Start.io | Tesla Target Market Analysis and Segmentation - Brand Overview (2023)

In 2020, Tesla celebrated 10 years as a public company. More than just an automaker, the Tesla brand has become synonymous with electric cars and sustainable living, propelled in a short time to the level of auto brand recognition matched only by the world’s most famous and veteran car companies, such as GM and Nissan.

The rising public interest and demand for electric-powered vehicles can be attributed to Tesla and the visionary spirit of its founder and CEO Elon Musk, whose other ventures include space travel.

In 2021, Tesla brand value was estimated at $42.61 billion, making it the most valuable automotive brand worldwide, beating even the long-standing popular Japanese, European and US brands like Toyota, Mercedes Benz, Honda and Ford.

Start.io | Tesla Target Market Analysis and Segmentation - Brand Overview (1)

Source – Statista

In a 2006 blog, Tesla CEO Musk outlined his long-term goal to “to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy.” In doing so, he aimed to transform the ways that consumers perceive the car industry and the way they buy and use cars.

Let’s take a dive into Tesla’s target demographics and see who are Tesla’s customers and Tesla brand positioning in different segments in the US and global auto market.

    (Video) Marketing: Segmentation - Targeting - Positioning

    Who is Tesla’s target market?

    While Tesla aims to alter the energy economy, the fact remains that electric cars are still a relatively expensive and therefore ‘luxury’ product. The main reasons that consumers are interested in purchasing an electric vehicle are environmental concerns surrounding the use of fossil-fuel based gasoline, and economic concerns about the price of gas.

    At the current time, the Tesla target market segmentation reflects a relatively small share of the overall car market, principally affluent, highly educated professionals and families with solid income whose lifestyle is built around reducing their carbon footprint.

    Since the 2008 launch of Tesla’s first model, the Roadster, the company continues to work towards the broader goal of potential Tesla market segments, and making electric cars accessible and affordable to a wide customer base.

    Tesla Target Market Segmentation and Audience

    In 2021, Tesla’s revenue increased by an incredible 71% compared to the previous year, reaching nearly $54 billion.

    Start.io | Tesla Target Market Analysis and Segmentation - Brand Overview (2)

    Source – Statista

    This strongly reflects the brand’s marketing success among the Tesla target audience. By breaking down the target market into various segmentation perspectives and conducting a demographic audience analysis, it is possible to gain an understanding of how Tesla continues to generate such powerful brand perception and sales.

    Tesla Demographic Segmentation

    The average Tesla customer profile has a median age of 54 years, mainly male customers, though there is a smaller target demographic of females that are interested in Tesla cars. 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.

    The average income of a Tesla owner for the entire household is $143,177 for the Model X and a slightly lower $128,140 for the Tesla Model 3.

    Tesla Geographic Segmentation

    Tesla cars are popular in North America, Europe and Asia, with vehicle deliveries reaching over 627,000 units in the first three quarters of 2021, representing an increase of more than 16 percent over sales in the whole of 2020.

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

    Start.io | Tesla Target Market Analysis and Segmentation - Brand Overview (3)

    Source – Statista

    China is a fast growing geographic segment for Tesla, with sales more than double in 2021 compared to the previous year, and representing a fifth of global sales. However, the US is by far the biggest consumer segment for Tesla, representing nearly half of total worldwide sales for the brand in 2021.

    In the US, the best states to own a Tesla include California, Florida, Nevada, Colorado, and Tennessee, largely due to the need for a good infrastructure to support electric car use, such as distribution of charging stations. In addition, Teslas tend to be popular in sunny, warm states where the weather maximizes the life of the battery, as well as states whose tax structures are favorable to electric car ownership.

    Tesla Behavioral Segmentation

    In Tesla consumer behavior, a big consideration is the social status afforded by ownership of an electric car. In addition to the environmentally friendly perception, Tesla is also seen as a long-term, cost efficient investment. For the Tesla audience, switching cars in a couple of years is not an option. They aim to hold onto their Tesla car for many years ahead.

