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Black And Decker Case Analysis

2403 words - 10 pages

Black and DECKER: power tools Case study

Problem Statement
Black and Decker has established its brand strength to be among the top ten firms in the United States. By creating the portable power tools business in the early 1990’s and being the world’s largest producer by the end of the decade, the firm has been vouched for offering high quality, differentiated products and excellent service in the Professional-Industrial segment. Powerful brand perception has helped Black and Decker attain the number one position in the Consumer segment. Although Black and Decker has been leading in two of the three segments of the $1.5 billion portable power tools market, it could not make a significant ...view middle of the document...

Being number one in the Consumer segment and a leader in the Professional-Industrial segment has not necessarily attracted buyers in the fast growing Professional-Tradesmen market. Recent surveys among Professional-Tradesmen proved Black and Decker to have a very strong brand awareness at 98% as compared to its competitors Makita at 90% and Milwaukee at 95%. The Professional-Tradesmen market, which is growing at a faster rate of 9% compared to the other two segments, indicates an increasing pool of customers to cater to and an opportunity for Black and Decker to significantly increase its current overall market share and operating income from under 10%.
The Professional-Tradesmen market is portrayed to be a closed community consisting of consumers that are influenced by fellow peers in similar trades throughout the decision process. Considering that consumers only spend on an average of $1,000 on replacement tools annually, decision influencers can be a vital asset to Black and Decker. Tradespeople perceive Makita to offer a good baseline option in the major categories and other competitors to have specific product strengths, while Black and Decker was viewed as tools designed for home consumers. Black and Decker must ensure a positive relationship and performance feedback from these influencers to attain a higher market share through new customers and most importantly returning consumers looking for replacement tools as a result of inevitable damage and failure.
Tool performance and quality dictates the lively hood of the self-employed consumers in this segment. Quality perception among tradespeople ranked Black and Decker among the bottom two tiers in the market place, with Makita and Milwaukee at the top of the spectrum. Despite hard research evidence established by Black and Decker via extensive laboratory and field tests proving the competitive quality of major tools that represent 80% of the total sales in the Professional-Tradesmen Segment, consumers stated the contrary belief in response to the telephone surveys and annual Image Study conducted. This general perception might be driven by the viewpoint of a few tradespeople that deem Black and Decker products suitable for home usage rather than on the job. With very basic product differentiation by changing color schemes, there have been reported instances of Black and Decker tools designed specifically for the Consumer market failing when subjected to the demands of the job site. The inability to differentiate Consumer and Professional tools by the tradespeople has negatively affected Black and Decker’s firsthand reviews of quality and durability. Tradesmen have also displayed emotion towards a decline in their personal image and lack of sincerity were they to be seen on the job with “one of those Black and Decker gray things” indicating a sense of high pride man ship in their trade. The current color scheme mildly differentiates the Consumer and Professional grade using colors black...

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