Using market segmentation to increase household electricity conservation

Australia is the highest per capita emitter of carbon dioxide in the world, therefore improving energy conservation efforts is important to Australia’s economic, social and environmental wellbeing as it is also important to a range of other countries. Social marketing provides a means of affecting the required societal paradigm shift. This paper focuses on motivating electricity conservation efforts in residential New South Wales (NSW), Australia through hypothetical consequence incentive packages (i.e. financial reward and feedback frequency). Segmenting NSW residents according to Environmental Attitudes and Beliefs (EAB) allows a meaningful study of consumer proclivity to conserve household electricity. It is proposed that incentive packages for energy conservation campaigns will be most effective when targeted specifically to each of the EAB segments. This paper investigates interactions between EAB segment and incentive packages for both consumer likelihood to conserve electricity and preference. A cross sectional survey of 188 respondents from metropolitan N.S.W. residents was conducted to identify the respondents’ likely EAB segment, their likelihood to conserve under various incentive packages, preference ranking of the packages, and demographic information. The resulting analysis provides support for the EAB segments differing in their preference for incentive packages and in their likelihood to conserve everyday household electricity consumption. An important policy implication of this research is that policy makers would be better advised to design marketing communication and intervention programs segmented and targeted to specific EAB segments rather than a mass media campaign.