Measure the Communications’ Result: At the beginning, Taipower can measure the “inquiry rate” by counting how many people inquiry this power system to

presume the communication results; after that, how many people apply or order this power system is the most direct indicator of the communication results. If the inquiry rate is low, Taipower have to review its communication methods and skills. However, even the inquiry rate is high; it doesn’t mean there is a high order rate because the higher costs of clean power normally stop many potential

customers.

Above already described how Taipower communicates with public people to let them have fundamental understanding about this fuel cells power system, the research tries

to discuss how Taiwan government assists in supporting the promotion of this power system or other clean powers. As a government ’s standpoint, the key point is to restrain the greenhouse effect and protect our environment, so any clean power achieving these goals will be brought into the government’s energy policies, which means the government’s promotion policies will not limit to the fuel cells power but cove most clean powers.

After studying other existing policies (South Africa Department of Minerals and Energy 2002; Consumer Education Sub-account, California 1997; Mclennan

Magasanik Associates Pty Ltd. 2002), Taiwan government current policies (Bureau of Energy 2005) and Taipower’s status and role, the research finds the strategic goals and supporting objectives will be instrumental in facilitating the development of an

enabling framework in order for Taiwan government to meet its commitment to promoting clean powers. Four key strategic areas have been addressed as below:

1. Financial Instruments: The goal is to promote the implementation of clean power through the establishment of appropriate financial instruments with the following objectives:

l To ensure that an equitable even higher level of national resources is

invested in clean powers technologies, given their potential and compared to investments in other energy supply options.

l To set targets for the directing of public resources for the implementation of clean powers technologies in combination with international sources of funding for this purpose.

l To introduce appropriate fiscal incentives for clean powers.

l To extend existing financial support systems and institutions and introduce innovative approaches to the establishment of sustainable structures and financing mechanisms for delivering clean power systems.

l To facilitate the creation of an investment climate for the development of the clean power sector, this will attract foreign and local investors.

2. Legal Instruments: This goal is to develop, implement, maintain and continuously improve an effective legislative system to promote the implementation of clean powers with the following objectives:

l To develop an appropriate legal and regulatory framework for pricing and tariff structures to support the integration of clean powers into the energy economy and to attract investment. Section 5.3 clearly introduced the possible pricing methods.

l To develop an enabling legislative and regulatory framework to encourage current Independent Power Producers (IPP) into the developing these clean power systems.

l To develop an enabling legislative framework to integrate local producers of related fuels like hydrogen or natural gas supplement into their respective systems.

3. Technology Development: The goal is to promote, enhance and develop

technologies for the implementation of sustainable energy and clean powers with

the following objectives:

l To promote the development and implementation of appropriate standards and guidelines and codes of practice for the appropriate use of clean power technologies. It should be helpful for the development of Taiwan’s fuel cells industry.

l To promote appropriate research and development and local manufacturing to strengthen clean power technologies and optimize its implementation.

4. Awareness Raising, Capacity Building and Education: The goal is to develop mechanisms to raise public awareness of the benefits and opportunities of clean powers with the following objectives:

l To promote knowledge of clean powers and energy efficiency and thereby to increase their use.

l To promote and stimulate the clean powers market through the

dissemination of information regarding the economic, environmental, social and trade benefits of clean powers technologies and their applications.

l To persuade the appropriate Government and Government funded institutions like schools and state-owned organizations to implement training and education programs with regard to clean powers.

l To actively involve women in decision- making and planning and promote empowerment in clean powers programs or activities, it’s because women are generally considered having less opportunity to participate in

public-affairs decision making.

l To improve communication and interaction between central and local Government institutions on clean power policies. If they can adequately cooperate then its outcome will be more significant.

At present, as described, the utilization of these clean powers is no t cost competitive in many countries when compared to fossil-based or nuclear energy. There are many reasons for this discrepancy in cost, including the fact that the lower cost associated with fossil fuel does not fully account for its adverse impact on the environment explained as in Natural Capitalism. Even so, the market conditions for clean power generation can be optimized by reducing the barriers to the increased production of electricity from this source through the development and implementation of an appropriate financial and legislative framework. There is a need for Taiwan government support for clean powers to help establish initial market share and demonstrate the viability of clean powers, after which economies of scale and technological development take over. Besides, mechanisms need to be developed to help the qualified third party enter to this market and procedures and wheeling charges have also to be defined and regulated to remove the barrier of cost effective transmission of power.

5.5 Path Strategy

The objectives of this P, Path, are to establish channels for different target markets and aim for efficiency, control, and adaptability. Normally, producers and suppliers who do establish their own channels can often earn a greater return by increasing their investment in their main business. Because the marketing strategies are developed under the standpoint of Taipower, the method of the path strategies is developed by combining with Taipower’s current organization structure and Taiwan domestic status.

At this emerging stage, the path’s functions are (1) to gather information about potential customers, vendors, materials and fuel suppliers, and others; (2) to develop and disseminate persuasive communications to stimulate purchasing; (3) to provide for the successive introduction, movement, and install of physical products.

