CONSUMER BEHAVIOR ASSIGNMENT

Selling CFLs at Walmart

Submitted by-
Group – 6
NAME ROLL NUMBER
Abhijeet Ramnath Selhi 190101005
Anik Chowdhury 190101019
Anusha Mukherjee 190101026
Ashik Ahmed 190101032
Roshni Dasgupta 190101096
Shorya Parihar 190101109

Q1 How has the introduction and propagation of CFL bulbs influenced the decision-
making of consumers in the lighting products category?
Ans The energy saving compact fluorescent light bulb was first invented in 1970’s in
response to the 1973 oil crisis and were introduced for consumer use in 1980. When
concerns about energy dependency on foreign oil and global warming mounted in
1990’s, greater attention was given to CFLs. CFLs were quite expensive ($25), but it
offered consumers great savings on their household energy bills.
o On average a CFL bulb used 75% less electricity than an incandescent bulb
o It lasted 10 times longer, usually 5-7 years
o On average, each bulb saved consumers $30 a year on their lifetime
o It produced 450 pounds fewer greenhouse gases from power plants over its
lifetime
Since the average household had 45 light bulb sockets, this meant hundreds of
dollars in savings, even if just a few were changed to CFL. Even the ENERGY STAR
program initiative had evoked consumers to adopt CFL bulbs. This initiative
promoted energy conservation across all types of household appliances and
technologies bestowing logo on products that used 20%-30% less energy than
required by federal standards. Even the new act which was passed by the
government provided homeowners with federal tax credit of 30% of costs ($1500)
which was earlier had been $500. CFL purchases and any related bulb installations
costs, now qualified under the Act and could be deducted from consumer’s annual
federal tax payment. This steps and benefits made consumers move/influenced
towards CFL bulbs.
Q2 Enlist the advantages and disadvantages of CFLs to the US consumers. What are the
sources of resistance of CFL adoption among consumers?
Ans The following were the advantages and disadvantages of CFLs to the US consumers:
Advantages
o Savings: CFLs offered consumers great savings on their household energy
bills, approximately $30 on annual electricity bills
o Less energy consumption: On an average, a CFL bulb used 75% less electricity
than an incandescent bulb
o Long Product Life: A CFL bulb lasted approximately 10 times longer than a
conventional one, usually 5 to 7 years
o Less Greenhouse Effect: It reduced the carbon footprint by over 450 pounds
fewer greenhouse gases over its lifetime
o Wider Assortments: CFLs came in different shapes, sizes, forms and watt
capacity offering many colors and even dimmer effects and better recycling
Disadvantages
o Expensive: CFLs were initially quite expensive, as much as $25 each. By 2009,
its price averaged at $3, which was still well above the average $0.50 of an
incandescent bulb
o Mercury Poisoning: There was a fear and risk of mercury poisoning Prolonged
Payback Period: It had a prolonged and difficult to assess payback period,
approximately 10 years
The sources of resistance of CFL adoption among consumers were:
o Long time to warm up
o Often buzzing and flickering of CFLs as they wore out
o Could not be used with a dimmer switch
o Strict and inconvenient recycling procedures
o Unflattering white light
o Strange bulky shapes
Q3(a) Explain the role of electric utilities and government in the adoption of CFL bulbs
Ans Utility companies had an interest in getting consumers to adopt CFL bulbs. The
companies took the following steps for the same:
o Collaborated with retailers to promote product switch
o Offered coupons, trade-ins and price promotions to entice consumers
Safety standards, utility price regulation, and government oversight had long been
part of the electric industry.
o ENERGY STAR Program was created and a new consumer education was
launched which promoted energy conservation across all types of household
appliances and technologies
 o Federal tax policies were used to incentivize energy efficient households
o The American Recovery and Reinvestment Act was passed which provided
homeowners with a federal tax credit of 30% of costs for undertaking home
improvements to reduce energy costs up to $1500, from previous $500
o The Energy Independence and Security Act required the general purpose light
bulbs to become 70% more energy efficient than incandescent bulbs
o Ban on the incandescent bulbs in different countries like Australia, EU, Japan
etc. also facilitated the adoption of CFL bulbs
Q3(b) What measures can the manufacturers and retailers take to increase the adoption
and sales of CFL bulbs?
Ans The following measures can be taken by the manufacturers and retailers to increase
the adoption and sales of CFL bulbs:
o Endorsement: It can be endorsed by using CFLs inside the store and as a part
of associate industries like lampshade, table lamp, garden light stand etc.
o Experiential Marketing: Demonstrating the color spectrum, dimmer effect
and association with moods like romantic and bright shades
o Educating Benefits: Consumer Education using in store promotional banners
and kiosks which inform benefits, cost saved, tax benefits and contribution to
carbon footprint reduction can help in better perception of the product
o Promotional Discounts and Exchange Offers: Celebrating Environment related
events like the Earth Day, World Environment Day etc. by offering discounted
price on specific occasions. Longevity of Product life can be comparatively
emphasized. For example - Duracell