    With the median age of Tesla buyers being 54 years, this older and financially established Tesla market demographic can afford to consume luxury brands, not just in their choice of car but in other product segments too. In fact, 77% of Tesla Model S owners earn over $100,000 a year.

    Tesla Psychographic Segmentation

    The Tesla target market is characterized as early adopters of technology, with a forward-thinking and image conscious psychological make-up. They are highly driven, with character traits defined as “Aspirer, Succeeder, Explorer, Reformer, and Environmentally cautious.” This is evident in their professional success and high earner status.

    Tesla marketing strategy – Key Elements

    In contrast to traditional marketing methods typically used by auto companies, such as TV commercials and expensive Super Bowl spots, Tesla brand communication focuses on the user experience.

    This includes tactics such as customer referral programs, influencer marketing and organic social media, all of which enable the company to achieve enormous success with far smaller marketing budgets compared to prominent car brands.

    Tesla CEO Elon Musk is very vocal about his antithesis to advertising. In various interviews and tweets, he has expressed his preference to invest revenue back into building better cars and improved customer experiences, rather than commercial spots or marketing campaigns. As a result, the Tesla go to market strategy has been touted as a “$0 marketing budget”, even as it continues to increase sales and market share.

    (Video) Segmentation, Targeting, Positioning & Branding: Marketing Management- Unit 3 Overview

    The personality of Elon Musk has been essential to driving Tesla brand recognition, with tweets that drive online buzz and his feature at the top of the list of Time magazine’s Top Influential People in 2013.

    In addition, Tesla succeeds because it positions itself not just as a car, but as a lifestyle and philosophy that extends to every aspect of the customer relationship, including its Tesla Centers, designed to circumvent dealership restrictions and give a faster, better sales and service experience for customers.

    In order to deliver better customer experiences, it is important to understand the typical customer profile. A glance at Start.io data about hybrid and electric car owners in Houston, for example, shows that they are mostly male, aged 25 to 34 years, and spend time at the gym and Walmart.

    Hybrid or Electric car owners in United States

    In Q4 2021, just over 240,000 hybrid and plug-in hybrid electric vehicles were sold in the US. By 2035, EVs are predicted to make up 45% of the total US auto market.

    Despite this impressive rise, a recent report noted that 18% of people who buy electric cars eventually revert back to gas-powered vehicles. If the EV is a hybrid model, the owner is 20% more likely to prefer to return to gas-run options. This is largely due to difficulties and inconvenience of having to charge the car. Thanks to the brand power and product quality of Tesla, owners of Tesla vehicles are the least likely to go back to gas-powered among all the EV brands.

    In 2021, Tesla Model Y was the best selling plug-in electric car, with sales of over 172,000 units.

    As of 2022, the Tesla Model Y is the best selling electric car worldwide, followed by its closest competitor, the Wuling Hongguang Mini EV, the Chinese made model that only came on the market in 2020.

    Start.io | Tesla Target Market Analysis and Segmentation - Brand Overview (4)

    Source – CleanTechnica

    Consumer Insights and Audiences

    Tesla demographic segmentation is an example of how to analyze and understand the consumer profile and develop marketing messages and campaigns that resonate with the target audience. This is vital to build brand awareness effectively and become the success story that is still unfolding for the electric car brand.

    (Video) Tesla Presentation on segmentation targeting and positionning : Popov, Bouilly, Beuvain, Gavagnin

    At Start.io, the Consumer Insights and Audiences hub provides a deep dive into thousands of mobile consumer segments. Simply filter by interest, country, or city to uncover valuable granular insights about your target audience, whether EV and hybrid car owners, or any other interest or lifestyle niche, and achieve better results from your mobile campaigns.

      Tesla Motors FAQs

      How is Tesla impacting the automotive marketplace?

      While traditional automakers are struggling with sagging sales and supply chain concerns, Tesla is beating its own sales records, year on year. Apart from the rise in sustainability awareness and consumer demand for eco-friendly products, this success is also attributed to Tesla’s innovative technological, logistical and management capabilities that ensure the company consistently provides high performance in both product and service.

