American Cultural Perceptions of Wind Energy An Exploratory Study of Holistic Branding Lauren Bolinger, Martha Bettina Jensen, Lisa Sutherland Culture, Communications and Globalization Aalborg University 8th Semester 28 May 2009 59 pages, 128.743 characters Table of Contents 1. Introduction (Lauren Bolinger) 3 2. Methodology (Lisa Sutherland) 2.1 Values and Orientation 2.2 Methods 2.3 Respondent Characteristics 2.4 Methods of Analysis 2.5 Ethical Considerations 2.6 Comments on Methodology 2.7 Discussion on Methdology 6 6 7 10 10 11 12 13 3. Theory (Martha Bettina Jensen) 3.1 International Market Communication in an Intercultural Perspective 3.2 Cultural Influence on Perceptions of Wind Energy 3.3 Overall Branding and Holistic Branding Theory 3.4 Brand Value and Secondary Brand Associations 3.5 Theoretical Considerations on Corporate Web sites 3.6 Summation 3.7 Discussion on Theoretical Limitations 15 16 17 18 20 20 22 22 4. Background Information (Lauren Bolinger) 23 5. Interview Analysis (Lauren Bolinger, Martha Bettina Jensen, Lisa Sutherland) 5.1 Associations with Wind Turbines 5.2 Current Public Perceptions 5.3 Knowledge of Vestas 5.4 Knowledge of Competition 5.5 Perceptions of Market 5.6 Additional Topics for Analysis 5.7 Summation of Interview Analysis Fall 31 32 35 38 40 42 44 45 6. Interview Discussion (Lauren Bolinger) 6.1 Basic Brand Differentiation Strategies 6.2 Brand Differentiation through Secondary Brand Associations 46 46 47 7. Analysis of Vestas Website (Lauren Bolinger, Martha Bettina Jensen, Lisa Sutherland) 7.1 Overview of Vestas Website 7.2 Modern Energy 7.3 Analysis of Modern Energy 7.4 Summation 51 52 54 55 57 8. Overall Discussion (Lauren Bolinger, Marthan Bettina Jensen, Lisa Sutherland) 57 9. Conclusion (Lisa Sutherland) 58 2 08 1. INTRODUCTION Vestas Wind Systems, a Danish wind turbine manufacturer that has long been regarded as a market leader in their respective industry, is currently facing new competition both in Denmark and abroad that is challenging their market share. Some of the company’s biggest competitors, for example Dong Energy and Siemens Windpower, are in a close run for Vestas’ position. In fact, recently Dong won a USD $20 million contract with Siemens Windpower for building offshore wind farms in Northern Europe1. Vestas is therefore facing unusual trouble on the market, especially as stocks decrease due to the global economical crisis2. It is inevitable that competition will grow, as climate change continues to move to the forefront of private and governmental agendas worldwide, countries increase investment in clean energy, and businesses begin to respond to this demand. Vestas is currently working to maintain their standing amongst the competition, including improvements to their marketing strategy and customer focus3. Some main issues that Vestas face in their communication strategy are an issue of adaptation to specific markets and differentiation among competition4. This then raises the issue that Vestas should seek to understand what strategies can be implemented to develop a holistic brand, one that reaches out to each market and allows the company to differentiate itself from the competition within those markets. In beginning to examine Vestas in this way, the focus will zoom in on the market in the United States. This is a market of particular interest in terms of wind energy; over the course of the next 10 years, the newly elected President Barack Obama has pledged to invest $150 billion USD in order to jump start private sector investment in clean energy sources5. It is also a market within which Vestas holds a strong 1 http://epn.dk./brancher/energi/alternativ/article1624317.ece 20-03-2009. Taken from conversation with Manager Thomas Rune Pedersen, Vestas A/S – Control Division, HammelDenmark. 3 http://epn.dk/brnacher/energi/alternativ/article1636426.ece. 20-03-2009. 4 Refer to transcript for Interview, Respondent #2, Appendix p. 27, lines 270-271 5 Barack Obama and Joe Biden. “Barack Obama and Joe Biden: New Energy for America”http://www.barackobama.com/pdf/factsheet_energy_speech_080308.pdf [Accessed 28 March 2009]. 2 3 reputation for producing quality products6. Lastly, it is a market with a strong demand and interest in wind energy on the whole7. These points, therefore, represent an ample opportunity for the expansion of wind energy in the United States and for Vestas to maintain the position of America’s market leader. Therefore, the specific problem to be examined is stated as follows: How can Vestas adapt its overall brand to the American market, in order to differentiate itself clearly from the competition and to continue to ensure its position as the market leader? From there, theories of branding and cultural perceptions will be applied to first understand American cultural perceptions of wind energy and knowledge of Vestas within the American energy market. In order to gather these perceptions, interviews will be conducted with individuals from the non-profit, government and private sectors. Once gathered, these perceptions will be compared to the way Vestas currently markets itself within the American market by analyzing the content of Vestas’ corporate web site. For the purpose of analysis the problem can then be broken down into three main research questions: 1) How is Vestas currently marketing its brand in the U.S. and are they clearly addressing the perceptions/values of the American market? 2) Looking at the U.S. as an expanding market for clean energy8, in particular wind energy, what are general American cultural perceptions of wind energy? 3) Do American organizations/agencies that deal with clean energy have any previous knowledge or perceptions of Vestas? If so, what are these views and how do they perceive Vestas and its role in the American market? These three questions are important to examine because the information gained will allow for the comparison to be made between the way Vestas brand is currently marketed in the U.S., and how the United States, through the lens of various American organizations and agencies, perceives wind energy in general and Vestas’ 6 Based on information gathered from the six interviews. Interview transcripts can be found in the Appendix between pages 1 - 126 7 Interview transcripts in Appendix, ibid. pages 1-126 8 Global Wind Energy Council. “Global Wind 2008 Report” http://www.gwec.net/fileadmin/documents/Publications/Report_2008/Global_Wind_2008_Report.pdf [Accessed 28 March 2009] 4 position in particular. The main assumption on the part of the researchers is that Vestas has pursued a global strategy9, marketing themselves and their products globally without adapting to foreign markets. Therefore, in comparing American perceptions to Vestas’ market communications strategy (via their web site), any discrepancies that may exist will be evident and suggestions will be made as to where Vestas may be able to improve their web site, thus strengthening their brand. The interviews mentioned earlier will comprise the main portion of our methodology and will be constructed based on ideas taken from the three research questions mentioned above, seeking to gather perceptions from individuals across the three different sectors (non-profit, private and governmental)10. Keeping in mind that this is an exploratory study, based on the small numbers interviewees, – only six interviews were conducted – the questions will address associations with wind turbines, general perceptions of wind energy, knowledge of the competition, knowledge of Vestas, and perceptions of market. Gathering these views across all sectors is extremely important because of the amount of different stakeholders involved the wind industry in the U.S. In fact, within the promotion and development of wind energy, each sector plays its own vital role. The non-profit sector most often seeks to provide research, data and education (both for and against wind energy). The government seeks to provide the tax incentives, the regulatory framework, and the infrastructure for development. Lastly, the private sector seeks to make the connection between landowners and developers, as well as developers and manufacturers, in order to assess locations and resources, increase investment, boost production and turn a profit11. These varying viewpoints will cover a wide range of players within the wind energy industry and will ideally give us a thorough picture of current perceptions. It is therefore believed that Vestas can employ this information to further develop the Vestas brand, as they seek to differentiate themselves from the competition, to take 9 Frandsen, Johansen, and Nielsen: International Markedskommunikation, p.253 Sargeant: Marketing Management for Nonprofit Organizations, p. 5 11 Interview transcripts in Appendix, op cit. pages 1-126 10 5 hold of a growing market and to maintain their status as one of the wind turbine industry leaders in the U.S. 2. METHODOLOGY 2.1 Values and Orientation The researchers have a social constructivist approach to understanding the problem and a hermeneutic approach to the research design12. The necessity for finding an alternative source of energy is a pending issue that needs to be addressed socially within the foreseeable future. The research process was composed of gathering data on perceptions of the market through interviews. The relationship between the branding of wind energy in the states and the branding of wind energy from the Danish company Vestas was examined. An understanding of the viability of Vestas as the market leader in the U.S. was gained through a process of triangulation.13 Triangulation was achieved using the cultural perceptions gathered from the interviews, and comparing that information to the branding of Vestas as exhibited by their website. This process allows for an understanding of the compatibility of the Vestas brand with the US wind energy market. The researchers have a set of guiding assumptions and values prompting the formation of the research questions and therefore the process by which the problem is studied. Fossil fuels as an energy source are non-renewable necessitating an alternative clean energy source. Wind energy is a viable solution for this clean energy source. Denmark is the worldwide leader in wind energy, and that Vestas is the leading Danish wind turbine manufacturer14. The U.S. market is in need of an alternative source of energy. There is a long history of wind energy use in the U.S. and there is currently a market for wind energy. This orientation has guided the researchers throughout the research process, beginning with the literature review. 12 Bryman: Social Research Methods, p.11 Bryman, Ibid. p.9 14 www.vestas.com [Accessed May 2009] 13 6 The available literature on the background of wind energy in the U.S. is limited within the scope of this analysis; Robert Righter’s was used as it is one of the only comprehensive texts available on this subject15. This text describes the development of wind energy from early agricultural uses to large scale utility wind plants in use today. The information gained from Righter’s book supported the researchers’ assumptions. 2.2 Methods As described by Bryman, the nature of the research problem and research questions lead naturally to methods and data generation16. In this project the research problem and questions lead naturally to perceptions of the American market. The U.S. is currently an emerging market, which is determined by those who have the capital to participate in the market; most likely private investors and project developers supported by government tax incentives. Originally, the research design included email surveys sent to relevant organizations, predominantly smaller NGOs, and conducting supplementary semi-structured interviews. The assumption was that these organizations, especially those involved in education and advocacy would have the most current information on the perception of the energy market17. Due to geographical location and the number of organizations contacted, the most appropriate manner of accessing these NGOs was email, therefore an email survey was originally proposed. The survey questions were based on review of the literature, flowing from information gathered from primarily historical references18. For example, the knowledge that historically most wind farms in the U.S. were small private enterprises primarily related to farming, and that over time the use of wind energy has been adapted for utility scale use lead to the question “What associations do you have with the image of a wind turbine?” Questions were discussed by the researchers and were chosen based on consensus. The survey questions were then organized using GoogleDocs’survey tool and posted online. 15 Righter: Wind Energy in America Bryman, op.cit, p.395 17 Bourdieu as cited in Bryman, Ibid, p.6 18 Included in Appendix 7 p. 127 16 7 Questions from the survey were designed with a few guiding principles. The survey should be short, easy to read and understand, and elicit as much information as possible within five questions. Questions for the interview were designed with the understanding that the questions from the survey would be used as background information; the additional interview questions would allow for more precise and in depth answers. The interview questions are listed as follows19: 1) What is your job? What is your role in working with wind energy? 2) What is the focus of your organization? (Clarify sector) 3) What adjectives come to my mind when you see the image of a wind turbine? 4) Do you think this image has become sort of an icon? 5) What do you believe the current public perception of wind energy is in the United States? 6) Do you think there are misconceptions? What are they? How can we rectify these misconceptions? 7) What general communication strategies does your organization employ to promote wind energy? 8) What do you find most effective? What programs have been effective? 9) What do you think is the most effective communication strategy? 10) Which wind energy companies are you familiar with? Have you worked with any? 11) Do you have a relationship with any wind energy companies? a. What do you know about them? What are your views? b. Are you familiar with Vestas? How do you perceive them and the work they are doing? 12) Who invests in wind energy? 13) Who actually buys the product, the turbine? 14) Where do you believe investment in wind energy should come from and why? 15) Looking at the current state, long-term viability of wind energy in the American market? 16) What does he think the new administration’s promise of investment in clean energy means for the wind energy industry? After the questions were decided upon and organized in a logical flow, the NGOs were found using the Google search tool, using the terms “wind energy”, “non-profit organizations”, “clean energy”, and “U.S.A”. The sample of the organizations ranged from environmental with a division devoted to wind energy to being entirely wind energy focused. They were chosen in a manner of sampling similar to convenience and a list of 30 organizations was compiled. These organizations were contacted in the following process. 