Commodity Branding: A Qualitative Research Approach to Understanding Modern Energy Brands 3031299655, 9783031299650

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Commodity Branding A Qualitative Research Approach to Understanding Modern Energy Brands

Fridrik Larsen

Commodity Branding

Fridrik Larsen

Commodity Branding A Qualitative Research Approach to Understanding Modern Energy Brands

Fridrik Larsen Reykjavik, Iceland

ISBN 978-3-031-29965-0    ISBN 978-3-031-29966-7 (eBook) https://doi.org/10.1007/978-3-031-29966-7 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Acknowledgements

If anything, throughout my career I have been trying to bridge the gap between academia and industry. That is the ‘why’ behind this book. I started with a notion that it would be both interesting and useful to talk to senior energy-sector professionals from around the world on how they were approaching energy branding, and then turn that into academic modelling. In the interviews, I asked them about best practices and what should be avoided when branding a commodity. I also wanted to know what they thought about some issues that constantly come up, such as if branding was equally important in the business to business market, as in the business-toconsumer market. These topics, and many more, are found in this book. As is often the case with academic books, writing them can be a lengthy process. This book is not an expiation, and during the time it has taken to write it, there have been some twists and turns on the way. At first, I looked at some of these as unnecessary detours, but thinking back I can see how valuable they were for creating a solid piece of work. During this time, I have been privileged to work with two people who should be acknowledged at the beginning. Those are my former student at the University of Iceland, Agusta Hronn Hjartardottir and Nick Medic, an independent researcher. I’m also grateful to all the executives who devoted their time to speak with me. Due to the nature of how this book is written you remain anonymous but please know how grateful I am to you. v

Contents

1 I ntroduction  1 2 Literature Review on Energy Branding and Related Fields  7 3 Methodology: A Qualitative Approach 29 4 Findings: Understanding Modern Energy Brands 45 5 Conclusion:  Conceptual Model of Branding in the Energy Markets131 R  eferences137 I ndex149

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Author Biography

Fridrik Larsen  is Associate Professor of Marketing at the University of Iceland. He is a leading authority on branding within the energy space and the first individual to hold a PhD in energy branding. Larsen holds graduate degrees in finance, economics, and psychology, and a postgraduate degree in marketing. He is the author of three books on energy branding, a sought-after public speaker, and the founder of the international Charge Energy Branding Conference (CHARGE) conference.

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List of Figures

Fig. 3.1 Fig. 3.2 Fig. 3.3 Fig. 3.4 Fig. 3.5 Fig. 4.1 Fig. 4.2 Fig. 4.3 Fig. 4.4 Fig. 4.5 Fig. 4.6 Fig. 4.7 Fig. 4.8 Fig. 4.9 Fig. 5.1

Interview questionnaire Example of the coding process Example of coded quotations The organisation of the analysis material Visual presentation of category and code analysis Opportunities and challenges related to liberalisation Energy market liberalisation and its impact, leading to the awareness of the importance of branding Challenges in branding energy Service branding in energy companies Factors of organisational culture in energy brands Intrinsic and extrinsic factors of branding combined Main benefits of branding for energy companies Sustainability factors and energy brands Energy efficiency programmes and their impact on consumers Conceptual model of branding in energy markets

36 39 40 41 42 57 63 67 73 78 92 111 115 119 134

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List of Tables

Table 3.1 Table 4.1 Table 4.2 Table 4.3

Participants 34 Description of all themes and categories 48 Features of energy companies as to positive or negative effect 59 Theme of energy market characteristics, with quotations from experts 64 Table 4.4 Theme of branding commodities, with quotations 74 Table 4.5 Theme of intrinsic factors and quotations from experts 83 Table 4.6 Theme of extrinsic factors and quotations from experts 93 Table 4.7 Theme of business-to-business branding and quotations from experts 102 Table 4.8 Experts’ opinion on measuring ROI of branding 106 Table 4.9 Theme of investing in brands and quotations from experts 112 Table 4.10 Theme of sustainable energy brands with quotations from experts123

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1 Introduction

Abstract  In this chapter the challenges of branding energy and the limited research on the subject are introduced. The main challenge of branding energy is that it is a commodity. Energy is interchangeable with and indistinguishable from other instances of the same type, which makes it difficult for consumers to identify differences between competing businesses. In such markets, the importance of brand and communication is crucial. Additionally, the objectives of the book are addressed. There are two overall objectives. First, to examine the challenges and opportunities that experts in the energy market face when deciding on strategic brand positioning. Second, this research examines the relevance of brand-­ building in this type of market, based on the experiences of experts operating within it. Therefore, the research attempts to fill the gap in the literature as it reveals to what extent theoretical and practical methods of branding and brand strategies belong or are used in a commodity market, such as the energy market. Keywords  Energy branding • Commodity branding • Brand management • Brand building

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 F. Larsen, Commodity Branding, https://doi.org/10.1007/978-3-031-29966-7_1

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In the last three decades, energy markets across the globe have been liberalised in order to promote competition (Selçuk & Köktas, 2016). By ‘energy markets’, we understand the wholesale and retail supply of such energy carriers as oil, gas, and electricity. To be competitive in newly liberalised environments, energy companies have had to focus on marketing and branding. As energy is commonly viewed as a commodity, however, in the sense of being interchangeable with and indistinguishable from other instances of the same type, this makes it difficult for consumers to identify differences between competing businesses. In such markets, the importance of a strong brand and communication becomes crucial (Geuens, 2004). Brands have the dual purpose of identifying one seller’s goods or services and differentiating them from its competitors. Brands are made up of specific attributes that can be real or imagined, rational or emotional, and tangible or intangible (Ambler & Styles, 1996; Kotler, 2000). Brands must possess certain attributes in customers’ minds, with the role of brand managers or marketers to establish which to emphasise, for example, tangible versus intangible, or rational versus emotional. This strengthens a brand’s positioning (Keller & Lehmann, 2006). When developing a brand, there are multiple tasks that management must perform to build and maintain it. Managing brands can be challenging, however, due to changes in the marketing environment, consumer behaviour changes, government regulations, and other external forces. Brands must therefore adapt to these changes and challenges while maintaining consistency (Keller et al., 2012). Branding in consumer markets is generally considered mandatory, while less so in other markets, such as the B2B (business-to-business), industrial, commodity, and public sectors. These markets have not expressed the same interest in branding (Keller & Webster, 2004; Kotler & Pfoertsch, 2007; Martin et al., 2005), although this has changed somewhat as various sectors have realised its importance. Companies and organisations understand that building and maintaining a relationship between a brand and its customers are crucial in competing effectively in today’s marketplace (Leek & Christodoulides, 2011). As commodity lots of the same type are indistinguishable from one another, some actually consider branding essential in markets where

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commodities are retailed (McQuiston, 2004). There, customer loyalty is uncommon, as customers make decisions based on pricing. By researching customer needs and the market environment, however, companies selling commodity products can use branding to gain market share and strengthen customer relationships (McQuiston, 2004). Furthermore, at the turn of the century, Stanton and Herbst (2005) found that the consumer mind-set towards buying commodities is changing. Consumers actually want to place their trust in branded commodity-selling companies, as this benefits their busy lifestyles. This creates opportunities for commodity marketers to focus on branding their commodities and to provide consumers with peace of mind and added comfort (Dias et al., 2019; Stanton & Herbst, 2005). Despite such findings, energy branding has not received much attention in academic literature (Larsen et  al., 2008). Ongoing scientific research and policy discussions on climate change, however, have sought to understand how energy firms can transition to generating and supplying low-emission fuels, as well as electricity from renewable sources. For this reason, what literature exists on the subject of branding energy has focused chiefly on ‘green branding’ (Truffer et al., 2001) and this is still the case to date. Aside from green energy branding, research has been done on customer loyalty, brand associations, differentiation strategies, and brand positioning in the energy market, to name a few specialist areas (Hartmann & Ibáñez, 2007; Larsen, 2014; Paladino & Pandit, 2012). Energy companies are increasingly being urged to include social responsibility and environmental sustainability in their business frameworks and, as research by Hoffmann and Kristensen (2017) and by Bolton et al. (2011) reveals, energy companies are implementing corporate social responsibility (CSR) into their branding strategies and brand positioning. Furthermore, a study by Agudelo et al. (2019) shows that energy companies face various external and internal drivers that motivate them to operate responsibly, and that CSR can create a positive image for energy brands. In conclusion, when it comes to branding the energy space today, an exciting and largely unexplored field of research emerges. Energy companies are under the spotlight, as consumers press for positive action on sustainability, CSR, and environmental issues—while expecting energy

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prices to remain affordable. Therefore, the objectives of the research forming the foundation of this book are twofold. First, to explore the challenges and opportunities that experts face when deciding on strategic brand direction. Interviews show how practitioners in recently liberalised markets have met the emerging branding challenges, such as differentiating commodities, taking on increased competition, meeting new consumer demands, and building strong brands. Such challenges in the energy market will be discussed in detail from the experiences and perspectives of experts. Second, the book examines, from an expert-­ practitioner point of view, whether branding and building brands are activities relevant to this type of market. This book, therefore, attempts to fill a literature gap, as it examines the applicability of theoretical and practical methods of branding and brand strategies in a commodity market, in this case the energy market. This book is divided into five chapters. Following this introduction comes Chap. 2, containing a literature review. In Chap. 3, the methodology and analysis used in this research are explained and the experts who participated are introduced. In Chap. 4, the findings are presented in seven themes, each including, where applicable, literature that confirms or contradicts those findings. In the final chapter, the conclusions of this research are summarised and a conceptual model is introduced.

References Agudelo, M., Johannsdottir, L., & Davidsdottir, B. (2019). A literature review of the history and evolution of corporate social responsibility. https://doi. org/10.1186/s40991-018-0039-y. Ambler, T., & Styles, C. (1996). Brand development versus new product development: Towards a process model of extension decisions. Journal of Product and Brand Management, 6(1), 13–26. https://doi.org/10.1108/0263450 9610152664 Bolton, S.  C., Kim, R.  C., & O’Gorman, K.  D. (2011). Corporate social responsibility as a dynamic internal organizational process: A case study. Journal of Business Ethics, 101, 61–74. https://doi.org/10.1007/ s10551-­010-­0709-­5

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Dias, C. S., Rodrigues, R. G., & Ferreira, J. J. (2019). What’s new in the research on agricultural entrepreneurship? Journal of Rural Studies, 65, 99–115. https://doi.org/10.1016/j.jrurstud.2018.11.003 Geuens, M. (2004). Editorial: Strategic brand communications. Journal of Marketing Communications, 10, 69–71. https://doi.org/10.1080/135272604 10001693776 Hartmann, P., & Ibáñez, V. A. (2007). Managing customer loyalty in liberalized residential energy markets: The impact of energy branding. Energy Policy, 35(4), 2661–2672. https://doi.org/10.1016/j.enpol.2006.09.016 Hoffmann, J., & Kristensen, M. E. (2017). Sustainable oil and profitable wind: The communication of corporate responsibilities as inverted positioning. Nordicom Review, 38(2), 79–96. https://doi.org/10.1515/nor-­2017-­0404 Keller, K. L., & Lehmann, D. R. (2006). Brands and branding: Research findings and future priorities. Marketing Science, 25(6), 740–759. Retrieved from https://search.proquest.com/scholarly-­journals/brands-­branding-­research-­ findings-­future/docview/36796318/se-­2?accountid=28822 Keller, K. L., & Webster, F. (2004). A roadmap for branding industrial markets. Journal of Brand Management, 11(5). https://doi.org/10.2139/ssrn.530823 Keller, K. L., Apería, T., & Georgsson, M. (2012). Strategic brand management: A European perspective (2nd ed.). Pearsons Education Limited. Kotler, P. (2000). Marketing management: The millennium edition (10th ed.). Prentice Hall. Kotler, P., & Pfoertsch, W. (2007). Being known or being one of many: The need for brand management for business to business (B2B) companies. Journal of Business & Industrial Marketing, 22(6), 357–362. https://doi. org/10.1108/08858620710780118 Larsen, F. (2014). Branding as a bridge for commodities towards a liberalized market: A study in the electricity sector. Journal of Economics & Management, 15, 123–154. Retrieved from https://search.proquest.com/docview/166172 2097?accountid=28822 Larsen, F., Greenley, G., Palmer, M., & Rudd, J. (2008). Commodity branding: A review, conceptualization and research agenda. Rannsóknir í Félagsvísindum IX, 149–162. Retrieved from https://skemman.is/bitstream/1946/7650/1/ vidskiptabok%202008.pdf#page=149 Leek, S., & Christodoulides, G. (2011). A literature review and future agenda for B2B branding: Challenges of branding in a B2B context. Industrial Marketing Management, 40(6), 830–837. https://doi.org/10.1016/j. indmarman.2011.06.006

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Martin, G., Beaumont, P., Doig, R., & Pate, J. (2005). Branding: A new performance discourse for HR? European Management Journal, 23(1), 76–88. https://doi.org/10.1016/j.emj.2004.12.011 McQuiston, D. H. (2004). Successful branding of a commodity product: The case of Raex Laser steel. Industrial Marketing Management, 33(4), 345–354. https://doi.org/10.1016/j.indmarman.2003.07.001 Paladino, A., & Pandit, A. P. (2012). Competing on service and branding in the renewable electricity sector. Energy Policy, 45, 378–388. https://doi. org/10.1016/j.enpol.2012.02.046 Selçuk, I. S., & Köktas, A. M. (2016). Energy market regulations and productivity: An examination on OECD countries between the years of 1975–2007. Sosyoekonomi, 24(27), 243–261. Stanton, J. L., & Herbst, K. C. (2005). Commodities must begin to act like branded companies: Some perspectives from the United States. Journal of Marketing Management, 21(1–2), 7–18. https://doi.org/10.1362/02672 57053166848 Truffer, B., Markard, J., & Wüstenhagen, R. (2001). Eco-labeling of electricity strategies and tradeoffs in the definition of environmental standards. Energy Policy, 29(11), 885–897. https://doi.org/10.1016/S0301-­4215(01)00020-­9

2 Literature Review on Energy Branding and Related Fields

Abstract  This chapter introduces and examines the literature relevant to the topic of branding in the energy market. The first section centres on the energy market and the liberalisation that has occurred therein. The second section focuses on describing branding and brand management, and presenting branding in several sectors, especially in the energy sector. In the first section literature on the liberalisation of the energy market is summarised and the challenges and opportunities that have emerged following liberalisation are presented. In the second section, general and principal branding theories are presented such as literature on brand management, branding in different markets such as business-to-business (B2B), industrial markets, commodity markets, and service markets. To conclude, the limited literature on energy branding is introduced. This shines a light on the purpose of this research, that is, analysing the challenges and opportunities that experts operating in the energy industry face, for instance, in terms of differentiating commodities, handling increased competition, and meeting the demands of today’s consumers. Keywords  Energy branding • Commodity branding • Industrial branding • B2B branding • Service branding • Energy liberation • Energy regulation • Energy market • Commodity market • Industrial market • Energy brands © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 F. Larsen, Commodity Branding, https://doi.org/10.1007/978-3-031-29966-7_2

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This chapter will examine and introduce literature relevant to the topic of branding in the energy market. The first section centres on the energy market and the liberalisation that has occurred therein. The second section focuses on describing branding and brand management, and presenting branding in several sectors, especially in the energy sector.

2.1 Energy Market and Liberalisation The energy market refers to the market that deals with the trading and supply of energy. The most common energy sources are oil, coal, and natural gas (Bp, 2020). This is quickly changing, however, with the market’s transition towards a renewable and sustainable energy system. Renewable energy sources and other sustainable energy options are becoming more and more widespread, and countries all over the world are implementing energy policies that promote renewable energy development (Wang et al., 2018). Before looking to the future of the energy market, however, it is helpful to review the history of the energy sector— how the liberalisation of energy markets came about, as much as its effects on consumers and the sector in general. In the last 25–30  years, the economic liberalisation movement has affected many different industries worldwide, including the energy sector (Joskow, 2008; Kagiannas et  al., 2004; Selçuk & Köktas, 2016). The criticism of the energy sector’s traditional structure started in the 1980s. Its monopolistic features came under scrutiny, on the one side, for not being efficient in terms of resources and productivity, while on the other, for the lack of service quality. In the early 1990s, many countries around the world started planning reforms of their energy markets. These reforms were mainly directed towards securing independent energy sector regulation and boosting competition in the market. Furthermore, in some countries, privatisation was also implemented (Selçuk & Köktas, 2016). Energy liberalisation is the process of curtailing energy market monopolies (monopolistic companies), by legislative means, and opening the business of generating, distributing, and selling energy to private and public enterprises. The overall aim of liberalisation is to encourage competition, thereby increasing the quality of energy as a service and

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reducing costs to the end customer. The stimuli for liberalisation in Europe were the directives of the European Commission in 1998, mandating an end to the conventional monopolistic structure of the energy market and supporting a diversified internal energy market (Capece et al., 2013). The electricity market reforms were mainly based on what has been called the ‘textbook model’ and consist of several factors that are used as guidelines for improvements (Joskow, 2008). These factors are, essentially, ‘unbundling’, privatisation, and establishing authoritative institutions. ‘Unbundling’ means isolating and dividing the different stages of energy production, distribution, and sales, or rather, parcelling out such stages (as operational within an energy monopoly) into discrete assets, in preparation for a free market. Furthermore, unbundling prescribes separation between companies owning and operating the various energy-­ infrastructure assets, such as storage facilities, transmission networks, power plants, interconnectors, and retail companies; so, for example, a company cannot own both an electricity transmission network and an electricity retail operation. Unbundling was introduced to prevent the re-emergence of vertical integration, thereby securing a free energy market (Brunekreeft, 2015; Pollitt, 2008). In other words, it was thought that separating the generation, transmission, distribution, and sales of electricity into different asset classes would counteract cross-subsidisation and prevent discriminatory and uncompetitive pricing policies, particularly when it came to accessing distribution networks (Joskow, 2006). In our example, were it not for unbundling, it would be easy to imagine a company owning both a distribution network and an electricity retail business, overcharging its retail competitors for network access. Another factor of the ‘textbook model’ was privatisation. Policy makers assumed that privatised companies would use their capital more efficiently than state-owned monopolies for system maintenance, investment, and improvement. Privatisation would also generate high budget constraints for performance improvements, however, and it was regarded as beneficial to keep the electricity industry away from inflated political agendas (Joskow, 2008; Nepal & Jamasb, 2013). The third factor of the model suggested the introduction of independent governing institutions. Independent regulators would oversee

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conduct in the industry and act in the public interest (Joskow, 2006). As the provision of electricity is a process involving many actors, an authority is required to administer rules of conduct, with particular attention to monopoly-prone parts of the energy business. Its job is to set fair prices, ensure non-discriminatory network access, improve performance, and make sure that generating companies provide a steady flow of electricity (Joskow, 2008; Nepal & Jamasb, 2013). As to the question of whether liberalisation ‘works’, in the sense of benefiting the consumer more than the regulated (‘statist’) model, there is voluminous literature favouring either view. Almost every aspect of the energy business has come under close scrutiny by energy-economists, in numerous ‘before-and-after’ studies. To offer just a few examples, in a regulated framework the cost of remote access to rural, island, and other low-population-density customer accounts is cross-subsidised, so that their cost of electricity is remains equal to that in urban centres. The system might not be fair, as one group of customers subsidises another, but due to the nature of modern power systems (large power plants generate electricity, which is then delivered to customers via high-voltage transmission lines) apart from cross-subsidy, there can hardly be another solution to keeping prices equal—liberalisation or no liberalisation. (The other solution, that of remote customers paying more for electricity is usually perceived as politically sensitive, because it comes across as ‘punishing’ people for living in remote locations.) On the other hand, there is evidence that low-income consumers have benefited from liberalisation. Price (2005) shows that these consumers profited from being able to escape—by switching suppliers—the type of accounts geared to their socio-economic group. This is because they were able to switch to credit payments, such as monthly or quarterly bills, from the higher-cost prepayment metres. There is little doubt that deregulation (which is another name for liberalisation) has shaken up every facet of the energy industry. It has created waves of transnational mergers and acquisitions, as companies capitalised on new rules of ownership (Sonenshine, 2020). It has opened up new sources of funding, thus accelerating the deployment of capital-­ intensive power projects. It has introduced competition in electricity retail, with a proliferation of new suppliers both to households and to

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businesses. All of these are deemed positive developments. There are concerns that in some cases, however, deregulation has led to higher energy prices to consumers. As Vihalemm and Keller (2016) have pointed out, for instance, there was a substantial rise in energy prices after the 2012 liberalisation of the energy market in Estonia. Regarding the quality of service pre-liberalisation, while it could be argued that government regulation has safeguarded standards, there is also a sense that energy monopolies, because of their privileged position, have not really been active at heeding customers’ inclinations, or resolving their difficulties. But, in criticising the role of the state, Gayer and Viscusi (2013) go a step further. Most of the purported benefits of regulation, they claim, reflect government agencies’ notion that market actors (customers and companies) tend to behave irrationally. According to this statist perspective, the government can better address the real needs of both customers and companies than if they were left to their own devices. But, even if such an attitude to regulation occasionally churns up some benefits, these are eventually outweighed by actual costs to the public according to Gayer and Viscusi (2013). In brief, there is still considerable debate on both the potential and concrete benefits of liberal energy market reforms (Capece et al., 2013; Joskow, 2008; Pollitt, 2008). Research has shown that a proportion of consumers do not trust deregulated electricity providers. Some claim, however, that this could be counteracted by executing more efficient branding strategies (Larsen, 2014; Paladino & Pandit, 2012). Furthermore, there is some controversy about ‘consumer switching’—the liberalised market practice of consumers changing suppliers. Switching is taken not only as a mark of healthy competition, but as an indicator that consumers are informed about the choices available. While a ‘switching rate’ is not the final objective of market liberalisation, it is illustrative of the degree to which consumers benefit from such policies. Taking such a view to its logical conclusion, Gamble et al. (2009) suggest that consumers who do not switch to another company that gives them better value actually jeopardise the basis of liberalised markets. Among energy policy experts, the rate of switching is a key indicator of the performance of market liberalisation, as a measure of customer participation (Yang, 2014). To sum up, many see high switching rates as a healthy sign of free

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competition in the energy market (Al-Sunaidy & Green, 2006), while others point out that changing suppliers has little effect on consumer bills (Rokicki et al., 2021). Looking at Asia, Shin and Managi (2017) studied consumer switching in the liberalised energy markets of Japan. Their results state that consumers who switched companies showed enhanced satisfaction rates. Additionally, the degree of satisfaction was higher compared to those consumers who did not choose to switch. Therefore, those consumers who chose to switch actually benefitted from their decision. The results indicate that switching can be utility improving by increasing customer satisfaction. Finally, it is worth noting that although market reforms have attuned consumers to price differences between suppliers, findings show that they are still quite uninformed about the operations of both the distribution networks and the generating infrastructures responsible for providing those same consumers with electricity (Shove & Chappells, 2001). Given the complexity of such systems, however, this should not come as a surprise. Implementing liberalisation can take a long time (Jamasb & Pollitt, 2005). This brief overview of the history of energy market liberalisation demonstrates that liberalisation has dramatically affected marketing and branding practices within the energy sector. In the next section, the concept of branding will be presented.

