You are on page 1of 31

top

Case Study
Black and Decker Corporation (A) - Power Tools Division

Black and Decker, a US based corporation has reached the #7 brand in the US and the #19 in Europe.
By creating the power tools business in the early 1990s and by being the worlds largest producer, the
company has been recognized as offering high quality, differentiated products and excellent service in
the power tool market. Moreover, a strong brand image has made B&G achieve the number one
position in the Consumer segment and leadership position in the Professional-Industrial segment.
Despite that Black and Decker has large market share in two of the three segments of the $1.5 billion
power tools market, it only has a 9% share in the Professional-Tradesmen segment, which was the
fastest growing segment of the power tools industry. Black and Decker has to start an action plan to
take away shares from Makita and Milwaukee, the main players who occupy 50% and 10% in
Professional-Tradesmen segment.

I would describe the problem that Black and Decker has, as described in the case, as a b) Perception
problem. Results in the case showed a great discrepancy between brand awareness and perceptions.
The B&G name in the Professional-Tradesmen segment had poor quality perception and lack of proud
ownership of the tools, because the tools were perceived to be designed for home usage. On the
contrary to quality perception, B&Gs product quality was strongly competitive thanks to laboratory
tests and extensive field tests. This contradiction stems from the brand being highly associated with
the Consumer market and the low segment differentiation through the use of color and packaging for
the products. The lack of dominance in the retail distribution channels such as the emerging Home
Centers exacerbated B&Gs disadvantaged position.

SWOT
External Opportunities
O1. Professional Tradesmen segment was rapidly growing at 9%
O2. Some densely populated developing countries have more needs for home constructions
O3. Easy servicing quality ranked higher than competitor Makita

O4. Makita did not please some retailers and distributers that offered no channel protection and no
special treatment for outlets
O5. Milwaukee and Makita charge a premium while B&G has already provided sufficient services
External Threats
T1. Makita provided a good baseline option in the major categories and other competitors to have
specific product strengths
T2. Competing brands use highly differentiated solid colors for the Professional Tradesmen segment
T3. Makita grasps every retail channel especially membership clubs and the fast growing home
centers such as Home Depot
T4. Milwaukee achieves the smallest difference between brand awareness and brand acceptance at
15% tend to gain loyalty of customers
T5. Power tools market is affected by economic environment

Internal Strengths
S1. Very strong brand image in the global market and high awareness at 98%
S2. High market share in the power tools market: #1 in the Consumer segment and a leader in the
Industrial segment
S3. Large high-quality product portfolios under innovative culture and intense experiments with
relatively lower price
S4. Have good service perception even by those who prefer other brands
SO Strategies
S3, S4/O3. A greater discount and longer return policy to support their extensive lab test results for the
competitive-leadership quality products
S1/O2. Expand into developing countries that require industrial and self-employers
S1, S3/O5. Use the pricing strategy in the international market backed by their less pricy and practical
products
ST Strategies
S3/T1. Reinforce the quality of the tools depending on the market share especially those that not
satisfied by competitors
S3/T1. Reduce manufacturing costs by shifting production from the US and England to lower-cost
locations such as Mexico and China to make the selling price more competitive

S4/T3. Focusing on Home Depot, the largest retailer, offer them discounted rates and excellent
customer service

Internal Weakness
W1. Brand name and image are associated with household products which unintentionally influenced
proud ownership of tradesmen
W2. The inability to differentiate Consumer and Professional tools has negatively affected perception
of quality and durability
W3. Low market share in distribution channels: below 10% in the Two-Step and Home Centers which
are most frequently patronized by tradespeople
WO Strategies
W3/O4. Offers some sort of incentives and special treatments to preferred retailers
W1/O3. Targeted the opinion leaders and successful tradespeople in this market
W3/O3. Promote in the media tradespeople primarily rely on and demonstrate in television channels
and retailers especially Home Centers to prove the quality of the tools
WT Strategies
W1/T2. Separate the Consumer segment and the Professional segment by using the DeWalt name for
professional products and the B&D brand for household tools
W2/T2. Use a differentiated color and packaging for their Professional power tool line
W3/T3, T4. Research each type of channel and treat them differently according to market share

