Energy Management Questions, Quiz Example

What key factors must an energy-focused company consider when attempting to develop a new product or service? What are some new energy-related products that have failed? What do you believe caused this failure? How would you have handled the product or service launch differently?

Some of the factors to consider when launching a new product energy product or service are first marketability of the product(Bell, 2008). Marketability of a new energy product will be greatly influenced by the pricing mechanism of the company compared to the market and the competitors.

Second factor to consider is the environmental impact of the product(Bell, 2008).Is the energy product renewable or biodegradable? And if not, what merits does it offer compared to other products?

Third key factor is to consider synergy possibilities with products or services that already exist within the company. This involves checking whether the new product will complement the function other products the company is already selling. Some examples of new energy products that have failed are bio-diesel and ethanol energy related products. These two products are basically used only by small scale to medium scale farmers.

There have been attempts to commercialize bio-diesel and gasoline mixed with ethanol but variable cost of productions and weather patterns have affected and mispriced these two products out of the market(Bell, 2008). A different approach one can use in launching these two renewable energy products is to provide incentives to large scale buyers, like reducing expense on community social responsibility expense since they are can apply for carbon credits when they use these environmentally friendly products.

What factors must be considered in price setting for products or services in the energy sector? Which factors are typically most important? Explain why. Why is adapting the price of a product important?

Like stated from the previous question, some of the factors to consider when setting the price of new energy products are the prices set by their competitors. Setting the price slightly lower or higher or at par with the competitors’ will affect the level of demand and perception in quality of the product. (Gera, MacGregor, & Economic Council of Canada, 1985)

The second factor to consider is the world market price dictated by nature of supply and demand. It is important for the company to forecast the potential sales volumes for the first quarter after it launch, for example, and check whether they can meet the demand coming from potential consumers. Conforming to government policy is also beneficial. Price adaptation is prudent because it will always give a company easy entry point to the market prior to launch of the product. It helps identify market segments that you can probably market these new energy products.(World Bank, 1994)

References

Bell, R. (2008). The green bubble: Waste into wealth : the new energy revolution. New York: Abbeville Press Publishers.

Gera, S., MacGregor, M. E., & Economic Council of Canada. (1985). Economy-wide implications of alternative energy sector tax and pricing policies: Simulations with the MACE model. Ottawa: Economic Council of Canada.

World Bank. (1994). Market outlook for major energy products, metals, and minerals. Washington: World Bank.