Proposed Marketing Plan Group 5: Erika Burch Lauren Curatola Brittany Maul Michael Mitchell Courtney Wilson
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Table of Contents:
Executive Summary…………………………………………………………………….......2 Situation Analysis…………………………………………………………………………..4 Company Analysis…………………………………………………………………4 Industry Analysis…………………………………………………………………..6 Market Analysis……………………………………………………………………8 Competitor Analysis……………………………………………………………….10 Environmental Analysis……………………………………………………………11 SWOT………………………………………………………………………………………13 Strengths……………………………………………………………………………13 Weaknesses………………………………………………………………………...13 Opportunities……………………………………………………………………….14 Threats……………………………………………………………………………...15 Marketing Strategy Development…………………………………………………………15 Marketing Mix Development………………………………………………………………17 Marketing Objectives, Budget and Timeline……………………………………………..20 Marketing Performance Evaluations……………………………………………………..21 Sources………………………………………………………………………………………22 Exhibits………………………………………………………………………………………24
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Executive Summary Triad Solar Store, a member of the USA Solar network, is a specialty retailer offering energy-efficient products and educational resources to promote the rapid spread of environmental efficiency. Established in Lexington, North Carolina, by owner/solar expert Lindsay Dilley, Triad Solar Store has a protected 30-mile/45-minute market area to extend its reach well into the Piedmont Triad area (Exhibit 1). Triad Solar Store’s mission is to spread the practice of energy conservation, energy efficiency, and renewable energy applications to save customers money and make a positive contribution to the community and environment. Triad Solar’s value proposition is the assurance of quality brand name products and the personal service customers receive from a solar expert. Through intense research Triad Solar Store’s competitive advantages were evaluated in the following areas: Company, Industry, Market, Competitors, and Environment. A competitive analysis of the solar industry via the Porter’s Five Force model found that Triad Solar Store has an advantage in buying power through its USA Solar Store licensing and an increased demand in alternative energy sources. The solar-energy market is growing at a consistent rate, 39% annually, proving that consumers are interested in utilizing green technologies to heat and power their homes. Competition in the Piedmont Triad area primarily comes from local dealers, with secondary competition coming from big-box retailers. The economic environment provides tax incentives through the Energy Policy Act of 2005 to increase consumer participation in these solar efficient products. A SWOT analysis evaluates the company’s internal structure and external pressures. Strengths within the company are the convenience of a one stop-shop for solar supplies and the owner’s expert knowledge of energy efficient products. A weakness of Triad
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Solar is the inability to maximize profit potential due to the high cost of its products to purchase and install without financing options. Triad Solar Store has opportunities with the manageable market size and expected market growth as well as how several environmental disasters have increased the awareness of alternative energy sources. Threats include the abundance of solar equipment stores and the expenses associated with purchase and installation of solar efficient products. Triad Solar should target single- family homeowners with a combined income over $100,000; a house valued over $300,000 and residence within the specified market area. Further segments of the single-family homeowner market are: Environmentalists, Technology Savvy and Financially Frugal. Triad Solar has a licensing agreement with USA Solar Store that allows the company to sell over 8,000 products at affordable prices. Triad Solar will sell, install, and service renewable energy systems with the focus being on solar water heating and solar electric systems. Located in Lexington, NC on Main Street, the company will benefit from a lively downtown environment, home to many festivals and parades. Additional promotional activities around the end of year will maximize sales due to tax-related purchases, as well as a grand opening celebration to show off their environmentally friendly products and expertise. Utilizing customer financing options from GE Money will assist in creating customer loyalty and increasing sales. Lindsay Dilley should set marketing objectives to accurately benchmark against the primary and secondary competitors. He should aim to sell one Solar PV system per month in addition to the lower priced items. Triad Solar Store needs to sell approximately 14 units a year to break-even.
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Situation Analysis Company Analysis Triad Solar Store is an independently owned business, selling renewable energy and energy-efficient products and services. Triad Solar hopes to educate the local community about the benefits of its customizable products that promote energy, economic, and environmental efficiency. While not considered a franchise by parent company standards, Triad Solar is a part of the USA Solar Store network. USA Solar Store, headquartered in Vermont, began in 2001 by Dave Bonta to provide environmentally friendly products and educational resources to consumers. Dave Bonta’s vision was to start a “national chain” of solar stores across the nation4. There are 26 stores operating in 12 states, with the next store opening in Lexington, NC in July 2011. Triad Solar’s mission is to spread the practice of energy conservation, energy efficiency and renewable energy applications as simply and rapidly as possible to save the customer money and make a positive contribution to the community and environment. The business would like to position itself as the friendly, neighborhood solar energy store. In just one stop, a potential customer can get a consultation, technical advice, and installation information from an expert at a competitive price. Triad Solar’s value proposition is the assurance of quality, brand name products and personal service from a solar expert. Lindsay Dilley, owner of Triad Solar Store, earned a Bachelor of Science degree in Industrial Engineering from North Carolina State University in 1986. He continued his education in renewable energy technologies and green building from North Carolina State University at the NC Solar Center. He is a certified professional building analyst from The Building Performance Institute.
