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Black and Decker corporation : Power Tool Division
The Black & Decker Corporation : Power Tools Division
Synopsis• 90 yr old and reputed company• Strong brand-ranked 7th in US & 19th in Europe• Three product segments in power tool market – Comsumer tools – 45% – Professional Industrial tools – 20% – Professional Tradesmen tools – 9%
B&D’s 9% vs Makita’s 50%• B&D positioning as a Consumer brand, not a professional Tradesmen brand “……B&D makes a good popcorn popper, and my wife just loves her dust buster, but I’m out here to make a living…” “…..on the job, what you are working with….if I came out here with one of those B&D grey things, I’d be laughed at.”• B&D’s absence from membership clubs
B&D’s 9% vs Makita’s 50%• Tough competition by Makita- – Dominance in distribution channel patronized by tradesmen – Provided a good baseline option in all major categories – Perceived as better reliable for professional use – Enhanced goodwill by discussion of good performance on job sites – Trading down strategy (positioning as Father’s day giving)
B&D’s 9% vs Makita’s 50%• Color-No product differentiation between consumer and professional tools Consumer Goods Professional Tradesmen tools
Buying Behavior Of Trademen• Perceive B&D as a consumer product, not a professional tool• Repulsive from its color resembling domestic goods• Patronize distribution channel dominated by Makita• Descent purchasing capacity to afford Makita’s product priced at a premium• Discuss tools and their performance discussed on job sites
Makita’s Competitive Strategy• Dominance on distribution chain• Monopoly in membership club• Targeting tradesmen• Expanding competitive market by no channel protection• Provide good baseline option in all major categories• Trading down strategy (positioning as Father’s day giving)
Milwaukee’s role• Reducing the price contrast• A major competitor to B&D – Better brand awareness – Best brand as over per “Consumer Agreement Data”
Action Alternative• Recommended solution – Option 2• Not recommended to dilute existing brand• Exploit on high ranking and awareness level (98%) of brand• Product differentiation and expansion of market share by sub branding
The ChangeCurrent market share : 40% of the US power tool market http://www.thestreet.com/comment/theturnaroundartist_up/10006480.html