SYNOPSIS Of MGT-738

TOPIC- A Study of Consumer preference towards energy saving products and technologies.

Submitted to: MR.Hitesh Jhanji

Submitted by: Dilip Gupta (RQ3703B31)

OBJECTIVES OF STUDY To identify the factors affecting the buying decision for energy saving product and technologies. To identify the consumer switching and complaining behaviour. To know about the awareness level of consumers regarding energy saving product. To study the consumers' satisfaction level towards energy saving product. To identify the focus area in the policy initiatives of the government

Introduction Consumer Preferences Consumer preferences is used primarily to mean to select an option that has the greatest anticipated value among a number of options by the consumer in order to satisfy his/her needs or desires. Preferences indicate choices among neutral or more valued options available. The preference of the consumer is the result of their behaviour they show during searching, purchasing and disposing the products. Consumer Satisfaction Every human being is a consumer of different products. If there is no consumer, there is no business. Therefore, consumer satisfaction is very important to every business person. The consumer satisfaction after purchase depends on the product performance in relation to his/her expectations. Philip Kotler(2008) observed that satisfaction is a person's feelings of pressure or disappointment resulting from product's perceived performance (outcome) in relation to his or her expectations. Consumer satisfaction is the level of a person's felt state resulting from comparing a product's perceived performance (outcome) in relation to the persons expectations. This satisfaction level is a function of difference between perceived performance and expectations. If the product's performance exceeds expectation, the customer is highly satisfied or delighted. If the performance matches the expectations, the customer is satisfied. If the products performance falls short of expectations, the customer is dissatisfied.

Consumer satisfaction or dissatisfaction is the feeling derived by the consumer when he compares the product's actual performance with the performance that he expects out of it. Consumers make their expectations from the service quality, service, delivery, communications, past experiences and references.These all are to be judged correctly by the management so that their perceptions match with consumer expectations. If any of these factors are wrongly interpreted then the expected level of consumer satisfaction cannot be reached.

World Energy Scenario

According to the 2007 BP Statistical Energy Survey, world 2006 electricity generation was 19,028 terawatt-hours (TWh). The countries generating the most electricity were, in order, the USA, China, Japan, Russia, India, Germany, Canada and France. World electricity demand in 2006 was 15,000 TWh and is forecast to be 30,000 TWh in 2030. In 2004, 18% of world electricity came from hydro and 16% from nuclear. In 2006, according to the IEA, the main sources of electricity worldwide were coal (39.8%), gas (19.6%), hydro (16.1%), nuclear (15.7%), oil (6.7%) and other renewable (1.8%). The contribution of coal is growing at a rapid rate compared to all the others. There is renewed interest in nuclear but hydro is stagnant. As of March 2007, Africa was using 5% of its hydro potential compared to Asia (40%) and Europe (80%).

Indian scenario India is one of the countries where the present level of energy consumption, by world standards, is very low. The estimate of annual energy consumption in India is about 330 Million Tones Oil Equivalent (MTOE) for the year 2004. Accordingly, the per capita consumption of energy is about 305 Kilogram Oil Equivalent (KGOE). As compared to this, the energy consumption in some of the other countries is of the order of over 4050 for Japan, over 4275 for South Korea, about 1200 for China, about 7850 for USA, about 4670 for OECD countries and the world average is about 1690. 4. In so far as electricity consumption is concerned, India has reached a level of about 600-kilowatt hour (kwh) per head per year. The comparable figures for Japan are about 7,800, for South Korea about 7,000, for China about 1380, for USA about 13,000, for OECD countries about 8050 and world average are about 2430. Thus, both in terms of per capita energy consumption and in terms of per capita electricity consumption, India is far behind many countries, and as a matter of fact, behind even the world average. Therefore, to improve the standards of living of Indian people and to let them enjoy the benefit of economic development, it is imperative that both energy consumption and electricity consumption level is enhanced. India is targeting a growth rate of 9 10%, having already reached a level of almost 8%.

