Question 1: B&D leads in two product segments, but trails in the third. Why?
Answer: It seems from the case that there are several reasons why B&D leads in Professional-Industrial and Consumer product segments, but trails in the Professional-Tradesmen segment. It is also clear from the tests performed by Black & Decker that their products were at comparable, or even better at some cases, quality.
Branded as Home Tools: It appears that professional-tradesmen did not want to use the same tools that housewives used at homes (Black & Decker). Tradesmen viewed Black & Decker tools more for home use than being subjected to demands of the job site. This was a perception issue that was hurting Black & Decker big way.
Distribution
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They were: o Rated best (80%) on "one of the best" Agreement Data survey o Rated high (95%) on the awareness scale, next to Black & Decker (98%) o Rated best on the "Makes High-Quality Tools" and "Makes Durable/Rugged Tools" (91%)
· Additionally, Milwaukee 's markets share in Professional-Industrial segment is at parity with B&D. This shows Milwaukee 's competency in power tools.
Milwaukee Weaknesses:
· Like Makita, Milwaukee 's products were also priced at Premium over B&D. This could be a weakness, as competitors could sell under their price to capture the share.
· Data in exhibit 2 reveals that either Milwaukee was not participating in the "Membership Club" or was not very effective in it.
Question 4: Describe the marketing options available to B&D. What are the pros and cons of each?
Answer:
There are three marketing options available to B&D. They are as following:
Option 1: Harvest professional-Tradesmen Channels
In this option the strategy was to concentrate on the Consumer and Professional-industrial segments and only participate in Professional-Tradesmen segment for profitability. There was no emphasis on capturing the market share.
Pros:
· In this option the focus will be on profitability only, not on market share.
· Better concentration on the Consumer and Professional-Industrial segments
Cons:
· Taking focus away from a big market (US Market Segment of $420MM) is not a good idea
· Profitability is good,
4) Based on your positioning strategy, what brand name and marketing budget allocations would you advise?
Given your assessment of the competitive situation, what are the pros and cons of (a) continuing the present market targeting and positioning strategy and (b) adopting the recommendation made by Foote, Cone & Belding? (make a comparison table of pros and cons for each approach).
My recommendation is for the company to stay focused on its main competitive advantage of supplying a
4. What are the pros and cons of the mail order marketing strategy? What are the pros and cons of alternative distribution methods?
What has Target done well over the years in terms of its integrated marketing communications strategy? What should it do going forward?
When BPL entered the market, it wanted to manufacture high quality electronic products and make BPL a household name. A household name, by definition, is a brand name that is very well known to the great majority of households. So, BPL segmented its market and catered to the masses. It targeted households who wanted to have high quality electronic products.
Tradesmen's bad feedback over B&D products and seeing it as for home use rather than job use.
2. Given the markets the company is operating in, what is the best structure for the sales force? How did you decide?
price point than the big 3, the company saw this as the perfect strategy to penetrate the saturated
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In the 1990’s Black and Decker had a great position in the market for their products to appeal to the Professional Industrial segment and the Consumer segment but when it came to the Professional Tradesmen segment they were lacking. Their 9% market share vs. Makita’s 50% market share in the tradesmen segment was incomparable. Makita clearly had a better product in the eyes of the Professional Tradesmen. In the Professional Segment most of the people who buy the products are people who need these tools to make a living such as carpenters, electricians, plumbers, roofers, and general remodelers. Black and
* Product Differentiation: It is evident from the case that B&D products in the professional segment were of good quality with 10 out of the 14 products in leadership category (Figure E). Therefore, the problem faced by B&D products in this segment is more of differentiation than of product quality. The consumer level products in black in color are not substantially differentiated from professional level products which were charcoal grey in color (Figure D). This lack of differentiation has adverse influence on the buying decision made by professional tradesmen as they take pride in their work which is more rigorous than “do it yourself” low quality consumer segment. Therefore, the professional tradesmen segment has disassociated itself with Black and Decker brand name despite good quality professional tools manufactured by B&D.
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