Black and Decker

Its 1991 and Black & Decker must decide how to address its pocket-sized market overlap in the Tradesmen surgical incision of its power tools business. At this time, power tools represent 29% of B&Ds $5 billion dollar sales (fig. A); though B&D dominates the Consumer and Industrial segments, it has only a 9% circumstances and about $3 million in operating income from the Tradesmen segment relative to the 50% market share held by be Makita (table A/pg. 3). As outlined by the case, B&D now has 3 options: 1) to harvest and exit the Tradesmen segment, 2) to develop a new sub-brand for this segment, or 3) to drop the B&D key out in the Tradesmen segment and to manufacture harvest-homes under the DeWalt brand. Options 2 and 3 must achieve the joint objectives of doubling segment share from under 10% to 20% (with major share withdraw from Makita) and increasing operating income from 10% to at least 12% without venturing into the Membership Club channel (pg. 11). The heart of B&Ds woes in the Tradesmen segment likely stems from poor consumer perceptions of its product quality specifically, the fact that tradesmen see the brand as identical with household goods such as popcorn poppers and vacuum cleaners rather than with work-appropriate power tools (pgs. 5, 9 & 10; tables c & d).

These perceptions were most likely created by B&Ds attainment of GEs Housewares division and exacerbated by the subsequent intense media campaign it ran to promote B&D branded household products (pgs. 2&3). A second contributing factor could be B&Ds use of color by using shades of black and grey for its consumer and professional products, B&D inadvertently reduced the perceived product eminence between industrial and household products (pg. 7). In contrast, competing brands use to a greater extent color differentiation, making product differences more obvious. Brand sentiency is unlikely to be an issue, as B&D enjoys 98% awareness in this segment (table B). There is case secernate that Tradesmen perceptions of poor... If you want to get a full essay, order it on our website: Ordercustompaper.com

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