2.2 Branding Branding has been practised throughout history as a method for sellers or producers to identify their products and differentiate them from the products of others. Today, branding is considered vital for companies to gain value for their goods, and it effects a host of other positive outcomes (Keller & Lehmann, 2006; Murphy, 1992). Branding has an impact on customers, as brands can simplify the procedure of choosing and enable trust among buyers. Kotler (2000) defines a brand as a ‘name, term, sign, symbol, or design, or combination of them, which is intended to identify the goods or services of one seller or group of sellers and to differentiate

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them from those of competitors’. Differences can be tangible or intangible, according to Ambler and Styles (1996): they define a brand as ‘the promise of the attributes that someone buys … the attributes that make up a brand may be real or illusory, rational or emotional, tangible or intangible’. Keller and Lehmann (2006) argue that brands must possess specific properties in the minds of customers, and therefore, it is essential to develop brand positioning by establishing which tangible and intangible attributes these should be, and what the brand should do with its marketing (Gwin & Gwin, 2003; Keller & Lehmann, 2006). Brand image is an essential part of branding and refers to reasoned or emotional understandings consumers connect to specific brands. A brand concept is one that consumers hold in mind; it is subjective, as it is acquired through consumers’ interpretation (Dobni & Zinkhan, 1990). Grönroos (2007) argues that, conclusively, as the brand is internalised in consumers’ minds, it is actually the customer who builds an image of the brand in his or her mind. The marketer’s role is then to provide favourable settings for creating this image, in other words, to employ branding. An important consideration to be made concerning definitions of branding is the importance of differentiation. The components of a brand that differentiate it from another brand are called brand elements or brand identities. These can be, for example, the name of the brand, the logo, character, slogan, packaging, and more. Brand components can improve brand awareness and build brand equity (Keller et al., 2012). The concept of brand equity has two main aspects, the financial and the consumer-based. The financial aspect refers to the value of the brand and its performance in the market. On the other hand, consumer-based aspect of brand equity relates to how consumers respond to a company’s marketing efforts and react to the brand (Faircloth et al., 2001; Hampf & Lindberg-Repo, 2011). Brand equity is commonly built on four factors: brand loyalty, brand awareness, perceived quality, and brand associations; combining these assets can create value for both consumers and companies (Salzer-Morling & Strannegard, 2004). In modern times, branding has been used mainly in consumer markets, but this has changed rapidly over the years, as numerous sectors have realised that branding is crucial to business operations. Companies and organisations in both the public and service sectors, as well as

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non-governmental and inter-governmental organisations are investing money in branding, having realised its value. An important factor is building and maintaining a relationship between the brand and its customers, thus focusing on brand loyalty. Additionally, what matters is aligning employees with the brand, as their actions directly affect customers’ perception of the brand. Therefore, branding literature has found its way into human resource management and other management areas (Martin et al., 2005). Brand management will be discussed in the following section.

2.2.1 Brand Management Brands are not born overnight. Branding takes time and consists of various tasks that management must perform. Keller and Lehmann (2006) identify specific subjects or tasks that are part of brand management, such as developing a brand position, assessing brand performance, growing brands, and strategically managing brands. Managing brands is challenging due to changes in the marketing environment, consumer behaviour changes, government regulation, and other external forces. Brands must therefore adapt to these changes and challenges while maintaining consistency (Keller et al., 2012). Over the past few decades, one of these changes to the marketing environment has been caused by a shift in public attitudes to climate change (Peattie et al., 2009). The start of the twenty-first century has seen branding and CSR (corporate social responsibility) merge. Although CSR is not a new concept, it has only relatively recently become popular in branding. This can be traced to both a growing understanding of how a company’s reputation affects brand equity (Hampf & Lindberg-Repo, 2011) and findings from the United States that examined public outbursts of anger sparked by occurrences of large organisations mistreating their customers and employees (Dobson, 2003). Kumar and Christodoulopoulou (2014) argue that brand managers need to execute a sustainability strategy, within a wider brand strategy, to effectively compete in business. This involves making comprehensive changes to company structure and operations. If done accurately, brands will perform better. Moreover, the

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effects of promoting a product or service through its ethical or environmental attributes can be advantageous for brands whose buyers are accountable for their purchases. This applies in public settings, as much as in organisational buying (Peloza et al., 2013). Backhaus et  al. (2011) researched the importance of the brand in industrial or B2B settings. Their findings show that industrial customers value brands because they decrease the risks associated with purchases, and they are therefore willing to pay a premium for them. Many companies are now incorporating CSR and sustainability into the foundation of their operations and reflecting this in their brands, which is in line with Hampf and Lindberg-Repo (2011), who maintain that adopting CSR principles is necessary for current and future brand management. Brand management does not only involve managing activities that affect the external aspects of a brand; it can also be applied to internal activities, such as managing human resources. Brand managers need to provide desirable settings for consumers to create a beneficial brand image in their minds, and part of that is ensuring that corporate culture is in line with the brand personality. Internal branding is the communication carried out within an organisation to maintain a consistent brand both internally and externally. Therefore, internal branding is meant to represent a company’s values and its brand promise (Mahnert & Torres, 2007). Findings from De Chernatony et  al. (2003) show that internal brand management should be multi-departmental and led by senior managers to create a brand-supporting culture. This can lead to employees feeling confident in fulfilling the brand promise to customers (de Chernatony et al., 2003).

2.2.2 Branding in Different Markets Even though branding theories have primarily been formed around consumer products, branding can be employed in all sectors, including the electricity sector. In this section, existing literature on B2B (business-to-­ business) branding, industrial branding, service branding, and commodity branding will be reviewed, as these can all be associated with branding energy.

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2.2.2.1 B2B Branding Branding in consumer markets is something that hardly any company today overlooks. This is not the case in business-to-business markets, however. Many managers in such environments consider that branding need not apply in the ‘rational’ world of B2B (Kotler & Pfoertsch, 2007). Business-to-business or B2B environments relate to the marketing and delivery of products and services from one businesses to another. When it comes to branding of B2B products, the rules are different to B2C (business-to-consumer) marketing. There has been much research on what separates branding practices in B2C and B2B, leading to a deeper understanding of how B2B can reap the benefits of a solid branding strategy. There is still the misconception in the B2B environment, however, that branding is irrelevant, for several reasons. Koporcic and Tornroos (2019) suggest that the B2B environment is usually dominated by the manufacturing and processing industries, in which bulk-purchasing is the norm. Therefore, subjects in such a trading environment may not be very interested in branding. According to Cockayne (2016), primary considerations in B2B branding are logic and reason. Rather than focus on emotional motivators, business purchasers are chiefly concerned with economic value. This is because such buyers procure a product or service with the intention of reselling, or in some way enhancing the value of their business. Again, Österle et al. (2018) indicated that product affordability to the consumers is also crucial when determining the commodities to purchase, the given brands, or even selecting the names of these products. Facts, statistics, and numbers have a significant role to play when making decisions in this market. In summary, reasons for B2B companies deprioritising branding are that buyers in B2B businesses emphasise rationality, price plays the most critical role, and relationships between sales representatives and buyers are more influential than brands (Gomes et al., 2016). However, seeing how important relationships between sellers and buyers are in B2B companies, one can see how branding could also play a role. Branding can enable trust and build relationships between a buyer and a seller and therefore impact the decision-making process irrespective of it being in the B2B or B2C market (Leek & Christodoulides, 2011).

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2.2.2.2 Industrial Branding Keller & Webster (2004) argue that it is incorrect to think that branding in industrial markets is not as valuable or as necessary as in consumer markets. Furthermore, Webster et al. (2004) state that the fundamentals of brand strategy apply to industrial firms, but aspects of the industrial market need to be considered. For example, industrial firms usually have significantly fewer customers that B2C firms; however, industrial markets are not characterised by products, but by buyers. Therefore, industrial firms need to tailor their branding strategies towards intangible attributes such as reliability, service, and specialised expertise. Likewise, Kotler and Pfoertsch (2007) state that B2B companies, such as those operating in industrial markets, need a holistic branding approach, due to the challenges of market liberalisation. They conclude that creating a strong B2B brand in an industrial market is essential to gaining a competitive advantage. Perhaps, as Mudambi et al. (1997) point out, this should be done bearing in mind that consumer branding strategies do not apply directly to industrial firms, while factors such as buyer–supplier relationships and segmentation are essential. If these factors are considered, branding can play an influential role in creating relevant differentiation in a market where differentiating products can be extremely tough.

2.2.2.3 Service Branding Lately, there has been a growing acknowledgment of the importance of the concept of service in marketing, and the role brands play in the value-­ adding process that creates customer experience. In this aspect, brands can influence customers, stakeholders, employees, and the companies themselves (Brodie, 2009). The idea that good service increases customer satisfaction is widespread (and taken for granted) (Parasuraman et  al., 1985) and that, in return, it promotes consumer loyalty and retention (Heskett et  al., 2008). When viewed from the perspective of service branding, a brand’s purpose can be extended to being both an entity and

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a process. This differs from the traditional view of branding being about creating a brand image or brand identity, and the impact of branding on consumer behaviour (Brodie, 2009). As a result, the brand has a wider scope and is viewed as a transmission portal to consumers, and a tool for interactive communication between firms and consumers (Prahalad & Ramaswamy, 2004), as well as between company employees and other stakeholders. Furthermore, the brand can be seen as a window through which the customer can observe the company and its offerings (Mitchell, 2002). Service branding can be used to fashion an intangible service attribute into a valuable brand message. This is done using physical components associated with a service to differentiate the brand from its competitors. In service branding, internal marketing is vital, as employees are required to deliver the brand promise. Therefore, a service branding strategy needs to cover the training and recruitment of staff on fulfilling the brand promise (McDonald et  al., 2001). De Chernatony and Riley (1999) found in their research that building trust and maintaining relationships are crucial when it comes to service branding strategies. As services are intangible offerings, customers need to trust the service brand regarding reliability and quality. Therefore, managing service branding entails training and investing in staff recruitment for the company to maintain its service brand image. An important aspect of an energy brand, in the guise of a service brand, is the perception of employee expertise and customer interaction. Emphasis on the service quality of an energy brand creates a customer-focused culture, based on positive staff–consumer interactions. This is the foundation of a strong energy brand. In contrast to product-based branding, the interaction in service branding between customers and company employees is as important for the service brand’s image as marketing communications. Hence, brand associations are reliant on the performance of the company as a whole. To develop such positive associations, much weight has to be given to the consistency of delivering high-quality service. Therefore, employees play a continuous critical role in the energy-as-a-service brand-building process (Hartmann & Ibáñez, 2007).

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2.2.2.4 Commodity Branding In the field of marketing, the term ‘commodity’ is used for primary products or raw materials. A commodity usually goes through very little processing before it is ready for sale or transportation. A commodity can be a primary product that is further used in the manufacturing of value-­ added products. For example, oil is used to make plastic, which is ultimately used to make bottled drinking water. In commodity markets, different producers sell comparable and highly standardised products, making the competition between suppliers similar to ‘perfect competition’ (as used in economic theory). The commodity brand is commonly based on the pillars of perceived quality, self-concept, and category involvement (Morrison & Eastburn, 2006). What characterises batches of the same commodity, quantity aside, is that they are tricky to differentiate from one another, which results in customers choosing on price alone (McQuiston, 2004). Typically, customer loyalty is a rarity in such industries; purchasing decisions follow the lowest cost principle. Consequently, competition for customers is fierce and margins relatively low. Therefore, companies operating in a commodity market have fewer choices regarding differentiation and cost (Thomas & Koonce, 1989). A solution to this problem is commodity branding. Research has shown that by studying customer needs and market environments, commodity sellers can use branding to gain market share and profits (McQuiston, 2004). Pope et al. (1998) propose several ways of approaching the subject of branding commodities. Firstly, one can develop a brand for the commodity that relates to the commodity’s specifications, qualities, and add-ons. Furthermore, attributes such as country of origin and product form can be differentiated, as well as those relating to performance and customer expectations. Considering commodity branding as a whole, consumers’ attitudes in this niche area of marketing are changing, and there are indications that they want to place their trust in branded companies, because it suits their lifestyles. This creates opportunities for commodity marketers to create successful brands, providing consumers with peace of mind and added comfort (Stanton & Herbst, 2005).

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2.2.3 Energy Branding The use of branding in commodity-based industries has not received much attention in the academic literature (Larsen et al., 2008). This also goes for the energy industry—the focus, when it comes to differentiation, has usually been on pricing. This is changing worldwide, however, due to the liberalisation of energy markets. Findings by Rutter et al. (2018) on branding in the energy sector in the United Kingdom show positive correlation between consistent branding and customer retention. Their studies indicate that energy brands that focus on brand personality and brand consistency have lower levels of customer switching. Geuens (2004) argues that in markets where it is tough to see differences between competing businesses, as is the case in the energy sector (where there is little difference in product offerings), the effect of a well-established brand becomes more significant. As noted earlier, public attitudes to climate change have turned the spotlight on energy firms, and therefore, the focus in the literature on branding energy has mainly been on green branding (Truffer et al., 2001). Hartmann and Ibáñez’s (2007) study, however, reveals other pertinent brand attributes in energy branding, apart from those considered ‘green’. For example, they identify quality of technical service as a relevant brand association, together with corporate attributes such as energy companies being perceived as innovative and dynamic. The research also reveals that brand trust and customer loyalty could be improved by energy brands’ specific behaviour and communication. Likewise, Wiedmann (2004) measured brand equity via brand associations in the energy sector in Germany and found various relevant elements of energy brand identity, such as competence, reliability of supply, and customer focus. Wiedmann (2004) argues that energy companies using these elements in their branding strategies will succeed when it comes to establishing influential energy brands. Findings by Larsen (2014) also reveal that there are differentiating factors that can be used to build strong energy brands, being service, price, green factors, and imagery. He suggests that energy companies can create differentiated brands ‘as a bridge for commodities from state monopolies to liberalised markets’ (p. 150).

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When looking at the subject of green branding, there is still inadequate research and literature focusing on its application in the energy sector, as most of the research is on the green branding of tangible products (Hartmann et  al., 2005). One exception is the Paladino and Pandit (2012) study of renewable electricity brands, which highlights how they attract consumers and become more competitive using green branding. Their research findings indicate that using emotional as well as functional brand positioning can appeal to consumers, and that building a sense of community and creating a ‘living brand’ can be beneficial for renewable electricity brands. To sum up, in this literature review, the concept of energy market liberalisation has been introduced (as a crucial precondition for the development of energy branding) and principal theories regarding branding and the concept of brand management have been presented. Furthermore, branding in B2B, services, commodity markets, and industrial markets has been covered. Some of the literature on energy branding has been introduced (while noting that the volume of work on the subject is still somewhat limited and new studies are rare), which, in turn, shines a light on the purpose of this research, that is, analysing the challenges and opportunities that experts operating in the energy industry face, for instance, in terms of differentiating commodities, handling increased competition, and meeting the demands of today’s consumers. This book aims to boost the body of literature and add to a better understanding of the subject. In the next chapter the methodology utilised in the research is explained.

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McDonald, M. H. B., de Chernatony, L., & Harris, F. (2001). Corporate marketing and service brands: Moving beyond the fast-moving consumer goods model. European Journal of Marketing, 35(3/4), 335–352. https://doi. org/10.1108/03090560110382057 McQuiston, D. H. (2004). Successful branding of a commodity product: The case of Raex Laser steel. Industrial Marketing Management, 33(4), 345–354. https://doi.org/10.1016/j.indmarman.2003.07.001 Mitchell, C. (2002). Selling the brand inside. Harvard Business Review, 80(1), 99–101. Retrieved from https://search.proquest.com/scholarly-­journals/ selling-­brand-­inside/docview/72909690/se-­2?accountid=28822 Morrison, M., & Eastburn, M. (2006). A study of brand equity in a commodity market. Australasian Marketing Journal, 14(1), 62–78. https://doi. org/10.1016/S1441-­3582(06)70053-­2 Mudambi, S. M., Doyle, P., & Wong, V. (1997). An exploration of branding in industrial markets. Industrial Marketing Management, 26(5), 433–446. https://doi.org/10.1016/S0019-­8501(96)00151-­4 Murphy, J. M. (1992). What is branding? In J. M. Murphy (Ed.), Branding: A key marketing tool. Palgrave Macmillan. https://doi.org/10.1007/978-­1-­ 349-­12628-­6_1 Nepal, R., & Jamasb, T. (2013). Security of European electricity systems: Conceptualizing the assessment criteria and core indicators. International Journal of Critical Infrastructure Protection, 6(3-4), 182–196. https://doi. org/10.1016/j.ijcip.2013.07.001 Österle, B., Kuhn, M. M., & Henseler, J. (2018). Brand worlds: Introducing experiential marketing to B2B branding. Industrial Marketing Management, 72, 71–98. https://doi.org/10.1016/j.indmarman.2018.04.015 Paladino, A., & Pandit, A. P. (2012). Competing on service and branding in the renewable electricity sector. Energy Policy, 45, 378–388. https://doi. org/10.1016/j.enpol.2012.02.046 Parasuraman, A., Zeithaml, V. A., & Berry, L. L. (1985). A conceptual model of service quality and its implications for future research. Journal of Marketing, 49(4), 41–50. https://doi.org/10.1177/002224298504900403 Peattie, K., Peattie, S., & Ponting, C. (2009). Climate change: A social and commercial marketing communications challenge. EuroMed Journal of Business, 4(3), 270–286. https://doi.org/10.1108/14502190910992693 Peloza, J., White, K., & Shang, J. (2013). Good and guilt-free: The role of self-­ accountability in influencing preferences for products with ethical attributes. Journal of Marketing, 77(1), 104–119. https://doi.org/10.1509/jm.11.0454

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Pollitt, M. (2008). The arguments for and against ownership unbundling of energy transmission networks. Energy Policy, 36, 704–713. Retrieved from http://www.sciencedirect.com/science/article/pii/S0301-­4215(07)00447-­8 Pope, J., Cullwick, D., & Kennelly, J. (1998). Commodity branding. In S. Hart & J. Murphy (Eds.), Brands. Palgrave Macmillan. https://doi.org/10.1007/978-­ 1-­349-­26070-­6_16 Prahalad, C. K., & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing, 18(3), 5–14. https://doi.org/10.1002/dir.20015 Price, C. W. (2005). The effect of liberalizing UK retail energy markets on consumers. Oxford Review of Economic Policy, 21(1), 128–144. https://doi. org/10.1093/oxrep/gri007 Rokicki, T., et al. (2021). Differentiation and changes of household electricity prices in EU countries. Energies, 14(21). (MDPI, Basel). https://doi. org/10.3390/en14216894 Rutter, R., Chalvatzis, K. J., Roper, S., & Lettice, F. (2018). Branding instead of product innovation: A study on the brand personalities of the UK’s electricity market. European Management Review, 15(2), 255–272. https://doi. org/10.1111/emre.12155 Salzer-Morling, M., & Strannegard, L. (2004). Silence of the brands. European Journal of Marketing, 38(1/2), 224–238. https://doi.org/10.1108/030905 60410511203 Selçuk, I. S., & Köktas, A. M. (2016). Energy market regulations and productivity: An examination on OECD countries between the years of 1975–2007. Sosyoekonomi, 24(27), 243–261. Shin, K., & Managi, S. (2017). Liberalization of a retail electricity market: Consumer satisfaction and household switching behavior in Japan. Energy Policy, 110, 675–685. https://doi.org/10.1016/j.enpol.2017.07.048 Shove, E., & Chappells, H. (2001). Ordinary consumption and extraordinary relationships: Utilities and their users. In J.  Gronow & A.  Warde (Eds.), Ordinary consumption (pp. 45–59). Routledge. Sonenshine, R. (2020). Merger waves: Are buyers following the herd or responding to structural queues? Eurasian Business Review, 10(2), 287–308. https:// doi.org/10.1007/s40821-­019-­00136-­7 Stanton, J. L., & Herbst, K. C. (2005). Commodities must begin to act like branded companies: Some perspectives from the United States. Journal of Marketing Management, 21(1–2), 7–18. https://doi.org/10.1362/0267 257053166848

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Thomas, J. G., & Koonce, J. M. (1989). Differentiating a commodity: Lessons from Tyson Foods. Planning Review, 17(5), 24–29. https://doi. org/10.1108/eb054270 Truffer, B., Markard, J., & Wüstenhagen, R. (2001). Eco-labeling of electricity strategies and tradeoffs in the definition of environmental standards. Energy Policy, 29(11), 885–897. https://doi.org/10.1016/S0301-­4215(01)00020-­9 Vihalemm, T., & Keller, M. (2016). Consumers, citizens or citizen-consumers? Domestic users in the process of Estonian electricity market liberalization. Energy Research & Social Science, 13, 38–48. https://doi.org/10.1016/j. erss.2015.12.004 Wang, H., Pietro, G. D., Wu, X., Lahdelma, R., Verda, V., & Haavisto, I. (2018). Renewable and sustainable energy transitions for countries with different climates and renewable energy sources potentials. Energies, 11(12). https://doi. org/10.3390/en11123523 Wiedmann, K. (2004). Measuring brand equity for organising brand management in the energy sector: A research proposal and first empirical hints: Part 1: The development of a theoretical concept and a research programme. Journal of Brand Management, 12(2), 124–139. Retrieved from https:// search.proquest.com/scholarly-­journals/measuring-­brand-­equity-­organising-­ management/docview/232491066/se-­2?accountid=28822 Yang, Y. (2014). Understanding household switching behavior in the retail electricity market. Energy Policy, 69, 40–414. https://doi.org/10.1016/j. enpol.2014.03.009

3 Methodology: A Qualitative Approach

Abstract  The findings in this book are based on the qualitative research method, which in this particular instance involved data collection through in-depth one-on-one interviews, as well as subsequent analysis. This chapter is divided into three sections covering the qualitative research method, data collection, and data analysis. Literature on the qualitative research method is introduced along with interview methods and reflections on researcher’s positionality. For this book, a semi-structured type of interview was chosen, as the goal was to collect data on the wide-­ ranging subject of branding in the energy sector. In total, 19 interviews were carried out with individuals who are either executives in the energy sector or external specialists who have worked for energy companies on marketing and brand strategies. Interview questions revolve around different topics of branding, focusing especially on commodity branding, as well as sustainability, and green branding. In the analysis step, a qualitative data analysis software (QDAS) was used in order to assist with the analysis. The benefits and disadvantages of using a QDAS is discussed with relevant literature. Furthermore, the coding process of the analysis is explained and illustrated in detail, to make the process transparent. The analysis entailed seven themes which are the findings of the research.

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Keywords  Qualitative method • Interview research • Qualitative data • Qualitative analysis Methodology is the technique by which research is conducted. It is the scientific approach that a researcher chooses to systematically solve problems posited by initial analysis or observation. In social sciences the research methods are either quantitative or qualitative, with the quantitative methods relying on numerical data to understand phenomena. In contrast, qualitative research is descriptive, focusing on collecting and analysing non-numerical data (Mishra & Alok, 2017). The findings in this book are based on the qualitative research method, which had involved data collection through in-depth one-on-one interviews, as well as their subsequent analysis. In the next section the qualitative method will be further introduced and explained.

3.1 The Qualitative Research Method There are many ways of conducting qualitative research, but what they all have in common is a focus on understanding social processes by considering people’s subjective experiences. Qualitative researchers, on their part, strive to understand the meaning of social phenomena while mindful of how their own perspectives and biases could affect their interpretations (Esterberg, 2002). Merriam (2009) identifies four main characteristics of qualitative research. First, qualitative researchers try to understand how people interpret their experiences and make sense of their lives. Second, the researcher is the primary agent when it comes to collecting and analysing data, a process which entails an awareness of own biases, particularly as to how such biases could shape data interpretation. Third, in qualitative research theories are built from observations. Meaning, it is an inductive method, which seeks out patterns in raw data, rather than use that data to test hypotheses, as in deductive reasoning. Lastly, qualitative research is characterised by ample and often rich descriptions. Words,

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rather than numbers, are used to describe the gathered information, and quotes or notes from participant interviews are used to support the findings (Merriam, 2009). In the next section the interview method will be further elaborated, with an explanation on how the interviews in this research were structured and carried out.

