The Black & Decker Corporation Household Products Group: Brand Transition
78
Harvard Business School Marketing Cases
Black & Decker Corp.: Household Products Group, Brand Transition
Case
© The McGraw−Hill Companies, 2001
Harvard Business School
9-588-015
Rev. October 6, 1992
The Black & Decker Corporation Household Products Group: Brand Transition
In April 1984, Black & Decker Corp. (B&D) acquired the Housewares Division of General Electric Co. (GE), combining the GE small-appliance product line with its own household product line to form the Household Products Group. The terms of the acquisition set the stage for a unique marketing challenge. B&D was permitted to manufacture and market appliances carrying the GE name, but only until April 1987. During the intervening three years, B&D would have to replace the GE name on all the acquired models with its own brand name. Immediately after the acquisition, Kenneth Homa, B&D’s vice president of marketing, was assigned responsibility for the brand transition. Homa had to design a marketing program to transfer the B&D name to the GE small-appliance lines without losing market share. Specifically, he had to determine the timing for the transition of the various GE product lines and the roles that advertising and promotion should play in the transition. Homa had been asked to have the proposal for the brand transition completed by June 1Conly a week away. Before he began to formulate the proposal, Homa reviewed the acquisition and the challenges it presented.
The Acquisition
With 1983 sales of $1,167 million, B&D was the leading worldwide manufacturer of professional and consumer hand-held power tools. Over 100 products were produced in 21 factories around the world. By the late 1970s, B&D was confronting two important problems—a slower growth rate for the power tool market worldwide together with increasing foreign competition. At the same time, management realized that the American housewares market presented a significant opportunity. Capitalizing on its expertise
Harvard Business School Marketing Cases
Black & Decker Corp.: Household Products Group, Brand Transition
Case
© The McGraw−Hill Companies, 2001
Harvard Business School
9-588-015
Rev. October 6, 1992
The Black & Decker Corporation Household Products Group: Brand Transition
In April 1984, Black & Decker Corp. (B&D) acquired the Housewares Division of General Electric Co. (GE), combining the GE small-appliance product line with its own household product line to form the Household Products Group. The terms of the acquisition set the stage for a unique marketing challenge. B&D was permitted to manufacture and market appliances carrying the GE name, but only until April 1987. During the intervening three years, B&D would have to replace the GE name on all the acquired models with its own brand name. Immediately after the acquisition, Kenneth Homa, B&D’s vice president of marketing, was assigned responsibility for the brand transition. Homa had to design a marketing program to transfer the B&D name to the GE small-appliance lines without losing market share. Specifically, he had to determine the timing for the transition of the various GE product lines and the roles that advertising and promotion should play in the transition. Homa had been asked to have the proposal for the brand transition completed by June 1Conly a week away. Before he began to formulate the proposal, Homa reviewed the acquisition and the challenges it presented.
The Acquisition
With 1983 sales of $1,167 million, B&D was the leading worldwide manufacturer of professional and consumer hand-held power tools. Over 100 products were produced in 21 factories around the world. By the late 1970s, B&D was confronting two important problems—a slower growth rate for the power tool market worldwide together with increasing foreign competition. At the same time, management realized that the American housewares market presented a significant opportunity. Capitalizing on its expertise