Discuss about the ‘Take the power back’-Encouraging households to purchase solar panels and home batteries.
Australian household owners are struggling to pay energy network generators and electricity bills in order to keep pace with growing demands for energy (Ha & Janda, 2012). Installing of solar panels and batteries would allow households generate independent type of power generators reducing reliance on electrical energy. Though solar panels have existed in the market, consumer demands have not picked up for the products. The scope of this paper is to provide ways as a consumer psychologist which could create demand for solar panel purchase alongside home batteries for reducing electricity bills and improvise their financial wellbeing.
In order to sell solar panels and batteries, household consumers firstly across major cities in Australia will be targeted. Once major cities in Australia are targeted and their demand can be influenced significantly then suburban areas of the country will be taken into consideration.
Companies that are providing solar panels and batteries for alternate source of power generation have not been able to create a demand for their products. The current problem statement concerns undertaking financial aspects of rising electricity costs to cater to the same.
Overview of literature on topic
Varied literature sources have provided detailed understanding related to consumer behaviour or purchase intentions related to energy efficient product purchases. Literature primarily reflects ways in which consumer behaves once they are provided with a choice of either making purchase related to a product or not. Ha and Janda (2017) evaluates purchase intention of consumers when making choice related to solar panels and batteries. Primarily this literature focuses on evaluation through attitudinal theories for the consideration. Another literature by Gordon et al. (2018) evaluates consumer purchase decision when making undertaking a choice for a valued behaviour. Solar panels with batteries offers valued purchase which consumers need to take into consideration prior to making final decision related to the product. This literature evaluates theories of consumer behaviour such as attitudinal theories, motivational theories and learning theories to ascertain a choice between them.
Theory Evaluation
In the current evaluation of the problem a prominent theories from consumer behaviour can be taken into consideration. Attitudinal theory of model of goal directed behaviour is taken into consideration for understanding related to consumer understanding related to their reaction to particular product. (Refer Appendix 1)
The theory analyses integral role of planned behaviour in accordance to goals compared to behavioral outcomes. Meaning that in this case, installing of solar panel and batteries will ultimately lead consumers to save their financial costs relative to electricity charges that they are currently paying (Gadenne et al., 2011). As per this theory all attitudes, positive or negative anticipated emotions, subjective norms lead into behavioral desire. Perugini and Bagozzi (2001) further stated that marketers nee to influence all these attributes in relation to attitudes, emotions and subjective norms so as to be able to influence a behavioral desire towards purchasing of solar panel and batteries. Perceived behavioral control significantly influences on behavioral desires, as consumers here might not want to switch into solar panel installations from electricity or generator power that they are already making use of. Behavioral desire can lead into behavioral intentions, once a marketer is able to influence behaviour desires then such desires is bound to create an effect on behaviour intentions (Simpson & Clifton, 2015). Frequency of past behaviours further influences behavioral desires, behaviour intention and ultimately behaviour. In this case solar panel and battery installation is not repeated purchasing behaviour therefore in this case frequency of past behaviour is bound to impact future behaviour. But this case is a onetime behaviour that might arise from intention towards saving electricity and energy costs. Current behaviour that consumer undertakes will be an outcome from all influences as well as past behavioral trends that a consumer experiences. Meaning that present behaviour will be an assimilated outcome for all influences that leads to desire for a customer. In this case only desire that can be taken into consideration is that of saving electricity or financial costs. Desire is a stronger predictor as against attitudes as well as subjective norms. Erasmus et. al. (2001) proposes a comprehensive explanation for the model stating that analysing primary desires related to customer segment can help companies into designing products or services that can meet desires or perception of desires. It is an effective consumer decision making model that marketers take into consideration while designing their products according. Apart from identifying goals, the model allows analysis of perception related to analysing desires in customers.
Marketing Strategy 1
Analysing from varied models from literature review, marketing strategy need to be comprehended so as to arrive at a decision relative to products. Currently there are a number of companies that are selling solar panels and batteries across markets in Australia, a brief analysis into competitor’s strategy will allow arriving at an appropriate marketing strategy for this purpose. (Refer Appendix 2 for Marketing Mix). Analysis of Porter’s Five Forces of competition reveals that industry level competition is high, with immense threat from new entrants in the market. (Refer Appendix 3) Suppliers and buyer’s purchasing power being high, companies need to apply competitive based pricing methodologies to promote financial benefits for customers (Ozaki & Sevastyanova, 2011). As the companies within Australia Solar energy sector will be competing extensively, sole criteria that can lead a company to extend its products in the market by evaluation of marketing 7P’s is pricing. Targeting consumers on the basis of affordable prices to install solar panels. This will allow consumers to save costs in their electricity payment as well as while installing their solar panels will allow company to expand its market base. (Refer Appendix 4 for companies competing in Australia). Prices will able to trigger within consumers, whose desires will in turn be motivated to make purchase behaviour towards the product. In this case lower prices will act as factors that trigger desires or consumers. Advantage of competitive pricing strategy will mainly be attracting more number of customers towards the products of the Company. While disadvantages from applying this strategy includes operating at lower costs that market rates that are currently prevalent. Therefore, the Company has to be operative at low costs which would imply lower profits for the Company as well.
