Tesla’s Cybertruck – Public Relations in Action

Students often wonder how public relations is used as a promotional tool. Compared to advertising – which is very transparent – public relations and news releases are hidden from the view of most consumers. Yet, public relations is a critical tool in the marketing toolbox. It is relatively inexpensive (compared to advertising), can be targeted to specific news outlets, can be easily focused on a specific geography and industry, is a simple way to “influence the influencers,” and it lends an aura of credibility when consumers read a story in the news.

Although public relations may look like independent news, all of the efforts are initiated by marketers in order to get attention from the media. Think of it this way: The target market is comprised of editors and writers for news releases, not the consumer. The news releases are focused on providing important information that the consumers of the media outlets want to hear about.

One company that stands above the rest when it comes to public relations is Tesla. The company is a non-stop news-making machine, headed by CEO Elon Musk.

  • Tesla uses social media extensively. It does not use traditional advertising, but instead relies on media coverage to help promote its products.
  • In November the company announced a live stream of an event in Los Angeles preceding the LA Auto Show, held at Tesla’s Design Center. This event launched the new electric Cybertruck, retailing for $39,900 – $69,900.
  • Tesla also provided information on its Web site about the new truck.
  •  In less than a week following the announcement, an estimated 150,000+ pre-orders (at $100 each) have been placed for Cybertruck, and there were millions of web hits and stories generated.
  • All this was accomplished with broken windows in the demonstration, but without a single paid advertisement!

So now tell us, where does news come from?

Group Activities and Discussion Questions:

  1. Start by discussing the value of public relations.
  2. A video of the news release distribution process can be seen at: https://www.businesswire.com/portal/site/home/
  3. Use the ‘Tesla Cybertruck’ announcement as a PR example. Have students do a search on the phrase using their phones or laptops.
  4. How many hits are there? How many videos? Does the news expand to outside of the U.S.? What is estimated the dollar value of this reach?
  5. Compare the information in several articles with the information included on Tesla’s Web site: https://www.tesla.com/cybertruck
  6. Have students select a company or product. Then, have students find business articles in the news and trace the articles back to information provided by companies.

Source:  Bloomberg; New York Times; Wall Street Journal; CNN News; Wired magazine, other news sources

 

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Amazon’s Echo Glasses Frames

Does it seem like there are more wearable devices than ever in the marketplace? Well, get used to it. Already there are headphones, ear buds, jackets – there is a lot, and it doesn’t appear to be slowing down any time soon. One of the latest wearable device are the new Echo Frames smart glasses from Amazon, with always-on Alexa voice control.

The glass frames gives the wearer hand-free access to the Alexa services at any time. Alexa – Amazon’s digital assistant – can answer questions, take reminders, and even operate smart home gadgets. The frames let the wearer interact with Alexa, listen to music, podcasts, and more. The frames are controlled by swiping along the earpiece and microphones can be shut off on command. The sound is subtle; only the wearer can hear the Alexa replies.

Priced at $179.99, the frames can be customized with subscription lenses at any optometrist outlet. They currently work only with Android phones; no word on connecting to iPhones at a future time.

If you remember the Google Glass, one of the criticisms was the display with cameras. These Echo frames do not have that capability and there are no cameras.

Now our glasses not only help us see better, they also can cooperate and provide additional functions. How is your vision?

Group Activities and Discussion Questions:

  1. Discuss the impact of wearables, including smart glasses.
  2. Show the Amazon Echo frames: https://www.amazon.com/dp/B01G62GWS4/ref=sxts_snpl_1_0_cb5e5e76-63c9-4995-ba6c-9e5dc465d041?pd_rd_w=96hzn&pf_rd_p=cb5e5e76-63c9-4995-ba6c-9e5dc465d041&pf_rd_r=DVD6DZKRH8TCMHNGS97B&pd_rd_r=2515e17b-55cd-4dd3-8278-8dabcc07c7ae&pd_rd_wg=eioFb&qid=1571077129
  3. Show video: https://youtu.be/gmVgPF4ofsE
  4. What are the opinions of the students about this device?
  5. Discuss the importance of clearly defining a target market.
  6. For the Echo frames product, what is the target market?
  7. Divide students into teams and have each team develop a profile of a target market for the product. Include demographics, psychographics, behaviors, values, attitudes, etc.
  8. Based on the target market profile, what makes this product unique for these customers?
  9. How should the product be marketed to this target market segment?

Source: Amazon.com; Smith, D. (8 October 2019). Amazon Echo frames – here’s what you didn’t know about Amazon’s new smart glasses. C/NET.

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Pricing in the Entertainment Streaming Industry

The entertainment streaming industry is on fire right now. Apple, Hulu, Netflix, Disney, HBO, and more brands are ramping up to fight it out for the monthly consumer subscription!

Here is how the current prices compare between services:

Service Monthly cost Shows
Netflix $12.99 Stranger Things
Hulu $11.99 (ad free), or

$5.99 (with ads)

Handmaid’s Tale
Amazon Prime Video $8.99 Marvelous Mrs. Maisel
Apple TV+ $4.99 The Morning Show
Disney+ $6.99 The Simpsons
HBO Max $14.99 Friends

 

Notice anything interesting in the prices? How each price ends? Which vendor is using penetration pricing? Or below-competition pricing? Name a price model and it’s probably on the list above. Blockbusters, as well as all-new created movies and shows are all offered from multiple services and it can be hard to determine which has which. The marketing focus should be on differentiation – the services are starting to sound alike, and be priced alike.

There has been a dramatic shift in recent years about how consumers get their information and entertainment, and how many more consumers use streaming services each year. The average consumer in 2019 has 2.6 stacked services. This is up from 1.6 stacked services in 2016, but far short of the projected 4.9 staked streaming services by 2023.

Think about it… how many services are currently in your household?

Group Activities and Discussion Questions:

  1. Poll students: How many subscription services does each household have today? Add them and average it for the class.
  2. Show a video about the topic: https://www.wsj.com/video/video-streaming-services-battle-for-subscribers/AED37E41-E1EC-447A-A47F-C55D1834B7E0.html
  3. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  4. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  5. For these streaming services, divide students into groups and have each group work on setting the price level.
  6. Assign each team a different model to use (demand-oriented, cost- oriented, profit-oriented, and competitor-oriented) and have the team explain how the model was used when setting their price.
  7. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: FitzGerald, D., & Flint, J. (29 October 2019). AT&T lays out price, show line-up for HBO. Wall Street Journal; other news sources

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