Marketing trends
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Sample Marketing Plan: DeWalt Industrial Tool Company
November 29, 2023
This sample marketing plan is adapted from Chernev (2020). It depicts Black & Decker’s launch of DeWalt Industrial Tool Company. At the time of launch, Black & Decker was the world’s largest manufacturer of power tools, electric lawn and garden tools, and residential security hardware. Despite its success in consumer and industrial markets, Black & Decker was underperforming in the tradesman segment—consisting of small businesses and independent contractors. Recognizing the growth potential of this segment and its strategic importance in gaining market position, Black & Decker made the decision to launch a new product line designed specifically to address the needs of tradesmen. The new product line would be managed by a separate company, organized as a wholly owned subsidiary of Black & Decker and carrying the name of one of the brands in Black &Decker’s portfolio—DeWalt.
DeWalt’s marketing plan illustrates the launch of a new brand under the auspices of the newly created strategic business unit (DeWalt Industrial Tool Company) of Black & Decker. The launch of the new offering is positioned in the context of an existing product line targeting three different customer segments: consumer, industrial, and tradesman. In this context, the marketing plan illustrates DeWalt’s strategy for optimizing the value for its customers, collaborators, and the company. DeWalt’s marketing plan further highlights the specifics of the different elements of the marketing mix—product, service, brand, price, incentives, communication, and distribution—that carry out the proposed strategy.
The contents of this sample marketing plan are shortened to provide you with a brief outline of a business-to-business (B2B) marketing plan for a real company. Also, for brevity, the actual exhibits are not included in this plan.
Table of Contents
Executive Summary ............................................................................................................ 5
Situation Overview ............................................................................................................. 6
Goal ..................................................................................................................................... 7
Strategy............................................................................................................................... 7
Target Market ....................................................................................................................7
Customers................................................................................................................................................................ 7
Company .................................................................................................................................................................. 8
Collaborators........................................................................................................................................................... 8
Competitors............................................................................................................................................................. 8
Context..................................................................................................................................................................... 8
Value Propositions and Positioning Statements...................................................................9
Customer Value Proposition ................................................................................................................................ 9
Customer Positioning Statement ........................................................................................................................ 9
Collaborator Value Proposition ........................................................................................................................... 9
Collaborator Positioning Statement ................................................................................................................... 9
Company Value Proposition ................................................................................................................................. 9
Company Positioning Statement .......................................................................................................................10
Tactics ............................................................................................................................... 10
Product ............................................................................................................................ 10
Service ............................................................................................................................. 10
Brand ............................................................................................................................... 11
Brand Identifiers...................................................................................................................................................11
Brand Referents....................................................................................................................................................11
Price ................................................................................................................................ 11
Customer Pricing ..................................................................................................................................................11
Incentives ........................................................................................................................ 11
Communication................................................................................................................ 11
Customer Communication..................................................................................................................................11
Collaborator Communication.............................................................................................................................12
Distribution...................................................................................................................... 12
DeWalt products ..................................................................................................................................................12
DeWalt service......................................................................................................................................................12
Implementation ................................................................................................................ 12
Resource Development .................................................................................................... 12
Developing the DeWalt Offering ....................................................................................... 13
Commercial Deployment .................................................................................................. 13
Control............................................................................................................................. 13
Performance Evaluation......................................................................................................................................13
Analysis of the Environment ..............................................................................................................................13
Exhibits.............................................................................................................................. 14
Exhibit 1: DeWalt’s Customers .......................................................................................... 14
Exhibit 2: DeWalt Product Line Description ....................................................................... 14
Exhibit 3: DeWalt’s Collaborators...................................................................................... 14
Exhibit 4: DeWalt’s Competitors ....................................................................................... 14
Exhibit 5: DeWalt’s Product Line ....................................................................................... 14
Exhibit 6: DeWalt’s Portfolio of Services............................................................................ 14 Exhibit 7: Preferred Contractor Loyalty Program ............................................................... 14
Exhibit 8: Trade Incentives to Ensure Retailer Support....................................................... 14
Exhibit 9: DeWalt’s Communication Plan........................................................................... 14
Exhibit 10: DeWalt Service Plan ........................................................................................ 14
Exhibit 11: DeWalt Key Resources and Organizational Structure ........................................ 14
Exhibit 12: Processes to Design, Promote, and Distribute DeWalt Products and Services .... 14
Exhibit 13: The Specifics of the Commercial Deployment of the Offering............................ 14
Exhibit 14: DeWalt’s Performance Evaluation Metrics ....................................................... 14
References ........................................................................................................................ 15
Figure 1: Key Customer Segments in the Power Tool Market .....................................................6
Figure 2: DeWalt Value Proposition for Tradesmen...................................................................9
Executive Summary
Black & Decker’s power tools division represents the largest product group, accounting for 29% of the company’s US revenue. The power tools market comprises three segments: consumer, industrial, and tradesman. Although Black & Decker is the market leader in the consumer and industrial segments, it has only 9% share of the tradesman segment. Furthermore, despite the strength of Black & Decker’s brand and the quality of its tools, the company profitability in this segment was virtually zero.
