Why does the strategic positioning of Econo-Heat's wall-panel heater justify a green marketing strategy
Thesis (MBA)--Stellenbosch University, 2011.
This case study explores why the strategic positioning of the wall-panel heater, manufactured by Econo-Heat, justifies a green marketing strategy. The primary research objective is to provide Econo-Heat with a coherent marketing strategy framework, based on the outcome of the strategic analysis of the competitive positioning of the wall-panel heater. The following factors form the context of the study: the impact companies have on the environment, the energy crisis and the rising “green economy” in South Africa, and the increased consumer awareness about lifestyle consequences for the environment. The wall-panel heater uses convection-heating technology to warm rooms and has unique selling properties, such as being energy efficient, economical, effective and safe. Other space-heating products found in South Africa do not encapsulate all these qualities in one product. A strategic analysis done of the company revealed that the current competitive positioning of the wall-panel heater is a best-cost strategy. However, based on a literature review, the strategic analysis of the company and an exploration of the small household appliance consumer profile, the study found that the current competitive positioning of the wall-panel heater could be augmented. The combination of factors revealed by this study could be interpreted as push-factors towards the implementation of an applicable green marketing strategy that could support the re-positioning of the wall-panel heater to a broad-differentiated competitive positioning. These factors are the unique selling properties of the wall-panel heater, the lean manufacturing principles of the company, the rising green economy in the country, the energy crisis and the slow recovery from the global financial crisis in South Africa, as well as the unique characteristics of the environmentally-focused consumer. The view is held that green marketing can mitigate mass consumption. The case study suggests a future marketing strategy framework that consists of three combined elements. First, the argument is made that the unique selling properties of the wall-panel heater in combination with the unique operations of the company, against the backdrop of external factors that influence companies and consumers (i.e. the rising green economy and the energy crisis), could be utilised to discover new market space. The concept of “lateral marketing” is suggested as a framework should the company position itself to differentiate along the green dimension. Secondly, the “green marketing strategy matrix” is suggested as a framework to establish the size and greenness of its consumer segment, as well as the ability to differentiate along the green dimension. Lastly, the suggestion is made that the marketing objective of the company (its greenness) can be measured through the application of a “green marketing grid” that leads to innovation and the challenging of consumer behaviour. The combination of these elements is thought to form a coherent green marketing framework that could in future place the product at a strategic and competitive advantage within the space-heating industry.