Segmentation analysis

Market

Leader

B & D

Makita

B & D

Market Segments Distribution Channel

Grainger

Home Depot

Kmart

INDUSTRIAL

TRADESMAN

CONSUMER

Color schemes of various brands

Figure D Color Differentiation

Professional &

Tradesman

Consumer

• Makita - Teal • Milwaukee - Red• Bosch – Dark• Hitachi - Green• Black & Decker - Grey

• Black & Decker• Craftsman• Skil

• Wen• Private Label

What should B&D do?

Concede segment build share

Sub-brand Drop B& Dname

DeWalt New name

What do you think of this plan?

• Do these cosmetic changes really offer any true

competitive advantages?

How would you respond if you were Makita?

Has B&D’s analysis taken this into account?

• Does Makita have any real competitive

weaknesses to exploit?

Table 4 Percent Agreeing with the Statement

% agreeing with statement (Brand X "………….")

Makes High-Quality Tools 82% 51% 91% 43%

Makes Durable/Rugged Tools 71% 48% 91% 42%

Proud to Own 78% 43% 86% 36%

Easy to Get Service 68% 66%

Stands Behind Products 69% 52%

Those Who Prefer MilwaukeeMakita B&D Milwaukee B&D

44% 67%

56% 61%

Those WhoPrefer Makita

What Happened?

Makita Other

Makita Other

Black & Decker

1991 1994

DeWalt

Why was it successful?

• positioning in terms of service turned their weakness

(association with the consumer channel) into a

strength because the already existing B&D 117

customer service centers permit DeWalt to make a

credible guarantee of 48 hour turn around on repairs.

• added value from service guarantee permitted them to

charge premium prices (further supporting high

quality image)

What did you learn?

What surprised you the most?

Market share of tradesman segment

Black & Decker

Makita Other

What research did B&D do?

• visited tradesmen at their job sites

• visited Home Depot, and quizzed product demonstrators

• conducted lab tests of its performance and reliability

• conducted "blind" field testing

• analyzed market shares by firm, by channel, & by product

type

• took a "total product" approach – looked beyond the

technical aspects of the tool to evaluate how people felt

about using it

• understood that tradesmen did not want to be "marketed to“

in a conventional sort of way

The cola "taste test"

Group 1 “A" = RC Cola

“B" = Coke

“C" = Shaw's

Group 2 "a" = Coke "b" = Coke "c" = Coke

What are some reasons for having such a design?

A blind rating of Coke in 3 successive sips

Brand Recognition

Brand rated as best

Guesses about identity of "A" [RC]

Guesses about identity of "B" [Coke]

Guesses about identity of "C" [Shaw's]

Coke vs. RC:

Stated preferences vs. actual preferences

% preferring Coke to RC

stated actualPreference taste test