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Background and Issues Black and Decker (B&D) is a household name across America.

Having received the patent for the first power drill, they are well known for their power tools. In addition to power tools, B&D is also known for its various household products, like the Dustbuster. While B&D celebrated a nearly 30% stake in the power tools market across America, they had fallen drastically behind market leader Makita's 50% share in the Professional-Tradesmen market segment to just 9%. To get back into competition with Makita, B&D would have to answer several questions about their brand and identity, specifically: 1. Is the Professional-Tradesmen segment worth pursuing? 2. What is the problem with B&D's image? 3. How should B&D change their image to positively affect the Tradesmen market? 4. What factors come into pricing this new brand? 5. What outlets should B&D use to market and sell their products to tradesmen? Brand perception can be one of the biggest factors in a company's success or failure. This case analysis looks at the redevelopment of B&D's brand specific to the Professional-Tradesmen sector of the power tool market. Is the Professional-Tradesmen segment worth pursuing? Since Makita is such a dominant brand in the Tradesmen segment, B&D needs to consider whether the market is valuable to pursue. Overall, the Tradesmen segment is 28% of the power tool market, accounting for $420 million dollars in revenue. Makita has a 50% share of this market, while B&D has 9%, a disparity of more than $170 million in revenue. The top 8 manufacturers (Table A from case study) account for 94% of the Tradesmen segment. B&D has a brand awareness that is stronger than all of their competitors (Table B from case study). In addition, 44% of tradesmen agree that B&D was "one of the best" in the study presented in Table C from the case. B&D holds 20% of the Industrial segment, and 45% of the Consumer segment, but these two segments are growing slowly, with almost no growth for the Industrial segment and only 7% for the Consumer segment as opposed to the 9% growth for the Tradesmen segment. Assuming sustained growth, in 3 years, the Tradesmen segment will be equal to the Industrial segment, although the Consumer segment will remain larger until 2000. The lack of growth in the Industrial segment, and the existing dominance of B&D in the Consumer segment leave the Tradesmen segment as the only viable option for B&D as a source of revenue growth. Given that B&D has such a large share of the Consumer segment, it can use this success to fuel its growth in the Tradesmen segment. Since 80% of the segment's sales are represented by 3 product types (drills, saws, and sanders), B&D should focus on these segments. Makita dominates the segment, but according to tradesmen, provides only a "good baseline option" while other companies, such as Skil (saws), provided high-quality products within a particular product type. This line of reasoning provides that B&D is in a strong position to grow their presence in the Tradesmen segment. With strong brand awareness, and agreement that they have a good product, B&D has the position to make a move on Makita and Milwaukee, the top two competitors in the segment. From the product assessment (Figure E from the case study) B&D has strong offerings in drills, and to some extent, saws. By focusing on these product types, B&D can grow their presence in the Tradesmen segment. B&D can also focus on manufacturers that provide power tools that have no specific product strength, such as Ryobi or Bosch. B&D can provide higher quality tools at lower cost than these companies, and attempt to forcibly acquire the 12% market share that they represent, which would more than double B&D's share of the segment. Why do Tradesmen have a poor image of B&D? B&D's image has suffered within the Tradesmen segment for several reasons. First, B&D has seen perceived issues with the quality of their products, which have caused tradesmen to lose faith in the B&D product. As noted in the case, these quality perceptions have arisen from the use of Consumer-quality power tools in a professional fashion. Consumer-level tools are not built for the kind of rigorous or sustained use as Tradesmen- and Industrial-level tools. Consequently, the Consumer-level tools will break down, leaving the tradesmen who purchase them feeling that B&D produces an overall inferior product. As demonstrated by the B&D test on product quality (Figure E from the case study), this problem is not one of product

