Eva Brown Age: 20 Major: Economics Hometown: Columbus, Indiana
Kristen Uminski Age: 22 Major: Retail Management Hometown: Carmel, Indiana "Green is the new black."
Kyle Ludwick Age: 21 Major: Finance Hometown: South Bend, Indiana "I love marketing."
Kai Yang Age: 21 Major: Selling & Sales Management Hometown: Taipei, Taiwan
Zach Bilger Age: 21 Major: Selling & Sales Management Hometown: Fort Wayne, Indiana
Welcome to our site! To benefit the environment and energy consumers in rural Indiana, we have created a marketing plan to promote the usage of home appliances that have been given the Energy Star seal. According to its website, Energy Star is a government-backed program helping businesses and individuals protect the environment through superior energy efficiency. The Energy Star label is put onto appliances that have met strict requirements for energy efficiency. Our surveys tell us that most students and future homeowners are unaware that Energy Star products exist. Our target market is homeowners or future homeowners in rural Indiana between the ages of 18 and 35. Our goal is educate these consumers and build their awareness of this option in order to decrease our state’s energy consumption in the future. We plan to do this through a combination of online videos, advertisements, and advertising on our own website. We will develop an interactive website that allows consumers to compare their current energy consumption to the savings an Energy Star appliance brings. Our primary marketing objective is increase the market share of Energy Star appliances by 4% within the first year in the state of Indiana. Our other goals for the first year include reducing energy consumption in Indiana residences by 5% and increasing the number of people familiar with the Energy Star seal by 25%.
Market Description: Energy Star’s market for appliance products mainly consists of a wide population of homeowners and renters of apartments and houses living in the United States. These people greatly range in geographic location, age, gender, race, income, and social class. The consumers Energy Star targets are avid users of appliances needed for day-to-day life. Created by the U.S. Environmental Protection Agency and the U.S. Department of Energy, Energy Star guides shoppers in buying choices that will not only save them money, but also help them in contributing to save our environment. Any appliance product that passes Energy Star’s test and is deemed energy efficient, will have their logo placed on the product as a seal of approval which customers will be able to identify. While these products may be more costly to produce and could present a higher price tag to customers, they will save the owner a significant amount of money by reducing their monthly energy bill. Besides being a more cost-effective choice, Energy Star approved products also reduce greenhouse gas emissions and help ease the burden of providing enough power for the growing needs of the nation.
Product Review: Energy Star approved appliance products consist of refrigerators and freezers, clothes washers, dishwashers, dehumidifiers, air condition units, room air cleaners, and battery chargers. These products have to meet strict guidelines established by the Environmental Protection Agency and the U.S. Department of Energy in order to qualify. On average, using Energy Star appliances in the home can save households 10-50% less energy than other same type models would consume. By purchasing these products and becoming more energy efficient, households can save up to one third on their monthly energy bill.
Competitive Review: Energy Star is a non-profit program implemented by the U.S. government to care for the environment and to help reduce the rising energy consumption of the nation. Therefore, no direct competitors exist for the program itself. However, certain models in the same appliance product category that do not qualify for the Energy Star seal and most likely are manufactured by the same brand can still pose a threat. These other models could potentially attract the customer by promoting more features or lower pricing.
Distribution Review: Energy Star products are mostly distributed to and carried by a network of various retailers that sell common household appliances. Some of the more prominent retailers are Best Buy, Walmart, Sams Club, Costco, Sears, and Lowes. While Energy Star does not actually produce or distribute the products approved, major channel components that are utilized by the product manufacturers include: • Distribution centers • Storage facilities • Trucking facilities • Railway terminals
Overview Service Concepts has many strengths that are a solid base to building the company in the growing environmentally conscious market. The company will strive to build relationships with customers while competing in an intense market. The major trend of “going green” is one of the huge opportunities to help move the computer industry into using environmentally savvy products. The current economic situation of the United States is a threat the company will have to cope with as well. Overall, Service Concepts has an extremely solid company and can continue progress with continuous growth. Below displays and discusses the strengths, weaknesses, opportunities, and threats of Service Concepts in more detail. Strengths: • Intimate business setting • Increasing Growth • Cooperatives with companies • Environmental Benefits Opportunities: • Trend towards renewable energy • Increasing demand for energy
Weaknesses: • Dependence on limited clientele • Intense Competition Threats: • U.S. Economic Recession • Environmental Laws and Regulations (Datamonitor, 2008).
