April 6, 2011
Black and Decker Case Study
Cause of B&D’s 9% share in the Tradesman segment; In the 1990’s Black and Decker had a great position in the market for their products to appeal to the Professional Industrial segment and the Consumer segment but when it came to the Professional Tradesmen segment they were lacking. Their 9% market share vs. Makita’s 50% market share in the tradesmen segment was incomparable. Makita clearly had a better product in the eyes of the Professional Tradesmen. In the Professional Segment most of the people who buy the products are people who need these tools to make a living such as carpenters, electricians, plumbers, roofers, and general remodelers. Black and …show more content…
Their brand awareness is at 90% which is important. This shows that the consumer is well aware of their brand and there are many positive attributes that go along with it. Also, within the tradesmen community Makita has very good positioning. Makita is priced 5% to 10% above B&D but still has good pricing and also offers a membership club where you are eligible for discounts off of their product. When people see they are eligible for a discount they love it. Makita was believed to be “arrogant and dictatorial” this caused retailers to become not so positive about them even though they held such a strong position with tradesmen. They also had no channel protection. They sold their products to a range of markets from retail to membership clubs. Makita was also known to “trade down”. They would position their product to look attractive to the consumer for example for a gift for Father’s Day.
Milwaukee Role in the Segment Milwaukee was more on the same level as B&D. They were an older company selling only in the high end of the market but had great brand awareness of 95%. They held the second position in the tradesmen market with 10% not much different than B&D with 9%. They had a selling rate of about $200 million per year worldwide. Really $200 million was not that much in comparison to B&D who had sales of $4.8 billion in 1990, but Milwaukee again was only targeted to the high end market. Milwaukee