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Triad Solar is located in historic uptown Lexington, NC with a retail space leased in the J.C. Smith Building. The building is a two-level Colonial Revival brick structure built in the early 1900’s and offers ample parking to its customers4. Once used as a General Store, the aesthetically pleasing building contains raised brick archways and round-arched windows with granite sills. The retail space is 1,600 square feet and is three bays wide by three bays deep. The first floor will accommodate two offices, a product showroom and storage space as well as a shared bathroom with the other building tenants. There are no plans to use the second floor, as it needs renovations that are not yet scheduled. Triad Solar has over 8,000 products available to customers due to its licensing agreement with USA Solar Store. The products range from solar water heating to solar electric heating, LED lamps, solar lighting, solar refrigerators, composters, composting toilets, solar charges, solar attic fans, sustainable living books, and other solar tools. The company is able to save its customers up to 75 % off their entire energy bill through its energy efficient product offerings. Lindsay Dilley predicts a 30% growth in sales, mainly from the sale of PV and Solar Water Heating systems, by July 2012 based on previous USA Solar Store affiliates first year sales. In order to attain the desired sales growth, Triad Solar is utilizing a $3,000 marketing budget to attract his target market of single-family homeowners. The marketing expenses will allow Triad Solar to develop an advertising campaign and inform targeted consumers about the benefits of solar efficiency through classes and workshops. While already approved for a $125,000 line of credit, Triad Solar has opted to finance most of the operating expenses through personal equity. Some operating expenses have utilized the line of credit, such as licensing and initial start-up fees, however Lindsay Dilley has incurred most of the responsibility. Triad Solar aims to finance future growth through cash flows instead
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of utilizing loan options. Industry Analysis The solar power industry is intensely competitive. Solar power companies are competing not only with each other, but against other alternative energy sources such as hydroelectricity and wind power. The solar industry must compete for government subsidies and incentives to lower the cost of solar power generation. Due to tough economic conditions in 2008 and 2009, there was a decrease of 2.8% in consumer spending and business investments that weakened the demand for power necessary to operate businesses and factories. Additionally, the housing crisis made things worse as home foreclosures and shared homeowner housing further decreased the need for power1. The advantages of solar power are that it provides intermediate power and the capability of being switched on or off to meet the demands of the seasonal climatic conditions. Wind farms and power stations fueled by natural gas and oil are the main competitors in the electricity market. Since they serve the same function, these technologies compete on price, as electricity firms seek the lowest cost technology to produce power. The solar industry is capital intensive because of the high cost equipment that must be purchased to produce solar power. When entering into the solar energy industry companies need to guard a compelling amount of capital to enter. One of the main barriers to entry in this industry is finding the experts who have the boundless knowledge of solar energy. Another key factor to take into consideration that creates a barrier to entry is the remoteness of solar power buildings from demand centers. When buying and leasing land in remote areas, this will cause a high risk for firms that have never generated solar power before. According to Lindsay Dilley’s business plan, in the industry section under Energy Efficiency, in 2010, there has been an
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emphasis on energy efficiency. By 2014, there are predictions that there will be $50.2 billion in the installation of new electrical systems, appliances and major equipment, HVAC systems, roofing, windows and doors, Energy Star appliances, lighting, and other efficiency improvements. These factors will make energy-efficient residential products and services a hot sector over the next several years. For the threat of substitute products, Triad Solar Store has to be able to differentiate the quality of their products versus the competition because some of their higher quality products are more expensive. To generate revenue in this industry companies sell solar power generation directly to utilities, wholesale electricity providers and retail electricity users. Electricity can be delivered in countless ways, and is usually more conveniently and cheaply available through the grid. Fossil Fuels and other renewable forms of generation are just a few sources that electricity is generated from. These forms of generation are functionally indistinguishable from solar electricity, and may be available at night or on cloudy days. Consequently, they are not only readily available substitutes to solar panels, they are more convenient to use. The bargaining power of the customer is low because of the high price of the products and the limited number of sellers. Additionally, there is low bargaining power to customers because the solar industry is relatively newer and still in its growth stage. Based on research, the power of the supplier of the energy industry as a whole is high because there are only a select few solar energy suppliers around the area. This forces the buyers to purchase items at the price the manufacturers are willing to sale. In the future this is likely to change due to increase of new entrants and innovators researching a cheaper way to create solar products.