Intimate Business Setting The smaller business structure of Service Concepts LLC offers the ability to build more personal relationships with customers. The size of the company offers the flexibility to quickly make changes to better meet clients needs. “Service Concepts provides negotiated terms that utilities may enjoy, tracks sales and monitors vendor performance on a regular basis to ensure high quality service and customer care relationships. Best practices, sales and product training and regular group forums are convened to take advantage of the experience of others” (“About Us”, 2008). These strides to offer superior customer service allow Service Concepts to build valuable customer relationships. So the unique company structure allows Service Concepts build a personal experience for clients. Increasing Growth Since the company began in 1999, they have continued to grow. “Aquisition of a similar organization formed by utilities in western states led to the expansion and current service to over 250 rural utilties in 32 states” (“About Us”, 2008). With the constant developments in the company, there is a huge opportunity for continued success. As the success of the comanpany continues, the size will also increase. Introduction of new information and products will help Service Concepts offer the newest products to customers. Providing information about Energy Star rated appliances will help the company expand into this additional energy saving market. Cooperatives with Companies Having these relationships with other companies helps Service Concepts continue to grow its market share. One cooperative is with Nova Information Systems, allowing convient payment options(“About Us”, 2008). Having these partnerships offers special capabilities not only for Service Concepts, but the services Service Concepts can offer their clients. These unique offerings are a differentiating factor that can help the copmany separate from competition. They can strengthen a partnership with the U.S. Environmental Protection Agency (EPA) and U.S. Department of Energy (DOE) in order to provide information and build awareness about Energy Star appliances. Environmental Benefits Due to the current market trends, offering environmentally friendly products is a huge benefit for any company. Offering eco-savvy products and renewable energy not only has benefits to the company but it also helps the environment. The environmental products that the company offers can benefit clients through tax breaks, rebates, and energy savings. These rebates and tax breaks are also directly applicable to Energy Star appliances.
Dependence on Limited Clientele The energy industry is dominated by a segment of large utility providers. For continued growth, Service Concepts needs to continue to obtain more rural clients and consider building profitable relationships with non-rural customers. This could be difficult because many of these large utility companies are under contracts and have done business with their current clients for years. So it could be challenging obtaining these new accounts. Intense Competition As noted before, the energy industry is often dominated by many large suppliers. In each area there is a prominent energy supplier and it will be difficult to obtain new clients and compete with these large companies. Therefore it will be a struggle for Service Concepts to maintain satisfactory customer relationships while trying to expand to new, larger markets. Also, since the main focus is on rural areas, extensive research must be done when trying to obtain these new customers.
Trend Towards Renewable Energy The increase of environmental regulations and the need to reduce pollution is influencing the popularity of renewable energy. The green services and products that Service Concepts offers are a great way to try to have clients transform to use renewable energy. Even though the trend is new, the idea will gain awareness and this is an opportunity for Service Concepts to strive in this market niche. By including Energy Star in their education energy information, clients can build their knowledge about Energy Star and better understand the advantages of these products. Increasing Demand for Energy The United States has an increased need for energy. So the ability to provide energy to rural and expanding markets is a great advantage to Service Concepts. Clients will have a constant demand for energy and new and improved energy saving technologies. So as long as Service Concepts strives to stay current, opportunities are endless.
U.S. Economic Recession According to the U.S. Department of Labor, the unemployment rate has reached 6.5%; this is well above the ideal rate. This combined with the current downturn of the stock market and consumer confidence has put the economy under a recessional state. The negative economic situation of the U.S. can put stress on Service Concepts for obtaining clients and revenues. Survival of any copmany during poor economic times is difficult ("U.S. Department," 2008). Environmental Laws and Regulations The current developments in conducting business in environmentally sound practices has made companies aware of their carbon footprint and willing to take actions to reduce their impact on the environment. Along with these companies, many government agencies such as the Environmental Protection Agency have introduced legislation limiting business practices and regulating pollution and waste issues. The creation of these new laws limiting pollution offers Sevice Concepts a chance to help residents reduce their energy consumption. The use of Energy Star products is a way to help reduce energy consumption.
First Year Objectives: Because we are aiming to increase product knowledge and awareness, our first year objective is to increase Energy Star appliances' market share by 4% market share. Our other first year objectives include: reducing energy consumption in Indiana residences by 5% and increasing the number of people familiar with the Energy Star seal by 25%. Second Year Objective: Our second year objectives are to achieve a 5% Indiana market share, reduce energy consumption in Indiana residences by 7%, and increasing overall awareness of Energy Star by an additional 20%. Issues: In relation to product awareness, our largest issue lies in positioning and marketing message. We will invest strongly in marketing to increase overall product knowledge and awareness regarding the importance and convenience of energy efficient appliances. We must measure consumer responses to our marketing scheme and be able to adjust our positioning properly over time.
