Unformatted text preview: lighting accounted for
approximately 8 percent of total U.S. CO2 output48 and each CFL used 75 percent less
electricity.49 From August 2005 to August 2006, Walmart sold only 40 million CFLs compared
to roughly 350 million incandescent bulbs.50
Light bulb manufacturers like GE, Philips, and Orsam Sylvania had not advertised the benefits of
CFLs to customers because sales of CFLs would cannibalize their business in incandescent
bulbs. In transition to CFLs, these companies would watch their sales deteriorate (because each
CFL lasted 10 times longer than an incandescent bulb51) at the same time that their existing
manufacturing facilities for incandescent bulbs were rendered obsolete, requiring costly clean-up
and remediation upon closure.
Sales of CFLs would directly cannibalize Walmart’s own lighting business, as well. The
company expected its lighting aisle to shrink from 60 to 40 to 20 feet over the next several years
as its product assortment became dominated by CFLs and customers purchased bulbs less
frequently. Nevertheless, Walmart lowered its prices on CFLs from roughly $8.10 for a threepack of bulbs to $7.59 (versus approximately $1.50 for three incandescents), expanded the
presence of CFLs in the stores by moving the bulbs to eye level on the shelves, and heavily
promoted CFL technology through creative marketing partnerships, media product placements,
and other less traditional communication strategies. Walmart further invested in in-store
displays to help educate consumers on the benefits of CFLs, giving up precious selling space to
showcase information about the value of the bulbs (each CFL was expected to save the consumer
$30 in energy costs over its lifetime).52 Concurrent with these promotional efforts, Walmart was
closely monitoring the reduction in CO2 emissions achieved by its CFL initiative and other
energy efficiency projects, but had not yet shared the detailed CO2 emissions data with policy
makers and the public.
There was some question about how much detail to provide consumers about CFL operating
costs and mercury content. If Walmart confused people, the plan could backfire. For example,
when the company added information to i...
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This note was uploaded on 01/14/2014 for the course LGST 210 taught by Professor Sep during the Winter '10 term at UPenn.
- Winter '10