      What motivates people to buy a Tesla?

      The demographics of Tesla owners is made up mainly of consumers who are passionate about reducing their carbon footprint or are interested in the gasoline cost savings. Another aspect of Tesla’s appeal is the social status that it affords, based on its image as an environmentally friendly, highly desirable luxury brand.

      While the consumer segment who buys Tesla today are mostly affluent, high-income families, the brand aims to make electric cars affordable for all.

      How long do Tesla cars last?

      Tesla positions itself as a long-term purchase, offering a battery lifetime of 300,000 to 500,000 miles, which equates to an average of 21 to 35 years for the typical driver! Tesla is building its brand identity as having a lifetime relationship with its customer base.

      What are Tesla's best-selling models?

      In 2021, the Tesla Model Y and Tesla Model 3 were the best-selling models for the brand in the US, and appear to be among the top 20 car models sold in the US, holding positions 17 and 19 respectively.

      (Video) What is Tesla's Target Market?

      In Europe, the Tesla Model 3 was the 17th top selling car during 2021, and also held the impressive number 1 spot as the top selling model in the mid-size car category.

      FAQs

      What is market analysis and market segmentation? ›

      Market segmentation analysis, at its core (see Fig. 2.1), is. the process of grouping consumers into naturally existing or artificially created segments of consumers who share similar product preferences or characteristics.

      What is Tesla segmentation? ›

      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.

      Who is Tesla Model 3 target audience? ›

      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 positioning statement? ›

      The Future is Sustainable

      We design sustainable systems that are massively scalable—resulting in the greatest environmental benefit possible. Our energy generation and storage products work together with our electric vehicles to amplify their impact.

      How do you write a market segmentation analysis? ›

      The Steps of Segmentation Analysis
      1. Goal setting – Decide on the objectives of your segmentation and what end goals they should realize. ...
      2. Identify segments – Decide on the type of research you'll perform. ...
      3. Develop a strategy – Choose your target segment and identify implications from the research validation process.

      What are the 4 types of segmentation? ›

      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.

      What resources did you use to identify their target market? ›

      Identify Your Target Markets with These 5 Resources
      • Social Media Insights. Several of the main social media platforms provide geographic info about your social followers/communities. ...
      • Database Composition. ...
      • Distribution/Customers. ...
      • Sales Data.
      12 Apr 2016

      What is Tesla's marketing strategy? ›

      Tesla marketing strategy is building a brand rather than selling individual products. This approach is known as “product-as-a-service” and is designed to make Tesla a one-stop-shop for all your electric vehicle needs.

      How can Tesla improve marketing strategy? ›

      Tesla uses one of the most effective methods of marketing: word-of-mouth. The brand's referral program rewards those who share their experiences with others. Consumers tend to trust recommendations from people they know and trust — friends, co-workers and family members — more than brand-owned channels.

      What is Coca Cola positioning statement? ›

      Coca-Cola Positioning Statement:

      Unlike other beverage options, Coca-Cola products inspire happiness and make a positive difference in customers' lives, and the brand is intensely focused on the needs of consumers and customers.

      What makes Tesla different from its competitors? ›

      Unlike other car manufacturers who sell through franchised dealerships, Tesla sells directly to consumers. It has created an international network of company-owned showrooms and galleries, mostly in urban centers.

      What is Tesla brand personality? ›

      Tesla have the characteristic of a mixture of Excitement and Competence and Sophistication. Excitement is one of the Tesla's personality, which means Tesla is daring, imaginative and innovative.

      Who is Toyota's target market? ›

      The target customers of Toyota are in the age group of 30-50 years old with middle-range income and looking for automotive vehicles with good value for money. When thinking about Toyota cars, people think of durability, sustainability, quality, safety, reliability, and innovation.

