Marketing Strategy for Set up Photovoltaic Solar Energy Systems in Turkey

Analysis of PV Solar Energy Systems in Turkey

Master's Thesis, 2012

130 Pages, Grade: 1,5


Table of Contents

List of Figures

List of Tables and Maps


1 Introduction
1.1 Research Questions
1.2 Research Aims and Objectives
1.3 Research Method

2 Literature Review
2.1 Marketing Environment
2.1.1 Microenvironment
2.1.2 Macroenvironment
2.2 Marketing Strategy
2.3 Diffusion of Innovations
2.4 Green Marketing
2.4.1 Segmentation
2.4.2 Green consumer buying strategies
2.4.3 Green Marketing in Turkey
2.5 Conclusion

3 Photovoltaic Solar Energy and Systems in Turkey
3.1 Photovoltaic Solar Energy Systems
3.2 Industry
3.3 Marketing Environment
3.3.1 Microenvironment
3.3.2 Macroenvironment
3.4 Market

4 Empirical Study
4.1 Survey Design
4.2 Empirical Results
4.2.1 Company
4.2.2 Microenvironment
4.2.3 Macroenvironment
4.2.4 Marketing Strategy
4.2.5 Performance, Customer Portfolio and Governmental Support

5 Marketing Strategies for Installers
5.1 Segmentation
5.2 Targeting
5.3 Differentiation
5.4 Positioning
5.5 Marketing Mix
5.5.1 Product
5.5.2 Price
5.5.3 Promotion
5.5.4 Place

6 Conclusion
Discussion and Further Research

Appendix 1: Distribution of Household Ownerships in Turkey A

Appendix 2: Web-based Survey Questions in Turkish B

Appendix 3: Web-based Survey Questions in English G

Appendix 4: Web-based Survey Results in Turkish J

Appendix 5: Answers of Open Questions (15-18) S

Appendix 6: List of PV Solar Energy Companies in Turkey AA

Appendix 7: Statistical Tables and Figures HH

Works Cited WW

Affidavit CCC

List of Figures

Figure 1 - Managing Marketing Strategies and the Marketing Mix

Figure 2 - Four Ps of the Marketing Mix

Figure 3 - Diffusion of innovation showing progressive stages of adoption overtime

Figure 4 - Photovoltaic and Thermal Solar Energy Systems

Figure 5 - PV Solar Energy Systems by categories

Figure 6 – Number of PV Solar Energy Industry in Turkey by functions of companies

Figure 7 - Population pyramid of Turkey

Figure 8 - Distribution of population in Turkey by urban and rural areas

Figure 9 - Population growth rates in Turkey by urban and rural areas

Figure 10 - Annual GDP growth and foreign direct investments, net inflows

Figure 11 - GDP of Turkey

Figure 12 - Gross national products per capita

Figure 13 - Gini Index values of Turkey

Figure 14 - Current Account of Turkey

Figure 15 - Interest Rates of Turkish Central Bank

Figure 16 - Electric power consumption per capita in Turkey

Figure 17 - Power production, import and loss in Turkey

Figure 18 - Electric power transmission and distribution losses (% of output)

Figure 19 - Comparison of Cultural Dimensions of Turkey, U.S. and Germany

Figure 20 - Roadmap to a license-free solar system in Turkey

Figure 21 - Estimated Residential PV Price Parity in 2012 And 2015, $ per kWh

Figure 22 - EPIA’s unlocking the PV potential of Sunbelt

Figure 23 - Steps of Survey

Figure 24 - Usage of marketing channels (Count)

Figure 25 - Usage of new marketing methods (Count)

Figure 26- Coding Key By Categories U

List of Tables and Maps


Table 1 - Categories of responses to new technological innovations

Table 2 - Some Online Component Suppliers for PV Solar Energy Systems

Table 3 - Enforcing Contracts Indicators of Turkey

Table 4 - Reported PV power capacity in participating IEA PVPS countries by 2010

Table 5 - Detailed annual historical market data and outlook until 2016 (MW)

Table 6 - Answers to Question 10 - Translation in English


Map 1 - Global horizontal irradiation of Turkey

Map 2 - Allowed solar power plants area in Turkey with license application.

