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Black & Decker Corp Power Tools Division

Case Analysis Report

Prepared by Team 10

Section B 10/4/2011

Marketing Management Case Analysis – Term II

and perception of tradesmen’s that B&D’s products are of inferior quality. Different options were analyzed to change the negative consumer perception about the B&D products. Marketing Management Group 10 Page 2 . Situational Analysis The 5C analysis framework can be adopted to study the position of Black & Decker. The most effective option for B&D is to go for a rebranding of products in the professional tradesmen segment of the market while leveraging on the positive points in the existing market segments.S. reflected in the market-share. Power Tools Market.Executive Summary Black & Decker franchise holds nearly 30% market-share overall of The U. They have pioneered the portable power tools business and ranked 7th strongest brand in US. These coupled with the lack of color differentiation makes B & D’s products not product tradesmen are proud to own. This would further enable them to increase their market share in the segment. B & D’s research on tradesmen’s perceptions of supplier’s quality has shown that they are ranked in the 3rd tier out of 4 tiers in the marketplace. less durable/rugged for the required work conditions. which is due to the fact that B&D are viewed more as a consumer brand. It is the market leader with 30% share of the US market.  Company: Black & Decker has been in existence since 1910 and has become synonymous with the power tools segment.

 Context: Thought B&D produces tools customized to different customer segments.  Customers: B&D’s customer segment can be divided into professional – industrial. Though both these companies price their products at a premium of 10% to 5%. they enjoy a higher share in the tradesman market compared to B&D. Though it enjoys high presence in the consumer (45%) and industrial (20%) power tools segments. It promotes its products aggressively through channels like membership clubs where B&D has no presence. Milwaukee is another large competitor whose products are perceived to be high quality and regarded by 80% tradesmen as one of the best. its share in the high growth tradesman segment has been just 9% with the industrial tools segment remaining stagnant. Collaborators: B&D collaborates with leading distribution channels including two step. Home centres and farm outlets. it uses the same colored tools in both consumer and professional segments. Even with a high brand awareness of 98% only 44% tradesmen perceive B&D to be one among the best. One of the problems faced by B&D has been their difficulty to convince tradesman about the capability of their tools in the high stress work environment and inhibit the usage of consumer tools by tradesman. professional – tradesman and household – consumer segments.  Competitors: Makita is the largest competitor to B&D and holds 50% share in the tradesman market. This resemblance in Marketing Management Group 10 Page 3 . Consumer segment is catered through retail chains like WalMart and K-Mart.

They will launch the products as DeWalt and use their own servicing & distribution mechanism. Problem Statement Change the customer perception about their products in Professional-Tradesman segment and increase their market share in Professional-Tradesman segment. They can introduce the products in a separate brand name DeWalt® which B&D have acquired long time ago.Serviced and distributed by B&D 5) Drop the Black & Decker Name & Marketing Management Group 10 . They will launch the products as DeWalt and Page 4 2) Get behind Black & Decker Name with Sub-Branding 3) Drop the Black & Decker Name from the Professional-Tradesman Segment & identify the product as DeWalt 4) Drop the Black & Decker Name & identified as DeWalt . The possible and feasible options right now for Black & Decker are given in the table. They will introduce the producs under the brand name of Piranha®. 1) Harvest Professional-Tradesman Channels B&D will focus on consumer & the professional-Industrial segments and in the Tradesman segment they will focus on profitability even at the expense of market share.appearance leads to a perception of resemblance in performance and hence B&D tools are not trusted to withstand the stress of work environment. Criteria for Evaluating Options Criteria Eliminate the negative perception from customer’s minds Purchase interest of customers in B&D products Leverage the positive perception of distribution & servicing capabilities of B&D Differentiate between various product lines Weightage 4 3 2 1 Generation of Options B&D has certain constraint in implementing the action plans – a) They cannot just reduce the prices and compete as this would hurt their already strained margins.

Eliminate the negative perception (4) Purchase interest of customers in B&D products (3) Leverage the positive perception of distribution & servicing capabilities of B&D (2) 2 Differentiate between various product lines (1) Sr. The evaluation matrix for the available matrix is given in the following table. Decision Making Marketing Management Group 10 Page 5 . After that the composite score for each option are evaluated using the product of criteria weight and rank of the option in that criterion). The option with the least total score is the most fruitful option to achieve the desired objectives. No. serviced and distributed by B&D Evaluation of Options: use their own manufacturing.identified as DeWalt Manufactured. Options Total 1 2 3 4 5 6 Harvest ProfessionalTradesman Channels Get behind B&D Name with SubBranding Drop B&D name and launch a new brand Drop B&D name and use existing DeWalt brand DeWalt-Serviced & distributed by B&D DeWaltManufactured & Serviced & distributed by B&D 6 6 6 52 4 5 4 2 41 2 4 5 1 31 2 1 3 1 6 1 2 4 31 13 5 2 2 5 35 It has been aassigned weightage to the criteria in order of their importance (Values given in the brackets). servicing & distribution mechanism. Then the options are ranked depending upon the various criteria.

we see that if the company goes with option 4 i. Firstly removal of the Black & Decker name will help in removing the negative perception that tradesmen have already associated with their products belonging to this line. Marketing Management Group 10 Page 6 . By following this approach.e. The different product lines will be clearly demarcated by this approach which will help in their market segmentation of their products. B&D can increase the interest level among tradesmen by 58% which can help in reversing the negative association that people have had with their Tradesmen line of products. The reasons behind this are explained below: 1. if Black and Decker drops their name from the ProfessionalTradesmen Segment and instead utilize their existing DeWalt brand with the service and distribution advantage of B&D. then that may actually help them regain their market share. 3.Based on the options evaluated on different criteria in the previous section. This will actually be perceived as a value addition to the new sub-brand by the customers. We are keen on keeping the Black & Decker name for the service and distribution of this new sub-brand so that B&D’s already existing extensive distribution and servicing infrastructure can be leveraged. 2.