Wednesday, March 29, 2006
Periodically, I cull a pile of materials on sustainable technologies; a few articles survive the purging like Fortune’s 2004 article, “Inside the Head of BP: He doesn’t like red meat. He thinks green. What is John Browne doing running the world’s largest oil company?”
He’s marketing clean energy…among other things.
A friend recently landed a job with BP Solar (formerly Solarex) in Frederick, Maryland, so the company has been on my mind. (I had approached Solarex in 1995 about working for it – prior to its purchase by Enron and Amoco – and was told by a worried marketing executive that it might not survive dwindling subsidies. What a difference a decade makes.)
BP Solar sells crystalline-based photovoltaics (PV); in 2002 it ceased manufacturing thin-film PV, saying “while the technology continues to show promise, lack of material demand and present economics do not allow for continued investment.” Thin-film PV can use semiconductor materials other than silicon. Paradoxically, silicon, on which crystalline-based PV depends, is in short supply; the costs of silicon are going up; demand for PV panels is rising – all of which is increasing end-product costs (and contradicts ‘economies of scale.’ – see “Clean-Energy Trends 2006.”)
Marketing is pivotal to market adoption, but there are some things marketing just can’t control – like rising raw materials costs, product availability, changing regulations and incentives and (all too often) corporate business strategy. Marketing can, however, enhance business development via sponsorships, partnerships, affiliations and channels, and it can direct strategic branding, product placement and messaging.
Emerging from the monopoly utility sector, where marketing is something of a misnomer, it’s a pleasure, for me, to see companies like BP Solar employ great strategic marketing. (I do get pulled back…Claritas and ESource sponsored a WebEx seminar this week on the strategic marketing of utility green-pricing and demand-side management programs – a very utility-centric, but informative, hour that covered basic strategic marketing and implementation tactics: PRIZM® cluster segmentation, channels, customer acquisition costs, customer loyalty, retention and churn, integrated marketing communications, affinity marketing…and ‘version’ messaging, that is, tailoring messages to different segments.)
Ah, yes, messaging. On that topic, Amely Greeven, a marketing consultant guru, scoffed at clean energy marketing in a 2002 article by Amanda Griscom of Grist Magazine.
“Mainstream consumers simply aren’t turned on by an industry associated with smiling suns, glittering purple-panel roofscapes, and purist, hippy-dippy lifestyles…Like it or not, the face of ‘green’ needs a makeover. It needs a marketing strategy that’s edgy and of-the-moment, rather than lost in a ’70s sensibility. Young celebrity spokespeople, for one thing, could go a long way to push this fringe movement into the mainstream.”
(Did you just cringe at ‘fringe’? I did, but also am of the mind that the ‘green’ market segment – people whose concerns about climate change, resource depletion and the environment influence their purchases – is finite, and that the term itself turns off buyers with a block against anything remotely ‘tree-huggie.” But that’s a topic for another day.)
Griscom wrote that BP ‘got it’ in 2002 with a hip branding campaign (BP on the Street) created by Ogilvy & Mather (big corporations turn to big agencies). You’ve seen these ads about new energy and climate change. If not, it’s time to get out more. They are ubiquitous. (“And they’re everywhere, too!” a friend would joke.) The BP branding campaign includes tv and print, point-of-sale materials and even an online calculator for your ‘carbon footprint.’
BP Solar marketing today?
On November 29, 2005, BP announced formation of an Alternative Energy unit and expansion of the Frederick (crystalline-based PV) manufacturing plant. (Joel Makower, a contributor to the cleantechblog, wrote about the announcement, ‘It’s a Start.’) A webcast of that day includes a speech by US Congressman Roscoe Bartlett who noted the importance of job creation for Maryland – but mostly he spoke on population growth and ‘peaking oil.’ Vivienne Cox, BP’s Executive VP of Gas, Power & Renewables, addressed marketing:
“When complete, these steps will effect the doubling of BP’s global solar manufacturing capacity. The success of solar power is not just dependent on the right manufacturing strategy of course. It also requires world class marketing to attract energy consumers to the merits of and access to solar power. [italics mine] … This growth plan will ensure BP Alternative Energy is one of the world’s top 3 solar manufacturers and marketers. And we aim to be a leader in the solar industry in the drive to reduce the total installed costs of providing solar energy to levels at which it can compete strongly with oil, gas, coal and nuclear in the generation of electricity – something that is possible today in some markets (California peak, Japan, Hawaii). This is possible through continued innovation and technology gains across the solar value chain, including lower cost panels, higher efficiency cells, and more productive ‘total system’ installations. Over the next 5 years we see another 30-40% total system cost per watt improvement which will close the ‘grid parity’ gap considerably in many markets.”
What is BP Solar’s marketing strategy? I’ll be writing about it here next week.