April 6, 2011
Black and Decker Case Study
Cause of B&D’s 9% share in the Tradesman segment;
In the 1990’s Black and Decker had a great position in the market for their products to appeal to the Professional Industrial segment and the Consumer segment but when it came to the Professional Tradesmen segment they were lacking. Their 9% market share vs. Makita’s 50% market share in the tradesmen segment was incomparable. Makita clearly had a better product in the eyes of the Professional Tradesmen. In the Professional Segment most of the people who buy the products are people who need these tools to make a living such as carpenters, electricians, plumbers, roofers, and general remodelers. Black and Decker were branded for tools to use at home. Therefore, tradesmen looked at the Black and Decker brand as tools for home use, and not for work. Since they were branded for home use it seemed as if they weren’t made for everyday use, and would not hold up for the wear and tear a carpenter or electrician would need them to. B&D clearly had a problem with brand association with its consumers. In exhibit 2 it shows that Black and Decker failed in capitalizing in the Membership Club distribution channel which was in the top five profitable distribution channels. Makita did distribute its tools to membership clubs and it turned out to be very successful channel for them having 85%. Black and Decker had such a lack of profitability in the tradesmen segment due to having the wrong brand perception and inadequate distribution channel, where Makita excelled in both.
Buying Behavior in the Tradesman Segment
Buying behavior also had an impact on B&D having such a low market share in comparison to Makita. When tradesmen go out looking for tools they look for quality, performance, functional benefits and product services. Product color also has an influence when it comes to purchasing. Color is important because the color...