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ENERGY STAR Program Requirements: Product Labeling

ENERGY STAR Program Requirements: Product Labeling. July 22, 2003 Ann Bailey, Director ENERGY STAR Product Labeling. Why Label Your Products?.

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ENERGY STAR Program Requirements: Product Labeling

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  1. ENERGY STAR Program Requirements:Product Labeling July 22, 2003 Ann Bailey, Director ENERGY STAR Product Labeling

  2. Why Label Your Products? • More than 50% of the general population considers energy efficiency to be a very important product attribute when purchasing electronics(The Natural Marketing Institute, 2003) • ENERGY STAR awareness is 40% nationally and exceeds 50% in many major markets • 50-60% say the presence of the ENERGY STAR influenced their purchase decision • 71% are likely to recommend ENERGY STAR to a friend

  3. Why Label Your Products? • ENERGY STAR offers the attributes of a strong ingredient brand • immediate point of differentiation • added value (saves energy, money and the environment) • reduced effort and perceived risk for consumers • Plus objective third-party credibility • products that earn the ENERGY STAR meet strict energy efficiency guidelines set by the Environmental Protection Agency

  4. Why Label Your Products? • Print articles mentioning ENERGY STAR have reached a combined circulation of more than 700 million people over the past year • As of May, 850 companies run ads each month for ENERGY STAR products • ENERGY STAR product ads have risen 25% over the past year -- exceeding 10,000 per month

  5. Partnership Agreement • Goal: standardized format capturing fundamental program requirements • comply with product eligibility criteria • comply with logo use guidelines • qualify a product within a set time • provide shipment data • keep product lists up-to-date • label products, product literature and web site • Transition began in 2000 and takes place as product specs are revised - only OE remains

  6. As of April 1, 2003

  7. Labeling of Qualified Product • Interior fixtures 96% (78%) • Portable fixtures 100% (100%) • CFLs 81% (67%) • Programmable Thermostats 75% • Clothes Washers 86% • Refrigerators 94% • Dishwashers 75% • DVDs 47% (TVs 25%) • Ceiling fans 35% Source: EPA Retail Store Level Assessments September 2001 June 2002

  8. Provide clear and consistent labeling of ENERGY STAR qualified computer monitors. The ENERGY STAR label must be clearly displayed on the top/front of the product, on the product packaging, in product literature (i.e. user manuals, spec sheets, etc.), and on the manufacturer’s Internet site where information about ENERGY STAR qualified models is displayed. Labeling Language

  9. Purpose of Labeling Requirement • Make it simple for buyers (consumers and businesses) to easily identify energy-efficient models • Clearly differentiate between models • Allow retailers and manufacturers to leverage significant outreach • Ensure partners are recognized for their high efficiency products • Increase awareness of ENERGY STAR among purchasers

  10. Chronology of Labeling Discussion • Early 2001 - Initiated discussion with ITI concerning the new PA • March, 2002 - Letter to monitor manufacturers • explained rationale for PA requirements • indicated our willingness to consider labeling options • included laundry list of proposals we had heard so far • April, 2002 - Monitor industry meeting • further discussion of labeling requirement and sharing of concerns/suggestions

  11. Chronology of Labeling Discussion • May, 2002 - Letter to monitor manufacturers • announced decision not to accept labels on back panel • stated intention to issue approved set of labeling options as official interpretations of PA • final call for suggestions • June, 2002 - Additional industry input received • ITI, IBM, Viewsonic, Dell, Apple

  12. Chronology of Labeling Discussion • December, 2002 - Partner meeting • reviewed the new PA requirements • status report on PA phase-in • July 22, 2003 - Today’s meeting • presentation of proposal allowing four options for labeling of monitors

  13. Partner Concerns • Desire not to include brands other than their own on the product • Preference for a transparent, seamless design • Costs to produce and apply the label • Contamination of recycling process • Consumers don’t look/ask for the label • Label does not add value for buyer • Label does not increase sales for partner

  14. Options Considered • Temporary label • Electronic label • Folder similar to control panel folder • On screen display • Label on monitor base or stand • Removable label for power cord, similar to safety labels on consumer products • Label incorporated into boot up process (initial boot up or all boot ups)

