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2023megan · 2 years ago

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Post #1: Black & Decker

Today’s topic

Black & Decker’s strength as a top brand for household tools and appliances does not directly translate into the power tools category, specifically for Tradesmen, despite top positions in the Industrial and Consumer segments. This post explores B&D’s failure to compete with Makita in the Tradesmen segment and how it can re-brand its products to change the perception for professional buyers.

Why does B&D struggle to compete in the Tradesmen segment?

The main challenges B&D faces in the Tradesmen segment is reputation and perception of product quality:

Ironically, the reputation of B&D power tools for this segment is negatively affected by the success of in the Consumer segment. The reputation is low due to tradesmen attributing the products to novice users instead of experts. This is because B&D tools are associated with novice DIYers (like my dad who bought a power tool to build IKEA furniture for my apartment in Cambridge). Even though their needs are the same (i.e., quality, reliability, price conscious), professionals want to be associated with tools produced for their specific expertise and craft. Tradesmen likely attribute their own personal reputation and skill with the tools they use, and do not want to be perceived as using the same tools as common consumers (just like buying a designer bag is a status symbol). This is similar to how professional golfers prefer the Callaway brand, which is known to produce the best equipment and golf wear, as opposed to mainstream brands like Nike or Adidas.

This association is strengthened by the fact that the color scheme and branding for these segments were indistinguishable. B&D uses the same charcoal grey color for its professional grade tools (and a similar black for its consumer tools) as other brands do for their consumer segments. This biases professionals away purchasing other B&D tools because of the perception they are buying amateur products.

Similarly, B&D dominance in the consumer market for power tools, and with home products and appliances more broadly, may lead professionals to believe that all B&D products are produced for common use. This creates the perception that B&D products are low quality and cannot hold up to their industrials needs and standards. It doesn’t help that B&D underperforms in two key categories (Milter Saws and Belt Sanders) that make up 80% of this segment’s sales, compared to Makita, which ranks as a high performer among all.

Why this doesn’t affect the Industrial segment…

In the power tools market, B&D performs better in the Industrial segment compared to the Tradesmen segment. Why is this the case if the tools are the same? The answer comes down to who purchases the products. The Industrial segment is comprised of large, commercial contractors who buy power tools for their employees. These companies are likely to rely on price to make purchasing decisions and rely on trusted relationships with suppliers. Given B&D is priced 5-10% lower than competitors, performs well, and has favorable relationships with the key purchase decisions influencers in this segment, it is favorable against competitors. However, B&D’s brand reputation in Industrial does not translate to the Tradesmen segment. This is most likely because the two segments are not in the same network and do not speak to each other (aka no word of mouth marketing). Tradesmen are comprised of electricians, plumbers, carpenters, roofers, etc, who buy tools for themselves. Although the end-user is the same in these two segments, those who make the purchasing decisions are different.

What can B&D do?

Drop B&D name: I think B&D should use the DeWalt name for the Tradesmen segment. The association with the Consumer segment will likely not be defeated due to industry perception and social stigmas among professionals. Starting fresh with a new name will allow B&D to break away from the image it has with the Tradesmen segment, and DeWalt is already known in the market as quality and has no ties to the common consumer. Many companies have been successful at using different brands to market products that are conflicting to the parent company or to other products in the portfolio. Examples include, Toyota and Lexus, General Mills and Larabar, and Coca Cola and Honest Tea. In these examples, the parent companies created brands that service the needs of different consumers while giving the perception that the product stands on its own.

Change the color: B&D should change the color of the tools from charcoal grey to yellow. This will differentiate the tools away from the consumer segment and make it more appealing to professional users as the color is already associated with construction and safety.

#2023MITSloanBrandingSA

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theauctionmap-blog · 7 years ago

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