Assumption University of Thailand

Graduate school of eLearning

Master of Science in Management
Semester 2/2014
Course Title: MS6402 Advance Marketing Management
Lecturer: A. Bhumiphat Gilitwala
Group Case Study No.1
ENERGY PERFORMANCE SYSTEMS, INC.
Group Members
1. Mr. Swatchai Bualert

Student ID no. 5772008

2. Ms. Ausara Saelim

Student ID no. 5772006

3. Ms. Watsana Ruchidamkoengsak Student ID no. 5772001

4. Ms. Pimparat Snguannapaporn

Student ID no. 5672003

Introduction
David Ostlie, the power plant superintendent who invented and patented Whole-Tree-EnergyTM
technology (WTETM) and the president of Energy Performance Systems,Inc. (EPS). Ostlie worked for
Northern States Power, learned well about electricity generation and created the experimental called
Whole-Tree-EnergyTM. WTETM is a new potential power source for a new electric power generation
technology, this system isn't only produce electricity by burning sections of whole hardwood trees that
have been dried in an air-support fiberglass dome but this patented innovation also appears to be an
attractive cost-competitive alternative to fossil-fuel power production.
There are 3 key features that Ostlie mentioned in the case study journal what make the ESP owned
and patented WTETM which are unique technology and innovative concept.
1. Using whole hardwood trees
Whole-Tree-EnergyTM technology offers higher efficiencies than plants fired by chipped wood, not
just because of greater plant size and drier fuel but also because it employs high-Pressure, highTemperature steam. " Hardwood trees" in this journal means all broad left trees which will be using
wood burned to produce electricity which will reduce the cost, time and energy.
2. Drying the whole trees
Harvested and delivered whole, the trees are dried in a air-supported fiberglass dome structure over
a 30-day period by using waste heat from the combustion process in the adjacent plant. WTETM process
dries the tree to remove about 70% of the moisture before the combustion process start which will
reduce energy output and decrease resulting in emissions that lead the acid rain and air pollution.
3. Three-stage combustion

The idea was to simulate the wind-sheltered environment integral to the whole-tree drying process
which trees would be dried inside an air-supported fiberglass dome structure. In an actual, Whole-TreeEnergyTM plant waste heat from the combustion process would be used to dry the trees. There are
Three-stages of combustion, (a) as trees in a 12-foot deep, mid-level pile, (b) as wood char that falls and
is burned on a great below the pile, and lastly (c) as volatile gases above the pile that burns cleanly like
natural gas. The outcome is not only increase the environmentally-clean but also efficient combustion
throughout the process.
Furthermore, WTETM is the advance thinking which will create the development and improvement
toward existing issues from the traditional power plant technology. According to the case study Ostlie
explained the benefits of WTETM into 3 solutions; the environment and pollution, Jobs and economic
development and Buying interest of utilities.
1. The environment and pollution
Whole-Tree-EnergyTM technology is a renewable energy technology that offers environmental
benefits at an acceptable cost without the need for the expensive sulfur dioxide (SO2) emission control
equipment required for many coal-fired power plants. The WTETM concept has been developed and
tested over the years with support from EPRI, Northern States Power, and other organizations. The final
test result has shown that this concept decrease the volumes of SO2, NOx, ash and extra CO2 which will
be a reduction in air pollution, acid rain, and global warming causes.
2. Jobs and Economic Development
Biomass power offers economic benefits by increasing the huge number of jobs for growing,
harvesting and transporting whole trees and in the plant producing electricity which will stimulate the
economic by increasing the local employment. Besides, WTETM is using the existing trees that overage,

diseased and otherwise unmarketable portions by other forest product firms that could be targeted as a
traditional fuel resource. Harvesting over-age hardwoods actually stimulates forest regeneration,
provides better habitat for wildlife and also modified the useless trees to be beneficial resources.
3. Buying Interest Utilities
Nowadays, demand volume of electricity is increasing everyday by industrial, commercial and
residential users. To avoid electrical blackouts and improve the generating capacity of electrical, WTETM
technology project provides an opportunity either retrofitting WTETM to the old coal and oil-fired plants
or building the new WTETM plants which will increase the capacity to reach the high demand volume in
the future and also reduce the existing air pollution from the old technology.

