Strategic Brand Management - Consortium for Energy Efficiency

JANUARY 15, 2008

             ENERGY STAR®:
       Strategic Brand Management

                       Sam Rashkin
       National Director, ENERGY STAR for Homes
                          U.S. EPA

• ‘Brand’ Success to Date
 What it Means for Tomorrow

• Program Foundation
• Outreach Activities
 New PSA Campaign and Other Efforts

• Updates
 Commercial/Industrial Update
   Environmental ‘Brand’ Success Requires
Finding/Building Upon Intersection of Interests


  Manufacturer/Retailer           Preferences

                                                 No Sacrifice in
                     Utility                     Performance

                                       Consumer is Key
             ENERGY STAR

• Protects the Environment
  through superior energy efficiency

• No Tradeoffs
  in performance or quality

• Cost Effective
  (2nd price tag)

• Source of Authority
  Govt. backed symbol providing valuable, unbiased information

• Binary

• Power of the individual
  to make a difference
        ENERGY STAR Strategies

Residential:                        Commercial:
Labeled Products                    Corporate Energy Management
•   50+ products                    •   benchmarking, goals, upgrades
•   1700 manufacturers                  (management, systems vs. widgets)
                                    •   whole building label for excellence
Labeled New Homes                   •   technical Assistance
•   ~20-30% more efficient
                                    Labeled Products
Home Improvement                    •   plug loads, not system components
•   beyond products
•   ducts / home sealing            Industrial
•   whole home retrofits
                                    Small Business
         International partnerships – Canada, EU, Japan, etc
ENERGY STAR Accomplishments

In 2006, Americans with the
  help of ENERGY STAR:

• 37 MTCe
  GHG emissions prevented = ~25 million vehicles

• $14 billion
  energy bill savings

• 170 billion kWh
  lower energy use – almost 5% of US electricity sales

• 1/3 total US GHG
  emissions reduction from EPA’s CCP’s
ENERGY STAR Program Success

• 70%+ Public awareness
• 9,000 organizations engaged in man., delivery, adoption
• 2 billion qualified products purchased by consumers
• 725,000+ new homes                     Environmental
• ~10% of new homes starts               Positioned to

• 10,000’s buildings benchmarked          Double
                                            over next
• 1,000’s of buildings improved             10 Years
                                                          Large Environmental Benefit

                                                                                                           DOE Appliances
                                                                                                         DOE Appliances
                                                                                                           DOE Lighting (CFLs)
                                                                                                         DOE Lighting (CFLs)
                                                                                                           EPA Lighting
                     GHG Reductions (mmtce)

                                                                                                         EPA Lighting
GHG Reductions (mmtce)

                                                                                                           EPA HVAC
                                                                                                         EPA HVAC
                                                                                                           EPA Other
                                                                                                         EPA Other

                                   30                                                                    EPA Appliances
                                                                                                           EPA Appliances

                                   20                                                                    EPA Consumer Electronics
                                                                                                           EPA Consumer Electronics

                                   10                                                                    EPA Resid Office Equip
                                                                                                           EPA Resid Office Equip

                                                0                                                        EPA Comm Office Equip.
                                              0                                                            EPA Comm Office Equip.
                                                1995             2000             2005   2010    2015
                                              1995              2000              2005    2010    2015   EPA Homes/Home Services
                                                                                                           EPA Homes/Home Services

                                               Source: LBNL Analysis, EPA Goals                          EPA Comm/Industrial
                                                                                                           EPA Comm/Industrial
                                              Source: LBNL Analysis, EPA Goals
                           A Brand:

 Complex relationship
 emotional connections and functional benefits

 Exists in the mind of consumer
 Everything you do defines your brand:
 -- products                   -- people     -- communications
 -- services and support       -- website    -- R&D
     … the list goes on
                            The Brand

                              Employees            The
      Organization                               Customers
  Loyalty is the goal

