The Black & Decker Corporation (a): Power Tools Division

The Black & Decker Corporation (A): Power Tools Division

1. How should Joe Galli market power tools to the Tradesmen segment? Why? What risks does he take? Be specific about your actions and remember he has three audiences to please: the customer, the retailer, and Nolan Archibald and Gary DiCamillo
2. Why is Makita outselling Black & Decker 8-to-1 in an account that gives them equal shelf space?
3. What, if anything, do you learn from Black & Decker’s consumer research?
4. Joe Galli’s objective is to “challenge Makita for leadership” in the Tradesmen segment. To do this, he needs to build share to “nearly 20% within three years, with major ‘take-away’ from Makita.” Is this realistic?

Market Segment

• Major player in Consumer and Industrial Segments.
• Lacking in Tradesmen segment.
• Permeation into Consumer Segment likely hindering our perception in Professional Segment

From Exhibit 2 : 5 major outlet types

• Poor performance in channels that make up 65% of the professional market.
• Majority of Industrial sales come from Warehouse HCs.
• Tradesmen sales coming from Two-Steps and Home Centers

Customer (Brand Perception)

From Table B, C and D, and Figure C

• B&D has highest brand awareness (98%) under Professional-Tradesmen
• B&D: Bottom half of brand perception under Professional Tradesmen
• Lowest “One of the Best agreement” data for B&D (44
• Discrepancy between awareness and product image
• Those who favor Makita indicate displeasure with Makita products where B&D is strong (Opportunity)
• Need to investigate the cause, whether it is due to the actual performance of professional tools

Poor performance in Tradesmen segment caused by:

• Poor brand perception in Professional segment
• Brand not differentiated well enough from tools meant for the consumer segment
• Need further research about perception vs reality

Figure E: Product Assessment

• The professional quality of items 1, 2, 3, 5, 9, 13, and 14 are above that of our competitors.
• All other products need additional development.
• Proves that permeation into households in the consumer segment has inhibited our brand perception in the professional tradesmen segment. B&D products CAN stand in this market

Strategy Recommendations

Competitor:

Milwaukee

• High end market in the professional-industrial tool industry.
• Have a solid presence in the Industrial segment through the Warehouse sales channel.

 Makita

• Provide high quality tools
• Arrogant and dictatorial acc to retailers. No channel protection, despite retail grievances.
• Trading down offerings

Option 1:

Harvest Tradesmen Channels and Focus on Consumer and Industrial: No

• Tradesmen segment has highest growth. Losing out on potential opportunity
• Increasing profit at the expense of market share may have negative long-term impact

Option 2:

Sub-Brand products with a new major label AND the Black & Decker: No