The additional concerns

Ostlie mentioned about 6 emerged prospective to give clearer picture about WTETM. First, after
several test showing burning wood technology create enough power that will produced higher volume
heat-release and will definitely enough to generate electricity. Second, WTETM dried the whole trees in
an air-supported dome like a sport stadium size which won't affect the loading, transporting and drying
process. Third, WTETM researchers said to support the power plant, only 0.1 percent of land in a 50-mile
radius of the plant would be harvested each year plus WTETM also create hybrid tree plantations. Thus
there will be enough trees available to support this technology. Fourth, Ostlie claimed that WTETM create
environment benefits by retrofitting and building no polluting plants which will decrease the pollution
that created by the old power plants. Fifth, to retrofit might be a little costly but create more future
value while building a new WTETM plants is cheaper than a new fossil fuel plant. Lastly, a recent study
evaluating that WTETM technology create less production cost that today's fossil fuel plants.

Question No. 1 : In a utilitys decision whether to buy and use the WTE technology, (a) who comprises
the buying center, (b) what aspects of the buying decision does each look at?
Answer: (a) Who comprises the buying center?
For Energy Performance Systems, INC (EPS) to achieve its first sale objective of its WTE
technology, it is essential to understand needs, resources, policies, and buying procedures of its
prospected customers, which is electric utilities in this case. Like most of business buyers, a buying
decision of electric utilities will be made through their buying center. The buying center is comprised of
all members of the organization who play any of seven roles in the purchase decision process (Ibid) as
illustrated in below figure.

Source: www.brianddayday.blogspot.com

Each player in an organizations buying center plays different roles in buying procedures and decisions.
1. Initiators: It refer to those individuals or groups who initiate or request to purchase a
product/service. An inquiry of a product or service always comes from initiators.
Regarding to our case study, initiators within electric utilities are those who are responsible for
planning, and managing utilities supply chain, especially in the aspect of sufficient and secured sources
of energy. The initiators are production-capacity planning department, business strategic planning
department, and supply chain department. Additionally, a research and development department (R&D)
could possibly inquire for WTE technology as their new development alternatives.
2. Users: They are individuals or groups who uses a product/service. These people sometimes
involve in initiating a need for a purchase of a product/service, and help define its
specifications.
From the given definition, users of WTE technology can be identified as those who involve in
electrical power production. This implies to staffs, supervisors, and managers working in production
department.
3. Influencers: Individuals or groups who influence the buying decision can be called as
influencers. Their roles include not only to help defining appropriated specifications, but
also to provide information used for evaluating alternatives.
According to the mentioned role, influencers of electric utilities should possess both expertise,
and experience relating to energy sources in order to give influential advice or proposal. Therefore,
electric technicians, power plant engineers or environmental specialists are considered as important
influencers in utilities buying decision.

4. Deciders: It refers to individuals or groups who decide on a product/service requirement,

and on suppliers. All informations are collected, compared, and analyzed by deciders to
incorporate their decision makings.
Referring to our case, there are several key aspects to consider whether electric utilities should
buy WTE technology, therefore, deciders could possibly come from various department. Deciders for
cost-related matter are purchasing department. For technical and specification issues, electric
technicians and engineers play a decider role.
5. Approvers: As suggested by its name, individuals or groups who authorize buyers and
deciders to take action on their selected alternative. This role often depends upon
organizations hierarchy and policy.
For electric utilities, the top management or the chief executive officer usually plays an approver
role. However, it is possible that the approval can only be granted by the broad of directors or the
executive committee rather than any top managerial individuals alone if the deal is considerably high
value
6. Buyers: They are those who are authorized to select suppliers, and arrange purchasing
terms. Buyers also play an important role in negotiating with potential suppliers to achieve
the best deal.
To perform such role, buyers in most organizations buying center including electric utilities
refer to individuals in purchasing department. In the case of high value, and complex purchasing
activities like WTE technology, it would include departmental high level management as well.

