A RESEARCH ON LED LIGHTING TECHNOLOGY AND MARKET: A STUDENT PROJECT ON ENVIRONMENTAL SUSTAINABILITY FOR THE LOCAL COMMUNITY
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A RESEARCH ON LED LIGHTING TECHNOLOGY AND MARKET: A
STUDENT PROJECT ON ENVIRONMENTAL SUSTAINABILITY FOR
THE LOCAL COMMUNITY
1
WESLEY ENTERLINE, 2SEAN HALEY, 3RILEY SOCKETT, 4YUSHAN ZHAO
University of Wisconsin-Whitewater, Whitewater, WI 53190, USA
E-mail: zhaoy@uww.edu
Abstract- This project explores the shift to LED lighting solutions in businesses, schools, highways, and households across
the world. LED lighting emits light in a specific direction. Therefore, it is able to use light and energy more efficiently in
many applications. We apply marketing concepts to analyze the LED lighting market including market competition and
marketing mix (product, place, promotion, and price). There are several steps in the marketing strategy a LED light
manufacturer should do to be successful. In addition, we offer recommendations for the local community to adopt LED
lighting technology in order to reduce energy consumption and move toward a sustainable future.
Index terms- LED Lighting, Competitive Analysis, Market Analysis, Sustainability, Student Project.
I. INTRODUCTION competition focuses on innovations, performance,
quality, output, and reliability.
Light-emitting diode (LED) lighting has attracted However, even though LED lights have multiple
great attention from both business and individual positive attributes, in regards to sustainability, they
customers in the marketplace. An LED bulb is an do not sell as much as other forms of lighting. LED
electric light bulb, that has a far longer life span, and lighting has a few key disadvantages [6], [7]. Some of
is much more energy efficient than the incandescent these difficulties include high price, temperature
light bulb. Energy consumption of LED lighting is dependence, voltage sensitivity, blue hazard, blue
significantly low and the lifetime can be up to 10 pollution, light quality, and dimming issues. In this
times longer than that of traditional light bulbs [1], project, we research LED lighting and its impact on
[2]. In the U.S., about 22% of electricity consumption sustainability, offer suggestions to improve the
is lighting [3]. Almost half of the electricity used by product, conduct market and competitive analysis,
industry is for lighting. In homes, up to 25% of the and provide recommendations to the local community
electric bill is for lighting. Incandescent light bulbs, on how to adopt the LED technology to enhance
using the technology developed in 1879 by Thomas environmental sustainability.
Edison, produce the most lighting. This project
researches LED lighting and how it promotes II. PRODUCT DESCRIPTION
environmental sustainability.
LED lights are the most environmentally The incandescent light bulb, which is considered one
friendly lights on the market. They last longer than of the greatest inventions of all time, is rapidly being
other light sources and are far more biodegradable. In replaced by the innovative production of LED
addition, LED lights can be used to decontaminate lighting. LEDs, introduced to the market in the early
water [4], further positively affecting the 1960’s, is a semi-conducting device in which
environment. LED is a new form of technology that electrical currents continuously flow together to
revolutionizes the overall quality and functions of produce a bright, yet, efficient light.
lighting. LED bulbs generate light when current pass As illustrated in Figure 1 (adopted from Narendran,
them and are directional light sources. They emit 2017) [8], the LED lighting system is comprised of
light in a specific direction. This sets them apart from several components that must work in accordance
incandescent and compact fluorescent because these with one another to produce such a function. The
two lighting solutions emit light in all directions. device includes a driver that provides a constant
Because LED lights emit light in a specific direction, current level as well as protection against variations
they are able to use light and energy more efficiently in the level of voltage. Additionally, when there are
in many applications. multiple LEDs, they are assorted depending on the
The LED lighting will allow businesses to develop type of photometric design desired. The last main
new markets, design new business models, and component of this device is the luminaire. The
increase business efficiency. In new markets, luminaire, which is also referred to as the fixture, is
companies need to develop a strong competitive the external material of the LED light. These fixtures
analysis to portray their strengths over other types of may include the refactor, reflector, and the lens,
lighting products [5]. It is important to conduct both which produce such a clear and distant light. With all
competitive and market analyses. The basis of the components working together and with its
Proceedings of Research World International Conference, Chicago, United States of America, 22nd-23rd June 2018
22A Research on Led Lighting Technology And Market: A Student Project on Environmental Sustainability for The Local Community
distinctive design, it has transformed the incandescent for nearly any situation as it emits very little heat that
light bulb into an efficient and eco-friendly product. can be harmful in certain circumstances. In addition,
with such a low voltage, these LED lighting systems
are commonly found in many outdoor settings with
the use of solar-energy. LED lights have also been
found to be capable of efficiently cleaning water.
