Segmentation analysis Market
Leader
Market Segments
Distribution
Channel
B & D
INDUSTRIAL
Grainger
Makita
TRADESMAN
Home Depot
B & D
CONSUMER
Kmart
Color schemes of various brands
Figure D Color Differentiation
•
•
•
•
•
Makita - Teal
Milwaukee - Red
Bosch - Dark
Hitachi - Green
Black & Decker- Grey
• Black & Decker
• Craftsman
• Skil
• Wen
• Private Label
Professional
&
Tradesman
Consumer
What should B&D do? build share
Concede segment
Sub-brand
DeWalt
Drop B&D name
new name
What do you think of this plan?
• Do these cosmetic changes really offer any true
competitive advantages?
¾ How would you respond if you were Makita?
¾ Has B&D's analysis taken this into account?
• Does Makita have any real competitive
weaknesses to exploit?
% agreeing with statement (Brand X "………….")
Table 4 Percent Agreeing with the Statement
Those Who
Prefer Makita
Those Who
Prefer Milwaukee
Makita B&D
Milwaukee
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
44%
67%
68%
66%
Stands Behind Products
56%
61%
69%
52%
B&D
What Happened?
1991
1994
Makita
Makita
Other
Black &
Decker
DeWalt
Other
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
Makita
Other
Black &
Decker
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
Group 2
"A" = RC Cola
"B" = Coke
"C" = Shaw's
"a" = Coke
"b" = Coke
"c" = Coke
What are some reasons for having such a design?
A blind rating of Coke in 3 successive sips
5.6
rating
5.4
5.2
5
4.8
4.6
4.4
4.2
"a"
1st
taste
"b"
2nd
taste
"c"
3rd
taste
Brand Recognition
30
25
20
15
10
5
0
Coke
Pepsi
RC
Pres.Ch.
Sam's
Tab
Dr. Pepp
Diet Coke
Shaws
Meijer
Thorofare
Brand rated as best
20
18
16
14
12
10
8
6
4
2
0
Coke
Pepsi
RC
Pres.Ch.
Sam's
Tab
Cherry C
Diet Coke
Shaws
Meijer
Thorofare
Guesses about identity of "A" [RC]
14
12
10
8
6
4
2
0
Coke
Pepsi
Dr. Pepper
no idea
Guesses about identity of "B" [Coke]
12
10
8
6
4
2
0
Coke
Pepsi
Generic
Root Beer
no idea
Guesses about identity of "C" [Shaw's]
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Coke
Pepsi
generic
Diet Coke
Pepsi one
Dr. Pepper
Tab
RC
no idea
Coke vs. RC:
Stated preferences vs. actual preferences
100
90
80
70
% preferring
60
Coke to RC 50
40
30
20
10
0
stated
preference
actual
taste test