7. Gatekeepers: This is the last but yet significant role in organizations buying center.
Gatekeepers refer to individuals or groups who possess certain power that could obstruct
either sellers or information to reach other players in the buying center.
To reach prospected members of electric utilities buying center, EPSs salesperson should make
sure to get a bypass from gatekeepers such as receptionists, operators, or purchasing agents.
Answer: (b) what aspects of the buying decision does each look at?
The buying decision process of organizations or businesses is a multi-personal activities
comprising of individuals or groups playing different roles as explained in the previous part. Unlike
consumers buying, organizations or businesses buying are more complex, and not influenced by
individuals own needs. For developing its business marketing strategies targeting at prospected electric
utilities, EPS should consider major aspects of buying decision below.
1. External Environmental Factor: How businesses or organizations operate, more or less, is
influenced by their external forces. The buying decision and process also has no exception.
Economics conditions, changes in related regulatory, political environment, or even
competitions are major elements affecting buying decision of businesses and organizations.
2. Internal Organizational Factor:

It is not only external environment, but its internal

organizational factors also play a big part in influencing buying decision. This includes
organizations, goal & objectives, structure, policies, technological level, and manpowers
skill/competency.
3. Interpersonal & Individual Factor: Organizations or businesses buying involves many
participants as their nature. Therefore, the interpersonal relationship among players in
buying center are crucial. It could specifically implies to degree of participation, authority,

risk-taking abilities, interpersonal conflicts and/or interest, and personal factor (i.e. ages,
education, cultural background)
4. Situational Factor: From time to time, organizations or businesses act upon their current
situation. Thus, the situational factors such as time frame, availabilities of products/services,
promotions, and financial situations determines their buying decision.
Despite all influential factors are being considered, it is essential for business marketers to be
able to identify how the factors influence each player of organizations buying center. The implication of
EPSs marketing strategy is illustrated in below table.

Factors
Who

External

Internal

Interpersonal &

Environment

Organization

Individual

Situational

Initiators
- Availability &

- Capacity Vs.

- Relationship &

- Delivery Time

Related

accessibility to

demand of energy

performance of

- Availability of a

Dept./Personal

current energy

sources.

current suppliers.

product Vs. need

- Business Strategic

source & other

- Organizations

- Personal factors

alternatives.

target production

Planning
- Production Planning

- Energy and electric

- Supply Chain

related regulatory.

- R&D

Users

N/A

- Personal factors
- Compatibility w/

- Delivery Time

Factors
Who

External

Internal

Interpersonal &

Environment

Organization

Individual

Situational

Related

current technology &

- Availability of a

Dept./Personal

infrastructure

product Vs. need

- Electrical & Power

- Applicable for

Production

manpowers skill
- Easy to use in
production

Influencers

N/A
- Pros & Cons of

- Compliance w/

- In-dept. knowhow

Related

other technology

purchasing policy

of salespersons

Dept./Personal

alternatives

- Compatibility w/

- Degree of

- Electric Technicians

- Environmental

current technology &

participations

- Electric Engineers

Regulatory.

infrastructure

- Personal factors

- Environmental

- Cost & Price

- Applicable for

comparisons

manpowers skill

- Pros & Cons of

- Compliance w/

- In-dept. knowhow

- Organizations

Related

other technology

purchasing policy

of salespersons

Financial Situation

Dept./Personal

alternatives

- Compatibility w/

- Degree of

- Time Frame

Specialists

Deciders

Factors
Who

External

Internal

Interpersonal &

Environment

Organization

Individual

Situational

- Electric Technicians

- Environmental

current technology &

participations

- Delivery Time

- Electric Engineers

Regulatory.

infrastructure

- Relationship w/

- Availability of a

- Purchasing

- Cost & Price

- Applicable for

selected suppliers

product Vs. need

comparisons

manpowers skill

- Personal factors

- Competitors (i.e.

