EXECUTIVE SUMMARY
Dow Corning is a global leader in silicone-based products. It sold its products to more than 80 countries globally and has a 40% worldwide market share in 2006. Its success to date was a large part driven by a major marketing initiative that revived the company half a decade ago, the launch of dual brand strategy and the resultant launch of the Xiameter brand. The Xiameter brand was an instant success, but is now experiencing challenges from increasing competition.
This paper will discuss what caused the decline of Dow Corning to force it to introduce the Xiameter brand. It will then discuss one major change that complemented this Xiameter brand and it was the change in customer segmentation scheme. The report to
The new segmentation method highlighted the exact needs of the customers, much better than the previous segmentation.
Secondly, the new segmentation approach helped to understand the level of contact, engagements and partnerships its clients want from Dow Corning. The previous industry segmentation meant industry specialists will spend similar efforts to sell and service the customers. The actions of these industry specialists cannot be blamed because the earlier segmentation by industry meant financial performance were evaluated on an industry group basis, and obviously each specialist would want to encourage its customers to buy all kinds of premium products Dow Corning can offer. However, what is realised through the new segmentation is that some customers would prefer to be left alone and not subject to outsell (such as the price seekers), and yet some customers would want a high degree of engagement with Dow Corning (such as the proven solutions segment), or even partnership with Dow Corning (like the innovation solution segment). Getting this understanding of customers’ preference on level of engagement is critical to build a long lasting relationship and to not annoy the customer.
Thirdly, this needs based segmentation made client profitability much more transparent throughout the organisation. Previously, client profitability would have partially hidden within industry