Essay on Black & Decker

Submitted By GeorgeZFan
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Black and Decker (B&D) has one of the strongest brands in U.S. (ranked in top 10) and is a leader in the U.S. power tools market, yet, it struggles to gain a strong market share in the Professional-Tradesmen (Tradesmen) segment. For a multitude of reasons, B&D must remain in the Tradesmen segment but, going forward, should leverage the DeWalt brand name in its possession as its primary brand (Option 3), in order to steal market share from its main competitors – Makita and Milwaukee.
The Tradesmen segment offers a tremendous growth opportunity for B&D. This segment is experiencing the largest growth of the three segments in the U.S. power tools market. Even though it is the smallest of the three segments, the Tradesmen segment had a growth rate of 9% in 1990; by comparison, the Consumer and Professional – Industrial (Industrial) segments only grew 7% and 0%, respectively.
There is also a great risk of losing market share in the other segments if B&D leaves the Tradesmen segment to build on its presence in the other segments. Despite having an extremely strong brand identity (ranked one of the top 10 brands in the U.S.), the Tradesmen customer base has a perception that B&D’s products in this segment are inferior to other company’s products (despite that the results of recent product tests prove that B&D’s products are comparable in both quality and performance). The leader of the Tradesmen segment, Makita, could take advantage of this weakness if it decided to move into the Consumer segment. Also, Makita prices its products in the U.S. at a premium, meaning they could lower prices, if needed. If B&D decides to focus on the other two segments and not address its perception issues, Makita could decide to expand into the Consumer segment and potentially steal market share from B&D. Therefore, B&D should remain in the Tradesmen segment.
Rather than using the B&D brand name directly though, B&D should reinvent its identity and leverage the existing DeWalt brand name. According to the annual Image Study, DeWalt already possesses a strong awareness rating as well as a higher perceived quality than B&D. The B&D name should still be leveraged as suggested by research that an “endorsement” from B&D would positively impact “purchase interest.” Also, B&D needs to move away from the grey color scheme, as it is synonymous with a consumer product and would risk perception issues from the initial rollout. Yellow would be an
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