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Black And Decker Globalization Strategy

.. assembly plant will be the hub for dispatching DeWalt products to distribution centers. These assembly plants will be in a strategic geographic location. It is obvious that B&D will have to use multiple channels and/or hybrid channels to deliver its product to the international market. B&D will form key alliances with distributors such as hardware stores and specialty stores. An attractive incentive scheme for distributors will also be developed to push DeWalt products.

As part of the alliance, B&D will also assist the distributor with implementing Just In Time (JIT) systems. These systems will help B&D in shipping the right products while reducing the inventory at the distributor’s warehouse. B will take an active part in training the sales consultants in the stores to allow them to convey the right message to the consumer. c) Communication Plan The communication strategy will be centered on the relative value a customer receives when purchasing the DeWalt brand of power tools. Relative value is the ratio of perceived value to the product price. The international launch of the DeWalt brand is focused on satisfying the homogenized needs and desires of the global market namely price, quality, and service.

By advocating a global strategy centered on the homogenized needs of consumers, B will be able to recognize synergies in all functions of the value exchange process. The international DeWalt campaign will be centered on the value maximization. The maximization of the consumers perceived value will be communicated to both the end consumer and the market wise distribution channel. The distribution channel serves the market by providing consultative selling or referencing of product characteristics. The distribution channel significantly influences consumer-purchasing behavior. B will adopt a push strategy to leverage the existing distribution network through their message of value maximization. It will work with its alliance partners to promote direct marketing campaigns that stress product value and reliability.

In addition, B will also employ the pull strategy to stimulate demand by increasing brand awareness and recognition. The DeWalt product line will be promoted through trade journals, store displays, and point of sale promotions. Local pricing situations should be considered. For example, things in Japan are generally more expensive than in the US. So the prices there need not be reduced tremendously there.

d) Competitive Marketing With the introduction of DeWalt line in Europe and Japan, B’s competitors will certainly take notice. Therefore, it is very important that the global strategy takes into account competitors’ moves. It’s highly critical that coordinated efforts must be seamlessly established with sales, marketing, manufacturing, and financial departments before the roll out of DeWalt product line. Given Bosch’s stronghold on the European market and Hitachi and Makita on the Japanese market, the competitors could easily launch a price war against market expansion. One way is to aggressively market their products at lower prices and leveraging their distribution channels to prevent or derail the introduction of DeWalt.

In addition, B may see negative advertising campaigns promoting domestic products versus American products. As such, the best approach to counter competitors’ moves is to offer a value priced product supported by excellent facilitating and supporting services. Besides marketing Dewalt’s brand image, an aggressive marketing program promoting the product reliability and excellent customer service will counter any effective promotions from competitors. Furthermore, to ensure the effectiveness of the marketing effort, B needs to make sure that the infrastructure for its products and supporting services can deliver the promises to the customers. Some supporting services that will be bundled into B’s products and offerings are: Establish customer support and sales centers in key locations in Europe and Japan. This is essential especially in Japanese market where the preferred custom is the establishment of a trusted business relationship.

The presence of local agents or distributors can be very helpful in providing this support. The customer support and sales centers will be coordinated with the establishment of distribution channels. Establish warranty programs that meet or exceed competitors’ offerings; Establish timely product repair and replacement policies; Develop an attractive package for B’s products; Guarantee delivery dates and arrival times for shipments and the conditions of the product. Shipments should arrive at the agreed time, and should be well packed and undamaged upon arrival. Establish a separate hot line for customer complaints, product inquiry, product information, etc.

This will allow B&D to get feedback from its customers and continuously improve its product development and supporting services. All of the above supporting services will be met through B&D’s distribution channels in Europe and Japan. ii) Europe: Europe is geographically a large market with diverse cultures. However the countries in Europe are well connected through various modes of transportation. B will employ multiple assembly plants in Europe to serve the entire continent. The existing Elu brand in Europe is bringing in less than 10% of B Europe’s revenues in the Professional segment. DeWalt in Europe will replace the Elu brand completely.

