Applied Case Analysis: Use of SPADER Approach for a Lighting Case

CASE ANALYSIS using SPADE Approach CONVERTING to ENERGY EFFICIENT LIGHTING Bong De Ungria

Outline: SPADE model shows the way!
Situation
Problem
Alternatives
Decision
Evaluation
Old vs. New Bulbs How to Convert? Which P to Use? Sell on Benefits Setting Milestones

SITUATION A new, efficient product!
Current product (incandescent) is
Cheap (P30)
Short life (6 months)
High power consumption (100 watts)
Low involvement product
No communication needed/ sells by itself
New product (fluorescents) offers advantages in longer life, less consumption but is 4 times the price (P120)

PROBLEM: How to convert incandescent users to CFLs
… .even if they have to spend more initially? is the major one!
Who is my target market?
What do they need?
How to position?
How to introduce?
How to sell?

ALTERNATIVES give choices!
Sell the benefits (Product/ Promo)
Lower price (Price)
Advertise! (Promotions)
Target only the Class A market (Primary Target Market)
Don’t sell CFL’s (Strategic Planning)
Don’t sell incandescents (SWOT)

DECISION is to sell benefits Pros Cons Price Gain from higher revenue per piece Lower income market wont switch quick Product Higher quality Cant stop selling old type of bulbs; Longer replacement periods Place Everyone has access Greater Distribution Challenge Promo Prepare market for better technology products Expensive. Needs Consumer Education Positioning Consumer gets better value

DECISION: Sell energy saving benefits at a higher price to Class ABC Incandescent Energy Savers Initial Cost (Selling Price) 30 120 Monthly Electricity Cost 10 2 No. of Lamps needed in 6 yrs 12 1 Total Cost of Ownership in 6 yrs 960 240 % Savings ---- 75%

DECISION is to sell benefits Incandescent CFL Initial Cost 30 120 Monthly Elec.Cost 10 2 No. of Lamps needed in 6 yrs 12 1 Total Cost in 6 yrs 960 240 % Savings 75%

The decision was implemented -2006

EVALUATION means putting checkpoints for choice!
Specify:
Sales increase of 30% in 1 yr
Number of incandescents sold decreases by 20%
Number of CFLs sold inc

EVALUATION for Philips: Adjust price competitiveness
Price was effectively adjusted from
P 120 to 99 for Philips CFL
To compete better
vs. other CFL brands
P 60 to 75
Vs. incandescents
P 15 to 25

EVALUATION: Adoption was too slow Give away 13 million CFLs to poor!

Summary: Conversion is happening! Plan adjustments made…
Situation
Problem
Alternatives
Decision
Evaluation
Old vs. New Bulbs How to Convert? Which P to Use? Sell on Benefits Setting Milestones Doing Plan B

Applied Case Analysis: Use of SPADER Approach for a Lighting Case

by Remigio Joseph DeUngria on Oct 15, 2009

Accessibility

Categories

Tags

Upload Details

Usage Rights

1 Embed 193

Statistics

Applied Case Analysis: Use of SPADER Approach for a Lighting Case — Presentation Transcript