Black & Decker Case
1) Why is Makita outselling Black & Decker 8 to 1 in an account which gives them equal shelf space?
• Trade is asking for advertising allowances and rebate money on products, profitability in the Tradesmen segment is near zero.
• The B&D brand in the Tradesmen segment may be regarded as “weak” due to the fact that B&D dominated the consumer segment.
• The “heavy do-it-yourselfers” may have a misconception on the quality/reliability/durability of B&D professional line. These individuals make a living from using these tools and simply cannot risk the aforementioned features.
2) Why are Black & Decker's shares of the two professional segments -- Industrial and Tradesmen -- so different? Wouldn't you expect them to be similar?
• Tradesmen segment is growing faster than the industrial segment. B&D did not initially capture or dominate the tradesmen segment, hence the share differential.
• Decision influencers in the industrial segment viewed B&D as a high-quality brand. Similarly, the consumer segment regarded B&D as a strong brand which helped B&D attain the #1 position in the marketplace. This did not spill over to the tradesmen segment, which needs more differentiation.
• Strong influencers in outlets such as “Home Depot” educate the consumer to “stay away from B&D”.
3) What, if anything, do you learn from Black & Decker's consumer research?
• B&D uses very similar branding strategies for their tradesmen and consumer segments.
• Brand perception is the main issue with B&D strategy for capturing a larger market share.
• Durability/Quality issues are not substantiated. Blind tests of B&D products in the tradesmen segment reveal that B&D products are comparable to other major competitors’ products. In some instances, B&D products are elected as leaders in their product categories.
4) Joe Galli's objective is "to develop and gain corporate support for a viable program to challenge Makita for leadership" in the Tradesmen category (p.1). To gain
• Trade is asking for advertising allowances and rebate money on products, profitability in the Tradesmen segment is near zero.
• The B&D brand in the Tradesmen segment may be regarded as “weak” due to the fact that B&D dominated the consumer segment.
• The “heavy do-it-yourselfers” may have a misconception on the quality/reliability/durability of B&D professional line. These individuals make a living from using these tools and simply cannot risk the aforementioned features.
2) Why are Black & Decker's shares of the two professional segments -- Industrial and Tradesmen -- so different? Wouldn't you expect them to be similar?
• Tradesmen segment is growing faster than the industrial segment. B&D did not initially capture or dominate the tradesmen segment, hence the share differential.
• Decision influencers in the industrial segment viewed B&D as a high-quality brand. Similarly, the consumer segment regarded B&D as a strong brand which helped B&D attain the #1 position in the marketplace. This did not spill over to the tradesmen segment, which needs more differentiation.
• Strong influencers in outlets such as “Home Depot” educate the consumer to “stay away from B&D”.
3) What, if anything, do you learn from Black & Decker's consumer research?
• B&D uses very similar branding strategies for their tradesmen and consumer segments.
• Brand perception is the main issue with B&D strategy for capturing a larger market share.
• Durability/Quality issues are not substantiated. Blind tests of B&D products in the tradesmen segment reveal that B&D products are comparable to other major competitors’ products. In some instances, B&D products are elected as leaders in their product categories.
4) Joe Galli's objective is "to develop and gain corporate support for a viable program to challenge Makita for leadership" in the Tradesmen category (p.1). To gain