Summary

Facts:

Black & Decker was present in three segments in the power tools business tradesmen,
consumer and industrial
Tradesmen segment was meant for professional users such as carpenters
Consumers segment was for the home segment and included tools such as electronic
screwdrivers, vacuum cleaners, coffee-makers, toasters, irons, etc
Industrial power tools comprised tools sold to large corporates which were used by their
employees
The market share in the three segments as per the 1990 data was 20% (professional and
industrial), 9% (tradesmen) and 45% (consumer segment)

Situation Now

$1.5 bn market - $530 mn was consumer power tools, $400 mn was tradesmen and $450
was industrial power tools
Growth was highest for the tradesmen segment at 9%
In the professional industrial segment, B&D was viewed as offering high quality and
differentiated products and excellent service
In the consumer segment, its brand recognition and image helped it obtain the number one
segment but the same was not true for the other two segments

Problem at hand

B&D products had a good brand perception in the household segment however, in the other
two segments, there was no clear demarcation as its products were used interchangeably in
the three segments; a clear-cut image for the three segments was not present
This was aggravate by the use of same charcoal-grey colour in professional tools and black in
consumer tools whereas other brands used standard colours such as bright red or yellow
Therefore, other brands were highly differentiated in these segments whereas B&D was not
There were no problems with product quality as was evident from the research done by B&D
Brand awareness was highest amongst competitors in these categories

Three options considered

Focus on consumer and professional industrial segments

Professional tradesmen segment to focus only on profitability even if it was at the expense
of market share
To get behind B&D name with sub-branding
To drop B&D name from the professional tradesmen segment by either developing a new
brand name free of any negative associations or to use any other name already existing in
the B&D stable of brands

Suggestions

Since the only major problem is differentiation between B&Ds product lines, it can make its
differentiation effective by following standard industry colours in the professional
tradesmen segment by painting its tools yellow or red
The purchase interest for products serviced by DewaIt and distributed by B&D is as high as
58%. Thus it can also go for sub-branding through DeWalt, this will provide a good
awareness position to start from and is also free from any negative connotations that the
B&D brand has for tradesman.