Market Segmentation for a Prominent Client in the Energy Sector Helps Promote Business Efficiency

December 21, 2017

It is estimated that globally, more than 1 billion people do not have access to electricity and more than 3 billion still use fuel sources like wood, charcoal, coal, and dung for cooking and heating.

The global energy landscape is witnessing rapid transformations, owing to the technological improvements and environmental concerns. The energy sector at large is moving toward a lower carbon future to meet the regulatory compliance requirements. Also, at the fundamental level, the energy sector is influenced by population, economic growth, and energy efficiency improvements. Although the energy sector is witnessing promising growth, several factors pose a hindrance to the growth of the global energy market. These factors include:

  • Uncertain regulations: With the stringent regulations imposed by the government, leading organizations are compelled to enhance competition and drive efficiencies. The regulation is applicable to all countries and is focusing on issues pertaining to fair pricing, security of supply, and environmental concern. With the rising need to address these regulations, leading organizations have to refine their existing architecture to push for efficiency, economic performance, and quality of service.
  • Increasing competition: The shift from monopoly to a more competitive environment is opening up the space for new market entrants in the energy sector. With the entry of prominent global leaders, the market has witnessed an increasing level of competition with new entrants attempting to gain a major share of the energy space. Also, the shift toward renewable sources of energy is resulting in the entry of new service providers, which is affecting the current supply landscape.
  • Heightened customer expectations: Since the demand for energy services is spurring significantly, prominent utility companies are facing relentless pressures to maintain a secure, reliable, and affordable supply to the customers. With the customer expectations increasing, leading companies need to switch suppliers frequently to meet the needs of the target audience.

To address these factors and enhance business performance, leading organizations in the energy sector are facing the need for effective market segmentation studies. Market segmentation helps leading organizations classify promising market segments in terms of the geography, distribution, and lifestyle.

The Business Challenge

  • The client: A leading company in the energy sector
  • Area of engagement: Market segmentation

A prominent client in the energy sector with a considerable number of service offerings wanted to profile the most promising segments and accordingly allocate resources to these pre-determined segments. The client wanted to classify the customer’s demand for services and efficiently target specific audiences in a cost-effective manner and reduce the risk of an ineffective marketing campaign. The primary concern for the client in the energy industry was to better profile the customer segments and allocate their attention and resources.

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The Journey

To effective identify potential market segments and target specific customer groups, the market segmentation experts at Infiniti carried out extensive interviews and discussions with prominent stakeholders in the energy sector. Additionally, to measure the market size, the market segmentation experts at Infiniti also compiled information from a wide array of secondary sources such as paid industry databases, company presentations, and industry forums.

The Solution Benefits and the Business Impact

The market segmentation solution offered by Infiniti helped the leading organization in the energy sector effectively define the markets into subsegments and profile the market based on similar needs, wants, and demand characteristics. The market segmentation engagement also focused on designing a marketing mix that can go on par with the expectations of the customers. The engagement also sought ways to supply the needs of the entire market and better allocate their resources to meet the client’s requirements. The market segmentation study also offered personalized marketing campaigns to target specific audiences in a cost-effective manner. Moreover, the engagement further helped the client in the energy sector match the expectations of the targeted market.

The Future

Globally, energy companies are shifting from a one-size-fits-all approach to a more personalized approach to better meet the needs and wants of the customers. With the recent shift towards renewable sources of energy, leading organizations are redefining their existing architecture to transform their business models and manage their operating costs more efficiently.

A must-read market segmentation case study for strategy specialists and decision makers looking to develop an understanding of the energy sector


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