19 Included in Appendix 9 p. 129 8 First, all of the agencies were called as an attempt to build rapport and ask for participation in the survey. If they agreed to the survey, it was then asked if another member of the organization would consent to an interview. The link to the survey was emailed to those who agreed. Although there were a great number of people who agreed to respond to the survey, only three actually responded. Lack of time by overburdened workers is perhaps the best explanation for this lack of response; an email survey is too easy to ignore20. However, the first respondent agreed to an interview and referred four others who agreed to be interviewed. All respondents except one that were interviewed were referred by Respondent #1. The survey questions were decided upon first, stemming from the literature review. The interview questions were then designed to delve deeper than the survey to add even more perspective than the surveys might have allowed. These questions were used as the interview guide21. The interviews were conducted over the phone using Skype. There were six interviews ranging in time from 20 minutes to over 1 hour. Audio recording took place using the software program Garage Band. The respondents gave their consent to the interview through either phone or email during the initial contact. The interviews were conducted in a semi-structured manner. An interview guide was used during the interviews, with the questions described above. The questions allowed the interviewee to respond as they chose and gave the interviewer a great amount of perceptions. After the interviews were recorded, they were transcribed22. Due to the lack of response to the survey and a greater willingness to be interviewed on the part of the respondents, the research design was adjusted. An exploratory pilot study more appropriately describes the current project rather than a survey design with supplemental interviews. As an exploratory pilot study, the emphasis has been placed on the depth of response provided by each respondent rather than the volume of response. As each of the respondents was important to the development of the study, their basic characteristics are listed. 20 Lipsky: Street Level Bureaucracy Included in Appendix 9 p. 129 22 Included in Appendix: 1-6 p.1-126 21 9 2.3 Respondent Characteristics The characteristics of the respondents are as follows: Respondent #1 represents Ohio and is a program manager for a non-profit organization which focuses on education, outreach and promotion of wind energy. Respondent #2 represents Ohio and is a wildlife biologist for a state government agency and focuses on siting of wind farms to minimize impact on wildlife Respondent #3 represents New Jersey and is in a private consultant firm that researches environmental and wildlife impacts related to wind plant siting. Respondent #4 represents Ohio as executive director of a research institute that focuses on research for alternative energy sources Respondent #5 represents Ohio and is an attorney that focuses on helping landowners and project developers with the legal process of building a wind plant Respondent #6 represents Ohio and is a wildlife biologist for a federal government agency which comments on how to minimize impacts on wildlife in upcoming wind development projects 2.4 Methods of Analysis The interviews were conducted in a semi-structured manner. An interview guide with questions was used during each interview, but the respondents were also able to discuss the issues that were significant according to their perception. The data was analysed by all three researchers using ad hoc methods of coding23. Ad hoc methods of coding allow for the creation of categories that have meaning. The categories for the interview analysis were chosen based on the interview questions mentioned above24. The information was organized as part of the coding process into tables25. For example, the question concerning associations was divided into three subcategories: general, positive, and negative. After the categories were defined, each transcript was analysed using these categories. The respondents’ perceptions in each category helped to paint a picture of how the U.S. market understands wind energy. Analysis of the website26 was conducted in a general manner with the concept of holistic branding27 and corporate branding28. A couple of assumptions were kept 23 24 Kvale InterViews p. 203 Kvale Ibid p.192 25 Included in Appendix 10 p 130-135 26 www.vestas.com/en [Accessed May 2009] 10 during the process. Those for who the website is intended is not the general public; it is the private investors and project developers. Analysis of the website was conducted following the interview process. Analysis of the website therefore addresses the question, how does this match the description of the wind energy market given by the respondents? Similar to the concept described by Sandstrøm, the cultural perceptions of wind energy in the U.S. should add value to the associations of Vestas creating a relationship between the consumer and the company29. The process of creating a holistic brand that speaks to the American culture is the strategy Vestas needs to pursue within the U.S. market. Vestas’ brand demonstrated by the information available on the website was compared to what is necessary for gaining the position of market leadership in the U.S. The Vestas brand was analysed from the perspective of holistic branding and market communication strategy, using the information published on the website. This information was compared to the perceptions described in the interviews. From this suggestions can be made concerning how well the Vestas website addresses the perceptions and concerns about wind energy in the U.S. market, as described by the respondents. Essentially, views of wind energy in the U.S. are compared to the Vestas brand, in order to understand how these perceptions can be used to strengthen the brand30. 2.5 Ethical Considerations The respondent confidentiality is of greatest priority, best practices require this. In the current project, all of the respondents agreed to be interviewed. However, the majority were not told that they were being recorded. To retain the respondents’ confidentiality, in all transcripts, direct references to the person have been omitted. Vestas was contacted prior to beginning of the current study. The response to our question of branding was met with the response that the Vestas marketing department is outsourced to another company, and therefore Vestas could not be of any help in 27 Schmidt and Ludlow: Inclusive Branding Sandstrøm, Lars: Corporate Branding, 29 Sandstrøm Lars, Ibid. 30 Sandstrøm Lars, Ibid. 28 11 the project31. The decision was made to proceed with the project, despite the lack of cooperation with Vestas. A relevant project is possible without the direct cooperation of the company, especially because the focus was the American perceptions of the market. The lack of cooperation on the part of Vestas creates additional ethical rhetorical questions. Is it ethically acceptable to align oneself with a company? Should research remain pure research? 2.6 Comments on methodology Instead of only representing the NGO sector; two of the interviewees were from nonprofits, two were from government agencies and two were from the private sector. This provides a broader image of the available market in the U.S. The three responses to the surveys were limited in scope and do not add any new information, and most importantly are no longer applicable to the research design32. The interview respondents spoke of issues that were significant to wind energy according to their perspective. Issues that ranged from the number of bats killed per year and the best methods of educating the public about wind energy gave a broad picture of the perception of the wind energy market in the U.S.. This information, although not central to the categories defined by the questions, is important to consider when discussing perceptions of the U.S. market that may be helpful in establishing a relationship to the Vestas brand. There are several components of the wind energy market that are not represented in the sample. The sample of respondents is largely composed of the people who play a role behind the scenes, specifically in the research and in regulating the wind energy industry. The sample does not include a landowner, someone who leases land to a wind plant, and gains a profit. The sample also does not include a project developer or private investor, those who are responsible for the vision and capital necessary to create a wind plant. Also not included is a member of an anti-wind group. The lack 31 32 Personal email, 10-3-2009, from Kasper J. Granat, Group Marketing & Customer Insight, Included in Appendix 8 p. 128 12 of these perspectives in some ways limits the perceptions provided by the interview respondents, and limits how representative their view is for the whole population. It is possible that the respondents are not representative of the market. However, for the purpose of analysis in this study, it will be assumed that the respondents are representative of the markets they describe. 2.7 Discussion of the Methodology Several limitations exist within this project related to the methodology. As the interviews were conducted over the phone, it was not possible to show the same image to the respondents when they were asked to describe their associations. Therefore the images from which they drew their associations were entirely in their imagination. Another methodological consideration is that four of the respondents were referred by the first respondent. This creates an inherent bias towards one perception as five of the respondents are from one network and four are from the same state. The purpose of an exploratory study is to explore; as many perceptions as possible would be preferable, to gain as much information as possible, creating great depth. Another limitation of the current study is local perception. As with any country, there are regional and local differences. Four of the six respondents were speaking about one state in particular (Ohio), while the other two spoke about two other states (Texas and New Jersey). All of the states are in different geographical regions, the South, the Northeast and the Midwest. The information provided by the respondents may apply to their local and regional market. The limitation previously mentioned about local differences is compounded by another limitation, the sample is small. As described, the wind energy market in the U.S. has primarily developed in small pockets. It is therefore best to gather as many perceptions as possible, from as many locations as possible. Having only six respondents limits the amount of data that can be gathered. However, considering the time allotted, this is a great amount of data. The respondents were very willing to be 13 helpful in providing as much information as possible. One respondent even mentioned that at one time they were also a graduate student, and therefore understood the necessity of participation in studies. Given the sample size and difference of local markets, the information gathered in the amount of time given, was of great depth. One of the strengths of the current study is the research design; a pilot study in which the information gathered can be adapted to build future studies. The questions asked gathered perceptions. Perceptions lend themselves to background information; most of the respondents provided ample background information. They however, did not provide vast amounts of specific information on the developing market. For future studies, the questions asked could be adjusted to gather more specific information. The research design lends itself to future studies; the beauty of a pilot study is that the foundation is laid for adaptation. For example, the current study primarily focused on land based wind energy. More studies could address the development of offshore wind plants. Another future study could focus on how federal funding dedicated to research in clean energy is designed to help heal the economy by creating jobs well as turn the markets toward renewable energy, and the effect this has socially. Another study could focus on the local effects of federal funding. This idea is supported by the respondents in that they mentioned that the money will be distributed at the state level. These are possibilities for future studies. A final thought, as a general perception, being environmentally conscious is considered to be expensive. The question that needs to be asked is, is it worth it? It is worth the expense to live without smog; is it worth it to be able to drink tap water, or to even have drinking water at all; is it worth it to give up my car and take public transportation? The less philosophical and more practical question is, is it actually more expensive? It is possible that the cost of being more sustainable is an upfront cost and will eventually; perhaps even within a year repay the debt? All of these questions need to be considered when discussing wind energy specifically and renewable energy in general. Vestas maintains that wind energy is free! This 14 probably does not include the cost of the windmill. However, they do have a point, once erected; the wind used to generate the energy is free. 3. THEORY The main theoretical framework employed within this exploratory study is that of International Market Communication in an intercultural perspective33. This perspective lends itself to the researchers’ interpretative stance as it allows for an understanding of the interaction between cultures, perceptions based on culture, the market, the theories of branding and the company in question, in this case Vestas. By examining these communicative interactions overall, the researchers believe they can provide suggestions as to how Vestas can use American perceptions of wind energy to build upon their current branding strategy and maintain their leading position. The researchers employed theories discussing how culture affects perceptions, as they gathered viewpoints from various stakeholders within the wind energy industry. This then puts the perceptions reported into a cultural context, which were compared against Vestas’ current marketing and branding strategy to see if they are addressing the American market. Within this framework, the theory of holistic branding was employed as a way to understand how Vestas can create a differentiated stance within the market. In order to understand how a differentiated stance is created, the concepts of brand value, specifically secondary brand associations were employed. These two concepts therefore represent the main tool of analysis for understanding how Vestas can use the information gained in the interviews to build upon secondary brand associations, which in turn creates a greater brand value. This therefore employs the overall holistic approach to create a strongly differentiated brand. Consequently it has set the stage for comparing the perceptions reported in the interviews to the information contained in Vestas’ website. It follows then that the final theoretical consideration examined how corporate web sites are best used in an intercultural context. From there, these theories were employed in conjunction with 33 Frandsen: International Markedskommunikation I en postmoderne verden. 15 the theories of brand value and secondary associations to offer suggestions as to how Vestas can use American perceptions of wind energy to improve upon their current branding strategy. 3.1 International Market Communication in an Intercultural Perspective The overall framework of intercultural market communication used in this project employed the “Paradigm of interaction”34 which defines communication as: “a social interaction [..] The communication is perceived as a dynamic and strategic process, in which the sender and the receiver are active players who interpret the message through the codes belonging to the cultural bounded context”35. This quote describes the researchers overall understanding of how communication takes place in an intercultural context. This implies that everything is understood from each individual´s culturally-bounded horizon. According to Inger Askehave in the book Meanings and Messages, perceptions depend on the readers’ cultural preunderstanding and values.36 Askehave also states that, “Interpretation begins with fore – conceptions[pre-understandings] that are replaced by more suitable ones. This constant process of new projection constitutes the movement of understanding and interpretation”37, which further illustrates this point. It is important to mention that pre-understandings are limited to our own horizon; horizon is, according to Gadamer as cited in Meanings and Messages38 a metaphoric help to illustrate that we are understanding everything from our own (cultural) perspective and at the same time determine how we see and navigate in the world. This is further illustrated by the following quote: “The horizon is the range of vision that includes everything that can be seen from a vantage point. Applying this to the thinking mind, we speak of narrowness of horizon, of the possible expansion of the horizon, of the opening of new horizons, and so forth”39. 