- Compliance w/

- Reliability of

- Organizations

Related

others electric

corporate policy

influencers &

Financial Situation

Dept./Personal

utilities )

- Organizations

deciders

- Time Frame

- Top Management

- Market Trends (i.e.

strategic goals

- Authority Power

- CEO

clean energy)

- Applicable for

- Personal factors

- Broad of Directors

- Political factors (i.e.

Organization

- Executive Committee

governments

structure,

subsidy)

manpowers skill

Approvers

- Economics (i.e.
world s oil price )
- Legal issues

Buyers
- Cost & Price

- Compliance w/

- Relationship w/

- Special Offers

Factors

External

Internal

Interpersonal &

Environment

Organization

Individual

Related

comparisons with

purchasing policy

selected suppliers

- Long credit terms

Dept./Personal

other utilities &

- Organizations Cost

- Personal factors

- Delivery Time

- Purchasing

other technologies )

and Price target

Who

Situational

- Availability of a

- Economics factors

product Vs. need

i.e. interest rates

Gatekeepers

N/A

N/A
- Compliance w/

- Relationship w/

Related

confidential policy

salespersons

Dept./Personal

- Existing established

- Personal factors

- Purchasing agents

contact route

- Receptionists
- Operators

Question No. 2: What are some of the key elements EPS should have in developing its strategy to
market WTETM to prospective utility buyers?
Answer: There are 4 key elements of business customers can be identified.
1. Price-Oriented customers

Concern of buyer will satisfied at level of the price that they can afford to pay, will decide at
affordable price. How much can company lower the price and still make margin.
Compromise on profit margin, lower the profit margin make sure the buyer will happy with the price
that company offer.
A group of actions taken by a business to support its sales and service staff in considering client needs
and satisfaction their major priorities. Business strategies that tend to reflect a customer orientation
might include: developing a quality product appreciate by consumers; responding promptly and
respectfully to consumer complaints and queries; and dealing sensitively with community issues.
By setting to low price and low condition.
2. Solution-Oriented customers
Solution-Oriented customers are always looking for extra benefits that comes along with the end
product.
These customers seeks more value added on to the product and are often flexible to the prices
offered even though the prices are higher by extra benefits meaning extra service offered by the
supplier such as free delivery on-site installation, repair and maintenance and yearly inspection.
Some examples of being solution-oriented are offering suggestions, giving advice, providing solutions,
offering samples or store credit, etc.
3. Gold-standard customers
Gold-standard customers are someone that willing to pay more no matter price will high or low, gold
customer will need everything to be perfect on service, product, quality or extra benefit sometimes. For
example, company shouldnt only provide the product feature advantage information before selling but

also need to clarify what is after sell services.

4. Strategic value customers
Strategic value customers are customers who value supplier more like a partners in their
business and expects suppliers to be reliable and dependable they know that without supplier support it
is difficult for them to run their day to day business so they put suppliers as key element in their
strategic planning decisions.
Customer sees you as a dependable and reliable supplier in a sense that company will able to
support them on a consistent basis while they are also concerned about their responsibility towards the
environment, labor, laws and their corporate social responsibility.

Product feature advantage information.

Wood trees reliable delivery on time.

Additional of strategies that EPS should considerate as below:

Develop strategies EPS have to look for potential growth by capturing be insights and feedback
of the market.
Reviewing and analyzing what the competitors are doing in the market place to better
understand the need of the market while also developing the brand image.
Deliver value to the customers while also keeping a close eye on the margins or profitability of
the business.
Seeking ways to strength the core competency and eliminate weaknesses.

