A choice-modeling market information system that enable ABB Electric expand its market share

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 perferred by customers and for which ABB had long-term cost advantages. ABB survived, grew, and now is the dominant firm in its industry.