Our promotion of the Energy Star label will begin in February. The following are the summaries of the action programs that we will use during the first six months of next year to achieve our final goals. January: In addition to performing our own primary research, we will be gathering information from secondary sources and attending Energy Star alliance trade shows to prepare every angle of our advertising campaign. We will begin designing the website and preparing our advertising messages. February: We will launch a largescale advertising campaign using a combination of print, radio, and internet advertising. We will target homeowners between the ages of 18-35 in the rural Indiana market we serve. The campaign will illustrate how Energy Star appliances are environmentally friendly and cost effective, and it will begin building positive brand relationships. March: After its initial purpose of brand awareness, our advertising will serve to direct consumers to our website. Our website is an imporant resource, giving informaton about the major brands that carry Energy Star appliances (LG, Samsung, GE, etc). It will contain a spending calculator where energy consumers can calculate their savings from using Energy Star appliances over the lifetime of the machine. April: We will hold personal interviews with graduated college students who have bought their first Energy Star appliances. We will interview students with diverse ethnic and socio-economic backgrounds. We will then put these interviews together into lighthearted and educational video aimed at connecting young people with the Energy Star brand. We will post this video on You Tube, Yahoo!, and several other sites frequented by our target age group. May: We plan to launch our door-to-door personal selling campaign. Here, qualified individuals will explain to homeowners the benefits of owning an Energy Star appliance. The purpose of the campaign will be to reach rural citizens unaffected by regular electronic advertising channels. June: We will send out a direct mail surveys to our target market, both to those who own and to those who have not yet purchased Energy Star appliances. The survey will measure brand awareness and the effectiveness of the initial advertising campaign.
Pricing Strategy
Product Strategy
Positioning
Positioning for Service Concepts will focus on long term price differentiation. We will educate consumers about the long term savings gained from purchasing Energy Star appliances. Our goal is that with the increased awareness of Energy Star products, consumers and first time buyers of home appliances will choose Energy Star over the competition.
Since Service Concepts does not directly manufacture Energy Star appliances we would not have a direct product strategy. Our strategy will be an indirect one: providing information on these products and where they can be purchased. With each main product category, including refridgerators, freezers, dishwashers, clothes washers, and dryers; we will provide energy savings information, pricing information, videos, and personal household audits. These features will be located on our website and other educational interfaces.
Service Concepts is not a direct retailer of Energy Star appliances, therefore pricing strategy will be in the hands of retailers that sell these products. We will provide our clients information on where to purchase these products and what rebates and tax breaks are avaliable but specific pricing is up to the discretion of the final retailer. For refridgerators, the pricing ranges from $700-$8000 depending on size and model features. Washing machine prices are $450-$3500. Dishwasher pricing ranges from $250-$1600. Air conditioners are $170-$400 and finally, televisions can be priced anywhere from $150-$7000. As with all appliances, pricing ranges due to differentiation in brands and features of the product. So our pricing strategy will focus more on the rebates, tax breaks, and energy savings that clients will receive by using Energy Star. As noted in the article, Appliances can have big appetites, the average American homeowner spends about $1900 a year on energy (Brent, 2007). With the added savings of Energy Star appliances, homeowners can greatly reduce this number. An Energy Star refrigerator can save between $120 to $150 per year (McLaren 2008). This savings included with other savings from Energy Star appliances can drastically reduce a households consumption of energy.
Service Concepts strategy is to build consumer awareness of Energy Star products. Through a survey that we conducted, we found that majority of people surveyed were unfamiliar with Energy Star. Therefore, we think it is imperative to make consumers aware of the benefits on Energy Star. We will be targeting 18-35 year old homeowners or future homeowners. We hope to build our target market’s knowledge of Energy Star and influence the purchases of these appliances. We will reach these consumers through direct mailers, features on our website, and Energy Star audits. Our ambition is to have our clients use Energy Star in order to help reduce engery costs and reduce the negative impact on our environment.
Distribution Strategy Our main channel strategy is to inform our clients through direct mailers, educational information on our website, and personal household audits. We strive to build awareness and increase Energy Star appliance purchases.
