Choice Modelling for Abb Electric

Choice Modelling for ABB Electric

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ABB Electric is a young company producing and selling electrical equipment, such as transformers and swichgears, etc. It’s base is located in North America, and most of ABB’s customers are electical utilities, who are the largest segment among 4 types of customers. ABB only has 4 years history, and market share only accounts for six percent. And the whole industry is expected negatively next few years due to the high level of stocks. Other strong competitors are General Electric(GE), Westinghouse and McGraw-Edison(Edison).

The company aims to reduce the cost and standardize its products, meanwhile, ABB wants to improve the salesforce, who rely on traditional methods to sell. The company also faces the products segmentation problem, consumers cannot distinguish ABB’s products from other competitors’. So this report discusses the effective way of promoting, selects the targeted audience by analyzing respondents’ choices, and makes comment on the choice model that has been used for analyzing the customers behavior.

Analysis of Descriptor Data

Solely look at the Descriptor Data tab, I first replace firm A with ABB, B with GE, C with Westinghouse and D with Edison. There are total 88 respodents of this survey, and 18 out of 88 respondents are currently cooperated with ABB. So based on the given information, the target companies can be divided into 2 kinds---encouraging low sales customers to purchase more and stealing markets from competitors.

Before filtering company list, this report first sort the Descriptor Data annual purchase volume from largest to smallest, then assume the volume of companies purchasing products annually fall into the first quartile is low net worth, and these companies should be encouraged to purchase more in ABB. In this case, the critical value of first quartile is 444, so customer 41, 45, 87, 24, 38 are low net worth customers and should be direct the marketing program.

And for markets that need to steal, ABB should put their emphisis on high net worth customers in a single district. Although ABB performs best in market share in district 2, the portion of customers choosing ABB in district 2 is still lowest compared with other 2 districts’ consumer number.

Based on the analysis above, the following is the table demonstrating the list of target companies to launch marketing campaign.

Choice Modelling Analysis (logit)

Based on the data analysis output, the key drivers of choice in market is (in order of importance) Energy Loss, Quality, Price, Problem Solver, Warranty, Ease of Install.