District heating 

The System Heat Brand promotes heat and hot water supplies that are secured by heating companies in Polish cities and towns. Currently, it is a product brand shared by more than 100 companies that do their best to ensure a positive perception of their business among customers and consumers alike. They carry out nationwide advertising campaigns, involve the brand in community efforts, and ceaselessly improve customer service standards, thus gaining more and more supporters. But only 30 years ago, the whole heating industry was operating in completely different conditions and did not have too many well-wishers.

 

Poles tend to recall the times of communism, which were indeed full of absurdities, tongue in cheek and make them the subject of present-day jokes. Hardly anything was available and the shortages could not be hidden from society: not in the shops or schools, nor in the heating industry. The centrally planned economy was so inefficient that even the power sector failed to fulfil its role, and citizens became acutely aware of heat shortages, especially during freezing cold winters. Even in the cult film Teddy Bear by Stanisław Bareja, we can hear: I understand that you are cold, but it is winter, so it must be cold, right? Lady boss, such is the eternal law of nature, isn't it!? – and no one could do anything about it. 95 % of energy was produced from coal, which was continuously in short supply, as it was exported to the Soviet Union rather than go to Polish power plants.

 

Living in circumstances where goods and products were in a permanent deficit continued until 1989. Even though no one was happy about the situation – neither heat suppliers, nor heat consumers – little could be done before. Only in 1990, did the free market arrive to Poland, and heating companies had to adapt to new realities and meet the challenge of production based on the actual social demand. Companies operating in the power sector embarked on transformation and restructuring processes. They had no choice, as the power industry – a cornerstone of free market economy – simply could not fail.

 

Heat supplies had to undergo a qualitative revolution. The eternal law of nature mentioned in the movie Teddy Bear was replaced with new Polish legislation. From that moment on, it had to be warm in wintertime. What is more, the State dropped its efforts to keep the heating enterprises operational whatever the price. Now they were required to produce and record a positive net income. Also, it turned out with time that heating companies ceased to be local monopolies, because they had to deal with a flood of competitive solutions from the West. As a result, the industry began to take care not only about the quality of supplies, but also about the quality of customer service, which undoubtedly affected the image of the entire sector. Production efficiency increased with the introduction of modern technologies, which in turn translated into reduced environmental impact. Not without significance here was Poland's accession to the European Union, which imposed stringent standards on pollutant emissions to which the Polish district heating sector had to adapt. That was the beginning of the new era. The importance of heat production in an ecological process of cogeneration was increasingly emphasized (with cogeneration understood as simultaneous production of electricity and heat, which helps to reduce atmospheric emissions and allows for a better use of raw materials in the production process).

 

Despite such fundamental transformations, the district heating sector's post-communist image still lingered on. Although heat suppliers were doing a lot at the local level to reach out to customers and consumers, little changed in the way they were perceived. Heating enterprises were trying to convince inhabitants of cities and towns that heat supplies had begun to be managed by modern companies that met some high standards of production and were fully committed to their mission; that is, ensuring heat supplies to citizens only when they actually needed them. It turned out, however, that a single company has too little clout to change the image of the entire industry which has perpetuated itself in the consciousness of heat consumers for years.

 

Only a top-down initiative which would combine the strength of enterprises from all over Poland could actually change something in the sector's image. The fact was noticed by the Polish District Heating Chamber of Commerce (further: IGCP), associating heating companies operating in Poland and representing the interests of the entire industry, among other things, in dealings with the legislator. The Chamber's mission is also about shaping the business environment so that it is conducive to the development of the district heating sector: here a positive image would definitely help. Enterprises associated in the Chamber were usually operating in different areas, so they were not competitors of one another.

 

As there were no inter-dependencies between the companies involved, the initiative stood a chance of developing a joint marketing programme, including some consistent promotional efforts for the entire industry, both local and nationwide. The programme was to engage the companies in a joint marketing plan that was meant to do away with the sector's outdated postcommunist image once and for all by promoting the brand of heat supplied by heating enterprises. The programme was modelled on twinlike schemes that had been successfully operating abroad.

 

Indeed, the idea of a joint promotion of the heating industry had been tried and tested before on foreign markets, including Denmark and Sweden. On the Danish market, a common designation was introduced for heat delivered domestically. What is more, a single organisation was established to manage the promotion of heat and provide advisory services. A similar solution was employed by the Swedes, who have created a very attractive branding for a common product brand of the heating industry. In Sweden, promotional activities are handled by a national industry organisation, as well as by local heating enterprises on their own. In both countries, joint promotional activities were introduced along with the development of improved standards that the companies must follow in order to be able to use the industrial product brand. Consequently, the new brand has become a hallmark of high quality heat. Poland was supposed to follow in their footsteps.

 

To put the plan into effect, the Polish District Heating Chamber of Commerce needed the support of at least some of the heat suppliers which understood the idea of joint promotion of the product supplied by heating companies. In 2007, IGCP, along with six enterprises – the programme initiators – began to work on a vision of promotiona  activities.