To sustain the double-digit growth rate for next 10-15 years, it would be essential that the level of energy availability and consumption, and electricity consumption in particular, is enhanced substantially. In the profile of energy sources in India, coal has a dominant position. Coal constitutes about 51% of Indias primary energy resources followed by Oil (36%), Natural Gas (9%), Nuclear (2%) and Hydro (2%). To address the issue

concerning energy consumption, and more particularly, the need for enhancing the energy supply, India has accorded appropriate priority to both - supply side management and demand side management. On the supply side management, while it is essential for India to radically expand the capacities on all the fronts and all the segments of energy, equally important is the need for efficient consumption of energy for which a number of initiatives have been put in place. On the supply side, the mis-match between demand and supply is so large that India can ill-afford to choose one option in preference to the other. For several years, in fact may be for next few decades, India would need to exploit all possible options to create reasonably large capacity base on the energy side. It needs to expand manifold the coal production, extract through all possible means, the oil and gas reserves, herever possible, resort to import of coal, acquire coal and gas reserves abroad, will need to continue substantial dependence on import of oil, and exploit fully the large hydro electric potential which is of the order of over 1,50,000 MW. Only about 32,000 MW i.e. about 20% of the hydroelectric potential has been exploited so far. Increase in the capacity base of power generation through dependence on the coal reserves of the country, which are of the order of 200 billion tones is inevitable. Nuclear programme has proved to be effective and successful. After initial teething problems in mid eighties, from early nineties, the nuclear power plants have demonstrated to be utilized at substantially high level of availability and efficiency and this is one of the important options that India is pursuing. Gratifyingly, a number of companies in India have discovered huge gas reserves, both on the Western, and more particularly, toward the Eastern coast. Besides, a number of LNG terminals have also been developed and are being developed so that the use of gas could be supplemented through import of Liquefied Natural Gas. India is one of the very few countries which has been successful in employing wind turbine technology and today of the total capacity of 1, 25,000 MW in

the country about 5% is constituted by the various non-conventional sources of generation, wind being the largest contributor.

Scenario of Punjab Punjab as a state does not have coalmines, natural gas, tidal power, and oil as a source of energy. the possibility of wind energy is also very low since the wind speed is low and the distance from the sea is vast. There is good scope for nuclear and solar energy which is yet to be harnessed. The state has three perennial river which are a source of hydroelectric power and also the state has three thermal power plants .The state is among the highest peak hour consumer of electricity, around 7700MW .Since the shortage of water is there the state has to rely on thermal power but cost of thermal energy is high and it is polluting also. The state government is now considering the option of nonconventional energy sources and has also commissioned two power plants from this source. The finances of states with respect to electricity are in a bad shape since it continues to supply subsidized power to the 37 % of its consumers, the farmers. Energy saving technologies. Solar Photovoltaics Photovoltaic technology means converting solar light directly into electricity. Thus, the most abundant free energy - that from the sun - can be harnessed to power domestic electrical equipment such as kitchen appliances, computers, and lighting. This is different from solar thermal technology used for hot water. The technology consists of PV cells connected together in PV modules (panels or arrays) which are semiconductors, typically made of crystalline silicon. When exposed to sunlight, the PV cells produce direct current (DC) electricity, which in order to use in the home is conducted to an inverter and transformed into AC electricity. The PV cells respond to both direct and diffuse solar radiation, meaning that even in overcast days a PV system can produce electricity. The output however is greater when there is more sunshine. The conversion efficiency range is between 5-15%.PV technology is ideally suited to use on residential buildings, 6

