Energy brands
The energy market is highly saturated and the lion's share of participants tries to differentiate by means of pricing. The potential of the brand is not tapped.
What is different about energy brands?
Brands did not become significant for energy companies until 1996 – as a result of market liberalization within the EU. That goes for both B2B brands and B2C brands.
The objective of the liberalization was: To establish a domestic market, destroy monopolistic structures and stimulate competition among energy providers – for the benefit of consumers. A host of new providers emerged. Since 2011, numerous providers of renewable energy have joined the mix, because Germany turned away from nuclear energy in the wake of the reactor disaster in Fukushima. In 2017, Germany had roughly 1,190 energy providers.
For consumers, this high degree of market saturation means: They have to try to get their bearings in a huge and very confusing flood of offers. They are exposed to enormous information overload.
Today's energy market is defined by price wars
Counter to the original goal of liberalization, some energy providers merged to form oligopolistic mega-corporations. In 2010, the market share of the four largest providers RWE, EnBW, E.ON and Vattenfall was nearly 45 %. The result was a merciless price war that continues to this day.
For consumers, price now seems to be the key criterion: Between 2012 and 2014, about half of the German population switched providers using energy comparison portals.
What could the management of energy brands look like?
In a highly saturated market like the energy market, providers can still escape the prevailing price wars: with a strong brand. Such successful brands have a specific personality, which has emerged from previously delivered peak performances. In brand management this is called the brand core.
Energy brands can emphasize their uniqueness with brand core values. They differentiate from the competition, increase their credibility and attractiveness. Consumers appreciate them because they offer orientation within overabundance.
Strong energy brands thus enjoy consumers' trust – and can escape the pricing spiral that way.
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