| Academic Open Internet Journal |
Volume 12, 2004 |
eSTRATEGIES FOR PROMOTION OF
END-USE EFFICIENCY PRODUCTS AND SERVICES IN THE LOCAL MARKET
Acad. G.
Bonchev Str. Bl. 2 , 1113 Sofia, Bulgaria
Tel: +359
2 979 32 30, E-mail: kdjevizova@icsr.bas.bg
Yordanka Atanassova
Acad. G.
Bonchev Str. Bl. 2 , 1113 Sofia, Bulgaria
Tel: +359
2 870 03 54; E-mail: dani1@abv.bg
Key words: local market, promotion, end-use efficiency, energy
saving products
21 century started with
enterprise usages of Internet such as marketing communication channel for
promotion of products/services via developed eStrategies.
In competitive economy customers may choose from whom and how to buy; receiving
information for products and services by traditional information channels
(radio, news papers, TV, mail, magazines, billboards) and/or using electronic
channels (searching engine, e-mail, SMS, MMS ) in virtual space. Marketing
concept is the base of market-oriented business (the paradigms of 6Ps: product,
price, promotion, place, people and performance and 7Cs: content, communication, customer care, community,
convenience, connectivity, customization) [1, 2]. The eStrategies
provide a basis of successful business usage of Internet today: enterprise must
always provide superior value, better than competitors, when it comes to
quality, price and services for customers. Marketing combination of management
activities should find the best way to fulfill customer needs of the local
market and follow new organizational changes. The internal dimensions of
marketing are related to collaboration betwåen departments and creation of data bases about
customers (of the local market) and business partners, and external with
developing partnership relations (customers, suppliers and distributors).
The
Internet today is environment for realization of basic business functions: the
communication function, the transaction function and the distribution function.
The communication function is to inform the present and prospective consumers
of the availability and features of the products and related services (promotion).
The transaction function facilitates economic exchanges between the producers
and the consumers of end-use energy efficiency products. The realization of
distribution function in Internet is possible only for the goods of information
type (software, music and etc.)
End efficient use of energy products in aspect of new market trend
developments
Adoption
and diffusion of end-use energy efficiency products in local market is a complex and dynamic phenomenon involving
interactions between new energy saving technologies, consumer behavior, local market
conditions and public policy. Decisions affecting end-use energy efficiency products
are made by manufacturers, sellers, architects and builders, contractors, and
consumers. Local market transformation is a process whereby energy efficiency
innovations are introduced into the marketplace and their penetration in a
large portion of the products market. Manufacturer and consumer behavior is
affected by events such as energy price swings or environmental concerns.
Markets vary in terms of prices, growth rates, competition, and other factors.
And a wide range of policies or programs including energy efficiency
regulations, financial incentives, and educational efforts are possible.
In spite
of these complexities, end-use efficiency of energy products greatly increased
in many market segments in
If
end-use energy efficiency products are cost effective, it is reasonable to ask
why they are not widely implemented in the marketplace without policy and
program intervention. In other words, why local market transformation
strategies needed at all? The answer to this question is that barriers such as
lack of awareness or information, limited product availability, energy price
distortions inhibit widespread and full implementation of cost-effective end-use
energy efficiency products has impact. These barriers are discussed in detail
in other studies [10, 11 and etc.].
As demonstration
of these barriers, end-use energy products markets implicitly act as if
consumers require returns of 30% or more when considering energy efficiency
investments. This problem and the barriers that cause it are addressed through
policies such as minimum energy efficiency standards, utility DSM programs,
demonstration programs. Local market
transformation combines individual policy and program initiatives into a
coherent strategy for rapidly moving up the diffusion curve and increasing the
ultimate market penetration of end-use energy efficiency products. We
consider market transformation from the perspective of new products and trends
in the fraction "end-use energy-efficient" (on examples: devices for
heat allocation and compact fluorescent lamps).
The
subject of local market transformation regarding the end-use energy efficiency products
has been addressed in other studies. Many of these studies examine particular
products, policies, or jurisdictions. Some of these studies focus on how
electric utilities can promote market transformation through their demand-side
management (DSM) programs. Other studies consider market-based efforts to
promote technological innovation and commercialization of energy-efficient
technologies.