Question No. 3: As a concerned citizen, (a) what do you see as the key benefits of the WTETM technology
and (b) what do you personally see as the potential show stoppers " for WTETM - the critical things that
can prevent it from being commercialized and becoming a reality?
Answer: a) what do you see as the key benefits of the WTETM technology?
According to the case study, Ostlie explained the WTETM technology key benefits into 3 parts.
1. The environment and pollution
Unlike coal, WTETM technology offers relatively low harmful sulfur or mercury emissions, less
nitrogen oxides, reduce ash which considered as a hazard waste, and no additional carbon dioxide in the
atmosphere which means less acid rain, global warming, smog and other toxic air pollutants. The WholeTree-EnergyTM concept has been developed and tested over the years, WTETM technology is sustainable
managed, and it can result in low or no net carbon emissions which will create a cleaner and healthier
environment for our future.
2.

Jobs and economic development

Every year in the United States, roughly 39 million tons of crop residues go unused. WTEYM
technology will create beneficial to these unsalable wood by turning to usefulness wood burning system.
Moreover, harvesting the crops isn't only could help reduce the country's dependence on fossil fuels but
also could be a booster to rural economics. A Whole-Tree plants will generate jobs and stimulate the
economic by increasing occupation to farmers, truckers, wood harvesters and others living in rural areas
surrounding the WTETM technology plants.
3. Buying interest of utilities

Due to high demanding of electricity, WTETM technology provided 2 opportunities to their industrial,
commercial and residential users. First, retrofitting WTETM technology to existed hundreds of coal and
oil-fired plants to reduce current pollution problems. Second, building the new WTETM technology
plants.
Answer: (b) what do you personally see as the potential "show stoppers" for WTETM, the critical things
that can prevent it from being commercialized and becoming a reality?
1.

Unintended economics and environmental consequences

Harvesting and raising the hardwoods crops for biofuels used a large amounts of fertilizer and water
to grow the healthy trees which could lead to the raising price of livestock food, fertilizer and also could
lead to shortage of water supply. Furthermore, planting hardwood trees required a big piece of land
which means the more WTETM technology is effective, the more land will be required for growing trees.
If the demanding of the land increase, it might lead to higher standing living cost and also could impact
the living style for those who lives around that area.
2.

Existing of indirectly competitors

WTETM technology is not the first wood-fired electricity generator in the country, several hundred
already exist. Most of them are owned by paper companies and saw mills, which burn their own scrap
wood to generate heat and electricity, primarily for on-site use. It's increasingly common for these
companies to sell excess electricity utilities. Thus WTETM might face to the new competitors if these
companies turn to produce more electricity from their leftover woods and expand their plants to be
electricity generator in the future.
3.

Overharvesting effect

One of the EPS plans is growing the trees to feed an electricity generator of WTETM technology.
Without the well management could lead to the overharvesting which will impact to small wildlife and
can cause the extinction toward some biodiversity. Typically, the crops can be harvest after seven years
of growth so ESP has to plan ahead for the nearest future by increasing the growth volume to avoid any
disruption and shortage of wood trees.
4. Overworked ecosystems
Furthermore, forests in the southern United States already produce more wood and paper products
than anywhere else in the world, so increased demand from the bioenergy market could put even more
pressure on these overworked ecosystems.
Question no.4: A new product or technology like WTETM requires educating a number of key groups, or
influencers, about the technology. Excluding the electric utilities themselves. (a) What groups, or
market segments, should EPS try to reach, (b) what key benefits should be emphasized to each, and (c)
what promotional methods or media should EPS use to reach each segment
Answer: (a) what groups, or market segments should EPS try to reach?
Regarding to the usage of the electric utility, it is wise to presume that there are already several
technologies that capable to generate the electricity without causing or least causing environmental
damage.
When it comes to the market segmentation, EPS must concern its unique strength and positioning in
order to aim their market. It obviously shown that EPS has three strong points as following

The environment and pollution concern

Jobs and economic development

Buying interest of utilities ( lower cost of production >>> low cost of consumption )

