All Cases For Marketing Strategy, 1st Edition O. C. Ferrell, Michael Hartline, Bryan W. Hochstein, Marc Boivin Chapter 1-20
Case 1 Tesla Races Ahead with Nontraditional Marketing Strategy* Synopsis:
Tesla, the leader in electric vehicles, has managed to become one of the most valuable car makers in the United States without any traditional advertising and an Internet-focused downstream distribution strategy. Tesla also leads with an extensive corporate social responsibility strategy that includes focusing on the safety of both employees and consumers, supporting a diverse work environment, sourcing responsibly produced materials, and contributing to education.
Themes:
ethics and social responsibility, sustainability, distribution strategy, promotion strategy, product strategy, pricing strategy, competitive advantage
Case Summary Tesla, an all-electric vehicle and energy generation products company, is widely admired for its industry-altering innovation built around its core vision of moving the world toward sustainable energy. Though Tesla got its start with electric vehicles (EVs) in 2003, the company has branched out to create a variety of renewable energy technologies from solar roof tiles to clean energy storage. Today, Tesla is the most valuable carmaker in the world. Remarkably, the automaker reached this status with a $0 advertising budget. This case explores Tesla’s marketing mix, including its product strategy, pricing strategy, distribution strategy, and promotion strategy. Tesla has a gift for attracting publicity due to its promotion tactics, such as its launch events, and headline-worthy achievements. Despite the company’s success, Tesla has attracted both skepticism and criticism from the public as well as investors, largely due to CEO Elon Musk’s outspoken nature, which has damaged the company’s reputation and stock price more than once. This case analyzes how Tesla established itself as a leader in EVs. Additionally, this case explores corporate social responsibility at Tesla. Tesla’s corporate social responsibility (CSR) strategy addresses stakeholders’ interests by monitoring and reporting on the company’s product and operational impact, emphasizing consumer safety and responsible sourcing, and focusing on its employees and building a strong organizational culture.
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Kelsey Reddick and Zachary Youngstrom prepared this case under the direction of O.C. Ferrell for classroom discussion rather than to illustrate effective or ineffective handling of administrative, ethical, or legal decisions by management, © 2022. Marc Boivin updated this case for the Canadian edition, © 2024. © 2024 Cengage Learning Canada, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Teaching Overview This case thoroughly outlines Tesla’s marketing mix. Students should be encouraged to update this information as needed and then conduct a comprehensive SWOT analysis for Tesla. The case also gives students an excellent overview of corporate social responsibility (CSR) at Tesla. Students should have no trouble discussing these efforts and their implications for Tesla’s marketing strategy. After this is completed, students could use this case to develop a marketing strategy for maintaining the company’s position as a leader in EVs. Tesla has become profitable, achieving record sales numbers, and has gained resources to propel its global expansion. Major SWOT Themes innovation, competitive advantage, profitability, leadership, global business, corporate social responsibility, product strategy, pricing strategy, premium pricing, promotion strategy, new product introduction, advertising, publicity, distribution strategy, supply chain, economic uncertainty, government regulation Problem/Decision Statement Despite the company’s success, Tesla has attracted both skepticism and criticism from the public as well as investors. Not all of Tesla’s publicity has been positive. Tesla’s history of leadership challenges has followed it in the media. Though many companies have benefited from having a celebrity CEO, Tesla has had to reign in CEO Elon Musk, who has been both an asset and a liability for the company. Additionally, Tesla now faces more competition than ever as mainstream automakers invest heavily in EVs. Musk believes that Tesla’s competition is not the small percentage of EVs being produced but rather the large number of gasoline-fuelled vehicles saturating the market. Discussion Questions 1. In what ways does Tesla address the interests of its stakeholders through its corporate social responsibility strategy? Tesla’s corporate social responsibility (CSR) strategy addresses stakeholders’ interests by monitoring and reporting on the company’s product and operational impact, emphasizing consumer safety and responsible sourcing, and focusing on its employees and building a strong organizational culture. Tesla believes that consumers should not have to compromise on price or performance when it comes to choosing sustainable products. To address this consumer interest, Tesla has introduced more affordable models of its environmentally friendly vehicles, which have resulted in millions of metric tons of emissions savings. Tesla has also prioritized consumer safety with advanced safety features and taking additional measures to give customers peace of mind. Tesla has also prioritized employee safety with its multiday training program and on-the-job training. Tesla’s goal is to have the safest car factory in the world. Tesla also fosters employee advocates by offering perks such as its employee stock purchase program. Many © 2024 Cengage Learning Canada, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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of its efforts simultaneously reduce carbon impact while providing valuable perks for employees. Additionally, Tesla supports workplace diversity in its recruitment and retention efforts with anti-discrimination and anti-sexual harassment training as well as unconscious bias training. To address the interests of shareholders, Tesla has taken measures to increase profitability, even going so far as to implement layoffs in a move toward streamlining the company. 2. How would you describe Tesla’s marketing strategy? Tesla’s marketing strategy is nontraditional. Tesla’s premium all-electric vehicles are its bread and butter, and yet, Tesla made the move to open source its patents to make them openly accessible. Though Tesla has now introduced more affordable models, relatively speaking, overall Tesla has a premium pricing strategy. Tesla does not use traditional advertising as part of its promotion strategy and has an Internet-focused downstream distribution strategy. 3. How does Tesla’s distribution strategy differ from other automakers? Tesla has invested many resources into its upstream supply chain by focusing on its inhouse battery cell production and vehicle production at its Gigafactories. This is one of Tesla’s key competitive advantages. Downstream, Tesla has a unique retail distribution compared to competitors. The company sells online with no agency dealerships. Customers pick up their vehicles at a Tesla-owned regional distribution centre. Interestingly, Tesla showrooms are strictly used for promotion, not purchases.