Special LEDs use a point-of-use disinfecting system
that could help potentially sustain the amount of clean
water on earth, and ultimately, save many lives.
This sustainable clean lighting system has many
advantages. While considering using a LED lighting
system, it is also important to fully understand the
challenges and disadvantages of using these lights.
The biggest drawback that customers view when
deciding upon the purchase of an LED light, is the
Figure 1: An LED lighting system price. While the cost of these lights is continuously
dropping, it is still more expensive than the
With a brief understanding of the LED’s distinctive incandescent light bulb. In addition, these lights often
design, how exactly does this innovation enhance the permit a directional flow of light rather than a more
efficiency behind energy consumption? With several broadened view like the incandescent bulb. In other
millions of dollars and years spent on research and words, they are viewed to have a tight design flow
development of LEDs, its benefits becoming widely such as a flashlight, whereas a traditional light bulb
appreciated by customers [9]. For instance, contrary emits light practically everywhere. In certain
to the traditional light bulb, the LED’s long life is one predicaments, these LED lights may not be of best
of the main characteristics that makes it so appealing. use as they are also much heavier due to the heat
In fact, it is estimated that the ordinary LED bulb is sinks located within the LED bulbs. More research
expected to last approximately 100,000 hours or 11 and development is needed to solve these problems.
years of continuous use. Unlike the standard lighting
conditions that would suddenly burn out when it III. MARKET AND COMPETITIVE ANALYSIS
reached its full life, the LED’s lighting diodes
gradually emit a lower level of output and, in return, A. Competitive Analysis
produce lower levels of brightness. Additionally, The LED lighting market is controlled by several key
LED lights are specifically known to sustain efficient brands. Three of the largest manufacturers are GE,
energy. Philips, and Osram Sylvannia. The market is further
In traditional lighting, the energy is transferred to divided into multiple smaller manufacturers, which
heat and that heat is what creates the light. With the include American Bright Optoelectronics,
LED lighting process, the light is created right away, International Light Technologies, Ledtronics
as opposed to traditional lighting where the bulb Samsung, Seoul Semiconductor Co., LG, Innotek,
needs to heat up in order for the light to appear. As and several others (such as Cree) [13].
shown in Table 1, the traditional light is estimated to Phillips has been integrating Wi-Fi into their bulbs.
operate at only 20% efficiency while the LED light The company created a mobile application that allows
approximately runs at 80-90% efficiency [10]-[12]. a user to control the bulbs (on/off and colors)
The effects of this energy efficiency can be enhanced whenever and wherever they like. Samsung has
on a greater scale throughout infrastructure projects, integrated their LED lights into TVs allowing them to
airports, and larger cities. reduce operating costs and create new type of TVs.
The company is developing a technology that applies
Table 1: Comparison of LED with incandescent bulb OLED (organic light emitting diode) lights into the
LED Watts Incandescent TVs which creates a more vivid picture [13], [14].
Watts The basis of competition focuses on innovations,
400-500L 6-7W 40W performance, quality, output, and reliability [13].
1000-1400L 12-13W 75W Companies invest heavily on the development of low-
Estimated Cost $5.00 $1.00 cost, high quality, and full-color LED products. At
Average 25,000 hours 1200 hours the same time, companies strive to save energy and
Lifespan reduce costs within their products. As LED prices
Note: L (Lumens-Brightness) continue to plummet, LED products are likely to gain
more market share in the commodity market. As a
Furthermore, LED lighting systems are built to be result, many new market entrants are expected to join
resistant to vibrations, shock, and any external the competition [14]. Competition in LED market
elements that make them extremely durable. With will become fierce as more companies enter the
nearly zero UV emissions, the LED light is suitable market.
