The Kohler Case Competition[1]

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This is a competition that Kohler sent out to schools affialated with the American Marketing Association. The goal was to raise awareness of Kohler’s water saving products, host a water saving event sponsored by Kohler, and sell Kohler products at said event. The budget was only $500.

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The Kohler Case Competition[1]

  1. 1. The Penn State University Advisor: Franklin Carter Executive Team: John Cremo Jr., Michelle Germani, Austin Sepulveda 1
  2. 2. Water Issues and Research Many obvious observations like the frequent rainfall and the green grass have been masking a serious problem underground throughout Penn State. Although water use has reduced over the years in State College, other water issues still appear in the community, one being a drought. John Gaudlip, OPP’s Utility System Engineer for the Penn State Water supply reported that all of Penn State wells are lower than normal. In response to this shortage, OPP put another well into operation, which should help meet the University’s demand, but all well levels will have to be closely monitored to ensure that they don’t start pumping air out of the wells. As resources dwindle, Penn State will have to either drill wells deeper or increase the number of wells, both costly procedures. According to Paul Ruskin, Communications/Public Affairs Coordinator for the OPP, for decades some laboratories on campus had plumbing connections which ran water to cool refrigerated areas. This practice essentially left a faucet running for many years and wasted a great deal of water. The practice was tracked down and essentially eliminated. A new acoustic system has been developed to detect and locate leaks early. The Penn State University has put in a significant amount of effort to conserve water within the community. Residential use accounts for 3/4 of all total urban water demand; therefore, in order to make a dramatic difference in preserving water, the Penn State Office of Physical Plant has created several projects for campus buildings that have had successful outcomes. Several buildings have been retrofit since 2003. According to Laura Miller, an Energy Program Engineer of the OPP, in 2003, the first three buildings that were retrofit were Atherton, Porter and Shunk. Low flow fixtures including flush valves for water closets and urinals were installed. Restrooms were refit with water saving faucets, and new showerheads were installed. The annual savings predicted to be about 5,000,000 gallons, and that goal was achieved. From this project, the 2007/2008 savings recorded as $57,500. In 2005, West Halls, one of five University dormitories on campus had been retrofit. The restroom fixtures in those buildings used anywhere from 2 gallons per flush to over 10 and some showerheads were also delivering more than 10 gallons per minute. Faucets were also unrestricted. The retrofits to these buildings were similar to that of the 2003 installments. The new showerheads that were put in were designed to deliver 2.5 gallons per minute, the water closets used 1.6 gallons per flush, and the urinals use 1.0 gallons per flush. The faucets were retrofit to deliver 0.5 gallons per minute. The annual water savings depicted 12,000,000 gallons. Dollars saved in 2007/2008 amounted to $119,000. In 2006, 3 more buildings were redone using the same techniques in the prior scenarios. Over 4,400,000 gallons were avoided and $37,000 in savings occurred in 2007/2008. In 2007, 3 more buildings had estimated water savings of 8,000,000 gallons and $66,000 savings in 2007/2008. Aside from installing water efficient utilities in buildings on campus, the Penn State Office of Physical Plant had made other recent strides toward the conservation of water, according to Paul Ruskin. The OPP is testing a waterless urinal at the physical plant building which has the potential to save the university 40,000 gallons of water per year, about twice the amount of water the average person uses annually. In addition, they are considering installing faucets that turn on only when hands are placed underneath. The manufacturers claim a 60 percent decrease in water usage with this equipment. OPP’s landscapers continue to select plants that are drought resistant, such as sedums, daylilies, liriopes, and euonymous. 2
  3. 3. According to Paul Ruskin, University Officials have decided to join EPA's Sustainability Partnerships Program (SPP) to further their efforts in conservation. As part of the event, audience members will be able to take the sustainability pledge, sponsored by Penn State's Environmental Stewardship Office and the Take Charge Committee. Those who sign up will pledge to change three behaviors over the week in order to reduce their impact on the environment. According to John Gaudlip, Utility Systems Engineer for the OPP, Penn State meters all water uses on their system. The data collected from these recordings over the last couple of years indicates that although the population has increased slightly, the water use has reduced (Please see exhibit 1 and 2) The OPP thinks that this is the result at least in part to fixture replacement. Target Markets and Segments It is recommended that Kohler focus deriving demand in both the business to business market, the homeowners market, and as well as the students (generation Y market) that attend the Penn State University in State College, Pennsylvania. To supplement Kohler’s efforts