34 Free translation from Interaktionsparadigmet. F. Frandsen: International Markedskommunikation I en postmoderne verden, p. 36. 35 Free translation from: F. Frandsen, Ibid, p. 36. 36 Askehave & Norlyk, et.al. Meanings and Messages, p.145 37 Askehave & Norlyk, et.al. Ibid, p. 42. 38 Askehave & Norlyk, et.al, Ibid., p.42 39 Akskehave & Norlyk, et.al Ibid., p. 44, (Gadamer 1989:268 16 The researchers furthermore rely on the definition of intercultural communication by Askehave which is stating that communication is about fusing horizons instead of transmitting messages from the sender to the receiver40. Askehave states that through dialogue people negotiate meaning and come to an understanding41. For the purpose of this project, it is understood that there should be interplay between the American cultural values and the culture that supports the Vestas brand. 3.2 Culture´s Influence on Perceptions of Wind Energy With the basis for understanding grounded in an intercultural perspective that is interpretive and constructivist in nature, it is important therefore to understand how culture affects perceptions. This can then be applied to understanding how perceptions of wind energy can be used to localize a branding strategy to a specific market. To begin this discussion, the concept of the web of significance as described by Clifford Geertz is examined: “The concept of culture I espouse[...]is essentially a semiotic one. Believing, with Max Weber, that man is an animal suspended in webs of significance he himself has spun, I take culture to be those webs, and that analysis of it to be therefore not an experimental science in search of a law but an interpretative one in search of meaning”.42 The conclusion to be drawn on the above quote is that everything possesses a cultural value to us, which consciously or unconsciously influences our social hierarchies and actions. It follows that our cultural understanding of ourselves and our surroundings is based on interactions within these “webs of significance”, or more simply put, personal interactions with culture. Within the specific context of this project, this can be interpreted to mean that just as interactions with culture build social understandings, culture similarly affects perceptions. Accord ing to Schifmann and Kanuk in Consumer Behaviour (2000) buying behaviours are influenced by cultural values such as achievement, success, activity, efficiency, practicality, progress, material comfort, individualism, freedom, external comfort, humanitarianism and youthfulness43. Evidence of these values may exist within in the respondents’ answers and in that case, these values would be important 40 Askehave & Norlyk, et. al. Meanings and Messages, p, 45. Askehave & Norlyk, Ibid, p. 45. 42 Askehave & Norlyk, Ibid p. 19. 43 Schiffmann and Kanuk: Consumer Behavior 41 17 to consider in terms of building a differentiated, yet locally appropriate branding strategy. It is also important to add that within a culture, subcultures may exist. These subcultures may hold somewhat different cultural values as compared to the main cultural group. As this definition applies to the United States, this project specifically looks at subcultures as individual states. This point therefore covers the idea that Vestas as a Danish company might use the knowledge of American perceptions to consider to not only how to penetrate the U.S. market in general, but how to further adapt its messages to within the different U.S. subcultures. Consequently, the researchers employed an interpretive analysis of these interviews in order to reveal American perceptions of wind energy and thereby the brand value of Vestas in an intercultural context. 3.3 Overall Branding and Holistic Branding Theory The definition of a brand in a holistic branding context is: “A brand is the “added value” which a company represents and which makes us prefer a particular company and its products towards its competitors. A strong brand is a combination of facts and feelings”44.A strong brand is therefore created on clear and consistent values, which differentiate the company from the competition, thereby creating a differentiated response from the consumer base. This is why it is important to understand American values and their connection to perceptions of wind energy, in order to apply that information to building a strong brand. The holistic approach incorporated in this project can therefore defined by Klaus Schmidt and Chris Ludlow: “The holistic approach is the embodiment of inclusive branding. The holistic brand model expresses the six interdependent dimensions of a holistic brand. And its core is a holistic brand positioning which is influenced by and implemented through the six dimensions.”45 These six dimensions are described as follows: 44 45 Culture Behaviour Products and service Schmidt & Ludlow, Inclusive Branding, p.22 Schmidt & Ludlow, Ibid, p.21. 18 Markets and customers Design Communications46 The holistic brand models main idea can be further illustrated by this model47: Culture Commu nications Behaviour Hollistic positioning Design Products and services Markets and customers Figure 1. Free Illustration of holistic branding model 48 The holistic model describes the interaction between all the above dimensions. In the analysis of the web site the researchers refer to the following model: Substance: Internal and External strategies Target audience Media Messages and content Plans and budgets Expression: Relevant Credible Topical Powerful Persuasive Figure 2. Free illustration of model: “Inclusive Branding, p 33. 46 Schmidt & Ludlow: Inclusive Branding, p. 23 Model adapted from Schmidt & Ludlow: Inclusive Branding, Ibid, p. 21 48Schmidt and Ludlow, Ibid, p. 21 47 19 3.4 Brand Value and Secondary Brand Associations Within the concept of holistic branding, therefore, it is possible to further employ the idea that a brand gives a company added value and to examine this idea as brand equity, which is defined as follows: “ The most important assets of any business are intangible: its company name, brand, symbols, and slogans, and their underlying associations, perceived quality, name awareness, customer base, and proprietary resources such as patents, trademarks, and channel relationships. These assets which comprise brand equity are a primary source of competitive advantage and future earnings”49 The implication of this quote is that brand equity can be built by linking the brand to other related entities that carry their own positive associations. This therefore creates a secondary brand association, from which the brand draws extra strength and so builds brand equity by sharing in this positive association. 3.5 Theoretical Considerations on Corporate Web Sites It was then possible to analyze Vestas’s online marketing materials, in this case their web site, in order to see if the company addressed American perceptions accordingly. The researchers understand brand and corporate branding strategy as integrated parts of the market communication strategy. Within this context Lars Sandstrøm describes that two types of corporate branding strategies exist “The invisible company” and “the stakeholder based company”50. The researchers understand and categorize Vestas as placed mainly in the “stakeholder based company” which can be defined as: “The stakeholder based company has the goal to create sustainability and value relationship with all the stakeholders of the company. [..]” The corporate web site is to many companies the foundation for communicating with all kinds of stakeholders. According to Lars Sandstrøm the following features for communicating with the different target groups via a corporate web site are: Customers Employees Investors Press and media Public (NGO´s, unions, local administrations)51. 49 D. Aaker as quoted in Sandstrøm: Coporate Branding, p.18 Sandstrøm, Ibid, p.104-105 51 Sandstrøm, Ibid, p.123-124 50 20 The relevant features to this study will be examined in the analysis of the Vestas web. Based on the structure of the interviews and the nature of the interviewees, the web site will be analyzed specifically in terms of customers and stakeholders, which the researchers assume to be the target audience for Vestas’ web site. Drawing again on the idea of holistic branding, as examined through the lens of communication – the question to examine here is, does the external communication strategy (here meaning Vestas web site) incorporate relevant expressions of the overall brand to the specific market? Following this idea, the specific tool used to analyze Vestas’ web site is described by Lars Sandstrøm in “Strategy for development of a corporate web site”52 as follows. In developing a web site, companies must keep some essential topics in mind, for example: Goal (What is the web site’s main goal?) Stakeholders (Who is the primary target group for the site?) Organization and cooperation (who is responsible for the organization of the development process?) Structure and inner activity (Is the web page informative? Is it based on creating communicative relations with its users?) Communication and marketing (How does the web site inform visitors and how are campaigns developed for the web site?) Effect (What are the requirements for success) To evaluate if the Vestas web site has implemented a successful strategy that connects the overall brand to the local audience, the researchers followed the theory described by Sandstrøm, which discusses the criteria necessary for the company to include in the web site: To create coherence between values, management principles, strategy and communication. To communicate proactively with a variety of stakeholders within a group. To employ interactive and targeted brand channels To employ a network and brand ambassadors to mediate the brand. To define and deal with relations that is critical to the brand. To measure and externally communicate the brand value. Utilizing this theory in the analysis follows the overall concept of holistic branding closely and allows the researchers to compare American perceptions of wind energy to the current structure of the Vestas web site, to understand if the company taking 52 Sandstrøm, Ibid, p.125-126 21 advantage of secondary brand associations and exploiting them to increase their brand equity. In this section it is important to mention that web pages are still a relatively new marketing tool used by companies as part of a branding strategy53. Within the overall intercultural approach utilized in this project the researchers argue that it is important for an international company such as Vestas to take into account the same cultural considerations discussed above in creating their company web site. 3.6 Summation In the case of Vestas, the researchers used the theories introduced above to reveal the strength and weaknesses of the official Vestas web page and their overall brand. Furthermore the theoretical stand points will be integrated to support the analysis of the Vestas web site. 3.7 Discussion of Theoretical Limitations The theoretical framework integrated in the project helps the researchers to get a broader understanding of the role the culture has for the Americans perception of wind energy and wind turbines. Additionally the theories provide a tool for understanding the communication between two different cultures, and reveals the issues that might occur when such communication fails or when the communication message is misunderstood at a given market. The theories used were based on the argument that the overall epistemological framework was interpretive and thereby “sees culture as a meaning system, which people produce and use to make sense of the world around them”54. One could argue that the lack of a more in depth theoretical approach in analyzing the interviews, such as a semiotic theory or discourse theory might have been appropriate to apply. However the researchers did not find it necessary to utilize these tools to analyze the respondents’ perceptions of wind energy. The theories presented in the 53 54 Askehave and Norlyk et.al: Meanings and Messages, p.147 Askehave and Norlyk et.al, Ibid, p.17 22 project give the explorative study a natural and logical flow within the intercultural framework presented by the announcement of the definition of culture. 4. Background Information Before examining current perceptions of wind energy, it is important to understand how the industry has developed in the U.S. and how this source of energy has been viewed by and marketed to consumers in the past. Wind energy in the United States has a long and varied history, beginning with small-scale agricultural uses, growing into a large-scale producer of electricity. Therefore a brief history of wind energy in the U.S. will be examined through the text of Robert Righter55. This text will be the main source referenced, as it is one of the only comprehensive academic texts available on this topic. It would be preferable to derive this information from a variety of sources to paint a wide picture and eliminate bias. However, as wind energy is still an up and coming venture in the U.S., there remains little other information that can be used to examine this history. Therefore, we will rely on Righter’s text to provide the background on this topic. As mentioned above, wind energy has its basis in agriculture in the U.S. The original American windmill was used for pumping water and is often cited as a crucial invention for the successful settlement of the western United States, a very arid and windy region56. These early windmills hold strong associations in the minds of Americans today; writes Robert Righter, quoting an anonymous writer, “The American windmill is more than a machine – it is a symbol, evoking different memories in each of us. What the buffalo meant to the Indian, what the horse meant to the Spaniard – that is what the windmill meant to the American settler. Survival – development – staying power57.” Righter also describes the idea that the windmill, “…represents technology, but a technology that is compatible with nature and the American sense of the bucolic58.” Thus, the original American windmill holds a nostalgic place in the minds of 55 Righter: Wind Energy in America Righter. Ibid, p.23. 57 Righter. Ibid, p.27. 58 Righter. Ibid, p.29. 