“Think Nationally, Act Locally”

1. “Think Nationally, Act Locally” National vs. Targeted/Regional Promotions in the Development of ENERGY STAR qualified products

2. Overview • In the past few years, Governments, Utilities and NGO’s have invested a great deal in the promotion of ENERGY STAR qualified products. Questions remain though as to the effectiveness of these activities in the development of long term change in behaviour patterns • Have consumers been influenced by tax breaks, price incentives, grants and product giveaways to make permanent changes in their habits, or have they merely created temporary opportunistic change? • Have national promotions or targeted/regional promotions been more effective in developing the repetitive behaviour necessary to create long term energy conservation habits? • It is my thesis that the real change is created at a grass roots level, and that targeted/regional promotions are more likely to create change than broad based national programs

3. Outline • Overview • Requirements for Effective Promotions • Requirements for National & Regional/Targeted Promotions • Advantages of Regional/Targeted Promotions • Target Selection • Product Selection • Delivery Partner Selection • Promotion Plan • Publicity • Conclusion • Contact Information

4. Effective Promotions • Effective promotions meet the following criteria • Well defined target groups • Exact understanding of the needs of the target group • Clear goals and objectives • Compelling call to action for the target group • Development of repetitive behaviour change through meeting the needs of the target group • Measurable results

5. National Programs • Broad based national programs require the following steps • Identify the product to be promoted • Identify the promotion method • Procure or arrange for product supply from the manufacturer/distributor • Arrange a delivery partner(s) with national scope • Create and prepare promotional collateral • Plan publicity (paid advertising/media awareness) • Launch and execute program

6. Regional/Targeted Program • Regional/Targeted Promotions require the following steps • Identify the region or target user • Identify the needs of the region or target user group • Identify the product to be promoted • Arrange a delivery partner with scope & expertise in the region or target user group • Develop a promotion plan in context of the user needs, and delivery partner expertise • Procure or arrange for product supply from the manufacturer/distributor • Create and prepare promotional collateral • Plan publicity (paid advertising/media awareness) • Launch and execute program

7. Advantages of Regional/Targeted Promotions • Regional/Targeted promotions better meet the “Effective Promotions” criteria noted earlier • They tend to be more likely by their nature to have well defined target groups • They are more likely to allow for innovative delivery methods, focussed on needs of the target user • They are generally more cost effective, allowing for better use of budgets • They are more easily constructed to provide measurable results • They are more likely to produce long term habit changes, as the promotion has been developed to meet the specific needs of the group or region

8. Target Selection • When possible clearly defined target groups or regions should be selected. • One of the major reasons for the success of the BC Hydro Powersmart program has been its ability to develop specific regional and user targets for each of its phases • Seek to create maximum impact with minimal contact • Planning a promotion which effects small change in a broad based group can be more expensive and difficult to execute than a tighter target group which can effect large change • For example targeting builders with incentives for the installation of ENERGY STAR qualified appliances in new homes, could have greater impact, prove easier to execute, and be more cost effective than a broad based consumer program • Providing retailers an incentive to only stock LED Holiday lights could force consumers to change their habits, without the cost of reaching out to the broader group of users

9. Target Selection • Look for target groups which are pre-disposed to change or that you perceive would have a clear and obvious benefit from change • For example independent retailers would obtain a clearer and more obvious benefit in changing lighting from Incandescent and Halogen to ENERGY STAR qualified compact fluorescents than apartment dwellers who may not pay their own utility bills • Understand the needs of the target group • Focus group your proposed target to fully understand their needs

10. Product Selection • Product Selection should be driven off the needs of the target group or region • Creating a promotion for ENERGY STAR qualified forced air gas furnaces in Montreal would not make sense, while it could produce excellent results in Toronto • Look for the low hanging fruit • Consider products which will create long term change within the target group or region, will have maximum uptake, and create the greatest energy savings within that group • Consider unique options • We often tend to look at the same products such as lamps, heating/cooling and refrigeration. Consider new and neglected categories such as LCD monitors, home ventilation and home entertainment

