Case 1 ABB Electric Segmentation Group 7C

Context
¡ ABB is a producer of electrical equipment. ¡ ABB established a new marketing strategy based on analytical techniques (MKIS)to improve its results. ¡ ABB management segmented its marketing into 4 categories using Choice Modeling : Loyal, Competitive, Switchable and Lost. ¡ ABB has been given a budget for a supplementary direct marketing campaign aimed at 20% of the companies in the region composed of 3 districts.

Outline
1. Customer targeting with limited data 2. Choice-based model 3. Limits of the model and suggestions

I. Customer targeting with limited data
• Introduction to the market • Limited data targeting : no geographical distinction • Limited data …show more content…

¡ Loyal: PABB - PComp > 75% ¡ Competitive: 0% < PABB – Pcomp < 75% ¡ Lost: All customers considered loyal to competitors (determined by the same calculation from the competitors’ point of view) are considered as lost to ABB. ¡ Switchable: remaining prospects which have not already been highlighted
Lost& 57%&

Segments(market(shares(
Loyal& 8%& Comp& 11%&

Switchable& 24%&

BEFORE/AFTER MARKETING ANALYSIS
¡ Comparing them to the initial chosen list (top 20%) and thanks to the choicebased model analysis, we found out that :
¡ 12 customers are lost ¡ 4 customers are switchable ¡ 2 customers are competitive
Customer 35 43 44 66 32 11 84 17 74 20 53 47 12 26 16 33 23 27 Ann_Purchase $14 798 $12 514 $10 997 $9 793 $6 270 $1 722 $1 404 $1 364 $1 219 $1 009 $989 $956 $928 $899 $894 $890 $871 $871 District 2 2 2 3 1 3 3 3 1 2 2 2 1 2 3 3 2 1 Firm_Chosen D C A B C A B B B B C B D D B D D D Segment Lost to Edison Lost to WH Loyal to ABB Switchable Lost to WH Switchable Competitive Switchable Lost to GE Lost to GE Lost to WE Lost to GE Lost to Edison Switchable Competitive Lost to Edison Lost to Edison Lost to Edison

¡ As expected, the choicebased model gives more accurate results and a better understanding of prospects’ intentions than the segmentation based only on annual purchase.

FOCUS of NEW CAMPAIGN EFFORTS
¡ F o c u s e f f o r t s o n c o m p e t i t i v e