Segmentation and Target Market - Term Paper Example

 «Segmentation and Target Market» Introduction Solar market is considered to be amongst the potential industry that is increasingly growing in the United States. This particular industry is unexploited by organizations and thus, there is immense opportunity in marketing solar panels in the United States, specifically in California. The solar market of the United States is quite different from any other nation in the world with respect to investment and number of solar connections (The Business Council of New York State, 2009). The paper will describe a marketing plan for XYZ Company which would aim towards promoting solar panels in California. The marketing plan for solar panels will consider the marketing mix elements such as product, price, place and promotion along with other environmental aspects such as the economic and the social conditions. The objective of the paper is to develop a marketing strategy for solar panels on behalf of XYZ Company. Solar Market of the United States The solar market of the United States is considerably large and is growing at a significant rate. The high cost of generating power along with high customer demand for energy and monetary inducements from federal government has accelerated the growth of solar market in the United States along with California. In the year 2009, almost 107,000 new solar heating, refrigeration and solar electric connections were implemented in the United States. In the long-run, the growth opportunity for this industry is measured to be quite bright. The market growth of solar products is a result of long-run extension of Investment Tax Credit (ITC) policy by the federal government (Sherwood, 2010). Solar Market Trend in California California is considered as one of the most populated states in the United States. It is also a reputed state with respect to the use of solar system. In California, a significant development for utilization of solar energy can be observed in the recent times. It is expected that by 2030, solar energy will represent almost 16% to 18% of total state energy consumption. California has the highest solar insolation levels in the entire United States. In present days, California accounts for almost 61% of entire United States’ solar energy plans. The state hosts around 27 organizations which are involved with solar energy related functions, comprising manufacturing of silicon cells, modules and solar chips among others. Therefore, these solar marketing trends represent favorable conditions for marketing the solar products of XYZ Company (Barber, 2003). Economic Condition of California In order to develop any marketing plan, the economic condition must be considered as it can determine the probability of success or failure of the product in the market. The Californian economy is driven by three major sectors which are technology, exports and hospitality. California was considered as the 9th biggest economy in the world in 2010. With respect to size, the Californian economy is learnt to be the second best in comparison to Brazil. According to the statistics of California Department of Finance, the Gross Domestic Product (GDP) of the state was almost US$ 1901 billion in the year 2010. The GDP growth of California is calculated to be almost 1.6% per annum. With respect to GDP Per Capita, California is considered as the 10th biggest state. In the year 2010, the GDP Per Capita of California was around US$51,470 which represents its robust economic condition (Center for Continuing Study of the California Economy, 2012). The key manufacturing goods in California comprises of electronic equipments, computer peripherals, industrial machines and transportation equipments among other tools (EconomyWatch, 2010). As the economy of California grows, there will be demand for more power. The consumers have the capability to purchase solar products which increases the probability of success for such products in the market of California. Social and Cultural Aspects The use of solar energy is continuingly becoming a concern for people, government and organizations. In order to enhance the utilization of solar products, there is need for enhancing the awareness of customers by providing education. XYZ Company will use initial trials with regard to the use of solar products through trade shows, exhibitions and free samples in order to demonstrate that power produced from solar panels is quite inexpensive and helpful compared to power production from other methods such as fuel or coal. The government is also committed towards increasing the trend of using solar power through investing in this particular segment (Ozer, n.d.). Segmentation and Target Market The opportunity for solar product in the market of California is quite substantial. California is a nation which almost had a population of 37 million in the year 2010 which is growing at a noteworthy rate. The population of California perfectly fits in the target customer segment of XYZ Company which is those people who belong to 30-65 years age group. People of this particular category (30-65 years of age group) are found to account for almost 11.4% of the total population of California. XYZ has recognized two different target market segments in California where it can sell the solar panels. The first target market segment is people with high alertness for protecting the environment, including relatively high income group customers and the second target market segment is the typical residential customers who desire to purchase solar system (U.S. Census Bureau, 2012). Product Plan XYZ Company will market three kinds of solar panels in California which are “Mono Crystalline Panels”, “Poly Crystalline Panels”, and “Multi Crystalline Panels”. Mono Crystalline Panels are regarded as the most effectual and reliable product to generate energy from the sun. In this product, each component is created from a sole silicon crystal and is more efficient and costly compared to Poly Crystalline Panels. Poly Crystalline Panels are considered as one of the most common and inexpensive solar panels. Its performance of generating power is lower compared to Mono Crystalline