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Efficient Negotiations with Lighting Manufacturers Andrzej Jarosz Business Energy Ecology Ltd.

Efficient Negotiations with Lighting Manufacturers Andrzej Jarosz Business Energy Ecology Ltd. ELI Workshop Marianske Lazne, Czech Republic 11.07.2000. Presentation Agenda. PELP lesson Part (I) understanding manufacturers strategy Lighting manufacturers’ objectives

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Efficient Negotiations with Lighting Manufacturers Andrzej Jarosz Business Energy Ecology Ltd.

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  1. Efficient Negotiations with Lighting Manufacturers Andrzej Jarosz Business Energy Ecology Ltd. ELI Workshop Marianske Lazne, Czech Republic 11.07.2000

  2. Presentation Agenda PELP lesson Part (I) understanding manufacturers strategy • Lighting manufacturers’ objectives • Determination of market share • Distribution channels • Vertical market assessment Part (II) efficient street lighting • The BEE concept • Overview of street lighting market in Poland • Typical project assessment • Major barriers of project implementation

  3. PELP Lesson • Manufacturers have a commercial interest in accelerating market transformation • Private sector delivery mechanism allows rapid and efficient lighting program implementation • The private sector approach allows incorporation of competitive mechanisms

  4. Understanding of Manufacturers Objectives • Earn money ( sales value) • Increase market share ( sales volume) • Manage and build distribution channels • Brand ( increase of brand awareness) • Product positioning ( vertical market policy) • Transaction security (payment terms)

  5. CFL Market Size in Poland

  6. Market Share

  7. Distribution Channel Development • Distribution channel analysis • Understand manufacturers’ channel policy • Proposing a program that conflicts with existing channels is a losing negotiation strategy • Offering new channels is a winning negotiation strategy

  8. CFL Branding • Product awareness (CFL) • Brand awareness (manufacturer logo or product name) • CFL brand campaign - objectives of various manufacturers • Cooperative promotion

  9. CFL Vertical Market Segments • End-users’ market segmentation • Residential and commercial - is this a sufficient segmentation? • CFLs sales value to various market segments • Manufacturers’ price policy towards market segments

  10. CFL Price Policy Issues • Market size and growth dynamic • Competition • Re-export (leakage through borders) • Distribution channel policy • Local duty and taxes • Vertical market objectives • Payment terms

  11. Good Negotiation Practices IF YOU • Know the market size and market value • Know individual manufacturers market share’s • Understand their channel policies • Understand vertical market objectives • Know the local duty and taxes YOU MAY START TO NEGOTIATE WITH MANUFACTURERS

  12. Street Lighting BEE’s Offer: To provide complete facilitation of the development of street lighting energy efficiency projects by providing financing and technical expertise.

  13. Street Lighting Market Size in Poland

  14. Spending on Street Lighting

  15. TypicalStreetEfficient Lighting Project Features • Technology: sodium to replace mercury • Number of lamps: 100-2000 • Energy savings due to technology replacement and tariff change: 40-70% • Maintenance savings: 50-100% • Investment cost structure: technical project - 8% equipment - 60% installation - 32%

  16. Street Lighting Retrofitat Gmina Rewal • Technology: sodium to replace mercury • Number of lamps: before - 1202 units (313.1kW) after - 1247 units (114.2 kW) • Tariff: C12b (960 PLN/kW/4000 hours) • Annual savings: energy - 190,000 PLN (795.4 MWh) maintenance - 38,000 PLN • Investment cost: 1,040,000 PLN

  17. Investment Financing from Saving

  18. Environmental Effects of the Rewal Street Lighting Retrofit Avoided emissions (tonnes/year) • Particles………………………....1.8 • SO2……………………………….7.4 • CO2…………………….…..… 899.0 • CO………………………………...3.2 • NOx…………………………..…..2.8

  19. Co-operative Procurement Is it Possible? Target: • Lower project cost Barrier: • Public tender procedure provisions Solution: • Regional projects (bundling)

  20. Sample Project at Regional Level

  21. Major Barriers • Small and dispersed projects • Public tender procedure • Taxes influence performance contracting agreements • High interest rates • Loan security problem

  22. For more information Business Energy Ecology Ltd. Tel. +48 22 754 0518 Fax +48 22 754 0517 Mobile +48 501 788 810 Contact: Andrzej Jarosz ajarosz@it.com.pl

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