CASES Segmentation and promotional strategies for selling CARB bearings in China

SKF Group is one of the largest bearing manufacturers in the world, well known for its innovations and high quality bearings. One of its innovations is the CARB bearing, which functions particularly well under severe working conditions where traditional bearings break down easily. Compared to traditional bearings, CARB saves costs and creates value because it requires less maintenance, has a longer life, and simplifies machine structure. SKF launched CARB in 1995 and acquired a patent for a period of ten years. CARB bearings, which are manufactured in Sweden, have been widely used in Western markets and become almost standard parts. SKF started to export the new bearings to China in 1997. CARB bearing markets, in China, could be classified into two parts, the new installation (OEM) market and maintenance market, which mainly consisted of the replacement of the CARB bearing for the Chinese‐made conventional bearings on numerous machines. The SKF Shanghai Office was in charge of devising a marketing strategy to sell the CARB bearings to the maintenance markets, the majority of which were large‐scale state‐run companies. But the China market is huge, culture and influences from the West vary across regions, styles of doing business are also different. The first task of the SKF Shanghai Office was to segment the maintenance market and select the segment which was least difficult to enter.