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B&D Case

The document discusses Black & Decker's power tool business and options to improve its brand perception among professional tradesmen. It analyzes B&D's customers and market share. Test results showed B&D's quality was as good as competitors but it had weaker brand perception. The document considers options like harvesting, sub-branding or launching a new brand. It outlines B&D's actions to reposition through the DeWalt brand, including new products, pricing, communication and distribution.

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joey131413141314
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78 views

B&D Case

The document discusses Black & Decker's power tool business and options to improve its brand perception among professional tradesmen. It analyzes B&D's customers and market share. Test results showed B&D's quality was as good as competitors but it had weaker brand perception. The document considers options like harvesting, sub-branding or launching a new brand. It outlines B&D's actions to reposition through the DeWalt brand, including new products, pricing, communication and distribution.

Uploaded by

joey131413141314
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Black & Decker (B&D)

Who are the customers?


Black & Decker (B&D)

B&D Market Typical Distribution


Size “Number 2”
Share Leader Channel

Consumers 35% 45% B&D Skil Wal-Mart, Sears


Professional 30% 9% Makita Milwaukee Home Depot
Industrial 35% 20% B&D Milwaukee W.W. Grainger
Black & Decker (B&D)
Product Quality vs. Product Quality Perception

• In blind tests (w/o brand names or logos), tradesmen


indicated B & D’s power tool quality was ≥ Makita across
75% of product categories
Product Quality vs. Product Quality Perception

• B&D brand dominance in consumer power tools is spilling over to


the perception of the tradesman power tools

• The corporate strategy of pushing more into household


appliances, with its own products and those acquired from the
purchase of GE’s small appliances business

• This horizontal expansion negatively impacted the brand


perception in the tradesman segment
What Do Tradesman Want?
• Functionality (Tools that will make money)
• Durable, does not break down, no downtime due to tool repairs

What does a tradesman’s client want?


• Clients don’t want to spend money on someone with the same tools they
have in the basement.

• Psychological and Social:


• Status: Respect from coworkers on the job site
• Professionalism: Having the “right stuff”
Product and Pricing of B & D

• It looks like
consumer stuff

• Price 10% lower


than Makita
Market Analysis: Customer Funnel
• Awareness and availability do not seem to be a problem

• Objective quality also not a problem, but perceived quality and liking

• Growth opportunity in professional tradesmen segment


What are the options?

1. Harvest Build Share

2. Sub- 3. New Power


branding Tool Brand

DeWalt
What are the options?

1. Harvest Build Share

2. Sub- 3. New Power


branding Tool Brand

DeWalt
Harvest

Pros: Cons:
• Little short-term • Allows Makita to
risk increase base and
penetrate Industrial
or Consumer
Segments
What are the options?

1. Harvest Build Share

2. Sub- 3. New Power


branding Tool Brand

DeWalt
What are the options?

1. Harvest Build Share

2. Sub- 3. New Power


branding Tool Brand

DeWalt
Sub-Branding

Pros: Cons:
• Increased credibility • Less freedom to
• Economies of scale create a distinct
image for offerings
• Communication
• Master brand could
synergies lack in terms of
credibility
What are the options?

1. Harvest Build Share

2. Sub- 3. New Power


branding Tool Brand

DeWalt
New Brand – “DeWalt”

Pros: Cons:
• Good awareness to build from • Used on large, stationary
• No negative association that equipment: Does this transfer to
B&D brand has for tradesmen power tools?
• Purchase interest as high as • Line has been de-emphasized
58% for DeWalt-serviced and by B&D
distributed by B&D • Its “One of Best” score is better
than B&D’s but still worse than
Makita or Milwaukee
B&D – Marketing Action Decisions
Product
• Extended product line (from 33 to 70 tools)
• Industrial-looking packaging and products in “industrial
yellow” color and metal case
• Free tool loan at dedicated DeWalt service centers to
reduce downtime
• Extended warranty: 1-year free maintenance service
Price
• Higher than Makita. On par with Milwaukee
B&D – Marketing Action Decisions
Communication
• $1 m for 75 p "Wolfpack” salesforce; “the van guys”; $1
million for industry ads, $0.5m for retailers
• Heavy “on-premise” activities: contests,
demonstrations, wherever the target is
Distribution
• B&D-Pro inventory discontinued and replaced with
DeWalt products
• Gained support by higher margins, channel protection
(no selling to discount clubs), and becoming ally against
Makita's dominant position
Results
Success?
• From $0 to $1.4 billion in revenue in 7 years
• World’s leading brand of power tools
• Market share of about 40% in power tool segment
• In 1998, B&D sold consumer appliances to focus on power tools,
accessories, and products related to home improvement, DeWalt accounts
for 40% of revenues
• 2010 Black & Decker merged with Stanley, the brand strategy for DeWalt
remained unchanged
Takeaways
• If brand identity ≠ brand image you need to reposition your
brand
• Repositioning starts with going back to customer and
competitor analysis: Perceptions rule!

• Several strategic options:


• from leaving segment
• over revitalizing brand through marketing actions
• to launching a new brand (DeWalt/B&D)

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