quality, but rather one of product differentiation. In 10 of 14 tool portfolios tested, B&D Tradesmen-level products tested into the "leadership" category of quality. B&D Consumer products (black) are not labeled or colored substantially different from Tradesmen- or Industrial-level products (charcoal grey). It is understandably difficult for the potential buyer to determine which product belongs to which class, and purchase one of appropriate quality. This lack of differentiation extends psychologically to the overall decision for the tradesmen to purchase a B&D tool or seek an alternative. B&D serves all consumer segments, and has strong brand recognition across all segments. B&D has 98% brand awareness amongst tradesmen, compared to 95%, 90%, and 77% for Milwaukee, Makita, and Hitachi, respectively. They produce tools for industrial, trade, garage, and home use. For most tradesmen, it is a matter of pride to have a highquality tool that gets the job done better than the low-quality tools of the "do-it-yourself" segment, or alternatively using tools that carry the same branding as common household goods, such as the Dustbuster. Because of the lack of differentiation in product classes within the B&D brand, these professionals feel that B&D tools offered in their quality segment are not sufficiently differentiated than the tools of the Consumer segment. Therefore, they are inclined not to purchase B&D tools, as they perceive them to be primarily for those seeking tools designed for the Consumer segment. What changes need to be made to position B&D product to Tradesman segment? B&D needs to better understand the Tradesman segment's customer behavior and why they purchase a particular brand. Tradesmen want to look good among their peers on the job site - they want what's best. Quality, durability, and long-term performance are especially important factors for these customers, more so than the average consumer segment. Even though quality does not seem to be the key issue as to why they are really losing market share in this segment, B&D needs to make sure the quality is there. Word of mouth and personal perception are key means to selling a particular brand, and quality or performance issues can quickly tarnish a brand's reputation. B&D has performed an assessment comparing its product portfolio to competitive products; it found that B&D was considered a leader or competitive in many product types. On this analysis, 80% of the Tradesman segment is drills, saws and sanders. On drills, B&D shows leadership and on different categories for saws and sanders B&D has a mixing of positions from leadership to weak/undeveloped. This analysis should be taken further and compared more in-depth to particular attributes and features. For example, the product's shape, weight, feel, grip, safety features, power, ease of use, warranty, service, etc. This will help B&D determine where their competitors have shortcomings and where they can add features to make them more favorable. Interviews with tradesmen on the job site will help determine which features are most important to them. While B&D may have the quality already, there may be some fine-tuning that can be done to help provide competitive advantage against Makita and Milwaukee. B&D needs to develop close relationships with these customers and satisfy their needs which are unique to the consumer segment. As previously discussed, B&D's association with household goods like the Dustbuster, and Consumer-level power tools is likely what hurt B&D's performance with the Tradesman segment. They have already tried some sub-branding with the "Professional" and "Pirhana" labels, but the B&D name is still present and triggers unfavorable perceptions. Trying to use the same B&D brand on the Professional-Tradesmen Segment can create difficulties for the B&D consumer market. For example, creating improved products to appeal to the Tradesmen market segment can increase cost and price of the tools, creating problems on the consumer market where the price is more critical. A massive advertising campaign to move the B&D brand up in the tradesmen market can hurt the consumer market, creating questions on the consumer market about the B&D position on both markets. To remove this conflict and gain market share in the Professional-Tradesmen Segment, it is recommended that B&D: 1. Create a new brand targeted at the Tradesman market segment and drop B&D 2. Create a new image to help distinguish this brand from others including B&D 3. Make sure quality and features meet or exceed the needs of this segment The new brand created for the tradesman segment should create a strong identity totally separate from the Black & Decker brand, with no association from the customer perspective. DeWalt comes as a logical option, with a great 70% awareness and a positive recognition by consumers. The new brand name should imply ruggedness, durability, and quality and "DeWalt" has this potential. At the same time, B&D does have the option and ability here to create an entirely new brand name at this point. However, it is recommended that B&D seize the opportunity available to them by using the DeWalt brand. Creating this new division can have many advantages, including: sharing a supply chain of basic parts with the B&D consumer market division, creating a specific R&D focus on the professional market, and increasing profit without damaging consumer market pricing.

