Case Abb Essay

1385 Words Mar 10th, 2014 6 Pages
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
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¡ Customers targeted represent an annual purchase of $68 388, of which 19% are ABB’s share
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

II. The choicebased model
• • • • • Key drivers of choice Segmentation criteria Focus on new campaign efforts Before/after marketing analysis Sales productivity improvement

The choice-based model
Confusion matrix

¡ After running the choicebased analysis, a lot more data can be interpreted.

¡ The model is accurate since 74% of the data is correctly predicted.

KEY DRIVERS of CHOICE
¡ Running the analysis, we can highlight 6 variables that are key drivers in the process of choosing a supplier: Price, Energy loss, Warranty, Ease of Installation, Problem Solving support and Overall Quality of products. ¡ The standard deviation for each driver is well below the coefficient estimations, and each t-statistic is above 2. Thus the key drivers are validated.

Segmentation criteria
¡ Identifying the 4 segmentation criteria of ABB known as loyal, competitive,

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