3.1.1 Interviews When collecting data in qualitative research, interviewing involves the researcher and the participant sharing information relating to the subject of the research study (Demarrais, 2004). There is extensive literature on the strengths and limitations of this research method, as well as on how to conduct interviews, and the different types of interviews in use. It is important to be aware of interviewing’s limitations, such as ‘the asymmetry of power’. In interviews, the researcher oversees the questioning, and therefore, it differs from everyday conversations where both individuals meet on equal ground. Due to this asymmetry, interviewers must develop inter-personal skills; they must be knowledgeable on the topic under discussion and use active listening. Finally, it helps data collection and overall research aims if they show genuine curiosity about what the participant is saying (Qu & Dumay, 2011). Regarding the different types of interviews, they are usually classed as highly structured, semi-structured, and unstructured. A researcher must choose an appropriate type of interview according to research design. Most interviews in qualitative research are semi-structured or unstructured as these types of interviews consist of open-ended questions and give the participant a chance to speak freely. They also provide the interviewers with a chance to probe, and can therefore bring new ideas to the topic (Merriam, 2009). For this book, a semi-structured type of interview was chosen, as the goal was to collect data on the wide-ranging subject of branding in the energy sector. Since ‘energy branding’ has emerged only recently as a topic in branding and marketing theory (Larsen, 2014), the semi-structured approach was also suited to following up and exploring new ideas, as they arose.

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3.1.2 Researcher’s Positionality As in any qualitative research, it is also necessary here to reflect on the researcher’s positionality (point of view). In qualitative research, the researcher is the main agent in data collection and analysis; therefore, it is imperative of them to reflect on their position and understand how it can affect research and its conclusions. In this step, the researcher turns the lens back towards oneself in order to critically examine how one’s point of view on the subject of the research is impacting the understanding of the data or the participants’ side of the dialogue (Berger, 2015). The aim of such reflection is to enhance the trustworthiness (chiefly, clarity, and impartiality) of the qualitative study method and its ability to account for all of the relevant facts. Furthermore, when researchers reflect on their position, they are increasing data and analysis transparency. Reflecting on one’s analysis means asking questions such as ‘Why am I saying this?’ and ‘How do I know this?’, which helps the researcher keep an open mind towards the data (Probst, 2015). The author of this book, to his best abilities, reflected on and questioned his own position in the data analysis to make sure that fixed ideas or views would not affect the research. Prior to this research, the author had accrued substantial knowledge on the subject of branding in the energy sector. The particular challenge of this book was to allow the data to ‘speak for itself ’. Furthermore, the author tried to make sure that his interpretation was objective. One of the methods in retaining objectivity was a research diary, containing memos on all the steps taken during data analysis. The aim was to explain in detail why the analysis was done in a particular way. This will be covered further in Sect. 3.3.

3.2 Data Collection In this research project interviews (data collection) commenced in October 2019, with the last interview carried out in July 2020. The length of the interviews ranged from 30 minutes to 80 minutes. Since the participants were located in different countries around the world, each of the interviews took place via phone or video call, as it was not viable to

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conduct them face to face. The interviews were recorded and transcribed, which resulted in around 260 pages of material.

3.2.1 Participants The participants in this research were 19 individuals who are all either executives in the energy sector or external specialists who have worked for energy companies on marketing and brand strategies. Fifteen of the participants are brand managers or CEOs in large energy companies, two are working as experts in branding agencies, one is a marketing expert in the finance industry and one is a brand consultant. Henceforth, all of the participants will be referred to as experts. Interviewing experts on branding in the energy sector gives an in-depth insight into the industry, and the branding activities of large energy companies, as all of the experts have substantial experience in this area. When choosing participants for the research, the criteria was diversity, primarily in terms of nationality, type of business, and participant’s role. This was to ensure a range of perspectives on the subject. However, it should be noted that the energy industry is a male-dominated industry with low female participation (Beck & Pánczél, 2018). This factor did influence the research as only four women were available to participate in the interviews. The companies that the experts work for (or have serviced) belong to a range of energy industry sub-sectors, such as electricity, oil and gas, and transmission—also, energy production (generation) and sales (both retail and wholesale). Due to the nature of the energy business, some of those companies might actually cover all of the above activities, while operating worldwide. For a guide on how the experts were distributed across the energy sector see Table  3.1. The variety of the companies’ catchment areas, types, and ownership structures, as much as variance in experts’ roles, opened up intriguing perspectives on intra-sectoral differences in approaching energy branding and marketing. To preserve the anonymity of these individuals, rather than their names or initials, only the region in which they operate is given. Four are working in the United States, eight in countries that will jointly be referred to as ‘Western Europe’ (France, the Netherlands, United Kingdom,

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Table 3.1 Participants Internal activity Pseudonym Gender Region US1 WE1 WE2

Occupation

Company

Sector

University Finance Energy

N/A Private Private

Electricity Energy Oil & gas

Private Private Public

Electricity

Public

Transmission

Public

Oil & gas

Private Private

CEO CEO CEO CEO CEO CEO

Branding agency Electricity Branding agency Energy Energy Electricity Energy Oil & gas Oil & gas

CEO

Electricity

Public

WE6

Male United States Academic Male Western Europe CEO Female Western Europe Head of brand Male Western Europe CEO Male Western Europe CEO Male Northern Head of Europe brand Male Northern CEO Europe Male Northern CEO Europe Male Western Europe Head of brand Male Western Europe CEO

US2 WE7

Male Male

United States CEO Western Europe CEO

US3 OC1 UAE1 US3 WE7 NE4

Female Female Male Female Male Male

NE5

Male

United States Oceania UAE United States Western Europe Northern Europe Northern Europe

WE3 WE4 NE1 NE2 NE3 WE5

Private Private Public Private Public Public Public Public

Germany) and five in ‘Northern Europe’ (Iceland, Norway, Finland, Estonia, Sweden). In addition, one expert is operating in the region of Australia and Oceania and one in the United Arab Emirates. Therefore, in this study, when quoted they will be indicated by an acronym of their geographical area and a single digit. As to parity of experience, it is worth noting that energy markets across the globe have been liberalising at different rates. Together with—as noted above—the variance in companies’ ownership structures (public or private) and sub-sectors (retail, generation, transmission and so on), this has been of consequence to the experts’

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practical insights on energy branding. In other words, although the experts in some cases shared a job title, their point of view on energy branding could diverge due to variance in corporate environments.

3.2.2 Research Questions In Fig.  3.1, the questions used in the interviews with experts are presented. Because the interviews were semi-structured, these questions worked as a guide for the conversation. Even if each of the questions was not asked directly in every interview, the matters under consideration were discussed to a greater or lesser extent with every interviewee; meaning that during the exercise, the data-gathering conversations touched upon the same, or closely related topics. As can be found in Fig. 3.1, the questions revolve around different areas of branding. Initially, to ‘kick-­ start’ the interview, experts were asked questions relating to personal employment history, their motivation to join the energy sector, as well as contextual questions on their current employer. Then the interviewer moved on to the research topic of branding, focusing especially on commodity branding, as well as sustainability, and green branding.

3.3 Data Analysis In this section, the process of data analysis used in the research will be presented. Usually, in qualitative research, some measure of data analysis happens concurrently with data gathering. As the interviews are conducted and transcribed, the researcher will start to notice patterns in the data, and these will shape the categories used to organise the data, and themes that will become the study’s findings. Gathering and analysis are dynamic, complementary, and interactive processes; therefore, once the first interview has been conducted, the analysis should start right away. This not only helps the researcher make sense of the collected data, but according to the literature on the subject, is the preferred approach to analysis (Merriam, 2009). In the research for this book, such a method was used.

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Fig. 3.1  Interview questionnaire

While listening to the recording of the first interview and reading the transcript, several interesting or important points were noted, forming the first step in the data analysis. After the same was done with the first four interviews similarities, as well as differences, began emerging between

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experts’ positions on key topics. It was also apparent that there were recurring motifs in the content of the interviews that became important for the research. This process was repeated with all 19 recordings and transcriptions, following which the researcher ended up with numerous pages of notes that were analysed in the next step of the process. That step was executed by the qualitative research software ATLAS.ti.

3.3.1 ATLAS.ti Software The use of qualitative data analysis software (QDAS) programs has attracted both positive and negative feedback from the academic community. Woods et al. (2016) state that the misgivings regarding QDAS programs mainly focus on their propensity to influence analysis. For example, researchers could start using techniques that a QDAS offers, regardless of whether they are suitable for that particular research. Such features of the program could then start dominating the researchers’ conduct, and the understanding of their own activities. This could bring about researchers designing and executing their research based on the type of workflow most easily facilitated by QDAS instead of designing the research based on the requirements of the research itself. However, the positive side of QDAS is that it can aid researchers in making both the data coding and the data analysis more efficient and precise. It can also facilitate more rigorous testing of the qualitative evidence, and support the researcher in connecting texts and other data together, a step sometimes not practicably possible by human data processing alone (Woods et al., 2016). When a researcher decides to use such a software, several things are important to keep in mind. First, the researcher must understand how the software will be utilised—the researcher must understand its advantages or disadvantages. Second, it is important to explain what steps and processes the researcher used in QDAS, for the readers to understand how the software helped in the analysis. Third, the researcher has to reflect on the limitations of using QDAS. Doing this will make the analysis transparent and present to the reader a better picture of how the researcher managed the analysis. With these conditions fulfilled, QDAS can assist in the process (Paulus et al., 2017).

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For this book, the software ATLAS.ti was used. ATLAS.ti is a QDAS that allows users to upload various types of documents to manage, code, rearrange, and link data according to qualitative research methods. ATLAS.ti was chosen due to its user-friendly reputation, and ease of learning (Predictive Analytics Today, n.d.).

3.3.2 Coding Process Once data has been transcribed, coding can begin. It is a method of specifying what the QDAS should be searching for in the data. By using coding, researchers can discover patterns in a large amount of text that they have collected. In a typical qualitative research situation, once all the interviews have been conducted, there is often a feeling on part of the researcher of being submerged by all the data. At this stage, the researcher can lose objectivity either believing that all of the data is important (and that identifying what matters to the research topic is difficult), or that none is, or that only part of the data directly relates to the research topic. This is where coding is helpful, as it organises the data and allows researchers to focus on what is relevant to the analysis (Auerbach & Silverstein, 2003). When done manually coding involves the researcher reading the data and highlighting or otherwise marking parts of the text, to organise and categorise it into codes. It is usual for a passage in a text to contain multiple different topics or themes, and therefore, it is crucial that when the researcher does the coding, he reads the texts thoroughly several times while coding (Patton, 2002). In QDAS it is possible to automate this process. This was done in the first step of data analysis of this research. There was no starting list of codes used; instead, the author began by coding all the documents using descriptive codes, as well as ‘live codes’ or ‘en-vivo’ codes. Live codes are when the words of the experts are used to represent their professional language or way of speaking. This initial coding took around several weeks and resulted in around 700 codes. Some of the codes were very specific, as the author coded everything that struck him as interesting, relevant, and meaningful, while remaining open to the data and allowing it to speak for itself. An example of a coded chunk of text is shown in Fig. 3.2.

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Fig. 3.2  Example of the coding process

The next step was to eliminate nonessential codes and note repetition of codes. In cases of repetition, codes were combined under one code. For example, all instances where participant-experts talked about ‘challenges’ were grouped under six codes: Challenges: Branding, Challenges: Commodity, Challenges: Communication, Challenges: Green, Challenges: Investing, Challenges: Differentiation. For instance, prior to this stage, when the experts discussed the challenges in differentiating energy as a commodity the author had had around 15 different codes that were either very specific (i.e. energy is difficult to brand) or too imprecise (i.e. differentiation). Therefore, these two codes, ‘energy difficult to brand’ and ‘differentiation’, became one code—Challenges: Commodity. The author also started dividing some of the codes into more specific codes. An example of splitting codes is the code Brand Image. The code Brand Image was split into Brand Image: Positive and Brand Image: Negative. This was done to make the codes more explicit and comprehensive. During the coding process, the author realised that the initial coding, consisting of 700 codes, was over-elaborate. Therefore, cutting down the number of codes without weakening the analysis was required. An example of this are the four codes concerning the same topic: Customer-­ oriented, Customer First, Customer Focus, and Customer Perspective. In this case, the author concluded that the code Customer Focus would cover all these topics without weakening the analysis—actually, it would make it more straightforward and accessible. This is presented in Fig. 3.3, where quotations have been coded with Customer Focus. As the image shows, both quotations revolve around focusing on customers and, therefore, one code encompasses this subject.

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Fig. 3.3  Example of coded quotations

This process was resumed until the author had reduced and simplified the number of codes to around 190. Following this step, a more holistic picture of the data started to emerge. The overall intention of ‘streamlining’ the codes was to make the data clearer and more readily understandable, as the author believed this would strengthen the analysis. This was done without omitting data, but rather the aim was to have a manageable number of clearly delineated and explicit codes. To illustrate this process of iteration, after the codes had been reduced from 700 to 200, the author rechecked that the new codes still adequately reflected the initial coding. This step yielded a few more instances of codes that could be subsumed under a common code, for example: Future, Connection, and Future Generations. They were substituted with one code: Connecting: FutureGen. Thus, in the author’s opinion, the patterns in the data were accurately captured. It is also worth noting that evaluative codes can be characterised as high, medium, or low impact, as to their frequency and significance. After the researcher had coded the data, it was possible to start placing the codes into categories. This involved figuring out what codes fit together, and spotting recurring regularities within the data. In this step, it was important to examine the categories internally and externally, that is, how well codes within a category match, as well as identifying apparent differences between categories (Patton, 2002). As discussed, the coding process ended up with 190 codes, and at this point, it was possible to link them together into groups. This represented step two in the analysis.

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The author began examining the codes, to establish what codes incorporated similar topics. For example, all codes relating to Emotions were identified and combined into a category called Emotional factors. Then, all codes relating to Green Energy and Sustainability were combined into the category Green factors. All codes relating to Investing in Branding and Measuring Brand Investment were grouped into the category Brand investment. At the end of this process, there were nine categories in total: Brand investment, Emotional factors, Energy as a commodity, Energy sector, External benefits of branding, Internal benefits of branding, Internal work, Green factors, and Personal background. At this stage, it was difficult categorising codes relating to B2B Branding and the characteristics of B2B companies, so it was necessary to go back to the data. The process of re-examining the data, estimating what categories made sense, and re-­ focusing on the differences between them, refined the data and offered further paths to categorisation. While doing this, the author realised that the categories formed thus far were too vague and extensive; they needed to be more specific, bold, and distinct. Therefore, the process was repeated, but this time, the author redistributed codes 21 categories, which fell under seven themes. In Fig. 3.4, codes, categories, and themes are presented as to the manner of their hierarchical organisation. The schematic below, illustrating

Fig. 3.4  The organisation of the analysis material

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Fig. 3.5  Visual presentation of category and code analysis

their relationship, shows that themes are the main (top-line) headings, and comprised of one or more categories. The categories, in turn, comprise of one or more codes. For example, Fig. 3.5 shows the category Energy market in transformation along with its headline theme, and higher and lower impact codes. The high-impact codes Effect of Liberalisation and Transformations in the Energy Market are composed of other codes that relate to each other. Note also the quotations—which in this case is the data under analysis—linked to the code Energy Market: New Entrants. This data is what the experts had directly said: it represents the transcribed words of the recorded interviews. Thus, Fig.  3.5 shows how categories are constructed from both high-impact and other codes, and how the codes relate within a category, while also indicating how they draw directly on the gathered data. Furthermore, Fig. 3.5 demonstrates how the analysis linked categories into themes, with this example illustrative of all the other instances of category and theme-building in this particular research.

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In conclusion, in this chapter we have reviewed the methodology of the research. Interviews were chosen to gain an in-depth understanding of the experts’ opinions about the energy market. As this was a qualitative piece of research, QDAS was used to streamline the processing of data contained in the interviews. The first step in the processing of data (in general, common to all qualitative research) was coding. This entailed noting down ‘codes’—recurring, shared, or stand-out ideas and concepts across all the interviews. The initial number of codes, standing at 700 was condensed to 190. Codes were then organised under categories, which were organised under seven themes. The findings of the analysis will be presented in the next chapter.

References Auerbach, C., & Silverstein, L. B. (2003). Qualitative data: An introduction to coding and analysis. NYU Press. Beck, S., & Pánczél, A. (2018). The Boston consulting group, women in energy. Retrieved from https://www.womeninenergy.eu/wp-­content/uploads/2018/ 12/Women_in_Energy_in_the_CEE-­SEE_Region_Dec2018_final.pdf Berger, R. (2015). Now I see it, now I don’t: Researcher’s position and reflexivity in qualitative research. Qualitative Research, 15(2), 219–234. https://doi. org/10.1177/1468794112468475 Demarrais, K. (2004). Qualitative interview studies: Learning through experience. In K. Demarrais & S. D. Lapan (Eds.), Foundations for research: Methods of inquiry in education and the social sciences. Lawrence Erlbaum Publishers. Esterberg, K. G. (2002). Qualitative methods in social research. McGraw-Hill. Larsen, F. (2014). Branding as a bridge for commodities towards a liberalized market: A study in the electricity sector. Journal of Economics & Management, 15, 123–154. Retrieved from https://search.proquest.com/docview/166172 2097?accountid=28822 Merriam, S. B. (2009). Qualitative research and case study applications in education. Revised and expanded from [WHERE IS THE ENDQUOTE HERE?] case study research in education. Jossey-Bass Publishers. Mishra, S. B., & Alok, S. (2017). Handbook of research methodology: A compendium for scholars & researchers. eBooks2go Incorporated. Patton, M. (2002). Qualitative research and evaluation methods (4th ed.). London.

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Paulus, T., Woods, M., Atkins, D. P., & Macklin, R. (2017). The discourse of QDAS: Reporting practices of ATLAS.ti and NVivo users with implications for best practices. International Journal of Social Research Methodology, 20(1), 35–47. https://doi.org/10.1080/13645579.2015.1102454 Predictive Analytics Today. (n.d.). Top 16 qualitative data analysis software. Retrieved March 13, 2021, from website: https://www.predictiveanalyticstoday.com/top-­qualitative-­data-­analysis-­software/ Probst, B. (2015). The eye regards itself: Benefits and challenges of reflexivity in qualitative social work research. Social Work Research, 39(1), 37–48. https:// doi.org/10.1093/swr/svu028 Qu, S. Q., & Dumay, J. (2011). The qualitative research interview. Qualitative Research in Accounting & Management, 8(3), 238–264. https://doi.org/10.1 108/11766091111162070 Woods, M., Paulus, T., Atkins, D. P., & Macklin, R. (2016). Advancing qualitative research using qualitative data analysis software (QDAS)? Reviewing potential versus practice in published studies using ATLAS.ti and NVivo, 1994–2013. Social Science Computer Review, 34(5), 597–617. https://doi. org/10.1177/0894439315596311

4 Findings: Understanding Modern Energy Brands

Abstract  In this chapter the findings of the research are presented. The chapter is split into seven sections which are the seven themes of the findings. First, all of the seven themes are summarised along with a table that visually presents the themes and subcategories. The first theme is ‘Energy Market Characteristics’ and deals with the experts’ description of energy companies and markets, and ways in which branding has been used in the energy sector. The second theme ‘Branding Commodities’ refers to experts’ descriptions of branding energy, a process different in many important aspects from branding consumer products. The third theme, ‘Intrinsic Factors’, covers the experts’ view that branding entails the total behaviour of a company. The fourth theme, ‘Extrinsic Factors’, relates to the general usefulness of brands in the energy sector—specifically, what branding does for consumers, stakeholders, and wider society. The fifth theme is ‘Business-to-Business (B2B) Branding’, which relates to how experts described the differences and similarities between branding in B2B versus B2C (business-to-consumer) markets. The sixth theme ‘Investing in Brands’ refers to financial aspects of branding, while the seventh and last theme is ‘Sustainable Energy Brands’. This theme examines the ideas regarding ‘green energy’ and sustainability, namely how

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 F. Larsen, Commodity Branding, https://doi.org/10.1007/978-3-031-29966-7_4

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these two concepts influence branding, and what role both energy companies and consumers should undertake to effect a sustainable energy future. Keywords  Energy branding • Commodity branding • Sustainable brands • Sustainable branding • Green branding • Emotional branding • Brand relationship • Executives • Brand building • B2B brand • Brand investment • ROI • Branding ROI Following data analysis, there were seven themes and 21 categories identified. The first theme is ‘‘Energy Market Characteristics’. It deals with the experts’ description of energy companies and markets, and ways in which branding has been used in the energy sector. The second theme ‘Branding Commodities’ refers to experts’ descriptions of branding energy, a process different from branding consumer products. As energy is a commodity, and also thought of as intangible, marketing and branding managers in energy companies need to overcome the challenges of ‘branding a commodity’. In general, participants described two approaches: one is taking on the challenge of branding energy as a commodity head on, while the other involves branding energy as a service, with a focus on building relationships and finding customer contact points. The themes ‘Energy Market Characteristics’ and ‘Branding Commodities’ are described in Sec. 4.1. The third and fourth theme both relate to branding and the bottom line. These themes are ‘Intrinsic Factors’ and ‘Extrinsic Factors’. Intrinsic factors are covered in the experts’ discussions on branding as more than just a logo or an image. In their view, branding entails the total behaviour of a company, necessitating, therefore internal branding, as well as ‘on-­ boarding’ (meaning, getting employees on side, or on-board with building the company’s brand). Extrinsic factors relate to the general usefulness of brands in the energy sector—specifically, what branding does for consumers, stakeholders, and wider society, as much as to what experts in energy companies should focus on when devising a branding strategy. The two themes are described in Sec. 4.2.

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The fifth theme identified was ‘Business-to-Business (B2B) Branding’, which relates to how experts described the differences and similarities between branding in B2B versus B2C (business-to-consumer) markets. The theme also covers discussions on why B2B branding has not received as much attention as branding in consumer markets. Some experts endorsed the view that a strong B2B brand can boost company value, while some argued that the distinction between B2B and B2C branding was outdated. The sixth theme, ‘Investing in Brands’, refers to financial aspects of branding, such as how to measure the return on branding investment, as well as understanding the possible financial and non-financial benefits of branding to companies. The two themes are described in Sec. 4.3. The seventh and last theme in the analysis was ‘Sustainable Energy Brands’. This theme examines the ideas regarding ‘green energy’ and sustainability, namely how these two concepts should influence branding, and what role both energy companies and consumers should undertake to effect a sustainable energy future. This theme is presented in Sec. 4.4. All themes and categories are presented in Table 4.1, including a description of each theme. Also, selected quotations from participants, relating to each theme, are shown for added clarity.

4.1 Branding in Energy Markets There were two themes identified relating to branding in energy markets. The first theme is ‘Energy Market Characteristics’ and the second theme is ‘Branding Commodities’.

4.1.1 Theme: Energy Market Characteristics The next three subsections will examine the structure of energy companies and how the characteristics of the energy market and its history have affected branding. Alongside statements from the experts and summaries from the interviews, there will be references to existing literature where relevant.

