Identification of Problem and Concept

Identification of Problem and Concept:

Black and Decker is a pioneer in portable power tools. Today, the industry features three major market segments: Professional Industrial includes tools that are sold to larger companies who buy tools for their workers; Professional Tradesman that target tools that are sold to independent contractors who use their own tools at the job site; and Consumer tools that are sold to the households. In 1991 B&D corporation faced a major challenge within the power tools industry; specifically in the Professional Tradesman segment where one of its biggest competitors, Makita, dominated that markets segment with ~50% market share opposing to ~9% for B&D. Never the less B&D still has a strong market share in the consumer and industrial markets as its ranked #1 in these market segments. Some trades people viewed all B&D products as for use at home rather than on the job; and conversely, there had been instances of a B&D product designed for at home use being subjected to the demands of the job site and failing. According to product research, the products that B&D has to offer are rated high on performance, durability and reliability. Despite these positive results, sales are still very low which made the company look for other causes for the problem, branding. As part of its Annual Image Study, B&D conducted a telephone survey which revealed that the B&D brand received a significantly high percentage of awareness among consumers in the Professional Tradesman market segment at 98%, but only 44% of those responded with B&D tools being “One of the Best”. A bad reputation had been developed within the Professional Tradesman segment, so the company found a need to change its strategy. Thus, it came down to three option: To Harvest Profession Tradesman Channels and focus on profit regardless the market share; To Get Behind B&D Name with Sub-Branding in order to re-establish the brand; or finally Drop the Black and Decker Name from the Professional Tradesman Segment using a different brand name to cast off the negative image from the quality product.

Analysis:

Before we explore in the three options mentioned above let’s roll back and briefly discuss the Market and the Competitor analysis that have a direct effect on the decision making, taking into account the market research and findings .

• Market Analysis and facts:

- B&D is a major player in Consumer and Industrial Segments with 20% and 45% market shares respectively.

- Lacking in Tradesmen segment with only 9% market share

- Poor performance in channels that make up 65% of the professional market.

- Majority of Industrial sales come from Warehouse