56 23 Americans who view it as a natural technology, representing the survival and development of their rural roots. However, with the industrial revolution of the 19th century, came a major change in the United States. Applied uses of electricity were discovered, fueling the growth of industry in urban areas59. Centralized power distribution systems were created to provide electricity to industry and to cities, and coal and petroleum were the sources of choice60; sources such as wind, solar, water and wood, were deemed inadequate for industrial use61. Consumption increased and the “age of energy” ensued.62 At the time, the public was not aware of or concerned with the long-term environmental impacts involved with this type of energy consumption63. While this situation was playing out in urbanized areas, the majority of rural Americans and farmers were still living without electricity64. Attempts to bring electricity to rural areas were generally fruitless due to prohibitive costs, but still the idea was met with skepticism and many farmers were quite hesitant to change65. Also occurring at the same time, scientists, inventors and other individuals started to make the connection between the idea of wind energy and producing electricity66. Thus, research into applications of wind as an electricity-producing source began. By the end of the 19th century, the various windmill manufacturing companies were growing and inventors were seeking to develop the best model. Despite the research efforts, though, it wasn’t until the 1920s that the application of wind energy in producing electricity truly began.67 By the 1920s, electricity-producing windmills had found a place for themselves in the rural American market. This seemed to be a solution to the issue of, on one hand, allowing farmers access to electricity in a way that was suitable to their needs and on 59 Righter. Ibid, p.33. Righter. Ibid, p.34. 61 Righter. Ibid, p.33-34 62 Righter. Ibid, p.34. 63 Righter. Ibid, p.35. 64 Righter. Ibid, p.63-64. 65 Righter. Ibid, p.64. 66 Righter. Ibid, p.35. 67 Righter. Ibid, p.59. 60 24 the other hand, overcoming the prohibitive costs of providing centralized electricity to hard-to-reach rural areas68. Initially these windmills were marketed for use in lighting homes and powering electrical appliances. Advertisements for windmills used taglines such as “Let the Free Wind Light Your Homes” and descriptors such as “automatic, noiseless, dependable, no fuel cost, less repair, longer life.”69 Other marketing strategies described the use of wind energy as an extra “farm hand that will save much valuable time and money for you”, while others reached out specifically to farm wives, citing the variety of devices the women could use in the home to help them in their daily routines70. Additionally, the Jacobs Wind Electric Company (whose wind mills came to be known as the most effective and reliable model available) marketed their machines with advertisements such as, “Wind! The Cheapest Power in the World Is Easily Available to Every Farm Home.71” It seems that the crux of windmill marketing at this time was based on the machines’ reliability, dependability, ability to save time and money, and practicality for use on the farm. These types of advertisements truly appealed to their rural, agricultural audience and convinced them of the positive aspects of one, electricity and two, generating electricity via wind. Not a lot of hard data from this time exists, but it is speculated that by the 1930s and 1940s, hundreds of thousands of independent wind systems were in use rural America72. This was, however, still the industrial age and centralized power from fossil fuels was the focus. As mentioned before, the costs of electrifying rural areas through a centralized system was most often prohibitive in terms of cost73, which seems to be the reason that the market for independent sources of energy grew in rural America. But, in 1935 came Roosevelt’s New Deal administration and the development of the Rural Electrification Act (REA), which completely changed the market. The purpose of the REA was to bring electricity to rural areas and integrate these communities into the centralized grid. The REA worked with farmers to form rural cooperatives, which would then take a loan from the government to buy the necessary 68 Righter. Ibid, p.64 Righter. Ibid, p.78. 70 Righter. Ibid, p.82. 71 Righter. Ibid, p.94. 72 Righter. Ibid, p.99. 73 Righter. Ibid, p.64. 69 25 supplies for stringing the electrical lines. The cooperatives were responsible for installing the systems themselves. These areas would then be integrated into the centralized system74. Not all areas were eligible to participate, however; three farms per mile of line75 were required and so, some sparsley-inhabited areas could not qualify. This meant that there was still somewhat of a market for independent wind systems. Even so, many farming families and communities embraced the idea and quickly joined the program. However, others were hesitant and concerned about accruing debt, paying high costs for electricity and losing their independence in terms of providing their own energy76. Also, many of these same farmers were still satisfied with their independent wind systems. They continually fought pressure from the REA to hook up to the central lines77. In the spirit of compromise, R.F. Weinig, the general manager of the Windcharger Corporation (then, one of the main players in manufacturing individual wind systems for farmers) proposed an amendment to REA legislation; the new bill would include integration of individual energy plants for farmers in low-density population areas78. However, the wind industry, just as the individual machines it was producing, was a non-cohesive group of individual companies, which therefore had no backing support in congress. The amendment was not passed and the wind industry reached a turning point. By the 1950s most of the manufacturers of windmills had gone out of business79. Wind energy still, however, represented the ideal of independence to some farmers and a few strong believers held tightly on to the technology. The question of integration of wind energy into the centralized system also remained and would be answered later on the in the 20th century. Throughout the post-WWII 1950s and 60s, consumption of electricity grew at a staggering rate. According to Righter, “… in the two decades after World War II Americans increased their electric power usage by 7.8 per cent each year, which 74 Righter. Ibid, p.115. Righter. Ibid, p.114. 76 Righter. Ibid, p.125. 77 Righter. Ibid, p.116. 78 Righter. Ibid, p.122. 79 Righter. Ibid, p.123. 75 26 doubled consumption in ten years80.” Energy producers began to understand that production would need to be raised in order to keep up with demand. As the U.S. began to investigate this dilemma, nuclear power emerged as the clear answer. It followed then that in the ten years between 1965 and 1975, the majority of research and development went to nuclear energy81. Just as quickly as it gained popularity, however, nuclear energy lost its appeal. In 1949, the Soviets had set off the first atomic bomb and the destructive nature of nuclear power was hard to ignore82. This was also the time of the McCarthy era and wide-spread fear; one of the many ideas discussed during this time was that the U.S. central power system could come under attack. Therefore, the U.S. began to consider the idea of decentralized power systems83; wind energy lent itself to this idea. Later concerns about nuclear energy that arose from the 1960s and 70s were related to costs, which had increased substantially, and questions of nuclear waste, which were not clearly answered. Anti-nuclear protesters had also been successful in making their voices clearly heard.84 Then, two major nuclear plant disasters – the meltdowns at Three-Mile Island in Pennsylvania in the U.S. and at Chernobyl in the Ukraine – more or less sealed the demise of interest in nuclear power85. These arguments against nuclear power, coupled with the formation of OPEC and the oil embargo of 1973, and the influence of a strong environmental movement, led to a renewed interest in wind energy on the part of the U.S. government. According to Righter, between 1973 and 1988 the federal government invested $380 million USD in a new wind research program86. The majority of this funding (75-80%) was focused on large-scale turbines, between 1 and 3 megawatts,87 while the rest went to support development of smaller scale turbines between 2 to 40 megawatts88. It was at this point that the electricity producing windmills of the early 1900s started to become the wind turbines of today. 80 Righter. Ibid, p.149. Righter. Ibid, p.151. 82 Righter. Ibid, p.141. 83 Righter. Ibid, p.141. 84 Righter. Ibid, p.151. 85 Righter. Ibid, p.151. 86 Righter. Ibid, p.158 87 Righter. Ibid, p.158. 88 Righter. Ibid, p.161. 81 27 However, new development faced many unexpected technical issues that stalled progress. Righter quotes Andrew Trenka, who at the time was the manager of a wind system called Rocky Flats; “we tended to be blinded because windmills had been used for more than 1,000 years… We thought the technology was there and all we had to do was bring it into the 20th century.89” But as the engineers found, it was more complex than just translating the technology to a larger scale; numerous cases of broken blades and short-lived turbines, etc., caused people to perceive wind energy as a potentially unreliable source.90 On the other hand, during this same time period, European countries made considerable advances in wind technology. Denmark in particular managed to create what was widely regarded as a reliable design91. Seeing there was still a market for wind energy in the U.S. that the Americans themselves had difficulty managing, the Danes aimed to take advantage of this opportunity. They quickly moved into the main market, which at the time was based in California92. By this time, the industry was much better organized than before and finally had the strong support of the government. In addition to research dollars, both the federal and state government offered tax credits related to the installation of systems93. The tax credits proved to be a strong motivator and by 1983 the industry was booming, particularly in California94. Private investment in manufacturing companies was also increasing; the return on the investment was quite high and people wanted to cashin.95 At this time the perception of wind energy changed as a way to make money and earn a profit emerged. Development was growing and California was the heart of it. However, this tax credit worked to the detriment of the industry and by 1986 the bubble had burst. The credits expired at the end of 198596 and the government would not renew the credits, as American scientists and companies had produced little 89 Righter. Ibid, p.174. Righter. Ibid, p.173. 91 Righter. Ibid, p.181. 92 Righter. Ibid, p.181. 93 Righter. Ibid, p.197. 94 Righter. Ibid, p.209. 95 Righter. Ibid, p.210. 96 Righter. Ibid, p.216. 90 28 results in terms of a reliable turbine model. The tax credits had therefore increased development in a negative way; some companies focused less on producing a quality product and focused more on installing as many turbines as possible. People had begun to perceive the wind industry as just a “tax dodge97,” and as Righter states, “Like most ventures it [wind energy] had its growing pains and in the late 1980s the idea of wind energy was associated with floundering technologies and failed investments98.” Despite these issues of reliability and consequent negative perceptions, the industry managed to survive the 1980s, and improve development in the 1990s. The corrupt companies were weeded out and the productive companies remained99. Additionally, under the Energy Policy Act of 1992, the government began to offer a new production-based tax credit. The policy is outlined as follows: “Under present law, an income tax credit of 2.1 cents/kilowatt-hour is allowed for the production of electricity from utility-scale wind turbines100.” This new incentive sought to ensure that new machines would be reliable and productive. This tax credit is still in place today. During this time, as the industry fought to improve development, two new sets of opposing perceptions regarding wind turbines emerged. Righter uses the resort town of Palm Springs, California as an example; the town was caught up in much of the wind farm development and held strong views regarding the wind farms. Negative perceptions that emerged were related to viewshed and noise. Many people simply did not like the look of the turbines. Righter cites an individual who was quoted in the Desert Sun newspaper in Palm Springs, California – the wind turbines brought to mind the image of “someone driving big railroad spikes into a beautiful painting by Picasso or Rembrandt101.” And in terms of noise, individuals who lived within two miles of the turbines often complained of disturbances102. Overall, these perceptions 97 Righter. Ibid, p.216. Righter. Ibid, p.222. 99 Righter. Ibid, p.222. 100 American Wind Energy Association. http://www.awea.org/legislative/#PTC. Accessed May 26, 2009. 101 Righter. Ibid, p.230. 102 Righter. Ibid, p.230. 98 29 led to concerns that the wind farms would be detrimental to tourism, which was and is the crux of Palm Springs’s economy103. Both in Palm Springs and in California in general, the idea of NIMBY, or Not In My Backyard104 arose from these negative perceptions. Residents who subscribed to the idea of NIMBY were mostly concerned with these issues of viewshed and noise pollution. They also shared concerns with environmentalists about bird deaths related to wind turbines, particularly related to federally-protected and endangered species that existed in California near proposed wind farm sites105. They saw the wind farms a nuisance and simply did not want the turbines near their homes. However, when the economic benefits of wind energy started to appear, many people changed their minds. In Palm Springs, the town was in need of money and realized that the wind farms could be a way to solve this issue, allowing them to avoid raising property taxes and to create new jobs106. The town also began to look at how they could utilize the wind farms as part of the tourist draw, as visitors had begun to take an interest in the wind turbines surrounding the area107. Thus, the negative perceptions still remained among some residents but positive perceptions emerged as the town saw economic benefits in terms of additional cash from property taxes, a boost in tourism and additional jobs. Following these perceptions, Righter sees the 1990s as the end of the first phase of wind energy in the U.S. He projects a potentially brighter future for wind energy, as well; Righter claims that in 1994, “15,900 medium-scale machines were generating nearly 3.4 billion kilowatt-hours of electricity nation-wide.108” Additionally, though many of the projects at the time were located in California, he lists that small projects had been installed in states such as “Oregon, Minnesota, Montana, New York, Wyoming, Texas, Hawaii, and New England.109” To end, Righter speculates that 103 Righter. Ibid, p.228. Righter. Ibid, p.239. 105 Righter. Ibid, p.230. 106 Righter. Ibid, p.231. 107 Righter. Ibid, p.232. 108 Righter. Ibid, p.291. 109 Righter. Ibid, p.291. 104 30 “Perhaps it [wind energy] will contribute significantly toward meeting the energy needs and environmental demands of the approaching twenty-first century110.” It is here that Righter’s description of the history of wind energy in the U.S. ends, and where the current exploratory project will analyze current perceptions of wind energy. Throughout the history of wind energy in America one can see the constant themes of “freedom” and “independence” referred to as a general American perception of wind energy. One can also see the perception that wind energy brings opportunities of economic development, from which landowners, towns, cities, etc. can benefit. We also see, however, the negative perceptions of unreliable technology, negative impacts to wildlife, noise pollution and destruction of landscape. This evolution of perceptions related to wind energy in the U.S. will play strongly into the current perceptions described by the respondents. 