Who Needs Advertising? Not Tesla.

Tesla continues to defy common advertising and marketing conventions, yet still managed to become a valuable brand and hot product. The company does not advertise or promote its cars through traditional media. This lets the company save a great deal of money, and focus on its design and manufacturing.

Tesla’s Model 3 goes on sale for an estimated delivery in the fourth quarter of this year. To date, without any advertising other than word-of-mouth and free media coverage, customers have put down $1,000 deposits on nearly 500,000 cars! According to the company, it continues to average 1,800 net orders per day.

This is an enviable position for the automaker considering that Nissan spent $4.3 million in advertising on its electric Nissan Leaf car, and General Motors spent $3.7 million on the Chevy Bolt electric car. Tesla may not sell as many vehicles, but its cost per vehicle is virtually non-existant.

The top five and bottom five spenders based on 2016 advertising are:

  • Hyundai Genesis – $6,821/vehicle sold
  • Lincoln – $2,719/vehicle sold
  • Jaguar – $2,376/vehicle sold
  • Fiat – $2,350/vehicle sold
  • Cadillac – $1,493/vehicle sold
  • Toyota – $353/vehicle sold
  • Dodge – $348/vehicle sold
  • Honda – $322/vehicle sold
  • Porsche – $283/vehicle sold
  • Tesla – $0/vehicle sold

It shows that while advertising is an important marketing tool, it is far from the only way to gain customers.

Group Activities and Discussion Questions:

  1. Discuss the various promotional tactics that can be used for launching a product.
  2. Have students come up with tactics and list all the tactics on the white board (ex: billboards, print, direct mail, etc.).
  3. Divide students into groups to work on this exercise.
  4. Show Tesla’s Web site: https://www.tesla.com/
  5. Videos are available on Tesla’s YouTube channel: https://www.youtube.com/user/TeslaMotors
  6. For Tesla, have each team select three different tactics. For each tactic, explain why it was selected and how it will be used.
  7. Debrief by putting together the entire suggested lists on the white board. As a final step, have the entire class vote on the top three tactics to use.

Source:  Ad Age Daily, Kantor Media, Automotive News

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