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Marketing and Competing

Fortnightly Magazine - April 15 1997

their needs. They are more likely to switch cable providers than any other service type.

These consumers do not appear interested in electric company product offerings. They are marginally prone to adopt premium cable channels over basic service and are moderate users of telephone features, with 46 percent not subscribing to any feature. This group is rather nondescript in that it contains average users of all services. The only exception is that members have higher cellular phone bills, which average $64.51 a month, than any other switching segment.

"Stuck in the Mud"

Members of the "Stuck-in-the-Mud" segment tend to be between 55 and 60 years old, divorced and with higher incomes. This switching segment includes 21.6 percent of the population. These consumers will not switch any provider for any reason. Members can be described as intensely loyal customers. Where technology is involved, they are the low-end users, not even prone to subscribe to basic cable TV.

This group is least likely to be interested in surge-protection products. While security is not an issue, they are most likely to want outdoor lights for landscaping. Members exhibit a significantly lower interest in monitoring their own energy use, although they account for higher-than-average monthly electric costs. These consumers show the strongest feelings against the restriction of household electricity use. Predictably, they are the group least likely to order local telephone features, with more than 50 percent not subscribing to any telephone features at all. Members of this group are more likely to switch their electric company than any other service provider, including cable.

"Give Me My Cable TV"

Members of the "Give-Me-My-Cable-TV" group tend to be widows or widowers, over 65 with lower incomes. This switching segment includes 14.4 percent of the population. This group is highly resistant to switching, with the exception of cable TV.

Given the opportunity, group members would almost certainly switch cable providers. This finding is significant since the cable penetration rate for this market segment is 90 percent. Of the switching clusters, these people are the most likely to subscribe to premium cable channels.

Consumers in this group are most likely to subscribe to at least one telephone feature. They are technologically oriented and more than half own home entertainment equipment, while another 40 percent own a personal computer. Almost one-fifth have modem capabilities. Members are concerned about home security, with 11 percent possessing a home security system and 40 percent interested in outdoor lighting for the same purpose. More than one-quarter would be interested in the ability to monitor personal home energy use. Interestingly, they have the highest average electric bills at $75.64 per month, but the lowest average long-distance and cellular phone bills, at $29.72 and $50.02, respectively. Group members are more likely to switch their electric provider than they are to switch phone providers.

Comparing Intentions with Behavior

How customers say they'll behave and how they actually do behave may not always match up. Analyzing how consumers switch long-distance telephone vendors may help determine their switching sincerity with regards to utility providers.

There can be a substantial