All Cases For Marketing Strategy, 8th Edition O. C. Ferrell (Author), Michael Hartline (Author), Bryan W. Hochstein (Author) Cases 1-21 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. *
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.
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 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-fueled 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.
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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 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 as 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 center. Interestingly, Tesla showrooms are strictly used for promotion, not purchases.
Case 2
Businesses Sink or Swim in the Face of COVID-19 Crisis*
*
Kelsey Reddick, Callie Kyzar, and Caleb Yarbrough 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.
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Synopsis:
The COVID-19 (coronavirus) pandemic caused a major shift in the global economy, sending businesses of all sizes into bankruptcy, upending the supply chain, and altering consumer behavior. While some industries were well-suited to the new normal, others had to quickly adapt to stay afloat.
Themes:
Strategic philanthropy, crisis preparedness, marketing mix, advertising, consumer behavior, environmental threats, supply chain, global economy, corporate social responsibility
Case Summary The global economy was upended in 2020 as a result of the COVID-19 (coronavirus) pandemic. The respiratory disease, identified in 2019, posed a serious public health risk because it spread easily from person to person, and there was little to no immunity against the new virus. For these reasons, international travel was limited, people across the globe were ordered to stay at home, nonessential businesses were closed, students attended school online, major events were canceled, and many people began to work remotely. This seismic shift was felt deeply and immediately as the virus hit the United States in early 2020. This case explores COVID-19’s impact on business by analyzing changing consumer behavior, exploring struggling industries, and highlighting thriving industries. Additionally, we examine the importance of adjusting the marketing mix in the face of a new economy to remain competitive. This case discusses supply chain disruption, mission-based marketing and causerelated marketing, and crisis preparedness. Teaching Overview This case examines the challenges businesses faced during the COVID-19 crisis. Students can select a company mentioned in the case (e.g., Walmart or Uber) or a company the student has researched and conduct a top-level SWOT analysis as it relates to the COVID-19 pandemic. Alternatively, students can focus on general external opportunities and threats created by the pandemic. The case also discusses the new normal for businesses. Students should consider the pandemic’s long-term impacts on business and consumer behavior.
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Major SWOT Themes Consumer behavior, mission-based marketing, cause-related marketing, product strategy, pricing strategy, promotion strategy, advertising, publicity, distribution strategy, brick-andmortar, e-commerce, supply chain, crisis management, new technology, omnichannel Problem/Decision Statement Marketers must keep risk-mitigation strategies top of mind to better prepare them for the future. Crisis management calls for a quick response to assess potential damage and take action. There are risks associated with both making the wrong decision and failing to take action, creating a high degree of uncertainty. Even the most prepared companies may not handle a crisis perfectly, resulting in both success and failure outcomes. To adapt quickly with new tactical decisions, businesses must engage in ongoing scenario planning. It’s also effective to create an internal dialogue about crisis management strategy to identify blind spots and unintended consequences. Organizations should also proactively establish communication channel strategies to reach various stakeholders with relevant messages. Discussion Questions 1. How did COVID-19 impact the global food supply chain? A crippled supply chain and panic buying led to empty shelves in grocery stores. Though food was abundant, the global food supply chain became dislocated. Dairy farmers had to dump millions of gallons of milk every day because cows need to be milked multiple times a day, regardless of whether there is a need, which led to plants collecting more milk than they could process and store. Because of the complex nature of the supply chain, this milk was not easily redirected to consumers. Many farmers were left without buyers due to the closing of restaurants, hotels, and schools. 2. Identify prominent changes in consumer behaviors and preferences and how these events will change businesses in the future. During the COVID-19 pandemic, many people left their homes only for essential needs (e.g., groceries, banking, gas, and medicine). Americans spent more on frozen food, snacks, household supplies, and home entertainment but less on apparel, travel, transportation, and out-of-home entertainment. Overall, consumers cut spending and started saving more of their money. Because of the desire to limit exposure to the virus, consumers visited grocery stores less but spent more per visit as shoppers stocked up. Stockpiling and strain on grocery store inventory made consumers less brand sensitive. During this time, many households tried online grocery shopping for the first time. The impacts on consumer behavior have been long-lasting. The pandemic affected consumer perspectives on a variety of issues such as retail spending and transportation.
© 2022 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.