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 â€Å"weak† due to the fact that B&D dominated the consumer segment. †¢The â€Å"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. )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 segm ent 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 â€Å"Home Depot† educate the consumer to â€Å"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. )Joe Galli's objective is â€Å"to develop and gain corporate support for a viable pro gram to challenge Makita for leadership† in the Tradesmen category (p. 1). To gain support, the minimal share objective would have to be â€Å"nearly 20% within three years, with major share ‘take away' from Makita. † How realistic is this? †¢This is realistic due to the fact that there are a number of negative perceptions of Makita’s products including â€Å"arrogant & dictatorial†. The problem is that no single brand dominates all the product categories in the tradesmen segment.This means that product selection may be circumstantial and mostly influenced by tradesmen in-store influencers etc. †¢Currently, B has ~9% market share, meaning that it would have to take ~11% market share from Makita who has ~50% market share. Makita has the most to lose in this industry segment. †¢Since, B is financial strong and is not making much money in the tradesmen segment, the financial risk would be limited. 5)If you think Galli should pursue a â₠¬Å"build share† strategy, what actions do you recommend? Does the DeWalt idea have any merit?How about the subbranding option? †¢Gallie should pursue a â€Å"build share† strategy but only under a different brand. Choosing a different brand name such as DeWalt that already has positive resonance in the tradesmen segment would not only disassociate the current perception of B within that segment, but could help reduce B risk of â€Å"embarrassment† in the other two segments in case the DeWalt brand fails. †¢The sub branding option still carries the B brand with it. At this point in time the tradesmen segment is not a new & emerging market, but a well developed growing market.Sub-branding at best could help drive some product categories, but not the overall brand as a whole. †¢The yellow color choice would help the DeWalt brand truly stick out from the competition. Currently, the most exotic color in the tradesmen segment is teal – Makita†™s color. The yellow color choice would less likely backfire since yellow is a familiar job site color associated with safety. 6)Be specific about what you would do and remember you have at least three audiences to please: the consumer (the Tradesman), the retailer, as well as Nolan Archibald and Gary DiCamillo. Consumer oIntroduce DeWalt brand with yellow coloring oOffer rebates and incentives †¢Retailer oIntroduce DeWalt with limited supply to generate â€Å"pull† oPromote demonstrations of products that demonstrate superiority oMaintain existing B line as a benchmark for DeWalt’s success oSlowly phase out B and replace with DeWalt oOffer volume discounts to large retailers such as Lowes and Home Depot, since this channel is the fastest growing one †¢Bosses oPresent above and maintain sub-branding exit strategy