Question 1: B&D leads in two product segments, but trails in the third. Why?
Answer: It seems from the case that there are several reasons why B&D leads in Professional-Industrial and Consumer product segments, but trails in the Professional-Tradesmen segment. It is also clear from the tests performed by Black & Decker that their products were at comparable, or even better at some cases, quality.
Branded as Home Tools: It appears that professional-tradesmen did not want to use the same tools that housewives used at homes (Black & Decker). Tradesmen viewed Black & Decker tools more for home use than being subjected to demands of the job site. This was a perception issue that was hurting Black & Decker big way.
Distribution Channel: It is also evident from the data (Exhibit 2) that Black & Decker lacked in capitalizing one of the most profitable distribution channels i.e. Membership Club. On the other hand, Makita who distributed its product through membership clubs, in which Black & Decker did not take part in, proved to be very successful channel (85%) for Makita.
Color: I believe that the unremarkable grey color did not help Black & Decker. The color was another factor that was strongly linked to the Black & Decker’s image. The color factor was very clearly demonstrated by lab tests and also by the comments from professional-tradesmen.
Multiple Segments: Black & Decker was involved with three different segments Professional-Industrial, Professional-Tradesmen, and Consumer. On the other hand, Makita (who entered the market in 1978) focused on only one segment of the market while B&D focused on three.
Question 2: Describe the salient psychological features of the tradesman’s buying behavior (values & need states).
Answer: This is
Tradesmen seem to believe that Black & Decker’s brand is for Consumer use only. They are well aware of the brand, but regard it as the brand that is more suitable for the tools used at home.
As Black & Decker holds about 45% of the consumer market, it has very good brand recognition. In a tradesmen’s mind the association of Black & Decker with consumer segment is so high that they feel that Black & Decker is for home use only and it is not rugged enough to be used professionally.
Need:
Strong tools, that can be used professionally
Value: They ne...
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...disassociation from Black & Decker brand
· Introduction of a Black & Decker’s one of the stable brands (DeWalt) that has no negative association
· DeWalt got 70 % awareness rating. This in turn means that Black & Decker will not have to spend money to establish a new brand
· DeWalt also achieved an “One of the best” agreement percentage of 63%
· Also scored 58% on the purchase interest by tradesmen in “DaWalt-Serviced and Distributed by Black & Decker’
Cons:
· It seems that every one at Black & Decker takes a great pride in the #7 “brand Power” position of the Black & Decker name. It will be a challenge to sell the option at Black & Decker.
· Linkage of aggressive objectives of doubling the Black & Decker’s Professional-Tradesmen segment share from 9% to about 20%
I strongly suggest that Joseph Galli should drop the Black and Decker name from the Professional-Tradesmen segment, sell the products in this category under the DeWalt brand and build more brand awareness for DeWalt
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Their committing strategy to provide excellence in customer service and deliver quality products has brought them leading market share in the industry. Konica is providing them with quality products at competitive prices enable them competition within the market along big names like Xerox, Sharp and Canon. Customers base their purchase primarily on service and dealer reputation and Daytun's commitment to these factors has helped them grow in the market. The industry is maturing and future growth opportunity within London is under question. Competitors are aiming to increase market share through aggressive pricing, which can, consequently affect Daytun's sales (See Exhibit 2).
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Rivalry. Home Depot, Ace Hardware and Menards are the biggest competition that Lowe’s faces. With Home Depot being the large...
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