1. Segmentation analysis
Market
Leader
B & D
Makita
Distribution
Channel
Grainger
Home Depot
Kmart
Market Segments
INDUSTRIAL
TRADESMAN
CONSUMER

2. Color schemes of various brands
Figure D Color Differentiation
Professional
&
Tradesman
Makita - Teal
Milwaukee - Red
Bosch – Dark
Hitachi - Green
Black & Decker - Grey
Consumer
Wen
Private Label
Black & Decker
Craftsman
Skil

3. What should B&D do? Concede segment build share Sub-brand
Drop B& Dname
DeWalt
New name

4. 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?

5. % agreeing with statement (Brand X "………….")
Table 4 Percent Agreeing with the Statement
Those Who
Prefer Milwaukee
Makita B&D Milwaukee B&D
Those Who
Prefer Makita
Makes High-Quality Tools % % % %
Makes Durable/Rugged Tools % % % %
Proud to Own % % % %
Easy to Get Service % %
Stands Behind Products % %
44% %
56% %

6. What Happened? 1991 1994 Makita Other Other Makita Black & Decker
DeWalt

7. 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)

8. What did you learn? What surprised you the most?

9. Market share of tradesman segment
Other
Makita
Black & Decker

10. 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

11. The cola "taste test" Group 1 Group 2 “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?

12. A blind rating of Coke in 3 successive sips

13. Brand Recognition

14. Brand rated as best

15. Guesses about identity of "A" [RC]

16. Guesses about identity of "B" [Coke]

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

18. Coke vs. RC: Stated preferences vs. actual preferences
% preferring
Coke to RC
stated actual
Preference taste test