    Communications            Performance

Awareness Relevance              Satisfaction   Loyalty

                         Brand Management
       ENERGY STAR has evolved

•   Mark now works harder
•   Established brand guidelines/book
•   Consistent personality/communications
•   Co-branding platform
•   Dialed up emotion with rational equity
    speak to head AND heart
              Protecting Integrity of
              ENERGY STAR Label
• Self-certification program works
  – competitive market place
  – active consumer groups (Consumer Reports)
• EPA monitors use/protects integrity of brand
  –   Information on products and appropriate logo use required
  –   Routine checking of manufacturer submitted information
  –   Selective product testing
  –   Pulling from retail shelves – twice annually
  –   Customer calls
  –   Manufacturer information on competitors
  –   Designed supplemental testing program for problem areas -- lighting products
  –   Track all advertisements (reports monthly)
  –   All printed press coverage– daily, monthly
  –   Web report –qtly
  –   Integrity Report - annually
  –   Insure correct use of mark: all violations dealt with; coord. with EPA’s OGC
• Complementary reinforcing package
 New Report on ENERGY STAR Brand

• Strong Brand
• History, Evolution,
  Current Status
• Benchmarks
 other brands, lessons learned

• Int’l Brand Expert
 ENERGY STAR is a strong brand

Applied lessons learned from 1000’s Brands:
• Brand tenants are serving ENERGY STAR well
  and cannot be compromised
  –   Proven technology
  –   Carbon reductions
  –   Benefits reasonably immediate and measurable
  –   Protect the brand
• Moving forward
  –   Continue to carefully manage the brand
  –   Be consistent; protect brand definition
  –   Results must be tangible
  –   Remain customer driven
  –   Innovate to maintain momentum
     ENERGY STAR Specifications

• Significant energy (GHG) savings
• Consumption/performance can be
  measured and verified
• Maintain/enhanced performance
• Cost –effective
• No bias to one technology.
• Effective differentiation for consumers
Target: strive for top 25 percent of product models
  (not sales) but key criteria can trump that goal
     ENERGY STAR Specifications
Well-Documented Process (Transparency)
           ENERGY STAR in the US:
            50+ Product Categories

                     Office            Home
Heating &                            Electronics         Appliances
                   Equipment                             Clothes washers
 Cooling             Computers       Battery chargers
  Central AC          Monitors       Cordless phones
 Heat pumps            Printers        Answering
   Boilers             Copiers          machines
                                                           Air cleaners
  Furnaces            Scanners          TV/VCRs
                                                          Water coolers
 Ceiling fans       Fax machines      DVD products
  Room AC           Multi-function     Home audio
Ventilating fans       devices       External power
                   Food Service
                                      Lighting            Home
                                           CFLs          Envelope
                                     Residential light   Home sealing
                                         fixtures        Roof products
                                       Exit signs        Windows/Doors
 Overview of New and Revised Specs

 Product Cat.     2007 New/Revisions                  2008 Revisions               New in 2008
Office          Imaging equipment -- 4 / 07      Imaging equipment (tier II)   Servers
                Computers – Jul 07               Computers (tier II)           Data storage
                                                 Monitors                      Large scale routers

Consumer        Digital TV Adapters –1 / 07      Televisions
                                                 Set-top boxes
                                                 External power adapters/
                                                 battery chargers

Lighting        Decorative Light Strings 9/ 07
                RLF – Sep 07

Commercial      Dishwashers -- 10/ 07            Fryers (new sizes)            Icemakers -- Jan 08
                                                 Refrigerators Freezers        Ovens and Griddles
Food Service
HVAC                                             Ventilation fans
                                                 Programmable thermostats

Other           Roof Products – 12/07
                Traffic signals/Transformers -
                - 5 / 07 (suspended)
                Vending machines -- 7/ 07
                    Other Possibilities

 Revisions                      New Specs
 • Boilers                      • Non-Ducted AC
 • Ceiling fan light kits         (aka mini-splits)
 • Water coolers                • Heat Recovery ventilators
 • Audio/DVD                    • Microwaves
                                • Hand dryers
    Will monitor market         • Comm Clothes Washers
penetration, update scoping     • Soft Serve Machines
   papers, develop new
 scoping papers to assess       • Autoclaves/Sterilizers
feasibility, potential energy
        savings, etc
Result: Product Sales Growing
Building Demand: Outreach critical
      to environmental results
• Specs are foundation
• People must ACT
  to achieve environmental benefit
• Substantial resources to
  outreach with results
   – Annual outreach strategy
   – Media reach of 1 billion plus per year
   – 6 million web visits per year
   Why talk about the environment?

