ABB ELECTRIC SEGMENTATION

Team 4

Case Background

ABB Electric created, supplied and distributed electrical equipment. Industry sales declined significantly in 1974. Increasing competitions from large companies.

MKIS Program

New Direct Marketing program using Marketing Information System (MKIS) to support decision making.

In order to increase market share:

Determine

client needs Behavior Based Segmentation Target

Customer Needs

Critical Attributes:

Invoice price Energy losses Overall product quality

Availability of spare parts

Clarity of bid document Knowledgeable salespeople

Maintenance requirement
Ease of installation Warranty

Supplier Choice

ABB Electric Loyal Segment (Loyal) Competitive Segment (Competitive) Switchable Segment (Switchable) Competitor Loyal Segment (Lost)

Choosing a District

Purchase Volume
Thousands 60

Summed the purchase volume. District 2 is our targeted district.

50

40

1
2 3

30

20

10

0 1 2 District 3

District 2
Companies Customer ID Purch. Vol.($) Choice Price Energy_Loss Warranty pare_Parts Prob_Solvuality District Maintenance S Ease_Install Q
A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A A 3 13 15 20 22 23 25 26 29 31 34 35 37 38 43 44 46 47 48 52 53 55 56 59 62 63 76 77 78 81 87 88 643 466 696 1009 518 871 800 899 290 37 355 14798 767 182 12514 10997 251 956 335 787 989 728 216 65 289 198 760 777 226 618 395 207 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 1 1 0 0 0 0 0 0 0 0 0 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 6 4 6 3 4 6 5 6 1 3 4 7 5 5 4 6 5 2 5 5 5 4 5 4 4 4 6 5 5 5 6 5 6 5 6 4 5 6 6 6 3 4 4 6 6 5 5 6 4 3 6 6 5 4 3 4 4 5 6 4 6 5 6 5 7 8 6 5 6 6 5 6 5 3 4 7 5 5 6 7 6 5 6 6 4 4 5 4 4 5 6 5 6 7 7 5 7 9 4 6 7 7 5 4 6 2 5 6 6 4 7 9 4 2 7 5 2 5 3 5 1 5 7 5 6 5 7 4 6 9 5 5 9 8 2 5 7 1 3 4 4 6 7 8 4 4 3 5 3 3 6 3 3 7 7 6 7 5 7 4 7 8 5 9 8 4 9 7 4 9 5 5 2 9 8 6 7 2 4 5 7 3 5 5 8 2 8 6 7 5 6 5 7 7 4 5 7 6 5 5 4 4 6 7 7 6 7 8 5 5 6 6 5 5 5 6 4 6 7 6 6 6 7 5 6 5 6 4 6 6 7 6 3 4 4 7 5 6 5 7 5 3 5 5 5 5 5 4 4 4 6 5 6 5 5 3

Customer Loyalty Based Segmentation

Key drivers of choice

Important variables:

Firm Selection