To drop the Black and Decker Name from the Professional-Tradesmen Segment is the most strategic
course of action for Black and Decker. Since the Professional-Tradesmen segment is fast growing at
9%, compared to a 7% growth rate for the Consumer and a stagnant Professional-Industrial market,
the company could not solely enjoy the favorable position in the other two segments. It can be seen
from Table 1, the brand image associated with the Consumer segment has causes confusion of
professional products with consumer products in the Professional-Tradesman segment, despite having
excellent quality products and service. To stop this long time confusion, separating the Consumer
segment and the Professional segment by using another familiar brand name for the Professional
segment that is free from negative associations is viable. DeWalt indicates a high purchase interest of
51% and greater positive brand image among tradespeople. Backed by Black and Deckers wellaware service, launching the Professional-Tradesman tools under the DeWalt brand name is a steady
option in the long run. Sub-branding may not be able to solve the problem of removing that perception
attached to household products. In terms of that B&G has no profitability in 9% share of the market,
therefore, Option 1 is too risky and unpredictable.

Recommendations
Product
Differentiating segment through a distinctive color for the Professional-Tradesman power tools under
the DeWalt brand name is the first step of the implementation. This can be visually recognized when
displaying in the market, allowing no bias attached to Black and Decker name. In terms of the choice
of color, it should be distinctive among competitors. Since main competitors have occupied three
colors (Red, Blue, Green) within the seven colors, there are limited choices for DeWalt to pick. Pink
and purple are not suitable to display a masculine image, in this case, orange and yellow can be
considered as they symbolize energy and safety respectively.

Reinforcing the quality of the tools depending on the market share especially those not satisfied by
competitors is the second step. Although Makita has large share for all categories in the ProfessionalTradesmen power tools segment, and that Skil and Ryobi held higher share in Circular Saws and Belt
Sanders, the market share in corded drills, Miter Saws, Reciprocating Saws, Jig Saws and Chop Saws
have potential spaces for DeWalt to grow. The promotion should mainly focus on these five categories.
In addition, among these five categories, Miter Saws, Reciprocating Saws and Jig Saws are less
competitive in terms of quality shown in Figure 5 of the case. It indicates that an intense improvement
for these three types of saws is vital.

Price
To make the selling price more competitive by shifting factories from the US and England to lower-cost
locations and to provide a greater discount and longer return policy for customers is the third step.
Some developing countries such as Mexico and China have lower salary requirement and more
human resources. Relocated production can reduce manufacturing costs and therefore reduce the
price of the product and relieve the burden of debt in the long term.
Since B&Gs products are less pricy compared with competitors, using the pricing strategy in the
international market can be an alternative.

Place
Making a difference among channels by focusing on the growing home distribution centers, such as
Home Depot, and offer specific incentives for preferred channels is the fourth step. Some special
treatments that can be given to Home Centers such as offering discounted rates and after sale
service, can be an attack on Makita that has no channel protection. This move would increase the
loyalty of retailers and build a sustainable relationship circle in the market.

Promotion

Targeting the opinion leaders and successful tradespeople in this market and promoting in the media
tradespeople primarily rely on and demonstrating in television channels and retailers to prove the
quality of the tools is the fifth step. Tradespeople are easily influenced by fellow peers in the decision
making process through their reviews and discussions, so identifying opinion influencers in this
segment is necessary. Although Dewalt owns a considerable level of buying interests, its brand
awareness is relatively lower in the market, rating at 70%. A series promotional campaign, targeting
media that tradespeople frequently access and demonstrating new products in retail stores by
advertisers, has to be undertaken to gain the publicity of the new brand. Endorsements on the
packaging show DeWalt is backed by Black & Decker could gain credibility taking advantage of the
high awareness and excellent service of B&G.

Zhuoyun Li, wrote in 2 March 2014


Marketing Concepts and Commercialization course, Rochester Institute of Technology
Professor Raj Murthy

Saizeriya Brand Critique

Saizeriya Restaurant Management Co., Ltd. is an exclusively foreign-owned enterprise. The company
employs as its innovative business model and enterprise core the integration of service business and
manufacturing thinking. It uses the manufacturing job analysis method to detail all of the concerns in
the store and achieve standardization and refinement.

During the fiscal year ending August 31, 2013, Saizeriya achieved the highest net sales in its history
both in Japan and overseas, posting consolidated net sales of 110,428 million. In November 2013,
the company likewise achieved its objective of operating a chain of 1,000 outlets nationwide. Saizeriya
entered the Chinese market in 2003, and was growing dramatically in the Pearl River Delta. In 2013,
Chinese outlets (151) accounted for almost the total number of foreign outlets (162). The increase is
especially evident in Guangzhou. From 23 outlets in 2011, Saizeriya expanded to 38 outlets in 2012
and 55 outlets in 2013.