• Americans are concerned
  – 87% strongly agree or agree with the statement “I am very concerned about
    the environment.”
  – 93% strongly agree that “Saving energy helps the environment”
  – 74% of consumers believe that a product that is better for the environment
    is a somewhat to a very important consideration when purchasing an
    appliance or an energy using product

• Create a long term connection for action
 help to motivate change

• Emotional
     The time is right: energy
  efficiency and global warming

• 82% of Americans believe in global warming,
 and there is widespread belief that human behavior is contributing to
 the problem.
 Fox News/Opinion Dynamics Poll, Spring 2007

• Majority believe immediate action needed
 NY Times/CBS Poll, April 2007

• 86% would choose one home over another
 based on its energy efficiency.
 Shelton Group/Energy Pulse 2006)

• 63% say change their consumption habits
 based on increase in energy prices.
 Shelton Group/Energy Pulse 2006
Coordinated Outreach Across Program
Partners and Key Product Categories
•   Broad
     – PSA – profiles of real people
     – ENERGY STAR Advice: energystar@home
     – ENERGY Home energy advisor
•   Lighting                                          Multiple Goals
     – Change A Light / Change the World
•   HVAC                                             Build Awareness
     – Cool your world – summer campaign
     – DIY Home sealing                              Provide value to
     – Properly used thermostat
                                                     program partners
•   Office equipment
     – Monitor enabling
     – New Low Carbon IT campaign
                                                      Promote action
•   Consumer electronics
     – Coordination with CEE members
                                                     Promote growth in
•   Commercial Food Service                            product sales
     – Working with utilities/other program admin.
   ENERGY STAR PSA Campaign:
       Current Components
• :30 TV PSA (currently in distribution)
• 5 print PSAs (in development)
   – 2 C&I, 2 Residential, 1 Special
• 2 minute video
    ENERGY STAR PSA Campaign:
          Print campaign

• Designed to work
  across ENERGY
  STAR offerings
• Residential
• Commercial
• Change a Light
• Available to Co-op
 Residential Sector
     2007 Campaigns: ENERGY STAR
             Change a Light
Change a Light Day,
Oct. 3, 2007
•Turnkey materials
•20 day bus tour; 10 stops

2006 and 2007 successes:
•1,000,000+ pledges to date
•650 participating organizations
•State leadership activity in nearly
every state
•30 proclamations of ENERGY
STAR Change a Light Day
              ENERGY STAR @ home

• Focal point for extending
  ENERGY STAR’s market position
 as a trusted source on energy savings information
• Broad range of “tips”
 in addition to highlighting labeled products, (e.g.
 wash full loads)
• Systematic selection and
  documentation process
 behind advice
       ENERGY STAR New Homes

• Nearly 200,000 homes in 2006
 ~12 % market share

• 12 states > 20% market pen.
• 3,500+ builder partners
• New spec in 2007
 first quarter 2007 shows about 11% market

• More High growth markets:
 Salt Lake City, North Carolina, Denver, Atlanta, and
 Pacific Northwest
      2007/08 Activities

• Expand Multi-Family High Rise Pilot
 20% > ASHRAE 90.1
• Annual sponsor meeting
 Develop national strategy for M&E

• Promote carbon neutral home
 Link with Climate Technology Initiative

• Expand efforts in affordable housing
 BOPs and Outreach to State Housing Agencies

• Launch “Designed to be ENERGY STAR”
                ENERGY STAR and
                  Existing Homes

• 30,000+ Retrofits to Date
 under Home Performance with ENERGY STAR -- Show average savings
 of 20 % per household

• New HPwES Programs in 2006
 Long Island Power Authority, New Jersey, Maine and Excel Energy in
 Minnesota (pilot program)

