Exposé

Market study of Smart Circuit Breakers in respect to Industry

4.0 and focus on expectations, anticipation and perception of
potential and existing clients in Eastern Europe of Eaton Indus-
tries GmbH

Submitted at

FH JOANNEUM GmbH
Business in Emerging Markets
(Master)

Submitted by

Moritz Wehr
Burenstraße 53/5
8020 Graz

Supervisor:

Mag. Ing. Denny Seiger

Table of Content

1. Introduction and problem formulation ................................................. 1

2. Research Question................................................................................ 2
3. Literature Review ................................................................................. 3
4. Methodology and Research Design ...................................................... 4
5. Draft Table of Contents ........................................................................ 6
6. Timeplan .............................................................................................. 8
15. List of literature ................................................................................. 9
1. Introduction and problem formulation

This master thesis elaborates on the expectations, anticipation and perception of

clients on Industry 4.0 and Smart technology with having an essential focus on
Smart Circuit Breakers. The main focus area will be industries and potential or
existing clients of Eaton Industries GmbH located in Eastern Europe, generally re-
ferred to as ‘clients’ in this Expose, whereas the specific countries are still being
specified in the future. It is therefore in its essence considered a market study on
smart circuit breakers. Essentially, the thesis is focusing on three main areas: In-
dustry 4.0 and Smart Technology and the expectations and understandings of
those. Smart Circuit Breakers with their respective features and how these are
perceived and understood. And finally how Eaton Industries GmbH as a company
and brand is being recognized as innovative based on experiences and appraisal.
All these areas are from the perspective of potential and existing clients located
in Eastern Europe.

The terms Industry 4.0 and Smart technology are widely discussed but often be-
ing described rather vague and broad. The expression Industry 4.0 is usually de-
scribed as the general enforcement of technological development with a strong
and comprehensive focus on the digitalization of industrial production. It reached
popularity within Germany and later worldwide, representing efficient intercon-
nection of machines and processes in all industries with the possibilities enabled
by information and communication technologies (Bundesministerium für
Wirtschaft und Energie, 2018).

‘Smart’ on the other hand has been already been used heavily by industries and
media to market certain products and is therefore strongly influenced by inten-
tional marketing, leaving much more room for interpretation and discussion,
what products can be considered smart. The distorted view created by marketing
complicates a clear definition of smart products. This is therefore interesting,
since it results in questioning the ‘smartness’ of products being labelled as smart

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and thinking whether the buyer as well as the seller have the same understanding
of ‘smart’.

This is leading up to the main problem, which is the lack of data concerning ex-
pectations and understanding on Smart Circuit Breakers as well as Industry 4.0 of
industries and potential clients of Eaton Industries GmbH in Eastern Europe. Fol-
lowing this, the main purpose of this master thesis is to find out about the notion
of Industry 4.0 and smart technology as well as how clients understand those
terms. Additionally within the thesis the key buying criteria which are being con-
sidered by the clients will be determined and evaluated accordingly.

The same issue is true for a Smart Circuit Breaker. What main features and capa-
bilities of a circuit breaker are being credited as smart and does the Smart Circuit
Breaker meet those expectations or even surpass them. The question arises, if an
a smart device can just be automatic and advantageous to an older model of the
same tech or is expected to have certain features, like connectivity and compu-
ting or processing power.

Additionally, the company Eaton Industries GmbH, which is currently planning the
market entry of a new Smart Circuit Breaker plays a vital part in the master thesis.
Necessary information about the technology and features behind the Smart Cir-
cuit Breakers will be provided by Eaton. Also, the master thesis will cover the per-
ception of Eaton by their potential clients, explicitly in respect to innovation and
brand awareness.

2. Research Question

Resulting from the above described problem, several research questions derive
and are suitable for further exploring the issue as well as coming closer to filling
the research gap. Those research questions will be answered within the master
thesis and form the main focus of the research.

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 How do clients understand Industry 4.0 and smart technology?

