Black & Decker Marketing Paper

Black & Decker Marketing Paper

Executive Summary

During the 1990's, Black & Decker lost significant ground in the Professional-Tradesman Power Tool segment to rival Makita Corporation (Dolan, 2001). Despite Black & Decker having a top-ten brand strength rating in the United States during this time, they could only manage to achieve a 9% market share (ranked 3rd overall) in the Professional-Tradesman market. However, they did have a strong market presence in the Consumer and Professional-Industrial segments within the power tool industry. Black & Decker must find a means to leverage the brand name in this market, while still being able to differentiate their product line enough to attract the Professional-Tradesman segment to purchase their products. This will be the only way they are going to make a significant attempt to gain market share from the current giant (Makita) in this segment.

Situation Analysis

Duncan Black and Alonzo Decker, Sr. started the Black & Decker Corporation in 1910. The business initially started as a machine shop and in 1917 received the first patent for a portable power drill. Today, Black & Decker is a manufacturer and marketer of power tools and accessories, hardware and home improvement products, and technology-based fastening systems. The company primarily operates in the United States and Europe. Black & Decker is headquartered in Towson, Maryland and employs approximately 22,000 people.

Strengths:

Strong Brand Awareness

Black & Decker is one of the most recognizable & respected brands in the world, which should contribute significantly to its growth in the Professional-Tradesmen segment. They have a brand-strength ranking of #7 in the United States and #19 in Europe (Dolan, 2001). Black & Decker must find a way to leverage this strength to gain market share from Makita.

High Quality

The Black & Decker power tool line is competitive in performance, reliability, and durability in the power tool market (Nolan, 2001). They tested unmarked Black & Decker tools and discovered that the products were of high quality. Black & Decker needs to continue to promote the quality of their products to help gain market share from their competitors.

Weaknesses:

Brand Name not Respected by Professional-Tradesmen Segment and

Brand Name Associate with Household Products

The Professional-Tradesmen segment does not respect Black & Decker power tools because they do not perceive them as a product that meets their needs. The tradesmen associate Black & Decker power tools with household products (Nolan, 2001). The fact that the Black & Decker brand name is on toasters and dust busters makes it difficult for this segment to take their power tools seriously as a rugged, reliable power tool that a tradesman would be proud own (Nolan, 2001).

Opportunities:

Professional-Tradesmen Segment is Fastest Growing

Even though Black & Decker is not currently the product of choice in the Professional-Tradesmen segment, they cannot ignore the substantial growth rate in this market. The Professional-Tradesmen segment is experiencing a 9% growth rate annually, which is more than any other segment.

Retailers Dislike Makita

Despite the popularity of Makita's products, many retailers dislike carrying their products because they will sell through any intermediary, including discount stores. The discount store sales channel has no exclusiveness to purchasing the product from a particular store, so consumers do not return to the same store for additional Makita purchases because their products are found on every block. In addition, the perceived value of Makita's products is compromised once the discount stores are involved.

Manufacture Products with Industrial Yellow Color

The color of power tools is a definite indicator of market success. The black and grey power tools sell much less than the more colorful brands in the Professional-Tradesmen segment (Nolan, 2001); therefore, Black and Decker should pursue the industrial yellow color for this market. This would allow them to differentiate from their previous color scheme of black and grey and the industrial yellow is quite often associated with safety.

Threats:

Makita Dominants Discount Stores

Black and Decker understands that Makita controls the discount store sales channels and they have no desire to sell their products in these