TAKING AMBIENT LIGHTING LEDS TO MARKET:
CONSUMER PREFERENCES
A Real-World Pricing Quasi-Experiment & LCDC
Experiment
Prese...
Why is this study different
2
 EM&V and program teams worked together
 Comprehensive market trial: stated and revealed p...
Research Questions
3
 Will consumers accept ambient-lighting LEDs?
 What are the barriers to LED sales?
 How sensitive ...
Study Components
4
Method Sample Size Objectives
Pricing Trial Quasi-
Experiment
117 Stores from 3 Big-
Box Chains
 Est P...
Presentation Name 5
Pricing Trial
IEPEC Chicago 2013
Taking Ambient Lighting LEDs to Market
IEPEC Chicago 2013
IEPEC Chicago 2013
Price Effects
8
 Average weekly sales by store-model combinations were the
observations (together w/incentive & trial pri...
Slide 8
AD2 Condence this slide with the next.
Anne Dougherty, 8/8/2013
Pricing Trial: Price Effects by Lamp Type and Retailer (log Price &
Sales)
9
IEPEC Chicago 2013
Taking Ambient Lighting LE...
Non-Price Effects
10
 Estimated with mixed effects or multi-level model
 We saw a very strong retailer effect (net of ot...
LCDC Study
11
IEPEC Chicago 2013
Taking Ambient Lighting LEDs to Market
LCDC Methods
12
Goals of LCDC study
 Learn consumer-stated preferences for LED vs other lighting types
 What is the basi...
LCDC Methods & Modeling
13
 71 of 252 A-Line respondents from in-home trial (experienced)
 69 of 224 Reflector responden...
Sample “Store” or “Shopping Occasion” (Another 4 on 2nd page)
14
IEPEC Chicago 2013
Taking Ambient Lighting LEDs to Market
LCDC & Interviews: Overall consumer Preferences
15
 Consumers treat A-Lines and Reflectors differently
 Price is importa...
LCDC: A-Line Purchaser Groups
16
IEPEC Chicago 2013
Taking Ambient Lighting LEDs to Market
17
LCDC: Reflector Purchaser Groups
IEPEC Chicago 2013
Taking Ambient Lighting LEDs to Market
Summary of Study Findings
18
 Consumers treat A-Lines and Reflectors differently
 At this point consumers prefer Reflect...
Contact Information:
Katherine Randazzo
Director of Advanced Analytics
760 729 8889 tel
760 729 8888 fax
krandazzo@opinion...
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IEPEC_Taking Ambient LEDs to Market_Randazzo

  1. 1. TAKING AMBIENT LIGHTING LEDS TO MARKET: CONSUMER PREFERENCES A Real-World Pricing Quasi-Experiment & LCDC Experiment Presented at the International Energy Program Evaluation Conference – Chicago 2013 Dr. Katherine V. Randazzo & Anne Dougherty, Opinion Dynamics George Boomer, StatWizards LLC Richard Greenburg & Brett Close, Southern California Edison
  2. 2. Why is this study different 2  EM&V and program teams worked together  Comprehensive market trial: stated and revealed preferences  Quantitative and qualitative  Consumer focused IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  3. 3. Research Questions 3  Will consumers accept ambient-lighting LEDs?  What are the barriers to LED sales?  How sensitive are consumers to price?  What are price elasticities?  What are the price limits?  Given 2 major types of LEDs, Are there differences in consumer attitudes between A-Line and Reflector lamps?  What non-price factors drive sales?  What are the consumer segments related to LED acceptance? IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  4. 4. Study Components 4 Method Sample Size Objectives Pricing Trial Quasi- Experiment 117 Stores from 3 Big- Box Chains  Est Price Elasticities  ID effects of: Income, Retailer, Store Location Focus Groups 2 groups  General impressions of consumer interest in LEDs & features  Test LCDC instrument In-Home Lamp Trial 98  See where free lamps were installed  Give consumers LED experience for LCDC In-Depth Interviews 20  Understand consumer preferences Latent Class Discrete Choice Experiment 252 A-Line, 224 Reflector Respondents  ID purchase priorities re attributes  Segment consumers IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  5. 5. Presentation Name 5 Pricing Trial IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  6. 6. IEPEC Chicago 2013
  7. 7. IEPEC Chicago 2013
  8. 8. Price Effects 8  Average weekly sales by store-model combinations were the observations (together w/incentive & trial price, area demos)  Price and sales were logged  Fixed-effects models used for elasticities  For every 1% decrease in price, LED A-line lamp sales increased by 1.14%  For reflectors, an additional 2.12% were sold for every 1% price decrease  These figures are likely the lower bound of what elasticities are in the current market because lamps with higher incentives usually sold their entire quota quickly, then ran out IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market AD2