providing pollution and noise-free electricity without using extra space. The use of photovoltaics in households has grown substantially in the UK over the last few years, with many impressive examples already in operation (see photo). PV systems can be incorporated into buildings in various ways. Sloping rooftops are an ideal site, where modules can simply be mounted using frames. Photovoltaic systems can also be incorporated into the actual building fabric, for example PV roof tiles are now available which can be fitted as would standard tiles Solar Thermal Solar thermal energy (STE) is a technology for harnessing solar energy for thermal energy (heat). Solar thermal collectors are classified by the USA Energy Information Administration as low-, medium-, or high-temperature collectors. Low temperature collectors are flat plates generally used to heat swimming pools. Medium-temperature collectors are also usually flat plates but are used for heating water or air for residential and commercial use. High temperature collectors concentrate sunlight using mirrors or lenses and are generally used for electric power production. STE is different from (and indeed much more efficient than photovoltaics, which converts solar energy directly into electricity. Windmill A windmill is a machine which converts the energy of wind into rotational energy by means of vanes called sails or blades. Originally windmills were developed for milling grain for food production. In the course of history the windmill was adapted to many other industrial uses. An important application was to pump water. Windmills used for generating electricity are commonly known as wind turbines. Biogas Biogas typically refers to a gas produced by the biological breakdown of organic matter in the absence of oxygen. Organic waste such as dead plant and animal material, animal dung, and kitchen waste can be converted into a gaseous fuel called biogas. Biogas originates from biogenic material and is a type of biofuel.

Review of Literature

Consumer preferences for energy efficient room air conditioner (Fac. of Electr. Eng., Univ. Technol. of Malaysia, Johor, Malaysia) In order to ensure the success of energy efficiency standards and labeling program, a detailed consumer analysis of the room air conditioner market should be carried out. It is essential to know what factors influence preferences for room air conditioner, so that a program can be devised to increase the market share for an energy efficient room air conditioner. Previous researchers typically have used attitude and opinion surveys to investigate consumers' perceived importance of product attributes. However, these approaches do not require consumers to tradeoff among different attributes. In this study, conjoint analysis was used to analyze consumers' preferences for room air conditioners described by a set of 5 attributes, examining the relative importance as well as the trade-off among these attributes. Among all attributes, price is the most important factor in purchasing a room air conditioner. However, different consumer groups attach different relative importance to these attributes was observed. Effect of Consumer Preference on Consumer Decision (Inst. of Bus. Manage., Southwest Univ. of Sci. & Technol., Mianyang, China ) The market survey is the foundation for enterprise to establish marketing plan and carry on decision, particularly in the current consumer-oriented under the buyer's market. The consumer preference reflects the subjective desire of consumers directly, and the result of consumer's subjective desire often influences consumer's choice immediately. Through empirical analysis the paper shows the uncertainty is importance in preference and decision. Consumer decision depends on not only consumer preference, but also uncertainty. Ignore the existence of such uncertainty may makes enterprises are in decision-making errors. Consumer Preference towards different product flavour Understanding consumer preferences for odor and flavor is challenging. Consumers know what they like but have a hard time describing their preferences. Our sensory professionals have learned to translate what consumers say into action plans to guide product developers and quality assurance groups. Our unique approach to providing these insights include professional sensory analysis and innovative consumer group testing. Our consumer product clients find this analysis and guidance helps them create successful products in a shorter period of time.

