people are provided with unique identifiers and the ability to transfer data over a network

without requiring human-to-human or human-to-computer interaction (WhatIs.com, 2014).

These technology is transforming the relationship between businesses and consumers while also

http://tinyurl.com/kk6krgb

BCG rankings.

Most

innovat

ive

com

pan

ies

acco

rdin

g t

o B

CG

.

https://www.bcgperspectives.com/content/articles/innovation_growth_digital_economy_innovation_in_2014/

https://www.youtube.com/watch?v=6_XEv2f_Uhw

https://www.youtube.com/watch?v=6_XEv2f_Uhw

http://tinyurl.com/kk6krgb

34

changing the relationship between consumers and their products. Tesla, being an innovative

company, launched an application that interacts with their Electric Vehicles, the Tesla App. The

following is a description of how the app make the life of the driver much easier:

1. Monitor charging progress in real time and start or stop charge

2. Heat or cool Model S before driving — even if it's in a garage

3. Locate Model S with directions or track its movement across a map

4. Flash lights or beep the horn to find Model S when parked

5. Vent or close the panoramic roof

6. Lock or unlock from a distance

35

https://www.mindmup.com/#m:new

36

10) EVALUATION AND ANALYSIS

OF THE COMPANY

SWOT

Str

en

gt

hs

1. Tesla launched the 1st fully electric sports car and saloon, the

Roadster and Model S respectfully

2. Also a strong supplier to other manufacturers such as BMW and

Nissan

Strong technological expertise in the area of electric transmissions

& drive train

3. Ability to develop vehicles completely in house including the

sub-assemblies required

4. Their current platform developed for Model S has the ability to be

used for their future crossover model, the Model X

We

ak

ne

ss

1. Since they fully develop the electric vehicles including their sub-

assemblies this leads to higher costs of production as economies of

scale are not achieved

2. The prices of their products are higher than their competitors, such

as Ford and Toyota who sell combustion engine powered vehicles

37

Op

po

rt

un

itie

s

1. The growing support by governments across the globe for

environmentally friendly vehicles in form of exemptions from

duties & other support

2. Supports the Mercedes’ Smart car, which can lead to learning

which will help them with their passenger cars which they plan to

launch in near future

3. Improvements in the quality control processes can reduce these

costs drastically

Th

re

at

s

1. Tesla wants to be able to produce, distribute & sell its cars to

average which seems difficult to achieve due to their current

business model

2. Their strategy for pricing (skimming) has not been used so far in

the auto industry

3. They are currently competing against a technology which has been

in use for over hundred years i.e. the combustion engines& also

their technology may take time for being optimal for use of masses

4. The plunge in oil prices is adversely affecting the demand for EVs

but fuelling the demand for conventional cars

38

PESTEL

1. Government policies such as the usage of renewable energy. Tesla

received, according FT, “Tesla $465m from $25bn of government money

that was set aside in 2007 for a scheme known as the advanced

technology vehicles manufacturing incentive programme” (Simon and

Soble, 2009)

2. The Chinese government waved 10 per cent sales tax on electric vehicles

(Mitchell, 2014). Increases the demand for EVs

3. The EU mandate to Reducing CO2 emissions from passenger cars has

fuelled the sales for electric cars in the EU

1. QE is likely to boost sales in the EU zone since banks will have money to

lend (Politi, 2015).

2. Free Recharging or Battery Swap at any Supercharging Station

3. Plunge in oil price = drop in EV sales (Morris, 2015)

4. Austerity still present in most Euro zone countries leads to the fall in

demand for cars

5. The creation of gigafactories will reduce the cost of making batteries

making Tesla’s cars more affordable (Young, 2014)

1. Consumers are more environmentally conscious there making a car that

runs on sustainable energy will attract demand.

2. Ultra-luxurious car = high social status. A car like the roadster is

accompanied by prestige among peers

39

1. Auto pilot = The Model S automatically follows the road, steering around

curves and varying its speed to match the flow of traffic and

Automatically change lanes by tapping the turn signal.

2. Regenerative brakes = If the driver removes his/her foot of the accelerator

the Model S automatically starts slowing down

3. 17 inch touchscreen tablet allows the driver to control every function in

the car

1. The Model S and Roadster are both environmentally friendly cars. They

emit zero carbon dioxide, carbon monoxide and sulphur oxide. These

gases are the main causes of climate change, heart and lung diseases.

2. Tesla’s cars emit zero noise

3. Tesla is about the consumption of sustainable energy

1. Tesla opened all its patents to allow the advancement of EVs. Competitors

can now use the patents in good faith.