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The advantage Triad Solar Store has with the bargaining power of suppliers is that USA Solar Store and Sundeavor Logistics are working together to gain centralized buying power and product research to succeed in the solar industry. They will keep up with technology changes, put on webinars for education on new products, switching suppliers when the supplier decides to go a different direction making their products available to everyone or lower quality in product forces a switch. Market Analysis The solar power generation market is growing and technological advances have helped to keep the industry in its growth phase. The introduction of new technology for making the conversion from sunlight to energy more efficient occurs on a regular basis. However, solar technology still lacks competitive costs with other forms of energy generation. Therefore, the government incentives are the only things driving industry growth. The Solar Energy Industries Association, in their 2010 Solar Market Insight report, named North Carolina a top solar state. In 2007 the state of North Carolina passed a bill that requires 12.5% of utility sales to be renewable energy sources by the year 2021. North Carolina could replace 22% of its current electric use to solar power by installing solar panels and solar hot water heaters on residential and commercial rooftops9. In 2008 with the solar additions statewide that were made, North Carolina’s capacity for solar energy grew from 0.7 to 4.7 megawatts. In total North Carolina has the potential to install 22 gigawatts of solar power, which is roughly 22% of total current energy usage. Pike research is a marketing firm that focuses on the analysis of clean technology markets worldwide. In its research paper entitled "The New Solar Market,” it forecasts that lower costs and more available credit options will drive solar demand. Senior analyst Dave Cavanaugh
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predicts "Overcapacity and intense competition will drive down module average selling prices, which will accelerate grid parity15." Market demand for solar energy will increase to at least 19 gigawatts by 2013 according to Pike’s estimates. Its research tells us three key things will differentiate the successful solar energy companies from the unsuccessful ones: low cost per watt, efficiency of modules, and the ability to provide "one-stop shopping" to customers. The US Solar Power Generation Industry generates almost $80 million in revenue, 30% from industrial users, 34% from the commercial sector, and 36% from utility companies7.The Triad Solar Store’s profile of the average solar consumer is a household with over $100,000 combined income between the 2 primary decision makers, who are between the ages of 45 and 67 and are “professionals”. It is estimated that 81% of the target population have an undergraduate degree or higher and 51% have a post-graduate degree3. In Lexington, as of 2009, there was a population of about 20,000 people and the total number of households was 7,931 with about 4,900 being single family households, the primary target market. Only 10.2% or 809 of those 7,931 households in Lexington, NC have household income levels of $100,000 or more. North Carolina as a whole boasts 17.8% of total households having income of $100,000 or more and in the United States 21.22% of all household incomes is $100,000 or more10. When you expand from Lexington and include the 30-mile radius from Main Street the total population, according to early 2010 Census estimates, jumps up to 1.1 million people with 440,377 households. The projection for 2015 is that the area will house 1.2 million people with 472,000 households. The 2010 Census estimates that 131,756 people in the area hold bachelor’s degrees and 57,335 have obtained some form of graduate degree for a combined total of 25% of the population.
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Competitor Analysis Triad Solar has several competitors in the North Carolina area, but more importantly has several in its target market. There are two main types of competitors: local dealers and big box competitors. Local dealers differ from the local big box competitors because the local dealers specialize in the solar industry; whereas, the big box franchises sell several different products not specifically related to the solar industry. This creates a competitive advantage for the local dealers because they are more knowledgeable about its products. The primary competition comes from local dealers (Exhibit 2): •
Honey Electric Solar, Inc. - Competitive advantage- has a well-developed web-page making access to the market easier.
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Windsong Energy Solutions, LLC. -Dedicated to achieving highest customer satisfaction.
•
SolectricSolutions.com- Competitive advantage-centrally located in a bigger city where the sales potential is higher.
•
Lighthouse Solar- Local franchise of a national company. Additional local dealers include: Batts Builders LLC., Triad Solar Power (company with
a similar name could pose as a problem for Triad Solar Store), Carolina Solar Energy Systems, Inc., and Beaver Brothers Inc. Competitors defined as big box corporations include: Home Depot, Lowe’s Home Improvement, and Northern Tool. Lowe’s Home Improvement and Home Depot provide solar products such as solar attic fans, tube lights, solar lighting, tank-less hot water heaters, and solaroperated electric fence controllers. Similarly, Northern Tool offers solar panels, solar powered floodlight, etc. A future competitor may come from Duke Energy’s recent purchase of the solar farm in Davidson County. This is only a problem if Duke Energy passes the energy savings onto
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its customers. The solar farm will be a joint project for Duke Energy and Maryland based SunEdison LLC. The Davidson County solar farm is the second largest active solar photovoltaic farm on the East Coast, as well as one of the largest in the country. Triad Solar Store has an advantage when it comes to retail showrooms. Triad Solar Store will have retail space available to aid customers in their purchasing decisions. This retail showroom allows customers to see the actual products on sale such as solar panels, LED lighting, solar attic fans, etc. There will be an associate available to explain how solar energy works and the many benefits that come from solar energy. In-person conversations are more effective at getting messages across than via e-mail or phone conversations. When it comes to an advantage over big box corporations, Triad Solar Store is a modest sized, 1600 square feet, retail showroom, which makes it easier to assist customers in finding the right product that matches their specific needs. Environmental Analysis Triad Solar Store’s environment consists of political, social, economic, and technological happenings that affect how it will operate on a daily basis: Political: The unrest in Libya has a major effect on the solar industry because as prices for oil rise, consumers will try to find ways to reduce costs. Solar energy will allow customers to decrease their monthly energy bill as well as save fossil fuels and reduce greenhouse emissions. Even more recently, the earthquake/tsunami in Japan destroyed many nuclear power plants, causing them to emit high radiation levels, dangerous not only to the environment but also to the Japanese. In 2005, Bush signed the Energy Policy Act, which states that the government will provide tax incentives and loan guarantees for energy production, both residential and commercial17. The incentives and loan guarantees encourage homeowners to