5. INTERVIEW ANALYSIS Following the previous presentation on historical perceptions of wind energy in the U.S, this chapter will present an interpretative analysis of current public perceptions related to wind energy in America. As mentioned previously in the methodology chapter, interviews were conducted with six respondents – two from the governmental sector (one at the federal level, the second at the state level), two from the private sector and two from non-profits. Interviews were conducted in a semi-structured manner, based on a common interview guide111. The interviews, once transcribed, were anonymized (only information related to their home state, gender and organization type was left) and assigned an identifying number of 1-6. In the following analysis, respondents will be referred to using their unique ID number. i.e. Respondent #1, etc. The respondents’ answers will therefore be analyzed within the context of the following themes: 110 111 Associations with wind turbines Current public perceptions Knowledge of Vestas Righter. Ibid, p.291. Included in Appendix 9 p. 129 31 Knowledge of competition Perceptions of markets The first question, concerning associations with wind turbines, seeks to understand the cultural perceptions Americans associate with wind turbines specifically and wind energy in general. The second question then aims to bring an understanding of current perceptions surrounding wind energy in the U.S. These questions take into account the theoretical stance that perceptions are derived from pre-understandings that are cultural-bounded and that a person’s culture, therefore, effects their perceptions112. Examining both American perceptions, as reported by the respondents, and cultural images of wind energy allows Vestas to understand how they can add value to their brand that extends specifically to an American market, both on a national level and a more regional level, therefore increasing their brand equity overall in the U.S. The third and fourth questions address knowledge of Vestas and knowledge of the competition, respectively. Examination of these questions allows for a closer at Vestas’ position in the market, how it the company and the Vestas brand are perceived and if it is in line with their current marketing and branding strategy. In this way, it will be examined if the Vestas brand is clearly differentiated from the competition, which is another very important factor in building brand equity. The final question discusses perceptions of market, which will be examined in order to provide an understanding of who is perceived to be Vestas’ main customers. This knowledge can then be incorporated with the previously discussed perceptions and cultural images, in order to provide an overall understanding of how the Vestas’ brand can be better targeted to its American audience. The respondents’ answers to the questions, when put together, create a holistic picture of perceptions of wind energy in the U.S. In the following chapter, this information will then be compared to Vestas’ web site to understand if they are clearly incorporating these images into their branding strategy. 112 Askehave and Norlyk: Meanings and Messages, p. 42-43. 32 5.1 Association with wind turbines113 The first interview question addressed the respondent’s associations with wind turbines. Overall, the respondents report either general or positive associations. (General associations simply refer to descriptions that do not lend themselves to either a positive or negative stance.) Very few negative associations were reported. In answering this question, Respondent #4114 replied with his own interpretation of the question, which offers considerable insight into the general American mindset; “Is it a ‘wind-flower’ or a bird killer (75),” he asks. This opens up two associations, one where a wind turbine is viewed as flower, presumably as something attractive and pleasing to the viewer, and the second where the wind turbine is viewed as something destructive and harmful to wildlife, and possibly the environment as a whole. As can be seen in later discussions within this analysis, this is a crucial point to understanding Americans’ perception of wind energy. Respondent #4’s personal associations differ, however. The respondent states that he associates wind turbines with energy and water (80-85). He does not expand further on the association of energy, but does clarify the association with water. The respondent explains that wind turbines in Texas were historically used to draw water up from the ground and deliver it for use on farms, or wherever it was needed (85-90). While this is more of a general historical association, the respondent also makes a positive association between wind turbines and water. He states that, “The wind turbines of today are saving water, because every 1 kilowatt-hour you make with renewable energy that does not use a steam process saves water” (91-93). Respondent #5115, on the other hand invokes a different set of images; generally, he describes wind turbines as tall and positively, as elegant structures associated with “the future” (49). The respondent had some difficulty describing any other associations and did not report any negative associations. 113 From here forward in this analysis chapter, citations at the end of the line refer to line numbers within the transcribed interviews in the appendix. The following footnotes will provide the pages numbers within the appendix where each interview can be located. The pages numbers for each respondents’ transcript are marked at the first instance of being mentioned. 114 Respondent #4, Included in Appendix 4, p. 57-101 115 Respondent #5, Included in Appendix 5, p. 102-109 33 Respondent #2116 reports strong positive associations concerning wind turbines, using adjectives such as “attractive” (76) and “graceful” (82) when asked to describe his associations to the image of a wind turbine. Similarly, Respondent #6 uses positive adjectives such as “large”, “impressive” and “magnificent” (83-94). Though the word “large” carries more of a general connotation, it is viewed as a positive association based on context; the respondent uses the adjective “impressive” to supplement the idea of the “large” size of the turbines. Respondent #1117 adds to these positive associations, describing a sense of awe with words such as “majestic”, “bold”, “freedom”, “strong” and “beautiful”(41-50). Building on those words, Respondent #1 uses the phrase “blowing in the wind” to describe the sense of independence that windmills possess (48). Respondent #3118 initially had difficulties describing his associations. He explains that as an independent consultant, having specific associations about wind turbines may cause him to have a biased perspective in his research. He then explained that his response would be his own personal perspective, representing his ideas as regular person, not as a consultant working with wind energy (335-346). Descriptions of wind turbines as “sleek” and large in size largely dominated his response (354). Interestingly, Respondent #3 states that wind turbines have become “part of the landscape” in his state (349), generating yet another positive association to show that wind energy is growing and coming of age in the U.S. Lastly, the majority of respondents agreed that the image of a wind turbine has become an iconic symbol of clean energy in the U.S. The only respondent who did not provide a clear view on this point was Respondent #4, who stated that his view of wind energy was too intertwined with science, and that he does not view wind energy in such a way (118). However, Respondent #6119 sums it up for the rest of the respondents when she states, “Yeah, absolutely. It [a wind turbine] is recognizable as opposed to solar power or solar panels [...] definitely, iconic yes (100-104).” Overall 116 Respondent #2, Included in Appendix 2, p. 18-22 Respondent #1, Included in Appendix 1, p. 1-15 118 Respondent #3, Included in Appendix 3, p. 34-56 119 Respondent #6, Included in Appendix 6, p. 110-125 117 34 the respondents believe that the recognizability of the design of wind turbines has turned it in to the symbol it is today. 5.2 Current public perceptions Respondents were then asked to describe what they believed to be the current perception of wind energy in the U.S. All respondents very clearly outlined both sides of the picture, explaining what they believed to be the current positive and negative perceptions. Respondent #4 again employs the ideas of “wind-flowers” and “bird killers.” He follows this idea by giving his perception, that Americans either love or hate wind energy and that very few individuals with a neutral opinion exist (128-129). In terms of positive perceptions, Respondent #1 explains that general ideas expressed by people in general are “very supportive and/or very interested in it [wind energy]” (70). Within this category, there is the general perception that the government’s new investment in development of clean energy sources, in particular wind, will create new jobs. Respondent #5 explains this perception and states that the general hope is wind energy development will bring not only more wind power (he refers specially to his state, Ohio), but that it will also bring new manufacturing jobs to replace many of those lost due to “movement of manufacturing to China, globalization… (141).” Respondent #2, also based in Ohio looks at wind energy as way to create jobs that were lost in the context of the failure of the automotive industry and the current financial crisis. He states: ( #2)” I think it would be extremely beneficial if we could convert those, our current rough belt [automotive industry] jobs over to green energy jobs […] and have them making solar panels or wind turbines, it’s kind of been the holy grail of the Great Lakes states” (389-399). Following this point, there is also the perception that wind energy is a profitable business. Respondent #4 touches on this specifically discussing the idea of wind turbines being equated with money (575) in a positive way. To explain this idea he uses the example of his home state of Texas; during the interview the respondent states that Texas has the most installed capacity of wind energy in the U.S. The interviewer then points out this is counter to an association that is often made between Texas and the oil and gas industry (549-552). The respondent counters this idea, however, and explains that Texas is a state not so much associated with the oil and 35 gas industry (as might be commonly assumed in the U.S.), but rather with the energy industry as a whole (556). He states that Texas oil businessmen are now simply saying, “Renewable energy is still energy and I know the energy business. Let’s make money in it, too (572-575).” Following this, he describes the idea that wind energy will be the next business boom for those seeking a profit from the energy industry (586). Overall the respondents feel that wind energy is a long-term viable source of energy in the United States. Respondent #5 in particular states that the demand for energy will increase globally, including regions of the U.S. that generally have slow growth rates; he refers specifically to “the industrial Midwest”, which in his opinion includes Ohio (167-169). From there, the respondent believes it is a matter of the U.S. “put [ting] a price on carbon emission”, in order to make the prices of renewable sources, such as wind energy, more competitive (171). Switching then to negative perceptions, the respondents reported several specific issues. One of the main concerns, as expressed in particular by Respondent #6, is the issue of bird and bat mortality rates. She states specifically that “some of the older wind farms in California have significant impacts and are still having significant impacts on raptors [...].”(181-182). Furthermore, she adds that an even greater concern is their impact on the mortality of bats (205). There is a particular concern about bats because, as she states, bats have a longer life span than birds and do not reproduce as often. Therefore if turbines kill more bats in year than are being born, the issue of the population’s sustainability can be endangered (217-22). The respondents also bring up another set of negative perceptions of wind energy related to the idea of “Not in My Backyard” (NIMBY) as described in the background chapter, and includes the idea that wind energy: 120 121 is a detriment to the viewshed (the concern wind turbine installations will ruin the aesthetic value of the landscape) (240)120 causes unfavorable noise pollution devalues lands (242)121 Respondent #4, Included in Appendix 4, p. 57-101 Respondent #4, ibid., p. 57-101 36 causes unfavorable light pollution in the form of shadow flicker (reflection of light on the wind turbine’s blades). The idea is clearly explained through its name; people simply do not want wind turbines installed close to their homes. Respondents #2 and #4 illustrate this idea, referring to a specific case of anti-wind sentiment involving Cape Wind in Massachusetts, located near Cape Cod and Martha’s Vineyard. There residents adamantly opposed an offshore wind farm based on the arguments outlined in NIMBY and their case was strong enough to freeze development and prevent installation of the wind farm (217-283). Following this, Respondent #6 addresses the issue of shadow flicker. She explains that there are some anti-wind energy organizations in existence, who argue that the shadow flicker from wind turbines can cause negative health effects (141). Overall the respondents paint a picture of mixed perceptions. Respondent #4 describes it as an issue related to benefits received from wind energy. The respondent discusses the idea that perceptions of wind energy really depend on “which side of the fence your view is from (265)”, which is to say – if a person is directly benefiting in some way from the wind turbines or the development, they have a positive perception of it. However, if a person is not directly benefiting from the development, but has to still deal with it in some way, whether by seeing or hearing the turbines, etc., then the perception is likely to be more negative. To rectify the issue of mixed perceptions, Respondent #5 believes that more education about wind energy is therefore needed (71). He believes that this education should come from all the stakeholders involved in wind energy; he cites the industry, nonprofits and other advocacy groups, public and elected officials, schools and universities, as well as utility companies (73-82). In addition to education, the respondents argue for proper siting of wind farms as a way to resolve many of the negative perceptions listed above. Respondent #5 states states the following: “Yes, it’s going to change the landscape. But guess what? As soon as your great grand pappy [grandfather] kicked over the first clod of dirt, it 37 wasn’t original anymore. Why is his doing it acceptable and my doing it is not acceptable? (297-302)” Additionally, he states, “change makes differences. And this is a change that we’re going to have to accept, that we’ve gotta create energy… if we want to be sustainable and we want to keep growing, you’ve gotta figure out ways to make energy. Windmills make energy (307-310).” Essentially the respondent believes that concerns mentioned in the above paragraphs should be addressed in the siting process and should not stall progress in wind energy development. He believes that we need to accept the change for what it is and move forward with development. To sum up the discussion of positive versus negative perceptions, Respondent #5 describes uses the story of a small town in Texas where the residents were clearly divided in opinion about whether or not a proposed wind farm should be installed (147-148). The objections were the very same ones mentioned above. The wind farm was built despite the vocal opposition, but it was found later that perceptions had changed (201). Some new negative perceptions emerge due to the visual lighting of the wind turbines at night (209-211), but on the whole, the respondent describes how the initial negative perceptions changed to positive. The purpose of this story is to portray the idea that perceptions can change, supported by knowledge, education, and experience. 