Taipower should adopt “pull strategy” that is, according to Kotler ’s definition (2003), the manufacturer using advertising and promotion to induce customers to ask

intermediaries of the product thus induce the intermediaries to order it. At this emerging stage, the main objectives are to educate customers and disseminate the knowledge of this power system, therefore it is very suitable for Taipower to adopt this strategy. Actually, the organizational structure of Taipower itself is capable of performing the role of so called “intermediaries”.

According to above method, the author develops a possible marketing channel to develop the fuel cells power system in Taiwan drawn as below Figure 5-4. In this figure, the Department of Business should be the center of this channel. It receives the direction from the government to establish the rules and plans of the fuel cells power system. It also needs to contact with qualified vendors and suppliers to understand the

market status, explore possible prices, compare products difference and search cooperative opportunities with foreign vendors. According to the description in

section 2, the “natural gas” is a very proper hydrogen source of fuel cells, so Taipower also needs to build natural gas supplement for fuel cells. Like the case of Avista Labs and SiGEN Sign Distribution Agreement described above, Taipower should look for the business cooperation with these vendors and suppliers to control its costs and accelerate its development.

After that, it can transmit its directions to the lower level 24 District Offices distributed in the whole country. Each District Office could be the role of above

“intermediary”, the contact point to provide face to face services including product introduction, function explanation, design principles, and environmental benefits of this fuel cells power system. In addition, it also needs to feedback customers’ feelings and comments to the higher level Department of Business to let it improve or upgrade strategies.

According to Kotler’s channel- management decisions opinion (2003), the design and arrangement of the fuel cells power system marketing channel should contain

following five parts:

1. Selecting Channel Members: In these 24 district offices, which one of them is suitable for being the “intermediary” needs to be evaluated detailed. Of course, if there are more offices to provide the designed service, the outcomes should be better. The question is, at this starting stage, Taipower doesn’t have enough qualified employee to execute required jobs, which may on the contrary cause adverse effects. Based on this concern, Taipower, at this beginning stage, can choose three to five offices located at north, central, and south Taiwan

respectively to be the “intermediaries” to execute designed functions, and then expand it to other offices gradually when more and more qualified employees are cultivated.

2. Training Channel Members: As described above, at present, Taipower doesn’t have enough qualified employee to execute required jobs, so the primary job is to cultivate qualified employees and assign them to those chosen offices to execute endowed missions. These qualified employees should be capable of executing the designed functions like product introduction, function

explanation, design principles, and environmental benefits of this fuel cells power system. In addition, these employees also have to be patient and polite;

after all, they stand at the first line of facing customers and will be viewed as the company by customers.

3. Motivating Channel Members: These chosen district offices, as the

intermediaries, have the decisive influence on the success and failure of this power system, so it’s very important for Taipower to ensure those offices to elaborate maximum effects. For a state-owned company like Taipower, a truth is the employee is highly impossible to lose job or be punished because of not performing well. Under the premise, Taipower should use “Reward Power” to encourage or stimulate these offices. This “Reward Power” could be prize, better position, and visible and invisible praise and so on. In addition, Taipower should continuously provide capability-building programs to let these employees feel themselves important.

4. Evaluating Channel Members: At the promoting stage, it’s not easy to evaluate the offices’ performance because its purpose is to let people get related

knowledge. However, Taipower should periodically hold discussion meeting with these offices to understand their situations and difficulties then develop improved approaches and strategies for promoting this power system.

5. Modifying Channel Arrangements: Due to staying at starting stage, Taipower current job is to build up the capability of these district offices-the

intermediaries. In the short future, before this fuel cells power system becomes prosperous, these district offices have to perform their roles well and in the long run, when this market becomes popular and many private companies want to enter this market, Taipower may adjust its channel management at that time.

Another important division, from Figure 5-4, is the New Business Development Office. The New Business Development Office is a new unit of Taipower set up in 2003. Its mission is to find potential business for Taipower and currently, the clean power development is one major item of Taipower ’s new businesses. For this fuel cells power system, the main function of this New Office is to be the bridge between the Department of Business and outside related units like research centers (IRIT, INER… ), universities, and domestic fuel cells industry. It can issue projects aiming to satisfy Taipower ’s needs to those outside units; it can not only use the achievements of those projects to support decision-making and strategy development but also nurture the growth of domestic fuel cells industry.

Moreover, The Department of Business has to closely cooperate with the Department of Power Development, Department of Construction, and the Department of Power Generation. When the Department of Business gets an order of a fuel cells power system, no matter for stationary or residential, it needs these three engineering

divisions to implement the site-choosing to find the most proper locations,

construction and installation to complete the power system building, and operation to provide power. Finally, when these power systems start to provide power, the district offices will undertake the responsibility of maintenance, routine tests and any

necessary services. Their relationships are also shown in Figure 5-4.

From above descriptions, a path strategy of developing fuel cells power system has been presented. By combining the real organization structure and operation process of Taipower, this path strategy from contacting vendors, interior divisions’ integration, to facing and serving customers should be feasible.