• 2007: 5 More Sponsors and 20,000 Retrofits
• Continued Support for BPI (EPA, DOE, HUD)
  More than 1,200 certified contractors in 31 states and growing
     National HPwES Activity

                                                                                WI – Focus on Energy
                                                                                                                                   ME – Energy Office
             OR - Energy Trust of Oregon                                                                 VT – Efficiency Vermont

                                              ID– Energy Division
                                                                                                                                       Mass Saves –
                                                                                                       NY - NYSERDA                    NGRID & NStar
                                           WY – Energy Office                                First Energy
                                                                                                                                      NY - LIPA
                                                                                Peoria – TRICON
                                                                                                                                        NJ - NJBPU

                                                                                                                                West Penn Power
                                                                                                                              Sustainable Energy Fund
 City of Anaheim

                                              CO - E-Star Colorado                                                                 Maryland Energy
                                               Ft Collins Utilities                                                                 Administration
So. California Edison
                                               City of Bolder
                                               Colorado Springs                                                                    Existing
                        Phoenix - FSL
                                                                                Georgia Power                                      Programs
                                                                Austin Energy
                                                                                           Jackson EMC                             Programs
      Other Activities: Existing Homes

• ES HVAC Quality Installation Guidelines
  – Completing pilots with SCE and Oncor to collect cost data and test
    verification procedures
  – Propose proper HVAC installation program this Fall 07 with CEE and
  – Launch in Spring 08
  – Provide program best practices and contractor training
  – HVAC maintenance campaign in 2008
• Web site tools
  – ENERGY STAR Home Advisor
  – Continue Home Energy Yardstick
• Seal & Insulate w/ENERGY STAR
  – New graphic for insulation man./retailers
  – Spanish language Do-It-Yourself Guide
  ENERGY STAR in the
Commercial and Industrial
       Commercial Sector Approach

• Whole Building Performance
    – promote integration of systems
    – about energy savings -- not presence of new technology
    – achieve twice the savings for a given investment

•   Performance Measurement System
    – can not manage what you can not measure
    – fix missing market information
         • how to measure efficiency / performance
         • when is a building efficient
    – provide information linked to real market transactions (like energy bills)

• Leadership in the market place
    – overcome confusion over role of codes
    – Working with utility programs
    – model for green building programs
        Commercial Buildings:
       ENERGY STAR Challenge
• Announced in 2005 with 20+ states, assoc., etc
• Improve buildings by 10% or more
• Key first step – assess building efficiency
  using standardized measurement system
• Cannot manage what you can not measure
• Galvanizing many end users, states, associations
           Commercial Buildings:
             Program Growth

• Building benchmarking being used as energy
  management/ investment tool
  – Over 6 billion sf of commercial space rated
  – 10,000+ schools
• 3,200+ buildings earn ENERGY STAR
• Added water tracking in 2006
  – 2,300+ water meters already added
          Commercial Buildings:
             2007 Update
• Energy Performance Ratings
  – Expand ratings to new markets:
     • release rating for big box retail Oct. 1
  – Update existing ratings with new data:
     • office building rating released Oct. 1
  – Capturing environmental benefits/profile of buildings:
     • Portfolio Manager incorporates emissions from EGRID
• California Benchmarking Initiative
  – PG&E automated utility bill transfer successful, expanded
  – Model for national implementation
            Commercial Buildings:
             2007 Update (cont.)

• BEEP first year launch trained 5,000
  building owners/managers
• Challenges members to 30%
  reductions measured w/EPA rating.
• BOMA Locals launching ES initiatives
  (Portland, Seattle, Austin)

• Comm. real estate listing service
• Highlights buildings earning ES
• Next step: All CoStar listings to
  provide ES performance rating
            Commercial Buildings:
             2007 Update (cont.)

