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A Choice-Modeling Market Information System That Enabled ABB Electric to Expand Its Market Share

Author

Listed:
  • Dennis H. Gensch

    (School of Business, University of Wisconsin-Milwaukee, PO Box 742, Milwaukee, Wisconsin 53213)

  • Nicola Aversa

    (ABB Electric Incorporated, 400 South Prairie Avenue, Waukesha, Wisconsin 53186)

  • Steven P. Moore

    (ABB Electric Incorporated, 400 South Prairie Avenue, Waukesha, Wisconsin 53186)

Abstract

In its third year of existence, ABB Electric was approaching the break-even point when it was confronted with a 50 percent drop in total industry sales of electrical equipment. The only way the firm could survive was to take customers from established major competitors. The firm developed a new type of marketing information system utilizing multiattribute choice modeling. It identified the current perceptions of customers on ABB's products versus various competitor's products. First, ABB used this information on what customers most want from products to devise strategies for taking customers and market segments from competitors. Second, the models' predictive accuracy enabled ABB to organize to meet the customer needs as the low-cost producer. Third, the information guided the firm in selecting new products that were preferred by customers and for which ABB had long-term cost advantages. ABB survived, grew, and now is the dominant firm in its industry.

Suggested Citation

  • Dennis H. Gensch & Nicola Aversa & Steven P. Moore, 1990. "A Choice-Modeling Market Information System That Enabled ABB Electric to Expand Its Market Share," Interfaces, INFORMS, vol. 20(1), pages 6-25, February.
    • Handle: RePEc:inm:orinte:v:20:y:1990:i:1:p:6-25
    DOI: 10.1287/inte.20.1.6
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    Cited by:

    1. Gary Lilien & Rajdeep Grewal & Douglas Bowman & Min Ding & Abbie Griffin & V. Kumar & Das Narayandas & Renana Peres & Raji Srinivasan & Qiong Wang, 2010. "Calculating, creating, and claiming value in business markets: Status and research agenda," Marketing Letters, Springer, vol. 21(3), pages 287-299, September.
    2. Gary L. Lilien & Arvind Rangaswamy & Gerrit H. Van Bruggen & Katrin Starke, 2004. "DSS Effectiveness in Marketing Resource Allocation Decisions: Reality vs. Perception," Information Systems Research, INFORMS, vol. 15(3), pages 216-235, September.
    3. Lilien, Gary L. & Rangaswamy, Arvind & van Bruggen, Gerrit H. & Wierenga, Berend, 2002. "Bridging the marketing theory-practice gap with marketing engineering," Journal of Business Research, Elsevier, vol. 55(2), pages 111-121, February.
    4. Peter C. Bell & Chris K. Anderson & Stephen P. Kaiser, 2003. "Strategic Operations Research and the Edelman Prize Finalist Applications 1989--1998," Operations Research, INFORMS, vol. 51(1), pages 17-31, February.
    5. Berend Wierenga & Gerrit H. Van Bruggen & Richard Staelin, 1999. "The Success of Marketing Management Support Systems," Marketing Science, INFORMS, vol. 18(3), pages 196-207.
    6. Sally Mckechnie, 2006. "Integrating intelligent systems into marketing to support market segmentation decisions," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 14(3), pages 117-127, July.

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