This plan outlines our key marketing activities directed at establishing Black & Decker’s market leadership in the tradesman segment by launching a new set of products and services under the DeWalt brand.
Situation Overview
The power tools market comprises three types of customers: (1) consumers—buyers who use power tools around the house, (2) tradesmen—small businesses and independent contractors, such as carpenters, plumbers, and electricians working in residential construction—using power tools on the job; and (3) industrial buyers, such as companies that purchase power tools for employee use.
The key attributes that customers typically consider when making a choice are: power,
reliability, service, brand image, and price. The relative importance of these factors for each of the three segments is shown below:
Figure 1: Key Customer Segments in the Power Tool Market
Power tools are distributed through a variety of channels that include industrial supply companies (W. W. Grainger), wholesale distributors (serving smaller retailers), large home improvement centers (Home Depot, Lowe’s), smaller hardware chains (Ace Hardware, ServiStar), independently owned hardware stores, and mass-merchandisers (Walmart, Kmart).
The key competitors in the US power tool market include Black & Decker, Makita, Milwaukee Tools, Ryobi, Skill, Craftsman (manufactured by Black & Decker and sold as a private label by Sears),
Porter-Cable, Bosch, Hitachi, Panasonic, and Hilti.
Black & Decker is the world’s larger manufacturer of power tools, electric lawn and garden tools, and residential security hardware. Black & Decker’s five largest product groups are: power tools (29% of Black & Decker’s US sales), household products (15%), information systems and services (11%), outdoor products (9%), and security hardware (9%). Black & Decker is the market share leader in the power tools segment, which is the largest contributor to Black & Decker’s growth. The Black & Decker brand was frequently ranked among the top ten most powerful brands in the United States.
Black & Decker targets all three customer segments: consumer, tradesman, and industrial. Due to Black & Decker’s subpar performance in the tradesman segment, the focus of this plan is on the tradesman.
Goal
Our primary goal is to improve the share of Black & Decker in the power tool market from 9% to
20% in three years. To achieve our primary goal, we have set the following objectives:
· Customer objectives. Gain awareness, build preference, and foster adoption of the
DeWalt brand by tradesmen.
· Collaborator objectives. Ensure product availability and promotional support by the distribution channels catering to the tradesman segment.
· Internal objectives. Improve operating income from 10% to 12%.
· Competitive objectives. Focus marketing efforts on stealing share from Makita, identified as the key competitor in the tradesman segment.
Strategy
Target Market
Customers . Our target customers are tradesmen—small businesses and independent contractors working in residential construction and using power tools on the job.
· Value potential: Tradesmen represent 28% ($420M) of the US power tools market and are the fastest growing (9%) segment of this market.
· Value drivers: Performance (power, precision, and ergonomics), reliability, service, and brand image.
· Demographic profile: Small businesses and independent contractors (carpenters, plumbers, and electricians) working in residential construction.
· Behavioral profile: Use power tools on the job; read trade press (Builder and Electrical Contractor); and visit trade shows and home improvement stores, including large home improvement centers, such as Home Depot and Lowe’s, and smaller hardware chains, such as Ace Hardware and ServiStar, and independently owned hardware stores.