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purchase alternative energy production systems for their homes to reduce the use of natural resources. All homeowners are able to participate in the promotion of green energy and can afford the renovations through this policy. Social: The green movement has increased tenfold the past few years. The movement has enabled many individuals to take part in the lifestyle change as different media outlets have allowed people to come together over a common idea. Social networking has played a big part in this process. Carbonrally.com, celcias.com, and makemesustainable.com are all networks dedicated to providing information about green initiatives and the positives of solar power. In the Greensboro area, there is the Guilford Energy Resources blog, which dates back to early 2007, providing the Triad area information about solar consumption and its benefits. The blog gives details on presentations given throughout the Greensboro area about solar energy and green ideas to conserve natural resources6. Economic: Tax incentives provided by the Energy Policy Act of 2005 as well as the savings by switching energy sources are the two motivating factors for investing in solar installation and other green movements. NC Greenpower is trying to provide more alternative energy sources to the state and for every donation of $4 or more, the company provides a block of 100 Kw hours in alternative energy14. Due to the increase in the U.S. solar market, many global companies are pursuing manufacturing facilities domestically. This creates jobs for Americans. The jobs created will assist in the stimulation of the economy leading to increased consumer spending, which can be spent on environmentally friendly products. Technological: The solar industry makes advances everyday to preserve remaining natural resources and reduce the dependency on foreign oil. Earlier this year, the efficiency of
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solar cell semiconductor band gaps was enhanced to increase levels of energy twenty percent. Solar cells are being made thinner and without silicon, which decreases the cost as silicon has been in short supply as of late. While still in the working stages, this discovery leads solar researchers to new developments that will help lower costs and create additional advantages for the ultimate consumer. SWOT Analysis Strengths Triad Solar has much strength that gives it a competitive differentiation advantage against competitors. First, Lindsay Dilley has expert knowledge about the solar industry. His credentials from North Carolina State University and certification from Building Performance Institute provide the target market with confidence in his abilities to install solar heating systems. Second, Triad Solar Store has a retail space, providing consumers the ability to visit the location and see the product line while getting information from an expert. The retail location offers convenience to its target market by acting as a one-stop shop for solar supplies. Lastly, Triad Solar Store is supported by USA Solar Store, a network of solar stores providing their independently owned retailers with reduced product prices, supporting materials and brochures and sales training programs. Weaknesses Due to the physical location of the retail store in Lexington, NC, Triad Solar Store may face difficulties in creating store traffic. Consumers may not like the idea of driving to Lexington to visit the Triad Solar Store when there are other solar equipment stores closer to their home. Triad Solar Store will only have one employee each shift making it difficult for
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customers to receive prompt and effective customer service as well as frustrating those customers who made the drive to Lexington. Another internal weakness is Triad Solar Store’s position on financing. They do not offer payment plans or crediting options to consumers. Installation and solar equipment is expensive and price conscious consumers may not be able to pay a large sum at one time, even knowing they will receive a rebate upon filing their tax return. Not offering financial assistance could possibly eliminate potential customers. Opportunities There are many outside influences that will propel Triad Solar Store to success. Triad Solar Store has opportunities with the small market size and the expected market growth. With the country continuing to become more environmentally conscious, the need for solar power increases. A good example of this is the recent earthquake in Japan, causing many nuclear plant explosions. This has created an environmental opportunity for the Triad Solar Store as solar energy is a clean energy source. The destruction of nuclear power plants and its effects in Japan will increase consumer awareness to research alternative sources of green energy. An additional opportunity for Triad Solar Stores comes from its relationship with USA Solar Store. Currently, there are twenty-six stores in twelve states, rapidly transforming USA Solar Store into a national store chain with increased buying power. Additionally, the relationship and shared retail space with Hearn and Associates creates an opportunity for Triad Solar Store. Hearn and Associates provides energy efficient insulation installation services, with its main product being Icynene Insulation. The regional location of the company creates another opportunity for Triad Solar Store. In 2007, North Carolina became the first state in the Southeast to adopt a Renewable
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Energy and Energy Efficiency Portfolio Standard (REPS). Under this new law, investor-owned utilities in North Carolina are required to meet up to 12.5% of their energy needs through renewable energy resources or energy efficiency measures16. Threats While Triad Solar Store has many opportunities to advance in the solar industry, there are two key threats. First, there are multiple solar equipment stores in the Triad area. Local stores such as Lighthouse Solar and big box chain Home Depot specialize in providing and installing solar equipment. These stores already have their name out in this highly competitive market. Without intense promotional activities, Triad Solar Store will not be able to compete. Second, solar efficiency is expensive. Consumers will experience high switching costs. While tax rebates alleviate some of the financial burden, they are not applied to the purchase until the customer files their tax returns requiring customers to pay all expenses up front. (Exhibit 3) Marketing Strategy Development Positioning Triad Solar Store should position itself as the local neighborhood solar store, providing high quality energy efficient innovations, in an effort to maximize customers’ short and long term savings and maintain a healthy environment for future generations. Target Market We recommend that Triad Solar Store target single family homeowners with environmental, technological, and financial motivation. Single Family Homes