2. Now buyers can buy Tesla car in all 50 states in the U.S (Tesla, 2014)

40

11) RESEARCH & LINK

FINDINGS TO OTHER

RESEARCH

Many websites and books were used in this project so that the relevant information can

be disclosed in this project. The following websites and apps were used for research:

1. http://www.consumerpsychologist.com/

2. http://tinyurl.com/np9y8kx

3. http://tinyurl.com/create.php

4. http://tinyurl.com/nshm8r7

5. Evernote

6. CamScanner

7. Facebook

http://www.consumerpsychologist.com/

http://tinyurl.com/np9y8kx

http://tinyurl.com/create.php

http://tinyurl.com/nshm8r7

http://tinyurl.com/bpahhzd

http://tinyurl.com/pwg85p7

41

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Bloomberg (2014) ‘Billionaire Elon Musk: How I Became The Real “Iron Man”.’

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8d4011e4-9f52-00144feabdc0.html#axzz3Ozv4lesO (Accessed: 6 February 2015).

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Gemünden

46

13) QUESTIONNAIRE DESIGN

49

14) QUESTIONNAIRE

RATIONALE

Question 1

The first question was constructed in order to determine the candidate’s age range.

Question 2

The idea behind the second question is to determine consumer’s motive and purchasing

behaviour when they are buying a car.

Question 3

The reason for question three is to determine whether the driver is able to commute

from their house to work and back home on a single charge.

Question 4

Question 4 is there to see if price is really a big factor when buying a conventional car. If

the questionnaire participate is to pick €50,000 + it is reasonable to say that money is it

much of a factor.

Question 5

The fifth question is constructed in order to determine if price is a factor when buying an

EV.

Question 6

Question 6 is quite self-explanatory. It was constructed in order to see if the candidate

is environmentally conscious and if they care about the use of sustainable energy.

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Question 7

The reason for question 7 is to know if the driver attains any satisfaction or benefit

when driving an EV.

Question 8

This question was made in order to know the barriers that a preventing the coming of age

of the electric car.

Question 9

The ideas was to see if the candidate was going to notice the text below and say yes to

buying a Tesla car.

Question 10

This question is there in order to determine the most popular electric car.

Question 11

The reason for question 11 is to determine the most trending electric car model.

Question 12

The last question was constructed so that the candidate discloses what goes throught their

head when they hear about electric vehicle. Basically, is was made to see how consumer

behave toward electric cars.

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15) SAMPLING / RE-CODING /

VALIDITY

Sampling

The candidates chosen for the questionnaire were from deferent back grounds and age

group. The questionnaire was conducted in this way in order to attain as unbiased

information. The question was send by e-mail or through Facebook, social media

platform, so that candidate will not be intimidate by the any one.

Re-Coding

The following diagram provided some assistance in interpreting the results from the

questionnaire

The gulf between yes and no illustrates that the electric car has not come of age in the

region since candidates did not even acknowledge free re-charging as an incentive

52

After analysing the above diagram, it show that 32% of the candidates ranked the electric

car as a 7 because of this Elon Musk’s mission to “transition the world to electric cars”

might be working, maybe.

Link to all the survey results: http://tinyurl.com/q6lqepx

Validity

In order to have accurate results the survey, interviews and focus group had to be

conducting in a way that will provide relevant results. People from deferent back ground,

motorists, pedestrians and cyclists all had to contribute so that the information would not

be one-sided.

Focus Group

Participates in the focus group were final year students. It was necessary to have final

year since there will be getting full time jobs soon and they will have enough disposable

income to purchase cars.

http://tinyurl.com/q6lqepx

http://tinyurl.com/q6lqepx

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Interviews

A series of interviews were conducted with two car dealerships. The interviewees

provided crucial insights that shaped their strategy of creating an approachable,

informative experience for customers

Questionnaire

Students doing different course did the questionnaire. They had to be from all ages so

and different back grounds

54

16) PILOT TESTING

Electric vehicle

Tesla

o Do you have electric car

o Option 1

do you like Telas

o Yes

o Nah

Are you environmentally conscious

o Yes

o No

o Maybe

o Depends

On a scale of 1 to 5, how would you rate an electric car

1 2 3 4 5

Do you love EV

Electtric vEhicle (EV)

When your are buying electic vehilce how influential are factors?

very influencila influencial not sure

brand

price

range Social status

is the Model S the future

1 2 3 4 5

55

stronly agree agree

have you ever driven EV

o Yes

o NO

Survey Analysis

The main reason for a questionnaire is to attain as much accurate information as possible.

Questions have to be phrased in an eloquent way making it easy for the chosen candidate

to answer the question. Unfortunately the above questionnaire was not ideally

constructed. Therefore the results were biased.

This questionnaire was a fiasco. The spelling mistakes in it made it difficult for choosen

candidate to express themselves. Most of the chosen participants for this survey were

frustrated by it as it was biased. It only concentrated on electric car, not many Irish

consumers are in possession of an electric vehicle. The

56

17) OTHER RESEARCH

Focus Group

58

18) CONCLUSION

Nowadays as company you have to move fast and move in the right direction in order to

keep your consumer satisfied. Demand and supply for every product is constantly

changing, going up and down for numerous reasons such as price and change of taste.