  9. 9. Slide 8 AD2 Condence this slide with the next. Anne Dougherty, 8/8/2013
  10. 10. Pricing Trial: Price Effects by Lamp Type and Retailer (log Price & Sales) 9 IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  11. 11. Non-Price Effects 10  Estimated with mixed effects or multi-level model  We saw a very strong retailer effect (net of other factors)  At a $10 price, the highest-selling retailer sales were 2.9 times higher than the middle-selling retailer  At a $10 price, in the lowest-selling retailer sales were 43% of sales by the middle-selling retailer  We saw a moderate catchment area income effect  In the highest-income areas, sales were 4.1 times higher than in the lowest-income areas  In the medium income areas, sales were 2.2 times the lowest income areas  There was no effect of central versus remote store locations IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  12. 12. LCDC Study 11 IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  13. 13. LCDC Methods 12 Goals of LCDC study  Learn consumer-stated preferences for LED vs other lighting types  What is the basic acceptance level of ambient lighting LED?  What are the limits of willingness to pay?  What models and characteristics are preferred?  Use this and respondent information to develop segments Preliminaries  We visited retailer outlets to find out  What they were offering  At what prices  What information was presented on packaging IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  14. 14. LCDC Methods & Modeling 13  71 of 252 A-Line respondents from in-home trial (experienced)  69 of 224 Reflector respondents from in-home trial (experienced)  8 Models presented in each of 8 “Stores” (separately for A-lines & Reflectors) allowing choices of which model would be purchased, which least likely to be purchased, including ‘None of the Above’ option  Lamp “Model” characteristics were assigned to produce a balanced and orthogonal design  Incandescents, halogens, and CFLs  Price levels for A-Lines: $1, $5,$10,$15, $20, $30, $50, $75  Price levels for Reflectors: $5, $25, $40, $50, $65, $75, $100  Brand familiarity, Energy Star or not, glare, dimmability, life of lamp were model characteristics  Covariates for consumer characteristics included to support segmentation IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  15. 15. Sample “Store” or “Shopping Occasion” (Another 4 on 2nd page) 14 IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  16. 16. LCDC & Interviews: Overall consumer Preferences 15  Consumers treat A-Lines and Reflectors differently  Price is important to both, but after that:  For A-Lines, drivers are:  Energy savings  Product Type (LED/CFL)  Long-term savings  For Reflectors, drivers are:  Product Type  Type of outlet  Brightness  At this point in the product life cycle, consumers prefer Reflectors  Consumers are distrustful of quality and longevity claims based on experiences with CFLs (based on in-depth interviews & focus groups) IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  17. 17. LCDC: A-Line Purchaser Groups 16 IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  18. 18. 17 LCDC: Reflector Purchaser Groups IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  19. 19. Summary of Study Findings 18  Consumers treat A-Lines and Reflectors differently  At this point consumers prefer Reflectors  Consumers are very price sensitive  Pricing Trial: A-line elasticity: 1.14%  Pricing Trial: Reflector elasticity: 2.12%  Pricing Trial: Prices below $20 produced good sales rates for both types  Pricing Trial: Prices above $40, produced essentially no sales  Pricing Trial: As prices fall, sales increase steeply, especially for Reflectors  LCDC: Consumers willing to pay up to $10, for A-Lines, but no more.  LCDC: Consumers willing to pay up to $30 for Reflectors, but no more  Retailer matters  Consumer neighborhood income level matters IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
  20. 20. Contact Information: Katherine Randazzo Director of Advanced Analytics 760 729 8889 tel 760 729 8888 fax krandazzo@opiniondynamics.com email 3412 Santa Clara Way Carlsbad, CA 92010 19 IEPEC Chicago 2013 Taking Ambient Lighting LEDs to Market
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