Black & Decker’s move “from the garage to the house” diluted its image as a power tool company and made the brand name synonymous with household products such as Dustbuster and Spacemaker. Heavy promotion of household products served to increase power tool sales in the Consumer segment, possibly due to greater brand recognition/loyalty, while failing to increase sales in the Tradesman segment.
The failure to increase market share in the Tradesman category could be in part to Black & Decker’s strong household brand association. Power tools carrying the same brand name as household appliances could create perceptions that Black & Decker power tools are not as tough and suited for everyday construction use as the competitors.
As the case notes “Tools and their performance were a constant topic of conversation on the job site.” And consumer feedback such as “…Black & Decker makes a good popcorn popper, and my wife just lover her Dustbuster, but I’m out here trying to make a living,” show the tremendous power of word-of-mouth and brand reputation in the Tradesman category.
Among the options presented in the case, option three – dropping the Black & Decker name – offers the greatest opportunity for building market share. Black & Decker’s research showed that they faired better than competitors in service and standing behind their products and that the DeWalt brand, owned by Black & Decker, had a 70% awareness rating and 63% agreement as “one of the best” among Tradesman. This gives Black & Decker an advantage in launching a DeWalt line of power tools aimed specifically at Tradesman.
Building on Black & Decker’s reputation for service and standing behind their products, identifying the new DeWalt line with Black & Decker would give legitimacy to DeWalt’s emergence in the power tools market. DeWalt’s success with stationary woodworking equipment already gives it legitimacy as a “professional” or “industrial” brand. Also using the DeWalt name and a bold yellow color for the tools would differentiate the line from competitors and limit associations with Black & Decker household products.
At the time of the case, large home improvement chains such as The Home Depot and Lowe’s were growing rapidly and were the largest outlet of Tradesman tool sales. Competitor Makita was aided by the development of this new distribution channel by blurring the lines of its consumer segments, positioning professional power tools as appropriate for consumer use (i.e. industrial drills as Father’s Day gifts).
The case also notes that Makita’s reputation with retailers was not uniformly positive. This presents an opportunity for Black & Decker to partner with the home improvement chains to cooperatively promote the DeWalt brand to Tradesman. Programs such as providing the retailers with tools to use in demonstrations to giving Tradesman opportunities to trial DeWalt tools at the job site to special deals or discounts to Tradesman could be beneficial to both manufacturer and retailer and help Black & Decker achieve its minimum objectives – double the Tradesman segment share and take away share from Makita.
The risks associated with launching a DeWalt line of power tools are manageable. Black & Decker has no profitability in the Tradesman segment, so potential loss of revenue is limited. Additionally, poor reception of the DeWalt line would have little to no effect on sales in the other segements carrying the Black & Decker name.
Finally, implementation of this strategy could be done fairly quickly and with relatively little investment. There would be no engineering or mechanical changes to the power tools, just a new look and feel and promotion of the DeWalt name.
