The Marketing Mix: Distribution Channels

Introduction

Tesla motors are the world only serial manufacturer of electric vehicles (EVs) based in

the US, they have perfected the art of manufacturing the high quality performance sports cars.

The name of the company is named after its inventor who was an electrical engineer and

physicist by the name Nikola Tesla. From the original design of Tesla the Tesla roadster uses the

AC motor designed in 1882 coined from a feverish exhaustion hallucination when acquired when

working as an inventor engineer in Hungary. This company takes the glory of also

manufacturing electric vehicles power train components; they are the only automakers that have

perfectly assembled highway compatible electric sports car called the Roadster (Hall, 2008).

According to Hall (2008) Tesla motors is the only one that is shipping EVs to Europe and

other states, recent statistics recorded from US Securities and Exchange Commission reports

indicates that this company ships at least 15 EVs every week and this are customized model that

suits the requirement of the owner. The models sport car uses lithium car battery that covers a

range of over 200 miles approximately 320 km before the next charge, this is more energy

efficient than Toyota Prius. The latest development from this organization is the Model S, which

is a family sedan and was launched at March 26, 2009 and will be launched in 2012. This model

comes with three battery pack option and can do about 300 miles per charge and is expected to

be sold for a base price of US$49,900.

Case question: Acting as the distribution manager for Tesla Motors this is how I would develop

the distribution strategy for the new Model S family sedan van.

Distribution strategy can be classified as the way that products are created to meet the

demand of the consumers, the way that the products are going to be shipped in a cost effective

manner from the point of production to consumption and how the brand would be managed

(Perrault, 54). These are the key factors that as a distribution manager am going to address while

sourcing for a distribution market for the Model S family sedan van.

Customer’s perception

This is the most important key point that I would strategize on as an important market

factor of addressing the customer’s perception of electric charged family sedan (Model S). This

would be based on the perception of the customer knowledge of buying and behavior toward the

product that I would be offering them (Julian, 99). I would acquire to know the medium that the

customers prefer when purchasing Model S, this is if they prefer purchasing the product from the

retailer, supplier or directly from the source.

Another very important factor is the knowledge that the customers have about EVs, how they

installed and serviced. Here I would also source for the best channel for information that the

customer would be provided with about EVs and the new model before they purchase, this would

come handy as the Roadster had later complication that forced the management to recall and visit

the customers home to bolt the back part that was analyzed to make the car to loose control while

in high speed as this are sports cars. I would source to find out the medium that the customers are

comfortable with when making an order if it through the internet, through the retailer or directly

from the supplier. These factors are very essential in knowing the customers perception of the

new Model S family sedan van, this would assist in knowing the target market and enhancing

good relation of the customers and the new brand of EVs and thus creating knowledge. This

training and promotional awareness would make the customer to be acquainted with the new

product in the market (Ferrell & Luck, 122).

Cost-effective way of creating demand for Model S

After creating awareness to the customers about the new Model S then as there are joint

ventures for Toyota to chip in the development of the new Model S, I would highly encourage

this merger because Toyota is a renowned brand all over the world and marketing the new Model

S in the brand of Toyota would be easy. When promoting for the new Model S I would

incorporate the name Toyota as people are familiar with this brand and it is respected and valued

in the motor vehicles market (Hall, 2008). I would also invest on selling or cataloging the Model

S over the internet and other medium of advertisement, this way I would capture a large

population as IT has provided business with a new advertising medium that is cheap and

effective. So I would incorporate with other company owned online showroom to create demand

for the new EVs model family sedan van.

I would also incorporate the selling of the same concept model to Toyota as they are a

major player in the market and with this they would generate their own model and create

awareness for their customers to integrate with the new Model S. This would mostly pent up the

customer demand for the new Model S family sedan by Tesla Motors as this would serve as a

catalyst for creating demand for the new model to the customers, this would entice them to

knowing that the new Model S is fun to drive and has social responsibility as it is non pollutant

100% (Allen, 78).

Best distribution channel

For the distribution channel that I would be implementing to Tesla Motors to fully

materialize I would incorporate exclusive distribution. By this I would be limiting the

distribution to single outlets as the company’s showrooms are growing on several states in US

and also Europe. The internet showroom I would also use as a distribution channel. The single

outlet is essential as the new Model S EVs sedan requires lot of details and only people

associated with this product can be able to explain and give proper details of the products when

selling it (Corey & Rangan 161). Exclusive dealers would be educated about the details involved

so that they may take the customer through the fine details involved in the new Model S.

Cost-effective way of products shipment to consumers

I would source for the most cost effective way for Model S delivery to the customers as

many order are booked online. If it is overseas shipment I would encourage sea as the means of

transport, if it within the states road would be the preferred choice, however having more

showrooms in every continent would help solve this problem as from there the mode of shipment

would be the road, which is the most cost effective way (Perrault, 149). I would also invest in

intermediaries to shipping new Model S into the desired market.

Conclusion

For the distribution strategy to be fully impacted in the market incorporating all the key

players would assist me to fully impact the targeted market, this would be by awareness creation

and demand expansion. I would also integrate other major key players in the market like Lotus

Motors and other companies to indulge into creation of hybrid motor vehicles as a mode of

demand creation and also customers enlightening about the EVs. Using exclusive distribution

channel I would create awareness for the new Model S to the potential customers by informing

them of the social responsibilities that the sedan is compatible with.

References

Hall Geisler, K., (2008). Tesla Store Locator. Retrieved January April 8, 2010 from

http://www.teslamotors.com/teslastore/

Ferrell, O.C., & Luck, D., (1998), Marketing Strategy. Orlando: Dryden Press.

Perrault, D. Jr., (2008). Basic Marketing: A Marketing Strategy Planning Approach. Boston: McGraw Hill.

Julian, J., (2008). Distribution Channels: Understanding and Managing Channels to Market. New York: Doubleday.

Corey, C., & Rangan E., (1998). Going To Market: Distribution Systems for Industrial Products. New York: John Wiley and Sons.

Allen, R. W. 1966. Management Science: Factors influencing market penetration. New York. Penguin