Abb Electric Case Study

Suppose you are the regional sales manager for ABB Electric, and you have been given a budget for a supplementary direct marketing campaign aimed at 20 percent of the companies in your region. 

1.  At present, you have information on the Descriptor Data tab of the ABB Electric Data (Customer Choice).xls spreadsheet about the location of customers (districts 1, 2 and 3) and the sales potential of each account or prospect. Based on this information alone, to what companies would you direct the new direct marketing program? Specify the accounts and customer or prospect types. 

We can look at ABB Data and focus on the companies that purchase the most from ABB.  These companies are existing ABB customers and are already buying from ABB. We would then try to notice any correlations between annual spending and the customer’s districts. The table below shows us the customers who have chosen ABB as the primary choice. We can see that seven of ABB customers are in district 1 with annual spending of $3,857,000, six are in district 2 with spending of $13,450,000 and five are in district 3 with spending of $4,217,000.  

Of the 88 responses provided by customers in ABB’s area, 18 of these responders chose ABB as their preferred firm. Eleven of the eighteen are spending over $500,000 per year on ABB products. To increase market share, ABB could maximize its “competitive segment’s” potential spending and take customers from competitors.  Of ABB’s existing customers we would shift our attention to the bottom seven existing customers (customer 13,61,41,45,87,24 and 38) to direct our new marketing program to increase their existing annual purchase volume.  

We could also shift our attention to winning over some new customers and non-existing customers (customers that aren’t in our market at present).  In deciding on which new customers to bring to our market and which one to target with the new marketing program. We would take note of which districts ABB is already having the most success in this case district 2 and focus marketing efforts in these districts as ABB’s has already established its Brand in this area. 

If we analyzed the table above from the customer choice analysis model we see, that ABB has its highest volume of customers but lowest annual purchases in District 1.  District 2 is by far the leader in annual dollars spent, and district 3 is the second district in term of purchases. We can also see from the table below that when it comes to spending the customers who didn’t choose ABB are also spending the most money in district 2.  So, targeting customers in this district for our new marketing program is a good idea. 

To gain market share (and win over new customers), ABB would benefit greatly from focusing its marketing program in District 2 since District 2 have a total sale of $13,450,000+ $40,189,000 = $53,639,000, and it has the largest customer buying power when compared to other districts.  The $21,524,000 total spending by ABB customers represents half of the total market share enjoyed by ABB’s competitors in this district. Also, it is the district in which ABB already enjoys the most success with its current customers. 

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