2 Color schemes of various brands Figure D Color DifferentiationProfessional&TradesmanMakita - TealMilwaukee - RedBosch – DarkHitachi - GreenBlack & Decker - GreyConsumerWenPrivate LabelBlack & DeckerCraftsmanSkil
3 What should B&D do? Concede segment build share Sub-brand Drop B& DnameDeWaltNew name
4 What do you think of this plan? • Do these cosmetic changes really offer any truecompetitive advantages?How would you respond if you were Makita?Has B&D’s analysis taken this into account?• Does Makita have any real competitiveweaknesses to exploit?
5 % agreeing with statement (Brand X "………….") Table 4 Percent Agreeing with the StatementThose WhoPrefer MilwaukeeMakita B&D Milwaukee B&DThose WhoPrefer MakitaMakes 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 astrength because the already existing B&D 117customer service centers permit DeWalt to make acredible guarantee of 48 hour turn around on repairs.• added value from service guarantee permitted them tocharge premium prices (further supporting highquality image)
8 What did you learn? What surprised you the most?
9 Market share of tradesman segment OtherMakitaBlack & 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 producttype• took a "total product" approach – looked beyond thetechnical aspects of the tool to evaluate how people feltabout 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'sGroup 2"a" = Coke"b" = Coke"c" = CokeWhat are some reasons for having such a design?