PGE Water Heater ET Final Report - FINAL.pdf - Emerging ...

PG&E’s Emerging Technologies Program ET12PGE3191
benefit-to-cost calculations for durable goods like water heaters are more likely to buy an
energy efficient product than those who cannot. 22
The Purchase decision
After the evaluation of alternatives, and with input and recommendations from the retailer
or contractor, the homeowner forms purchase intentions. Situations may arise causing the
buyer to modify, postpone or avoid the final decision. These could be sticker shock
(affordability), availability, or uncertainty about product or vendor reliability. The ultimate
purchase will not only include a decision about the product and vendor, but also decisions
about when to take deliver and how to pay for the product.
Post-purchase behavior
After the purchase and installation of the water heater, there continues to be interaction
between supplier and customer. The interaction concerns the customer’s satisfaction with
the purchase and installation process and the performance of the product. Satisfaction is a
function of how well the product’s perceived performance meets expectations. A higher
priced or premium product like high efficiency water heaters creates higher expectations
that for a standard product. Dissatisfaction will lead to product returns or complaints, while
satisfaction can result in word of mouth promotions and repeat business.
The speed of the water heater purchase decision depends on whether the decision is an
emergency or planned.
EMERGENCY VERSUS PLANNED DECISIONS
The definition of an emergency purchase depends on if the perspective is as a buyer or a
seller. In a 2011 customer survey, recent water heater purchasers stated that 43 percent
of purchases resulted from an emergency. A supplier survey at the same time reported that
suppliers believed that 61 percent of their sales and installs addressed emergency
replacements 23 . For consumers, "emergency replacements" definition only includes a
sudden failure. Suppliers consider an emergency any unit failure, either for poor
performance or sudden emergency.
22 D. A. Houston, “Implicit Discount Rates and the Purchase of Untried, Energy-Saving
Durable Goods, JOURNAL OF CONSUMER RESEARCH, Vol. 10, September 1983.
23 Verinnovation Inc., “2011 Water Heater Market Update,” REPORT #12-234, Northwest
Energy Efficiency Alliance, January 16, 2012, p. 15.
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