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Single family homes make up a majority of the housing industry in and around the Triad Solar Stores’ retail location. Within the Piedmont Triad, there are approximately 366,178 housing units. Of those units, 235,808 houses are owner-occupied. Due to high investment costs, the company should target consumers with a combined household income over $100,000 per year. In the Piedmont Triad, there are approximately 32,008 homeowners with an income above $100,000, making up 9.4% of the market3. The company should target customers that are well educated, holding at least a Bachelor’s degree. According to Mintel, respondents with professional degrees are 70% more likely to be Super Greens than the population as a whole. Similarly, respondents with a high school education or less are more than 40% more likely to be Never Greens12. There are 122,226 people in the target area with a Bachelors or Graduate degree, making up 21.4% of the population. Triad Solar Store should additionally target consumers that own homes valued over $300,000. Triad Solar Store should target consumers in the age range of 25-34. Surveys show this age group contains the most active green purchasers, with 67% reporting having spent money on products specifically to reduce the environmental impact of consumption in the last two years12. Within the single-family home segment there are three different types of people: Environmentalists, Technologically motivated, and Financially motivated. Environmentalists Environmentalists are concerned about making the world a better place to live in and protecting the well-being of the earth. This group is attracted to the green appeal that comes from solar energy and its effect of making the world less dependent on electrical energy. The value proposition is: Clean energy resources for a cleaner World.
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Technologically Motivated Technologically motivated people are concerned with acquiring the latest technology and supporters of innovations. Additionally, this group thinks that having the latest technology makes them look cool. This group typically doesn’t consider price an issue because they are willing to pay for the latest technology. The value proposition is: The latest and greatest technology for the technologically advanced. Financially Motivated The financially motivated are concerned with saving money right now and in the long run. Initially, it will be hard to attract this group because they typically want to see savings right away. The tax rebates and increased property values will aid in gaining this segment’s attention. The investment price may be high but this group will see the savings in the long run. The value proposition for this group is: Investing today for future savings. Marketing Mix Development Product Triad Solar Store will sell, install, and service renewable-energy systems with the main focus being on solar water heating and solar electric systems. It will offer consultation and installation services to customers interested in purchasing a new energy efficient system. In addition to the renewable-energy systems, Triad Solar will offer solar efficient products, such as solar-powered attic fans, through its licensing agreement with USA Solar Store. The agreement allows the store to sell over 8,000 energy-efficient products at an affordable price. Product warranties come with the purchase of a renewable-energy system. The warranty depends on the type and manufacturer of system installed. Triad Solar Store honors the manufacturer’s warranty as well as offers an extended warranty available for additional cost
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(Exhibit 4). Place Triad Solar Store will be located in the heart of downtown Lexington, North Carolina on Main Street. The building is in the Historic Uptown Lexington District at 104 North Main Street. Having a retail space will serve as a place to educate possible consumers and make selling easier. For a location like Lexington, being downtown on Main Street is best because the location gives the store front row access to parades and festivals that take place in the area. The “friendly neighborhood solar expert” will fit right in with the families enjoying themselves downtown. Price Since the primary target of Triad Solar Store is consumers in residential areas, it is important to fully satisfy the customer’s needs. The Store will provide consultation to determine the appropriate, customizable product at the most competitive price. Triad Solar is responsible for preparing a preliminary system design and estimated total installation cost (not reflecting applicable state or federal tax incentives). After selection of the final sales proposal, the customer is required to provide 70% of the total cost upfront, with an additional 20% required once the company receives the necessary equipment and the final 10% due upon commissioning of the system. Triad Solar Store should implement financing options to make their products more affordable to customers. Installation of a solar-efficient system is expensive, and would be beneficial in assisting consumers interested in purchasing the products but have initial sticker shock. Utilizing GE Money’s program to offer customer financing to small businesses Triad Solar will be able to increase sales, as well as develop customer loyalty through the continued
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use of credit (Exhibit 14). Promotion Triad Solar must undertake extensive promotion to educate its customers on the benefits of investing in solar energy. Approaching tax season Triad Solar should increase promotions/advertisements. Federal and state tax incentives will sway individuals who are interested in investing in solar energy and are worried about the expense to make a purchase. An important promotional strategy will be holding speaking sessions at a combination of classes and events each month to increase awareness while connecting with customers, as well as inspiring interest and confidence about Triad Solar Store’s expertise. Potential places for speaking sessions are at the: Rotary, Elks, Lions, Chamber of Commerce, company luncheons, Earth Day, Green Festival, environmental groups, builders groups, libraries, real estate, and at the store. There is an expectation of the grand opening of Triad Solar Store to be the most successful promotional activity and will set the tone for the store’s existence in Lexington. The event is marketed as a family event, providing food, games and door prizes. The door prizes include items such as Compact Fluorescent Lamp (CFL) light bulbs, iPhone and iPod Solar Chargers, Mini Solar lights, and Keyboard lights. Throughout the course of the day, any individuals who spend $25.00 or more will be entered into a drawing to win an iPad solar charger, case and battery. All shoppers will receive a reusable tote bag printed with the company logo for participating in the grand opening. Press releases will spread awareness through media outlets such as local papers, radio stations, and television stations to keep the community up to date on any activities and events that the store has to offer (Exhibit 8, 9 and 10).
