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PG&E Marketing Issues Case Study

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Updated: Jul 21st, 2021

The case of PG&E highlights numerous problems that decrease the effectiveness of marketing strategies. Modern companies’ issues related to marketing include the lack of research and client segmentation practices reflecting changes between consumers. The mistakes of PG&E impacting the outcomes of their marketing efforts can be corrected with the help of thorough planning based on studying customers’ attitudes to energy-saving and the development of advertising materials for specific industries.

The target customers of PG&E include both public and private businesses that need high-quality energy services. For production businesses in different industries, the ability to facilitate the manufacturing process and avoid unnecessary expenses can be the key motivator to reduce resource overconsumption. At the same time, when it comes to businesses that sell services (education, healthcare, tourism, etc.), they can be interested in energy-saving options since changes in operational costs allow devoting more funds to improving the service quality. According to Kotler and Keller (2015), the process of segmentation involves determining large and distinct groups of consumers. In the case of PG&E, it is possible to single out particular groups based on the combination of the industry and business size (small and medium/large). The company serves eleven different industries, ranging from food processing companies to educational institutions, so there can be twenty-two categories slightly different in terms of goals and financial opportunities.

Based on common knowledge about the business size and inter-industry differences, it is possible to make predictions related to target customers’ media habits. For instance, it is evident that business owners tend to use media sources related to their industry to learn more about their key competitors or advertise products or services. Concerning the size of the business, it is known that about three-quarters of small business owners actively use social media for business contacts and advertising, with Facebook, Instagram, and Tumblr being the most popular platforms (Rivers, 2017). There are no studies comparing small and medium-sized companies in this regard. However, due to the number of employees, it can be easier for small business leaders to organize educational events.

Despite the management’s efforts to develop an effective solution to the problem of energy overconsumption, the company’s current IMC program is associated with certain challenges. PG&E launched self-assessment tools for businesses allowing users to track companies’ energy consumption and get necessary recommendations, but it did not become popular. This failure can be attributed to the company’s inability to choose the best communication channels to increase clients’ awareness of consumption management opportunities (Hughes, Vafeas, & Hilton, 2018). The quality of information letters can also be a challenge. Given that the majority of clients show little interest in using new tools, the disseminated letters do not explain potential financial benefits comprehensively. Also, the problem is the company’s inability to elicit the potential of up-to-date communication technologies such as social media and video conversations.

Additionally, proper planning is critical to the effectiveness of IMC strategies. Based on the identified challenges, PG&E is recommended to add such steps as research and diversification to the planning process (Hughes et al., 2018). As for research, there are many ways to study differences between the groups of target customers – for instance, it is possible to conduct surveys to learn more about attitudes to energy-saving depending on the industry and potential causes of overconsumption. This information can be helpful during the stage of diversification. Based on industry-specific concerns, it is possible to make handout materials more effective by reviewing particular solutions and potential savings.

To sum up, the company did not study the motivations to use energy-saving solutions depending on business purposes. The selection of communication channels to build awareness among customers was not preceded by necessary research and did not reflect differences between clients related to business size and the industry. Therefore, proper customer research and the creation of materials that highlight industry-specific problems and their solutions are required.

References

Hughes, T., Vafeas, M., & Hilton, T. (2018). Resource integration for co-creation between marketing agencies and clients. European Journal of Marketing, 52(5/6), 1329-1354.

Kotler, P. T., & Keller, K. L. (2015). Marketing management (15th ed.). New York, NY: Pearson.

Rivers, A. (2017). Survey reveals social media habits of small business owners. The Marketing Scope. Web.

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IvyPanda. 2021. "PG&E Marketing Issues." July 21, 2021. https://ivypanda.com/essays/pgampe-marketing-issues/.

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IvyPanda. (2021) 'PG&E Marketing Issues'. 21 July.

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