Marketing Management – SolaMate
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Segmentation, Targeting and Positioning. 8
Marketing Management – SolaMate
The market analysis for the SolaMate invention commences with the executive summary followed by the background information on the origin of the invention as well as the owner, Stuart Elliot. The next part of the analysis addresses the impacts that the SolaMate products have on the environment. Consumer behavior analysis addresses the attitudes and behavior of the consumers concerning the new invention. The positioning, targeting and segmentation section deals with market position, the consumers being targeted by the product and the segment of the population. Lastly, the pricing plans section addresses the methods and processes used to come up with prices fro the different variations of the SolaMate.
The SolaMate is an innovative solar panel that was developed by Stuart Elliot. Stuart developed the panel with extraordinary and efficient features such as the ability to cool, ventilate and heat building ventilation systems using solar power. The developer of the solar panel, Stuart Elliot was a mechanical engineer who had an inspiration to produce clean energy that could power skyscrapers and other architectural projects. The idea for SolaMate originated from Stuart’s passion for the environment that led to him starting a project to create an environmentally friendly way of reheating his house. This was after he was unable to find a suitable product on the Australian market. After this, he decided to develop his own solar system that would serve large – scale needs. The new solar invention by Stuart had several advantages over the conventional solar panels as they were able to serve larger premises. They were also able to run ventilation systems in buildings.
The environmental analysis will assess three separate environments that assist Stuart and SolaMate with realizing trends, opportunities, forces and weaknesses. The SolaMate panels are mainly being marketed in the technological industry. Apart from selling a wide variety of high-efficient solar panels, SolaMate also offers top of the range solar air heating systems that are affordable and easy to install. The company has also entered into joint ventures with other companies and this has resulted in the production of both commercial and residential solar heating and ventilation systems. The objective of SolaMate is to develop solar products that can offer efficient heating and ventilation without having negative effects on the environment (Kuwahata & Monroy 2011). Using an achievable strategic plan, execution of promotion activities, and creation of a strong brand and dominating the renewable energy market, SolaMate have managed to build a national brand in the renewable energy sector (Clifton & Boruff 2010).
Within the environment in which SolaMate operates, several economic forces and trends create competitive conditions for the company and its products. When responding to global, technological and social elements, SolaMate must put into practice strategies that mitigate any threats that would decrease their market share. To do this, SolaMate has to prevail over several challenges such as competition from rival companies, stagnation in the market and high operating costs (Balaras, Grossman, Henning, Ferreira, Podesser, Wang & Wiemken 2007). SolaMate has been central in informing the Australian population on the benefits of using clean and renewable energy by creating an alternative source of heating and ventilation for residential and commercial buildings (Davy & Troccoli 2012). However, SolaMate may become a victim of its own aggression due to the closing in by rival companies that offer cheaper and efficient clean energy using wind and water. Due to the magnitude of SolaMates’ operations in Australia, distributors throughout the rest of the world may duplicate its brand and this can cause a drop in their brand name especially in overseas markets where it is difficult to enforce copyright laws. SolaMate will have to carefully scrutinize the different markets in which they operate and seek out ways to minimize these threats or take full advantage. Apart from these economic factors, there are non-economic factors existent in the environment in which SolaMate is operating (Baniyounes, Liu, Rasul & Khan 2012).
Companies have always adjusted their strategies depending on the societal demands and concerns. The attitudes, lifestyles and opinions of the consumers within Australia also greatly influence the success of the innovative solar panels developed by Stuart Elliot. A strong brand such as SolaMate has achieved national success and acknowledgement within the Australian population because their influence is evident and desirable. SolaMate considers the vital values in the society, communal needs as the environment when setting up sola panels for different purposes (Baniyounes et al. 2013). The company itself deals with clean, renewable energy which is a necessity among most residential houses. Commercial buildings are also increasingly being pressured to be responsible to maintaining a clean environment. The threat of depletion to the ozone layer ensures that SolaMate has an endless supply of customers desiring to make Australia a healthier place. The Australian commercial environment is littered with local and foreign companies engaging in solar-powered products. While SolaMate has distinguished itself using innovation to come up with a unique product that can be used in air conditioning, many other companies offer stiff competition that cut into SolaMates’ market share. These companies include Australian Solar manufacturing (ASM), Solar Power Australia, EuroSolar and Mueller Air Conditioning (Beath 2012).