Tesla, newest member in the auto industry, has revolutionised the auto industry making

and the Elon Musk, co-founder and CEO of Tesla, has been considered by some analysts

as the Henry T. Ford of EVs

Tesla knew introducing the world to auto industry was going to be a hard task to

accomplish. They started by converting the outlier, the likes of Mat Demon, into buying

the very first electric sports car. They knew celebrates will change consumer behaviour

towards electric car especially in this day and age where people are constantly following

their idols and role models on Twitter, Facebook and Instagram. The roadster sold more

than 2, 500 units showing that the world is ready to give up its addiction on fossil fuels

and start using sustainable energy.

Tesla did not just astonish the world by launching the very first electric sports car; in

2012 they launched the Model S, a high-end saloon and they have opened galleries all in

30 countries in order to educate potential buyers on EVs. Their galleries are

unprecedented because they are just concepts in them but ironically they work. The

gallery experience is breath-taking, the people walk in and they get to learn about

electronic cars, the Model S and X; next they customize their own car, picking color and

wheels for it and the costumer, if satisfied, is then taken to the back where they can

finalise the transaction.

The technology that comes with the Tesla screams the Mantra, “waiting is for losers”. A

17 inch tablet allows the driver to control every single item in the car. Regenerative

brakes eliminate the need of a foot brake. The dual motor allows “insane traction in all

condition,” in the words of Elon Musk. With is kind of technology Nissan should saying

“innovation that excites” because it is quite clear Tesla has overtaken them in that

59

department. The app makes the consumers life easier, now every Tesla owner does not

have to worry about running the engine in the morning because the application does It for

your.

This is where the magic happens

Tes

la P

roduct

ion p

lant

in C

alif

orn

ia

http://tinyurl.com/lkrvlr3

http://tinyurl.com/lkrvlr3

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19) THINK OUTSIDE BOX

The Internet of Things

Technology surely as taken us into a world beyond our imagination. The entire project

was constructed us the little tiny boxes in above picture. First of all the web store was an

ideal store because it supplied all the other applications in this screenshot.

Google Sheets

The questionnaire was constructed using google sheets. Google then drew the pie charts

and graph you can see under the heading Re-Coding.

YouTube

Tesla has been in the limelight even before it went public. Many news broadcasting

corporation such as Bloomberg are constantly seeking an interview with Elon Musk. Elon

Musk contestably promoting new Tesla cars and upgrade in satisfy consumer and show

they auto world how innovative Tesla is. Most of this video are only found on YouTube

and that is the reason why I chose it so that I can get the best quality video on Tesla.

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Mindmup

The main reason for mindmup was to have a synopsis of all the information needed to

write this project. A mindmup of anything is easy to interpret and this is main reason it

had to be one of the tools in constructing the project.

Gmail and Google drive

In the process of making this project a number of people where involved so

communicating with them was a priority. Gmail made it possible to send email to the

people involved in providing relevant information and Google drive allowed the sharing

of this information with many colleagues.

62

20) EXTRA

Wordle

63

Renault Documents

While in the Renault interview the interviewee decided to disclose valuable information

to us. Renault does not move a lot mental but concentrate on selling second hand

vehicles. The text written in ink shows the hire purchase agreement Renault offers to its

customers. Renault offers 0% interest to drivers that buy a car worth €11, 000 and are

will to pay the debt in a space of 3 years. This means customers will have to pay €305.65

per month. This is another way of retaining customers and keeping them satisfied. In this

tough economic times in Ireland price is a big issue and every customer in any industry is

discourage by austerity in the Euro zone to spend a lot of money.

64

Volkswagen Documents

Audi Documents

65

The above questionnaire was constructed for car dealership who were no capable of

participating in an interview. The one above was answered by one of the workers as

Volkswagen car dealership in Athlone.

Question 6 in this questionnaire proves that the dealership is ready for EV. The candidate

described an Electric car as “great product,” this prove there might be the next trending

car model in Ireland.

Since Ireland is in the EU this means they should enact laws that will promote EVs the

questionnaire candidate suggested “VAT and VRT free.” This suggestion will increases

electric car sales and encourage consumer to use sustainable energy reducing Ireland

carbon footprint.

Audi Documents

66

The 3 above documents disclosed how Audi retained consumer satisfaction and how they

conduct their interviews. The interviews are done over the telephone. Audi mainly

concentrate on satisfaction or utility that consumers derives when the last time they

dealership or workshop. Audi is also open for ideas so it has a section for additional

information for the consumer. Under this section a consumer can comment on any that

they might have experienced or observed when they were at Audi.

Audi interview mindmup

Tesla project 2015

Documents

Transcript of Tesla project 2015