in developing new business opportunities in the business to business market, a portion of the campaign will be directed towards consumers to provide additional incentives for businesses to become Kohler customers. In the business to business market, a target that was identified is off campus housing companies for students. Penn State is one of the largest universities in the country and the University Park campus exceeds over 44,118 students (Collegeboard.com) most of which live off campus. Throughout State College there are 57 off campus housing companies listed with Penn State (OffcampusLiving.com) and the major companies have apartment buildings which allow them to accommodate large amounts of students in a single location. One of these companies is A.W. & Sons. A.W. & Sons has 420 units that provide housing to over 1,300 students. According to the EPA water savings calculator (Water Sense) products, over the course of 1 year they would save $33,000. (See Exhibit 3). Acquiring a contract with A.W. & Sons and other off campus housing companies would be a very profitable venture for Kohler and a wise investment for their customers. Another lucrative example within the business to business market is the Penn State University itself. The university has over 900 buildings (psu.edu) and most of these buildings do not utilize water conserving products and therefore are not taking advantage of the cost-savings and environmental benefits that Kohler products could provide. It is recommended that Kohler take action now before contracts are put into place to correct these problems. Other notable opportunities that currently exist for Kohler in the State College market in terms of business to business sales is the State College Area YMCA, the State College Area School District, and especially the variety of hotels (The Nittany Lion Inn, The Penn Stater, etc). The second target market that Kohler should direct its attention to is the homeowners market. As of July 2008, there were 39,419 residents of State College, PA according to city-data.com. When segmenting this market, it is recommended that Kohler focus on reaching the Generation x homeowners and “savers” segment. The members of “generation x” are more inclined to purchase water-saving 3
  4. 4. products because of their desire to cut costs wherever possible. Advertising Kohler products and emphasizing their cost-saving performance over the appliances that the homeowner may already have installed in his or her home is the primary focus when marketing to these individuals. Generation X individuals are people who care about the environment and are more economically careful then Generation Y. (Armstrong pg. 70) The “savers” segment, are the middle and middle-lower income class (median income in the US according to the 2008 US Census was $50,233), who are concerned with saving money on bills and may be willing to purchase an upper-end product for future savings. The third target market is the students at Penn State (Generation Y) because they are future homeowners. It is recommended to Kohler to invest in this segment now because of their potential to become lifetime customers for Kohler. Kohler meets this segment’s desire to be a part of the green revolution, and therefore has a great opportunity to capture a significant portion of this segment’s future purchasers. According to earnmydegree.com, college graduates will make 1.5 times more compared to those with only high school diplomas, thus meaning this segment will be able to afford Kohler’s upper end products. Integrated Marketing Communications Plan The executive team will go through the Penn State Marketing Association, one of the suggested partners for Kohler to partner with, to assist in the execution all public relations necessary to promote the event. The message behind the campaign will be to increase awareness for water conservation, with the goal of creating a need for consumers to save water. This message will also be supplemented with the idea that saving water will also save consumers money on their monthly bills, and then providing them with ideas of how to attain these savings. Here, not only will Kohler be the answer to the environment’s problem, but also the solution to homeowners and businesses saving money. The public relation deliverables that will be executed in this campaign will be press releases, Letters to Editor, Facebook.com, weekly student news articles in all dormitories on campus (Stall Stories), and announcements through the student radio station. The Collegian and Centre Daily Times, the two dominant newspapers in Centre Country, will be used for press releases and Letters to the Editor. For Facebook.com, an event will be created to advertise and formally invite students and citizens of State College to the Save Water America event. This is where having partnerships with all the different student will be helpful because those members can invite their friends on facebook.com to the event. By having the executive team, PSMA’s 400 members, and other recommended partners post a status update for the event throughout the days listed in the campaign on their facebook.com accounts, promotion for the event will be constant and be frequently seen by all of their friends. Free radio announcements on WPSU radio will reach students and faculty regularly to inform them of the event. Stall story postings in dormitory bathrooms will address the issue of water usage in a location that water is often wasted. Postings in on-campus gyms and classrooms will not only reach the students, but the faculty as well. By physically speaking in the classroom, the speaker will be able to directly inform the instructor and students of the event and its purpose. 4