In addition to creating a new brand, the product line should have a new identity that can easily be distinguished on the job site and has no association with the B&D product line. All products should carry the same color scheme and labeling to minimize any confusion. A color such as orange or yellow, as suggested in the case, would stand out from common colors like black and gray. Physical appearance of the products should match the brand image and should exude a look of being the best. After B&D performs a thorough analysis of competitive products and a direct comparison to features and quality, B&D should make changes to the attributes to give them competitive advantage against current market leaders for this segment. They need to closely identify the needs of tradesman and make sure the product features and product line meet the performance requirements. Likely this will not entail a major change to quality or standards, but will optimize the product for this market segment. The new brand, identity, and product line will allow B&D a new start in targeting this market. An indirect benefit of these changes will likely be seen in the overall Professional market segment. Creating a more robust equipment brand for the Tradesmen segment will produce the opportunity to market the new line and brand to the Professional-Industrial segment as well. With this new opportunity, B&D can invest in a marketing campaign on the Industrial segment to increase market share on this market attacking their competition throughout the Professional segments. Pricing the New Brand Current pricing for the top two brands in this segment, Milwaukee and Makita, exceed B&D's Professional brand pricing by 10% and 5% respectively. Pricing for the DeWalt brand should be increased over the current B&D Professional brand level. B&D should match Makita's pricing. The increased pricing would allow increased revenue for B&D as well as form a distinction from the previous B&D professional brand. Pricing below Makita is not necessary to be competitive in this market. Tradesmen are more interested in tools that are high quality, dependable and will last for many years. B&D has already built these qualities into their professional line of tools. B&D tools, as measured against the competition by their own laboratory testing and blind field tests, showed that B&D made tools that held a leadership ranking in a majority of tool types and were at least competitive in all types except miter saws and belt sanders. Pricing DeWalt brand tools at the Makita level will also help give the perception that these new tools are of equal quality to that of Makita. Where to Market DeWalt Tradesmen most frequently purchase tools from Two-Step channel sellers like Ace and ServiStar. The Two-Step channel represents 40% of sales to the professional tradesmen market segment. Focusing on the Two-Step channel is necessary to capture what is currently the most popular method for purchasing Tradesmen-level tools. The number two sales channel is through home centers like Home Depot, which represents another 25% of this market segment. B&D should focus on these two channels for DeWalt brand power tools. Relationships with home centers like Home Depot should be strengthened. This sales channel is gaining popularity and is likely to overtake the Two-Step channel in the near future. Home centers typically offer prices that are significantly lower than prices from Two-Step sellers. Home Depot was shown to have prices as low as 30% of those offered at Two-Step hardware stores. Home Depot's superior customer service makes it hard to justify paying a premium to purchase tools at a hardware store. Home Depot is also a provider of tools to the growing "Do-It-Yourself" market which could generate additional revenue for the newly developed DeWalt brand. Home Depot stores offer their customers many seminars and classes on "Do-It-Yourself" projects. B&D should focus on becoming the tool of choice for these classes. Instructor use of DeWalt tools endorses the brand and puts DeWalt tools in the hands of class instructors that are usually sales associates. Positive experiences by sales associates will give them reason to recommend the brand to trades customers. In addition, student use of DeWalt tools allows those participating in the classes to gain familiarity with the brand. B&D should remain out of Membership Clubs and low end consumer store channels. Selling high quality tools at a significantly reduced price at Sam's Club may damage the brand image. DeWalt tools should not be available at Sam's Club or Wal-Mart. High quality tools should be purchased at a store that specializes in residential construction and highend home improvement.

Conclusions B&D needs to distinguish itself in the Professional-Tradesman market segment. To do so, it must separate from its currently perceived brand, that of household goods and inferior quality to other professional power tools. It is recommended to define itself under a new brand, such as DeWalt, with a new marketing and design scheme. A move such as this could be seen to cannibalize portions of B&D's Consumer segment sales, but the added revenue and market share in the Professional-Tradesmen segment will cover this loss. Consumers will be moving from one B&D brand to another at no overall cost to the company. In addition, this will allow B&D to market itself directly against Makita to the ProfessionalTradesmen segment and ultimately regain market share in this segment and the overall power tool market.