Beuth University of Applied Sciences Berlin

MBA Renewables

WRITTEN ASSIGNMENT

MARKETING ANALYSIS AND INSTRUMENTS

Lecturer: Dr. Sonja Leuthi

Student: Mario Maras, Dipl. Ing.

Berlin, 13th January 2014

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Table of contents

Task 1. Importance of Marketing.........................................................................................................3

Task 2. Main Criteria for Market Attractiveness.......................................................................................3

Task 3. Market Segment....................................................................................................................4

Task 4. Competitors..........................................................................................................................5

Task 5. Product...............................................................................................................................5

Task 6. Product to Customer.............................................................................................................6

Task 7. Pricing.................................................................................................................................6

Task 8. Communication.....................................................................................................................6

References.......................................................................................................................................7

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Task 1. Importance of Marketing

First of all, definition of marketing should be presented: "Marketing is a process of definition in the

business and social organization through which individuals and groups satisfy their needs and desires

by creating, offering and exchanging products and other items of value with each other.". Terms that

should be defined are: needs, desires, demand, product, benefit and satisfaction. To plan marketing

activity, process should be worked through: situation should be analysed, goals should be defined,

strategies should be developed, marketing mix should be presented, realization should be planned

and process should be controlled and after controlling phase, situations should be analysed from

beginning.

As trading solar products is an option, the best option is importing solar components from other

countries, i.e. China which provides cheapest solar modules in the world. Manufacturer with good

price-value should be chosen, legal aspects should be analysed - if there are any political barriers

between producer country and importer country, prices should be optimized to be in level with other

importers and producers, with possibility to offer cheaper product. Furthermore, whole logistics

process should be defined to avoid out-of-stock possibility, advertising policies should be defined and

be in line with legal requirements. Setting objectives like being No. 1 trader in five years is very

important, because without specific and reachable goals, marketing strategy won´t work. Financial

resources should be prepared before starting business, and all budgets should be defined, realization

of plans should be defined and worked through, and at the end whole process should be controlled

and at the same time analysed for potential mistakes to learn from them and to improve the process in

the future.

Task 2. Main Criteria for Market Attractiveness

Three main criteria that should be taken into account are environmental analysis, competitive analysis

and market research. Only for 2012, Inter-American Development Bank announced $3 billion

investments for "clean and sustainable energy" in Latin America. Development of first large scale solar

energy project - two 20MW power plants in Peru worth $123 million were announced in 2011 which

will generate 80GWh for 18.000 homes. China has been investing into solar projects in Brazil and

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Chile providing raw materials and financial support for new projects. Latin America strives for new

energy projects and as regions is called Sun-Belt it is very attractive for investors. Energy demand has

increased in whole region for 35%, therefore there is a lot of potential for investments in solar energy

projects. In 2011, Government in Chile has set a goal to produce 20% of electrical energy from

renewable resources by 2020. Atacama Solar is building $773 million, 250 MW PV project which is

expected to go online in 2016 which will consist of over 11.000 PV units. Investment agencies and

private capital markets have been expanding their business in Latin America making Latin America

very desirable place for expanding business in renewable energy, especially in PV.

Figure showing Total Energy Supply in Peru in 2002 shows great potential for expanding business in

this country and with opening market and setting objective to reach 20% of energy demand from

renewables by 2020 shows a great potential for business development.

Task 3. Market Segment

Suggestion would go to small off-grid systems. As there is great demand for electrical energy, and PV

provides cheap solution to families with small income. From available information, large projects

where being developed which includes big companies which sell electricity to public grid. By offering

small cheap solutions, all people who might have no access to electricity or buy it from public grid

system could go into independence from government. Great examples come from South East Asia

where companies provide cheap off grid systems that are being monitored by internet connection, they

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are fully financed by companies and families use electricity and pay electricity bills with their mobile

phones. With this solution, families with very low incomes can buy clean electrical energy and stop

burning kerosene during night time which decreases their chances for health damages. This option

provides not only good business solution, but is very social in its character which much more

important. Another option for financing small off-grid systems are micro credits provided by banks and

private companies. Penetration of this market segment has been shown very successful in

Bangladesh. Bangladesh became world´s biggest solar off-grid user . Over the past decade, since the

Bangladesh government launched a rural electrification programme supported by the World Bank and

other international aid bodies, the number of off-grid installations in the country has rocketed. In 2002,

installations rates stood at 7000; today that figure has exploded to nearly 2 million and counting, with

average installation rates now topping 80,000 a month.

Task 4. Competitors

In Chile, three big examples could be given. In Atacama Desert in northern Chile Atacama Project is

being developed. This project has potential to become world greatest power plant with capacity of

250MW PV, worth $123 million which is expected to go online by 2016. In October 2011, Solar Chile,

a subsidiary of Fundación Chile, and First Solar signed a strategic alliance to co-develop utility-scale

solar projects in Chile. First Solar will provide its cadmium telluride (CdTe) thin-film PV modules and

engineering services to the projects which are still in the planning stage and subject to definitive

project agreements. U.S.-based Tegal Corp. also recently announced that its large-scale solar project

subsidiary, Sequel Power, has opened offices in Buenos Aires, and Santiago. Sequel Power has more

than a dozen active projects in six countries with major partners in various stages of developing solar

utilities, including other large-scale solar projects in Argentina and Ecuador. As can be seen, most

examples are related to large PV projects providing much space for small off-grid projects.

Task 5. Product

Product of off-grid systems is electrical energy for small households who don´t have access to

electrical energy or are dependable to large power grids. Dependency on big companies include

financial dependency because these companies set prices which are in line with their company

policies and strategies, government strategies and strategies of companies that provide components

for power plants. All of this can be avoided if family would install small PV off-grid system and produce

electrical energy and heating by themselves.

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Task 6. Product to Customer

To be able to provide off-grid system to customer, it is important to gain technical knowledge for off-

grid system and have all necessary equipment in stock. Panels, inverters, cables, batteries, billing

solutions, trained technicians etc. For this kind of solution there is actually only one channel that

includes all aspects mentioned above.

Task 7. Pricing

Pricing is amount of money that customer has to pay for a product. This type of business solution

presents unique selling proposition and therefore, price sensitivity is low. It would be great if concept

including cheaper price than bigger companies could be developed. With this kind of concept there are

great opportunities for expanding business in energy developing countries.

Task 8. Communication

Advertising is very important part for attracting new customers. As there are no available information

from companies that provide these solutions as this market segment is still new, promotion on trade

fairs, television, support from government on national television channels, newspapers, store chains

are good channels for advertising. After new customers are attracted and projects are developed,

good reputation among people will surely attract most of new customers. Here it is important to

segment target customer - those are people with low incomes who possibly don´t have access to trade

fairs, television sets, etc. Therefore, honest and human contact would be best solution for attracting

new customers.

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References

Peter Meisen (2009). "Renewable Energy Potential in Latin America". Global Energy Network Institute.

Retrieved on 09th January 2014.

http://www.as-coa.org/articles/energy-update-solar-power-latin-america. Retrieved on 05th January

2014.

http://pv.energytrend.com/research/Latin_America_Solar_Market_20111207.html. Retrieved on 06th

January 2014.

http://www.pv-

tech.org/friday_focus/friday_focus_how_bangladesh_became_the_worlds_biggest_domestic_off_grid

_pla. Retrieved on 11th January 2014.