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Consistently using print media to remind people that the store exists will help to keep the company’s name relevant in the customer’s mind. The company plans to develop a mailing list based on target market demographics to notify residents about products and services they may be interested in. Triad Solar plans to send just under 3,000 pieces of direct mail periodically to residential areas in upper-class neighborhoods with houses valued at least $300,000. (Exhibit 11 and 12) Potential and current customers can also electronically access the store through the company’s website at www.triadsolarstore.com (Exhibit 5, 6, 12 and 13). An additional electronic resource the company should use is social media websites such as Facebook and Twitter to target the consumer within the thirty mile radius. Within the time frame of January 2009 to January 2010, Facebook saw a 24.8% growth in users between the ages of 25-342. Triad Solar Store can run promotions on its Facebook page to increase store traffic. Informative videos and text about the many benefits of solar products will also serve as an interactive technique to attract customer (Exhibit 7). Marketing Objectives, Budget and Timelines The marketing objectives we wish to accomplish are to attract single family households. With this being said, we hope to generate the correct amount of sales to reach a profit where Mr. Dilley will make money, rather than lose. Budget A break-even analysis was conducted to evaluate the profitability of PV Solar Electric Systems using Triad Solar Store’s financial information. The break-even point is 13.28 units/year, meaning that Triad Solar Store needs to sell 14 units to break-even. After adjusting the marketing expenses to include the increased grand opening budget and direct mail advertisements, the new break-even point calculated to 13.75 units/year, or 14 units. Even with
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the additional expenses to increase consumer awareness, Triad Solar will not have to sell more units to break-even. (Exhibit 15) Marketing Performance Evaluations In order for the company to know if its marketing performance efforts are paying off, the company should conduct surveys by making them available to potential or previous customers via postal services and Internet invitations. These surveys will ask the customer how they heard about the business. The marketing performance surveys should be available throughout the company’s retail space, on its website and social networks. The best time to administer the customer satisfaction surveys is after the completion of a sale and during the product lifetime or warranty period. For example, after the installation of a solar panel on a home, the company should administer an exit survey (Exhibit 16) to evaluate the installation experience and overall satisfaction. Six months after a solar panel is installed the company should send an additional survey (Exhibit 17) to examine how effectively the product is working and how pleased or displeased the consumer is with the product. Additionally, the company should have on its website and social media pages comment sections for customers to express their opinions about the company and its performance.
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Sources: 1 Consumer Expenditures--2009. (2010, October 5). Retrieved from http://www.bls.gov/news.release/cesan.nr0.htm. 2
Corbette, Peter. (2010, January 4). Facebook Demographics and Statistics Report 2010 – 145% Growth in 1 Year. Retrieved from http://www.istrategylabs.com/2010/01/facebook-demographics-and-statistics-report2010-145-growth-in-1-year.
3
DemographicsNow. (2010). Data retrieved March 31, 2011, from http://library.demographicsnow.com/.
4
Dilley, Lindsay. (2010). Triad Solar Store Business Plan.
5
File, Mark. (n.d.). Proximity is the First LEED® Platinum Hotel . Retrieved from http://www.proximityhotel.com/LEED_platinum.htm.
6
Guilford Energy Resources. (2010). Retrieved from http://www.guilfordenergyresources.org/.
7
IBIS. (2011, March). Solar Power Generation. Retrieved from http://www.ibisworld.com/.
8
IRS, (2007). Highlights of the Energy Policy Act of 2005 for Individuals Retrieved from http://www.irs.gov/newsroom/article/0,,id=153397,00.html.
9
Kaplan, S, & Ouzts, E. (n.d.). Growing Solar in North Carolina. Retrieved from http://www.frontiergroup.org/our-research/energy/reports-on-energy/growing-solar-innorth-carolina.
