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Segmentation analysis

Segmentation analysis. Distribution Channel Grainger Home Depot Kmart. Market Segments. INDUSTRIAL. Market Leader B & D Makita B & D. TRADESMAN. CONSUMER. Color schemes of various brands. Figure D Color Differentiation. Professional & Tradesman.

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Segmentation analysis

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  1. Segmentation analysis Distribution Channel Grainger Home Depot Kmart Market Segments INDUSTRIAL Market Leader B & D Makita B & D TRADESMAN CONSUMER

  2. Color schemes of various brands Figure DColor Differentiation Professional & Tradesman • Makita - Teal • Milwaukee - Red • Bosch – Dark • Hitachi - Green • Black & Decker - Grey Consumer • Wen • Private Label • Black & Decker • Craftsman • Skil

  3. What should B&D do? Concede segment build share Sub-brand Drop B& Dname DeWalt New name

  4. What do you think of this plan? • Do these cosmetic changes really offer any true competitive advantages? How would you respond if you were Makita? Has B&D’s analysis taken this into account? • Does Makita have any real competitive weaknesses to exploit?

  5. % agreeing with statement (Brand X "………….") Table 4Percent Agreeing with the Statement Those Who Prefer Milwaukee Makita B&D Milwaukee B&D Those Who Prefer Makita 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 68% 66% Stands Behind Products 69% 52% 44% 67% 56% 61%

  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 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)

  8. What did you learn? What surprised you the most?

  9. Market share of tradesman segment Other Makita Black & 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 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

  11. The cola "taste test" Group 1 “A" = RC Cola “B" = Coke “C" = Shaw's Group 2 "a" = Coke "b" = Coke "c" = Coke What are some reasons for having such a design?

  12. A blind rating of Coke in 3 successive sips

  13. Brand Recognition

  14. Brand rated as best

  15. Guesses about identity of "A" [RC]

  16. Guesses about identity of "B" [Coke]

  17. Guesses about identity of "C" [Shaw's]

  18. Coke vs. RC: Stated preferences vs. actual preferences • % preferring • Coke to RC stated actual Preference taste test

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