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Wim Wilms
Analysis of Price and Non-Price Factors Influencing the Adoption of Compact Fluorescent Lamps By European Households Philips Lighting, Marketing Research, ED-5, 5600 JM Eindhoven, The Netherlands Evan Mills Center for Building Science, Lawrence Berkeley National Laboratory, MS 90-3058, Berkeley, California 94720, USA Abstract It is often stated that the price of an energy-efficient compact fluorescent lamp (CFL) is the key determinant of consumer acceptance. Little systematic international research has been conducted, however, in this area. This paper presents results of price and non-price investigations into CFL purchasing behaviour in four European countries (France, Germany, Italy, and The Netherlands). Some surveys designed to determine a "price elasticity" (e.g. percent of households willing to buy a CFL at a given price) are susceptible to bias. More sophisticated price-perception research results show that there are certain "psychological price points" between which CFL prices are perceived as "normal". A normal price can be interpreted as a price that does not deter the consumer from purchasing the product. An "acceptable cheap" price, is perceived as a bargain price for the product. For prices higher than "normal", or lower than "bargain", consumer interest declines rapidly; lower prices can evoke doubts about product quality and higher prices are seen as too much money to consider buying. The relatively flat and wide "normal" price regions (typically range from ~$12 to ~$20) observed in each of the countries studied, suggest that CFL sales are adversely affected by non-price barriers and frictions in the marketplace. This finding is consistent with the nearly complete lack of correlation between CFL price and consumer response rates for a number of CFL programs held throughout Western Europe. CFL promotion strategies must do more than focus on providing large financial incentives. To achieve maximal penetration of CFLs, a multifaceted strategy for building the market should focus on minimizing non-price obstacles. increasing awareness of the benefits of CFLs (including environment), and increasing product availability. Successful efforts to address non-price factors will help reduce the flat price-responsiveness curves found in each country examined and thereby improve consumer price-responsiveness. Once this is achieved, reductions in prices will have more impact on consumer adoption of CFLs. Thus, for optimal results lighting manufacturers, utilities, and others interested in promoting greater use of energy-efficient lighting must address price and non-price factors at work in the market.
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