 What are the expectations of clients of Industry 4.0 and smart technology?
 What are the advantages of Industry 4.0 and smart technology according
to the clients?
 How would clients describe a Smart Circuit Breaker and what are their ex-
pectations?
 What advantages does a Smart Circuit Breaker have according to the cli-
ents?
 What are the key criteria of the buying center for using a Smart Circuit
Breaker?
 How is Eaton Industries GmbH viewed in respect to innovation by the cli-
ents?

The goal is to find out about those issues and answer these research questions in
a way that leads to promising findings which can then be used to improve current
strategies or give direction to other research in that field. Ideally, the managerial
implications will be useful to Eaton Industries GmbH.

3. Literature Review

Since Industry 4.0 and smart technology are widely discussed topics in the last
century, there is plenty of literature available on these topics. The main task will
be to thin out the most important and scientific ones, especially since there is a
huge amount of newspaper and online articles compared to a rather small
amount of books and scientific papers on this specific topic. Literature will be
heavily used for defining both Industry 4.0 and smart technology as well as giving
an outline on the general industries expectations on these matters.

Furthermore literature concerning brand perception and measuring the brand in-
novation performance must be reviewed. When it comes to interpreting the re-

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sults and form managerial implications based on the findings gathered by the em-
pirical part of the master thesis, literature about brand and innovation marketing
strategy will be crucial.

In order to find proper scientific and trustworthy digital sources, search engines
like Google Scholar, Emerald Insight, Researchgate, SemanticScholar and others
are being used. Books and additional literature will either be bought online or in
bookstores or borrowed from the library of FH Joanneum or Karl-Franzens Uni-
versity Graz. Articles from newspapers or comments on current developments in
the specific field and topic may also be used if they prove to be credible and suit-
able for the master thesis.

Additionally, confidential information will be given by Eaton Industries GmbH and

will be used within the master thesis for gathering details along with the main
features of the Smart Circuit Breaker. This is especially important, since this in-
formation will be used to construct the interviews and compare the expectations
with the status-quo. Besides the information about the Smart Circuit Breaker,
Eaton Industries GmbH will also provide information about the company itself
which will then be used in the brand innovation perception part of the thesis.

4. Methodology and Research Design

The first part of the thesis will be dedicated to the necessary theory explaining
the main definitions of Industry 4.0, Smart technology in addition to the smart
circuit breaker. The goal is to create a general understanding of the topic to be
able to delve deeper into it within the research part. Furthermore the company
Eaton Industries GmbH will be overviewed as well as theory on measuring and
determining a brand image in respect to innovation. The first part will be assessed
with essential literature on the topics and on the basis on already existing scien-
tific articles, books and various other theoretical sources. This is fundamental in

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order to create the framework for the following parts of the thesis which will ex-
plore the topic deeper and more detailed.

In the second part of the paper the empirical study takes place, focusing on ex-
ploring and examining the understanding, expectations and perception on Indus-
try 4.0, Smart technology, Smart Circuit Breakers and the brand Eaton in respect
to innovation. In that case primary data will be gathered via qualitative and quan-
titative methods and then analyzed. Primary data is information which is gath-
ered firsthand by the researcher specifically for answering and elaborating on the
research questions. Those can be gathered with qualitative and quantitative
methods or mixed/multiple methods (Malhotra & Birks, 2007). For resolving the
research questions, both a qualitative and quantitative approach has been cho-
sen, called a mixed method.

The qualitative research part will be conducted through carrying out interviews
with several people in different positions employed in the industries targeted by
Eaton with their Smart Circuit Breakers. This will give a detailed insight and a
deeper understanding of the matter and enables the explorative generation of
data later used for the quantitative research. Furthermore the key criteria used
by the corresponding buying center will be determined and weighted when doing
the interview, which is essential for the quantitative part afterwards.