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Lanse, Sarah. (2011). UNC Greensboro Expanding Into Glenwood Neighborhood. WFMY News2, Retrieved from http://www.digtriad.com/news/article/167042/57/UNC-Greensboro-Expanding-IntoGlenwood-Neighborhood.
11
Lexington Household Income Statistics. (n.d.). Retrieved from http://www.clrsearch.com/Lexington_Demographics/NC/Household_Income_and_Net_ Worth_Statistics.
12
Mintel. (2011, February). Green Marketing - US. Retrieved from from http://academic.mintel.com/.
13
NC GreenPower Generators. (2011, March). Retrieved from http://www.ncgreenpower.org/resources/photos/Generator-map_NEW.gif.
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Resources > Generators . (2011, March). Retrieved from http://www.ncgreenpower.org/resources/generators.php. 15 Solar Energy Market Will Grow 43% Year-Over-Year in 2010, but Oversupply is Likely. (2010, May 19). Retrieved from http://www.pikeresearch.com/newsroom/solar-energy-marketwill-grow-43-year-over-year-in-2010-but-oversupply-is-likely. 16
The Coalition. (n.d.). Retrieved from http://windindustryjobsfornorthcarolina.com/The_Coalition.html.
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The White House. (2005, August 8). Fact sheet: President Bush Signs Into Law a National Energy Plan . Retrieved from http://georgewbushwhitehouse.archives.gov/news/releases/2005/08/20050808-4.html.
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Exhibit 1: 30 mile radius
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Exhibit 2: Main Competitors Company
Location
Annual Revenue
Employe es
Retail Store
Products/Services Offered
4
Revenue Per Employee $164,000
Honey Electric Solar
Liberty, NC
$656,000
YES
$950,000
2
$475,000
YES
Greensboro, NC
N/A
N/A
N/A
N/A
Greensboro, NC
$100,000$500,000
5 to 9
$20,000$55,556
YES
-Design, sale and installation of residential and commercial solar systems -solar electricity -solar water heating -solar pool heating -Design, sale and installation of residential and commercial solar systems -solar electricity -solar water heating -solar pool heating -LED lighting -Sale and installation of residential and commercial solar systems -solar electricity -solar water heating -solar pool heating -Sale and installation of residential and commercial solar systems -solar electricity -solar water heating -solar pool heating
Windsong Energy Solutions LLC.
Burlington, NC
SolectricSo lutions.com
Lighthouse Solar
26
Exhibit 3: SWOT
Strengths • • • • • • •
Retail space Ability to educate customers-customer service Tax benefits/rebates when purchasing One stop shop for solar products-has array of products Quality of products Ability to purchase through USA Solar The private label solar domestic hot water systems will help build name identity and awareness for USA Solar Stores
Weaknesses • • • •
Opportunities • • • • • •
Manageable sized market Expected market growth Environmental impact from issues in Japan Relationship with USA Solar Shared retail space with Hearn and Associates NC first state to adopt REPS
Physical location of retail space Price Only one employee No financing options
Threats • •
Numerous competitors High switching costs
27
Exhibit 4: Warranty Periods for solar products
Solar Water Heating
Solar Electric
Grid Tied Inverters
Collectors - 10 years
Solar PV Modules - 5 to 10 years
Grid-Tied - 5 to 10 years
Solar Storage Tank - 5 to 10 years
Power output guaranteed for 25 years
Off-Grid 2 to 3 years
Circulation Pump - 2 years
28
Exhibit 5: Triad Solar Store Brochure
29 Exhibit 6: Triad Solar Store Website
30 Exhibit 7: Triad Solar Store Facebook Page
31
32
Exhibit 8: Tote Bag Design Bulletinbag.com Item #: BAB39B1213
250 $1.69 $2.86
500 $1.59
750 $1.49
1000 $1.29
$2.58
$2.37
$2.22
Top row represents quantity of bags ordered Middle row represents pricing with one color logo Bottom row represents pricing with full color logo Total: 250 x $1.69 = $ 455.20
33 Exhibit 9 GRAND OPENING BUDGET Cost Saving Benefits (CFL light bulb) Regular incandescent light bulbs are very inefficient. In fact, over half the energy consumed by an incandescent light bulb produces heat, not light. Compact fluorescent light bulbs are more efficient than incandescent bulbs. A CFL bulb typically uses 65%-75% less energy than a standard incandescent bulb to provide the same amount of light. Another benefit of CFL bulbs is that they last up to 10 times longer than a regular light bulb. Although the up-front cost of a CFL bulb is typically higher than a standard incandescent bulb, the cost savings over the life of the bulb can be striking. Let's take a concrete example. Suppose you replace one 100-watt standard incandescent bulb with a 28 watt CFL bulb that produces the same amount of light. Assume also that: • The CFL bulb costs $5.00 and lasts 10,000 hours • A standard incandescent bulb cost $0.75 and lasts 1,000 hours (therefore 10 standard bulbs are required to last as long as the one CFL bulb). • The cost of electricity in your area is $0.12/kWh
