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					          Segmentation analysis 


Market
                        Distribution
Leader
    Market Segments      Channel

B & D
                          Grainger

             INDUSTRIAL

Makita
      TRADESMAN         Home Depot


B & D
       CONSUMER               Kmart

Color schemes of various brands


    Figure D Color Differentiation




            •   Makita - Teal
            •   Milwaukee - Red
                                              Professional
            •   Bosch - Dark                       &
            •   Hitachi - Green               Tradesman
            •   Black & Decker- Grey



  • Black & Decker          • Wen                 Consumer
  • Craftsman               • Private Label
  • Skil
              What should B&D do? 





Concede segment               build share



                  Sub-brand         Drop B&D name




                          DeWalt                new name
       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?
% agreeing with statement (Brand X "………….")


Table 4 Percent Agreeing with the Statement

                                Those Who       Those Who
                                Prefer Makita   Prefer Milwaukee
                                Makita B&D      Milwaukee    B&D

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%
            What Happened?


     1991                     1994





                       Makita
                                       Other
            Other
Makita




            Black &
            Decker            DeWalt
            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





                 Other
        Makita




                 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                "a" = Coke

       "B" = Coke                   "b" = Coke

       "C" = Shaw's                 "c" = Coke


What are some reasons for having such a design?

          A blind rating of Coke in 3 successive sips



            5.6


            5.4

            5.2

rating





              5


            4.8

            4.6


            4.4

                        "a"     "b"       "c"

            4.2

                        1st
     2nd
      3rd

                       taste
    taste
    taste

      Brand Recognition



30
                        Coke
                           Pepsi
25

                           RC
20
                        Pres.Ch.
                           Sam's
15
                        Tab
                           Dr. Pepp
10
                        Diet Coke
                           Shaws
 5

                           Meijer
 0
                        Thorofare
      Brand rated as best



20
                          Coke
18
                          Pepsi
16
                          RC
14
                          Pres.Ch.
12
                          Sam's
10
                          Tab
 8
                          Cherry C
 6
                          Diet Coke
 4
                          Shaws
 2
                          Meijer
 0
                          Thorofare
 Guesses about identity of "A" [RC]



14

12

10

                                   Coke
 8
                                Pepsi
 6
                                Dr. Pepper
                                   no idea
 4

 2

 0

Guesses about identity of "B" [Coke]



12


10


 8
                                 Coke
                                    Pepsi
 6
                                 Generic
                                    Root Beer
 4
                                 no idea
 2


 0

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



  5

4.5
                                 Coke
  4
                                 Pepsi
3.5
                                 generic
  3
                                 Diet Coke
2.5
                                 Pepsi one
  2
                                 Dr. Pepper
1.5
                                 Tab
  1
                                 RC
0.5
                                 no idea
  0

                    Coke vs. RC:

      Stated preferences vs. actual preferences



              100

               90

               80

               70

% preferring
  60

Coke to RC 

               50

               40

               30

               20

               10

                0

                        stated      actual
                      preference   taste test

				
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