1. Marketing Class #2 August 6, 2009 John W. Huppertz, Ph.D. Associate Professor of Management Christie M. Griner, MBA Adjunct Instructor

2. Today’s Agenda Fill out 1-page survey Quick review from last class Where to, for Marketing? Market data and analysis Break Segmentation Green marketing and social marketing Framing

3. Some key concepts from Week 1: Definition of Marketing, the Marketing Concept Difference between marketing and selling, advertising Different types of markets (consumer, business, government, etc.) The four “P’s” Disintermediation Push and Pull marketing strategies

4. Strategic Business Planning and Decision Making How marketing links to strategic business planning Translating business goals to marketing strategy From---To: Where are we now in terms of a marketing approach and where do we want to be in terms of marketing at NYSERDA

5. Translating business goals to marketing strategy NYSERDA ‘s business goals are intertwined with marketing. How to get customers to change behavior? How to get customers to care? How to make sure that energy considerations get factored into their decisions? Choosing the right markets, the right products, the right messages. That is what marketing strategy is all about.

6. Strategic Business Planning and Decision Making From---To: Where are we now in terms of a marketing approach and where do we want to be in terms of marketing at NYSERDA Where do we go now?

7. QuizQuestion 1. Your friend comes to you, all excited about a great idea for a business, and she wants you to invest some money to help start it. If you were considering investing in her new business venture, what should you know before writing a check?

8. QuizQuestion 2. You’re the Director of NYSERDA. The leader of the group in charge of new energy technologies comes to you, all excited about a great idea for a NYSERDA program, and wants your support and additional funding. If you were considering investing in this new idea, what should you know before writing a check?

9. Category Development Index (CDI) CalculationExample: Foot-Joy Golf Shoes Market Penetration = Annual Golf Rounds / Population (1,000’s)

10. Category Development Index (CDI) CalculationExample: Foot-Joy Golf Shoes Market Penetration Average x 100 CDI =

11. CDI Summary

12. Let’s apply this tool to energy.

13. Census data: Consumers http://factfinder.census.gov/servlet/DatasetMainPageServlet?_program=DEC&_submenuId=&_lang=en&_ts= http://factfinder.census.gov/servlet/DTSubjectKeywordServlet?_ts=267529505781

14. Census data: Businesses http://factfinder.census.gov/servlet/IBQTable?_bm=y&-ds_name=BE0200I101&-_lang=en

15. Target Market Having a customer in mind when designing a product, advertising campaign, channel strategy, or price level. Which customer offers the greatest opportunity?

16. Defining the Target Market How would you define the target market for: Solar water heating? Geothermal wells? Energy audits? NYPA Power? Compact fluorescent bulbs? Co-generation?

17. Target Market Segmentation Source: Childbirth Connection, survey of 1,600 new moms.

18. Market Segmentation In the Target Market Not In the Target Market

19. Market Segmentation * * Ages 14+

20. Market Segmentation Or, 280 million segments with N = 1

21. Market Segmentation * * Ages 14+

22. Market Segmentation * * Ages 14+

23. Market Segmentation * * Ages 14+

24. Market Segmentation

25. Market Segmentation: Age

26. Who Wants to Be a Millennial? Source: Harris Interactive YouthPulse/The Harris Poll

27. Market Segmentation You can create segments on almost any characteristic. Demographics Lifestyle Buying habits Behaviors Health status Benefits ?? Find those which are relevant.

28. Market Segmentation

29. Benefit Segmentation Segment customers based on the benefits they seek from a particular product. Group customers based on their needs. EX: non-prescription pain relievers and exercise.

30. If you have aches and pains, do you prefer:

32. 5 4 3 2 1 5 4 3 2 1 4 3 2 1 5 3 2 1 5 4 2 5 4 3 1

33. Segmentation by Attitude

34. Segmentation by Attitude 5-10  Couch potatoes 11-19  Casual exercisers 20-25  Exercise nuts

35. If you have aches and pains, do you prefer:

36. If you have aches and pains, do you prefer:

37. Green Marketing: Best Practices

38. Shades of Green

40. Eco-Villans are mostly middle income white males

41. Green Naivesmostly female

43. Commercial Case Study: Wal-Mart Does WMT market “green” to each segment? How?

44. Who is this targeting?

45. ..and this?

