By Ralf Quellmalz

“Don’t find customers for your products. Find products for your customers.”

Seth Godin

There is no doubt that Tesla is a fascinating company. It attracts all kinds of crowds – people who love the brand, people who criticize it, fans that can’t live without it, and those who adore it. The truth of the matter is, very few companies have the unique capacity to drive so much attention, scorn, and adoration – all at the same time – towards their brand the way Tesla does. Regardless of what the popular opinion might be, what is clear is that Tesla’s influence has shifted the auto industry towards manufacturing and investing in electric vehicles. Tesla has convinced both customers and automakers that the future is electric.  

Even though Tesla has never had a full year of profitability since its launch in 2003 in California, the electric-vehicle manufacturer has not only seen consistently increasing revenues, but has also surpassed the market valuation of Ford, General Motors, and Fiat Chrysler combined (Harvard Business Review). Such fact becomes even more powerful when you add the fact that Tesla’s market value places the company as the second most valuable automaker in the world, just behind Toyota (Wall Street Journal).

Tesla has all the key ingredients to become the auto’s industry’s leader: beautifully designed vehicles, a compelling vision, an inspiring purpose, ground-breaking technology, competitive pricing strategies, a remarkable product development capacity, superior electric-technology advantage, and a growing worldwide presence.

A red Tesla Model S driving in a road by the mountains
Tesla’s Model S, among the most appraised electric vehicles in the market

Godin’s Purple Cow:

Tesla’s beautifully designed and superior performing products has made their brand what marketing guru Seth Godin describes as the purple cow. By the purple cow, Godin refers to those products and services whose unique differentiating qualities make them stand out and conquer over popular sentiment. As Seth Godin describes it, today’s marketplace is an increasingly crowded marketplace in which too many companies are trying to sell the same thing. Consumers today have way too many choices to pick from, but way less time to figure out what product best satisfies their needs and preferences.  

As a result, companies can no longer rely on traditional forms of marketing. As Seth Godin explains, today’s marketplace will punish those companies creating ordinary products that fail to creatively entice and attract customers. The key, as Godin explains, is to “create remarkable products that the right people seek out.”

Why Tesla Embodies Godin’s Purple Cow:  

Tesla beautifully represents Godin’s purple cow: they are masterminds when it comes to generating interest and brand-awareness. Today, Tesla is much more than a product. Tesla stands up for something. It’s a symbol. Owning a Tesla says something about its owner. It stands up for innovation, disruption, visionaries, and accelerating sustainability in the world.

Tesla understands that “in a crowded marketplace, fitting in is failing. In a busy marketplace, not standing out is the same as being invisible” (Seth Godin). By creating remarkable, beautifully designed, and highly appealing products, Tesla is able to generate its own demand. The fact that Tesla consistently receives thousands of pre-orders with each new-product launch serves as proof that Tesla’s marketing strategy is indeed remarkable. Think about that for a second.    As soon as Tesla announces that a new product will be launched to market, thousands of customers around the world line-up their preorders online. They haven’t even touched the car, tested its driving feeling, nor tried its software. Yet, they cannot wait to get their hands on a Tesla. Tesla’s reputation assures customers that they will be getting unique products that no other automaker will be able to match. While other automakers spend millions in advertising to generate sales, Tesla understands that there isn’t a more effective way to market products than by focusing on the products themselves.    

However, the surprising fact is that Tesla barely spends in advertising or marketing campaigns compared to other automakers. Tesla’s marketing is, in fact, their product. Tesla understands that marketing should not be done to a product, but rather the product itself is their single greatest marketing strategy.

Tesla’s best salespeople are their own customers. The EV manufacturer greatly benefits from positive word-of-mouth and glowing PR articles serving as ambassadors to the Tesla brand. This enables Tesla to minimize their advertising spending. By focusing on their products, Tesla has been able to generate a consistently increasing number of sales and a loyal customer base – a powerful combo to have faith in the automaker’s long-term success potential.

Tesla’s technology and product development strategy fuels the automaker’s capacity to produce and market brilliant and innovative cars. Without its strong focus on technology and product development, Tesla’s products wouldn’t stand out the way they do. Tesla’s $4.1 billion investment in designing, developing, testing, and perfecting its EV product-line has enabled the company to attract a cult-like following. By focusing on their own path, Tesla eliminated its competition and created its own market for electrically-powered vehicles.

When Tesla introduces new products, like its recently announced Cybertruck for instance, featured in the picture below, consumer reception usually goes all over the place. Some people love it. Other criticize it and view its design as something completely out-of-touch with what consumers actually want. Yet, what customers tend to neglect is the fact that Tesla’s focus when launching such radical products is not to capture profits. Instead, its purpose is to capture attention. Tesla wants to get people talking about its newly launched product. They want automakers and customers to focus their attention on what kind of products Tesla has the power and capacity to produce. But above all, Tesla wants to prove that, regardless of popular opinion, they are indeed one of the industry’s most innovative automakers.

Tesla's recently announced and controversial Cybertruck
Tesla’s recently announced and controversial Cybertruck

The results of such strategy are magnificent. As soon as Tesla’s Cybertruck was announced, Tesla received more than 200,000 pre-orders. Take a second to digest that for a minute.

200,000 pre-orders for a recently announced product. The product hasn’t even come to market yet, but it has already proved its huge market potential, has generated buzz, and customers are increasingly placing pre-orders.  

The best part of it all? Zero dollars spent in advertising.   Regardless of what your personal view might be either about Tesla or its erratic yet visionary leader Elon Musk, the automaker has proven that its marketing strategy is simply, brilliant. Hats off to them. They deserve all the credit for it. Tesla has demonstrated that investing in products’ design, technology, and features result in a way more effective marketing strategy than investing in advertising them. Tesla is the auto industry’s purple cow.  

The Different Strategies Tesla is Using to Disrupt the Auto Industry:

Tesla is the leader in the EV market. While other auto manufacturers around the world are adapting to Tesla’s disruption of the market, Tesla is leading the change.

Tesla's motor vehicles posing next to each other

BIBLIOGRAPHY:

Thompson, Arthur A. Crafting and Executing Strategy: The Quest for Competitive Advantage: Concepts. McGraw-Hill Education, 2020.

Shipley, Lou. “How Tesla Sets Itself Apart.” Harvard Business Review, 28 Feb. 2020, hbr.org/2020/02/how-tesla-sets-itself-apart.

Furr, Nathan, and Jeff Dyer. “Lessons from Tesla’s Approach to Innovation.” Harvard Business Review, 18 Feb. 2020, hbr.org/2020/02/lessons-from-teslas-approach-to-innovation.

Schwab, Katharine. “Forget the Cybertruck: This Is the Most Important Tesla Product No One Is Talking About.” Fast Company, Fast Company, 2 Apr. 2020, http://www.fastcompany.com/90459676/this-tesla-product-will-be-more-even-important-than-the-cybertruck.

Walker, Sam. “Elon Musk and the Dying Art of the Big Bet.” The Wall Street Journal, Dow Jones & Company, 30 Nov. 2019, www.wsj.com/articles/elon-musk-and-the-dying-art-of-the-big-bet-11575090005.

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