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Green Power Marketing

Fortnightly Magazine - December 1997

services; and

electricity bill roundups.

For business customers, adding private value may prove especially important and could include public acknowledgment of participating retailers. In the Massachusetts pilot, for example, Northfield Mountain Energy offers its business customers community recognition through free advertising and a plaque publicizing the environmental commitment of the business.

Marketers also could offer an array of green products and services, each with its own mix of private and public attributes. By developing a product line, a marketer can segment and expand its market. Already, several utilities that initially offered only one option are designing a range of green products. The Public Service Company of Colorado, for example, began with a single green pricing program but now offers multiple products.

Strategy 2

Appeal to a Sense of Community

Green power programs are likely to be most successful when they appeal to a sense of community and tap into social norms and values. Individuals may respond to social, psychological or moral pressures encouraging them to "go green."

Where possible, marketers should consider locally sited, visible projects and community-based marketing. Traverse City Light and Power, a small, municipally owned utility in Michigan, successfully used community-based marketing to build a 600-kW wind turbine that is visible from town. Local subsidiaries may prove more successful at green marketing than large, multi-state or multinational corporations seen as having little interest in any one community.

Marketing should target the most effective forms of social pressures and norms. The Roper Organization has identified several green consumer segments, each with a different level of environmental commitment and motivators. Environmental and public benefits may inspire certain consumers to purchase green energy, whereas local recognition and peer approval will influence others. Still others may be prompted to buy green out of guilt over their role in environmental degradation. In each case, marketing messages and products should be targeted accordingly, and careful market research will be important.

Strategy 3

Assure Customers They Make a Difference

Voluntary contributions to public goods often can be increased if individuals feel their own participation is pivotal to the provision of the good.

Public goods contribution programs are therefore often conducted under the condition that the good only will be provided if some minimum level of funding is obtained. For marketers, this tactic is useful for situations where a specific level of demand is needed to construct a renewable energy project. Offering to refund contributions if the funding target is not reached also can increase consumer willingness to pay. Similarly, if contributions or customer demand exceeds the amount needed for the specific project, green marketers could reimburse customers equitably or use the money to support additional renewable energy.

More generally, research shows that people who feel they can "make a difference" are more likely to contribute toward public goods. As such, marketing messages should affirm the concept of individual efficacy in environmental protection. Marketers may also want to appeal to an individual's sense of leadership, suggesting that by buying green they are leaders in their community.

Finally, it is important that consumers know their dollars are managed