http://www.onebillionbulbs.com/Learn Door Prizes 15 CFL Light bulbs = $75.00 2 iphone & ipod Solar Charger= $34.95= $69.90 5 Mini Solar = 7.95= $39.75 5 Keyboard Light 7.95= $39.75 3 Warning/Flashing Light (red, yellow, blue) $39.95= $119.85 1 I-‐PAD SOLAR CHARGER, CASE & BATTERY $139.95 (Special drawing for individuals who spend a total of $25.00 on Grand Opening Day) 30 Door Prizes= $484.20 250 Tote bags= $422.50 Happy Rentz Cotton candy machine $55 Sugar $8.45 x 2 per 100 sugar cones $5.25 per 200=$22.15 Pink Dunking booth $250 Moon Walk 10x10 castle $100 Snow Cone Machine $55 Syrup $12.50 x 2 cups $12.50 per 200= 37.50 White and yellow striped tent 20x30 $350 Tables $7.50 piece 8-‐10 people 8 (foot table) 10 tables $75.00 Chairs $1.50 80 chairs= $120.00 $100 set-‐up and delivery HR=$1,164.65 GRAND OPENING TOTAL=$2,045.85
Exhibit 10: Press Release 34
35 Exhibit 11 DIRECT MAIL BUDGET 2,893 (excludes duplicate mailing addresses)= $405.02 View Criteria GEOGRAPHY
ZIP + Radius
27292 (25 mile radius)
PROPERTY
Current Home Value
$300,001-$400,000 $200,001-$300,000
DEMOGRAPHICS
(Household) Estimated Income
$100,000-$124,999 $125,000-$149,999
(Household) Education
Bachelor Degree
ADDRESS-COMPLETENESS
Mailing Address Complete
CORPORATE-OWNED
Exclude
OPTIONS
http://www.listsource.com/ Quantity & Pricing (rates are based on standardized addresses.)
Quantity
Production
Fees
Postage
Total
Savings
2,893
$812.07 / $730.86
$0.00
$679.86
$1410.72
Save 10%
1000
$280.70 / $266.67
$0.00
$235.00
$501.67
Save 5%
2500
$701.75 / $631.58
$0.00
$587.50
$1219.08
Save 10%
5000
$1403.50 / $1192.97
$0.00
$1175.00
$2367.97
Save 15%
https://click2mail.com Creating and mailing postcards= $1,410.72
36 POSTCARDS TOTAL=$1,815.16 Exhibit 12
37
Exhibit 13: Newspaper Ad for The Dispatch
“Your friendly neighborhood solar store experts.” Triad Solar Store 104 North Main Street Lexington, NC
38 Exhibit 14 Financing options with GE Money
GE Money programs offer: • • • • • • •
Easy-‐to-‐use online application and sales processing tools with Business Center Flexible promotions and competitive interest rates Fast credit decisions and funding Responsible credit lines High quality, friendly service Marketing, best customer lists and direct mail services Free online training for your staff
Phone Number: 1-‐866-‐838-‐065
39 Â Â
Exhibit 15: Break Even Analysis Triad Solar Store Break Even Analysis Exhibit Purchase Price 20,000
Unit Variable Cost
14,000
Fixed Assets
79,658
Includes: Depreciation Expenses Salary and Wages Ammortized Start Up Costs Fixed Asset Total from P &L Statement
Units 13.2763333 Triad Solar Store needs to sell 14 units to breakeven
Improved Triad Solar Break-Even Analysis Purchase Price
20,000
Unit Variable Cost
14,000
Includes:
Fixed Assets
82,474 Units
Initial Fixed Assets Direct Mail: Customer List and Postcards Grand Opening Budget
13.7457017
Triad Solar Store will still need to sell 14 units to break-even
40 Â Â
Exhibit 16: Customer Satisfaction Exit Survey How satisfied are you with the purchase you made? o o o o o
Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied
How satisfied are you with the service you received? o o o o o
Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied
How satisfied are you with our company overall? o o o o o
Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied
How likely are you to buy from us again? o o o o o
Very Unlikely Unlikely Maybe Likely Very Likely
How likely are you to recommend our product/service to others? o o o o o
Very Unlikely Unlikely Maybe Likely Very Likely
How likely are you to recommend our company to others? o o o o
Very Unlikely Unlikely Maybe Likely
41 Â Â
o Very Likely Exhibit 17: Customer Satisfaction Survey How satisfied are you with the purchase you made? o o o o o
Very Dissatisfied Dissatisfied Neither Dissatisfied or Satisfied Satisfied Very Satisfied
Do you find our product quality and performance is at par with your satisfaction level? o No o Somewhat o Yes Are there any changes which you would like to see in your purchased product to increase your satisfaction level? o No o Yes If yes, what? ______________________________________________________________________________ ______________________________________________________________________________ Within the last six months have you bought additional products from our store? o No o Yes Overall how satisfied are you with your experience with our company? o o o o o
Very Dissatisfied Dissatisfied Neutral Satisfied Very Satisfied