      Who is Amazon target market? ›

      With around 120 million products for sale on its site, the Amazon target audience comes from all walks of life, including students and professionals, singles and families, low to high income.

      Who is the target market for electric cars? ›

      The top demographic of 2019 EV owners are middle-aged white men earning more than $100,000 annually with a college degree or higher and at least one other vehicle in their household.

      What is an example of market segmentation? ›

      Common examples of market segmentation include geographic, demographic, psychographic, and behavioral. Companies that understand market segments can prove themselves to be effective marketers while earning a greater return on their investments.

      What is an example of a target market? ›

      For example, a children's toy may have boys ages 9–11 as the target market and the boys' parents as the target audience. It may also be defined as the consumer segment most likely to be influenced by an advertising campaign. The target market is also distinct from the buyer persona.

      How do you write a market segment in a business plan? ›

      Steps in Market Segmentation
      1. Identify the target market. The first and foremost step is to identify the target market. ...
      2. Identify expectations of Target Audience. ...
      3. Create Subgroups. ...
      4. Review the needs of the target audience. ...
      5. Name your market Segment. ...
      6. Marketing Strategies. ...
      7. Review the behavior. ...
      8. Size of the Target Market.

      What are the 4 main levels of target markets? ›

      There are four key types of market segmentation that you should be aware of, which include demographic, geographic, psychographic, and behavioral segmentations. It's important to understand what these four segmentations are if you want your company to garner lasting success.

      What are the 5 methods of market segmentation? ›

      There are many ways to segment markets to find the right target audience. Five ways to segment markets include demographic, psychographic, behavioral, geographic, and firmographic segmentation.

      How do I identify my target market? ›

      How to identify your target market
      1. Analyze your offerings. Ask yourself what problems your products and services solve, and, in turn, to whom they appeal. ...
      2. Conduct market research. ...
      3. Create customer profiles and market segments. ...
      4. Assess the competition.
      30 Apr 2019

      Why is it important to understand your target market? ›

      Why have a target market? For your business to thrive you need to know who your customer is. Knowing your customers will help you to target customers who are willing to pay for your product or service. This is a much more effective and affordable way to reach your customers and generate business.

      Why is target market important for a business? ›

      Having the right target market helps you determine where to find potential clients who are looking for what you have to offer. If you have a target market, you know where to concentrate your marketing efforts and what to offer that is compelling and well received.

      How do you identify your customers? ›

      Purchasing lists of prospects who fit your ideal customer profile. Targeting people with your ideal customer profile on social media. Getting referrals from your ideal customers (their friends are likely to be ideal customers, too) Selling your product or service via their preferred sales channels.

      What are the marketing objectives? ›

      What Are Marketing Objectives? Marketing objectives are the outcomes a brand wants to generate from its marketing activities. They should be measurable (and realistic) so that you can map out your efforts in a strategic and focused way.

      How does Elon Musk do marketing? ›

      While you expect Elon to sell cars, he is creating flamethrowers – a product that has little use or demand. So while you expect him to convince you to buy it – he is doing the opposite, asking you not to buy it – making it even more interesting – drawing a lot of attention.

      What is Tesla's strategy when it comes to customer market particularly high versus low end consumers? ›

      The strategy of Tesla is to enter at the high end of the market, where customers are prepared to pay a premium, and then drive down market as fast as possible to higher unit volume and lower prices with each successive model.

      What are some of the marketing strategies auto manufacturers use to stimulate sales of certain makes of automobiles? ›

      9 Automotive Marketing Strategies for Success
      • Build Trust with Customer Reviews. ...
      • Be at the Top of Google SERP. ...
      • Bid on Competitor Keywords. ...
      • Actively Manage your Negative Keyword List. ...
      • Adjust your Campaign Budgets Based on Car-Buying Trends. ...
      • Target the Right People. ...
      • Compel Shoppers to Come into Your Store with Unique Offers.

      What competitive advantages does Tesla have? ›

      Tesla is a leading player in the EV sector. The company's competitive advantages emanate from its focus on environmental sustainability, its incorporation of technological innovations, product differentiation, and cost leadership among other aspects.

