The Black & Decker Corporation (a): Power Tools Division

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The Black & Decker Corporation (A): Power Tools Division Power tools segments overview The United States power tools have three market segments: Consumer, Professional-Tradesmen and Professional-Industrial segment. The first segment is consumers who buy power tools for home use. Professional-Tradesmen segment is consumers who are contractors that buy tools for themselves because of work requirement. Lastly, Professional-Industrial segment refers to consumers who are companies or organizations which the purchase and ownership of tools are from the company and conductors who work under it will use the tools for large projects. Among these segments, Professional-Tradesmen segment has the largest growing potential according to the statistical data. Problem Definition Black & Decker (B&D) is one of the world’s most popular power tools brand which is known for its superior quality of the products. B&D has captured 45% and 20% market shares in Consumers and Professional-Industrial segment respectively. However, it only has 9% market share in Professional-Tradesmen segment. On the other hand, B&D’s major competitors, Milwaukee Electric and Makita (market leader) have better performance in this segment: 10% market share for Milwaukee and 50% market share for Makita. The reason for low market share in this segment is that only consumer segment perceived B&D as a leading brand, but not in Professional-Tradesmen segment which perceived B&D as having poor quality products. Firstly, it is not due to product quality because it has been tested out on its performance, durability and reliability. Secondly, it is not due to awareness because telephone survey had measured that 98% of Professional-Tradesmen segment users know about the brand (Table B). However, only 44% among it thought that B&D is one of the best (Table C) and less than 50% believed that B&D provides high

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