Government

Research Centers Universities Producers

Department of

Figure 5-4: The Marketing Flows in the Marketing Channel for the fuel cells power system

6 Conclusions and Recommendations

6.1 Conclusions

A case study of 4P marketing strategies of developing the fuel cells power system under the standpoint of Taiwan Power Company (Taipower) has been presented. In this study, the research method and thesis structure are first explained in section 1.

Following with section 2, the basic principles, advantages, disadvantages, their

applications of different kinds of fuel cells are described, and a comparison among the products is also included. In addition to this section, the new idea of “Natural

Capitalism” has been introduced and the fuel cells power system is proven to extensively match the 4 principles of this new thought.

In section 3, the fuel cells industrial structure is explained initially and the supply side of fuel cells power, the demand of future fuel cells power, and the policies designed for fuel cells power in advanced countries are all summarized in this section.

Taiwan’s current stages of fuel cells development are described in section 4,

containing the status of technological development and present governmental energy policy. In this study, Taipower is the chosen to be a pioneer company and develop this fuel cells power system in Taiwan. The main background information of Taipower is beginning to be introduced and it is suggested Taipower has to look for transformation to raise its reputatio n and coordinate with the world trend of

environmental friendly and protection.

The possible 4P marketing strategies with the viewpoints through Product, Price, Promotion, and Path are presented in the section 5. The sources of these strategies include academic documents, textbooks in the areas of business, internet information,

Taipower’s internal information provided, and some personal working experiences.

From these strategies, the development of the fuel cells power system in Taiwan is feasible. Due to the higher cost of this power system nowadays, Taipower should have the understanding that it ’s highly possible to suffer a profit lost at the beginning stage and invest a long run for future feasible profitability. Moreover, Taiwan government has to play the key role of developing the clean powers by making policies with financial support, lawmaking, technological development, and public education.

Finally, this study also indicates: even suffered a profit loss at the initial stage, Taipower may have a payback such as, “Shaping Industry Structure”, “Enhancing Reputation”, and “Learning Experience” according to the viewpoints of Michael Porter.

6.2 Recommendations

The fuel cells products have the advantages of high efficiency and low pollution as well as becoming a high potential energy source in this century; while they somehow have the disadvantages like high cost, hydrogen supplement. Therefore, it needs some time to overcome those barriers and achieve full commercialization. Though the 4P strategy based on Taipower’s standpoint has been discussed, however,

Taipower is only a government-owned company which does not have enough and full authorization to determine national and local energy policies. On the other hand, developing and adopting clean power has been the core value of future energy trend.

Obviously, Taiwan can’t survive itself without this trend. After studying this fuel cells industry, the following recommendations are honor to provide to Taiwan government :

1. Assistance in introducing foreign technology or building joint venture: Frankly, compared to other advanced countries, Taiwan’s fuel cells market is relative small, which fundamental brings Taiwan the difficulties of acquiring necessary supports from foreign manufacturers. Majority, it must rely on governmental firm pledge on the way of supporting the development of fuel cells industry. Taiwan

government can create unique market niche through the legislation, subsidy, and constructing infrastructure yet direct consultation with strong brand-name foreign manufactures to reach a technological cooperation or transformation. Through this type of international cooperation, Taiwan will have better opportunity to develop this fuel cells industry in future.

2. Choosing proper objects to install fuel cells power system: As described in section 5.2, fuel cells power products are able to satisfy different kinds of customers. Taiwan government should select proper objects, for examples, schools, hotels, hospitals, and public places to install fuel cells power system, which will not only provide clean and stable power but also accomplish the purpose of promoting this fuel cells power. The physical operation of this power system will be able to educate public people and achieve promotion more

effectively. Besides, government can attract householders and small businesses by making preferential measures, favorable loan, and tax reduction to accelerate the widespread of the usages of this power system.

3. Strengthening education and promotion of hydrogen energy: Fuel cells power is one application of hydrogen energy regarded as the deliverer of future energy problems. According to technological development, people may enjoy pure hydrogen from technology like solar photovoltaic (PV) and at that time, the

hydrogen supplement will be cheap and limitless in the long term. Up to now, most people are still unfamiliar with such products, it’s necessary for government to strengthen its education and promotion plans on hydrogen energy to well establish the fundamental for its future applications.

4. Making safety regulations and standards for fuel cells products: Yet hydrogen is a promising energy source, there is one thing requires more attention. Since the hydrogen is a gas with explosion possibility, it is necessary to make laws to regulate its manufacture, transportation, distribution, storage, and usage.

Currently, The American National Standard Institution (ANSI), The National Fire Protection Association (NFPA), and The American Society of Mechanical

Engineers (ASME) have already built standards for the design, construction, install and operation of fuel cells power systems (Kao et. al). Therefore, to understand the importance of world standards, Taiwan government should make comparable laws and standards to develop and apply this hydrogen energy safely.

5. Cultivating marketing talents of clean powers and performing managerial strategy flexibly: As described in section 5, Taiwan currently does not have enough aptitudes to promote clean powers, would it be better the government should design plans to encourage this new business development and marketing talents.

It will bring the possibility of Follow- up promotion with implementation. In

It will bring the possibility of Follow- up promotion with implementation. In