      What is market segmentation definition and examples? ›

      Market segmentation is a process that consists of sectioning the target market into smaller groups that share similar characteristics, such as age, income, personality traits, behavior, interests, needs or location. These segments can be used to optimize products, marketing, advertising and sales efforts.

      What is the purpose of a segmentation analysis? ›

      Segmentation analysis is a marketing technique that, based on common characteristics, allows you to split your customers or products into different groups. This in return gives the ability to create tailor-made and relevant advertisement campaigns, products or to optimize overall brand positioning.

      What is segmentation explain? ›

      Segmentation is the process of dividing a company's target market into groups of potential customers with similar needs and behaviours. Doing so helps the company sell to each customer group using distinct strategies tailored to their needs.

      What is segmentation in data analysis? ›

      Data Segmentation is the process of taking the data you hold and dividing it up and grouping similar data together based on the chosen parameters so that you can use it more efficiently within marketing and operations. Examples of Data Segmentation could be: Gender. Customers vs. Prospects.

      How do you identify market segments and targets? ›

      Market segmentation has several steps you need to follow: Find your customers according to what they need and want. Analyse their usage pattern, likes and dislikes, lifestyle, and demographic. Note the growth potential of your market as well as your competition and the potential risk they may represent to your company.

      Who is your target market example? ›

      A target customer is an individual that's most likely to buy your product. And it's a subset of the broader target market. For example, if your target market is female athletes between the ages of 13 to 25, a target customer could be female athletes in the specific age range of 13 to 16.

      What is the importance of segmentation in marketing? ›

      Segmentation helps marketers to be more efficient in terms of time, money and other resources. Market segmentation allows companies to learn about their customers. They gain a better understanding of customer's needs and wants and therefore can tailor campaigns to customer segments most likely to purchase products.

      What are the 5 requirements for effective market segmentation? ›

      Regardless of your approach, a useful segmentation should include these six characteristics:
      • 1) Identifiable. You should be able to identify customers in each segment and measure their characteristics, like demographics or usage behavior.
      • 2) Substantial. ...
      • 3) Accessible. ...
      • 4) Stable. ...
      • 5) Differentiable. ...
      • 6) Actionable.
      9 Jul 2014

      How do you write a market segment in a business plan? ›

      Steps in Market Segmentation
      1. Identify the target market. The first and foremost step is to identify the target market. ...
      2. Identify expectations of Target Audience. ...
      3. Create Subgroups. ...
      4. Review the needs of the target audience. ...
      5. Name your market Segment. ...
      6. Marketing Strategies. ...
      7. Review the behavior. ...
      8. Size of the Target Market.

      What is market segmentation explain its benefits and bases? ›

      Market Segmentation is a convenient method marketers use to cut costs and boost their conversions. It allows them to be specific in their planning and thus provide better results. It ultimately helps them to target the niche user base by making smaller segments.

      What is a segment in a company? ›

      A segment is a component of a business that generates its own revenues and creates its own product, product lines, or service offerings. Segments typically have discrete associated costs and operations. Segments are also referred to as "business segments."

      What are segmentation strategies? ›

      A market segmentation strategy organizes your customer or business base along demographic, geographic, behavioral, or psychographic lines—or a combination of them. Market segmentation is an organizational strategy used to break down a target market audience into smaller, more manageable groups.

      Which tool is used for audience segmentation? ›

      Google Analytics can also be a very good customer segmentation tool for businesses looking for a specific kind of assistance. The platform provides a ton of website traffic data that can be invaluable to your audience segmentation process. Its Audience tool provides a great overview of your web traffic set.

      Which data analysis is most suitable for market segmentation? ›

      RFM segmentation is more effective than the previous two market segmentation data analysis methods, as it takes into account not only the amount purchased but how often and how recently. It uses data analysis to rate customers based on three variables: Recency (R), Frequency (F), and Monetary (M).

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