As the U.S. electric power industry unbundles, the industry and its regulators grapple with two big questions concerning the degree to which distribution services should be unbundled. First, what...
Green Pricing: The Bigger Picture
market carefully and bundle services to add value.
s Simplicity. Keep the program easy to understand and easy to get into and out of.
s Specificity. Clarify what renewables the utility intends to build, where they will be built, how much they will cost, how they will be funded, and who will benefit.
s Tenacity. Market the programs through education, outreach, and repeated advertising. Keep expectations for program startup realistic.
s Credibility. Partner with high-profile individuals and businesses to increase awareness and program acceptance. Seek environmental endorsements from well-established environmental advocacy groups.
s Marketability. Target the niche market with a strategy that focuses on the branding and positioning strengths of the program.
s Visibility. Promote and advertise the project to keep it in the forefront of the target market's attention.
s Tangibility. Make renewable electricity real to customers, using language they understand. Or include more tangible elements in the program, like rate stabilization and related product discounts.
s Community. Emphasize partnership between the utility and the community. Community pride in the renewable project can spill over into positive perceptions about utility corporate citizenship.
s Strategy. Provide leadership, vision, and top management support.
Imminent competition finds every utility looking for strategies that will differentiate the company and its products from its rivals. Green pricing offers just such a strategy (em not only for traditional utilities, but also for energy marketers. Green pricing creates a perception that the seller understands its market and varies its products and services accordingly. It solidifies the utility's position in the communities it serves.
Moreover, low cost is not necessarily the prime selling point for customers interested in environmentally friendly electric generation. Green pricing offers this niche market an appealing "value-added" feature. For C/I customers who seek to capitalize commercially on intangible benefits, green pricing offers a way to use their participation to promote their organizations as "environmentally friendly." The green pricing
premium simply becomes a cost
of doing business (em not a disadvantage, but a promotional opportunity. t
Brian Byrnes and Renee de Alba are principals of Insight Research, Inc. in Boulder, Co. Maribeth Rahimzadeh is a marketing research analyst for Wisconsin Public Service Corp., and Keith Baugh is a market research analyst with Hewlett-Packard Co.
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