Marketing Strategy 2
Companies selling solar panels and batteries can aim at designing marketing strategy relative to Ansoff’s product development strategy. Evaluating the marketing mix of 7 components of the product, it can be clearly understood that product, distribution, people or technology for the product remaining constant, the companies present in the market need to aim at market development for the product category. (Refer Appendix 5 for Ansoff’s matrix). Meaning that market development through promotional efforts has to be undertaken such as through traditional as well as contemporary methods of marketing (Ottman, 2017). While traditional marketing methods includes promoting solar panel benefits across televisions, radio, banner and posters, contemporary approaches includes promoting by means of social media efforts such as Facebook advertisements, Twitter, Instagram and so on. Through educating the market mainly through Facebook regarding the several benefits accruing from solar panels, the company can easily sell its products to customers (Buchanan, Russo & Anderson, 2014). Focus for such promotions will be centered on financial savings and sustainable energy being applied across markets (Frederiks, Stenner & Hobman, 2015). Advantage of applying Ansoff’s market development strategy includes long term scope for several marketers and companies to sell the current product of solar panels and batteries. Disadvantage arising from this strategy primarily includes developing markets for all competitors present and not based on a single company.
Marketing Strategy 3
The third marketing strategy will focus on converting the cash cows for the Company into stars, according to BCG matrix (Chapman, McLellan & Tezuka, 2016). Solar panel and batteries bring about high profits and retention values for companies. They are able to generate immense amounts of incomes for current companies. (Refer Appendix 6 for BCG Matrix). Therefore, companies need to focus on promoting these products such that they develop into becoming stars in the future for the company. According to BCG matrix, companies need to make investments to further promoting of such products which are able to provide and generate returns for the Company. In the current scope of analysis solar panels especially batteries that are able to generate desires amongst consumers for products will create immense scopes for the Company. Once investments such as promotions or other aspects are made into the products, they are able to capture market and generate more amounts of returns for the Companies (Fuller, 2011). Major advantage for this marketing strategy includes that it is able to invest into a product to devise its capabilities for growth. Moreover, once an investment is made and the market growth is attained then the product will keep on generating future returns on the product. However major disadvantage arising from this theory includes incapability where in case the product becomes such that it is not being able to generate returns. In such a case the entire investment that has been made into the product goes into waste.
Recommendation & Conclusion
There are three valid and vital strategies which have been suggested that companies can accommodate. Amongst the three strategies while all of them appear to be feasible for the current company, only one strategy that can be highly applicable is competitive pricing strategy. Offering products at relatively less costs in the market compared to its peers will allow the company to expand its market share and market potential as well. The company according to this strategy needs to adopt the following recommendations as well.
References
Buchanan, K., Russo, R. and Anderson, B., 2014. Feeding back about eco-feedback: How do consumers use and respond to energy monitors?. Energy Policy, 73, pp.138-146.
Chapman, A.J., McLellan, B. and Tezuka, T., 2016. Residential solar PV policy: An analysis of impacts, successes and failures in the Australian case. Renewable energy, 86, pp.1265-1279.
Frederiks, E.R., Stenner, K. and Hobman, E.V., 2015. Household energy use: Applying behavioural economics to understand consumer decision-making and behaviour. Renewable and Sustainable Energy Reviews, 41, pp.1385-1394.
Fuller, R.J., 2011. Solar industrial process heating in Australia–Past and current status. Renewable energy, 36(1), pp.216-221.
Gadenne, D., Sharma, B., Kerr, D. and Smith, T., 2011. The influence of consumers’ environmental beliefs and attitudes on energy saving behaviours. Energy policy, 39(12), pp.7684-7694.
Gordon, R., Dibb, S., Magee, C., Cooper, P. and Waitt, G., 2018. Empirically testing the concept of value-in-behavior and its relevance for social marketing. Journal of Business Research, 82, pp.56-67.
Ha, H.Y. and Janda, S., 2012. Predicting consumer intentions to purchase energy-efficient products. Journal of Consumer Marketing, 29(7), pp.461-469.
Ha, H.Y. and Janda, S., 2017. Predicting Consumer Intentions to Purchase Energy-Efficient Products. In The Customer is NOT Always Right? Marketing Orientationsin a Dynamic Business World (pp. 897-897). Springer, Cham.
Ottman, J., 2017. The new rules of green marketing: Strategies, tools, and inspiration for sustainable branding. Routledge.
Ozaki, R. and Sevastyanova, K., 2011. Going hybrid: An analysis of consumer purchase motivations. Energy Policy, 39(5), pp.2217-2227.
Simpson, G. and Clifton, J., 2015. The emperor and the cowboys: The role of government policy and industry in the adoption of domestic solar microgeneration systems. Energy Policy, 81, pp.141-151
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