Black & Decker Case

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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 support,...
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