  5. 5. The direct marketing deliverables that will be executed in this campaign will be direct mail, e-mail marketing and door-to-door leaflet marketing. The direct mail will be targeted towards businesses that were suggested as primary targets in the business to business market. The e-mail marketing campaign will be directed towards the 787 students groups (psu.edu) at Penn State’s University Park. The door-to- door flyering will be targeting large residential neighborhoods and the car flyers will be executed at Wal- Marts, Giant Food Stores, Wegman’s, and downtown parking lots in State College to target the vast majority of different consumer groups in State College (Please see exhibit 4 for images of the brochures). It is anticipated that word-of-mouth marketing will be generated as a result of these efforts. The advertising deliverables that will be executed in this campaign include lawn signs and facebook.com. Lawn signs will be strategically placed in neighborhoods that fall into our target market of middle-class and lower middle class consumers (Please see exhibit 5 for an image of the lawn sign/flyer). In addition, these signs will also be placed in high volume traffic areas. The integrated marketing communication plan has 12,120 marketing/advertising deliverables with the goal of a ten percent success rate. However, due the UNICEF’s water walk that is going to be heavily marketed by the Penn State Marketing Association through a separate budget and marketing campaign, the event plans on having over 1,000 participants (of all ages), which of whom will see the Kohler tent and their displays. (Please see exhibit 6 for the IMC schedule). To induce people to go to SaveWaterAmerica.com/PennState, the website address will be included on all marketing/advertising deliverables and will be included in all announcements (Radio, press releases, classroom announcements, Facebook.com status updates, Facebook.com event page). Event Details Date: March 21, 2010 (First day of World Water Week) Time: 1:00 PM-4:00 PM Location: HUB Lawn, University Park Campus Partnerships Our water event will be amplified by the numerous partnerships that we will have. Our partnerships will help us increase awareness and generate more sales leads in an attempt to increase purchases at the Save Water America event and at SaveWaterAmerica.com/PennState. The key partnership for the integrated marketing communications plan will be the Penn State Marketing Association. PSMA is the second largest student run organization at Penn State with over 400 members. A partnership with PSMA will allow us to get our mission out to the entire campus with the help of advertising and non- 5
  6. 6. profit divisions. PSMA’s massive size and student enrollment would allow for advertising methods unattainable with a small group such as door to door marketing. The other key partnership will be with the UNICEF’s The Tap Project. The Tap Project’s mission is to work till the day that zero children in the world are dying from water-related diseases. The week of March 21st till the 28th is the World Water Week, and the Tap Project will be executing a majority of its fundraising events. One of the fundraising events is the Water Walk, which will be held on Penn State’s campus on March 21st. It is recommended to Kohler to become a partner with The Tap Project and support this event, preferably with a percentage of the purchases made at the Save Water America event going towards The Tap Project’s fund Habitat for Humanity, one of Kohler’s corporate partners, also has a large presence on campus as a Penn State student organization. A partnership with this group would provide more credibility to our project because of the popularity of Habitat for Humanity. Their well known name would attract more people to the event, which should increase brand awareness for Kohler and generate potential sales or sales leads. Our event would be in conjunction with a Water Walk which would appeal to Habitat for Humanity’s philanthropic initiative. It is recommended to be partnered with the student film organization. This organization is always looking for new projects and filming our event and editing it to appear as a documentary would present them with a unique challenge. The executive team has spoken to the Student Film Organization and this is something they are interested in doing. The film could then be posted on Kohler’s website or turned into a commercial showing the impact of Kohler on the community. Partnering with ecological clubs such as Sustainability Coalition, Society for Human Resources, Environmental Society, Sierra, and other similar clubs would help us raise awareness and provide us with the man power necessary to bring more people to the event. These clubs see the value in Kohler’s water efficient products and realize the impact it has on the environment. The State College Borough Water Authority has the same goal and message of water conservation and sustainability as Kohler does. A partnership with them would not only provide credibility towards Kohler’s mission to conserve water, but they would also be helpful in reaching out to the entire community of State College through their website, board meetings, and newsletters. This then would attract a greater number of people to the event and not solely Penn State students. This group of people would be more likely to purchase Kohler’s environmental friendly products at the event. For entertainment purposes at the event, Penn State Sports Properties is recommended. PSSP is responsible for all corporate sponsorships on Penn State’s campus, which would provide Kohler and the executive team access to free Pepsi products and Gatorade products which could be given to participants of the Water Walk and those attending the Save Water America Event. In addition, PSSP will also provide an opportunity for the Penn State athletes to get involved and be present at the event. 6
