Black & Decker Corp

Power Tools Division

Case Analysis Report

Prepared by Team 10

Section B

Marketing Management Case Analysis Term II

Executive Summary
Black & Decker franchise holds nearly 30% market-share overall of The U.S. Power Tools
Market. B & Ds research on tradesmens perceptions of suppliers quality has shown that
they are ranked in the 3rd tier out of 4 tiers in the marketplace, which is due to the fact that
B&D are viewed more as a consumer brand, and perception of tradesmens that B&Ds
products are of inferior quality, less durable/rugged for the required work conditions. These
coupled with the lack of color differentiation makes B & Ds products not product tradesmen
are proud to own, reflected in the market-share.

Different options were analyzed to change the negative consumer perception about the B&D
products. 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. This would further enable them to increase their market share in
the segment.

Situational Analysis
The 5C analysis framework can be adopted to study the position of Black & Decker.

Company:
Black & Decker has been in existence since 1910 and has become synonymous with
the power tools segment. It is the market leader with 30% share of the US market.
They have pioneered the portable power tools business and ranked 7 th strongest brand
in US.

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Collaborators:
B&D collaborates with leading distribution channels including two step, Home
centres and farm outlets. Consumer segment is catered through retail chains like WalMart and K-Mart.

Customers:
B&Ds customer segment can be divided into professional industrial, professional
tradesman and household consumer segments. Though it enjoys high presence in the
consumer (45%) and industrial (20%) power tools segments, its share in the high
growth tradesman segment has been just 9% with the industrial tools segment
remaining stagnant. 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. Even with a high
brand awareness of 98% only 44% tradesmen perceive B&D to be one among the
best.

Competitors:
Makita is the largest competitor to B&D and holds 50% share in the tradesman

market. 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. 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.

Context:
Thought B&D produces tools customized to different customer segments, it uses the

same colored tools in both consumer and professional segments. This resemblance in

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appearance leads to a perception of resemblance in performance and hence B&D tools are not
trusted to withstand the stress of work environment.

Problem Statement
Change the customer perception about their products in Professional-Tradesman segment and
increase their market share in Professional-Tradesman segment.

Criteria for Evaluating Options

Criteria
Eliminate the negative perception from customers 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.
The possible and feasible options right now for Black & Decker are given in the table.
1) Harvest ProfessionalTradesman Channels

2) Get behind Black &

Decker Name with SubBranding
3) Drop the Black & Decker
Name from the
Professional-Tradesman
Segment & identify the
product as DeWalt
4) Drop the Black & Decker
Name & identified as
Marketing Management

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.
They will introduce the producs
under the brand name of Piranha.
They can introduce the products in a
separate brand name DeWalt
which B&D have acquired long time
ago.
They will launch the products as
DeWalt and use their own servicing &
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DeWalt - Serviced and

distributed by B&D
5) Drop the Black & Decker
Name & identified as
DeWalt - Manufactured,
serviced and distributed
by B&D

distribution mechanism.
They will launch the products as
DeWalt
and
use
their
own
manufacturing,
servicing
&
distribution mechanism.

Evaluation of Options:
The evaluation matrix for the available matrix is given in the following table.

Sr. No.

1
2
3
4
5
6

Options

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

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)

Differentiate
between
various
product lines
(1)

52

41

31

31

13

35

It has been aassigned weightage to the criteria in order of their importance (Values given in
the brackets). Then the options are ranked depending upon the various criteria. 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.

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Total

Decision Making
Based on the options evaluated on different criteria in the previous section, we see that if the
company goes with option 4 i.e. 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.
The reasons behind this are explained below:
1. 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.
2. The different product lines will be clearly demarcated by this approach which will
help in their market segmentation of their products.
3. We are keen on keeping the Black & Decker name for the service and distribution of
this new sub-brand so that B&Ds already existing extensive distribution and
servicing infrastructure can be leveraged. This will actually be perceived as a value
addition to the new sub-brand by the customers.
By following this approach, 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.

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