• Local Government and the ES 10 % Challenge
• Cities/counties play a vital dual role in the Challenge
   – Lead by example and improve own buildings
   – Promote energy efficiency to constituents

• Unanimous Support for ES Challenge
  U.S. Conf. of Mayors (USCM) and National Assoc. of Counties (NACo)

• Expanded materials to support ES Challenge
   – Sector Fact Sheets
   – Energy Facts
   – Co-Brandable brochures, posters
           Commercial Buildings:
          Energy and Water Update
• ENERGY STAR Water and Wastewater Focus
  – Benchmarking tools and energy efficiency best practice guides
    completed by October 1, 2007

• Water tracking in Portfolio Manager (PM)
  – Added in June 2006
  – Over 1,000 PM users tracking water use
  – More than 2,300 water meters

• Joint energy and water utility meeting - March 08
• New ES specs for products using energy and water
  – Commercial dishwashers
  – Ice Makers
                    Industrial Program
• Grown to include 10 industrial sectors
• Focus meetings a continuing success
  – Peer exchange
  – Sector-specific barriers and opportunities

• 2006, first 20 man. plants ES qualified
  – auto assembly,
  – cement, and
  – wet corn milling plants

• 2007, petroleum refining earned ES
• New industries to be added each year
  – fiberglass and cereal production in 2007
  – Two a year
    Assisting Industry with Excellence in
            Energy Management

2007 Priorities: Finalize 3 EPIs for the freezing and canning of fruits and vegetables, flat glass, and container glass
production—update EPI for auto assembly, and advance 2nd EPI for food industry for cereal production plants
                Industrial Program
                   New report

“Energy Strategy for the Road Ahead,
  Scenario Thinking for Business Executives
  and Corporate Boards”
 issued by the Global Business Network

 Business Leaders
 broad cross-segment of American industry including autos,
 chemicals, high tech, banking, consumer products and logistics.

• Focuses on 4 Scenarios
• Need to Move Beyond Short-term Planning
 Think strategically about energy; reaction is the wrong way to face
 the future.
                      C&I Focus for 2008

• Broaden the ENERGY STAR Challenge
   – Reach new associations
   – Target 10-15 priority cities to serve as model cities to implement Challenge

• Revise/Expand EPA’s energy performance ratings
   – Update existing ratings (schools, supermarkets, hotels)
   – Address data centers

• Build the market for energy efficiency services
   – Continue to engage energy service providers, utilities, state energy programs
   – Challenge architects to design buildings that will earn the ENERGY STAR.

• Cont. easy link carbon emissions/reductions w/ES
• Make it easy to assess energy use on a cont. basis
• Leverage 70%+ brand awareness in C&I market
  ENERGY STAR becomes the brand to look for at home and work
                  ENERGY STAR:
             ‘Brand’ Goals for the future
• Triple carbon savings by 2012 (from 2000).
  From 16 MMTCE to over 50

• Build consumer ‘brand’ awareness and loyalty
• Motivate consumers and build demand
• Maintain meaning/integrity on full suite of products
  – Quality, cost-effective, relevance

• Enhance partnership with utilities and EEPS
• Reduce costs of assisting partners to expand
  – Need to manage more products; builders/new homes; commercial/industrial partners

• Build home improvement – beyond products
  – Duct sealing, home sealing, whole home performance are big opportunities

• Transform C&I approaches
  – Whole building approach, many building types, industrial
      Maximizing the Use of the
      ENERGY STAR Platform

• ENERGY STAR label for products/homes
  – Broadly relevant technologies
  – Meet brand principles
  – Well-proven
  – Broadly available
  – Well proven
  – But high costs
• Advanced Technologies
  – Exploring how to leverage ENERGY STAR infrastructure to
    help address market barriers
  – Inappropriate to use ENERGY STAR ‘Brand’
                                          On Track to Meet
                                    Future GHG Reduction Goals

                            Home HVAC                                       Goals
                                                                                    Priority Areas:
                      30    Home Appliances
                            Consumer Electronics
                                                                                    • Lighting
                            Home Office Equipment
                                                                                    • HVAC
GHG Avoided (MMTCE)


                            Commercial Appliances
                            Office Equipment
                                                                                    • Consumer
                                                                                      Electronics (and
                                                                                      power supplies)
                      10                                                            • Office Equipment
                                                                                    • Commercial
                                                                                      Food Service
                           1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Source: LBNL Analysis (2007)

Source: LBNL Analysis (2007)

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