Panels. The Multi Crystalline Solar panels are cheap and less effective compared to the Mono Crystalline Panels (SlideShare Inc, 2012). XYZ Company will import the chips on the basis of the demand of customers, and the main focus will be on marketing the Mono Crystalline Panels as these are the high performing solar panels. Positioning Plan XYZ Company will position the product in the niche customer segment i.e. domestic residential customers with high consciousness for environment and having moderate to high income level. XYZ Company will specialize more on power generation efficiencies of its products. This particular factor can help XYZ Company to position itself in a better way compared to the other existing merchants of solar panels in the market of California. The focus of the company will be on the aspect of building a good reputation as a good solar energy product provider at affordable costs. The marketing strategy concentrates on residential households and organizations which require solar electricity. Promotion Plan Within the part of promotional strategy, XYZ Company will advertise the products in order to increase the awareness of customers. Both print media as well as television media will be used for educating the people about the benefits they can get from using solar panels. Use of media will help to communicate the message to the vast audience. The advertisements will concentrate on simplicity and efficiency of using the solar panels of XYZ Company and the advantages customers can get from purchasing them. As a part of promotional strategy, XYZ Company will also provide several incentives to the customers such as discounts or special offers. Pricing Plan The price of the solar panels will be set by considering the purchasing power of the people of California. Each solar panel will be available in four capacities which are 80 watt, 100 watt, 150 watt and 230 watt. The price range will be US$200 to US$400 on the basis of quality and power generation capability. Besides, there will be an additional cost for on-site consultation, service charges and installation charges which will be almost US$100, keeping in mind the income level of people of California. Place/Distribution Plan Distribution is a vital aspect for developing a marketing plan. A key method for XYZ Company to provide solar power solution through solar panels is by way of direct distribution channels. XYZ Company will attempt to distribute the solar panels to various dealers in the market of California. As the concept of solar panels is different and is not used extensively by majority of people, therefore local presence of the product is essential. XYZ Company will market the products by using various retailers and wholesalers. The solar products will also be available and purchased through the internet and the phone. Sales Strategy There are two target customer segments on which XYZ Company will focus to market the solar panels. In order to trigger sales and increase the customer base, XYZ Company will attempt to maintain a mutually beneficial relationship with the various retailers and wholesalers who deal in solar products. As retailers and wholesalers are the one who will sell the solar panels to the customers, there is a need for maintaining good relationship with them and supporting them by providing additional satisfactory information. The marketing campaign of XYZ Company will concentrate on increasing the knowledge of customers about environmental and monetary advantages of solar panels. The environmental advantages are those solar panels which are renewable source of power generation, and entail negligible harmful emission, and therefore facilitate people to make serious commitment towards environmental protection. Furthermore, customers will also enjoy a substantial monetary savings through using solar panels in residences or in offices. Competitive Advantage There are certain competitive advantages which will help to differentiate the products of XYZ Company from the other competitors. The first advantage is that XYZ Company will serve both the residential as well as commercial customers’ segment and therefore can arrange one most demanded product for marketing in both the target segments. The second is that XYZ Company will provide high quality solar panels with affordable rate and will be available in different models. Conclusion There are certain assumptions which are made in the marketing plan of solar panels for XYZ Company such as, increase in the demand of solar energy and appropriate economic condition of the United States. From the study, it is evident that the business prospect in the solar market is enormous in California, United Sates. The market is measured to be favorable for XYZ Company to sell the solar panels. With the demographic characteristics, market and economic situation, it is possible for XYZ Company to gain profit through marketing solar panels. Selecting the right marketing approach is the key for accomplishing success in the solar market of California. References Barber, D. A. (2003). California’s solar growth. Retrieved from http://www.energytrend.com/node/2965 Center for Continuing Study of the California Economy. (2012). 2010 California economy rankings. Retrieved from http://www.ccsce.com/PDF/Numbers-Jan-2012-CA-Economy-Rankings-2010.pdf EconomyWatch. (2010). Economy of California state. Retrieved from http://www.economywatch.com/world_economy/usa/states/california-economy.html Ozer, S. E. (n.d.). Marketing plan. Retrieved from http://userwww.sfsu.edu/~seozer/images/papers/paper4.pdf Sherwood, L. (2010). U.S. solar market trends 2009. Retrieved from http://irecusa.org/wp-content/uploads/2010/07/IREC-Solar-Market-Trends-Report-2010_7-27-10_web1.pdf SlideShare Inc, 2012. Solar panels business plan (FYP) — presentation transcript. Retrieved from http://www.slideshare.net/smsulari/solar-panels-business-plan-fyp The Business Council of New York State. (2009). U.S. solar energy market opportunities. Retrieved from http://www.bcnys.org/inside/env/presentations/2009/Goeres-SolarEnergy.pdf U.S. Census Bureau. (2012). State & county quick facts. Retrieved from http://quickfacts.census.gov/qfd/states/06000.html Read More