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Table 4.1  Description of all themes and categories (A) Themes in Sect. 4.1 Themes Categories Description Energy market Energy market in The theme relates to characteristics transformation various Attributes of features energy mentioned companies by the Utilisation of experts that branding in the characterise energy market the energy market and energy companies

Branding commodities

Commodity branding Service branding

Quotations This is not an industry that is standing still. It’s fast moving (WE4); Today there is strong competition. Today you don’t have the national or geographic boundaries that used to exist before (WE6); They’re engineer-driven companies for the most part and engineers are very smart … but they’re not always knowledgeable or savvy about how people think… (US1); You tend to find companies that have been successful but have not developed brands that are easily accessible to consumers (WE3) Since we are dealing in The theme the very basic needs of relates to human civilisation, which how one can are electricity, water, brand energy, using and gas, it is definitely a challenge … to brand either our services (UAE1); I commodity think we have to focus a branding or lot on emotion because service electricity is always the branding same electricity (NE5); This you can’t call a commodity. This is a service. We are servicing customers and bringing the latest technology and value to customers (NE4) (continued)

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Table 4.1 (continued) (B) Themes in Sect. 4.2 Themes Categories Intrinsic factors Organisational culture Brand building Communications

Description Quotations The company has been The theme very customer oriented focuses on for many years so it was the different easier to build this kind internal of brand (NE3); branding factors is very holistic, and it mentioned starts with the culture of by the the company (WE8); So, experts that first you change your have an inside, and you build impact on your brand, which branding, becomes an external and how force through good these factors times and bad (US3); We are necessary are ready to tell this so that story inside the company branding so that we all feel that strategies we belong to this story can be … this created the basis successful of our brand commitment (NE4) Every business needs to The theme Extrinsic factors Brand purpose deliver value to society, examines the Brand promise it must have a social Brand sentiments external purpose (WE1); You factors of make a commitment to branding your customers, society, that affect and to your stakeholders society and … then you stakeholders. communicate around It also that and you deliver discusses the around it (NE2); When importance we connect emotionally of having a with each other, and we brand to create empathy, we can show what go deeper, because once the company I know you and care stands for, as about you, I know what well as the you like … brands are all benefits about emotion, at the received in end of the day (US3) return (continued)

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Table 4.1 (continued) (C) Themes in Sect. 4.3 Themes Categories Description Quotations When I deal with B2B The theme Frequent Business-to-­ companies, a lot of the shows what business (B2B) misconceptions time I try to convince the experts Advantages of branding them that they have to think of brands realise that just having branding in Brand to human great products is not the B2B markets, whole story … (US1); It why it is makes it easier for you important, to get support and I and why it think that goes very has been much also for B2B overlooked. companies … if you have The experts other companies as your also revealed customers, they also that B2B or want to be connected to B2C was an suppliers who have a outdated strong, reliable brand concept as (NE2); I think what business is changes in B2C is always about primarily in the people communications … the purchase cycle is not as long as in B2B (WE5); This is an outdated definition because we have to see that behind any corporation there are people (NE4) (continued)

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Table 4.1 (continued) Investing in brands

Measurable return on investment (ROI) Elusive benefits

(D) Themes in Sect. 4.4 Themes Categories

Brands are never made The theme overnight and for brands explores the to be sustainable, they financial have to have a longaspect of term process. So branding. It similarly, spending on shines a light marketing and branding, on the I completely agree that debate of the ROI will take some measuring time (UAE1); You need branding to set a goal of what you ROI, as well want to achieve with as exploring your branding. Then you brand need to be able to experts’ views on why measure it (NE4); The energy industry is energy extremely competitive… companies It makes financial sense should invest to invest in branding. It in branding. reduces churn, it Experts improves price premium, mentioned it reduces the need for various frequent discounting financial and (WE5) non-financial benefits of branding Description

Quotations (continued)

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Table 4.1 (continued) Sustainable Responsibility energy brands Action over words Consumers’ role People, Planet, and Profit (the 3Ps of sustainability)

Transmission companies, The theme although they are reveals the monopolies, are very discussions on the future important players in the new energy world and in of combating climate sustainability change, and that’s why in the energy market, what we have to step up and show that we are role working for the societies consumers (NE3); Energy companies and energy are and can be very companies much responsible, so play, and energy companies are how ‘People, now realising that Planet, and Profit’ matter something has to be done and they’re doing in this it (WE7); A company context operating in the energy sector should understand the social, environmental, and economic impacts created in all the regions affected by its activity (UAE1); I think sustainability and how you play that, and environmental responsibility is going to be an increasingly important battlefield for people of younger generation (US1)

The first subsection, Energy market in transformation, will analyse the experts’ discussion on how liberalisation and regulations have impacted the market, to understand the social and business environment in which energy companies operate. Furthermore, the subsection examines the current transformation of the energy market and how it might evolve in the future. The various changes in the market revolve around servitisation

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(energy companies’ evolution into service providers) and an increased role of new technologies, whether IT or renewable energy devices. The second subsection, Attributes of energy companies, studies how the experts describe the image of energy companies; the specific features that apply to them (as opposed to other businesses), and also how the experts talk about the structure of energy companies. In general, this subsection aims to reveal how the experts described energy companies and the energy industry from their viewpoint as CEOs, or brand and marketing professionals working in this environment. The third subsection, Utilisation of branding in the energy market, highlights opinions that experts hold on the subject.

4.1.1.1 Energy Market in Transformation The liberalisation initiatives in the energy sector over the last two to three decades have affected the world of energy in numerous was (Joskow, 2003): the unbundling of retail sales from the generation and distribution side of the energy business ended state-owned energy monopolies. This has introduced competition for customers, a new phenomenon in the sector, where large vertically integrated companies controlled geographical catchment areas, excluding (often by law) competing firms. In parallel, there was a diversification in energy generating technologies, some of which, like rooftop solar panels and wind turbines, became available to private consumers. In this subsection, the liberalisation of energy markets will be examined along with other changes, such as technological and business innovations, mentioned above. These developments are all relatively new, having gathered momentum over the past 20  years. Experts’ statements on the impacts of liberalisation on their businesses and (sub)sectors, will be the focus of the subsection’s opening paragraphs, along with a discussion on the influence of evolving market regulations on energy branding. The liberalisation of the energy markets has brought about many changes to the generation and supply of energy, including increased competition, as households and businesses can now choose between energy companies. Conversely, competition for customers affects energy companies to the extent that they now have to pay increased attention to

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branding and marketing. Failure to do so impedes their ability to operate successfully—meaning, to win new customers, retain existing ones, and, consequently, turn a profit and grow as businesses. In keeping with this shift in priorities, experts frequently mentioned increased competition and liberalisation as the motive for doing things differently. Some described the new business environment as one of ‘aggressive competition’, while others iterated that many new entrants were coming into the market. In common to all, however, was an awareness of both the challenges and opportunities introduced by liberalisation. One of the challenges mentioned was that many established or traditional energy companies were not prepared for the increased competition, and had not realised that they needed new branding strategies to protect and grow their business. Another challenge is that since energy is a commodity, branding and differentiating it requires approaches that are not widely used, for instance, in the marketing of consumer goods. Therefore, fighting for market share requires on the part of energy companies a deeper examination of marketing and branding techniques to find the right fit, a process more demanding than in other sectors with longer histories of open competition and clear differentiation. For traditional energy companies, often former state monopolies, this challenge is particularly pertinent as they are competing against new and smaller entrants whose business models are more in tune, from the outset, with liberalised energy markets. These business models often include a deeper understanding of the shift from energy as a commodity to energy as a service. Many mentioned the positive consequences of liberalisation, such as new business opportunities for both existing energy companies and said new entrants. This is in line with research findings on the effects of liberalisation on the electricity markets in the United States—positive effects such as technological improvements, increased performance, and improved organisational practices (Craig & Savage, 2013). In their research on power generation investments before and aftermarket restructuring in the United States, Csereklyei and Stern (2018) found a significant increase in investment in natural gas technologies and a decreased investment in coal technologies. They also found that in liberalised markets wind and solar investments increased with higher natural gas prices. Their findings show that the liberalisation of energy markets has a

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significant impact on the choice of investments, favouring, to a certain extent, renewable technologies. Therefore, liberalisation, supported by an increased public awareness of environmental issues and the need to combat climate change, has increased sector diversification. This diversification covering funding and business models, retail companies, generating technologies, and other facets within the energy business, has ushered opportunities for companies to invest in sustainable energy and renewables. Especially as many consumers prefer sustainable and green energy options over fossil fuels. This is reflected in the statement made by WE4: ‘If you’re a traditional energy company and you want to play in the new energy world, then you have to be able to compete effectively against new entrants that are coming in.’ Many participants mentioned how new entrants are shaping the market by introducing new business models such as retail energy, service provision and niche offerings. When discussing the diverse regulatory environments that energy companies operate in, some experts argued that the regulatory environment, especially in the United States, was ‘toxic’, meaning overly political. They also claimed that operating in a heavily regulated market entails an understanding of the energy companies’ public role. Beyond protecting their ownership and the bottom line, their duty was to the public. For instance, rather than push back against regulatory compliance, energy companies post-liberalisation needed to take on-board that regulation addresses public concerns about the environment, sustainability (energy security) and cost. Such concerns could then be addressed through specific business models, where the energy company becomes part of the solution, instead of remaining part of the problem. Concurrent with the structural reforms of the energy market since the advent of liberalisation, almost every facet of the business has undergone significant change. The expansion of new generating technologies, investment and ownership models, energy storage and management solutions, to name just a few examples, has been accompanied by changes in branding, marketing, and communication practices (Bettencourt et al., 2013; Rutter et al., 2018). The energy sector has been adapting to a product-­ service perspective, also known as ‘servitisation’. Most researchers agree that servitisation creates advantages for both consumers and suppliers.

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From the perspective of a supplier, servitisation could be a good strategy to improve sales, while from a customer’s perspective, servitisation means predictable maintenance costs (Slack, 2005). Another factor in energy branding is innovation and technology. Many energy brands strive to be recognised as modern and technologically advanced. Consumer perceptions of the energy brand as being technologically advanced and innovative enhances customer satisfaction and loyalty, as innovation boosts the brand’s ability to provide continued satisfaction to the customer (Wijnholds, 2000). Amongst the experts there was also broad agreement regarding the transformation of utilities, from mostly local and national enterprises which operate in one pre-defined local catchment—city, province or state—to global and multinational corporations, working across continents. Therefore, according to experts, having a global brand is necessary to a modern energy business. Servitisation of the industry was also mentioned in the context of energy companies moving away from being simply commodity suppliers and towards bundling services, as a way to enhance profit margins and secure customer loyalty. Servitisation requires a more intense customer focus than is characteristic of traditional energy companies. This focus should be reflected in the brand, signalling that the company is offering different service packages and solutions, whether to businesses or households. By servitising their output, energy companies engage to a fuller extent with customers, and for such an engagement to work, companies focus on building relationships. One expert, WE4, argued that modern energy companies should think of themselves, for example, akin to telecommunication service providers. By adopting this mind-set energy companies can bring more value to their customers. Another expert, OC1, also believed that the servitisation of the energy sector would entail big changes, in how energy companies engage with customers. The sum of these changes (such as increased focus on customer needs, provision of new services, deliberate branding and marketing) will affect the energy sector positively, by improving performance, responsiveness, and social impact. Lastly, technological advances in recent years have had a big impact on the industry, with UAE1 stating, ‘We have entered the age of disruptions. Technological innovations, climate change and more tense geopolitics are

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reshaping the world of energy. We need to assess the macro-uncertainties and craft a strategic response.’ In common to all the discussions was the view that energy was a fast-moving industry due to improvements in technology, whether on the generating side or ‘behind the metre’ (in customer’s homes or workplaces). The role of energy companies was not only the delivery of electricity to customers, but the creation of value through technological advances. One expert, NE4, even argued that energy companies could view themselves as IT companies, due to the increasing roles of internet connectivity and smart devices in the production and consumption of electricity. To summarise, energy market liberalisation presented both challenges and opportunities as shown in Fig. 4.1. On balance, participants thought liberalisation was a positive development as it encouraged competition, investment, technological advancement and the evolution of branding, marketing, and energy sector communications. Ultimately, all of these developments benefit the consumer. In the discussion on the future of the energy sector participants mentioned ‘uncertainty’ and ‘anticipation’. The assumption can be made that innovation, technology, and servitisation will continue to change and influence the energy world, especially regarding renewable energy development and sustainable investments. The transformative influence of

Fig. 4.1  Opportunities and challenges related to liberalisation

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new technologies and business models, while nudging the sector towards greater diversity of ownership and low-carbon power sources, is still hampered by the practicalities of the energy transition. These practicalities are—amongst other things—a still relatively modest contribution of renewable energy to total consumption, and a relatively high initial cost of low-carbon consumer technologies.

4.1.1.2 Attributes of Energy Companies As described, energy liberalisation led to the separation of the generation, distribution, and retail stages in the energy value chain—a process known as unbundling. This resulted in differentiation amongst companies primarily on the basis of their position in the value chain. Energy firms operating in distribution and import, such as, for instance, grid companies or transmission-system operators (TSOs) are usually monopolistic companies with a significant state-owned holding. Energy firms operating in retail and production are often privately owned. Some of them are entirely new companies, formed to take advantage of the liberalised energy market—as opposed to other retailers whose histories can be traced back to state-owned enterprises. And then there are utility companies which both generate and retail their electricity (Kagiannas et  al., 2004). On the whole, the energy sector landscape post-liberalisation is one in which companies of various sizes, some new and some old, with different funding and ownership structures—and occupying specific positions in the value and delivery chain—compete in markets around the world. Each of these markets, with its own legal and regulatory framework, contains former monopolies, which have been privatised to a greater or lesser extent. As a rule, new entrants are competing against these monopolies (Iovino & Migliaccio, 2019). The experts in the interview connected type and size of energy company (features) to their corporate attitudes to branding. These attitudes were thought by the experts to be typical of such businesses, and were a product of their corporate structure, tradition, and culture. In Table 4.2, these attitudes are presented, as to their positive and negative effects, which are elaborated in further detail in this subsection.

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Table 4.2  Features of energy companies as to positive or negative effect Feature of energy companies Monopoly

Traditional

Size (large)

Size (small)

Positive effect

Negative effect

Has to focus on branding because Think they own the ‘social licence to operate’ is market and therefore dependent on public and don’t need branding governmental acceptance Embrace the heritage of the brand Have a bad image due to in order to develop their image/ their previous dealings. reputation Limited focus on customers Can maximise the positive effects Have a negative impact on on the environment and reduce the environment due to negative impact company size Responsive to customers, Constrained by small innovative in branding, quick to budgets, susceptible to adopt new technologies market turmoil

One feature commonly mentioned was that, even post liberalisation, in many countries energy companies have remained monopolies (e.g. transmission-system operators) or have evolved from former monopolies. Also, even those monopolies which have been privatised, are in many cases part-owned by the state. Although the trend in liberalised markets is for the state or public owner to gradually reduce its stake, this feature— which can be described as a privileged position—affects (the experts believe) how these companies are viewed by society, and how they behave. Some experts argued that when energy companies are monopolistic, there is a risk of the companies not prioritising customer relations and their reputation, therefore not focusing on branding. One expert, US4, discussed how monopolistic companies in the past believed they owned the market, forgetting to consider their end-users. When the market was deregulated these companies lost their privileged position, and with it many of their accounts. However, experts who were CEOs of state-owned monopoly companies contradicted these views. These experts argued that because they are state-owned, they focus even more on their brand due to the acceptance they need from society—their ‘social licence to operate’. One protective measure to keep an operating licence—a regulatory

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requirement in all modern energy markets—was to consistently work on their brand. For example, expert NE3 stated, ‘I think it is especially important for the monopoly companies to know what society and customers think about you because they have all the tools to control you.’ In conclusion, interviews with experts from monopolistic energy companies support the view that these companies have to focus on branding as well, albeit for different reasons to the ones given by independent and wholly private companies. As noted, the focus is due to the acceptance they need from society, regulators, and authorities. By using branding, monopoly companies signal that they are fulfilling their social function: not just that they are providing their customers with the best services and products, but also that they are looking after state resources (public goods). Another feature commonly discussed by the experts was that some energy companies, especially those who used to be monopolies, tend to have a traditional and somewhat conservative company culture, even though this is changing rapidly. They not only tend to be viewed as ‘dinosaurs’, but might also be burdened with a negative image due to their legacy, particularly the impact they have had on the environment. These companies now realise that branding is vital in order to change and influence this image. One expert, US1, discussed how he has been working with traditional companies to assist them in their branding strategies. He argued that these companies understand that branding matters and that they want to become progressive in this new energy world. He stated that there are ‘some very traditional, family-run companies that are actually realising that marketing and branding matter.’ Other experts also described their experiences with these types of energy companies. For example, WE2 argued that there will always be people with an old-fashioned view of branding. WE2 thought that this was because such people were conservative in their outlook on business strategy—they focused more on the product than the customer. Similarly, US3 discussed the traditional approach that was prevalent in the company before she took over as CEO: ‘It seemed like a very bureaucratic … very traditional (company) … sort of all about power but not about the delivery of power.’ However, US4 discussed how she was able to embrace the traditional company structure as a brand attribute. She used the heritage and foundation of the company as a strength.

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The last feature to be discussed here relates to the size of energy companies, and their impact both locally and globally. The experts often mentioned that energy companies are usually substantial in size, and sometimes operate on a global scale. This affects them in many ways, for instance, it is expected of them to exist for something more than just making profit. They are expected to have a purpose in society and they are also expected to project this purpose through branding. NE5 stated: ‘We [energy companies] are always big in the communities, we are having a big impact on the environment, both negative and positive, so branding … and the values of the company, and the values of (our) services is important.’ Another reflection on how the feature of company size should be understood was offered by UAE1: ‘A company operating in the energy sector should understand the social, environmental and economic impacts created in all the regions affected by its activity.’ This is similar to what NE5 said about the impact on local regions: ‘The size of our projects and the impact we are having is substantial. Of course, we try to reduce the impact and try to do it as well as possible … but we always have a big impact.’ It was clear from the interviews that CEOs of large energy companies were aware that due to the size of their companies, they need to be particularly sensitive to how they affect both the natural and social environment, almost in line with that famous motto ‘With great power comes great responsibility.’ In addition, experts believed that it was necessary to try and minimise any negative impact their company was having on society and the environment, while maximising positive impact. As WE5 stated, ‘It’s such a big ship that if, through your efforts, you can convince it to take a certain direction, you can really change the world because of the impact that our kind of companies have.’ The discussion of the impact of size is often related directly to the sustainability challenges that societies, and by extension the energy sector, faces today. However, as it is a prominent characteristic of many energy companies, it affects their branding strategies, and influences their role in societies.

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4.1.1.3 Utilisation of Branding in the Energy Market As already discussed, there is little research that deals with branding in the energy sector, and it was therefore interesting to hear what experts operating in this sector have to say about branding practices. According to the experts, the awareness of the power of branding, starting from a low baseline, has increased in recent years in the energy industry. The experts argued that the energy world has been late to the table in using modern branding methods. Several reasons were mentioned for this, one of them that, traditionally, in the energy industry there are low levels of customer engagement. Customers mainly engage with energy companies when they receive the bill, or when something goes wrong, such as when there is a power outage. These background considerations have framed the discussion, in terms of challenges in communicating with customers. Another reason the energy sector has been late to branding was that many energy companies operate in a B2B environment. As the experts pointed out, there is an implicit assumption, or as some would call it a misconception, that in a B2B environment branding is of little use. This view will be elaborated in a later subsection. Lastly, experts discussed how internal company structures affect branding. Meaning, energy companies are generally engineer-managed and technology-focused, and therefore rarely grasp the ‘soft science’ of branding. Experts pointed out that energy companies are mainly staffed by engineers and other employees with a ‘hard science’ and ‘hard hat’ background. This translates to corporate cultures, specifically in the domain of external communication and customer relations, that prioritise ‘rational’ problem solving approaches, at the expense of emotional intelligence and empathetic understanding. Experts traced back both the lack of emotional intelligence, and misconceptions about branding to the structure of these companies. Some participants discussed training programmes within their companies, aimed at addressing this corporate cultural bias and improving communication skills. Furthermore, the experts mentioned that the energy market did not have to focus on branding until after the market was liberalised. This is now changing, and energy companies have begun to realise the importance of branding, but, to quote WE8: ‘Everything related to customer relationships—to even building a brand in relation with the

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customer—is all new. And that’s what is happening here today.’ Branding practices in the energy sector are becoming increasingly important, but due to the nature of the companies, as well as the history of the energy industry, it has taken longer here than in many other industries to acknowledge the power of branding. Taken together, the characteristics of the modern energy market serve to explain how and why companies have come to understand the power of branding. The schematic illustrating this is presented in Fig. 4.2. It shows that the liberalisation of the energy market has led to globalisation, servitisation, technological advances and increased competition. These changes have impacted both the monopolistic, or traditional companies, and new market entrants, and have interacted with energy-company-­specific features (such as being of large size, being technically driven, and pursuing lower-intensity customer engagement strategies). Such complex interactions between the dynamic and static features of the energy industry, have raised awareness of the importance of branding. The consensus now seems to be shifting towards the view that good branding is necessary for improving company image, connecting with customers, gaining and retaining a licence to operate, and successfully competing in the marketplace. To conclude our analysis of the theme ‘Energy Market Characteristics’ we give an overview of quotations in Table  4.3. The table has been

Fig. 4.2  Energy market liberalisation and its impact, leading to the awareness of the importance of branding

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Table 4.3  Theme of energy market characteristics, with quotations from experts Category: Energy market in transformation CEO Head of brand External consultant This industry that is The energy industry I remember thinking, this is different from a lot of is increasingly an enormous sector that’s other ones is going to converting to going to undergo enormous play out with these services. And those change … And now, 20 younger audiences in are two very years later, it’s more really interesting different cultures. interesting than ever before ways. That’s why it’s a (WE2); In recent (WE3); Many energy very dynamic market years we’re even companies are moving (US1); Getting into the more conscious of beyond pure commodity world of services is the marketing as we supply of power and gas … best expression of enter new We should perhaps think of ourselves in line with mobile businesses like retail how the energy business is moving energy … Also our phone operators and how into the future (WE1); B2B business has they bundle tariffs and And what happened expanded. So, I services (WE4); We have also to a massive think from that entered the age of degree in Europe and point of view it’s disruptions. Technological the US, is the innovations, climate change, been really an even liberalisation of the stronger impetus and more tense geopolitics industry, so where you (to consider are reshaping the world of had monopolies you branding), as the energy (UAE1); We serve a now have many market gets more community that we are companies (WE7) proud to live in and we have competitive and we enter new business to keep reinvesting in our models (WE5) families, as we’re making this big evolutionary shift in the energy industry around the globe (US4) Category: Attributes of energy companies CEO Head of brand External consultant (continued)

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Table 4.3 (continued) The first challenge is It’s such a big ship I think it’s especially that most of the that if you can, important for the monopoly brands in this field through your companies what society and came from a moment efforts, help steer the customers think about when it was all the ship in a certain you because they have all monopolistic and direction, you can the tools to control you national companies, really change the (NE3); The reason I said no and there was no (to the job offer) three times world because of competition, there was because it seemed like a the impact our kind was no economic of companies have very bureaucratic … very challenge (WE6); The (WE5); We are stuffy, very traditional traditional oil definitely a big (environment). Sort of all companies are just energy company … about the power but not different from the big part of the about the delivery of power problem … and that more progressive (US3); We used to think the alternative energy means we are energy sector is just boring companies so it’s hard thrilled to see engineers and no to lump them solutions. I think emotions… This has to together. The more that’s a big change (NE4) traditional ones suffer challenge for from an image energy companies problem as they’re (NE1) seen as not being good for the environment—for having all kinds of negative consequences (US1) Category: Utilisation of branding in the energy market CEO Head of brand External consultant (continued)

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Table 4.3 (continued) That’s where I think we You know, when I Energy, historically, has not can really bring a lot arrived, everybody been an industry that of help to companies was saying ‘We consumers have had very … The thing with don’t know how to much enthusiasm for or energy companies, it’s talk about energy, understanding of, and no different from it’s so complex…’ therefore, not a lot of technology companies Looking at it, it is engagement with (WE3); because there is a lot extremely technical, The vast majority of energy of technology in not to say boring, companies are in an open energy … they’re to build a brand market where there’s engineer-driven around that (WE2); competition for the companies … they’re I really don’t think customers and there is now not always that that the energy a desire to move into knowledgeable or space has been solutions and broadening savvy about how among the first the offering (WE4); people think (US1); I movers when it Everything that is related to think most energy comes to change in customer relationships to the world … they’re companies, even building a brand in particularly utilities, definitely a little bit relation with the brand is all have a major of a late adopter new. And that’s what’s challenge, because when it comes to happening here today, in people turn on the thinking about the parallel with the whole lights, they don’t think importance of renewable business (WE8) about the fact that branding (NE1) there is an energy company behind it (WE1)

organised according to the experts’ roles and title of category. The experts have been divided into three groups: energy company CEOs, marketing directors or heads of brand, and lastly, those working as external brand consultants for energy companies.