Map 3 - Number of households by ownership status of housing unit in Turkey A


illustration not visible in this excerpt

1 Introduction

This work focuses on analysis of photovoltaic (PV) solar energy systems market in Turkey and shapes a general marketing strategy for set up photovoltaic systems in Turkey.

Transition from traditional fossil energies to renewable energies was the one of the most discussed topic on world politics after the nuclear reactor explosion in Fukushima, Japan on March 12, 2011. In addition, since the cut in incentives for PV solar systems in Germany were fiercely discussed especially between solar industry in Germany and the German government. {Stratmann 23.02.2012, #6} It became a hot topic in March 2012 again.

However, the usage of PV solar systems in Turkey is quite rare in comparison with Germany. {EuPD Research 07 January 2011 #8} Although, irradiation levels in Turkey are higher than Germany {European Communities 03.10.2007 #5}, which has the largest solar energy systems in the world today {Solarbuzz #7}, solar energy is not a popular energy source in Turkey. Moreover, costs of electricity recently rose there by up to 8,1% (0,1319 €/kwh) on 1 April 2012. {Ankara Zaman 01.04.2012 #1}

In the light of this information, I decided to analyze the Turkish PV solar energy market.

1.1 Research Questions

In this concept, following questions came up in describing the PV solar energy systems market in Turkey:

v How many PV solar installation companies are active in the solar energy business there? What kind of functions do they have?

v How is the actual and future outlook to the PV solar energy market in Turkey?

v How do the market players perceive the market environment?

v How do they communicate with their target audience?

v How do they use latest methods and marketing tools to reach the end customer?

These questions led me to develop the following question for my research question:

What are actual conditions of PV solar systems market in Turkey and how can be developed a general marketing strategy for increasing PV solar energy for installation companies there?

So, I am going to analyze the market and the companies that they directly in contact with end users to find the possible answer. Although, the profile of customers is also an important factor, I am not able to analyze them due to the lack of financial limits and my location in Germany.

1.2 Research Aims and Objectives

The first goal of the thesis is to understand the solar energy market there and analysis marketing strategy of market players that directly in touch with end users. Second goal targets to create a marketing strategy for convincing Turkish energy consumers, in order to increase use of PV solar energy systems.

Defining research problems and objectives was described as major difficulty especially for “…converting a series of business problems into tightly drawn and achievable research objectives” in international market researches by Ghauri and Gronhaug. {Cateora op. 2006 #17: 153} Hence, another challenge is to describe problems of Turkey and trying to find possible solutions to them.

The purpose of this study is listed as follows to meet the defined aims.

1. To analysis their marketing environment of solar installer companies in Turkey
2. To define active installer companies at the solar energy market in Turkey with an exploratory research
3. To describe their marketing strategy and target customers
4. To recommend a general marketing strategy in the light of gathered information for PV solar energy systems installation companies of in Turkey.

1.3 Research Method

The topic is an ambitious problem, because PV solar energy systems are a new market, which is in early stages of evolution in Turkey with limited number of studies. In addition, Mooi wrote that,” …the objective of exploratory research is to explore a problem or situation.” {Mooi op. 2011 #10: 13–15} This citation explains exactly my research and therefore, it is as an exploratory research for the marketing field of PV solar energy systems. In addition, secondary sources were used for the evaluation of the market. However, the empirical research was gathered primary data as well and that part was done with quantitative research methods.

2 Literature Review

This chapter reviews the actual marketing analysis and strategy knowledge with different marketing models such as green marketing or diffusion of innovations. Here is firstly mentioned the marketing environment for defining influence factors to markets and marketing strategy theory. Secondly, new marketing approaches to PV solar technology are described.