In
this article, we consider market transformation on a wider basis. We examine
the entire technology diffusion process, the full array of policies and
programs that can contribute to market transformation, and key distinct heat
end uses on
Internet as Environment for Promotion
of End-Use Efficiency Products and Services
The
purpose of marketing is to create exchanges that satisfy consumer and
organizational goals. To achieve this purpose marketing
involves two important tasks: the communication task and the operating task. The
communication task can be thought of as information primarily conveyed through
promotion, price, product label and etc. This
information is used to position the product in the market and to inform and
persuade present or potential customers. A marketing channel can be viewed as
performing three functions to support the flow of products and information: the
distribution function, the transaction function and the communication function.
The transaction function facilitates economic exchanges between the sellers and
the consumers. The communication function is to inform the present and
prospective consumers of the availability and features of the products and
related services.
The Internet is
capable to transforming the communication process and the consumer need
fulfillment through new consumer processes [ 6, 7, 9 and etc.]. A consumer
process is a collection of tasks or steps that a consumer goes through to
achieve a goal, usually the fulfillment of purchasing and consuming a product.
Table 1. Comparison of traditional and web
channels (on the basis of [ 8 ], p. 370)
Characteristics
|
Traditional retail channel
|
Web-based direct channel
|
|
Product distribution |
1.Critical infrastructure
are physical such as warehouse and stores 2. Exploits product bunding and economies of scale in shipping to keep
distribution costs low 3. In-store inventory 4. Products in inventory
and display, and immediately available |
1. Critical infrastructure
are electronic such as Web, e-store fronts, and e-payment systems 2. Ships products to
individual consumers in small lot sizes 3. Virtual inventory 4. Products always require
lead time for delivery |
|
Customer service |
1. Reach of consumers
usually limited by geographic location and time 2. Provides physical
services such as consultation, testing and installation 3. Support in-person
interaction with sales person 4. Sales support, limited
by knowledge and information of retailer,can focus
on the shopping experience |
1. Reach not limited by
geographic location and time 2. Provides information
based services such as searches, product information and online help 3. Uses electronic
databases 4.Sales support can
interactively link to use knowledge distributed across the Web; services
support is depending on update service provide`s
site |
|
Product promotion |
1. Product promotion
usually target at aggregate consumer segments 2. Product display
designed to aggregate consumers 3. Product display are
usually static and reflects aggregated consumer choice 4. Suitable for experience
goods that need personal inspect or trial |
1. Product promotion
customized to individual consumer 2. Product display can
accommodate more personalization 3. Product display can
adapt in real time to suit the changing preferences of individual consumers 4. Suitable for search
goods that can be evaluited from information and images |
|
Market intelligence |
1. Provides aggregated
market demand and preference information to the marketer 2.Information flows
through intermediaries, possibly causing distortion |
1.
Market has direct access to market demand and preference information 2.Information
flows directly, reducing distortion 3.
Consumers can easily collect information on competing products |
While
undergoing the fulfillment process, many consumers experience needs such as product
knowledge, interaction with provider of goods, aggregation of related and
required services and customization to suit individual needs.
As a communication
medium, the Internet is different from the traditional mass media. Using the
Internet, consumers can gather information about products and services,
communicate with other consumers and firms for related products and services
and complete transactions. Firms can use the Internet to provide product
information to consumers, collect information about consumers, and communicate
with consumers and partners.
The two-way communication
capability and the information processing power of connected computers is key
to building interactive relationships with consumers and offer them
personalized marketing messages. Interactivity enables a consumer to seek and
access more information interactively using databases and search engines, and
allows the marketer to have an electronic dialogue with each consumer on a
personalized basis.
A Framework form Traditional and Web Channels in the Mining
of Transformation Business Strategies
The
Web and the traditional retail channel differ in fundamental ways, which we
summarize in Table 1. These differences in channel characteristics imply that
different channels are appropriate for different products. Even if a product
can be sold simultaneously on the Web as well as through traditional channels,
the marketing strategies are likely to be different for each channel. There are
several factors that affect the decision to use a channel and important among
them are the type of product and the type of market. There are two levels of
presence that organizations can have on the Web. The first level is to use the
Web to communicate with their consumers, provide them product information and
other information based services. The second level is, in additional to
providing information, selling directly to the consumers over the Web,
bypassing the retail channel (this opportunity is real for other type products,
its not realized for ePayment and on the end-use
efficiency energy products in this local market).
The
implications of this strategy, when the retail channels are independently
owned, are not clear at this moment. Companies following this strategy can use
the two channels to enhance one another, explore different market segments
using the different channels, or allow the Web channel to cannibalize the
traditional retail channel. We now summarize the marketing needs and the
strategy types in Table 2.