4.1.2 Theme: Branding Commodities Three characteristics of the energy market have now been identified and examined through the words of the experts. This theme, ‘Branding Commodities’, looks at how branding is applied when dealing with a

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commodity such as energy. Two categories that relate to branding energy emerged from the interviews. They are ‘Commodity branding’ and ‘Service branding’.

4.1.2.1 Commodity Branding As discussed in the literature review, commodities are primary products or raw materials. When it comes to commodities, branding is usually based on the features of perceived quality, self-concept, and category involvement (Morrison & Eastburn, 2006). Quantities or batches of the same commodity are difficult to differentiate from one another, which often results in customers choosing commodities based on price alone (McQuiston, 2004). However, studies show that consumers’ mind-set towards commodities is changing as consumers now want to place their trust in branded companies (Stanton & Herbst, 2005). The experts discussed commodity branding, emphasising that there are both challenges and opportunities for energy companies in that respect. In Fig. 4.3, the main difficulties and challenges mentioned for branding energy (as a commodity) are shown. The impact of these challenges on branding is presented and rated. The ratings are based on how often the challenges were mentioned by experts. Figure 4.3 shows that challenge of differentiating energy was of the highest impact, followed by the moderate impact of energy being considered an essential service, in other words, a basic need in people’s daily lives. Intangibility, complex offerings and

Fig. 4.3  Challenges in branding energy

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energy being taken for granted were considered low impact challenges. Meaning, these challenges were not mentioned as often as the other two, but still matter to energy companies, as they can influence how branding strategies are planned and executed. As mentioned, the challenge of the highest impact was differentiation. This is a common issue with commodities and in line with literature on commodity branding. Commodity batches of the same kind tend to be perceived as not altogether different, which makes branding complicated. Differentiation is important to branding—to the extent that it is an essential early step in every branding strategy. With this in mind, the experts broadly agreed that differentiation (in branding energy as a commodity) was one of the main challenges in how sector companies branded and marketed themselves. However, experts also suggested solutions: branding the company on the basis of its track record, history, social role and achievements; focusing on service provision, and the positive emotions elicited in your customer base on being serviced to expectation. Finally, and significantly for the broader discussion on energy and commodity branding, many of the experts stressed that within a modern infrastructure system, energy is actually not a homogenous commodity, but that there are demonstrable differences in terms of how it was obtained or generated. Attributes such as ‘clean’, ‘green’, or ‘renewable’ were some of the solutions suggested to the question of differentiating quantity (unit) of energy (or electricity) from another, and by extension, an energy company from its competitor. WE8 states, ‘It’s hard to differentiate commodities … you could have some aspects of your brand that you work on, like we are cleaner than the others, or we have better customer service. But it’s very complicated.’ Another challenge mentioned was due to energy commonly considered an essential service, or basic need. Experts reminded that energy is usually taken for granted and that consumers hardly think about the companies that supply it, because they expect the lights to go on when they press the light switch. One expert (US2) argued that electricity is different from all other commodities since people believe they are entitled to it. US2 said that in the United States people view energy as a social benefit, unlike, for example, commodities like beef or rice. The expert

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argued that this is due to the history of electrification in America. Many experts shared this opinion, that the intricacies of the energy business, the sheer task of generating and distributing energy, as well as maintaining the energy system, is generally under-appreciated by consumers. WE1 stated: ‘No one ever phones an energy company at the end of the day and goes, “So guys, I just want to say you’ve been fantastic today. I had lights all day. Thank you very much.” You never get that telephone call.’ In agreement with this view was UAE1, who stated: ‘We are not selling fancy products, so creating a branding campaign is difficult. Our products and services are the daily need of our customers.’ Experts converged on the view that neither energy companies, nor the products and services they offer were at the forefront of consumers’ minds—unless there was an increase in energy prices, or an emergency, such as disruption to normal service. Experts also discussed the intangible nature of energy. For example, when consumers receive and use energy, there is no way to distinguish, for example, between solar electricity and electricity from nuclear power plants. In fact, at any given time a modern distribution system accepts and transmits at the regional and national level electricity from a multitude of sources including wind, solar, nuclear, gas, biomass, and other. The homogenous nature of this ‘energy mix’, coupled with its intangibility, hampers differentiation—prompting marketers in energy companies to seek other ‘unique selling points’. Lastly, some experts mentioned that the subject of energy (as understood here) is quite complicated and technical. The vast majority of consumers rarely understand the process of generating, transmitting, and delivering energy, nor the interplay of the various social and political issues influencing the energy economy. This results in traditionally low-­ level consumer engagement with energy companies (in terms of both frequency and quality), which some branding strategies seek to overcome with a clear value proposition. This state of affairs is addressed by US1 who talks about how energy companies can justify spending money on branding: ‘The investment is to make sure that the value proposition is in line with the customer’s needs and interests, and that they appreciate that. And that in a very competitive world, with a fairly complex product, people ‘get it’, and therefore make the right choices.’

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Finally, there were also branding opportunities in connection with energy as a commodity, such as that energy has value for societies and is key to social development. As WE6 stated, ‘You can believe it’s just a commodity, but this commodity will shape the future.’ Some experts considered invoking emotions to differentiate their company. For example, WE1 mentioned that the energy business she works for was able to use excitement as an emotion connected to energy, and that helped them stand out as a brand. Another expert, NE5, mentioned that since energy being intangible and ‘always the same at the point of use’ it is important to link it to emotions. Yet, another opportunity for branding energy is to view it as a service, and service branding is addressed in the next subsection.

4.1.2.2 Service Branding The previous subsection discussed complicating factors in differentiating energy as a commodity. However, by treating energy as a service, marketers in energy companies have more strategic branding options, and customer-­relationship pathways. When it comes to branding energy as a service, the keyword is ‘quality’ which, in the first instance, means reliability of supply. This can then be followed by bundling other services (Blose & Tankersley, 2004). In service branding, internal marketing is essential as employees are required to deliver on the brand promise. Therefore, service branding strategies need to incorporate the staff training and recruitment procedures (McDonald et al., 2001). As services are provided by the company’s employees, these procedures need to focus on building trust on all levels: as much as between employees, as between the company and its customers. This creates loyalty and long-lasting relationships, strengthening trust vested in service brands, as well as their reputation. Ultimately, trust, reputation, customer loyalty and other positive features can be the basis for differentiation (De Chernatony & Riley, 1999). Such views are gaining ground in the energy industry. When asked how branding a commodity is different from branding other products NE4 answered, ‘I don’t think energy is a commodity today, because

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energy is a service.’ This view was shared by other experts in the study, particularly that the energy industry is evolving into a service industry. As WE4 pointed out, ‘If energy was purely a commodity, then customers would switch providers on a daily, weekly, or monthly basis and always go to the lowest cost.’ The expert stated that customers want a good service, and they want peace of mind. The experts discussed how the energy sector’s transformation to a service industry was in line with the needs and wants of today’s consumers—there was agreement around the notion that they want different price plans, and different levels of service. Also, experts talked specifically about how energy companies they worked for were adapting to the shift from selling products (commodities) to providing services. Internally, there was a culture shift which emphasised greater focus on customers, as well as on better understanding of service provision. The experts discussed ways in which customer satisfaction was important for energy companies, and how building a relationship between the customer and the brand created value for both. Service branding allows consumers to relate and connect to an energy brand, in ways which circumvent many of the problems traditionally associated with energy product (commodity) branding, as practised in the sector (intangibility, low levels of engagement, few points of contact). Many experts discussed how engagements with and connections to customers are limited in the energy sector, and often the only communication between the energy companies and their customers is the energy bill. With this in mind, many of the experts discussed the importance of building positive relationship with customers simply by virtue of regular communication (‘staying in touch’). Another opportunity for relationship building was identified in the B2B market, where trust (related to credit and payment terms) and loyalty (necessary to honouring contractual obligations) are essential business enablers. According to Melewar et al. (2017), such companies rely heavily on high-value and long-term relationships with their clientele, in which loyalty is much more precious than in B2C transactions. Similarly, Tartaglione et al. (2019) found that after customer satisfaction, trust is the most important factor in building long-term relationships in a B2B environment—explaining why many B2B marketers use branding to reinforce an image of trustworthiness. Experts in this study

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thought that trust provided customers with a sense of security. In other words, by creating a reliable brand, energy companies can build trust with customers, connect with them at an emotional level, and provide them with a peace of mind. A quote from WE4 illustrates this: ‘If you want people to choose you and to stay with you, and start buying other things from you—more solutions, more bundles and more products, you have to have trust and you have to have more of an emotional connection.’ US2 mentioned that because energy is a complicated commodity, it is important that you become a trustworthy company, meaning that customers trust you even if they don’t necessarily understand every aspect of your operations. Similarly, WE8 said that in B2B energy companies are often dealing with big contracts that tend to be complicated and therefore, trust is important in these settings. As mentioned earlier, energy sector servitisation is a part of a deeper transformation—a transformation welcomed by both energy companies and energy consumers. By focusing on service branding, an energy company can differentiate itself from its competition. There are various analytical marketing and branding tools that can aid such differentiation, such as customer surveys, statistical evaluations and market segmentation tools. US2 discussed how his company did a customer analysis to be able to find the right customer fit for the brand and was therefore able to service specific types of customers and increase customer satisfaction. He argued that establishing the right service offering was a prerequisite to successful communication: ‘Specific types of customers, by which I mean mostly customers who buy into and believe in your brand – who believe in what you’re doing—those customers want to be interactive.’ Also, many of the experts mentioned how energy is becoming a service due to the different options available to consumers regarding energy choices and consumption levels, in line with a growing awareness of environmental issues. As more consumers seek to reduce their carbon footprint companies are increasingly expected to offer services, such as household energy management, installation of solar panels, energy efficiency and other. With the proliferation of such services, energy companies can differentiate from competitors and strengthen their brand.

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Fig. 4.4  Service branding in energy companies

In Fig. 4.4, service branding by energy companies is presented. Starting with internal activities, energy companies need to implement a customer focus, train their staff members to provide outstanding customer service and offer diverse service elements and offerings. By doing this, energy companies can find more contact and engagement points with their customers, and build stronger relationships. This in return, can help energy companies create reliable and trustworthy brands. Furthermore, by providing customers with diverse service offerings and by having a strong brand image, energy companies can differentiate themselves from competitors. In conclusion, when dealing with a commodity such as energy— according to experts in the energy field—it can be more efficient to focus on service branding rather than branding the commodity itself. It gives energy companies a point of difference as well as helping build customer relationships. In Table 4.4, the categories are presented along with quotations from the experts, to give further insight into the theme.

4.2 Brand Factors The experts argued that brands are comprised of certain factors, chiefly intrinsic and extrinsic. Therefore, to analyse this notion two themes were identified and explored: ‘Intrinsic Factors’ and ‘Extrinsic Factors’.

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Table 4.4  Theme of branding commodities, with quotations Category: Commodity branding CEO Head of brand External consultant I think part of it is just It’s not an industry that is You are trying to how to compete. The differentiate in an top of mind for people thing with energy is to extremely … If you want people to commoditised market. me a classic example choose you and to stay how your value What do you stand with you … you have to proposition really for? Why should they have trust and you have matters because you’ve buy from you and to have more of an got to convince people why should they stay emotional connection of the costs and benefits with you (WE5)? Let’s (WE4); As energy in a very tangible way not focus so much on companies we’re for this thing that’s the ‘what’ but on the providing a service to actually pretty ‘why’. When you start the country we are in, intangible (US1); It is explaining the ‘why’ and that service is more difficult for you get to the considered essential leaders of commodity emotions (WE2) (OC1); I think the companies to challenge is that the understand that they service we are offering need to have a brand is an infrastructure from a purposeful service (NE5) standpoint (WE7); If you can find a way to get emotion around that commodity, you find a point of differentiation (WE1) Category: Commodity branding CEO Head of brand External consultant (continued)

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Table 4.4 (continued) You can differentiate It is a matter of I’m going to build that anything. It’s because establishing the right relationship with the you are not really selling relationship and trust customer. I’m going to a product—you are (WE2); I think that let the customer know selling a solution. It’s part of the arguments that I’m there and I’m about how to satisfy on why we should going to constantly find needs, how to solve take branding ways to touch them problems for people seriously is because (US2); I don’t think (US1); Needing to find we have to have a energy is a commodity positive moments of relationship with the today, because energy is next generation (NE1); engagement with their a service … We are stakeholders is so I believe in customer servicing customers and important for energy centricity, competitive bringing the latest brands (WE1); Energy marketing, strategy, technology and value to used to be power. and delivery. Some of customers (NE4); We are Today, I believe energy these elements are socially responsible in is more about relatively new or applying the best empowering people undervalued in a practices for our (WE6) company where the customers. By improving massive focus is on the performance of our safely extracting services and products, resources and then which is a part of our selling it via trade customer engagement, networks (WE5) will impact their satisfaction. (UAE1)

4.2.1 Theme: Intrinsic Factors In its simplest sense, branding is a process of identification that denotes ownership of a particular company (Barwise et al., 2002). A brand identifies the products and services of a seller and differentiates them from those of his competitors (Evans & Berman, 1994). However, when viewing branding from a broader perspective, it is possible to use branding as a tool in human resource management (Backhaus & Tikoo, 2004). Internal branding can be considered an element in internal corporate communication (ICC). ICC is defined by Welch and Jackson (2007) as ‘communication between an organization’s strategic managers and its internal stakeholders, designed to promote commitment to the organization, a sense of belonging to it, awareness of its changing environment and understanding of its evolving aims.’

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When talking to the experts interviewed for this book, they often mentioned intrinsic factors of branding in energy companies. When analysing the data, there were three main categories identified in the discussion on intrinsic factors of branding: organisational culture, brand building, and communications. In the following subsections, these three categories are presented, and statements from experts will be examined to shine a light on their views.

4.2.1.1 Organisational Culture Organisational culture refers to a set of implicit, shared understandings within any organisation regarding values and ideologies at a point in time. However, it is not simply enough that these understandings are shared by the organisation’s members—they have to be communicated to new members as they join the organisation (Arogyaswamy & Byles, 1987). A brand communicates the perspective of a consumer, as well as that of the organisation. Therefore, it is possible to conclude that organisational culture forms an integral part of branding, and according to Kapferer’s brand identity prism (2008), culture has a considerable influence on brand identity. Rashid and Ghose (2015) studied the relationship between organisational culture and brand identity and concluded that the ‘brand personality’ of a market leader influences organisational culture, and that a flow of business intelligence is essential when creating a brand identity. To conclude, an organisation’s values (as embodied in its organisational culture), and its internal marketing (the communication of such values) have an important role to play in developing and building brand identity (Rashid & Ghose, 2015). When discussing organisational culture, customer focus was commonly mentioned, in the context of brands having to transform their internal culture towards having a customer orientation. Line employees build the organisation’s image in the eyes of the customer (Grönroos, 1994) and can have a significant impact on customer perception of the energy brand and the company behind it (Balmer & Wilkinson, 1991). As Truffer et al. (2001) indicate, even the quality of interpersonal communications with the customer via call centres, or any other information

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technology has a lasting impact on the company–customer relationship. Therefore, brand managers should communicate their brand’s objectives, values, and performance indicators to the employees to ensure their participation in the brand-building process (Hogg et al., 1998). It has been mentioned that energy companies are often technically driven and perceived as lacking in emotional intelligence. This affects their internal culture and attempts at cultivating a more customer-focused orientation. Implementing such an orientation was commonly mentioned when discussing cultural shifts within energy companies. US3 said, ‘So in essence, my first message, right up to my last message, has always been about how we go about creating an organisation that is doing things that make customers want to love us.’ Similarly, WE4 discussed that when transforming his company, he saw an opportunity to integrate a customer focus into the culture: ‘by spinning off our traditional generation businesses, there was a real opportunity to restate and reposition what we wanted the brand to stand for, and we did a huge amount of research with all our customers, all our segments across all our markets, as to what’s important to them—and then we put that into our brand.’ When the experts discussed transforming organisational culture in terms of increasing customer focus, it was concluded that after such a change in emphasis the brand would be perceived as starting to stand for something. This confirms the findings of Papasolomou and Vrontis (2006). Their research indicates that changing organisational culture into one that is more customer-oriented can set a foundation for building and sustaining a strong corporate brand. On this note, NE3 mentioned that the customer orientation within the company’s organisational culture, made it easier for him to build a brand on top of that culture. When discussing why organisational culture is important, the experts mentioned that a brand is the total behaviour of a company. Therefore, having a strong corporate culture that staff commit to reinforces the brand, and its values. This is reflected in the following statement by WE8 on the risk of having employees who do not fit into the organisational culture: ‘you have to lay a foundation of a culture that fits who you want to be as a company, and that culture should be there, and if someone doesn’t fit with the culture, he will make decisions that go against it and will do bad for your brand.’

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The experts commonly argued that everything that the organisation does, for example, its actions, behaviour, and communications is part of presenting the brand. Some experts mentioned that because staff behaviour is important to customers’ perceptions of the company, one should view employees as brand ambassadors. WE6 articulates this as follows: ‘The relationship between customer and the brand requires every employee to be in line with the story that the brand is telling. You cannot succeed if your employees are not like your brand ambassadors.’ To sum up, it was evident from the interviews that the experts considered organisational culture an important factor in branding. Figure 4.5, a schematic of the elements of organisational culture as based on expert’s notions, demonstrates why. As evident, all these factors work together in laying a strong foundation on which to build a brand. Organisational culture in energy companies is composed of customer focus, internal values, behaviour and communication of employees, and the conviction that employees should be brand ambassadors.

4.2.1.2 Brand Building Internal branding is the process of ensuring that employees engage in corporate culture and strategy, and transform brand messages into brand experiences for customers or other external stakeholders (Backhaus & Tikoo, 2004). Internal branding focuses on employee behaviour and employee interaction with stakeholders and emphasises employee communication of brand values. Although senior management defines and disseminates brand values, and in ideal cases leads by example, employees

Fig. 4.5  Factors of organisational culture in energy brands

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at junior levels are central when building a brand, as their behaviour and communication can either reinforce or degrade brand values. After all, they are often the first point of contact with the public, and it is on the strength of their behaviour that the company is judged. Furthermore, brand identity has become increasingly important in literature on brand building, as brand identity focuses on how managers and employees make a brand unique (Harris & de Chernatony, 2001). This subsection will examine how the experts described brand building, as well as what ideas they had about internal values and inside-out branding. To the question of ‘what is a brand’, some experts posited ‘what the company stands for internally’—while noting that branding displays these values externally. Internal values and behaviour were very commonly discussed, with WE3 stating, ‘It’s not about something superficial like money. It is about values—how we behave.’ US1 also emphasised the importance of internal behaviour, stating, ‘that’s why it’s so important to have a really clear understanding of what your brand is and make that filter through everything you do.’ Another (NE5), argued that a brand was a common agreement between everyone within the organisation as he stated: ‘The brand is created by all our activities. How we work and how we proceed in society. It has to be a kind of common agreement within the company, how we work, how we talk and how we present the company.’ Similarly, US3 discussed how a brand is created by the activities of everyone in the organisation. The interviewee mentioned that she liked to follow a strategy, which could be termed inside-out branding: ‘It is about how you change your inside, and how you build your brand, which becomes an external force through the good times and bad, through the changes you’ve made to your inside.’ She stated that inside-out branding applied to everyone in the organisation and that the brand is a commitment to the values set by the organisation. From these statements, it is evident that employee behaviour and internal communication are fundamental to brand building. As mentioned in the beginning of the subsection, senior management and CEOs must communicate the established brand values to employees (particularly ‘front-line staff’), to ensure that they convey the brand messages correctly to customers. Some of the experts discussed this idea, in

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the light of how CEOs and directors can affect the organisation and the brand. For example, when describing how the CEO of the company viewed branding, WE8 said, ‘The CEO is very aware of the brand and the importance of everything he does, and every communication. He knows it impacts his brand and his own people, his employees.’ Similarly, when discussing branding and why it is important NE4 stated: ‘We don’t have this luxury to not define what we are and where we want to be. Any company, any manager, any CEO has to do it first and they have to have a consensus inside the organisation on this. Then you can move to branding […] Branding nowadays is equally important to your customers, of course, to your stakeholders, but more and more to your staff.’ This is in line with findings by Punjaisri and Wilson (2011) on front-­ line service employees and the impact of internal branding. Their findings reveal that internal branding directly influences employees’ sense of belonging; also, that internal branding needs to work together with other marketing elements such as organisational culture, corporate identity, management, and human resources to be successful. Internal branding was considered an integral part of branding as experts discussed how branding is the total behaviour of the organisation and what the organisation stands for. In those instances where experts did not directly use the term ‘internal branding’, they used terms such as inside-out branding, behaviour, values, action, and others to discuss the matter.

4.2.1.3 Communications In the previous two subsections, the findings on organisational culture and brand building were presented. The experts discussed internal factors and they commonly mentioned that before they could implement branding within the company, they had to convince various stakeholders that branding was indeed necessary. In this subsection, the focus is on the details of internal communications, and preparation that were needed for employees to understand the importance of branding. This includes ‘the how’ of internal communications: how the experts convinced stakeholders in their companies, how they changed their use of branding or

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marketing terms, how they adapted or changed the organisational culture following branding or rebranding initiatives, and so forth. The question whether experts needed to convince stakeholders that branding was necessary, revealed differences in experience. The differences related not just to the amount of persuasion, but also to the internal constituency they had to work with, meaning, who they needed to convince. For example, some mentioned they needed to convince the board members or the executive committee, as was the case for WE4: ‘I really needed to hand-hold the senior organisation, almost one-on-one explaining what brand and marketing is about, so they could support the journey.’ Echoing this, US2 discussed that the board was the hardest to convince, as to the importance and necessity of branding. NE5 said that he needed ‘to convince people that the brand was an important part of the company and that took quite a while. Many, for several years, thought this was a waste of money.’ Those experts who needed to convince others usually mentioned that the hard work was due to a lack of understanding of why branding is important, and a misunderstanding of what branding is. This is in line with findings made by Koporcic and Tornroos (2019) as they propose that the B2B environment had only lately considered the effectiveness of branding. This is due to the sector often being dominated by bulk purchasing, which affects the lack of interest in branding since it is believed that ‘rational’ (readily quantifiable) concerns, such as price ratios, contract terms and delivery schedules, overcame the emotional aspects of branding. US3 even explained how the discussion she had to have with the company’s former CEO was so difficult that it was as if they were speaking different languages. This was because the CEO did not comprehend branding: ‘I mean he literally, having grown up and spent all this time in the energy space, couldn’t understand what I was talking about and I remember just getting crushed and saying we needed to become like the Ben and Jerry’s (popular ice-cream company, An.) of the utility world.’ However, not all the experts needed to convince others on the importance of branding, since, in some cases, the company culture already embraced the idea. For example, WE5 argued that convincing was

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unnecessary because employees loved the company and were willing to do anything to help build the brand. WE8, went along similar lines and said that he didn’t think he needed to convince anyone, because they had already laid a culture aligned with the brand. Some mentioned that rather than using the expression ‘to convince’, it was more about ‘on-boarding’ stakeholders, as with NE2: ‘It was not so much about convincing people. It was more about bringing people on board for the process of making use of these tools.’ Once again, this relates to changing organisational culture and management methods by influencing employee behaviour and focusing on getting people to understand and endorse the branding process. As mentioned, one expert (US3) argued that when discussing branding with her former CEO, it was as if they were speaking different languages. Other experts discussed this as well. There was broad agreement that because energy companies are dominated (in terms of both staff numbers and managerial posts) by engineers and other employees with technical backgrounds, the branding and marketing is not deemed a priority. Therefore, experts mentioned that it is necessary to speak a language that the energy businesses understands, and to avoid using marketing buzzwords. When experts discussed how they talked about branding within their companies, they often mentioned that they used words or phrases such as ‘reputation’, ‘reliability’, ‘society’s view’, ‘company image’, ‘network goals’, and others. The experts argued that by using such words to describe the importance of branding, they could get people on board. This relates to the fact, mentioned above, that energy companies are engineering-­ focused, or technically driven. In the words of NE3: ‘brand is a very difficult name for engineers. It’s for marketing people, not for electrical engineers.’ Therefore, it is evident that when discussing branding and marketing within energy companies, marketers and CEOs might have to adapt to the organisational culture and refrain from using ‘marketing-­ speak’ in order to convince people on the usefulness of branding. To conclude the theme of intrinsic factors, quotes relating to the theme are shown in Table 4.5.

