CASE ANALYSIS

MARKETING MANAGMENT

Group I
Mahesh Katta Rahul Ranjit Sameer Thombare Shivaprasad Raja Sourav Khurana 1011250 1011271 1011276 1011285 1011279

CASE HISTORY
•Power tools & Accessories •Electric lawn & garden tools •Residential security hardware

PROBLEM STATEMENT •Market leader in Consumer segment 50% •20% share in Professional-Industrial Segment •ONLY 9% share in Professional-Tradesmen Segment  High quality products at lower price  No Profitability Joe Galli (VP. Sales & Marketing) wants to increase B&D’s market share in Tradesman Segment .

DISCUSSION AGENDA •What is the cause of B & D’s share vs. Makita’s 50 %? •How does the buying behaviour impact the situation? •What is Makita’s competitive strategy? •What role does Milwaukee play? •Which action alternative should B & D pursue? .

SITUATIONAL ANALYSIS: CUSTOMERS Customer .Professional Workers • Need – Reduce manual labour • Want – Durability/Ruggedness – Efficiency/Throughput – Ease of use/Light Weight • Demand – High Quality – Premium Brand perception – Pride of ownership .

SITUATIONAL ANALYSIS: COMPETITION •Japanese Brand . •Rapid development in Home Centre mode of distribution. . 40% of products •Baseline options in all major categories -> preferred by workers •Aggressively pursues & achieves within Professional Tradesman segment. No Channel protection. 5% Premium over B & D •Not present in Consumer Segment.

SITUATIONAL ANALYSIS: COMPETITION •Market leader in Professional Industry Segment with B & D •Only high end of the market. Affordable only to Industry segment . 10% premium over B & D •Best image & Highest Brand perception in Segment IMPLICATIONS : •Best tool as far as tradesman are concerned •Expensive for typical worker.

SITUATIONAL ANALYSIS: COMPANY • • • • • Expertise in producing high quality tools Traditionally in consumer tools segment → ‘consumer brand’ Strong presence in professional industry segment Strong brand awareness in professional tradesmen segment Associated with low quality and low durability .

doesn’t distribute through membership clubs • Low share in sales from two-step and home centre • Two major distribution channels (65% market share) .SITUATIONAL ANALYSIS: COLLABORATORS • Offers channel protection to an extent • Unlike Makita.

PROBLEM DISCUSSION Perception issue: • B&D looked upon as ‘consumer brand’ • Perceived as low in quality and ruggedness • Low price adds to this perception .

PROBLEM DISCUSSION Tackling the issue: • Need to demarcate the consumer & tradesmen segments • Position in tradesmen segment as ‘high quality & rugged’ • This will improve pride of ownership and may improve sales • Need a marketing mix that addresses these issues .

SWOT ANALYSIS Strength Weakness Opportunities Threat SWOT Analysis .

having positive awareness rating .Confirmed by lab tests • High awareness of power tools brand •Better service perception than Makita •Owner of DeWalt brand .STRENGTHS •High Product Quality .

WEAKNESS • B&D brand being associated with household brand • B&D not attractive to professional tradesman • Tradesman perceive it to be low quality brand • Same colour as tools in consumer segment .

OPPORTUNITY • Fastest growing segment : tradesman @ 9% • Retailers don’t approve of Makita’s distribution strategy • Yellow colour not used by professional grade tools .

THREATS •Failure of yellow colour could brand it a “lemon” •Failure of re-branding could affect other segments .

OPTIONS AVAILABLE Profitability Improvement Price Cost Decision Point B&D Share Improvement Sub brand DeWalt New Brand New name Repositioning B&D .

81 • Difficult to reduce cost • Not sustainable.75 22.75 12.19 Operating Income 3. Not optimum .8m USD Millions Sales COGS Gross Profit SG & A Existing Price 35 22.75 14 9.PROFITABILITY : PRICE & COST • Market Share Same or less • Price Increase of 5% increases Op. Income to 4.25 8.5 4.75 5% Premium 36.

MARKET SHARE : SUB-BRANDING • Association with Parent brand – May not be effective • Need to build the sub-brand – Expensive option .

MARKET SHARE : RE-BRANDING B&D • Reposition B&D as a supplier of “High Quality Industrial Grade Tools” from the current image as a “Consumer Brand” • Positioning the brand at high level will help it to cater to lower levels as well • However. risky & expensive .

building a new brand is costly as awareness of the brand needs to be built • Hence use deWalt brand – High awareness in the target segment – 63% tradesmen consider deWalt ‘one of the best’ compared to 44% for B&D – 58% purchase interest in deWalt ‘serviced and distributed’ by B&D .MARKET SHARE : NEW BRAND • Free from the perception issue • However.

SOLUTION: MARKETING MIX • Product – Maintain the same quality – Change the color – Offer under the brand name ‘deWalt’ serviced and distributed by B&D • Price – Currently lower than competition – May consider rising it to Makita’s price or more .

can focus exclusively Home depots and Two Steps .SOLUTION: MARKETING MIX • Promotion – Promote ‘deWalt’ as ‘high quality and rugged range of tools ‘ for professional tradesmen – Partner with channel partners to push the sales • Place – May follow Makita’s strategy of using all distribution channels – Or.

THANK YOU .

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