The Black and Decker Corporation (A): Power Tools Division
B&D only has 9% of the Professional-Tradesmen segment. Makita has 50% of this segment. B&D’s strength as a consumer brand had negative effects on the Professional-Tradesmen segment: “Some tradespeople viewed all B&D products as for use at home rather than on the job; and, conversely, there had been instances of a B&D product designed for at home use being subjected to the demands of the job site and failing.” (p.6)
Option 1: Harvest Professional-Tradesmen Channels (focus on Consumer and Professional-Industrial segments; in Professional-Tradesmen segment, focus would be on profitability even at expense of market share) Option 2: Get Behind B&D Name with Sub-Branding (to rebuild B&D brand) Option 3: Drop B&D Name from Professional-Tradesmen Segment (use DeWalt brand)
Chose option 3. Tradesmen already have idea embedded that B&D manufactures consumer goods and not professional tools. Better to use a different brand name, especially since DeWalt already has 70% recognition and 53% responded that they are interested in purchasing DeWalt which is manufactured, serviced and distributed by B&D. Tradesmen may be more concerned with image of using the tools more than the quality of the tool or what they themselves think of it.
Option 1 only effective for short run. If they don’t strengthen brand, soon competitors will take all of market share. Option 2: will only help for those products that are sub-branded. Tradesmen may lose loyalty to B&D brand if it is diversified too much.
Must assume that % of purchase interest reflects how consumers will actually behave. If consumers are merely interested in DeWalt but choose to buy competitor’s brand, option 3 may not be successful.
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