5.3 Knowledge of Vestas The third main interview question addressed the respondents’ knowledge of Vestas Wind Systems as a company. All of the respondents were had an existing knowledge of Vestas and on the whole the respondents perceived Vestas in a positive manner. To begin, the respondents were very clear on basic information about the company. When asked if he is familiar with Vestas, Respondent #4 replies, “Oh, yeah. They’re based out of Portland, Oregon (726).” Respondent #6 also explains that Vestas is a manufacturer (292), which Respondent #4 follows by stating that Vestas is not involved in a lot of project development (730). The respondents also discuss the basic perceptions of Vestas in the U.S.; Respondent #1 describes the company as having a “good name” (18) and Respondent #3 adds that Vestas produces quality products 38 (467-468). The Respondent #4 supports this idea by explaining that Vestas is one of the better manufacturers in the American market (807). Several of the respondents, also stated that Vestas is one of the main players in its market, but that competition is quickly growing. Respondent #5 sums this up by stating that he views Vestas as a pioneer in both the U.S. and Europe and states that they “…are still in a leading position, but I think there are a lot of other’s trying to come into the field (120).” Respondent #4 supports this idea with his statement that the company is “a big dog in a small yard (779)”. The respondents in general, believe that Vestas has a good position in the current market, but need to focus on maintaining that position amongst the competition. Improving brand differentiation is one strategy Vestas can use to address this problem. Following this idea, Respondent #4 also states that Vestas is pro-active and highly recognizable at industry trade shows and conferences. He provides the example of a recent wind conference in Chicago, where Vestas had one of the larger booths on the floor as they do each year (825-827). This implies that Vestas is still a leading force amongst their competition. Additionally Respondent #1 states that all five major projects in Ohio used Vestas turbines (20), and Respondent #4 states that in Texas some of the largest installations belong to Vestas (745). This shows that Vestas has strong roots within wind energy development within the U.S. There are some issues, however, related to Vestas’ image as described by the respondents. First, Respondent #6 states that while she is familiar with Vestas because of her work in assessing the impacts of wind farm developments on wildlife, she has also seen Vestas commercials on TV. She points out, though, that otherwise she believes that the public does not have a specific knowledge of what Vestas is and what the company stands for (312-319). Respondent #4 explains that within the industry there is a rather serious problem with gearboxes in the wind turbines; the gearboxes on larger units are breaking down and now need to be replaced (815-820). While this is an industry wide problem among manufacturers, the fact is this perception still exists related to Vestas. However, the respondent does state that one of the company’s strong points in this issue is their 39 high level of responsiveness (864). He says, “[It’s] not that they did it right the first time, because they didn’t. There’s a problem, but that they’re getting it fixed as fast as they can (869-871).” Respondent #4 also makes the point that Vestas’ solid reputation rests heavily on the success of the company’s “workhorse”, otherwise known as the 660-kilowatt turbine (835). While Vestas has grown into 3-megawatt turbines, not enough time has passed to prove the long-term reliability of this model (839-841). In the mean time, the company still depends on the reputation of its previous model to maintain it’s good name. As the respondent states, “…until it gets that years and years and years of reputation, it’s, uh… well, nervous time (854).” A final main issue facing Vestas’ image is described by Respondent #2: “I guess, well… [laughs] it’s bad, because to me they [wind turbine manufacturers] all kind of look alike at this point… (271)” What the respondent is describing here is an issue of lack of differentiation from the competition. While overall it appears that Vestas holds a strong place in the market and that the Vestas brand is well received in the U.S., it still seems that they are not so clearly differentiated from their competition. With competition quickly growing, as described above, this could prove to be a major issue for the company. 5.4 Knowledge of competition The fourth main interview question sought to understand the respondents’ knowledge of Vestas’ competition. Based on the respondents’ answers, it is assumed that the company’s main competition includes other manufacturing companies. Developers play a different role in the industry in relation to Vestas and within his analysis developers will be viewed as a member of Vestas’ market. When asked to list the names of wind turbine manufacturers that the respondents were familiar with, Respondent #5 begins by noting the amount of manufacturers that are participating in the industry. He states, “…the list of manufacturers is getting longer rather than shorter… (126-127)”. An interesting point, though, is that all of the 40 respondents mentioned Vestas when listing manufacturing companies. This implies that while the competition is growing, Vestas still holds a solid place in the market. Respondent #1 then begins the list of competitors with GE, Clipper, Suzlon (177, 179), Nordex and Acciona (192, 194). Respondent #2 adds Vestas, Gamesa, and Horizon” and Respondent #3 includes Iberdrola, Siemens and Shell (446-450). From Respondent #3’s point of view, the leading contenders against Vestas are Siemens, which is “making more inroads” into the market, and Suzlon which is “starting to sell more turbines here [in the U.S.]” (448-450). Respondent #4 adds Dewind and E.on to the list, as well as smaller, individual developers in Texas (730-732), and the only additional company mentioned by Respondent #5 is Repower (105-107). Respondent #6 states that she has reviewed development plans for many wind energy companies, but does not add any new companies to the list (p.7). Therefore, the overall list for the competition facing Vestas, as perceived by the respondents, is as follows: GE Clipper Suzlon Nordex Acciona Vestas Gamesa Horizon Iberdrola Siemens Shell Dewind E.on Repower As demonstrated by the list above, there are many well known competitors in the U.S. market. This generates an even greater need for Vestas to address the American market in such a way that differentiates them from the competition. Recognizing the competition in this project offers perspective on how important it is for Vestas to provide something unique to the American market, allowing them to gain market leadership. An important point in this part of the analysis is that there appears to be some confusion among the respondents as to which company is a developer and which company is a manufacturer. For example, where Respondent #2 lists Gamesa as manufacturer (253), Respondent #4 lists Gamesa as a developer (719). Perhaps these companies are involved in both project development and manufacturing which has 41 caused the disagreement. However, the main point for Vestas is that all the respondents were clear on the nature of the company’s business. This seems to further strengthen the case that Vestas has a strong position amongst the different competitors, according to the respondents. 5.5 Perceptions of market The final topic explored in the interviews was the respondents’ perceptions of the wind energy market in the United States. The first point addressed within this topic addresses the understanding of who are Vestas’ actual customers. Across the board, respondents listed developers and project owners as the main consumers of Vestas’ products. Respondent #6 also adds an interesting point that “…any of the major utility companies (327),” are also potential Vestas customers. Additionally, the respondents discuss the idea that there is a valid market for wind energy in America. Respondent #3 describes the wind energy market as “active with room to grow” (305). Respondent #1 then describes this idea in terms of Ohio; in that particular state “things are taking off”, as Ohio passed the Renewable Portfolio Standard last year. (229-230). This legislation requires individual American states to produce a certain percentage of the state’s energy from renewable sources. The percentage varies by state, and the information listed on the government’s website is from 2007, therefore Ohio is not included122. Also, Respondent #1 makes the point that the federal government has extended its production-based tax credit through 2012, mentioned in the earlier background information chapter, which provides an incentive for further development of utilityscale projects. This legislation gives $.021 of credit based on the number of kilowatthours generated through wind (263-275). These perceptions lend themselves to support the idea that the wind industry, its market and wind energy itself are viable in the long run, as is discussed by Respondent #2 (341). While the respondents describe that the wind energy market encompasses the entire U.S., Respondent #4 also states that the global market is just as strong; “If a turbine is 122 U.S. Department of Energy, Energy Efficiency and Renewable Energy. http://apps1.eere.energy.gov/states/maps/renewable_portfolio_states.cfm. Accessed May 2009. 42 coming to Texas that means it didn’t go to Denmark or Delhi or China or some other place. This is a world market that you’re fighting against (785-789)”. As the global market for wind turbines, so does the market in the U.S., further supporting that the American market is viable for the long-term. Respondent #4 then describes the role that the Obama administration’s new investment will play in terms of wind energy and growing the market; he explains that the administration is seeking to improve education in math, science and engineering, at the same time that the government is researching where and how to expand electricity transmission line infrastructure. The idea is that by the time the infrastructure has been expanded, there will be enough individuals with the appropriate educational background to fill the jobs that will be created by new sources of energy (453-465). This implies that there will be room for electricity generated from new clean energy sources, i.e. wind, to be added to the grid and enough educated individuals to support this development. Respondent #4 then describes that while Vestas is taking full advantage of the market for large-scale wind turbine installations in the U.S., he believes that the company is missing a market opportunity in terms of community-based development, or C-BED. The respondent realizes that there are some tradeoffs related to this for the company; he says, “…so from their marketing viewpoint they’ve gotta say, there’s no way I can make money with that, if I go ahead and produce 1,500 of these a year and only sell, you know, 1,000 of them, you know I’ve wasted production line, while I could have made 10 more 3 megawatts and sold every one of them (897-903).” Despite this point, the respondent still believes that Vestas has overlooked this part of the market (896). In terms of the future of the market, the perception among respondents seems to be that the wind industry as a whole will face competition not only from fossil fuel sources such as coal, as described by Respondent #6 in terms of Ohio where there is a strong coal lobby (359), but also from other renewable resources such as solar energy, as described by Respondent #3 (600). Respondent #2 also states that he sees a definite market in offshore wind energy (351), which is supported by Respondent #3 who 43 explains that there are plans to build an offshore wind farm in the Atlantic (605-615) and by Respondent #6 who discussed proposed plans for an offshore wind farm in the Great Lakes region (423-424). Therefore it seems that some of the future market in the U.S. is moving towards offshore development, which is an important point for Vestas to consider. Lastly, in terms of market, the Respondent #4 explains that now is the time for wind energy; “…think of it this way, is every energy source the whole world has ever used has grown at a nice gradual rate, hit a peak, and then tapered off (1217-1220)”. He then adds, “We’ve seen this growth of energy use over and over and over again, this is the current status right now. We’re peaking out on oil production, we’re peaking out on what’s available, and now it’s time for something else to start growing and taking its place (1245-1247).” 5.6 Additional topics for analysis As previously mentioned, the themes for the analysis were extracted from the questions asked by the interviewer. As the interviews were semi-structured, the respondents were given room to discuss what they felt was important. This resulted in topics that did not always fit into the specified categories of analysis. These perceptions are mentioned below, as they still represent valuable perspectives. Originally, the perception of the researchers was that a demand from the public, supplied by information from NGOs, would cause a large investment into wind energy by the federal government. However, Respondent #2 disagrees; his belief is that the manufacturing companies have more of a responsibility for communicating the benefits of wind energy than do NGOs, because they to go out and conduct the “pre-market education have the incentive (194-197). Following this logic, it means that traditional manufacturing companies would need a more assertive education and marketing plan, a step which seems to be out of line with the current marketing practices of companies involved in the wind industry, who focus their marketing efforts on their customers and other direct stakeholders. 44 Also it seems that wind energy is not necessarily separate from other environmental issues in the minds of those who are involved in the industry. For example acid rain in New Jersey is a topic that Respondent #3 covers (323). Both Respondent #1 (460) and Respondent #3123 talk about the use of coal as energy. Respondent #3 also goes into depth describing the process of clean coal production, with the conclusion that clean coal simply doesn’t exist (544-579). Respondent #3 further describes a process of scoring different forms of energy production to see which has the least impact environmentally (295-310). Although it was very important to Respondent #3 to find a form of clean energy production (150-154), the respondents did not frequently mention that wind energy was a clean form of energy. Perhaps, this is because the respondents are industry insiders and simply take it for granted that wind energy is considered clean energy. However this could also not be a concern to the respondents. It seems as if the dominant concerns for the respondents were impacts to wildlife due to project siting and much needed manufacturing jobs to suffering local economies. These could in fact be the points at which Vestas or other wind companies could use as part of their marketing strategy. 