 

The programme initiators were the following companies:

 

• Gdańskie Przedsiębiorstwo Energetyki Cieplnej Sp. z o.o. (Gdańsk Heat Supply Company, Ltd.);

• Energetyka Cieplna Opolszczyzny S.A. (Heat Power Engineering of the Opole Region, PLC);

• Stołeczne Przedsiębiorstwo Energetyki Cieplnej S.A. (Heat Supply Company of the Capital City, PLC);

• Szczecińska Energetyka Cieplna Sp. z o.o. (Szczecin Heat Power Engineering, Ltd.);

• Grupa Dalkia w Polsce (Dalkia Group in Poland);

• E.ON edis energia Sp. z o.o. (E.ON edis energia, Ltd.);

• Miejskie Przedsiębiorstwo Energetyki Cieplnej Kraków S.A. (Municipal Heat Supply Company Cracow, PLC);

 

 

And that is how organic work began. Together with professional consulting firms, the companies involved conducted market research. It confirmed negative associations with the central heating concept, and a negative perception of heating companies: as monopolies with obsolete organisational structures and long red tape. Therefore, a range of proposals was examined for the name of heat supplied by heating enterprises. Ultimately, the one bringing the most positive associations was selected, namely System Heat. The research also verified which characteristics of heat from the municipal system are the most essential for the users. It turned out that in comparison with alternative methods of heating, System Heat performs better in terms of safety, security of supplies, and ease of use. Consequently, these advantages were to become pillars of the brand promotion in the media.

 

Based on the research information, a brand strategy and a framework for the System Heat Promotion Programme (further: the Programme) were developed. The Programme was to be joined by new heating enterprises provided that they fulfil some specific technological and marketing standards. The companies were learning how to reach the interesting target groups, among which two consumer categories were singled out, namely: end heat consumers (B2C) and a business group: decision-makers in the process of choosing a heating method for buildings, including property managers, designers, architects, property developers, local authorities and the media (B2B).

 

Then, a visual identity system was prepared, including a figurative device and corporate identity, where the brand use guidelines were specified. Also, a nationwide online industry portal was launched (at cieplosystemowe.pl), with separate sections for heat consumers and for the business group. Having the foundations thus laid, it was time to start the operating activities. The first nationwide advertising campaign was launched, which highlighted the advantages of System Heat. At that time the brand name first appeared on TV and the radio. Spots were spreading awareness of the benefits related to the heat supplied by heating companies compared to competitive heating solutions. Advertising tracking ratios for the campaign were very promising, and the effectiveness of promotional efforts was further confirmed by findings of the marketing research in 2011.

 

The study (PBS/DGA 2011) has shown that in the consumer group, 23 % of the respondents confirm that they know the System Heat brand, whereas in the business customer group the awareness reached 33 %. The progress in brand recognition figures triggered off even more intensive promotional efforts. 

 

In subsequent years, campaigns aimed to increase System Heat awareness were carried out not only on TV and the radio but also in newspapers and online media. We should mention here the launch of the System Heat Magazine – a publication full of useful information and advice for property managers and developers, as well as housing cooperatives and communities. The quarterly provides the interested audience with some hard-to-access knowledge on how to effectively manage heat and energy in a building, or information about the latest technologies. Business focus can also be seen on the Internet District Heating Discussion Forum (at cieplosystemowe.biz), where visitors can find the latest news from the industry and for the industry. Here one can learn about the latest changes in legislation and keep track of the most important industry issues.

 

Owing to the System Heat brand, the district heating sector also had an opportunity to discuss issues related to modern district heating during a debate organised on TVN CNBC. However, apart from taking up some serious topics in the media, the System Heat brand has been trying to get closer to people who use heat every day.

 

 

The brand became socially responsible: it is a regular participant in Christmas charity events organised by Channel Three of Polish Radio. As part of two editions of the event, support was given to family-type children's homes and the Polish Humanitarian Action (PAH). However, participation in charitable activities is not the only step that the brand has taken to get closer to heat consumers. Among numerous projects undertaken by the initiative, we should also point to those addressing the youngest audience.

 

Special educational materials were prepared for the heating companies which may now use them to give lessons in kindergartens and primary schools (first grades) devoted to efficient heat management. Meanwhile, older pupils and teenagers have a chance to play a computer game where their mission is to save a smog-wrapped city by connecting the building to the municipal heating system. To complete the task, they must unravel numerous mysteries that will teach them what ecological heat supply is about.

 

A growing popularity of the System Heat brand is evident among new heating companies that are increasingly willing to accede to the joint promotion scheme. Since 2008, when the advertising campaign was launched nationwide, more than 100 companies have joined the Programme (as of 2013). Today, the enterprises identify themselves with the brand, and tend to use it more and more resourcefully. They create websites, leaflets and other promotional literature on their own, yet they do so in accordance with the top-down guidelines, which actually help to prepare the materials quickly and efficiently. Frequently, the companies prepare their own independent advertising campaigns at a local level that are consistent with the national ones.

 

In this way, the advantages of the common product brand are reinforced in the public awareness along two tracks. Therefore, the brand brings more positive associations in both the micro- and macroenvironment of the suppliers. The new, refreshed corporate image also translates into an improved perception of the entire industry. This is because changes in marketing go hand in hand with the ongoing restructuring and privatisation of the companies concerned. Not without significance here are improvements in the production and transmission processes, which are becoming greener and minimize their environmental impact. Customer service standards have improved noticeably too, making a deeply-rooted communist-era image of heating companies firmly obsolete and no longer valid. So the future appears to be ecological, safe and comfortable – “systematically heated”.