11. Product Selection • Balance cost with quality • The ENERGY STAR label does not necessarily equal product quality. It means that the product samples submitted to the testing lab met the ENERGY STAR specifications. It remains a key responsibility of the promotion sponsor, and your product supplier to ensure that the product is of a quality to provide the target users with a satisfactory experience and build long term change • Quality product may cost more money, but if it drives a satisfactory user experience, it will lead to long term change, and the creation of centres of influence who will expand that change • Consider the impact of Brand Equity • Programs which involve respected brands have higher take-up, and create greater user satisfaction than cost driven programs which neglect Branding as a key component. Again Brand equity is a cost factor, so scale the promotion to be able to take advantage of this key driver

12. Delivery Partner Selection • Choose the Delivery Partner that can execute the task in the context of your target group or region • For example if you have a target that is rural, select a partner that has a broad base of distribution points within that rural area • Be certain your Delivery Partner will execute • Do your research beyond looking at financials. Talk to users in your target group, and get their thoughts about the delivery partner,s capabilities and reputation. Visit their operation and customers. Remember, just as product branding reflects on your Brand, so does the selection of a delivery partner

13. Delivery Partner Selection • Think outside the box • We all look to retailers as our Delivery Partners, but consider the options available. Bear in mind that the closer you get to the end user, the greater the trust, and the greater the likely participation. • If you were planning a farm based program for lighting, consider a company calling on farms • Similarly consider using home inspectors and Energuide for Houses auditors to deliver programs • Consider trade associations/buying groups as possible delivery partners or coordinators of deliver partners

14. Promotion Plan • The Promotion Plan needs to be innovative, effective and centered around a call to action • Typically ENERGY STAR promotions have involved rebates, couponing, and product sampling • While rebates prove effective (the higher the dollar value of the offering, the greater the effectiveness), couponing and sampling may be less effective in creating long-term change • Be innovative • Consider creation of integrated programs which enhance the program. For example couple a rebate on an ENERGY STAR qualified refrigerator with a Sweepstakes to “Win a House Full of ENERGY STAR qualified appliances • Consider Value added offerings such as a “Winter of Free Natural Gas” with an ENERGY STAR qualified Gas Furnace

15. Promotion Plan • Focus on being effective • Handing out CFLs to consumers in a parking lot, may or may not drive long term habit change • Giving CFLs to a group that has shown itself pre-disposed to long term change, such as consumers paying for an Energuide for Houses audit, is likely to create long term change • Develop a compelling Call to Action • Require the target group to “invest” in the promotion to receive the reward. Programs that do not require an investment of time, effort or money, may create initial uptake, but are less likely to create long term change than those which require an investment • Be certain that the Call to Action is clear, and easy to execute • Ask the question “What would make you…….?

16. Promotion Plan • Timing Timing Timing • Be certain your timing meets the needs of the target group or region, and think beyond the obvious. We all know that running a program on ENERGY STAR qualified air conditioning in December might be poor timing, but also consider the hidden timing issues, such as positive and negative income “bumps” caused at RRSP time (negative), tax return season (hopefully positive), crop planting time (negative) and harvest (positive)

17. Publicity • Publicity needs to be tailored to the target, and is most effective if it considers the Delivery Partner • The more you consider the target, the less you spend, and the more effective you are. If you need to reach hotel operators, the various trade and trade association publications serving that industry represent far better avenues than broad based publicity and promotion • Make use of Co-op advertising with your Delivery Partner. Most effective Delivery Partners will be doing some form of advertising, which can be shared to reach your target, saving you money and adding value for your Delivery Partner

18. Conclusion • Think Nationally but act Locally, both in the geographic and demographic sense. While we manufacturers love the sales that are generated by broad based National programs, as corporate and individual citizens we need to consider how we can create a more sustainable society, ahead of how we can create profits. • By focussing on targeted groups, we can more effectively spend the dollars that are available for creating change, and ensure that we develop and support long term behaviour modification as opposed to short term opportunistic change • Good promotions create awareness and change. Plan carefully, target precisely, understand the needs of the target, execute in an innovative fashion, and we can achieve our goals of creating an “ENERGY STAR” society in Canada

19. Contact Kevin Smith National Business Development Manager Panasonic Canada Inc 5770 Ambler Drive Mississauga On L5T 2A4 905-238-2494 e-mail ksmith@ca.panasonic.com