Table 2. Channel management
strategies (eStrategies)
Marketing needs
|
Channel
management strategy
|
|
|
Case Study - 1
We did a research about
the existing in Internet pages and firms offering one of the most typical
energy-saving products with a variety of innovative solutions for the recent
years. The promotion of the compact fluorescent lamps Å27,
suitable for common residential and public applications are the base for
the research for the firms business strategies on the local Internet space. The
realized corporate business strategies, investigated by the customer
information, available on their web-sites are presented in Table 3. The main
conclusions of the research are:
1. The way in which one
firm shows the information on its own site for the offered goods and services
shows the estimation for the possibilities of Internet as an environment for
business communications and transactions. The information for the local users
of the corporate sites (General Electric, Philips, Osram,
DZU-St. Zagora) does not
express the actual profile of the customers of the end-use efficiency energy
products. On the sites of the firms with long history the information is multiaspect actualized (technical standards, functional
characteristic, eco-tendency), but the possibility of choice for customers are
weakly presented.
2.
The web-pages of the local distributors in languages of
local markets rarely express clear business strategy, the actualization of the
information is on large time intervals, rarely contains price information and
promotional campaigns. They are input pages for
the main corporate site of the producers. From the
view point of the design the local sites of Osram è Philips are done in the corresponding corporate
style of presentation in Internet. We hope that the well represented beginning to be filled
up with quality content, so that their
pages be attractive and useful for their customers.
Case Study -2
The object
of this study was investigation on actual public problem: homes equipment with
intelligent heat devices as advanced technological solutions for optimizing consumption
of energy resources in the households.
According to sources from “Centralized Heating System Supply – Sofia” only 18.4%
of subscribers were on calorimeter account until January 2002. The introduction
of this new way of account becomes obligatory after September 2002 year for
households which have not installed the required device would have to pay
penalty in the range of 100 to 500 BLV and would have to pay 10% increased
bills for heating [3, 4, 5]. Sofia CHSS Co. has
contracts for calorimeter accounting with eleven firms whereas offered by them
services are similar. The price of complete device for one radiator varies
between 40 and 70 BLV with option of payment on leasing. For monthly framing of
accounts subscribers would pay a fee of about 12 BLV per annum.
Presently
Sofia CHSS Co. has 362 098 subscribers <http://www.toplo.bg/general.htm
>, which from the beginning of heating season 2000/2001 have the possibility
for payment of consumption heat energy through Internet.
Most
of them pay cash while some 37 971 subscribers own disbursement bank deposits with
Sofia CHSS Co. and another a few hundreds subscribers pay off through Internet
and other electronic ways.
Research
has been carried out for the promotion of the companies, which offer
heat-account service in the Internet space. The product and services
information about customers, found in firm’s sites is shown in Table 4.
Out of 11 companies
offering related devices and services on the Bulgarian market, seven have made
certain attempts for using the resource of Internet for establishing relations
with would-be customers.
The
results are divided into groups of three types:
Some
companies (4) are presented only by an address and a telephone number displayed
on other owner’s site, i.e. <http://toploschet.hit.bg>, linked with site
of “Centralized Heating System Supply – Sofia”.
Another
group of companies are presented by uncompleted sites or sites of European
manufacturer of devices, with missing information addressed sales offers toward
Bulgarian consumer. The presented information on site address <http://www.viterra-es.com/>, in English and German versions, is not targeted
at the Bulgarian consumer and provides unadapted
information about products and services.
On the site address <http://www.techem.net/>,
on the beginning our research (June 2002) remains unfinished where
pages related to devices and services are
missing and labeled “under construction”, nor the whole structure is consecutive in development.
Four of companies have
developed web sites of their own, where information about products, prices,
conditions of delivery and installation of heat allocators
and ventils heat account services are submitted.
Nelbo
Engineering Co. on site <http://www.nelbo.com
> is presented by visual and text information for the same service. It is
different from the rest by offering the on-line access for their subscribers
about measured data on a monthly basis. Through an e-service on their web-site
the consumer is rendered a different and better level of service. Remote
accounting in combination with an interactive access to data basis through
Internet enables consumer’s control. This company has achieved flexible and
quick response to market modification.
Business
activity today is stimulated by tight terms of time and hard competition. Companies which are not presented or have not appropriate
business behavior in Internet, are demonstrate a monopolistic conduct on the
local market.