Proceedings of Research World International Conference, Chicago, United States of America, 22nd-23rd June 2018
23A Research on Led Lighting Technology And Market: A Student Project on Environmental Sustainability for The Local Community
B. LED Market Analysis that take place soon after an LED light is turned on or
The majority of people in the United States use light off.
bulbs, thus the market potential for LED bulbs in the Another issue faced with LED lighting is that its light
millions. There are three types of lighting on the is directional, meaning that it streams light in only
market: LED, Incandescent, and Compact one direction. The standard light bulb emits light in
Fluorescent Lights (CFLs). There are numerous pros all directions, rather than one. Omni-directional lights
and cons to all three of these products. Incandescent create a brighter environment, because light shines in
bulbs are the traditional lighting method and offer a many directions. While omni-directional LED lights
warmer light. However, these bulbs have a larger do exist, they are created for small lights, particularly
impact on the environment and burn out faster. CFLs targeted to a consumer’s home. High voltage LED
use about 70% less energy than incandescent bulbs. lighting, for example, what many universities would
However, these lights also burn out frequently and use, does not have the option to purchase omni-
require time to warm up before they are fully lit. LED directional LED lighting because the product does not
lights are energy efficient, like CFLs, but last much exist. The product development of high voltage omni-
longer and are better for the environment. The directional lighting would benefit the market.
drawback is the cost of LED lights is higher the Universities would take advantage of the opportunity
competitors. However, LED is the most cost effective to create a brighter, sustainable environment with
option in the long run due to its longevity. LED lighting.
Within the LED lighting market, there are various In addition, connectivity to the LED light bulbs using
segments. These include general light manufacturers, Wi-Fi could cause some problems if the Internet was
new entrants, home automation, connected bulbs, and to ever go off. If the Internet in a home goes out, then
intelligence [14]. According to O’Malley (2015), the customers would not have control to any of lights
general light manufacturers produced incandescent through the app. If LED could have both Wi-Fi and
lights previously and have moved into LED lighting Bluetooth connectivity, it will be more appealing to
market. GE, Osram, and Cree, for example, are in this customers.
segment. Further, LED light bulbs have a heat issue. LED
The new entrants are the manufacturers that are new lights perform largely upon the temperature in the
to the lighting industry. Enlighted, Ilumi, and environment and in return, high ambient temperatures
Nanoleaf are examples in the segment. Home result in overheating of the LED package and
automation includes companies that provide home eventually lead to a device failure. Our suggestion is
solutions for various products (thermostats, electric to develop a concept that improves heat transfer
switches, and lights) that can all be synced together. allowing the LED bulb to run in all conditions [16].
Connected bulb manufacturers focus on making the
Wi-Fi enabled lights. The intelligence segment Lastly, many people tend to steer away from LED for
creates lighting for technological products [14]. indoor lighting due to the cold/harsh hue of the
Overall, the market is anticipated to grow to $42 lighting. The color is not as warm or inviting as that
billion by 2019. The increase in revenue will come as incandescent bulbs, thus detracting from customer
from a push to consumer markets. Currently interest. The biggest part of the market is getting
companies are focusing on B2B sales, but this shift in homeowners to use LEDs inside their homes. In a
a target audience will provide new sales typical house, LED lights are usually placed on the
opportunities. There is an anticipated drop in price in outside of the house for things like back porch lights,
the next few years, which will push sales even further garage lights, and basement lights, while
[13], [14]. incandescent light bulbs are still being used in places
like the kitchen and living room.
IV. SUGGESTIONS FOR PRODUCT If developers could establish a line of LED lights that
IMPROVEMENT mimics the warmness of incandescent lights, more
people would be inclined to purchase them. This is
While LED lighting provides numerous benefits, evident in our interview with a manager at True
there is still an opportunity to improve the product. Value. The manager mentioned that many families do
Consumers are drawn to LED lighting because this not purchase LED lights for inside their home due to
energy-saving light bulb helps reduce energy costs. the cold hue.
