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Overall, the use of demographic, psychographic and geographic segmentation has allowed us to narrow down the different potential target markets considerably. These different markets each offer different levels of potential for exploitation by a solar panel installation firm. The targeting of each different segment will be analyzed in the next section of this report.
The targeting strategy is used to find ways to bring the product to each of the segments that have been targeted. For solar panels in Australia, there are three main segments when understood by demographics -- consumers under $100,000; consumers over $100,000 and small businesses These segments are all desirable for a firm that is seeking to build a strong presence in the Australian market going forward.
There are a number of ways to target the different markets. Differentiated or segment marketing would result in each segment being targeted with a product that is different for the needs of the particular segment. Undifferentiated marketing would involve selling a single product to the whole market, whereas niche marketing would focus on just one segment within the market (No author, 2010). The Australian market is relatively small, so it may be difficult, even with the concentrated 8.4 million people in Sydney and Melbourne combined, to build sufficient economies of scale to build the solar panel business with a niche strategy. The market simply lacks the clean, differentiated niches that would support the viability of the niche market strategy.
Worth considering is that the two main consumer segments as split by demographics and the different consumer segments by psychographics have very little differentiation in terms of their product needs, but the small business market does have some differentiation in terms of product needs. In particular, small businesses may need greater amounts of electricity, more sophisticated systems and systems on multiple sites. This difference between the two segments marks a point where the marketing can be differentiated.
Within the consumer segment, although there are significant differences between the demographic and psychographic segments that have been identified, an undifferentiated approach in particular with respect to product should yield positive results. The main differences between these segments will occur with respect to the marketing message and with the under $100,000 segment there may be some financing needs that have to be met as part of the product differentiation.
Because of the weak market for manufacturing of solar panels in Australia, it is anticipated that most of the ones sold will have to be imported, either from China or Japan. As a result, the undifferentiated strategy will allow the company to import in bulk the equipment needed to install solar panels in the residential market. This will give the company the opportunity to develop cost savings in purchasing. In addition, most consumers, including those with strong orientation towards environmentally-friendly products, are unlikely to have a high level of sophistication with respect to solar panels. Thus, they will be unlikely to demand a high level of customization or personalization in their solar panels, which again leads to the conclusion that an undifferentiated strategy should be successful. Elements of the marketing message, such as financing help or appeals to emotion, can be built into an integrated campaign easily or can be incorporated into a single ad if need be.
The positioning strategy must take into account the way that the product is positioned against the competitors, but also it must take into account the positioning of the product in relation to the consumer. Solar panels are a largely undifferentiated product for most consumers. Although there are some differences in terms of quality and power of solar panels, the most important element on which the company can differentiate against competitors is with respect to service. The installation and service function can provide the consumer with a degree of confidence in the company and in the product. A focus on service also addresses the fact that the consumer is making a significant immediate financial outlay for a product that will take years to pay for itself in energy savings. This fact means that there is likely to be a high degree of buyer's remorse on the part of the consumer, and the service function can limit not only the incidence of buyer's remorse but its impact on the company in terms of returns and refunds.
Therefore, it is recommended that the solar panels are positioned at the high end of the market. The panels themselves will be of good quality, but the service is going to support the premium positioning. By developing the best sales and installation workforce, the company can build a source of competitive advantage, which would be impossible with a strict focus on product. Therefore, focusing on premium positioning based on service gives this company the best chance to counteract any potential price competition or any distribution advantages that potential competitors may have.
Positioning the product relative to the consumer will require the use of a couple of different dimensions. These particular messages may be delivered in separate communications, but can be combined into a single communication if need be. The first key message is the economic argument. Given the rising cost of fossil fuels, it is easy for the consumer to accept the argument that solar panels will be a more effective way of powering their homes in the future. In addition, the high amounts of sunshine that Australia enjoys can help to lend an emotion element to the economic appeal. For example, it could be pointed out that if solar panels can save consumers money in a cloudy country like Germany, those benefits are going to be even more noticeable in Australia.
The economic argument can be used both for families above and below the $100,000 threshold. For families above, the economic argument should be easy to understand because they are likely to have a higher education level but also are more likely to have excess cash with which to make an investment. That the government incentive no longer exists should be ignored in the current marketing message as it is irrelevant to the current purchase decision. For families below the $100,000 threshold, they still receive the economic incentive, and will see a shorter payback period sooner as a result. The lower and middle ends of this market are unlikely to make such an investment as they may lack the necessary disposable income, however, towards the higher end of the $100,000 threshold, disposable income may exist and it is these consumers who should be targeted most aggressively within this segment.
The emotional appeal to "green" values can be used on both demographic groups. This appeal can be especially powerful when combined with the economic argument. The emotional appeal points out the logic of using solar power in a sunny country and the environmental benefits of moving away from coal-powered electricity. Themes such as pollution, sustainability and environmental stewardship should be explored as part of the marketing message. The communications should focus on making consumers feel guilt about having not already installed solar panels and connote a sense of ethical and moral superiority upon consumers who have already installed solar panels. This emotional appeal should tap into the sentiments that many consumers already feel, but have yet to be converted into action. It is hoped that the company can derive substantial sales by converting such sentiments into action over the coming years. The more consumers adopt solar panel technology, the stronger these messages should become, in order to convince the remaining uninstalled base that they are missing out on all of the moral, ethical and financial benefits of solar panel technology.
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