Black & Decker hopes DeWalt tools' reputation will conjure new business


April 05, 1992|By Ross Hetrick | Ross Hetrick,Staff Writer

Bill Mihaliak, a third-generation construction worker, is exactly the type of customer that Black & Decker is after with its new DeWalt line of tools.

A carpenter foreman for Richard D. Poole Inc. in York, Pa., Mr. Mihaliak said he probably has every tool made by Makita, a Japanese power tool maker and Black & Decker's nemesis.

But now he has changed his brand loyalty, seduced by the name DeWalt. "I specifically came out to check out the DeWalt line," Mr. Mihaliak said recently at the annual John H. Myers' show and sale in York, where suppliers to hardware stores show off their wares. "That's what my dad always had," he said about DeWalt.

After looking over the line, Mr. Mihaliak was a convert. "I was impressed," he said, buying a miter saw on the spot. "If I could trade in all my Makita tools, even up for DeWalt tools, I would," he said.

That reaction is exactly what Black & Decker had in mind when it rolled out the new line of DeWalt tools last January.

Reviving the DeWalt name goes hand-in-hand with trying to unseat Makita as the No. 1 seller in the professional power tools market.

"This is the largest initiative in the history of our company," said Joseph Galli, vice president for sales and marketing for Black & Decker U.S. Power Tools. "Our whole company has been focused on this for a long time," he said.

Mr. Galli declined to say how much the company is pumping into the effort, other than to say it is "millions and millions."

Black & Decker is already the dominant company in two of the three segments of power tools, Mr. Galli noted: the do-it-yourself consumer market and large industrial customers.

But starting in the late 1970s, Makita started carving out a new niche, focusing on the small to medium-sized contractor who buys his equipment at retail outlets.

"That market really wasn't big before," Mr. Galli said. Makita "created that segment."

That market is worth $432 million and growing at 9 percent a year. Makita controls about half of it, and Black & Decker is a distant second with about 10 percent, industry observers said.

If Black & Decker reaches its goal of capturing more than half of that market, that could provide more than $200 million in revenue, Mr. Galli said. It also would increase Black & Decker's market share in the accessories and service business for those tools. The accessories market alone for professional power tools is $600 million a year, Mr. Galli said.

The DeWalt effort had its origins with Michael Hammes, executive vice president and president of the company's power tools and home improvement group. Moving from Chrysler to Black & Decker in 1990, Mr. Hammes brought the "Acura concept," a method by which Honda was able to enter the upscale automobile market by adopting a new name.

As it turned out, Black & Decker already had an old, underused brand name that was still magic to construction workers.

Essentially meaningless to most consumers, in the world of construction workers the name DeWalt conjures up memories of high school shop classes and reliable old radial-arm saws that never wore out. But more important, the name is not Black & Decker.

Before its reintroduction, the DeWalt name was recognized by 70 precent of tradesmen in a nationwide market survey done by Black & Decker, Mr. Galli said. Better yet, of those who knew the name, 90 percent had a favorable reaction, he said.

"The brand name lives on in the minds of the users," Mr. Galli said. "It's almost mystical."

Although Black & Decker is one of the best known brand names in the world, it is too closely associated with lighter-weight consumer tools -- not the heavy-duty equipment that professional builders want. To make matters worse, Black & Decker's old professional line of tools was charcoal gray and barely distinguishable from its black consumer tools, Mr. Galli said.

In contrast, the DeWalt tools are yellow, which is associated with safety equipment on construction sites and stands out nicely in store displays, he said.

Another problem with Black & Decker was that it wasn't considered a macho name.

"They want the most macho brand name out on the work site," said David S. Myers, vice president of retail sales for John H. Myers & Son Inc. "They don't want the same brand as their blender," he said.

So far, the name change and the stepped-up promotion seem to be having the desired effect, Mr. Myers said. In his five hardware stores in York, DeWalt is outselling Makita 3-to-2, he said.

The male-dominated market for power tools was evident at the Myers show and sale, where construction workers were lined up to have "Miss Makita" sign photos of herself in a bathing suit holding a Makita drill. Not to be outdone, Black & Decker hired a "Miss DeWalt" from a modeling agency and had her signing bathing-suit pictures, too.

But besides not being the Black & Decker name, the DeWalt name brings with it the legacy of a Lancaster, Pa., company Black & Decker bought in 1960.

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