Submitted by: Submitted by msdmht2323
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Date Submitted: 11/21/2010 10:02 AM
Case Analysis:
The Black & Decker Corporation (A): Power Tool Division
Sid Mehta
1. What is the cause of Black & Decker’s 9% share vs. Makita’s 50%?
1. Brand misconception
The professional tradesmen considered B&D’s products much suited better for consumers. This conception bought B&D towards the lower end of the spectrum amongst the Professional Tradesmen Segment buyers. B&D’s consumer products don’t necessarily lack quality but rather are poorly differentiated. The product color makes it difficult for the professional segment buyers to determine the product class making it a psychological barrier to overall buying decision.
2. Inappropriate Professional Tradesmen Distribution channels
Exhibit 2 clearly shows that B&D lacks a comprehensive distribution channel especially where the major concentration of sales were by Professional tradesmen. Two-Step and Home Center Channels where the Professional Segment sales were 40% and 25% respectively Makita’s share was 55% and 45% where as B&D was less than 10%.
2. How does the buying behavior of Tradesmen impact the situation?
Buying behavior amongst the Professional Tradesmen is based on performance, quality, availability, functional benefits, brand perception and product services. While B&D provides high quality tools that provide all the functional benefits it lacks the brand perception which adversely affects its target consumers to choose other alternatives. In addition B&D is not heavily penetrated in the most common distribution channels associated with the professional tradesmen segment.
3. What is Makita’s competitive strategy and what roles does Milwaukee (the #2 brand in the segment) play? What are their vulnerabilities that Black & Decker might capitalize on?
|Makita |Milwaukee |
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