Running head: CONSUMER BEHAVIOR, MARKET SEGMENTATION & POSITIONING
MRKT310
Consumer Behavior, Market Segmentation & Positioning
MRKT310
Part 1
A customer will generally follow a 6-step process either consciously or subconsciously
when considering making a purchase. Car buying is generally well thought out and consumers go
to great lengths to ensure the purchase is in their best interest.
Consumer Decision Making Process
Need Recognition
Purchasing a Tesla is not typically done purely out of a need for transportation as most
Tesla owners have decided they no longer want a gas-powered vehicle and are deciding to switch
to an electric car. However, there is a need. Some people live in urban areas with lots of chargers
available so owning a Tesla is not any more complex than a normal gas-powered car. This makes
the desire to own one easier to justify as a need as it is comparable to any other vehicle in their
specific situation.
The need for a Tesla can be based around a lot of things that owning a Tesla offers. Style,
refinement, and status for starters. For many, feeling good about the vehicle you are driving is a
“need” rather than a “want”.
Search for Information
Much of this stage is done via YouTube and social media as there are thousands of hours
of Tesla related content. Owners are very enthusiastic about their cars and love making content.
This content is valuable to potential buyers looking for more information. There are videos about
how to operate the user interface, road trip tips, long term reliability reviews, and extensive
, content about every aspect of ownership.
Additionally, there are websites than can accurately compare the cost of ownership vs
tradition gasoline cars. This is important as long-term ownership can be very expensive for the
stylish luxury vehicles that Tesla generally competes with. This information can have a strong
effect on the decision of the customer.
Product Evaluation
For most customers, cars are evaluated in a few metrics. Cost, style, performance,
reliability, efficiency, practicality, safety, comfort, and features are the most common when
deciding whether a vehicle is right for them. The style of a Tesla is one of its strong points. Tesla
has gone to great lengths to give their cars their own style and do not follow the same design
ideology that other hybrid and EV manufacturers follow. The performance of Tesla’s cars is
unmatched in the segment. No manufacturers are currently producing large volume performance
oriented electric cars. This puts Tesla in a very good position to capture most electric vehicle
sales.
Product Choice and Purchase
Tesla has made this phase of the process extremely easy as there is no need to shop
around. Tesla does not use the typical dealership model, instead you purchase your vehicle
online. You may decide whether to purchase or lease the vehicle and trade-ins are processed at
the nearest Tesla Delivery Center (the Tesla equivalent of a dealership). Once the vehicle is ready
you can either pick it up at the delivery center or request to have it delivered for a small fee.
Post Purchase Use and Evaluation
Tesla owners are overwhelmingly happy with their purchase. According to Consumer
Reports, Tesla is ranked second to last in reliability out of the 26 auto manufacturers, yet
somehow this does not seem to affect Tesla owners. Tesla is ranked #1 for customer loyalty with
70% of Tesla’s sold, were replaced with another Tesla vehicle (Henry, 2020). Tesla is very good
about keeping their customers loyal by offering good customer service and consistently updating
MRKT310
Consumer Behavior, Market Segmentation & Positioning
MRKT310
Part 1
A customer will generally follow a 6-step process either consciously or subconsciously
when considering making a purchase. Car buying is generally well thought out and consumers go
to great lengths to ensure the purchase is in their best interest.
Consumer Decision Making Process
Need Recognition
Purchasing a Tesla is not typically done purely out of a need for transportation as most
Tesla owners have decided they no longer want a gas-powered vehicle and are deciding to switch
to an electric car. However, there is a need. Some people live in urban areas with lots of chargers
available so owning a Tesla is not any more complex than a normal gas-powered car. This makes
the desire to own one easier to justify as a need as it is comparable to any other vehicle in their
specific situation.
The need for a Tesla can be based around a lot of things that owning a Tesla offers. Style,
refinement, and status for starters. For many, feeling good about the vehicle you are driving is a
“need” rather than a “want”.
Search for Information
Much of this stage is done via YouTube and social media as there are thousands of hours
of Tesla related content. Owners are very enthusiastic about their cars and love making content.
This content is valuable to potential buyers looking for more information. There are videos about
how to operate the user interface, road trip tips, long term reliability reviews, and extensive
, content about every aspect of ownership.
Additionally, there are websites than can accurately compare the cost of ownership vs
tradition gasoline cars. This is important as long-term ownership can be very expensive for the
stylish luxury vehicles that Tesla generally competes with. This information can have a strong
effect on the decision of the customer.
Product Evaluation
For most customers, cars are evaluated in a few metrics. Cost, style, performance,
reliability, efficiency, practicality, safety, comfort, and features are the most common when
deciding whether a vehicle is right for them. The style of a Tesla is one of its strong points. Tesla
has gone to great lengths to give their cars their own style and do not follow the same design
ideology that other hybrid and EV manufacturers follow. The performance of Tesla’s cars is
unmatched in the segment. No manufacturers are currently producing large volume performance
oriented electric cars. This puts Tesla in a very good position to capture most electric vehicle
sales.
Product Choice and Purchase
Tesla has made this phase of the process extremely easy as there is no need to shop
around. Tesla does not use the typical dealership model, instead you purchase your vehicle
online. You may decide whether to purchase or lease the vehicle and trade-ins are processed at
the nearest Tesla Delivery Center (the Tesla equivalent of a dealership). Once the vehicle is ready
you can either pick it up at the delivery center or request to have it delivered for a small fee.
Post Purchase Use and Evaluation
Tesla owners are overwhelmingly happy with their purchase. According to Consumer
Reports, Tesla is ranked second to last in reliability out of the 26 auto manufacturers, yet
somehow this does not seem to affect Tesla owners. Tesla is ranked #1 for customer loyalty with
70% of Tesla’s sold, were replaced with another Tesla vehicle (Henry, 2020). Tesla is very good
about keeping their customers loyal by offering good customer service and consistently updating