While savings to the consumer are important, many
experience problems when using an LED bulb on a V. MARKETING LED TO THE LOCAL
dimming setting [15]. Not every standard dimmer COMMUNITY
switch is compatible with LED lights. Issues
consumers face are that the light does not dim at all With all the information contained throughout this
or the light doesn’t dim smoothly, but only reaches report, it can be seen how beneficial LED lighting can
one unwanted dim level. The changing of the energy be to any business. However, there are still some
flow to LED lights can cause even more dimming businesses out there that believe in the traditional
problems. Flashing and ghosting are lighting effects light bulb. It is important that local universities see
Proceedings of Research World International Conference, Chicago, United States of America, 22nd-23rd June 2018
24A Research on Led Lighting Technology And Market: A Student Project on Environmental Sustainability for The Local Community
these facts and start to make a conscious effort to LED lighting companies need to show how and why
provide more LED lighting. their products are better than what universities
One of the first steps that needs to be taken when currently have by creating an advantageous and
composing a marketing strategy is determining a unique position in the customer’s decision-making.
target market at universities. Overall, a typical The best way to sell their product is to show the
campus consists of students, professors/advisors, and buyer the benefits, rather than just the normal
others work in all different parts of campus. Table 2 characteristics of the product. This is the point in the
shows the three segments in a midsized public market strategy process where the ‘wow’ effect needs
university. While LED lighting may be interesting to really be effective.
and intriguing to all these groups, there needs to be a Targeting, segmentation and positioning are all
more specific focus on exactly which type of group important parts of a marketing strategy [10], [13].
that will have the biggest impact. However, price is the most important factor for
customers to make the purchase decision of LED
Table 2: Three segments in a midsized public university lighting. When trying to portray price, it is known
Segments Total Number that LED lights will cost more than traditional
Students 12,430 lighting. However, like mentioned before, it is more
Professors/Administrators 897 important to show the benefits associated with what
Others 355 the university will be purchasing, rather than focus on
a price point. Creating a sustainable and energy-
Professors/Administrators are those on campus who efficient environment all throughout university
will be most familiar with sustainable efforts and the campuses is the most important for students and
effect on the environment. Many of these professors faculty.
teach classes that emphasize sustainability, and there
are a number of student organizations that are taking CONCLUSION
sustainability very seriously. With those previous
statements in consideration, we determined that LED In conclusion, we believe that LED lighting is the
light companies should focus their attention on best decision for universities. We analyzed the pros
professors/administrators as their primary target and cons with the product, how the product will better
group. This group has the most influential power affect the university, and all the potential to continue
around campus. to make improvements on LED products. LED is the
Students may contain a larger amount of participants new generation of lighting for both businesses and
who are environmentally friendly. Due to their everyday people. LED is still in the earlier stages of
relatively young age (compared to the other groups) the product life cycle, and there are so many more
and lack of influence/power on campus, they may efforts in R&D that are taking place to help further
lack experience but are equipped with the most the development of the product.
advanced sustainability knowledge and enthusiasm. Universities can apply LEDs in various ways. For
We therefore suggest that they are in the second example, they can use LEDs in parking lot and
target group due to the fact that they are the sidewalk. LEDs can help save energy in gymnasiums
generation that has been growing up in a more intense and natatoriums. Universities can also install LEDs in
‘sustainable-focused’ environment. The group bathrooms on campuses. The bathrooms require less
“Others” includes maintenance workers, food light than the classrooms/halls and do not have lights
workers, property maintenance, and so forth. We that are on all hours of the day.
recommend putting them into the third target group. We suggest that companies producing LED lighting
After we have determined whom to target, it is now should try to find additional cost-saving practices that
important to go one step further and research that may, in the future, offer their consumers a cheaper
group. alternative product that does the same job (or better)
At universities, many professors and student than the current LED lights that we have. LED
organizations are highly involved in different lighting is a new product with so much potential, and
sustainability activities. We researched a student we think that LED lighting would be beneficial
organization in a midsized public university. The goal throughout our entire society, including businesses,
of the student organization is to create a more earth- schools, residents, and so on [10], [13].
friendly environment around campus. They are led
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