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A business without advertising? Tesla experiments with a minimalist model June 14, 2013

Posted by rmshepard in Uncategorized.
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Tesla Motors has received significant attention recently for having almost no advertising, no ad agency, and no dealer network. While such a model might appear crazy to General Motors or Ford, Tesla is making it work, with stock prices sky rocketing, individual stores (like Apple Stores) going up across the country, and customers saying they appreciate the company’s soft sell style.

Would a limited or no advertising model work for other big businesses? It is tough to tell. All is not necessarily perfect at Tesla. According to some critics, the company has faced cancellations of orders and customers haven’t embraced alternative fuels as quickly as many predicted.

Watch the following ad that Tesla once released, and then consider whether the company is better off relying on word of mouth:

Discussion Questions:

1.  How is a word of mouth marketing model different from one that depends on advertising?

2.  What are the benefits of relying on a word of mouth model rather than a traditional model of advertising?

3.  Can Tesla really convince Americans to go electric without running ads?

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