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Table 4.5  Theme of intrinsic factors and quotations from experts Category: Organisational culture CEO Head of brand External consultant Because our employees all The relationship So, in essence, my first between the love the brand, they’re message, right up customer and the through my last message, willing to do whatever it brand requires every takes to help further has always been about employee to be in build the brand (WE5); how do we go about line with the story What makes the creating an organisation that the brand is difference is what the that is doing things that telling. You cannot makes customers want to brand stands for. And we’ve been lucky because succeed if your love us (US3); Branding employees are not I see a lot of work and a has got to be something like your first lot of vision from our that you live and ambassadors (WE6) CEO behind that (WE2) breathe. It has to be in the culture of your company (OC1); You have to lay a foundation of a culture that fits with who you want to be as a company, and that culture should be there and if somebody doesn’t fit with the culture … he will do bad for your brand (WE8) Category: Brand building CEO Head of brand External consultant (continued)

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Table 4.5 (continued) I would get them to The process is mainly built Branding is much more think about it this about what you do and up within the company way: you have to what you say. And that’s and the management … realise that all your why it’s important for us it’s really about making words and actions to say that branding is them understand the and everything else not about advertising … whole concept of the it’s the total behaviour of affects your brand strategy, the purpose, and therefore you the company (NE1); I where we’re going, our need to be thinking think we have to walk commitments, and then about that and how the employees through wrap that up in the you best develop it, like a good leader, to brand bottom line (NE2); that (US1); People the vision of where you Everything we do, as a need to understand would like to go, and the company, every decision what is the purpose path to do that, as well we make is building our of the organisation brand (US3); We have our as what help you need and the purpose is from them (WE5) story. We know where at the very core of we are coming from and what the brand we know where we are stands for … you today and where we need to own a want to go, and we are purpose and this ready to tell this story purpose has to be inside the company so articulated through that we all feel we everything you do belong to this story (NE4) (WE7) Category: Communications CEO Head of brand External consultant (continued)

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Table 4.5 (continued) What we were doing We’ve been putting a lot It was a very conscious in the of emotion, half or I effort to try and use communications would say 60% of the everyday language and function in terms of company was completely everyday commercial building that single, lost with that at the terms when we were global international beginning (WE2); I think talking about the brand brand was in some and marketing outside of most appreciate the respects following importance of branding the marketing the CEO’s vision, and marketing, but they communities (WE4); projecting to the don’t seem to appreciate Because we are very sort outside world the of technological and very or they’re divided on way in which the how easy they think it is, much driven by the laws organisation on the or how much effort and of physics, when you inside was changing resources are needed study physics, you never (WE1); I try to (WE5) mention the word brand convince them that and why it’s important. just having great But when you talk about products is not the reputation and reliability whole story (US1) … people understand (NE3); What I did in the beginning was to establish a group of departments within the company, just focusing on marketing and business development. And many people were asking me what are they going to work on, why do we need a full-time position on that? (NE5)

4.2.2 Theme: Extrinsic Factors In the previous section, intrinsic factors were examined and how they affect brands. In this section, the theme of extrinsic factors of branding is introduced. Three categories were identified under this theme: Brand purpose, Brand promise, and Brand sentiments. The first category is ‘Brand purpose’, which refers to the overall larger goal that the experts wanted their energy companies to serve. That purpose is more than just selling and/or delivering energy. The second

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category, ‘Brand promise’, refers to what the brand should achieve—what expectations it creates and delivers. The third category, ‘Brand sentiments’, refers to how the experts saw the purpose of emotions in branding, and how a connection with customers can be built through brands.

4.2.2.1 Brand Purpose Today’s consumers have many different expectations of a brand. These expectations, for example, can be societal, ethical, environmental, and economical. Many brands are starting to focus on communicating their purpose, and, as part of that, how their continued existence and operation meets the expectations of consumers. A brand’s purpose can be defined in terms of why the brand exists, why it is relevant or necessary, and how it can improve society. When brands take a stand on issues that matter to consumers, they are more likely to align with those consumers’ personal values and commitments. This can result in stronger relationships between brands and consumers, and increased profits for brands (Biraghi et al., 2020). Many experts discussed both the purpose of their brands, and why it is important to have a purpose. Several reasons were given: to bring value to people and society, show that the brand stands for something, and to connect the brand with current and future customers. On the related subjects of how brand purpose brings value to society, and the expectation to stand for something more than ‘just’ the business, WE1 said, ‘Every business needs to deliver value to society. It must have a social purpose.’ Connected to WE1’s statement about delivering value, NE4 discussed how his company facilitated access to latest technology: ‘We want to take the latest technologies from around the world and be useful to our customers, which means that we create value from the latest technologies and generate our energy more and more in a way to make the world a better place.’ Following this statement, US1 argued that branding had a deeper meaning than just being a logo: ‘It’s not the look of your brand and logo, the name, and all that. It’s more. What you stand for, your actual positioning and image, and all the meaning that you create, and all the value

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that you create.’ Some of the experts argued that it was profitable to have a purpose. For example, WE1 believed branding is about having a social purpose. He argued: ‘that’s not just because we want companies to do good in the world. It’s because that is actually the best way to be profitable.’ The experts commonly discussed that a brand purpose is essential because society and customers are expecting it from companies. As discussed earlier in this subsection, today’s consumers have different expectations of brands, than consumers before sustainability became an ‘agenda’. Such expectations don’t stop with the fulfilment of services, or the provision of products, but instead encompass the discharge of responsibility towards the environment and society. When discussing this change of consumer expectation, WE6 stated: ‘I need to be confident with the brand I am choosing not only regarding how they provide energy to me, but to what extent they will do their business with a view of protecting the future. … This is a branding challenge because the core of the identity is the core of the business. … Twenty years ago I was choosing a product because I needed that product. Today, I am choosing a product because I need the product and I’m confident in the people that make the product.’ The quote reflects how consumers think differently about energy brands now, compared to previous times. They need to be assured that the brand is doing more than just producing energy—that they are also doing good for society. WE7 discussed this change as well—he mentioned that society has pushed organisations to be open, ‘If you want to walk the talk, you have to use your brand, you have to really build a brand that stands for your organisation. You have to have a purpose.’ The experts explained that companies can connect to their current consumers, as much as future generation, by having a brand purpose. Brands play a role in this connection. By using branding, they can find meaningful ways to speak to different types of audiences. WE7 developed this idea in arguing that today millennials and Gen Z interact differently with brands—they need to see what the brand stands for in order to connect with it. NE1 agreed: ‘I think that was part of the argument on why we should take branding seriously, because we have to have a relationship with the next generation.’

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All the experts believed that branding is vital for energy companies, and they connected, at both the conceptual and practical levels, brand purpose with brand values and attitudes. A way of understanding values and attitudes is by considering ‘what the brand stands for’. WE3 said, ‘If you’re saying you want to create a brand, it’s not about the product. It’s about who you are. You create a brand based on what you believe in.’ Some of the experts discussed how this idea of having something to stand for and having a purpose emerged due to the changes in the energy sector. Today there is a demand for companies to operate differently than in the past, chiefly in terms of sustainability, renewable energy, and price sensitivity. Energy companies are in the midst of a transition that concerns the impact on the social, as well as the natural environment. In other words, there is a positive expectation that energy companies should have a progressive impact on society, for example, by creating jobs or keeping energy prices affordable; and on the environment, by reversing some of the damage done by outdated modes of energy production. As NE5 states, ‘I think for a company that has this big footprint in society, we have to get social acceptance both in the local community and the overall community.’ On a similar note, NE2 stated that ‘the concept of branding becomes this license to operate … we also want everybody involved, like regulators, the public, the people, to understand. Because we are so much involved in society where energy is everywhere. We’re distribution operators. We are electricity producers. We’re heat suppliers. And we want them to feel that this company is really committed to something that is important.’ Similarly, when a WE7 was asked why energy companies should focus on branding, he answered, ‘Because inevitably you play a role in the community and the role in the community has to be articulated through what you stand for … what the brand is doing is the very essence of your brand.’ The experts implied that a clearly defined, pro-social brand purpose secures an energy company’s ‘social licence’ to operate. Therefore, having a brand purpose is the essence of branding for energy companies as it demonstrates that they care about society, about people, and about delivering energy.

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4.2.2.2 Brand Promise This category refers to the discussion in which the experts discussed what they wanted their branding activities to achieve. As some of them noted, branding can create certain expectations on the part of the consumer. Those expectations are matched by promises on part of the brand, which are then delivered when customers interact with the product or service. It is then up to customers to decide whether their perceptions of that interaction met their expectations (Simmons, 2009). Brand promise and brand commitments communicate the intention to bring future benefits to the consumer. The promises can be either ‘clear’ or ‘fuzzy’, depending on the way they are delivered. Clear promises are, for example, when brands deliver on the promise—provided that the consumers use the products or services of the brand correctly. Fuzzy promises, on the other hand, propose a condition that will be fulfilled by the brand at some point in the future. An example of a clear brand promise from an energy brand could be that it guarantees the stability of supply, whilst a fuzzy promise could be that buying from a particular brand will eventually reduce the consumer’s carbon footprint. Therefore, fuzzy promise implies that the consumer has to continue interacting with the brand for the promise to be delivered (Anker et al., 2012). The experts mentioned brand promises and commitments, and the importance of making sure that brands are creating the right expectations—those that they can ultimately fulfil. NE2 argued that this is what branding is really about: ‘It’s like you make a commitment to your customers, and to society and to your stakeholders, and you live up to it. And then you communicate around that and you deliver around it. That’s what to me branding is really about, creating expectations, and then fulfilling them.’ Similarly, many experts discussed how a brand is, in fact, a promise that an organisation makes to its customers. These promises can vary depending on what the brand wants to focus on. For example, WE4 argued that the brand promise is ‘solving problems and finding solutions’. Confirming this, WE5 argued that a brand is a promise, and that the promise depends on what brand attributes you (as the company) have

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decided to differentiate on. However, WE7 discussed the importance of the brand promise being delivered to more than just customers: ‘To me a brand is a promise, the effect the organisation has on its different audiences. Its audiences are not only its customers, or its consumers, but it’s also its employees, its shareholders, and the society at large.’ It was evident in the discussion that having and delivering a promise was an essential part of branding, and that brands must be able to communicate this to consumers. Furthermore, it is possible to say that the experts believed that a brand promise by energy companies should focus on ‘standing for something’, or having a purpose, as mentioned in the previous subsection. This means having a commitment that they then communicate to stakeholders, customers, and society via branding.

4.2.2.3 Brand Sentiments By building a connection with consumer brands can have an emotional impact ranging from moderate preference to a phenomenon termed ‘brand love’. The latter includes consumers feeling a high degree of emotional connectedness with the brand, strong loyalty and a desire (acted upon) to extol the virtues of the brand to others. It can be said of such consumers that they are fully invested in the brand; displaying, according to some researchers, not just a high degree of brand loyalty, or a great many positive word-of-mouth recommendations, but also the phenomenon of ‘brand forgiveness’ after service or product failures (Fetscherin & Heinrich, 2014). Managers and marketers can influence this connection with the consumer by ensuring that customers are satisfied, a process commencing with the understanding of customers’ wants and needs (Storbacka et al., 1994). When discussing what branding is and how it should be used in energy companies, many of the experts mentioned that branding is about connecting with customers emotionally. Some of them even stated that branding is all about emotions. Experts who head brand departments in their companies were especially emphatic on this point. In addition, several CEOs also agreed on the matter. US1 discussed that branding is how you want people to think and feel about you. US3 even said that she articulates

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the brand as love and that, ‘brands are all about emotion, at the end of the day.’ Many experts did not use the word emotion but often described branding as something that people feel in their hearts and that a brand is something meaningful both for customers and employees. What was also mentioned was that branding is dealing with people, so emotions will always be linked to branding. Many of the experts discussed that by using emotions, you create a connection between the brand, its customers, and employees. US3 discussed how she believed that the best way to build connectivity was by emotionally communicating the brand. Another expert (OC1), went along the same lines stating, ‘So, the challenge for us is how do we make interaction with energy companies interesting … by making it interesting, we can start to connect with emotions.’ When asked about the use of emotions in branding, many experts argued that the vital thing to have in mind when using emotions is to be authentic. Some argued that there is a risk when using emotions of it becoming gimmicky or fake. This should be avoided at all costs. They discussed that authenticity was something that people could feel and, therefore, it should be something that is flowing through the brand. As WE8 mentioned, ‘Let’s bring emotions. No, let’s bring out intensity. Let’s bring something real. And that’s your emotion. And that’s how you bring personality and make it human.’ Focusing on authenticity in a brand can create a trustworthy brand image that people can connect to. It should be noted that every single expert except one in some ways mentioned the role of emotions. This was an intriguing research result as most of the experts are CEOs of energy brands, and—as discussed in the beginning of this subsection—emotions are not a very prominent part of the business of energy (as opposed, e.g., to other businesses such as entertainment, luxury goods, sports, or apparel). However, the awareness amongst energy sector professionals of the importance of emotions in communicating brand, shows that perceptions are fast evolving, undoubtedly keeping pace with changes in the energy sector itself, as much as in the wider world of business. According to the experts, emotions are a great way to create and build a connection with consumers and therefore can be used as a differentiator for commodity brands. This is an outstep from marketing orthodoxy which clings to the belief that commodities cannot be branded, as they cannot be differentiated.

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In Fig. 4.6, extrinsic factors and intrinsic factors of branding have been displayed in parallel to show how they interact and connect with one another. Experts commonly discussed the importance of viewing branding holistically, and that branding is about internal and external values. Furthermore, as can be seen in Fig. 4.6, to create a brand story and build a strong brand, internal factors such as values, culture, and behaviour need to support and align with the external factors. For clarity of analysis the extrinsic and intrinsic branding factors have been separated here in two themes, but it is crucial to understand that when discussing branding at both practical and conceptual levels, these concepts are intertwined. Experts viewed internal matters as part of a holistic approach to branding and argued that branding is everything you do internally and externally. To conclude the theme of extrinsic factors, the categories along with descriptive quotes from the experts, are shown in Table 4.6.

Fig. 4.6  Intrinsic and extrinsic factors of branding combined

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Table 4.6  Theme of extrinsic factors and quotations from experts Category: Brand purpose CEO Head of brand External consultant This person suggested that People expect from large That’s why it’s important to focus companies that they I should care less about on branding because exist for something else being famous and ask you’re trying to than just the business more about what I create a clear (WE2); Advertising is wanted to be famous for. meaning and one tool in the toolbox Any energy company understanding about … but both you and I that’s wondering how to your brand and the know that branding is create an amazing brand, value it creates for much more about what what are you offering? people (US1); Every you do and what you What is your business, business needs to say … it’s the total your company that is deliver value to behaviour of the making the world a society, it must have company (NE1) better place? If you can a social purpose answer that, you’ve got a (WE1); In my opinion, brand (WE3); We want branding is not them (regulators and the about the category. public) to feel that this Branding is about company is really defining who you are committed to something and seeing to it that which we believe is you are a clear important (NE2) benefit to people (WE6) Category: Brand promise CEO Head of brand External consultant (continued)

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Table 4.6 (continued) It is the ‘how’ and ‘what’ To me a brand is a We were tapping them promise, brand is the attributes which will (customers) on a deeper effect the differentiate us. emotional level with organisation has on Obviously, the brand what we were hearing its different will have to deliver on that our customers value audiences and its that promise, a brand is and then challenging audiences are not a promise (WE5); I’m ourselves to come up only its customers, saying that all of you with new and innovative but its employees, its (board of directors) are ways to deliver on the shareholders, the totally dependent on ‘why’ for them (US3); We society at large support from the want to take the latest (WE7); You don’t community that we technologies from the have plenty of serve. And in order to world and be useful for opportunities to talk. get trust and support, our customers. We create You have to tell we need to deliver on value from the latest clearly who you are our promise (NE1) technologies and in terms of generate our energy production, but also more and more in a way in terms of to make the world a philosophy (WE6) better place. We have our commitment to what we want to be and how we are useful for our customers and how we can benefit the world as a whole (NE4) Category: Brand sentiments CEO Head of brand External consultant (continued)

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Table 4.6 (continued) The challenge for us is how Trust is obviously something that you do we make interaction have to earn over time with energy companies and emanate this interesting … By making sentiment around the it interesting we can start company and this to connect with emotions industry as such … I (OC1); Emotions are a think that part of the priority, because at the argument on why we end of the day we are should take branding dealing with humans and seriously is because we humans are all about have to have a emotions. Emotions fuel relationship with the your brand energy next generation (NE1); (UAE1); People want to You have to find feel like you are putting emotional and rational them first … We got to benefits that work make people feel like together. Emotional they’re valued and feel benefits give you the like they’re heard … Even differentiation that though we are a huge sometimes the rational company, we are benefits cannot give personal (US4) and it allows your brand to be infused with a certain personality (WE5)

It’s not literally, just the look of brands. It’s more like how do I want people to think and feel about me … So the communication part, where branding comes in, plays a role (US1); We were able to build excitement around energy that no other energy company was able to build, that was something that gave our commodity, which is identical to other commodities, something different (WE1)

4.3 The Value of Branding Two themes were identified that centre around the value that branding can bring to energy companies. These themes are ‘Business-to-Business Branding’, which examines why and how branding could be useful in a B2B environment, and ‘Investing in Brands’, which examines reasons why energy companies should invest in branding.

4.3.1 Theme: Business-to-Business Branding Branding in consumer markets is generally something that no company active today would dare dismiss. However, that is not the case with business-­to-business markets, as many managers in the B2B environment

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believe that branding does not apply in the ‘rational’ world of B2B (Kotler & Pfoertsch, 2007). However, branding literature has shown that branding in B2B markets can be advantageous as it can help establish trust and create relationships between buyer and seller (Leek & Christodoulides, 2011). B2B branding was addressed in the interviews, as many energy companies operate in that setting. Furthermore, as there is a debate on whether branding in B2B markets is as relevant as in B2C markets, it is valuable to understand the standpoint of the experts interviewed for this book. There were three categories that emerged from the discussion. First, the experts mentioned common misunderstandings concerning branding in B2B markets, and the differences between the B2B and B2C markets. Second, the experts mentioned the value and benefits that companies operating in B2B markets receive by branding. Third, some argued that the very conception of B2B and B2C branding (and marketing) was outdated as in both markets, people are at the centre of business.

4.3.1.1 Frequent Misconceptions In the B2B environment, there are various misconceptions about branding, summarised by Kotler and Pfoertsch (2007). The most common ones are that branding solely works for consumer products, that a brand is just a name or logo, that in the B2B environment customers are rational, and therefore, brand loyalty doesn’t apply as it is considered non-­ rational behaviour; also, that customers in the B2B environment already know a great deal about their products. When discussing B2B marketing, the experts acknowledged common misunderstandings, and some suggested that it is likely due to incomprehension of how branding works. One expert (WE2) said that B2B branding depended on the lead of company executives, particularly as to the understanding of its influence on sales and the bottom line—and many executives assumed that branding was unimportant because their clients knew the company so well. Another (US1) argued that there are many assumptions that B2B companies make, and one of them is that it is sufficient to just have a good product as their buyers are rational thinkers. He qualified this discussion with the statement, ‘You just can’t assume that because even if your product is

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better, that you’re going to win in the marketplace. It’s just not how it works.’ Rationality as a key quality of transactions (business decisions) in the B2B arena was mentioned by many of the other experts as a reason why companies in this environment tend to disregard branding. They also argued that the incomprehension of marketing in the B2B environment is due to the fact that for many for many practitioners branding is a new reality. WE2 mentioned this, saying that traditionally there hasn’t been a culture of branding in the B2B environment. WE7 discussed this and noted: ‘I think energy companies have taken longer than others. Same with B2B in general. The B2B world has woken up late to the concept of the power of a brand.’ The experts agreed that there was a lack of understanding in many B2B companies about branding. However, they also argued that this was changing fast, particularly in the energy world where sustainability and acceptance from society are needed in order to do business. As the usage of branding in the B2B environment is becoming more accepted, there are some who argue that there is a variation between methods of brand-­ communication in the B2B market compared to the B2C (business-to-­ consumer) market. For example, Rėklaitis and Pilelienė (2019) discussed the difference between B2C and B2B branding, stating that the B2C market is based on consumers’ emotions, while the rationality of the purchase decision is of a secondary concern. However, in the B2B sector, companies focus more on the logical side of purchase-making decisions, by analysing extensively the product and its attributes, functions and features. In addition, even though branding strategies in B2B and B2C environments are based on different presumptions, customer orientation is common for both processes, though ‘reason’ and ‘emotion’ are not necessarily of the same priority (Garg, 2014). Another difference between the two settings is the use of media for marketing communications. McDonald (2016) mentions that B2B companies have always considered the financial returns of using mass media in marketing as questionable. This is because it is difficult for them to establish a causal relationship between campaign expenditure in mainstream media (such as television and daily newspapers)—and achieved marketing objectives. The other reason, of course, is that B2B companies do not sell to the mass consumer market, but rather to a much smaller number of decision makers at target companies.

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Mentioning branding differences in the two business arenas experts compared the use of communications, decision making practices, and purchase cycles, arguing that such differences result in divergences when it comes to branding practices. US1 argued that the difference in decision making between B2B and B2C purchases was due to the level or risk involved. In B2C you are purchasing a product or service whose potential shortcomings might only affect you. In B2B you are deciding on behalf of the company. If things go wrong there are more people affected, who in turn would blame you for making a bad decision. Your reputation amongst your peers might be at stake, and in the worst possible outcome, you could lose your job. Hence, the rational strategy here would be to minimise risks and play it safe. Interestingly, that also means there are stronger levels of negative (commonly avoided) emotions at stake here, such as fear and shame, compared to B2C purchasing decisions. NE1 agreed: ‘The difference is that you’re not spending the money on behalf of yourself, but on behalf of the company.’ All of the above casts a new light on the debate of rationality versus emotions in this market segment. As some of the experts argue, counter traditional wisdom, in B2B branding the importance of having ‘rational’ benefits linked to ‘emotional’ benefits might be even greater than in than in B2C. NE1 mentioned that the rational benefits are a somewhat more important in B2B, but it is still necessary to deploy both. Similarly, NE2 mentioned the importance of striking the right balance in B2B communication. Expanding on the subject, one expert (WE5) compared the purchase cycle in B2B and B2C: ‘I think what changes in B2C is primarily in the communication … understanding the number of changes needed, as the purchase cycle is not as long as in B2B.’ The experts also discussed the use of media, and how B2B marketers needed to be more specific in B2B branding, as marketing campaigns were aimed at smaller, more selective audiences. These discussions buttressed the earlier point that mass communication was suitable for the B2C, but not necessarily the B2B environment. The discussion on B2B and B2C highlights the main differences between the two markets and how managers should focus on different priorities, depending on what market they are operating in. However, it was also mentioned that many energy companies are operating in both

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markets and therefore, it is a good idea to try and incorporate a mix of methods to reach both. This is especially important when it comes to media and communication.