A detailed description of DeWalt’s customers is given in Exhibit 1.
Company . DeWalt Industrial Tool Company is a strategic business unit of Black & Decker. A
detailed description of DeWalt is given in Exhibit 2.
Collaborators . Distribution channel partners: Wholesale distributors (serving smaller retailers), large home improvement centers (Home Depot, Lowe’s), smaller hardware chains (Ace Hardware, ServiStar), and independently owned hardware stores. A detailed description of DeWalt’s collaborators is given in Exhibit 3.
Competitors . Makita Electric (50% market share), Milwaukee Tools (10% market share), Ryobi (9% market share), Skill (5%), Craftsman (5%), Porter-Cable (3%), and Bosch (3%). A detailed description of DeWalt’s competitors is given in Exhibit 4.
Context .
· Economic context: Recession, resulting in high unemployment, limited money supply (credit), increased inflation, rapid growth of new home construction and remodeling prior to the recession, and rise of big box home improvement centers such as The Home
Depot and Lowe’s.
· Regulatory context: Price dumping allegations against some of the Japanese manufacturers, including Makita, raising the possibility of imposing import duties on certain tools imported from Japan.
Value Propositions and Positioning Statements
Customer Value Proposition. Our value proposition for tradesmen is offering high-performance, reliable tools backed by a national service and quality commitment unparalleled in the power tool industry. Our offerings will deliver greater value to tradesmen than the competition on each of the key attributes important to tradesmen as shown in the following table (the first set of ratings reflect the importance of each attribute to tradesmen and the remaining ratings reflect the performance of each competitor on these attributes):
Figure 2: DeWalt Value Proposition for Tradesmen
Customer Positioning Statement . For the tradesman who uses power tools to make a living, DeWalt offers dependable professional tools that are engineered to be tough and are backed by a guarantee of repair or replacement within 48 hours.
Collaborator Value Proposition .
· Monetary value : Potential to increase sales volume and profit margins.
· Strategic value : Increased customer traffic supported by a large promotional budget, streamlining the procurement process by having a single supplier for both consumer and professional segments, and price protection from discount retailers.
Collaborator Positioning Statement. DeWalt power tools are a better choice for retailers than
Makita because they offer price protection from discount retailers.
Company Value Proposition.
· Monetary value: Potential to increase market share from 8% to 50% and increase margins from 5% to 10%. Increase the valuation of the company by creating a new brand.
· Strategic value: Ensures leadership positioning in the growing tradesman segment. Solidifies Black & Decker’s relationship with retailers by offering an attractive product portfolio that enables retailers to have a single-source supplier for both consumer and professional segments.
Company Positioning Statement . DeWalt power tools are a great choice because they enable
Black & Decker to achieve its profit goals.
Tactics
Product
Thirty-three high-performing power tools (drills, saws, sanders, and plate joiners) and 323 accessories designed to maximize power, precision, ergonomics, and reliability, and designated to replace the Black & Decker Professional product line. DeWalt’s product line is outlined in Exhibit 5.
Service
· Loaner tool policy: DeWalt will lend a tool for the repair period.
· 48-hour service policy: If a repair is not completed within 48 hours, DeWalt will provide a new tool free of charge.
· Technical support: Experts are available by phone at 1-800-4DeWALT to offer assistance regarding DeWalt products, service, repair, or replacement.
· Free one-year service contract: DeWalt will maintain the tool and replace worn parts free during the first year of ownership.
· One-year warranty: DeWalt will warranty materials and workmanship for one year.
· Superior diagnostics. DeWalt Service Centers use state-of-the-art testing equipment to quickly diagnose problems.
· Trade support: Black & Decker will provide support for its channel partners to facilitate ordering, inventory management, and returns.
DeWalt’s portfolio of services is outlined in Exhibit 6.
Brand
Brand Identifiers.
· Brand name: DeWalt® (replaces the Black & Decker Professional brand)
· Brand logo:
· Brand color: Yellow
Brand Referents.