  7. 7. Budget Marketing Deliverables Quantity Cost Brochures 5,000 $176.75 Flyers 7,000 $221.08 Lawn Signs 100 $85.00 Envelopes 20 $2.00 Stamps 20 $8.80 Total 12,120 $493.63 Works cited "KOHLER Water Conservation: Bathroom Faucets: Residential Products: Water-Saving Products." Kohler Kitchen and Bath Fixtures and Faucets. Web. 24 Jan. 2010. <http://www.us.kohler.com/savewater/products/residential/faucets.htm>. "KOHLER Water Conservation: High-Efficiency Toilets: Residential Products: Water-Saving Products." Kohler Kitchen and Bath Fixtures and Faucets. Web. 24 Jan. 2010. <http://www.us.kohler.com/savewater/products/residential/toilets.htm>. "KOHLER Water Conservation: Showerheads and Handshowers: Residential Products: Water-Saving Products." Kohler Kitchen and Bath Fixtures and Faucets. Web. 25 Jan. 2010. <http://www.us.kohler.com/savewater/products/residential/showerheads.htm>. Marketing: An Introduction. Pearson Custom/Prentice-Hall, 2007. Print. "Penn State University Park." http://collegesearch.collegeboard.com/search/CollegeDetail.jsp?collegeId=4136&type=qfs&skey=penn state "Penn State University Off-Campus Living." StudentAffairs.psu.edu. Web. 25 Jan. 2010. <http://www.sa.psu.edu/ocl/realtors.asp>. Ruskin, Paul D., John W. Gaudlip, and Laura J. Miller. "PSU's efforts toward water conservation." E-mail interview. 13 Jan. 2010. "Unicef." http://www.feelgoodfastfood.org/wordpress/wp- content/uploads/2009/03/tap_project_unicef_logo.jpg "UP -West Halls PSU OPP Energy." Welcome PSU OPP Energy. Web. 24 Jan. 2010. <http://energy.opp.psu.edu/projects/gesp/gesp-projects/copy5_of_hazelton/>. "WaterSense Water Savings Calculator | WaterSense | US EPA." U.S. Environmental Protection Agency. Web. 25 Jan. 2010. <http://www.epa.gov/watersense/calculate_your_water_savings.html>. 7
  8. 8. Exhibit 1: Number of Accounts and Average Day/Peak Use in State College (provided by the State College Water Borough) Year No. of Accounts Average Day Use 2000 11,965 5,382,169 2001 12,130 5,499,438 2002 12,333 5,698,581 2003 12,561 5,710,422 2004 12,810 5,317,014 2005 13,003 5,363,717 2006 13,164 5,131,701 2007 13,272 5,246,074 2008 13,437 5,054,740 2009 13,795 4,993,444 Exhibit 2: Total Gallons Pumped and Average Daily Use Year Total Gallons for Year Average Gallons per Day 2000 1,969,874,000 5,382,169 2001 2,007,295,000 5,499,438 2002 2,079,982,000 5,698,581 2003 2,084,304,000 5,710,422 2004 1,946,027,000 5,317,014 2005 1,957,756,705 5,363,717 2006 1,873,071,000 5,131,701 2007 1,914,817,000 5,246,074 2008 1,850,035,000 5,054,740 2009 1,822,607,000 4,993,444 8
  9. 9. Exhibit 3: A.W. & Son’s Calculate Your Water Savings Answ er questions 1 through 4 below . Type the number of households in cell B5. Use the pulldow n menus provided in cells B6 through B10 to answ er questions 2 through 4. Estimates of the amount of w ater and energy that you can expect to save by installing WaterSense labeled products w ill appear in the “Results” area. Last Updated: 11/3/2008 To learn more about this calculator, go to: epa.gov/watersense/calculator/how_works.htm Inputs 1. Number of Households: 420 2. Number of People in Household: 3 <-- National average is 2.6. 3. Time Frame: 1 Year 4. Products: Toilets and Faucets >> Year existing toilets were installed: Don't know >> Method for heating water: Electricity Results That's Like… Or About… Water saved by choosing the 5.4 million gallons 8 Olympic-size swimming pools $33,000 WaterSense label… Energy saved is about... 40,000 KWh of electricity 3 households' annual electricity usage $4,000 Only products that are independently tested to meet EPA criteria for water efficiency and performance carry the WaterSense label. For a complete list of WaterSense labeled products, please visit: epa.gov/watersense/pp/lists.htm 9
  10. 10. Exhibit 4: Brochure Example 10
  11. 11. Exhibit 5: Flyer/Budget Example 11
  12. 12. Exhibit 6: IMC Schedule March 8th-13th Sunday Monday Tuesday Wednesday Thursday Friday Saturday E-mail X - - - - - - Marketing Direct Mail X - - - - - - Brochures X - - - - - X - Door-to-door - - - - - X Leaflets - Car flyers - - - - - X Facebook.com X - - - - - - Statuses Creation of X - - - - - - Facebook.com “Event” Collegian PR - - - - - - - Release Centre Daily - - - - - - - Times PR release Lawn Signs X - - - - - X Stall Stories X - - - - - - Classroom - - - - - - - Announcements Radio X - X - X - X 12
  13. 13. March 14th-21st Sunday Monday Tuesday Wednesday Thursday Friday Saturday E-mail X X X X X X X Marketing Direct Mail X - - - - - - Brochures X X X X X X X Door-to-door - - X - - X Leaflets - - Car flyers - - X X X X Facebook.com X X X X X X X Statuses Creation of X - - - - - - Facebook.com “Event” Collegian PR X - - - - - - Release Centre Daily X - - - - - - Times PR release Lawn Signs X X - - - - - Stall Stories X - - - - - - Classroom X X X X X X - Announcements Radio X X X X X X X 13

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