Conclusion
In this paper, we
examined the use of the Internet as an effective marketing channel for market
transformation business strategies and supporting to solve the actual public
problems in the area of energy saving:
·
individual (for
households) measuring and control for effective heat consumption - attracting
consumer subscribers in local distinct heat market;
·
enlargement usage of energy saving electric devices by promotion
of the compact fluorescent lamps Å27 suitable for common residential and public
applications.
We study business
strategies in local distinct heat and energy devices market on traditional and
Web channels and investigated the information for customers, available on firm`s web-sites. Our result is:
·
slow
infiltration of the new methods of promotion for end-use energy saving products
and services;
·
the local
corporate and firms realized the role of web presence to enhances traditional
channels;
·
they don’t strives
to increase of theirs web-sites usefulness (provide
information, opportunity of products choice, orders, payments and after purchase
support through today`s Internet capabilities) and attract target segments in this local market.
References
1. Homa
K (2003) Models of Profitability, http://www.msb.edu/faculty/homak/
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Co. (2003) E-business performance: Snapshots of Sales Innovation on the Web
3. Íaðåäáà çà
òîïëîñíàáäÿâàíåòî. Ïðèåòà ñ ÏÌÑ ¹ 64/18.03.2002 ã., îáí., ÄÂ 31/26.03.2002 ã.
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ÄÂ, áð. 27/15.03.2002 ã. <www.dker.bg>
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åôåêòèâíîñò, ÄÂ, áð. 64/16.07.1999 ã.(èçì., áð. 1/2000 ã., èçì. è äîï., áð.
108/2001 ã.)
4. Clay K., R. Krishnan, and
M. Smith - The Great Experiment: Pricing on the Internet, The Handbook of eCommerce in Business and Society, CRC Press. 2001.
pp. 139-152.
5. Smith M. D - The Law of
One Price? The Impact of IT-Enabled Markets on Consumer Search and Retailer
Pricing, Version: September 2001
6. eCommerce: Integration of
Web Technologies with Business Models, Kluwer
Academic Publishers 2000, Vol. 1, Number 4 (ISSN 1387 – 3326).
7. Informationssysteme
fuer E-Commerce (EMISA-2000), Johannes Kepler Universitaet Linz
8. The latest official
statistics on eCommerce: a focus on consumers` Internet transactions – Source
OECD, (http://www.oecd.org/pdf/M00027000/M00027669.pdf
9. Nadel,
S. and M. Kushler, “Public Benefit Funds: A Key
Strategy for Advancing Energy Efficiency,” The
Electricity Journal, October 2000, pp. 74-84.
10. Shumway
N. - Why Do Energy Companies Trade?
|
Web site * |
Brand name of CFL**
|
Product information |
e-Catalogue |
Online tools and software on the site |
Site condition of
customer poinview
|
Advantage of CFL
|
|
www.gelighting.com GE
Lighting |
Energy
Saving™ Genura™ Biax™ 2D™ Electronic
Biax™ Globe Elegance Tech New T Tech GLS Elegance |
technical
parameters, labelling, packing and recommendation
usage; organized
by product lines and customer segments |
GE
Lighting e-Catalog,
Version 2.0 – product
data base with online access, possibility for search and comparisons; product
brochures: files in PDF format |
feedback
form for questions;
Virtual Lighting Designer - can view and compare selected
lighting solutions; (side-by-side and scroll within the room in panoramic 360
mode); Energy Optimiser – online access to Savings
calculator; Product Optimiser – is your current lighting product
the best fit for your needs? Lighting
Guide |
FAQ
section; there is
no link to bulgarian site |
Energy Optimiser
- perform your
own energy audit and calculate how much you can save by switching to energy
efficient compact fluorescent products; ENERGY
STAR® labelling - easy to identify products |
|
www.generalelectric.bg GE Bulgaria |
TUNGSRAM MICRO QUAD STANDARD ECONOMY MICRO GLOBE GLOBE BIAX® |
technical
parameters; organized
by product lines |
file in
PDF format |
feedback
form for questions |
broken links in Lighting section; News
section: last news from end of 2001 |
not highlighted |
|
www.osram.com |
OSRAM
DULUX EL LONGLIFE CLASSIC FACILITY VARIO SENSOR PLUS GLOBE ECONOMY REFLECTOR OSRAM CIRCOLUX EL |
