Customer segmentation in the medical devices industry

This thesis addresses Company X's concerns about its product shipment options. The company ships over 70% of its products to its customers using the primary service provider that ensures that the product is at the customer site by 10:30 AM next day. As per the understanding with its customers, the company, absorbs the cost of premium shipping and does not pass it on to most of its customers. The company believes that this priority service is a source of competitive advantage that helps it get customer loyalty and thereby increases sales. However it is not a normal industry practice to provide this service free to the customers. Keeping in mind this enormous cost burden, Company X wants to minimize this cost. Medical device sales are non-seasonal and do not show promotional effects. We analyzed data for the months of June and October, 2006 as a part of our research. The objective of our data analysis was to validate the proposed approaches we reviewed as a basis for proposing ways to segment customers for improving service while reducing cost. We proposed three types of segmentation: by region, by order method and by division. Segmentation by region looks at dividing the customers by into 4 regions based on their location.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2007

Authors dc:creator

• Basu, Probal
• Kim, Eun Kyun

Advisor dc:contributor.advisor

• Larry Lapide.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/40110

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/40110