This section is made up of the analysis of the way in which consumers behave towards the marketing efforts, products and services offered by SolaMate. There are four main elements that influence customer behavior as far as the organization is concerned: cultural, social, personal and psychological factors (Baniyounes, Ghadi, Rasul & Khan 2013). Cultural factors are very significant in determining the final decision by a customer to buy a particular product. Australia is the main cultural context in which SolaMate operates. The bulk of the customers are Australians and other migrants but they all share several common characteristics. Most Australians are learned and can discern between fossil fuels and solar power. They also have a general idea of the different heating and ventilation systems (Oxizidis & Papadopoulos 2008). Most Australians can also access the Internet where different companies have websites marketing ventilation and solar systems (Savage 2011). Therefore, the customers are highly informed and make decisions after conducting extensive research on the products at hand. It is imperative to note that cultural factors play a major role in influencing the customer behavior because they are deep-seated, repetitive and traditional in nature (Wilhelm, Erik & Fowler 2006). The Australian culture of overspending and extravagance has infiltrated the energy sector where it is manifested in the form of dependence on fossil fuels. However, this culture is slowly degenerating with the increased promotion of clean and renewable solar energy (Villa, Erika & Medved 2008).
Social factors are also responsible for shaping the behavior patterns among consumers. Reference groups within the society greatly influence the personal attitudes that work in favor or against SolaMate products. Opinion leaders, government officials and other global icons have always championed the move to clean and renewable energy. Starting with the push from the Senate and Congress to pass many bills promoting the use of renewable energy, it is evident that a large part of the influential groups in society support SolaMates’ efforts to provide solar- powered ventilation and heating systems. Within families, the need to conserve the environment for future generations has pushed many households to adopt solar-powered systems in their homes. Lastly, the occupations of most of the company’s customers work to promote the use of alternative energy sources (Miller, Buys & Bell 2012). Most Australians work in the corporate sector and other affiliated areas and therefore, spend a large part of their lives in offices. The need for efficient heating and cooling systems powered by a renewable energy source is overwhelming (Villa et al. 2008). SolaMate has tapped into this need and is working to maximize the profits exhaustively.
Psychological factors that affect consumer behavior include the perceptions, beliefs and attitudes. While SolaMate products may not be an urgent or basic need for most people, it is nevertheless an important addition to residential and commercial buildings. Developers and homeowners having a perception that investing in long-term renewable energy systems for their ventilation easily purchase and promote SolaMates’ products (Chowdhury & Maung 2012). These products are also perceived to be improving the lifestyles of most Australians and this makes them highly desirable. The company has established a strong and dependable brand name and this makes it easier for people to have the right attitude concerning its products (Shafiullah, Amanullah, Shawkat, Jarvis & Wolfs 2012). SolaMate offers warranty and customer care services that reach out to the customers and reinforces their belief system.
Segmentation, Targeting and Positioning
The segmentation approach used by the SolaMate Company is divided into four: geographic, demographic, psychological and behavioral segmentation. Market segmentation involves breaking up the general market into smaller sections based on the special characteristics or behavior of the buyers. In this section, the focus is on the demographic segmentation for Australian consumers. Additionally, the income and age brackets for the consumers will be analyzed as significant parameters for segmenting Australian consumers within the technological industry. Geographical segmentation divides the market using geographical units such as nations, countries, districts or cities. SolaMate initially started operations from St Alphington in Australia and naturally, there are a large number of customers within this location. SolaMate also has a contract with EnviroShop that sells their solar panels and ventilation systems throughout the rest of Australia (Hinkley, Hayward, Curtin, Wonhas, Boyd, Grima, Tadros, Hall & Naicker 2013). As the main distributor, they are responsible for transporting and selling SolaMate products throughout the country. The major cities and towns in Australia include Sydney, Adelaide, Perth, Brisbane and Melbourne.
The demographic segmentation is involved with dividing the market based on the age, gender, occupation, nationality and family size among other variables. As of 2010, the gender gap between female and male customers purchasing SolaMates’ products was very slight. The age bracket between 15 and 64 made up the largest percentage of consumers of solar-powered products. This general age bracket can be divided into three major sections.
- Young people (<20): Still dependent on their parents, earn little income, highly interested in emerging technology and trending innovations.