5.7 Summation of Interview Analysis Overall, despite the fact that the respondents came from the non-profit, government and private sectors, many of the same perceptions were presented in their responses. Naturally, those respondents involved in studying impacts to wildlife might more frequently report perceptions related to bird kills, etc, a limitation which is taken into account in the discussion. Notably it is Respondent #4 who is involved with a nonprofit research institute, who discusses the idea of the profitability of wind energy (570-564), rather than the individuals from the private sector. Additionally, there is the possibility that viewpoints reported can vary depending on sub-culture, or geographic region, but in general the respondents reported the same ideas equally. The fact that the same perceptions were reported almost across the board implies that there is a general consensus within the U.S. in terms of wind energy. This then provides a clear and cohesive base from which the researchers can apply the theories of branding to understand how perceptions can be applied to building a strong brand. 123 Discussion about coal as a form of energy exists throughout the entire interview with Respondent #1, Included in Appendix 1, p.1-17 45 6. INTERVIEW DISCUSSION The respondents overall provided a variety of perspectives, which can be considered in terms of the branding theories and which will later be compared to an analysis of Vestas’ branding strategy, based on the information contained in their web site. It is important to clarify that within the theory of branding; this analysis looks specifically at the cultural perceptions as they apply to the theories of holistic branding. It follows, then that the purpose of the analysis was to understand how Vestas can use these perceptions in order to differentiate themselves from the competition, to adapt to the U.S. market and to build the brand’s equity. 6.1 Basic brand differentiation strategies Based on the interviews it is clear that Vestas has some issues with differentiation among the competition. For example, Respondent #2 had difficulty describing his knowledge of Vestas and is quoted as saying that the wind turbine manufacturing companies all appear very similar to him124. Therefore it is clear Vestas should consider ways in which it can stand out from the competition. The respondents list some interesting ideas about current issues in the market and future movements of the market that could assist in this process: There is an industry wide issue related to problems with the long-term reliability of the gear-boxes in the wind turbine125. Solving this issue could set the design of Vestas wind turbines apart from other manufacturers. Vestas is primarily a wind turbine manufacturer and is not involved very much in project development126. Within the industry, there seems to be a clear distinction between wind turbine manufacturers and project developers, but there does not appear to be any company that successfully carries both titles. Creating or expanding upon any wind energy project development activities, in addition to their already strong manufacturing base, could be one way to further differentiate Vestas from the competition. There appears to be a market for community-based development, with which Vestas is not currently involved127 and the competition has also seemed to 124 Respondent #2, Included in Appendix 2, p. 27, lines 270-271 Respondent #4, Included in Appendix 4, p. 83, lines 807-819 126 Respondent #4, Ibid., p. 81, line 730 127 Respondent #4, Ibid., p. 86, lines 873-907 125 46 overlook. One of the respondents in particular sees this as a valuable market and a missed opportunity. It is suggested then, that Vestas could focus part of their production efforts on this market, thereby creating yet another differentiating factor and increasing brand equity. The future of wind energy in the U.S. seems to also be moving in the direction of offshore wind farm development. Offshore endeavors represent a growing market within a growing wind energy market Vestas could take advantage of this opportunity to diversify into offshore development, thus further differentiating the Vestas brand. o A further note to the above point is that offshore development in the United States, based on the example of Cape Wind provided by the respondents, can be a controversial issue. Many of the concerns raised within the idea of “Not in My Backyard” are clearly voiced against offshore development. Vestas would need to consider these concerns in pursuing this market. Adaptation of any offshore development branding strategy to clearly address these concerns would be vital to differentiating the Vestas brand in this aspect. 6.2 Brand differentiation through secondary brand associations Additionally, Vestas could employ the concept of secondary brand associations in order to create a differentiated stance amongst the competition. Secondary brand associations are entities that are related to the brand, but carry their own individual associations and are an important factor in building brand equity128. As it relates to the interviews, the respondents reported many associations of wind turbines, which in turn lend themselves to the idea that they reflect perceptions of wind energy. The respondents also report an overall sense that the image of a wind turbine can be viewed as a symbol for clean energy. As Vestas is a company producing wind turbines, which in turn produce wind energy, there is an inherent link between the associations of Vestas, wind turbines and wind energy. Therefore, the following discussion will examine specifically how Vestas can benefit from and build brand equity by employing secondary associations of wind turbines and wind energy. To begin the analysis of secondary associations, one can begin by seeking to understand the root of these associations. It is the assumption of the researchers that personal interactions with culture are the basis for forming individual perceptions, associations, and cultural images. Following this idea, Shiffman and Kanuk describe 128Schmidt & Ludlow; Inclusive Branding 47 the idea that Americans grow up with cultural values including achievement, success, activity, efficiency, practicality, progress, freedom, individualism and comfort129. Of the associations reported by the respondents, two in particular are reflected in Schiffman and Kanuk’s list of American cultural values. One of these values, “freedom,” is clearly expressed both historically as a perception related to wind energy, as well as in the perceptions reported by the respondents. The cultural value of “individualism” is expressed both historically and in the interviews, but in a more indirect way using the idea of “independence.” While the words are not of the exact same meaning, the researchers carry the assumption that individualism is a by-product of independence; where as independence literally refers to a state of being free from outside control130, individualism refers to “a theory maintaining the political and economic independence of the individual131.” Therefore it follows that individualism results from independence, and the perception that wind energy is related to independence is in line with the American cultural value of individualism. Overall, the current idea of independence is somewhat different than the historical connotation. Historically, this idea meant that farmers were free to create and manage their own energy source, and could avoid accruing debt and paying high rates for electricity from a centralized system132. Currently, the idea of independence lends itself more to the idea of freedom from dependence on fossil fuels and foreign sources of energy, in particular oil133. The respondents reported these two associations as they relate to wind turbines, an object that they see also as a symbol of clean energy. Therefore it follows that clean energy sources, in particular wind energy, can carry the same associations as wind turbines. Vestas, as a producer of wind turbines, is then linked to these secondary associations of wind energy. Vestas can then build on the related associations of “independence” and “freedom” as they seek to build their brand equity by localizing the brand to a U.S. market. 129Schiffmann and Kanuk: Consumer Behavior Merriam-Webster Online Dictionary, http://www.merriam-webster.com/ 131 Merriam-Webster Online Dictionary, ibid. 132 Righter, op cit. 133 Righter, ibid 130 48 Following this idea it is clear that both historically and in the interviews, wind energy can be associated with economic development in terms of job creation and with making a profit. While these associations have arisen from somewhat controversial circumstances, dating back to Palm Springs, California as mentioned in the background information, currently these are viewed as positive associations and can be used by Vestas in the same way described in relation to the ideas of “independence” and “freedom.” Vestas should be clear and open about the company’s role in enhancing job creation and individual financial gain; these represent another set of secondary associations, which can be useful in order to further build brand equity. One point to keep in mind is that these two associations represent perceptions from two different regions of the United States. In discussing the idea of adapting to a U.S. market, one must remember that the United States is a large country, with different regions that can therefore represent different subcultures with their own associations. So, while the overall American cultural view holds that wind energy can create some form of economic development, one can further break this cultural view down by subcultures. As described by respondents based in Ohio, wind energy has an association with job creation. This region of the U.S. was heavily involved in the automotive industry, which over the past year has seen unprecedented job losses134. This region therefore sees itself as having the industrial capacity – both the factories and the laborers – to take on the construction of the various parts of wind turbines. Coupled with the knowledge of the upcoming federal investment in clean energy from the Obama administration, and thus the idea of “green jobs135” coming from this development, the perception in Ohio is that wind energy can bring much needed jobs to the state and this region of the U.S. Vestas can therefore employ this secondary association in their branding strategy to reach out to and build their brand equity within this American sub-culture. CNN.com, “Auto industry sparks surge in jobless claims” http://money.cnn.com/2009/05/14/news/economy/jobless_claims/index.htm?postversion=2009051411. Accessed May 26, 2009 135 White House.gov, Official U.S. Government web site. http://www.whitehouse.gov/blog/09/02/27/The-case-forgreen-jobs/. Accessed May 26, 2009 134 49 On the other hand, the association that wind energy carries as a means for making a profit is one that is more commonly expressed by Respondent #4, based in Texas. As the respondent explains, Texas is a state that considers it to be in the energy business136, and therefore interested in how to make a profit via energy generation. With demand for clean energy sources and environmental concerns rising, the perception in Texas is, therefore, that wind energy equals a means to turning a profit and furthering business. The idea of making money, along with the aforementioned perception of job creation represents secondary associations to wind energy that Vestas can employ to create positive associations within specific regions of the U.S. the make up the individual parts of the overall market. While the aforementioned perceptions lend themselves to positive associations, there are also several negative perceptions of wind energy that could hurt the brand just as much as the aforementioned perceptions could help. The respondents had a tendency to echo some of the perceptions as outlined in Righter’s history of wind energy in America.137 For example, several of the respondents discussed the idea of NIMBY, which has its roots in the California wind energy development boom in the 1980s and appears to still be a prominent concern in the United States138. Following the idea of NIMBY (which includes concerns related to aesthetics and viewshed, as well as noise and light pollution and property devaluation), Righter also described the idea that perceptions of wind energy truly depend on the side of the fence that a person is on, that is to say whether or not an individual is receiving economic benefit from the wind turbine installations139. This same idea was addressed by Respondent #4140, and is therefore still a strong current perception. In carrying a secondary association to wind energy, Vestas may also carry an association to these negative ideas. It is therefore in Vestas’ best interest to clearly address the benefits of wind energy in the context of these concerns – how they believe it will enhance rather than ruin the aesthetics of the surrounding landscape, how noise disturbance and light pollution can be avoided, and how impacts to wildlife are managed and avoided. This 136 Respondent #4, op cit., Appendix p. 86, lines 555-575 Righter, op cit. 138 Righter, ibid, Chapter 11 139 Righter, ibid 140 Respondent #4, op cit., Included in Appendix p. 66, lines 257-260 137 50 will help to negate these perceptions and turn them into positive associations of wind energy, which the company can then use to continue to build their brand equity. The strategies described here have sought to examine how the perceptions reported by respondents in the interviews can be applied to building brand equity for Vestas in the United States. The next section will look further into how Vestas actually communicates its image to the U.S. market and if it is in line with the perceptions outlined above. From there the analysis will seek to combine the information described above with the analysis of Vestas’ communication materials, in order to understand Vestas within the overall context of holistic branding and to understand how Vestas can most effectively communicate their brand within the U.S. market. 7. ANALYSIS OF VESTAS WEB SITE An analysis of the Vestas web site is included in the project in order to compare the information included in the web site with the perceptions reported in the interviews. In this way it will be possible to examine if the web page addresses the U.S. market on a local level or if the online communications are focused on a global level. In order to analyze the Vestas website the following points, as described in the theory, will be considered: “What is the main goal of Vestas’ web site? Who is the primary target group for the site? How does the Vestas web site inform visitors and how are their campaigns developed for the web site? Is the web site informative? Is it based on creating communicative relations with its users?141” o This point also relates to the holistic branding theory; in judging whether the site is informative, the researchers will consider the substance and expression of the information, in terms of its relevance to the reader. In this context, relevance means, is it applicable to the American market? The analysis will not discuss who is responsible for the organization of the development process and the requirements for success. Information related to the web site developers is not related to the current analysis. Also, the researchers are not in 141 Sandstrøm., Op.cit, (Free translation from Danish) p. 125-126 51 position to judge the success of the web site; their role is to describe the ways in which the web site does or does not address the American market. Within the context of these questions, the following criteria described by Sandstrøm can be used to evaluate the ways in which the Vestas web site does or does not connect the overall brand to the local audience. The researchers will examine: If there is a coherence between values, management principles, strategy and communication. If Vestas is clearly communicating a variety of stakeholders, i.e. members of the three different sectors (non-profit, governmental and private), as well as customers (project developers, private investors). If Vestas is employing secondary brand associations in their communications.142 7.1 Overview of the Vestas web site Keeping in mind the theoretical considerations discussed above, a general overview of the Vestas web site is provided. Below is a screenshot of the Vestas home page, Figure 1a. The top of the page prominently displays the Vestas logo and the slogan “No. 1 in Modern Energy.” Beneath this, is a text bar including links to the following subpages: Wind Power Solutions Modern Energy Jobs Investor Media About Vestas On the same horizontal line as this text bar, the page includes a link for choosing language, accessing contact information and a search bar for searching within the web site. The middle of the page includes large images; one depicting two wind turbines in a mountainous setting, one depicting the nacelle of their new V112 3.0 megawatt wind turbine model, and one promoting their graduate program. Below these images they have included additional information such as links to current press releases, to an email news service, and a quick link list to some of the pages mentioned above. 