Marketing Communications Strategy Our main marketing focus is to build awareness and knowledge of Energy Star. This will be done through a variety of strategies of direct mailers, educational information on the website, and Energy Star household audits. We begin the educational process of Energy Star products by a direct mailer to all of our current clients. This mailer will include an explanation on what Energy Star is, the benefits, how it can directly help save energy and money, and direct clients to the website for further information. The features on our website will include an Energy Star savings calculator, locator on where to purchase Energy Star appliances, rebate and tax break information, additional links, and an informational video and booklet. The Energy Star savings calculator will allow homeowners to see the savings that they can personally obtain by using Energy Star appliances. This will offer them the ability to see the savings for their personal energy bill. This will be similar to Service Concept’s current compact fluorescent payback calculator on the web page. The rebate and tax break information will be specifically catered to the individuals residential area. This will allow the customer to see exactly what companies in their area offer rebates when purchasing Energy Star products and if their local and state government has any tax benefits offered. Also, there will be links to the Energy Star website and U.S. Department of Energy’s website since these will offer additional information about Energy Star. Finally, in Service Concept’s Energy Education section we will provide an Energy Star booklet and video. These tools will continue to educate our clients and build awareness of Energy Star. Finally, we will offer the ability for clients to have a sales consultant come to their residence and conduct a personal Energy Star saving audit. This audit will allow the individual to personally see the savings that they could obtain by using Energy Star. Additionally, this audit will be personalized to the homeowner, offering a opportunity for these individuals to convert to Energy Star appliances.
Marketing Research Research has been conducted on our clients through primary and secondary means. We did a survey to obtain valuable input about Energy Star and individual’s views on using these types of appliances. We also have build a solid understanding of our customers through our knowledge of our target market and the relationships that we have built. Additionally, we have gathered extensive information about Energy Star appliances to product the most current and thourough education on these products. Marketing Organization Service Concepts chief executive officer is Steve Thrash. He oversees the operations of the company and strategic partnerships. He is staffed by a chief operating officer, national accounts manager, office manager, and sales consultant; Rob Kirkpatrick, Becki Cronin, Marsha Cassels, and Jim Otto.
Through extensive secondary research, our team has reviewed the promotional ventures already undertaken by Service Concepts, LLC., Energy Star, and other companies to promote responsible energy consumption. In 2007, Energy Star ran several 30 second public service announcements targeted toward both children and adults. For example, “Horton Hears a Who”, a campaign based on the popular Dr. Seuss story, was directed toward young children. Energy Star’s “Change the Light Change the World” campaign is eight years running. This campaign is directed toward adult consumers, asking them to change the light bulbs in their homes to compact fluorescent light bulbs (CFL’s). Service Concepts, LLC. themselves have promoted the Energy Star seal through their website, explaining to consumers the benefits of Energy Star light bulbs. In addition, individual brands (LG, Whirlpool, GE, etc.) run their own promotion targeted toward specific products in their own individual product lines. We also performed our own survey of students here at Purdue University that are nearing graduation. Only 20 out of 50 of the students surveyed recognized the name Energy Star, and of those 20, approximately 40% knew what the seal was used for. As a team, we decided that the promotions currently in place were not reaching the potential homeowners here in West Lafayette. We decided to target students and young adults, ages 18-35 that are or will soon become homeowners here in Indiana. After we made this decision, we held a focus group of fifteen students. Most of the feedback we received suggested online promotions using YouTube, Yahoo!, or other venues popular with college students.
(2008). Service Concepts. About Us. Retrieved November 30, 2008, from: http://www.serviceconcepts.coop/pages/about-us/. (2008). Service Concepts. Energy Education. Retrieved December 7, 2008, from: http://www.serviceconcepts.coop/products/energy-education/. Brent, P. (2007, April 21). Appliances can have big appetites: Fridges, freezers and dishwashers should be put on an Energy Star diet. The Toronto Star, V07. Retrieved from LexisNexis Academic database. Datamonitor. (2008, March 25). Duke Energy Corporation: Company Profile. Retrieved December 1, 2008, from Business Source Premier database. Energy Star [Appliances]. (n.d.). Retrieved December 4, 2008, from http://www.energystar.gov/index.cfm?c=appliances.pr_appliances. Energy Star [National Campaigns]. (n.d.). Retrieved December 7, 2008, from http://www.energystar.gov/index.cfm?c=promotions.pt_national_promotion. McLaren, D. (2008, October 20). How smart is your kitchen?; From calculating energy usage to figuring out government rebates, consumers get a mental workout. The Globe and Mail, E8. Retrieved from LexisNexis Academic database. U.S. Department of Labor. (2008). Labor Force Statistics from the Current Population Survey Unemployment. Unemployment Rate. Retrieved November 20, 2008, from: https://blackboard.purdue.edu/webct/urw/lc8056011.tp0/cobaltMainFrame.dowebct.
all rights reserved copyright 2008 Tel: 123-4567-890
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