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Case Study Answers

In: Business and Management

Submitted By poojiee
Words 720
Pages 3
Questions:
1. What is the cause of B&D 9% share vs. Makita’s 50% share?
2. How does the buying behavior of the tradesmen impact the situation?
3. What is Makita’s competitive strategy and what role does milwaukee play?
4. What action alternatives should B&D pursue? why?

Answer
1. Ans:
● Tradespeople viewed B&D as use at home rather than a professional/on the job kind of a product.
● Two-step channel is the most important distribution channel for Professional segment sales. Within this channel, Makita accounts for 55% of market shares, while B&D less than 10%. 25% of professional-Tradesmen tool are sold through home centers channel, within which B&D accounts for less than 10%, while Makita accounts for 45%. Makita’s rise to marketplace dominance was aided by the rapid development of this new type of distribution.
● High SG&A costs ( selling, general & administrative cost) -25%
● Customers perceive B&D as the third tier of brand quality, while Makita has the highest quality perception among customers.

2. Ans:
● Tradesmen usually bought when a replacement was needed spending up to 1000$ per year on an average and from retail stores such as the Home depot. Buyers bought most frequently in independently owned stores served by distributors, i.e. the Two-step channel: Within this channel, Makita accounts for 55% of market shares, while B&D less than 10%.
● Tradesmen are not brand conscious and are not looking for innovation. They just want something reliable and have been used by other tradesmen.
● Since tools and performance were a constant topic of conversation at the job site for tradespeople, they formed a slightly negative perception toward B&D products because they viewed these products as consumer products, not professional tools that they could make a living out of.
● The product color is not really a key attribute in purchase...

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