142 Sandstrøm, ibid. 52 Figure 1a. http://www.vestas.com/ At the bottom of the main page (refer to Figure 1b below), there is a link to a topic page entitled “No. 1 in Modern Energy”. There are also two drop down menus that allow visitors to choose their language (English, Danish, Chinese, Spanish, French, German, Italian) and their country (China, Germany, Spain, France, Italy). It is important to note that English is the first language listed above all other languages, including Danish which is the native language of Vestas. It is also important to note that the U.S. is not included in the country list. This, therefore, supports the idea that Vestas has pursued a global branding strategy that is not aimed specifically at the U.S. Next to this, the company lists their current share price for company stockholders, followed by a link to a brief disclaimer, which includes information for stockholders. At the very bottom of the site, there is a copyright, disclaimer, site map, contact information, and the company registration number. 53 Figure 1b. http://www.vestas.com/ All of the pages that are linked to this homepage were examined; however, this analysis will focus on the section entitled “Modern Energy”. A particular emphasis will be placed on the information included in “Modern Energy”, because it contains the bulk of the communication about the Vestas brand (i.e. “No. 1 in Modern Energy”). The “About Vestas” section also contains information about the company. However, it provides more of a company profile and historical overview of Vestas. It does not provide information that can be used to examine the Vestas brand. 7.2 Modern Energy Vestas then breaks down the “Modern Energy” (refer to Figure 2 below) section into subpages entitled “Understanding modern energy,” “Experience the wind,” “A global challenge,” “Political Initiatives,” and “Social Responsibility,” which are linked to in the top horizontal text bar. In the middle of this page there is a large image of a city lit up at night with a description of “Modern Energy” and links to some of the subpages mentioned above. Figure 2. www.vestas.com/en/modern-energy.aspx At the bottom of the pages Vestas breaks down the idea of “Modern Energy” into five topics: 54 “Wind power is competitive” - Competitive in terms of this web site means that wind energy can compete in price with oil and gas. “Wind power is predictable” – Predictable here means that wind energy is a consistent and free source of energy. “Wind power is independent” – Independent here is described as follows: “Wind knows no limits and doesn’t recognize national boundaries. It’s an unlimited source of energy indigenous to every country in the world. Wind creates local jobs – and it has the power to free countries from energy dependence.” This means that wind energy provides freedom from reliance on foreign sources of energy and creates local jobs. “Wind power is fast” – This means that the return on investment is both high and fast. “Wind power is clean” – Clean means that wind energy does not produce carbon dioxide and does not use water. 7.3 Analysis of Modern Energy After viewing the web site, it is the assumption of the researchers that the Vestas brand is based on the idea of “Modern Energy”143, and that the goal of this section is to communicate the positive aspects of this brand. This section is primarily targeted at Vestas’ consumers and key stakeholders, including project developers and private investors, and not the overall general public. Similar to Sandstrøm’s theory of corporate branding strategy, Vestas as stakeholder-based company seeks to create a relationship between these consumers and the brand. Vestas uses the five topics discussed above to define their concept of “Modern Energy”, which are the components that form their holistic brand. These fives topics (competitive, predictable, independent, fast and clean) are the points that Vestas believes will resonate with the consumers and therefore are utilized to create the value relationship with the consumers and stakeholders. Given the assumption that respondents are representative of American consumers and stakeholders, their responses will be compared to information presented in the “Modern Energy” section of the Vestas web site. Competitive: There is the implication in the interviews (according to Respondent #3 and #5) that the perception in the U.S. is that wind energy is not competitive in terms 143 Vestas.com. “Modern Energy”. http://www.vestas.com/en/modern-energy.aspx 55 of price as compared to other sources of energy. Vestas addresses this idea in the first of their five topics included under “Modern Energy,” and in contrast describes wind energy as a competitively priced source of energy. This speaks directly to American concerns related to the cost of wind energy. Predictable: Vestas puts a focus on the predictability of wind energy, which they define as being related to product reliability. However, this was not a major concern described by the respondents. In the past, specifically in the 1980s during the wind energy boom in California, large-scale wind installations did not have a strong reputation for reliability144. However, the issue of quality and reliability no longer appears to be an issue in terms of the respondents’ perspectives. In fact, overall the respondents, in particular Respondent #4, viewed Vestas as one of the better wind turbine manufacturers working the U.S. market. Independent: In their discussion on the idea of independence, Vestas explains that wind energy creates jobs and provides independence from foreign sources of oil. Most of the respondents discussed the idea of job creation, implying that this is one of Americans’ main positive perceptions of wind energy. This is both a current perception and a view that has been reported historically145. Fast: In this topic Vestas discusses the idea that once the initial investment in wind energy is made, the return on investment will come quickly. They also discuss the idea that the return on investment is high. The respondents did not directly discuss these concerns. They did, however, discuss the perception that wind energy can be a profitable business. Therefore, the idea presented here in the web site addresses the perception that wind energy can be a profitable investment. Clean: Vestas describes wind energy as being clean, meaning it does not produce carbon dioxide emissions or use water. This view was clearly understood and reported by the respondents. However, the significance of wind energy being a clean source appeared to be less important to the respondents than job creation or impacts on wildlife and surrounding landscapes. 144 145 Righter, op. cit. Chapter 11 Righter, Ibid 56 7.4 SUMMATION The assumption is that when a global company creates a website, the cultural backgrounds of the readers must be considered.146 There is a dynamic relationship between cultural perceptions and associations to the brand. Brands then build on associations in order to increase brand value. The topics presented on the Vestas web site do seem to address several American perceptions of wind energy, but do not directly address some of the most important. Therefore, it is important that Vestas considers a localized strategy in further developing their online communications. 8. OVERALL DISCUSSION It is common that international companies using a web site simply create the same web page in two or three languages to reach out to as many consumers as possible. This is referred to language strategy in the book Meanings and Messages147 for which there are a couple of models presented. Vestas however, does not fit into the models and the model below has been adapted to fit Vestas language strategy148. English www.vestas.com English /en Danish /da Chinese /cn French /fr German /de Italian /it Figure 3. Language model.149 The model illustrates that the overall Vestas.com website is in English. It is from here that a consumer may choose a language including English. The different language sites are equally accessible after being directed to the main English homepage. This indicates that English language site is not directed specifically towards an American audience. A menu for countries is also available and matches the available languages, with the exception of English and Danish. It is assumed that there is no website for Denmark because Danish is not widely spoken outside of Denmark. However, there are many countries whose official language is English. Therefore it is important for 146 Askehave and Norlyk, Op.cit, p.143 Askehave & Norlyk, Ibid, p 140 148 The model is inspired by the model: Askehave & Norlyk, Ibid, p. 140 149 Freely adapted: Askehave & Norlyk, Ibid, p. 140-141 147 57 Vestas to distinguish the countries from the language, especially where multiple countries speak the same language and yet have different market concerns. Based on the model and the website, Vestas uses a global marketing communication strategy; however they pursue a localized communication strategy. In adapting to local markets and taking into account local cultural perceptions, Vestas is creating added brand value, thereby increasing brand differentiation. According to the respondents, one of the main concerns regarding wind energy is impact on wildlife. Under the heading political initiatives on the Vestas website, they discuss the categories: Wind resource mapping Spatial Planning Noise Wildlife Grids150 These topics although presented on the website are not easily found. Spatial planning, noise, wildlife, are all important topics according to the respondents and should be at the forefront of the website. The website does not address aesthetics in terms of viewshed and shadow flicker, which was not mentioned on the Vestas website. As these are very clearly American concerns, they need to be addressed more clearly in the website. Perhaps, in creating the five topics of “Modern Energy” as described in the analysis, these concerns of the American market should be addressed. 9. CONCLUSION The U.S. has a long history of wind energy primarily tied to agriculture, but more recently to utility scale electricity generation. Relatively little information is available on the current wind energy market. It was therefore necessary to gather this information using interviews with those involved in the wind energy industry. The current project collected information from the private sector, the public sector, and the government sector. The information gathered from the semi-structured interviews relates to perceptions of the market is limited, but relates to key concerns for wind energy development. 150 http://www.vestas.com/en/modern-energy/political-initiatives.aspx 58 There were several predominant themes related to wind energy given by the respondents, supplying the perceptions of wind energy in the U.S.. If the respondents are representative of the markets they describe, it is possible to describe the wind energy market as: a way to provide jobs to struggling markets, especially in states like Ohio where manufacturing jobs were lost due to the collapse of the automotive industry, and in Texas where energy is big business. something that represents freedom and independence. not necessarily related to the idea of sustainable energy sources. something that may have a negative impact on wildlife. Secondary concerns are noise issues, viewshed destruction, and possible health concerns. not competitive with fossil fuel, in terms of cost. a market in which Vestas has a good reputation, but with many competitors. The respondents gave in depth information on perceptions of wind energy in the U.S., from general perceptions to very specific associations, creating more of a holistic interpretation. This information can be used by Vestas to understand whether or not their branding strategy will resonate with the market in the U.S.. The information gathered on Vestas was gained from their website. Interestingly, the languages available online are defined by country, except for English, which means that Vestas does not differentiate between English speaking countries. Vestas is “No. 1 in Modern energy” and gives five adjectives that describe this state; competitive, predictable, independent, fast and clean. An explanation of these terms was provided by the web site. Competitive meaning that the cost of a turbine and the cost of producing energy is low. Predictable means consistent energy flow, and that the turbines are reliable. Independence means an unlimited source of energy, therefore free from the global market, and able to create jobs. Fast meaning that the windmills themselves are fast and the market for wind energy is growing fast as well. Clean meaning a source of sustainable energy. These descriptions are essentially the brand of Vestas. Once outlined, these concepts a part of the holistic brand of Vestas were compared to perceptions of wind energy in the U.S. to see if the concepts were compatible. 59 It is assumed that the respondents are representative of the markets, therefore the brand of Vestas can be compared. One of Americans primary focus is job creation. Vestas does mention this, but it is certainly not at the forefront of the website. Vestas does address the image of wind energy as freedom by mentioning freedom from the global fossil fuel market. They address the problems that plagued the industry, not just Vestas, in the early 70’s and 80’s by discussing the reliability of the turbine as a product. The market is deeply concerned with impact to wildlife, a point the Vestas does not directly address. This is related to siting of the wind farms, and a description of how this is accomplished or a list of resources on the website could address this. Essentially, Vestas does have the overall picture of the U.S. perceptions of wind energy. However, the two key points of creation of jobs and wildlife impact need to be clearly addressed by Vestas to create buy-in from the U.S. market. The reality of the energy market is simply that fossil fuels are no longer reliable. A source of renewable energy is absolutely essential especially in the U.S., one of the largest consumers of energy globally. Wind energy could be a possible sustainable energy solution in the U.S., but is a market of great competition and development focused only in certain regions. As the respondents pointed out, in the U.S. market, the consumers of wind turbines are private investors, with a vision for the future. 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