Black and Decker Joseph Galli, VP Sales Essay

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Black and Decker

Joseph Galli, VP Sales and Marketing for Power Tools

Strategic Marketing Management Services

RE:

Market Share Issues re: Makita

Mr. Galli:

Per your request, we have done an analysis on the market share for Professional Tradesman tools between Black and Decker and Makita Tools. While B&D holds a substantial amount of market share in the portable power tools, Professional-Industrial and Consumer segments, a critical issue is the low comparative share in the fastest growing market, that of the Professional-Tradesman (See Figure 1). While B&D has remained a clear market leader for consumers, the lower than average perception of the product line by Professional-Tradesmen has lowered the share to 9%, with Makita, relatively new to the arena, at a solid 50%.

Demographically and psychographically, the buying behaviors of the tradesmen show that they spend an average of $1,000/annum on tools, usually replacing a broken or outdated model. This is a major purchase for this segment, and the subject of a great deal of conversation at the job site, as well as clear word of mouth advertising and recommendations. Makita seems to be the market leader in this sector for a variety of reasons: 1) Color and Style more appealing to the heavy use crowd, product seems more rugged; 2) Makita pushes the membership clubs and discount buying service niche; 3) Expands the market with no channel protection (e.g. home shopping network, etc.

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); 4) Offers trade ins for old equipment, and 5) Promotes the brand as "rugged," "long lasting" and designed specifically for the working professional.

Your mandate was to find a way to increase the market share for this important niche by at least double within 36 months. You have been presented with three options: Harvest Professional-Tradesmen Channels (Focus on the consumer, some cannibalization from consumer to Professional-Tradesmen would occur); Sub-Brand and push B&D Name, and remove the B&D Name from this segment as a sub-brand. The issue of the name is somewhat psychological, some of the research stated that tradesmen see B&D as a kitchen appliance manufacturer, but not necessarily a long-term solid set of working tools for the professional.

To drop the B&D name would essentially usurp….....

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