· High-performance industrial tools
· Guaranteed tough
· “No downtime” company
Price
Customer Pricing.
· Price: Premium price tier (10% higher than Makita)
· Returns: DeWalt will accept returns for any reason within 30 days from the date of purchase
Incentives
Loyalty programs. Preferred contractor program (Exhibit 7)
Trade incentives. Trade incentives to ensure retailer support (Exhibit 8)
Communication
Customer Communication.
· Message: Create awareness of the new product line and service program; build the
DeWalt brand to create customer loyalty. Taglines: DeWalt. Guaranteed Tough and
High-Performance Industrial Tools
· Media: Industry magazines ( Builder and Electrical Contractor, $1M budget); trade shows, direct-mail catalogs ($300K budget); point-of-sale displays at homeimprovement retailers, ten vans visiting job sites promoting DeWalt products ($1M budget)
A detailed description of DeWalt’s communication is given in Exhibit 9.
Collaborator Communication .
· Message: Create awareness of the new product line and service program; build the DeWalt brand to create retailer loyalty. Tagline: There’s only one thing about DeWalt that’s not tough: Making a profit
· Media: Trade shows (National Association of Home Builders trade show); Black &
Decker salesforce
Distribution
DeWalt products are distributed through the existing Black & Decker channels offering direct distribution to large home-improvement centers (Home Depot/Lowe’s) and indirect (wholesaler) distribution to smaller hardware chains (Ace Hardware/ServiStar) and independent hardware stores.
There will be a $20M inventory buildup at launch to ensure product availability and avoid stock-outs.
DeWalt service is offered through 117 Black & Decker authorized service centers with a dedicated DeWalt counter (Exhibit 10).
Implementation
Resource Development
DeWalt Industrial Tool Company utilizes the resources of Black & Decker for product development, manufacturing, service, promotion, distribution, and trade support. In addition, DeWalt is developing its own promotion and customer service team, designed to work exclusively with tradesmen. An overview of the key resources and the organizational structure of DeWalt Industrial Tool Company is outlined in Exhibit 11.
Developing the DeWalt Offering
The processes involved in designing, promoting, and distributing DeWalt products and services
are outlined in detail in Exhibit 12.
Commercial Deployment
DeWalt offerings will be deployed nationwide along with a communication campaign targeting tradesmen. At the time of launch, all distribution outlets outlined in the Distribution section above will carry a large inventory of DeWalt products to ensure sufficient availability. In addition, all Black & Decker service centers will be ready to support DeWalt products. The specifics of the commercial deployment of the offering are outlined in Exhibit 13.
Control
Performance Evaluation . The key performance metrics include market share, operating income, customer satisfaction, and retail availability. We evaluate DeWalt’s performance on these metrics on a quarterly basis and provide a comprehensive analysis at the end of the fiscal year. The specifics of our performance evaluation metrics are given in Exhibit 14.
Analysis of the Environment . We monitor the environment for changes in the needs of our customers and collaborators, changes in the competitive environment, and changes in the economic, technological, sociocultural, regulatory, and physical context in which we operate. In the absence of a major change in the environment, we evaluate these factors on a quarterly basis and provide a comprehensive analysis at the end of the fiscal year.
Exhibits
Exhibit 1: DeWalt’s Customers
Exhibit 2: DeWalt Product Line Description
Exhibit 3: DeWalt’s Collaborators
Exhibit 4: DeWalt’s Competitors
Exhibit 5: DeWalt’s Product Line
Exhibit 6: DeWalt’s Portfolio of Services
Exhibit 7: Preferred Contractor Loyalty Program
Exhibit 8: Trade Incentives to Ensure Retailer Support
Exhibit 9: DeWalt’s Communication Plan
Exhibit 10: DeWalt Service Plan
Exhibit 11: DeWalt Key Resources and Organizational Structure
Exhibit 12: Processes to Design, Promote, and Distribute DeWalt Products and Services
Exhibit 13: The Specifics of the Commercial Deployment of the Offering
Exhibit 14: DeWalt’s Performance Evaluation Metrics
References
Chernev, A. (2020). The marketing plan handbook (6th ed.) Cerebellum Press.