  15. Options Considered (cont.) • Consumer outreach/advertising in lieu of labeling • Label on promotional piece in the shipping box • Label on plastic protective covering for monitor • Label on accessories, e.g., mouse pad • Label on point-of-purchase promotional item, e.g., shelf-talker, and work with retail staff

  16. Where We Ended Up • Four options • Balance partner concerns with labeling objectives • Demonstrate flexibility while providing options that have roughly equal merit

  17. Monitor Labeling Options • - Permanent label on top/front • - Temporary label on top/front • - Electronic label • - Label used in advertising

  18. Permanent Labeling

  19. Temporary Labeling

  20. Temporary Labeling

  21. Electronic Labeling • Certification mark appears on monitor screen through software driven by the computer such as: • Desktop folder similar to control panel folder • On screen display • Boot up screen • Navigation screen • Allows flexibility in implementation, depending on operating system, but requires failsafe to ensure only qualified monitors are labeled • Will be handled case-by-case

  22. Electronic Label • Maximum 2 clicks to get to ENERGY STAR • Icon should be on a screen with few others • ENERGY STAR folder to contain information in .pdf files • What is ENERGY STAR • Energy and environmental benefits of ENERGY STAR qualified product • Information on ENERGY STAR products (OE and others) • Power management

  23. Electronic Label - Example From Desktop ENERGY STAR

  24. Electronic Label - Example

  25. Electronic Label - Example Two clicks down: ENERGY STAR icon ENERGY STAR

  26. Labeling via Advertising • Incorporate the logo into advertising such that the number of impressions that result are roughly equivalent to the impressions that would have resulted from consumer exposure to the label on their qualified product • Provide partners flexibility while guaranteeing approximate equivalency of impact as measured by the number of impressions achieved • impressions = reach (# of people) X frequency (# of times)

  27. Labeling via Advertising A = 52(S) Where: • A = # of impressions that would need to be achieved from the advertising and • S = # of ENERGY STAR qualified units shipped by the partner in the previous calendar year

  28. Labeling via Advertising Assumptions -- very conservative, derived in consultation with PR/Ad experts • Temporary labels • 75% of temporary labels removed immediately • 25% remain on for the life of the monitor • A monitor is used an average of 208 days/yr • 60% are in offices, used 5 days/week • 40% are in homes, used 3 days/week • combined total average is a little over 4 days/week • One impression per day

  29. Labeling via Advertising • To determine shipments, partner may use • actual shipments of qualified monitors in the previous year OR • an estimate of shipments calculated by multiplying its total monitor shipments by a national ENERGY STAR market share percentage provided by EPA

  30. Labeling via Advertising • At a minimum, ads must properly display the “Ask About ENERGY STAR” or “We Sell ENERGY STAR” logo with a statement conveying the meaning/value of ENERGY STAR • Partners also are encouraged to prominently display the certification or promotional logo in ads that feature qualified products and offer more explanation of ENERGY STAR along with a call to action

  31. Labeling via Advertising • Appropriate ad media: • TV, radio, print, Internet • Ads must be targeted to consumers outside partner’s company • The following may not be used to fulfill this requirement: • Employee education • Use of logo on company web site

  32. Labeling via Advertising • Reporting on ad activities • shipment numbers used to determine # of impressions needed • copies of ads in which the logo was included to fulfill this requirement • dates/period ads were placed • total # of impressions achieved

  33. Real World Example • Company D sold 4.3 million monitors in 2000, Assume 50% were ENERGY STAR qualified • At 52 impressions/qualified monitor, Co. D needs to achieve 112 million impressions Translated into dollars: • At an average of $14/thousand impressions, Co. D would need to spend $1.5 million on advertising that includes ENERGY STAR • Co. D’s ad budget was $431 million in 2001 • Co. D would be spending less than 1% of its ad budget on ads that include ENERGY STAR

  34. Timing • Partners are free to pursue any of the 4 labeling options beginning at any time • Official labeling requirement will be deferred until OE partners transition to the new logo • Transition to the new logo will be coordinated with changes to the EU agreement and is expected to occur in 2005

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