Thus, EPS should aim for the group of target which has certain authorities to make decision over the
wide area such as state governors, directors of natural resources due to united state department of
Energy or related-fields. Besides, those three positive factors could be the potential keys to support the
ideas and become a feasible project as it provides multiple positive impacts to the other fields as well.
In addition, the EPS could specifically aim to industrial state as some of those industries have their
own electric generator or power plants. EPS must be able to attract them by providing the lower cost of
the electricity per unit which could certainly reduce the industrial expenses in both short term and long
term.
Besides, as the world are now concerned over the environmental issue. The EPS could also aim for
the private group of people (private companies) who may have interested in using clean energy as
sources in launching their businesses.
Answer: (b) what key benefits should be emphasized to each?
As the market segmentation of EPS is fundamentally from the government. It would probably cope
and provide benefits to several aspects as following

Social response by reducing the air pollution which lead to the less of global warming and the
increase in environmentally friendly ( which people are now concerned )

In term of the pros to the government and economy, EPS provides the electricity at the lower
cost. Thus, there would be a high probability that the competitive rate from both domestic and
international industries will be increased due to the lower cost of electricity. As the result, both
GDP and GNP can be raised at a certain point.

An increase amount of workforce through the EPSs electric generating process which require
such a large amount of labor in order to perform all activities to bring out the final outputs.

Answer: (c) what promotional methods or media should EPS use to reach each segment?
EPS must use the government auction process in order to break through the market as they aim
to make the business with the government and all related department that are working along with the
government. However, EPS must not ignore to inform the information to the general public as the firm is
also need to build up the reputation as well as providing the reason of what the consumer can gain from
supporting the use of the Whole-Tree-EnergyTM (WTETM).
The types of the media must be various in order to reach all types of consumer that divided into
age, gender, life style as these groups of consumer may be differed in the way that they preferred to
update the news. Thus, EPS can use almost all of the media channel such as the advertisement via
television, radio, internet, newspapers.

Conclusion
WTETM is one of the best example for a present human concerned, creativity will enhance our
better life's quality that invent the best benefits with less or zero-impacts. WTETM technology is a
double-edged sword, depending on how and where it is produced. It can be produced in ways that
reduce global warming pollution or in a way that increase it. It can help clean up the air, water, and soil
and protect wildlife or it can degrade our lands, forests and water, threaten biodiversity and harm public
health. WTETM challenge is to ensure that this technology is not only reduce global warming pollution
but also protect the environment. In the other words, this technology should do the better job that the
fossil fuels it replaces.
As a marketer, ESP has a potential to commercialized WTETM to the utility market by providing
the core competency to their target market throughout the effective communication channels. The
targets of WTETM technology are not only selling this technology to business buyer and government but

it's ESP responsibility to convince and give the full details how this technology will benefits and impact
to a concerned citizen, it's part of ethical marketing principle. Besides, the company need to develop the
marketing strategies by using the key elements that match to their target customers then the
achievement of the company won't be far to reach. Even though the WTETM technology is still under
development but it appears to be a cost-competitive alternative compared to other power productions
thus ESP has to develop their technology by creating the outstanding and value as a first choice in their
customer's perception.
However, WTETM technology has proved that it is not too far for this technology to be one of the
best electricity power production in the nearest future, the company needs to improve their weak
points, promote their key benefits, creating the strong brand value and apply the right market strategies
to build up the long-term business activities to compete their competitors in the current market. Lastly,
the company has to keep developing their technology and plan ahead for any changes of environment,
to avoid any disruptions of the service and prepare for a new competitors to entry into the market.

References
1. "Marketing Management" ; an Asian perspective, 5th edition by Philip Kotler, Kevin Lane Keller, Swee Hoon Ang, Siew Meng
Leong and Chin Tiong Tan.

2. "Epri Journal" ; electric power research institute by Leslie Lamarre

3. https://energyperformancesystems.com/Energy_Performance_Systems/About_EPS.html

4. http://www.nrdc.org/energy/renewables/biomass.asp

5. www.brianddayday.blogspot.com