46. How is WMT reaching their audience?

47. Wal-Mart’s LT Goals To be supplied by 100% by renewable energy To create zero waste To sell products that sustain resources and environment Are they attainable?

48. The Power of Wal-Mart Choose Suppliers Wal-Mart will list criteria and suppliers must adhere to be part of the supplier list Requests full-disclosure on products via supplier Will it be worth it long-term for suppliers to alter their practices for one retailer?

49. Supplier Survey

51. Purchased Solar Power (22 CA&HI stores)

52. Wind energy supplies 15% of power to run TX stores

53. Energy-Efficient Transportation Fleets

54. Wants to improve by 25%

55. Overnight trucks have APUs to regulate temperature and communication

56. Testing hybrid trucks and alternative fueled trucks

57. Sustainable Packaging Network

58. Reduce packaging by 5% by 2013

59. Laundry liquid, private labels, digital media packaging

60. Plastic Bags

61. Reduce by 33% by 2013

63. Why does HE.6 matter? Market Pioneers Skylights LED lighting Recycled cement Low flow toilets/faucets Improved customer experience Wider isles Lower shelves Improved sightlines Service area

64. NYSERDA implementation How can you get a local retailer to implement a high-efficiency store format?

65. What goals has WMT achieved? Sold 100M compact fluorescent light bulbs in 2007 Effect: does away with the need for 100 million old-fashioned bulbs to be manufactured, packaged, shipped, bought, and discarded next year--and every year until 2012 or beyond Most of WMT’s goals slated out 4-5yrs

66. Do these companies “feel” green to you? Why?

67. Industrial Case Study: HP In general, HP.. Owns “e-waste” recycling plants that shred discarded, obsolete computer products into raw materials that are reused in the industrial food chain Takes back computer equipment of all brands All HP products are 100% recyclable Promises to lower energy consumption 20% by next year

68. HP Campaign: Power to Change

69. “Power to Change” HP Philosophy: industry leadership is about an ongoing contribution to society Launched 6/09 by Leo Burnett Modern, stylish, innovative, colorful, results-driven Gives consumer autonomy and purpose Taps into behavioral changes Quantitative Tracks cumulative energy savings if turning off idle PCs when not in use Method Widget Commitment: must enroll & install Gathers demographic information Enables campaign success metrics

70. Campaign Motives Small commitment yields large impact If 100,000 users shut down work computers each day, energy savings could total more than 2,680 kilowatts Reduce carbon emissions by 1,500 kilos/day equivalent to removing 105 cars from the road/day

71. HP Recycling Campaign

72. Education at POS via Labeling Energy Star labeling impacts Green Purchases 66%

73. Ex: HP Labeling Greater Variety + Eco-labeling = Increased sales + Customer Loyalty

75. Save money in difficult times

76. Consistent trends

77. Recycled paper

78. Green household cleaning products

79. Environmental safe laundry detergent

80. This links to where people see the need but not know how to implement it

81. Cloth grocery bags

85. Cohort Segmentation Simple age combination / aggregation into generational segments Message tailoring Example of simplistic segmentation (Yankelovich and Meer, 2006)

86. Cohort Segmentation

87. Cohort Segmentation What can you do with this?

88. Segmenting Business Markets Note: SIC  NAICS

92. Profitability (ability to buy)

94. Profitability (ability to buy)

98. Analytics

101. Profitability (ability to buy)

103. Framing In retail promotion: Hurry in and save $20. Hurry in and save 20%.

104. Framing In energy: Lower your energy use and save the environment. If you don’t lower your energy use, you won’t have an environment to save.

105. Framing In energy: Lower your heating bill by 30% and save the environment. Lower your heating bill by 30% and enjoy a vacation with the money you save.

106. Framing In class strategy session: Three teams, five minutes Come up with two alternativesways of framing the following: “You should buy compact fluorescent bulbs instead of incandescent bulbs because _________________________.”

107. Assignment, due next class Marketing “best practices” Teams: Marketing Services EES, EA, Clean Energy, REAP Economic Development New Technologies 10 pages, 10 minutes.

108. Summary What did we learn today? Some key take-aways? Some things you won’t forget?