Marketing Audit Siemens I&s Group

Marketing Audit

Siemens I&S Group: USFilter

MKT 551 Marketing Management

Donna Guevara

Karen Yunker

December 7, 2005

TABLE OF CONTENTS

Executive Summary 3

Environmental Aspects 6

Economics 6

Markets 7

Technology 8

Marketing 9

Objectives 9

Strategies 10

Tactics 11

4 P's 11

Product 11

Price 12

Place 13

Promotion 15

Organization 15

Executive Summary

Siemens Industrial Services and Solutions (I&S) specializes in developing systems solutions for customers, who include some of the world’s largest corporations and municipalities. I&S contributed Group profit of US$162 million in fiscal 2005, up 46% from US$111 million a year earlier. Profit growth was due primarily to a full-year contribution from the Group’s water systems business, acquired in the fourth quarter of fiscal 2004, backed by Group-wide earnings improvements. Sales climbed 26% for the year, to US$6.306 billion, including the water systems business and revenues from the portion of the VA Tech acquisition allocated to I&S. The acquisitions also contributed strongly to the year’s 31% growth in orders, which reached US$6.652 billion. Effective with the beginning of fiscal 2006, I&S includes Siemens’ Postal Automation and Airport Logistics divisions, which were formerly part of L&A.

The fourth quarter at I&S followed the pattern of the full year. Group profit rose to US$60.84 million from US$40.94 million a year earlier on broad-based earnings improvement, which more than offset amortization effects related to VA Tech. Acquisitions drove 42% growth in fourth-quarter sales and 39% growth in fourth-quarter orders.

Siemens recently purchased USFilter Corp. for US$993 million, a company that is based in Palm Desert, California and in Houston, Texas. US Filter is one of the leaders in providing "municipal and industrial water treatment products and services". This particular sector is managed by Siemens' Industrial Solutions and Services (I&S) group.

The sale of USFilter Water & Wastewater Systems and the Water & Wastewater Services & Products businesses for US$993 million was completed on August 2, 2004. Veolia Environment (VE) and Siemens had signed an agreement regarding the sale in Paris on May 12.

The sale consummates a process that began at the end of September 2003 with the announcement that VE was focusing business efforts on the long-term operating contracts business worldwide and that USFilter would be divested as “non core” to the Veolia business.

The Water & Wastewater Systems business supplies and services water and wastewater treatment systems for municipalities and industries. These systems treat municipal and industrial wastewater, potable