Caird and Roy in their study User centered improvements to energy efficiency (2006) observed that the users of the renewable energy products were less satisfied with the reduction in fuel and energy use. The study was conducted on a sample of 390 respondents from UK using random sampling as a technique. The major concern of the users was performance reliability and durability and cost. The consumer was also not satisfied with the design. Bhargav and Gupta in their study titled Power in Punjab have concluded that there has been a gap in the demand and supply of power and it can be balanced by the use of energy saving technologies in Punjab. Dhumal and Tiyade in their study Rural marketing consumer behavior have concluded that the positioning communicated by T.v and print media have a very significant effect on the purchasing pattern of the consumers preference as a literacy rate of rural population is increasing at a very high rate and thus creating awareness about the product and its brand. The study used spss as the software for measuring the variables. Bollino in his study titled The willingness to pay for energy saving products have concluded that estimate of Italian households is not enough to cover the subsidy cost necessary to attain the goal of additional uses. The study used traditional referendum and hypothesized model. sample size were 1601with random sampling. The study is conducted by Govt of India titled commercializing energy saving products in India had studied how to create awareness in rural areas ,in keeping with India national commitment to sustainable development. Johnson in her study titled Green technology consumer buying behavior have concluded that a higher income or education level does not predict which ecogrouping consumers fell into eco-considerate or eco-wary and most affluent consumers are engaged in wide range of activities and personal behavior that reflect their support for energy saving issues. Sidhu in his study titled energy saving resources have analysed that Developing countries could have the competitive advantage for driving the world market. Nevertheless, India must give more thrust too research and development in the field of energy saving resources. LU ,N& RICE in his study titled demand drivers and price support for energy efficient product in the U.S have concluded that there are potential benefits from the development of energy cellulosic ethanol including oxygenation and octane increases, lower green house gas and air pollutant emissions, and a favorable energy balance. The study used graphical method to show the demand.

Shahi in his study titled Energy markets and technologies have concluded that adequate availability of energy would be feasible for this objective to materialize. The ultimate goal is to develop these markets and facilitate through various policy initiatives. Their matured functioning in competitive manner. over last 10-15 yrs private investments are being encouraged. Another study conducted in United Kingdom Lighting up the rural Lao. The project provides Rental, solar equipments making electricity affordable for the majority of rural households or villages without the use of subsidies. The rental system encourages reliable, servicing, allows consumer flexibility of returning or changing the system to suit their needs. Wilhite in his study titled will efficient technologies save the world? Have concluded that new technologies do not determine new pattern of consumption, but creates potentials for change that connect with the changing socio-cultural practices in an outside the town.

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Research Methodology Scope of the study (Definition of problem area) Geographical Area: The study would be conducted in the district of Jalandhar (Pb) and both urban and rural blocks would be covered. Primary study Questionnaire: from 100 respondents. Secondary study

The following secondary sources would be referred for the study Websites of government agencies responsible for power generation and distribution. Databases like Proquest , EBSCO,Emrald etc Websites of companies into production of renewable energy technology firms.

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References
Anonymous, (2007), Lighting up rural Lao, ProQuest Central, UK , 34(2), 60-61 Bollino, Nov-(2006), The Willingness to Pay for Renewable Energy Sources, The Energy Journal, Italy, Vol. 30. No-2, page -81-96

Lu, N. & Rice, R.W. 2010, "Demand Drivers and Price Supports for Bioethanol Use as Fuel in the United States: A Brief Review", Forest Products Journal, vol. 60, no. 2, pp. 126-126-132.

Wilhite,(2007), Will efficient technologies save the world. A call for new thinking on the ways that endues technologies affect energy using practices, Centre for Development and the Environment, Norway vol.11, pp. 23-30

Shahi,(2007-2011), Energy Markets and Technology In India, The business review, vol.13. page. 1-14 Govt. of India,(2005), Commercializing renewable energy, The business review, India, Vol.15,No.4(2005)pp.45-56 Johnson(2008), Green technology: Consumer buying behavior, The business review, U.S, 33(2),pp. 1-10. http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=5998264 http://www.sciencedaily.com/releases/2006/07/060715104358.htm http://www.geiconsultants.com/environmental-services-consumer-preference http://en.wikipedia.org/wiki/Consumer_choice http://www.zaptron.com/literature/preference.htm http://www.hrcpinsights.com/keys-to-growth/building-consumer-preference.cfm http://www.energystar.gov/ia/products/pr_podcasts_rss.xml http://scholar.google.co.in/scholar?q=consumer+preference&hl=en&as_sdt=0&as _vis=1&oi=scholart http://en.wikipedia.org/wiki/Preference http://www.slideshare.net/guest5f71d4/consumer-preferences http://www.joe.org/joe/2003october/tt4.php

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