The interviews with the different employees will be done in the form of a partly
structured inquiry, meaning that a list of open questions concerning the main
topic and the research questions will be prepared beforehand. These questions
will then be directed at the interviewee in any random order most suitable for
the interviewer, while staying in the before constructed framework of the inter-
view. There is the possibility of asking additional questions resulting from the con-
versation, to collect additional depth and insights. This way new elements can
arise which may help to further understand the subject matter and create new

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incentives for appropriate criteria. The interview will be recorded with an audio
recording device, allowing to analyze the conversation precisely (Gray, 2004).

Quantitative research is conducted to test hypotheses and build a solid founda-

tion for a statistical analysis which is reliable and valid. The quantitative research
of this master thesis will be mainly based on the findings and results of the qual-
itative research done before, giving statistical meaning to the possible prospects
and findings. Also it will be strongly influenced by the literature and theoretical
part of the thesis. In the quantitative part the sample group will be the main ac-
tors of the buying center according to the Webster and Wind. Namely the user,
decider and buyer, because those are clearly identifiable within any company.
Since the gatekeeper and influencer are difficult to pinpoint, they will not play a
role for the quantitative survey (Frederick E. Webster, 1972). The sample is cho-
sen this way because the buying decision of a Smart Circuit Breaker would gener-
ally be made by the buying center and it is therefore logical to only include the
buying center into the survey. The questionnaire will most likely include closed
questions and a ranking questions, depending on the findings of the qualitative
part. The advantage of closed questions along with rankings is that the collected
data will be consistent and more suitable for analysis (Malhotra & Birks, 2007).
The data will then be analyzed in the statistical program SPSS.

5. Draft Table of Contents

The following draft table of contents gives an estimated and rough outline and
overview about the structure of the master thesis. This outline is a momentary
expectation and should be understood as a directional guide how the master the-
sis will be structured. Since during researching, gathering data and writing the
master thesis new impulses and intellectual approaches as well as valuable in-
sights, which are not yet brought in, will arise, this draft table of content should
not be seen as final or binding. The content and structure is likely to be altered
and changed according to findings, the research conduct and possible results.

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I. Front page
II. Affidavit
III. Table of Contents
IV. List of Tables
V. List of Figures
1. Introduction
1.1. Problem formulation
1.2. Research purpose
2. Industry 4.0 and Smart technology
2.1. Definition, history and progression
2.2. Expectations
2.3. Perception
3. Smart Circuit Breaker
3.1. Definition
3.2. Rough Overview of functionality
4. Eaton Industries GmbH
4.1. Overview
5. Measuring brand image
5.1. Based on experience
5.2. Based on estimate
5.3. Evaluation and interpretation methods of brand assessment
6. Methodology and Research Design
6.1. Qualitative Approach
6.1.1. Data Collection
6.1.2. Sample
6.1.3. Data Overview and Analysis
6.2. Quantitative Approach
6.2.1. Hypothesis
6.2.2. Sample and sample size (Buying center)

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6.2.3. Research design

6.2.4. Questionnaire
6.2.5. Data Overview
7. Qualitative Results
7.1. Overview
7.2. Findings/Results
7.3. Interpretation
8. Quantitative Research
8.1. Descriptive Analysis
8.2. Statistical Analysis
8.3. Findings/Results
8.4. Interpretations
9. Discussion
10. Managerial Implications
11. Limitations and Research Outlook
12. List of References
13. Appendix

6. Timeplan

In the following table I will elaborate on an approximate timetable which show-

cases the different actions taken in their respective time. Furthermore the order
of the different tasks is visible.

Date Task/Activity

15.April Topic Registration

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Meeting with both Mr Dontscheff (from Eaton In-

14. June 2018 dustries GmbH) & Mr Seiger for discussing the
scope and direction of Master Thesis

28. June – 14. July 2018 Draft of Expose

July, August 2018 Refining Expose

July – December 2018 Literature Review and Theory

Finding sample for qualitative research / Qualita-

August – December 2018
tive question and interview design

January 2019 Finalize Interview Questions

January – March 2019 Conduct Qualitative Research

February – March 2019 Analysis of Qualitative Research

March 2019 Start designing quantitative questionnaire

April 2019 – May 2019 Quantitative Survey

Analysis of quantitative survey, Findings and Re-

May - June 2019
sults

June – July 2019 Finishing Master Thesis

20. July Submission of Master Thesis

15. List of literature

Within the first research done on the topic the below stated literature and refer-
ence have been identified as useful for the master thesis. Further literature will

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be added in the course of additional research on the issue and during the pro-
gression of the master thesis. Some of the literature have already found usage in
this Expose.