technical
parameters, labelling, packing and recommendation
usage; organized
by product lines |
OSRAM
product catalogue online; product
brochures: files in PDF format; multimedia
Light Catalogue on CD-ROM (ordering by online form) |
feedback
form for questions; Lighting
design software for free download: ECOS, DIALux,
EULUMDAT; light@work - what effects the different
lighting systems create (can use 360° panoramic view) |
FAQ
section; there is
no link to bulgarian site |
compared with replacement ordinary
light bulbs: calculated the savings in euro for assumed period of use of CFL
at electricity price ˆ 0.13/kWh; offering with a long-term guarantee of 5 or 10 years |
|
Web site * |
Brand name of CFL**
|
Product information |
e-Catalogue |
Online tools and software on the site |
Site condition of
customer poinview
|
Advantage of CFL
|
|
www.osram.bg |
OSRAM
DULUX EL |
hyperlink to www.osram.com |
hyperlink to www.osram.com |
|
section,
accessible only for registered clients; lack of useful customer information in bulgarian
language |
presentment of CFL is oriented to customers in global scale, not to local
customers |
|
www.lighting.philips.com Philips Lighting – global light site |
AMBIANCE AMBIANCE
PRO PL E-T PRO PL E-C
PRO PL E-U PL Ecotone Economy SL-E PRO |
technical
parameters, labelling, packing and recommendation
usage; organized
by product lines and customer segments |
online
product catalogues, organized by regions and customer segments; product
brochures: files in PDF format |
Philips
Lighting Forums; Philips
Lighting Feedback - feedback form for questions; Lighting your
home - online
simulation tool for viewing and comparison of selected lighting solutions for
the interior; lighting
application software: DIALux, CalcuLux
and Database |
FAQ
section; there is
link to bulgarian site |
Philips Energy online calculator – can calculate your savings; examples
of use of CFL in different hotel positions and calculated savings per year
per lamp at electricity price ˆ 0.11/kWh; |
|
www.eur.lighting.philips.com/bgr_bg/ Philips Lighting Europe – Bulgaria |
|
technical
parameters, labelling, packing and recommendation
usage; organized
by product lines |
hyperlink to online product catalogue in english http://pc.lamping.info/pc01/UKindex.html |
lighting
application software: DIALux, CalcuLux
and Database |
some sections have not content in bulgarian
language; the impression
from site is for unfinished
state |
not highlighted |
|
* Sites reached between November 2002 and March 2004 **GFL – compact fluorescent lamp, integrally ballasted, 220 V, standard
E27 (Edison) socket. |
||||||
Table 3. Product information and customer support on global and local corporate’s sites (the illustration of case study-1).
|
Web site ** |
Type |
Price for 1 set of devices |
Monta-ge price |
Consuma-tive charge for 1 year |
Subscip-tion fee for 1 year |
Invoice fee for 1 month |
Guarantee period [years] |
Contract period [years] |
Standart |
|
|
Cash payment |
Installment
payment |
|||||||||
|
www.brunata.bg |
evaporaton |
17.50 |
18.50 |
3 |
0.5 |
6 |
1 |
|
|
BDS-EN
835; EN 215 |
|
www.brunata.bg |
electronic |
29.50 |
31.50 |
3 |
|
6 |
1 |
|
|
BDS-EN
835; EN 215 |
|
www.pmusofia.com |
evaporaton |
18.75 |
20.40 |
|
|
2 for each
set |
|
|
|
DIN reg.N 063/94G |
|
www.pmusofia.com |
electronic |
29.25 |
33.50 |
|
|
2 for each
set |
|
|
|
DIN reg.N 063/94G |
|
www.nelbo.com |
electronic
I |
30 |
36
| 39 |
no |
|
3 for each
set |
|
allocator 10 ventil 2 |
|
DIN ISO 9001 |
|
www.nelbo.com |
electronic
II |
35 |
45
| 48 |
no |
|
3 for each
set |
|
allocator 10 ventil 2 |
|
DIN EN
834 |
|
http://www.techno-link.com/clients/elveko/ |
evaporaton |
21,50 |
23 |
|
|
2.1 for each
set |
|
2 |
3 |
ISO 9001; ISO 14001 BDS EN 835 DIN reg. N 165/95E |
|
http://www.techno-link.com/clients/elveko/ |
electronic |
31 |
34 |
|
|
2.1 for each
set |
|
2 |
3 |
ISO 9001; ISO 14001 BDS EN 835 DIN reg. N 165/95E |
|
** Sites reached between June 2002 and March 2004; prices are in
EURO |
||||||||||
Table 4. Product and services information about customers,
found in firm’s sites (the illustration of case study-2).
Technical College - Bourgas,