The price inflation in the past few years and the continually increasing demand of busy city dwellers to
eat outside have driven the popularity of low-cost foreign fast-food restaurants. Under these
circumstances, the successful operation of Saizeriya in the Chinese market has revealed its internal
management advantage. However, the company likewise experiences challenges brought about by
external factors. The details are shown in Table 1.

Table 1. SWOT Analysis of Saizeriya Restaurant Management

SWOT
Strengths
Implements global supply chain management; materials supply directly from signing contracts with
the peasants or the sources of imports
Follows a centralized procurement process
Uses the advanced Saizeriya information system to analyze costs, sales, revenue contribution, daily
transactions, and so on, to make staffing adjustments that reduces the cost of human resources
Maintain an environment that is distinctly Italian to attract customers, and sell products at reasonable
prices
Weaknesses
The packaging design which including the menu and utensils, lack branding and representation
Promotional activity is insufficient
Dishes cannot compare with the traditional Italian cuisine
Based on the manufacturing efficiency principle, the menu has been deemed outdated; lacks new
ideas
Importance is attached to the standardization of food production and productivity; however, the size
and structure of the outlet are ignored

Opportunities
The development background of the brand founder provides inspiration
The use of the Internet and social networking platforms presents a huge potential
Mobile application accessibility
SO Strategies
Take advantage of the brand to create accurate positioning among the lower and middle class
demographic, as well as student groups
Attach importance to the material to compensate for the deducted point after the standardization in
the production process
Digital information technology as a guide, in Wi-Fi wireless transmission implies realizing the tablet
menu and information management services based on the customer habits

WO Strategies
Improve the store, brand image, and packaging
Under the precondition of retaining the dishes, creative mixing and matching can be designed can
be designed, or more applicable dishes of the same ingredients can be designed.
Use a relatively inexpensive network environment and social platform to increase publicity

Threats
Pizza Hut offers discounts on a number of its packages for a limited period
Compound business has become popular
Competitors have larger spaces and better advertising strategies
ST Strategies
Consider establishing the restaurant in a commercial location with lower rental rates
Unify the material preparation process but serve differently by changing the ingredients on top of the
dish
WT Strategies
Avoid being influenced by price competition, which reduces the quality of the brand
Improve management efficiency during peak hours

The SWOT analysis reveals that key to the success of the company is maintaining lower costs without
compromising quality. The application of information technology, cultivation of local talent, and
implementation of industrialization and standardization have enabled Saizeriya to fully optimize and
develop its potential in the Chinese market, which is largely composed of young consumers.

To confront future challenges, Saizeriya could maximize mobile applications. Its target customers tend
to use mobile devices and the Internet; thus, a bold attempt would be the development of an
application for an order system that is expected to save human resources and ease the crowded
environment during busy hours. The order system could include a digital menu with adequate
information about the dishes being offered, such as health benefits and preparation process.

In the short term, Saizeriya should improve its visibility via a social networking service through which it
could increasingly interact with customers, particularly the young ones, or provide a creative platform
for two-way communication. In the long term, Saizeriya should ensure the sustainable development of
its brand by seriously considering the use of online and mobile resources, launching low-cost but

effective promotions, and focusing on creativity to fill the gap created by its manufacturing-style
strategies.

Zhuoyun Li, first wrote in 2012, revised in 2014

Sources:
Annual Report 2013, Saizeriya Co., Ltd., August 31, 2013,
http://www.saizeriya.co.jp/PDF/irpdf000295.pdf
Annual Report 2012, Saizeriya Co., Ltd., August 31, 2012,
http://www.saizeriya.co.jp/PDF/irpdf000253.pdf
Annual Report 2011, Saizeriya Co., Ltd., August 31, 2011,
http://www.saizeriya.co.jp/PDF/irpdf000219.pdf

COACH BRAND AUDIT & COMMUNITIES

MINI Brand Audit Presentation of Coach Inc.


Marketing Concepts and Commercialization course, Rochester Institute of Technology
Professor Raj Murthy

Description
How do the brands messaging efforts (such as TV advertising, its social media presence, its website,
print ads and other media) convey the brands authenticity and its brand personality? Does the brand
do it effectively thus boosting its authenticity? Specifically look for evidence of this across countries or

different markets. The brands image and personality are often defined by its primary target market
and existing customers. - Professor Raj Murthy

Fields
Analyzing/ Case Study/ Brand Community/ Presentation

Date
2014

Zhuoyun Li 2014 all rights reserved