Baliga, B. J. (1991, July). An overview of smart power technology. IEEE Transactions on Electron
Devices , 38(7), pp. 1568 - 1575.

Beverland, M. B. (2005). Managing the Design Innovation–Brand Marketing Interface:

Resolving the Tension between Artistic Creation and Commercial Imperatives. The
Journal of Product Innovation Management, 193-207.

Bundesministerium für Wirtschaft und Energie. (2018, July 13). Was ist Industrie 4.0? Retrieved
from Plattform Industrie 4.0: https://www.plattform-
i40.de/I40/Navigation/DE/Industrie40/WasIndustrie40/was-ist-industrie-40.html

F. Shrouf, J. O. (2014). Smart factories in Industry 4.0: A review of the concept and of energy
management approached in production based on the Internet of Things paradigm.
2014 IEEE International Conference on Industrial Engineering and Engineering
Management.

Fraunhofer-Institut für Arbeitswirtschaft und Organisation IAO. (2013). Produktionsarbeit der

Zukunft – Industrie 4.0. Stuttgart: Fraunhofer Verlag.

Frederick E. Webster Jr., Y. W. (1972). A General Model for Understanding Organizational

Buying Behavior. Journal of Marketing, 12-19.

Frederick E. Webster, Y. W. (1972). Organizational Buying Behavior. Prentice-Hall.

Gray, E. D. (2004). Doing Research in the Real World. London: Sage Publications Ltd.

Ian Clark S. Sinapuelas, H.-M. D. (2015). The interplay of innovation, brand, and marketing mix
variables in line extensions. Journal of the Academy of Marketing Science, 558–573.

Jay Lee, H.-A. K. (2014). Service innovation and smart analytics for Industry 4.0 and big data.
Procedia CIRP 16, 3-8.

Jay Weerawardena, A. O. (2006). Does industry matter? Examining the role of industry
structure and organizational learning in innovation and brand performance. Journal of
Business Research, 37-45.

Malhotra, N. K., & Birks, D. F. (2007). Marketing Research - An Applied Approach. Essex:
Pearson Education, Ltd.

Malte Brettel, N. F. (2014). How Virtualization, Decentralization and Network Building Change
the Manufacturing Landscape: An Industry 4.0 Perspective. International Journal of
Information and Communication Engineering, 37-44.

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Max Blanchet, T. R. (2014). Industry 4.0: The new industrial revolution. How Europe will
succeed. Munich: Roland Berger Strategy Consultants GmbH.

Michael Rüßmann, M. L. (2015). Industry 4.0: The Future of Productivity and Growth in
Manufacturing Industries. Boston: Boston Consulting Group.

Robert B. Miller, S. E. (2008). The New Strategic Selling: The Unique Sales System Proven
Successful by the World's Best Companies. New York: Grand Central Publishing.

Shiau, H.-C. (2017). The Impact of Product Innovation on Behavior Intention: The
Measurement of the Mediating Effect of the Brand Image of Japanese Anime Dolls.
The Anthropologist , 777-788.

Shiyong Wang, J. W. (2016). Towards smart factory for industry 4.0: a self-organized multi-
agent system with big data based feedback and coordination. Computer Networks,
158-168.

T. Stock, G. S. (2016). Opportunities of Sustainable Manufacturing in Industry 4.0. Procedia

CIRP 40 , 536 – 541 .

Wolfgang Dorst, T. F.-W. (2013). Industrie 4.0 – Wie sehen Produktionsprozesse im Jahr 2020
aus? Saarbrücken: August-Wilhelm Scheer.

Moritz Wehr July 2018