4.3.1.2 Advantages of Brands Presently, most B2B marketing managers realise that B2B brands have financial value for companies. They facilitate the customer-engagement pathway, helping to get on bid lists, shifting tight purchasing decisions in a preferred direction, and improving customer loyalty (Wise & Zednickova, 2009). The benefits that the experts mentioned. Which could be received through branding in B2B were, for example, negotiation leverage, trust, and societal goodwill. NE2 stated that by branding ‘people are able to create a picture of the brand and how that will make a difference in their way of dealing with you. And therefore, I believe that branding is not only about selling electricity to consumers but also about accepting the views we have, the things we want to do.’ This statement hints that B2B provides brands with added leverage in business negotiations, leading to a greater chance of landing a deals or a contract. Many of the experts mentioned that branding was equally important in a B2B environment as it was in B2C, because brands refer to the values and responsibilities that companies hold. As WE4 stated, ‘I think branding in B2B is very important … (Signifying) what is it that you stand for internally and what is it you want to be notable for externally.’ What was also mentioned in regard to the importance of branding in B2B was the fact that in the current social climate, people expect high standards of corporate behaviour. There is more opportunity to scrutinise the inner workings of companies, which are turning into ‘glass boxes’ due to the advent of social media. Any actions they take can end up online for everyone to see. The experts discussed how B2B branding could help to create trust, as the most treasured value in B2B transactions, which deal with contracts of substantial monetary value, that can be extremely complex to negotiate. Trust between buyer and seller is of prime significance in these settings. The experts mentioned this especially in regards to contracts made in the energy sector, because of the time and level of expertise required to

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finalise them. This is why B2B energy brands need to create trustworthy reputations. This is expressed in the statement made by WE8: ‘Because we are doing a lot of deals, and it’s a B2B environment, the trust in all these deals is very important.’ Similarly, US1 talked about the importance of B2B branding due to the high financial and reputational stakes that are often involved in this area. He also mentioned that branding in B2B was about creating a sense of security. This is in line with observations made by Tartaglione et  al. (2019) regarding B2B branding. They found that after customer satisfaction, customer trust is the most important factor in building long-term relationships in a B2B environment. On this note, UAE1 stated: ‘When we are dealing with another business, brand is equal to trust. Trust brings loyal business customers and advocates. Once your customers or consumers are loyal to you it means they are ready to forgive you if you make some mistakes, it gives you security.’ Similarly, US3 also discussed trust: ‘I think branding is important no matter what. I mean, every company is run by people, and they want to feel good, and people want results, and they want to know that when they’re staying in business with you, that they’re not going to get dismissed because they’re not the biggest customer or anything. I mean we all want to feel special […]. We want them to trust our brand. That’s our perspective in the B2B area.’ It is evident from the interviews that the general perception towards branding in B2B is positive and that experts value its importance. As in this area creating trust is crucial—with successful branding also resulting in stronger leverage at the negotiating table—the values and benefits of strong B2B brands are obvious.

4.3.1.3 Brand-to-Human The last category in the theme, ‘Brand-to-Human’, examines the social aspect of branding, referencing the discussion in the interviews that business is about people, irrespective of whether it is B2B or B2C.  Some experts developed this idea by saying that B2B and B2C were outdated definitions as in both environments business are marketing and selling to people, hence business-to-human. One expert (WE1) stated, ‘I think B2B, B2C, B2G (business-to-government, An.), are all wrong. It’s the wrong way

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of thinking about branding. The best way of thinking about branding is B2H, business-to-human. Because B2B, B2C, B2G, these are all human beings you are trying to communicate with.’ Another way to understand the interviews is by noting that the B2B environment as a whole has undergone a shift in perspective when it come to the importance of branding, and that shift has influenced the energy world. All the experts in the interviews mentioned the role of emotions, as branding is about creating a connection with people and people are, in the end, always at the heart of any business. To conclude the theme, Table  4.7 highlights the main quotes from the interviews relating to the theme.

4.3.2 Theme: Investing in Brands In this theme, various aspect of investing in branding will be examined and discussed. First, the debate on measuring return of investment (ROI) on branding will be introduced and the experts’ perception and ideas on this matter will be examined. Second, the experts discussed various reasons why investing in branding is vital due to the elusive benefits received.

4.3.2.1 Measurable ROI Quantifying marketing ROI (MROI), as well as the ROI of branding, is one of the best approaches to the strategic development of such activities. In practice, however, tracking branding ROI is next to an unmanageable task. This is because branding activities have both short-term and long-­ term returns, of which only short-term returns can be reliably calculated (Klein & Swartzendruber, 2003). Nevertheless, measuring such ROI is essential because it is recognised that the capability to measure branding performance impacts the marketing functions, while also being perceived as an indicator of the performance of the CEO of a company (Rust et al., 2004; Sullivan & Abela, 2007). In brief, measuring the ROI of branding is difficult, due to the complexity of quantifying long-term returns. This results in many CEOs and board directors, especially in B2B companies, being hesitant when it comes to investing and spending

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Table 4.7  Theme of business-to-business branding and quotations from experts Category: Frequent misconceptions CEO Head of brand External consultant There are a couple of I think branding is much Concerning B2B assumptions that B2B activity, that’s quite more important in marketers make that I interesting, because business-to-business think are not good, and it’s true that it very than a lot of people think. Yes, they’re going much depends on the one is that if you have a great product that it leaders. So, some to be more price somehow almost sells would say ‘we don’t sensitive, they’re going itself. It just doesn’t have the money’ and to be looking for that happen. You have to ‘we don’t need to lower brand. But if make sure that you’re spend, because it’s a you’re not dealing with doing a good job (US1); word-of-mouth thing brokers and if you’re Corporately, the B2B and people know us’ really out there and world has woken up late (WE2); The difference you’ve got to sell out to the concept of the is that you’re not there and you’re really power of brand (WE7); spending money on trying to create that It’s a little more complex, behalf of yourself, energy, do you want to in both who you sell to but on behalf of the go with somebody who and how you sell, than company … That’s has made investments you would see in B2C and probably why in their brand and is the reason why is there’s rational arguments worried about harming a lot of segmentation and rational benefits their brand, or that goes on in B2B (US1) are a bit more somebody who really important, doesn’t care (US2) presenting the rational arguments with emotional weight (NE1) Category: Advantages of brands CEO Head of brand External consultant (continued)

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Table 4.7 (continued) Every business has to invest Say you’re buying If you’re a successful something simple like in and protect its social brander, then people licence to operate. you’re picking out have built a picture of Because even a B2B you and what you stand who will supply your business can lose its social coffee for your for. That will make a licence to operate and employees, or who difference in their way can find itself in a will sell you a service of dealing with you, position where its clients to supply truck fleets and therefore, I believe will desert it, simply to transport your branding is not only because their product to a B2B about selling electricity stakeholders will put customer. That’s a to consumers, but also pressure on them in B2B purchase that about making society order to avoid doing you’re doing. The accept the views we business with them truck fleet owner have, the things we (WE1); B2B companies needs to do want to do … it doesn’t have to cater for society, branding, because have anything to do have to cater for they need to have a with B2B, B2C in that employees, have to cater certain association sense (NE2); Basically, for potential employees, that my trucks are of the values that we are look from the corner of a certain quality presenting with our their eyes to the (WE5) brand are equally competition, and see important to our what the competition is corporate customers doing (WE7) and households (NE4) Category: Brand to human CEO Head of brand External consultant (continued)

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Table 4.7 (continued) My thinking has been I think B2B, B2C, B2G these Perhaps also the are all wrong. It’s the the same here for transmission sort of wrong way of thinking business is moving to be many years, from about branding. The best more and more business being B2B to B2C, way of thinking about and there is actually of people, person-to-­ branding is B2H, no difference. person business. It used business-to-human. Because a to be very technical Because B2B, B2C, B2G, businessman or business but now when these are all human businesswoman is we talk about beings that you are permitting laws, we talk also a human being trying to communicate with a heart, a about developing with (WE1); They call it human, and a person electricity markets … human to human that has lots of We talk to people all relationship … and that’s different choices the time and we have paramount to the fact when it comes to to be very credible and that IQ and EQ is of the companies and other we have to be very right balance, which is brands. In B2B good in working with what energy companies businesses, there are people (NE3); This is or any B2B or any people, human also an outdated industrial company has to beings, not just definition because we understand (WE7) rational thinkers have to see that behind (NE2) any corporation is people (NE4)

money on branding practices (Anees-ur-Rehman et al., 2018). The reasons for this, apart from the ones already mentioned, could be that brand-­ value measurements for B2B companies are missing. Some useful observations were made by Juntunen et al. (2011) that the current brand value measurement methods, which take as their starting point the branded product, do not work as well for B2B brand value calculations, as for B2C. It can be argued that such methods mislead B2B marketing managers into believing that their brands are not as valuable. Consequently, rather than restricting investment in B2B branding, there is a case to be made for brand value measurements being retooled so that they are equally suitable for both B2B and B2C markets. As there is no clear agreement on the best method to measure branding ROI, Dwyer et  al. (2014) suggest three main approaches. These are

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marketing expenditures, the brand’s economic contribution to the company, and consumer spending—which is the indicator of how much premium a brand can charge above its generic product price. Combining these metrics promotes accountability for marketing expenses and comparisons across alternatives, making it possible to converge on the best way of calculating ROI (Pauwels & Reibstein, 2010). Another issue in measuring ROI of branding is the difficulty of linking brand activity to ROI in the long term. Furthermore, if the focus is only on calculating the short-term ROI of branding, problems arise as highlighted by Mishra and Mishra (2011). They argue that the frequency of marketing and branding activity itself could hamper marketing managers in calculating ROI. This is because in executing ambitious, intensive, and long-term marketing plans their focus oscillates from executing the current activity to planning the next activity, rendering reliable ROI calculations on each step of the plan difficult. To put it another way, when executing a campaign marketing managers could be torn between finishing the current activity and justifying the investment in the next activity (the justification of which is based on at least partly on the current activity’s ROI, that is yet to be fully accounted for). This requires a challenging ‘leap of faith’ on behalf of many a CEO. Another significant problem in calculating branding ROI is that brand-building momentum is not typically a part of accounting procedures and methods. Therefore, it is a challenge to recognise and measure its value separately in the company’s overall value. Using a financial approach to brand valuation and ROI on marketing expenses creates problems in the company’s present versus future valuation (Schultz, 2002). The debate on whether a brand can be evaluated, as much as on the best way to do this is ongoing. Managers might argue on the appropriate method of brand valuation, but there is consensus on the fact that a very significant part of a brand manager’s job should be to know the value of the brand at stake. In a survey of over 3500 American companies, the contribution of a brand in the market value of the company is more than 50% (Yeung & Ramasamy, 2008), rendering it the most important longterm investment for any company. As securing short and long-term ROI is an essential yet perhaps the most complex aspect of brand building, it

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was intriguing to hear what the experts in this research had to say about measuring ROI. Across the interviews, there is a range of views on the matter. Generally, the experts agreed that investing in branding was very important, but they did not always manage to answer how return of that investment should be measured. In Table 4.8, the main opinions are given and the difference highlighted between the experts operating in the private sector versus those in state-owned companies (the public sector). As can be seen in the table, experts in the public sector generally seemed to have different ideas on measuring ROI than their private sector colleagues. They commonly believed that it was more difficult to measure ROI, arguing that one must trust branding to bring something of value to the company—while not giving up on finding a way to reliably measure ROI. On the other hand, experts working in the private sector commonly argued that it was possible to measure ROI. One explanation for this could be that there is more managerial pressure in private companies to measure branding investment, as public companies might have other non-fiscal priorities (Dufner et al., 2002). Some mentioned that one way to measure the ROI of branding practices is by having specific targets. Another expert said that it was reasonable to measure brand equity improvements over time quantitatively and that if you have higher brand equity, you will get significant benefits in return. Still another expert, who believed it was possible to measure the ROI of branding, pointed out that powerful organisations which perform well always have a strong brand. He said that there were metrics that one could use to assess the success of the organisation. Those experts that said it was possible to measure ROI did not indicate that they were using any such metric, instead giving more of a subjective and generalised answer. Table 4.8  Experts’ opinion on measuring ROI of branding Opinion on measuring ROI

The private sector

The public sector

Trust the process Difficult to measure Important to find ways to measure It is possible to measure

3/9 2/9 3/9

7/9 8/9 7/9

7/9

3/9

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Other experts argued that it was necessary to find better ways to measure ROI, with NE4 stating: ‘We have to and need to find a real measurement.’ WE4 seconded this view: ‘Marketers and brand leaders need to be able to demonstrate the impact of what they do and translate it into those commercial performance indicators and not purely brand performance indicators.’ The experts who discussed the importance of measuring ROI argued that it was important to show that the money spent on branding brings something in return and that it should preferably bring both short-­ term and long-term benefits for the brand (as opposed, e.g., just long-­ term benefits). Two experts argued that measuring ROI was tough. One (WE2) said that ROI was difficult to measure because it was not possible to quantify in advance the groups the branding practice will reach and that people have to trust the fact that these practices strengthen the brand. To illustrate that point the other (NE2) asked: ‘How can you make sure that these costs that you are spending on communicating your brand actually have a payback?’ When it comes to measuring the ROI of branding practices, companies do not always have the in-house ability or resources to do that. Some of the experts addressed this issue as part of the discussion on whether CEOs or other board members believed in the value that branding returned. This correlates to the idea that building a brand can take a long time and that strong brands do not happen overnight. One expert (US3) stated: ‘You had to trust that by taking the right actions, you were going to get the reward down the road because it’s not immediate ROI. When spending money on branding, it is necessary to believe that it strengthens you and your brand and that it gives you rewards later.’ It was also argued that if CEOs do not understand what branding will bring the company in the long run, then the discussion of investing in branding will always revolve around the spending of money—and that is a challenging discussion. Judging by the experts’ remarks, it seems as if the debate on how to measure the ROI of branding, and whether it is even possible, is still both highly relevant and undecided.

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4.3.2.2 Elusive Benefits When discussing why branding is important and why energy companies should invest in branding, experts commonly mentioned multiple benefits. In the interviews, the experts believed that branding brings reputational and financial benefits to the company, customers, stakeholders, and society. The most prominent benefits of branding were: branding builds support and good will, reinforces energy companies’ social licence to operate, builds and supports reputation, allows companies to differentiate their energy brands, increases company’s financial value, raises awareness, and attracts talent. These benefits are found in branding literature (Aaker, 2003; Kotler & Pfoertsch, 2007), but analysing these factors from the standpoint of energy brands can offer further insights into the matter. Starting with the branding benefit of gaining support and building good will: the experts often mentioned this factor regarding the liberalisation of the energy market and regulatory policies in the sector. An example of this is the statement by NE3: ‘Now that we get a more detailed regulator every day, the biggest risk for the owners of transmission companies is regulation, and if you want to protect yourself and manage deregulatory risk you must develop your brand, and your reputation, and show people that you are a good guy.’ Energy companies building their brand and establishing a brand image, are more likely to gain support from regulators, society, and consumers. NE5 also discussed this: ‘The owner is really the one that gives us license to operate and license to grow. And it is also very important to have the support of the owner when we are negotiating with big international companies.’ On the same note, US2 mentioned trust in this regard, as he said, ‘I need regulators to trust my brand, so that when something happens—there is a bad event in the market—I am more prepared.’ As US2 discussed, there are always possibilities of ‘bad events’ in the market, and branding can reduce the damage of such events to companies. This is in line with findings by Sinha and Lu (2016) who found that consumers who have a strong relationship with a brand are more forgiving if the brand makes a mistake. UAE1 touched on the topic when he said:

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‘Customers understand that as humans, every company and its employees are prone to mistakes. However, if a company has made a sustained effort to create and build great relationships, customers forgive. Branding is important because it increases trustworthiness, and it eventually leads to loyalty.’ Similarly, when asked why branding was important for energy companies, WE5 mentioned good will: ‘If you have an incident, it allows you to have greater resilience. For example, if you have a safety incident, it allows you to have greater resilience in terms of stock price, but also in terms of customer retention.’ This benefit of branding, which can be variously called good will, support, or tolerance, is crucial for energy companies due to their operational environment. As noted, energy companies need to work with regulators, but there are also possibilities of events such as outages and supply shocks which result in disruptions to services and increases in customer bills. According to the experts, the vital factor to have in mind when investing in branding is that it has a long-term positive impact on the company. Meaning, when you invest in branding you will reap the benefits later on, or as UAE1 stated, ‘Marketing is a guaranteed investment in your future business.’ Similarly, US2 argued the importance of understanding how the market works regarding long-term brand investment. He discussed how he could be spending money on branding today and how that will become the future brand, therefore bringing financial benefits in years to come through brand awareness and recognition. WE7 even compared investing in branding to investing in an education for your children. He stated that it takes time, but it will all be worth it later: ‘When you look at the value that a brand can give your organisation, whatever money you spend on it, it is nothing compared to the value tangible and intangible (in the future).’ WE5 mentioned both the reduction of cost acquisition, as well as increased price premiums as the financial benefits of branding and argued that, ‘the energy industry is extremely competitive and it makes financial sense to invest in branding.’ Several of the experts mentioned that the benefit of branding is that it attracts talent. NE4 went so far as to say that if you do not invest in branding, you won’t be able to attract talent, which means you won’t have a future in this competitive sector. WE2 stated that when she is travelling

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and speaking with her colleagues across Europe, the main hurdle they mention is recruiting talent, and she argued that the best way to do so is by working on your brand. Similarly, WE3 stated when asked why energy companies should invest in branding: ‘in energy, now more than ever before, we are working in a time where knowledge and expertise are the only really sustainable competitive advantages. We’re in a fight for talent every day. We want the best, smartest, hardest working, most motivated people working at our company and the very best people … they have many options where they can work, where they can spend their time. We think our brands and what we represent, and the kind of company and culture that we have, is one of our big competitive advantages.’ Therefore, one of the many branding benefits is that it gives you a competitive advantage in attracting talent. Lastly, differentiation was mentioned as the benefit of branding. When energy companies use branding, they can differentiate themselves from other competitors on the market. As already discussed in the subsection on energy market characteristics, there is growing competition in the energy sector as a consequence of liberalisation. With branding, energy companies can differentiate themselves from competition, as WE2 explains: ‘Few years ago you had maybe five players … today you have 40 plus. Therefore, that means that branding is super important.’ WE5 also mentioned the impact of differentiating, as he stated, ‘You will have to be differentiated if you want to be preferred. It is intellectually impossible to be preferred unless you differentiate. That differentiation is branding.’ The experts’ opinions on why branding is important, and why energy companies should invest in branding were extensive and cover diverse aspects of branding benefits. This is highlighted in Fig. 4.7, where the main benefits are presented. It is evident that the experts believe that investing in branding will bring you both intangible and tangible benefits, especially considering companies’ long-term performance. A good brand image is crucial in the energy world and a competitive advantage in a commoditised market. In Table 4.9, quotes from the experts relating to the theme are presented to give further insight.

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Fig. 4.7  Main benefits of branding for energy companies

4.4 Sustainability and Energy Branding There was one theme identified that covers how sustainability and climate change relates to branding in the energy market.

4.4.1 Theme: Sustainable Energy Brands Given the urgent threat of climate change and the complexity of mitigation measures, which need to be implemented by the energy sector, it is not surprising that four categories were found under this theme: Responsibility, Action over words, Consumers’ role, and People, planet, profit.

4.4.1.1 Responsibility In a modern business environment, there is a demand on companies to show accountability, not just towards shareholders but towards employees, stakeholders, wider society and the environment. It can be said that the dimension of corporate social responsibility (CSR) has merged with the company structure and the brand (Hampf & Lindberg-Repo, 2011). The experts frequently discussed the responsibility that energy companies have towards environment and society. Energy brands need to entwine sustainability with their branding activities because the energy sector (comprising of the power and oil and gas industries), as things

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Table 4.9  Theme of investing in brands and quotations from experts Category: Measurable ROI CEO Head of brand External consultant I don’t think you have Every day we are doing I think it’s not difficult for research to show the to wait too long. I us to justify spending impact we are having actually think you money on branding, but at our company. We can never really you have to have this have developed quantify how long general belief that this is methodology to show you got, whether it’s the right thing to do in six months’ time or different things. First, (NE2); Branding is a to what extent what in four years’ time, slow-cooked process. we do is changing because you need to Brands are never made people’s opinion about trust the fact that it overnight and any brand, who I am. This is not does reinforce you to be sustainable, has to very complicated (WE2); I’m of the have a long-term process. (WE6); That’s the school that it’s So similarly spending on obvious question, possible to measure marketing and branding, I anything. It’s possible where the brand completely agree that the evaluation comes on to quantitatively return on investment will the scene. You might measure brand take some time. However, believe, or you might equity improvements if the budgeting has been not believe in brand over time. It’s done wisely and the evaluation. To what possible to planning has been done degree can you value quantitatively efficiently there will an intangible like a measure how that always be higher ROI brand? There’s a higher brand equity (UAE1); Even in those number of metrics that translates into internal branding one can introduce to stronger preference, expenses, you had to trust see the impact of a purchase intention, the process, you had to brand and branding in trial, loyalty, price trust that by taking the an organisation, and premium … But right actions, you were the value of the brand frankly, the CEO going to get the reward is the easiest one … must believe in the for that down the road, depending on the power of building a for sure, because it’s not accounting system you brand, to have this immediate ROI … if I work on, you can sustenance and spend this, I’m going to actually play with your longevity in your get two times that return balance sheet (WE7) organisation (WE5) within business cycles (US3) Category: Elusive benefits CEO Head of brand External consultant (continued)

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Table 4.9 (continued) The energy industry is The feeling that a brand Every piece of cares about you can be extremely communication that you very strong. When competitive. In a do with your customers people believe that a highly competitive (is) to retain them, to look brand is not caring, market, it makes to migrate them to a new that’s when the real financial sense to tariff, to tell them about a problems begin. So, invest in branding. It new product or solution, our experience at our reduces your cost of to help them record their company, we pay very acquisition, increases energy uses, to give them much attention to loyalty, it reduces tips on saving energy. All these three topics, churn, it improves of these things can have price premium and in make the brand really positive short-term clearer, create a some cases, at impacts, as well as build competitive edge, and minimum, it reduces your brand (WE4); But to develop a stronger and the need for convince people that frequent discounting, richer, more appealing, (branding) was an experience for the promotions… (WE5); important part of our customers (WE6); The Let’s say you want to company took quite a obvious answer then is attract talent, you while and many people, that you’ve got to want to be protected for several years, thought spend money on it in terms of crisis. You this was just a waste of (branding) because want to be on the money. But when we shortlist of standards. otherwise you’re showed results, showed Then you need to put limiting the number of both the more diverse channels that you have money (into customer (base) and also available to branding) … (WE2). getting better value for Are we then going to communicate. And our products, then I think you’re limiting the reach out to that everybody agreed that reach and the this was an important part particular young targeting that you’re generation? That’s (of the business) (NE5) able to generate from why we open up those channels. So why branding in a new would you do that? way. Because it’s also (WE1) about putting a new set of associations into the brand (NE1)

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currently stand, is the most significant contributor to climate change. The sector is part of the problem, but it can be part of the solution. In addition, the impact energy companies have on society is commensurate to their size, through employment potential, taxable revenue, changes in supply prices and other aspects of their business. Several of the experts argued that this meant the responsibility of energy companies might be even higher than those of large companies in other industries. For example, WE6 stated: ‘Every day in the newspapers, on TV, we are talking about climate change and the impact of the energy world to that change.’ NE5 also addressed this and said: ‘I think this big footprint we have is our challenge and we have to limit the negative impact and try to increase the positive impact we are having.’ UAE1 adopted similar viewpoint, saying: ‘A company operating in the energy sector should understand the social, environmental and economic impacts created in all the regions affected by its activity.’ Thus, the experts were aware that energy companies have a great responsibility, although they had different opinions of how that responsibility should be discharged. Some argued that energy companies are responsible for reducing their footprint and finding renewable sources, whereas others believed that energy companies are also responsible for educating and assisting customers to reduce their footprint. Some of experts highlighted that their companies were already taking measures to fight climate change. For example, both WE2 and NE2 mentioned that sustainability did not belong in a particular department within the company but was in fact integrated within the business itself. As WE2 states: ‘Sustainability is not an add on … it’s really about what the company says!’ Other experts also talked about sustainability being a commitment companies must make towards their employees, customers, and society. This was a necessary responsibility that energy companies have to take, or as UAE1 stated: ‘We are committed to sustainable management of resources, creation of economic value, reducing environmental footprint and pursuing social development. We abide by these commitments while simultaneously continuing to provide quality and affordable energy and water to our people.’ All of this relates to branding, in the sense that energy companies need to affirm the commitment on combating climate change through their

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brand. This is best illustrated with the quote from WE7: ‘There’s a direct or indirect responsibility that energy companies have in understanding, or telling the world, that a more generous attitude towards Earth is something that will benefit us, our children, and (society) in the future. So, the easy way for energy companies, and I say the easy way, is to try to own a certain discourse in the green and the sustainability (debate), as well as investing in corporate social responsibility.’ This statement expresses how energy companies need to take part in the discussion of climate change and how they can do it by using branding. Energy companies can lead the discussion on renewable or green energy and show that they are committed to fighting this problem in their branding activities. In Fig. 4.8, sustainable factors of branding are presented. Energy companies need to face the pressure from society, accept, and understand the impact they have on the environment, and display, through branding, the actions they are taking to fight climate change. It was apparent that many of the experts believed that energy companies should focus on finding solutions to climate change (global warming). Their companies are important players in this challenge, so it makes sense for them to commit to finding solutions. Solutions can be, for example, investment in technology and assisting consumers in reducing consumption. WE5 mentioned that it might take some time to find these solutions, but that finding them was ultimately the goal: ‘I think it’s a journey. We are doing our part with our innovation and R&D spending and other things to find those solutions.’ Similarly, WE7 stated: ‘Now we have to find ways of heating our homes efficiently. So, it’s about using our

Fig. 4.8  Sustainability factors and energy brands

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brains and science that we have at hand to create a sustainable world. And that is a channel that energy companies have.’ Fighting climate change requires engaging with customers, to motivate a shift in behaviour towards greater responsibility in energy usage. For example, when discussing the future of society, NE5 thought it was vital to use emotions: ‘The question that should be considered is ‘How are you going to be responsible consumers, to support a sustainable development of society, for our children? So, it’s kind of our responsibility for the future. That’s the feeling that I think should be the main driving factor.’ This was also evident in conversation with NE2 who mentioned that energy companies need to focus on solving the climate issue; in that discussion, it was possible to bring in emotions. He claimed that in presenting their message on issues such the need to increase sustainability—issues which are somewhat abstract—energy companies should focus on concepts which are immediately relatable. For instance, the concept of ‘a generation’ is more immediate and relatable, than that of ‘years’. As he stated: ‘We want to express it “within one generation”, because that makes it emotional, it connects to your family, to your children, and it also reflects the strength of the commitment.’ The responsibility energy companies have regarding being ‘green’ or sustainable was shared by most of the experts, despite variance regarding which green or sustainable objectives should be of immediate focus. However, they agreed that using branding and brands is ideal for working with society, employees, and consumers on fighting climate change.