2.1 Marketing Environment

All actors and factors that are effecting to marketing activities and relationship to the target customer named as marketing environment. It is divided into two classes as microenvironment and macroenvironment. {Kotler 2012 #22: 66–69}

2.1.1 Microenvironment

The elements of first group are what make company depended to deliver its value to target customer, in other words close actors the company, suppliers, competitors, publics, marketing intermediaries, and customers. Internal forces all are controllable parts of company. Suppliers are one of the most important actors in delivering the value and the dependency to them increases the awareness in developing relationships with them. Moreover, they always are part of the products or services somehow. Thus, largest companies force to improve their suppliers in terms of quality for satisfying their customers. {Kotler 2012 #22: 66–69}

Marketing intermediaries consist of corporations in three different fields such as financial, physical distribution and marketing service agencies. These firms are part of value delivery process too and they have the role in reaching the target customer. Therefore, marketing intermediaries must be considered as business partners in value delivery network to customers, which are directly effecting own effort of the company. {Kotler 2012 #22: 66–69}

Moreover, competitors should be observed in terms of marketing strategies and offers for creating an advanced value and offer for target customer. Besides, the company should take into consideration the publics that have interest or impact in its way to reaching targets. They are grouped as financial, media, government, and citizen-action, local, general, and internal publics. Each member of these needs a special persuasive offer to produce an expected response in company‘s interest. Lastly the most important public is the customer. That is divided in to five types as consumer, business, reseller, government, and international markets. Each of them has different characteristics to serve and that markets are the last point of value delivery network for marketers. {Kotler 2012 #22: 66–69}

2.1.2 Macroenvironment

In contrast to microenvironment, the second group consist of “larger societal forces” demographic, economic, natural, technological, political and cultural forces. {Kotler 2012 #22: 70-88}

Firstly, demography affects mostly the market with the change of trends, which are depended on life-cycle, family, education, and diversity of humans. Thus, marketing decisions must be considered according the demand of this change in demographics. Although demographic trends affect mostly consumer goods industry, they are the base for a national market and they slightly influence overall economy in time. {Kotler 2012 #22: 70-88}

Secondly, economy of a country is the most effective force on markets, since it shapes the purchasing power of consumers. Each nation has a different type of economy such as industrial, subsistence and developing one and accordingly variable dynamics and consumer classes. In addition, the cost of living, savings, and income distribution are some indicators that help to form the market for targeting the right customer. Moreover, after the world recession in 2008, the shrinkage of luxury goods and more thrifty behaviors were observed in the U.S. economy, which are not any more temporary. This change due to economic crises brought a permanent economical purchase culture not just for the U.S. and to the rest of world too. Thus, marketers should keep eye on the trends of local and international economic variables. {Kotler 2012 #22: 70-88}

Third aspect of macroenvironment is natural environment. Today environmental sustainability is not any more a new topic for us and increasing world population is aware of scarcity of natural sources. Therefore, firms are more careful on their impacts to natural sources. They are minimizing their pollution with choosing more recycling raw materials or optimizing processes like production, logistics, packaging and marketing, in order to keep the natural resources safe and clean. Hence, environmentally sustainable strategies and green marketing were created. {Kotler 2012 #22: 70-88}

Another factor is technological environment that shapes dramatically the market. Tremendous developments in technology create new products and opportunities in markets. Marketing management is the part of the research & development teams today too, in order to produce practical, affordable and safe solutions. {Kotler 2012 #22: 70-88}

The political environment is shaped from legal limitations like regulations, laws and social factors. Kotler divides business legislation into three parts, which aim to: “…protect companies from each other…”, “…customers from unfair business…”, and “…interest of society against unrestrained business behavior…” Furthermore, non-governmental organizations and individuals are some of social environment that may influence actions of companies as social environment. Besides, marketers was developed cause-related marketing for exposing their positive effect to society. Briefly, national and international actors in these two groups forces to form marketing strategies by the changes in both written and unwritten political and social conditions. {Kotler 2012 #22: 70-88}

The last element of macroenvironment is culture. Culture has more than 100 definitions and the hardest force to be adopted by marketers. It briefly defined as “…an integrated system of learned behavior patterns that are distinguishing characteristics of the members of any given society.” {Czinkota 2010 #23: 94} It is consist of following elements language, nonverbal language, religion, values attitudes, manners and customs, and material elements, aesthetics, education, social intuitions, and sources of cultural knowledge. It is a though work to analysis culture under these subheads. On the other hand that is the “collective programming of the mind” according to Hofstede, that shapes decisions of the target audience. {Geert Hofstede 19.06.2012 #24} Therefore, marketers must observe every dimension in detail to deliver the value to its target with cultural passing strategy.

