Black and Decker Case Solutions

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“THE BLACK AND DECKER CASE”

By Luca Bisighini – 21675

Third assignment for Marketing Management class (Fall 2015/16)

October 5th, 2015 – Sabancı University

QUESTION #1 - What is the cause of Black and Decker's 9% share vs. Makita's 50%?

First of all we need to start introducing Black & Decker Inc. in this scenario. Black & Decker in the 1980s was a company well set in 3 major market segments.

These segments were:

• Professional Industrial tools;
• Professional Tradesmen tools;
• Consumer tools.

At the same time, Makita was able to establish a very tough competition throughout the 1980s by:
establishing the dominant position in the distribution channel usually for tradesmen;

• providing lots of products in all the major categories;
• making the brand perceived as trustable and reliable for its professional use.

The 9% vs 50% share competition was in the sector of the Professional Tradesmen tools.

The reasons behind this difference could be found in:

• popularity of B&D products for the consumer segment – which helped with profits the company but at the same time, was damaging the other sector where B&D was operating. This reason was mirrored especially in the Color-No product differentiation in these two segments;
• issues with the quality of the product - electricians, plumbers, carpenters, framers, roofers, and general remodelers working in residential construction – the basic customers for Professional tradesmen tools, were unsatisfied from these products;
• problems in the distribution – Makita by using new distributors like Home Depot, was able to catch a high share of the market to the expense of Black & Decker;
• perception of Black & Decker as a lower quality product – in several occasions, Consumers products by Black and Decker were used for professional uses, despite the non-rigorous use those tools were made for. In fact, the professional use was not suggested and those instruments for the most, broke in lots of times. Then the consideration of a lower-inferior product arose, despite the non-intention at the bottom

QUESTION #2: How does the buying behavior of tradesman impact the situation?

Well, the tradesmen were by the fact of Black & Decker selling all of his products with one unique color, despite the differences in its use, either for consumers’ uses and professional ones.

The confusion in the choice created a bad perception around the brand, for sure inferior to other 6 big competitors (Makita, Milwaukee, Bosch, Hitachi, Porter Cable and Panasonic).