4.4.1.2 Action over Words The discourse on sustainability, as well as that on environmentally friendly and ‘green’ companies has branched into many different topics. However, one concept that has gained much attention is that of greenwashing. Greenwashing is the act of a company misleading its consumers about the company’s environmental practices (De Freitas Netto et al., 2020). A study by Vollero et  al. (2016) on energy companies, corporate social responsibility (CSR), and greenwashing shows that energy companies need to avoid a number of common pitfalls that can lead to the

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appearance of greenwashing. They suggest that for energy companies to avoid accusations of greenwashing, they need to focus on corporate communication, making sure that they are both being honest about the environmental commitment of the company, and telling the story of the organisation’s contribution to sustainability. The experts discussed the importance of energy companies putting actions before words and showing that they are committed to fighting climate change. They also propose that energy companies should not ‘go green’ because it just makes them look good, but there should be a deeper motivation: They must want to be green (e.g. by choosing to produce energy mostly or entirely from renewable sources), because that is better for society. The experts commonly mentioned this regarding energy companies committing to fighting climate change. For example, WE6 discussed this from the perspective of a consumer and stated: ‘I need to be confident with the brand I’m choosing, not only how they will provide energy to me, but to what extent they will do their business in a way to protect my future, the future of my family, the future of my planet—and I don’t want them to just use words. I want them to show that they really are doing the job properly.’ Therefore, energy companies today have a twofold role: providing energy and protecting the planet’s future. They are expected to be commercial, ‘for-profit’ businesses, and also custodians of the environment. This is in tune with the point, mentioned earlier, how companies today are ‘glass boxes’ (meaning, due to social media there is less secrecy, and ever-greater transparency and scrutiny of corporate operations). Consumers can not only see companies’ actions, but also glance at what is going on ‘behind the scenes’ therefore putting pressure at corporations to align words and deeds. WE7 explains this as follows: ‘It’s not only about claiming that you care for a greener environment. It’s about doing it. So, you won’t go anywhere if you don’t do what you say you’re doing.’ Some of the experts directly mentioned greenwashing. Asked about the significance of sustainability for energy brands, NE1 mentioned the importance of matching actions and words. His view was that instead of overpromising and under-delivering, companies should better err on the side of caution, by under-promising and over-delivering: ‘Normally, you’re making sure that you are getting more actions than words. Because,

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if you are only talking about this and not doing something about it, then it’s greenwashing. And the last thing you need is greenwashing.’ Another expert also addressed greenwashing in regards to the importance of actually communicating to customers and society what the company is doing. NE2 stated: ‘I really want to make sure that we don’t stop communicating about our milestones, about things that are happening, that are supporting the way we present our purpose and the way we build our brand around that. So people really can feel that we are, what you call it, for real. That is my worry—that people might think that what we have created is a greenwashing thing or something similar.’ The experts suggested that energy companies needed to make sure that they are putting actions before words, and communicating to consumers and society that they are committed to finding solutions and fighting climate change. If that is not done, there is a risk of greenwash accusations, which is the last thing a respectable company operating in this industry wants.

4.4.1.3 Consumers’ Role The discussion on climate change and sustainability cannot overlook the consumers’ role. Their role relates to, for example, self-identity, consumption, and behavioural change. When discussing consumption in the interviews, experts mentioned that it contributes to climate change and that, in response to consumption-driven emissions, energy companies should both change their business activities and support consumers to reduce their energy consumption. US1 mentioned on the part of the consumers a certain inertia, and that companies are facing a challenge in how they can convince consumers to change energy consumption habits. US2 mentioned that his company has implemented specific programmes to help customers change their energy usage and assist them in conserving it. Furthermore, he discussed how this strengthened the relationship between the energy company and its customers. By contacting customers and discussing their energy usage, he created more engagement points and built a stronger relationship.

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US4 discussed a conservation programme that her energy company has implemented and that it involves both assisting customers in consuming less, as well as finding new technological solutions and lowering emissions. NE4 talked about his company’s vision and mission in this regard: ‘We should not only reduce our footprint on the environment, but we can also help others to reduce their footprint. So, we have an even bigger role.’ When discussing the consumption of fossil fuels, WE5 likewise mentioned customer consumption, as he stated: ‘Obviously, we contribute to less than 20% of that chain because we extract it and we sell it. But it’s the choice of consumption that ultimately determines where the carbon is finally emitted when you burn it. So, we believe in helping our customers to avoid and reduce and offset the emission.’ The attitude of the consumer is important for energy companies in reducing consumption overall, which can be only achieved by sharing a common goal. In Fig. 4.9, the interaction between energy companies and consumers is presented. When energy companies establish programmes to assist customers to reduce their consumption, they meet consumers’ wants and needs in terms of sustainability. This can affect and increase engagements between customer and company, which leads to a positive connection. Certain emotional factors were closely tied to the subject of climate change and consumers. Some of the experts mentioned that there was a self-identity aspect when it comes to energy, meaning that for some consumers buying sustainable energy is about doing good and feeling good. For example, WE5 stated: ‘If your rational benefit is that I give you 100% renewable energy the emotional benefit could be, I help you feel great about the environment … (I give you) the sense of optimism, that together we can change the world.’ OC1 also mentioned this as she argued: ‘I think a really good example is energy in New Zealand. There

Fig. 4.9  Energy efficiency programmes and their impact on consumers

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are energy companies that are fully 100% renewable generation. And when you look at their customer base, they are buying with their heart. They’re buying and the price is not the thing that they’re buying into, it’s this idea that “I’m doing something good.”’ This aspect was connected to the younger generation of consumers, as young people behave and interact differently with brands than, for example, the baby-boomer generation. This was mentioned by US1 who said: ‘I think sustainability and environmental responsibility is going to be an increasingly important battlefield for people from younger generations. They are going to take a long-term view and think about what their value proposition is going to include; whereas someone like me, who’s older, more established, maybe doesn’t think of it in the same way.’ Similarly, US2 also mentioned this generational gap saying that millennials have entirely different expectations of what they want and that ‘they want to see greener, they want to see this type of stuff. They tend to develop more of a brand loyalty than my generation out there.’ Furthermore, NE5 was asked about what the importance of sustainability should be for energy brands, and he answered: ‘This will only increase in the future, I think, because of the importance of all the new generations that are seeing the world in a different way than the old generation.’ In conclusion, energy brands need to connect to this new generation of consumers who want sustainable and green products and have a different consumer behaviour than the generation before. The changing role of the consumer (e.g. through a stronger preference for renewable energy, and greater expectation regarding the service they receive) impacts energy companies, as they need to understand and connect to these consumers to stay in business. In the word of NE4: ‘It’s pretty simple, those old utilities are having a huge loss of capital.’ He followed this discussion by saying, ‘I think that those who are not mentioned and not acting already, and who have not been acting in the last years to prepare for this will one day be out of the game.’ Energy companies need to assist their customers in reducing their energy consumption and find ways to influence customers in choosing green energy. According to experts, the consumer with all his inclinations and actual behaviours should occupy a central place in the discussion on sustainability.

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4.4.1.4 People, Planet, Profit: 3Ps or ‘the Triple Bottom Line’ The ‘3Ps of sustainability’ refers to the concept of the ‘people, planet, and profit’ triple bottom line. From a marketing and branding point of view, it refers to the idea that brands can positively impact both people and the environment. Sustainable growth offers opportunities for brands to invest in new technological and organisational solutions, reduce the risk of taking part in unsustainable practices, and grow as businesses while doing good for society and the environment (Fisk, 2010). This idea connects to the discussions across the interviews for this study: that sustainability is both about protecting the planet, and a profitable business strategy. In fact, it is, for many reasons, a better strategy than unconstrained or unsustainable business growth. Obviously, because such ways of doing business are ultimately self-defeating, but, also because today’s consumers want sustainable products and commodities. This creates opportunities for energy companies to satisfy an emerging need. When NE2 was asked about how sustainability creates business opportunities, he stated: ‘We’re building our brand now around the commitment to fight climate change, in the energy field, the field of electricity and heat … There is a considerable amount of business opportunities, and at the same time, we can see that we will provide the solutions to mitigate climate change. So, I think we, the brand, are very strongly trying to fight climate change.’ Similarly, US4 also mentioned business opportunities for energy companies as she discussed that her energy company is in this fight with her community and globally. She mentioned that the vision of the company is to invite as many people as possible to bring in new solutions. Some experts discussed the balance between the 3Ps of sustainability, in the sense that it was important to find harmony between these aspects. One of the experts (WE5) mentioned the importance of matching the corporate purpose to the customers’ needs and that sustainability could, in that way, help drive the business if the needs and purpose match. Many experts mentioned the meaning behind the word ‘sustainability’. In the sense that when businesses decide to implement a sustainable strategy or become sustainable brands, they are, in fact, thinking about longterm financial viability. WE1 elaborated on this: ‘Sustainable means that

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it can be sustained—it’s able to be sustained … it can last over a long period of time […] just the natural evolution of these business models is going to be very much towards these solutions which are aligned with sustainability.’ This statement illustrates why it is necessary to think about sustainability as being more than just ‘green’ and how it can be beneficial for companies to implement sustainable practices into their business. On a similar note, US3 discussed the long-term view of sustainability as she stated, ‘My gut feeling is that probably 30 or 40 years from now there will still be some traditional (energy companies) plugging along, but is that really the business you want to be in? Or do you want to be in a much more interesting, interactive, growth-oriented business being part of what the planet needs us all to do, and build strong companies while we do it.’ To summarise the theme of sustainability in the energy market, experts believed that energy companies could not operate in the future without being green or sustainable. There was, however, a range of opinions on what role energy companies should play in these developments. Some believed energy companies should invest in sustainable projects and technologies; others argued that energy companies should educate customers and assist them in reducing their energy consumption. Energy companies need to lead the conversation on sustainability due to their impact in society and on the environment. They can use branding strategies to show that they are putting actions before words and combining the 3Ps of sustainability: positively impacting people, protecting the planet, and making profit in the long term. In Table 4.10, the categories under the theme are displayed along with quotes from the experts to conclude this subsection.

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Table 4.10  Theme of sustainable energy brands with quotations from experts Category: Responsibility CEO Head of brand External consultant We are building our brand I think it’s very They have to really now around the important that we understand that the commitment to fight recognise that climate purpose of your climate change, in the change is real. It’s very organisation has to be energy field, field of important to aligned with sustainability electricity and heat, recognise that the and energy companies where we can see our consumption of fossil have a fundamental role role (NE2); Now we’re fuels over the past in sustainability (WE7); I looking for real solutions several years has need to be confident with so that we can actually contributed to it the brand I’m choosing, lower our emissions. (WE5); I know that we not only about how they (US4); We understand are the polluter, and I will provide energy to me, the vital role we play in know what it takes to but to what extent they building a sustainable bring it down because will do their business in a future for the country I’m so close to the way to protect my future, and the UAE (UAE1) problem, I’m close to the future of my family, the solution (NE1) the future of the planet (WE6) Category: Action over words CEO Head of brand External consultant I think that we have really You should be making I go back to my ‘black box’ taken very seriously the sure that you are and ‘glass box’…It’s not purpose of making fossil getting more actions only about claiming that free living within one than words. Because if you are for the generation… (NE2); you’re only talking environment, it’s about What I see often in the about this and not doing it (WE7); These energy sector is actually doing something transformations, in my people talking about about it, then it’s opinion, should be part of things, but they are not greenwashing and the the vocabulary of the ready to deliver. This we last thing you need is brand to show and make need to avoid. greenwashing (NE1); people comfortable with Sometimes I see that in We don’t have a the idea that their change the energy sector that sustainability is not a cosmetic one, that we have done something department at our it’s a real change, that it’s great, but we are still company. Our a long-lasting change, not talking about it to business is to help and it’s a change that is customers (NE4) others consume less trustworthy (WE6) and consume greener … So, sustainability is not an add on, it’s not something designed, it´s really about our company (WE2)

(continued)

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Table 4.10 (continued) Category: Consumers’ role CEO Head of brand I try to get my customers to I think a lot of it will change how they use have to do with energy, and you know, customers choosing to reduce their usage and switch over (WE5); So, be better conservers of we believe in helping energy… (US2); We can our customers avoid do it together. We not and reduce and offset only can reduce our the emissions (WE5); I footprint on the think that society has environment, but we can been evolving … We also help others reduce have had all those their footprint (NE4); We young students have one of the biggest mobilised around the energy efficiency and world. Everybody conservation programmes became aware of the in the nation… (US4); But importance of you know, we have so working on that much more of an activist (WE2) society today (US3) Category: Planet, profit, people CEO Head of brand And if they are negatively In today’s world, what impacting the we are seeing is that environment, then they (sustainability) helps will go out of business, drive business. It helps they will not stay longer. drive reputation. It Even the consumers are helps drive looking for the company recruitment. So, I that is eco-friendly (UAE1); believe sustainability Do you want to be in a should be somewhere much more interesting in the brand’s growth-oriented business positioning (WE5). … You know, being part Our clients are of what the planet needs desperate to progress us all to do, which is build into that strong companies while (sustainability) we do it (US3); I think key because they want to to that is sustainability, stay competitive and which is economically, their own environmentally, and shareholders are societally based. We are all putting pressure on benefitting from this them. So, it’s a whole harmony between these ecosystem (WE2) three attributes of sustainability (NE5)

External consultant The thing about sustainability, historically, if you go back two, three decades ago, a lot of people talked about it, but people wouldn’t act on it … And so that’s changed because of two reasons. One is that all these products have gotten better. You don’t have to sacrifice anything …And two, people are willing to pay more money for it. So, they will actually pay that premium (US1)

External consultant Just the natural evolution of those business models is going to be very much towards those solutions, which are aligned with sustainability. That’s what sustainability actually is… An unsustainable company is a company that can’t be sustained over the long term. And I would argue that certain sectors of the carbon economy are unsustainable over the long-term simply because the combination of technology, regulation, and financial market forces are acting upon it in a way that is going to limit its ability to be successful (WE7)

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5 Conclusion: Conceptual Model of Branding in the Energy Markets

Abstract  In this chapter, the research is concluded with a summary of the subject of the book. The treatment of the seven themes in earlier chapters indicated that the experts incorporate different branding methods in their day-to-day work, but view branding holistically. These findings are recapitulated and merged into a conceptual model that can be used as a basis for understanding the foundations of branding strategies for energy companies. The conceptual model summarises the findings and combines the seven themes into a flowchart. What is revealed in the conceptual model is that branding, in the context of energy companies, has a greater purpose than providing companies with a competitive advantage. Branding contributes to a ‘social licence to operate’ by building trust between consumers and energy businesses. Keywords  Brand trust • Brand relationship • Consumer brand • Energy brand • Commodity branding • Social licence • Brand building • Brand management This book is based on research on branding in the energy sector. Since the deregulation of the energy markets, energy companies have needed a © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 F. Larsen, Commodity Branding, https://doi.org/10.1007/978-3-031-29966-7_5

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better understanding of how to effectively sell their products and services. Whereas the pre-liberalisation market was monopolistic, in this new business environment they have to compete against other companies. To do that they must understand their customers. The post-liberalisation customer is a real living person, rather than simply a ‘metre’, a term many traditional energy companies used to designate their accounts. This book has had two main objectives. First, to examine the challenges and opportunities energy companies face in marketing and branding their products and services following deregulation. Second, to examine how both theoretical and practical branding strategies apply to the energy market. Data was gathered through interviewing 19 energy executives, who are also branding experts and/or experienced practitioners. The interviews were based on predetermined questions that allowed qualitative processing and analysis of the answers. Based on this processing, seven themes were identified. They are as follows: • Energy Market Characteristics. The energy market is dynamic and competitive. Due to the ongoing transformation of the energy market several features and attributes, some of them specific to this sector, need to be kept in mind for the successful utilisation of branding. • Branding Commodities. The products energy companies sell are commodities (electricity, oil, gas, other types of fuel), but that should not limit approaches to branding, especially as the sector is moving to the provision of services. • Intrinsic Factors. Energy companies need to support and embrace the philosophy of branding from within. To build and sustain strong brands, corporate branding initiatives should have deep roots internally. Smart communications are needed to mould the organisational culture around this long-term aim. • Extrinsic Factors. Extrinsic factors determine what the brand stands for amongst various stakeholders. These factors can be influenced through proactive, rather than reactive branding communications. In this respect, brand purpose, brand promise, and brand sentiments have been identified as the main categories. Addressing those should provide generous returns on brand investment.

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• Business-to-Business Branding. There is difference in the approach to branding between business and consumer markets. However, there are frequent misconceptions about branding in a B2B setting. Generally, the difference is overestimated because the brand is always about human-to-human interaction. Since business is always about people, the terms B2B or B2C are in some respect outdated. • Investing in Brands. There are both financial and non-financial benefits to branding. But, there is no common agreement how to measure them either in terms of ROI or KPIs. On the other hand, there is anecdotal evidence on the elusive benefits of ‘energy branding’. On balance, a commitment from an energy company CEO to invest in the brand can be difficult to obtain. • Sustainable Energy Brands. Branding based on ‘green’ or sustainable energy is paramount. In this regard, the companies need to show that they behave in a responsible manner, emphasise actions over words and engage with the consumer. In this context balancing the 3Ps, meaning ‘people, planet, and profit’, leads to a ‘win-all’ result. The themes encapsulate the experts’ views and experiences of branding in the energy sector. The themes reveal that the experts incorporate different branding methods in their day-to-day work, but view branding holistically. These findings have been recapitulated and merged into a conceptual model that can be used as a basis for understanding the foundations of branding strategies for energy companies (see Fig. 5.1). The energy brand is the starting point of this model, which is impacted by specific energy sector characteristics. Those are the effects of liberalisation, attributes of energy companies and branding challenges specific to energy companies. The findings reveal that the main challenges in branding energy are low customer engagement, difficulties in differentiating energy, and that energy is viewed as an essential service. Whether the energy brand operates in B2B or B2C markets, it needs to include both intrinsic and extrinsic branding elements. However, if the energy brand mainly operates in the B2B sector, a stronger focus on building trust and relationships with customers is needed. It can bring energy brands power in negotiations and other sales-promoting benefits.

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Fig. 5.1  Conceptual model of branding in energy markets

The intrinsic and extrinsic branding factors impact one another as the internal environment of a company needs to support the external brand. By aligning these two factors and incorporating elements such as service focus, sustainability, and CSR into the brand strategy, energy brands can

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increase customer engagements, build brand image, and gain/retain a social licence to operate. The findings reveal that branding, in this context, has a greater purpose than providing companies with a competitive advantage. Branding contributes to trust relationships between consumers and brands, which are crucial in the fight against climate change. The conceptual model can therefore be used as support, or as a set of guidelines in developing an energy brand. Branding in energy markets has not received much attention in literature. However, this research reveals that experts are incorporating branding practices on various levels of the energy business, and at a range of complexity. Furthermore, the findings shine a light on how dynamic and competitive the energy markets have become due to changes in the past decades. Considering the market environment today, it is safe to assume that further changes (some of which can be predicted) will continue to impact the market. Therefore, researching energy brands can offer intriguing insights into how companies react to various challenges by branding and marketing.

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Index

B

Brand building, 18, 76–80, 105 Branding ROI, 101, 104, 105 Brand investment, 41, 109, 132 Brand management, 8, 14–15, 21 Brand relationship, 2, 14, 46, 71, 86, 87, 109, 135 Brand trust, 20 B2B brand/B2B branding, 16, 17, 41, 47, 96–100, 104

Energy brand/energy branding, 3, 8–21, 31, 33, 35, 46–123, 133–135 Energy liberation, 8 Energy market, 2–4, 8–12, 20, 21, 34, 42, 43, 47–73, 108, 110, 111, 122, 131–135 Energy regulation, 8, 53 Executives, 33, 81, 96, 132

C

Commodity branding, 15, 19, 35, 54, 67–71 Commodity market, 4, 19, 21 Consumer brand, 90

G

Green branding, 3, 20, 21, 35 I

E

Emotional branding, 90–91

Industrial branding, 15, 17 Industrial market, 17, 21 Interview research, 31

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 F. Larsen, Commodity Branding, https://doi.org/10.1007/978-3-031-29966-7

149

150 Index Q

S

Qualitative analysis, 37, 38 Qualitative data, 37 Qualitative method, 30

Service branding, 15, 17–18, 67, 70–74 Social licence, 59, 88, 108, 135 Sustainable brands/sustainable branding, 111–124

R

Return of investment (ROI), 101–107, 133