Case 2 E-Commerce Soars with Shopify*
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Kelsey Reddick, Crawford Rummel, and Carrie Holt prepared this case under the direction of O.C. Ferrell, © 2022. It was prepared for classroom discussion rather than to illustrate effective or ineffective handling of administrative, ethical, or legal decisions by management. Marc Boivin updated this case for the Canadian edition, © 2024. © 2024 Cengage Learning Canada, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Synopsis:
Shopify, a Canadian e-commerce company, is used by more than 1 million businesses worldwide. Instead of marketing itself as an e-commerce platform, Shopify positions itself as an all-in-one service with a variety of tools to help business owners start, run, and grow a business. Shopify believes that investing in the planet, local communities, customers, and employees will bring the company long-term success.
Themes:
E-commerce, product strategy, supply chain management, product strategy, product mix, pricing strategy, distribution, competitive advantage, strategic partnerships, social responsibility
Case Summary Instead of marketing itself as an e-commerce platform, Shopify positions itself as an all-in-one service with a variety of tools to help business owners start, run, and grow a business. The company eliminates the need for many third-party tools and resources, such as e-mail marketing services and third-party logistics management, with its products. This case also explores Shopify’s pricing strategy, the competition it faces from other e-commerce platforms, and Shopify’s commitment to social responsibility. The company believes that investing in the planet, local communities, customers, and employees will bring the company long-term success. Teaching Overview Given its Canadian roots, students will likely have some knowledge of Shopify and its competitors such as Magento, BigCommerce, WooCommerce, and Wix, and they have likely made a purchase from online merchants using these platforms. Shopify’s diverse product portfolio has positioned it against e-mail marketing companies, 3PLs, banks, and even Amazon. Shopify’s ecosystem is its main competitive advantage. However, this attempt to be all things to its merchants could prove to be challenging. Major SWOT Themes competition, product strategy, e-commerce, digital marketing, pricing strategy, competitive advantage, strategic partnerships
© 2024 Cengage Learning Canada, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Problem/Decision Statement Looking to the future, Shopify will have to protect its top spot as the number one e-commerce platform. Shopify must find ways to build on this momentum long-term, and must keep customer churn from free trials to a minimum while focusing on the long-term satisfaction of subscribed clients. Discussion Questions 1. How is Shopify different from other e-commerce platforms? Rather than offering a basic shopping cart solution or an open-source platform that requires coding knowledge, Shopify serves as a one-stop-shop for all e-commerce needs. Shopify focuses on satisfying multiple customer needs: the need for an online store, for customer support, for order fulfillment, for payment transaction tools, and more. 2. Describe Shopify’s product strategy. Shopify has a wide product mix and has built a large ecosystem around its many à la carte services. Many e-commerce retailers use separate tools and services to run their business (e.g., web host, e-mail marketing platform, third-party logistics provider), but Shopify has solidified its lead over the competition by identifying common struggles that e-commerce retailers face and creating tailored solutions within the Shopify ecosystem. 3. What are Shopify’s strengths? Weaknesses? Shopify’s ecosystem is its main competitive advantage. Many clients are willing to pay a monthly premium for convenience, customer support, and easy-to-use features. Additionally, Shopify allows merchants to create their own store on a domain they own. Shopify’s extensive product mix is just one of many reasons the company stands out from its competition. While many Shopify products largely eliminate the need for thirdparty tools and services, the e-commerce platform still sees value in strategic partnerships. By working with other companies, such as Walmart, Facebook, and Pinterest, Shopify stands to add value for its merchants and attract new clients. Some will consider the Shopify ecosystem to be a strength while others will consider it to be a weakness. For example, some developers prefer open-source platforms such as Magento or WooCommerce. Additionally, Shopify seems to offer fewer “out-of-the-box” perks than competitors such as BigCommerce. One concern about this pricing model is that Shopify users could easily find themselves with a large bill by registering for too many à la carte applications to extend the functionality of their websites.
© 2024 Cengage Learning Canada, Inc. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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