Kotler approaches to culture through values and beliefs. He separates them according to their level of persistence. So, core values are the ones that are thought us in since childhood by family, religion and influenced us by school, government. On the other hand, secondary values are more flexible values, which are open to change. Thus, marketers are mostly tracking the secondary cultural values and trying to analyze and forecast them for their future strategies. In other words, these trends are the reflection of people’s views from different perspectives. Kotler groups these relative perspectives as people’s view of themselves, others, nature, organizations, society and universe. Hence, shifts in secondary culture by different views create new segments such as “lifestyles of health and sustainability” (LOHAS) in U.S. {Kotler 2012 #22: 70-88}

All together above defined major factors are the forces to understand behaviors of target customer groups. So, an effective marketing position could be developed in the light of this information.

2.2 Marketing Strategy

Latest marketing theory has developed from one center, the customer. Therefore, corporations try to be more flexible according to the needs of their customer, in order to have a long-lasting profitable relationship. Marketing departments use for reaching this aim many different tools after several stages. This process is named as marketing strategy and it is clearly defined by Kotler as “The marketing logic by which the company hopes to create customer value and achieve profitable customer relationship.” {Kotler 2012 #22: 48}

Marketing strategy starts from its center, the customer, with four functions. Market segmentation, target marketing, differentiation, and market positioning help to limit the focus on best profitable portions of total market. Further, these processes are used for satisfying customers by specific products and services. Then, that create the marketing mix with their variables such as place, product, promotion, and place. The optimum result is achieved by the information gathered from market analysis, decisions of market planning, actions of strategy implementation, and continuous control of these elements. {Kotler 2012 #22: 48–53}

Kotler wrote that “Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioral factors.” He describes marketing segmentation as division of market into groups according to “…different needs, characteristics, or behaviors, and who might require separate products or marketing programs.” So, they meet with the similar expectations of customers. The next step market targeting comes after segmentation, which used to select the most profitable segments for company’s product and services. In addition, most of start-ups focus on only one segment of market and then expand to other segments. The last processes are differentiation and positioning, where a product or service must be identified different than others and perceived with a unique offer (market position) by customer. That allows distinguishing the product from competitors. Therefore, differentiation of offer creates a “superior customer value”. {Kotler 2012 #22: 48–53}

illustration not visible in this excerpt

Figure 1 - Managing Marketing Strategies and the Marketing Mix.

Source: {Kotler 2012 #22: 48–53}

Above Figure 1 explains the whole processes and the connections from the center customer until the effected environment such as competitors, publics, suppliers, and marketing intermediaries.

After this strategic decision making process, marketing mix comes as next stage, where in detail planning and blending of marketing tools must done for getting a response from target market segment. Product, price, promotion, and place create the term 4P, which approach to market from the view of sellers not from the consumer. The four groups of various marketing elements described below in Figure 2. These “set of tactical tools” forms the marketing mix with a relative blending by the objectives in marketing strategy. {Kotler 2012 #22: 48–53}


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Marketing Strategy for Set up Photovoltaic Solar Energy Systems in Turkey
Analysis of PV Solar Energy Systems in Turkey
University of Applied Sciences Fulda
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marketing, strategy, photovoltaic, solar, energy, systems, turkey, analysis
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Taner Hamid Yilmaz (Author), 2012, Marketing Strategy for Set up Photovoltaic Solar Energy Systems in Turkey, Munich, GRIN Verlag,


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