- Young to Middle age consumers (20 to 30): most own businesses, employed in stable, well-paying jobs, have young families, embrace innovations in technology.
- Middle age (30 to 55): Achieved stability in work and life, children are independent, own many assets and investments, have the highest buying power.
However, the primary target of SolaMate products is the middle-aged people in the 30 to 55. This is because they are stable. They have alternative sources of income that are not depleted by dependants. They also seek out long-term investments and this makes them the most suitable segment for SolaMates’ sola-powered heating and ventilation products.
In this section, the evaluation of the attractiveness of the possible markets is done. Additionally, it will also discuss how the different segments identified earlier will be targeted. Assessing the geographical segmentation, it is evident that the five states in Australia that have the top incomes will be targeted by SolaMate as the main consumer areas. South Australia and Victoria states have unusually high number of public sector works and this signifies high-income brackets. Since the SolaMate Residential and Commercial units are relatively expensive, the perfect target market for these two packages should be consumers from the upper class (Fthenakis, Mason & Zweibel 2009). Demographic targeting according to the age and gender is equally important and rewarding. SolaMate has four major segments to handle. However, the ages below 20 are young and interested in innovations but they have low income and depend on their parents and guardians. Therefore, they lack the buying power to afford SolaMate products. Additionally, the older members of the community (55>) may have the buying power but most of them are retired from active duty and therefore have little use for solar heating and ventilation systems (Dawson & Peter 2012). Therefore, these two stages are not the ideal target market for SolaMate leaving the age bracket 30 to 55 as the best target market.
SolaMate Residential and Commercial are ventilation and heating packages that effectively conserve and recycle energy as well as serve massive buildings. The system can also be installed in different styles and sizes of buildings making it very flexible. The materials used to develop the products are found locally and have passed the test for safety as well as availability. Based on these features, SolaMate Residential and Commercial could be positioned as an innovative product that can deliver impressive ventilation and heating capabilities using clean and renewable energy. In conclusion, SolaMate Residential and Commercial should be placed as a high-end product having first class quality and the appropriate price in the technology industry (Hinkley et al. 203).
Product pricing involves allocating a specific price tag for a product based on the environment, social, economic and other factors. The pricing plan for the SolaMate packages will be developed after a full analysis of the targeting and positioning reports is complete. This is because pricing will be based on the different segments and markets identified in the earlier sections. SolaMate will price its two main packages using two factors: the type of customer and the geographic and demographic segmentation. The pricing plan is very influential in determining the success and growth of stores in different states within Australia. Pricing strategies should be well thought out and failure to do so will result in losses for the company. Conversely, placing the price bar too high when compared to other rival companies will result in a lower sales margin and a slower growth.
Since the solar company produces air conditioning units for residential and commercial purposes, the prices will be allocated according to these two major groups of customers. This is important since residential customers are mainly homeowners with average families. This category of consumers has meticulous demands concerning how the air conditioning systems should be installed in their homes (Yang 2012). Conversely, corporate customers are professional, standardized and larger in magnitude. Their demands may include supplying, installing and maintaining air conditioning systems for several branches or subsidiaries of the same company (Peterkin 2009). Therefore, the pricing strategy will differ according to the type of customer. The pricing method will lo be influenced by the geographic and demographic factors. Regions having lower income levels will have to be allocated a slightly lower price as compared to high-end neighborhoods occupied by affluent members of the community. Therefore, the price for a single SolaMate unit in Victoria will be different from that in Melbourne.
In conclusion, SolaMate Residential and Commercial packages are some of the initial solar-powered air conditioning systems that have been patented in Australia. With virtually no toxic wastes or emissions, the solar packages offer the consumers a chance to solve their functional, economic and environmental needs. From the market analysis of the SolaMate Residential and Commercial packages, numerous conclusions have been made at each level. The solar products have a ready market within the high-end Australian states previously mentioned. However, putting in mind that they are environmentally conscious, SolaMate has the potential of expanding their markets to a global scale. This is because there is an increasing focus on clean and renewable energy to counter the harmful effects of fossil fuels such as ozone layer depletion, acid rain and respiratory health complications. Therefore, when compared to diesel or electricity based air conditioning systems, SolaMate products are more superior and therefore attractive to most consumers. Furthermore, this innovation also has positive economic advantages especially in the long term as it utilizes renewable and free energy.
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