Furthermore, since the B&D professional and B&D Proline range of products are not performing well, they will be eliminated and replaced with the DeWalt product name. This means that DeWalt will become the product for the professional segment, and B&D will be the consumer market name. B&D has decided to implement this strategy to prevent confusion amongst its consumers by not offering multiple competing product lines. B&D will use a multiple channel strategy in Europe to sell DeWalt products. They will have a direct sales force to concentrate on getting business from the large industries where DeWalt could fit well in the Professional-Industrial environment.

B&D will also provide after sales service and support for these customers. Exhibit 3A shows the proposed European distribution channel. To support the Professional-Tradesmen segment, the source of the DeWalt products will be from the three existing channels namely specialty channels, traditional hardware channels and modern consumer channels. The channels will have complete responsibility for the physical distribution of DeWalt Power Tools including the service and support. The communication plan in Europe will conform to the proposed global strategy. iii) Japan Japan poses a different problem for B&D.

Their presence in Japan is insignificant. However there is a huge potential for introducing the professional line of DeWalt tools. Japan also poses a different cultural barrier than Europe in terms of the living standards and perspectives. Japan’s distribution system is complex, labor intensive and filled with seeming redundancy. It is expensive and accounts for much of the differential between prices in Japan and rest of the world.

Difficulties with Japanese distribution are partly socio-cultural in nature. Many Japanese are hesitant to disrupt longstanding relationships with suppliers. The customers are concerned about timely shipments or lack of after-sales service ability. B will research the market thoroughly to determine areas where they can be successful. Due to the close-knit nature of business circle in Japan, B will form a partnership with a firm who will be their focal point for sales and distribution. The advantage in doing so is the firm’s knowledge of the local market, their selling techniques and existing business relationships with potential customers.

B&D will help the agency setup offices in different locations in Japan. It will market the DeWalt products through a direct sales-force to industries. The sales/distribution firm will simultaneously sell the DeWalt product line within the Professional-Industrial market segment and cater to the service needs of these industries. In addition this firm will also market the DeWalt product line to local hardware stores and assist B&D in training the store personnel in effective sales of B&D tools. Exhibit 3B shows the proposed distribution channel in Japan.

The challenges for B&D in Japan are to increase brand recognition and leverage the distribution network and strategic alliances. The communication strategy in Japan will concentrate on increasing brand recognition and consumer value optimization. Specifically: B&D will work with the distribution channel to provide informational seminars and promotional demonstrations. As a cost-effective means of reaching mass consumers, B&D will take part in industry-specific trade shows. B&D will work with strategic partners and local advertising agencies to coordinate advertising campaigns.

For instance, 21 billion passengers use commuter transportation in Japan annually. To promote visibility of the DeWalt products, B&D will use transit advertising. Following is a tabulated set of recommendations and associated timeframes: Recommendations Implementation Plan/Responsible Party Timeframe 1 Combine Professional Product Lines in Europe Market DeWalt as the Professional Product/ Marketing & Sales task force Immediately 2 Maximize Market Potential Offer competitive prices, value, variety of products/ Product Manager/Sales task force Immediately 3 Maximize Market Potential Provide Sales and Customer service support to distribution channels/ Sales task force & manufacturing Immediately 4 Use Distribution Channels to their potential Use existing assembly plants Europe to centralize manufacturing and assist in implementing JIT delivery systems / Manufacturing & Product Manager Immediately 5 Employ hybrid push pull communication strategy Advertise, provide informational seminars, demonstrations / Sales & Marketing Task force Immediately 6 Compile data and interpret Japanese market Form a task force that consists of a representative from manufacturing, marketing, sales, and product management to study and interpret the data. Immediately /Ongoing study DeWalt in Europe and Japan Marketing and Product Management Fall Semester 1998 Professor Robin Chase By Marketing and Advertising.