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Consumer Segmentation Leading To Breakthrough New Branding / Product Strategies - Black & Decker Garment Care

This case study discusses the power of understanding your consumer and identifying their "need gaps" vs. competitive products. Attitudinal segmentation can show how consumers really think when approaching a purchase decision. This helps to reveal new products and/or features directions that can give a new product a competitive edge in the marketplace. The example of developing a new business from nothing is presented for Black & Decker's Garment Car Business

Rick Steinbrenner - The Global Brand Guy

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Consumer Segmentation Leading To Breakthrough New Branding / Product Strategies - Black & Decker Garment Care

  1. 1. 1 Consumer Segmentation Leading To Breakthrough New Branding / Product Strategies Developing A $30MM Business From Zero & Turning Around A Consumer Business
  2. 2. 2 Garment Care Business Situation Business and profit erosion: $140MM to $80MM topline sales; operating income from +$15MM to losing cumulatively -$13MM in 1993-5. Market share drop from 50% to 30% with Hamilton Beach & Rowenta taking the most of the share. Premium iron product design/performance lapped by competition and over 20 years old. Failed on four other occasions to develop a successful premium iron product. Iron consumer purchase behavior not well understood; Previous research results were focused on entire market vs. understand potential segments.
  3. 3. 3 Garment Care Actions Uninvolved/Low End Ironers Working couples on the go Time pressed Hate ironing Appearance Driven/High End Ironers Family’s appearance is key “One Pass” ironing Likes to iron ATTITUDINAL CLUSTERS “NEED GAPS” IRON FEATURES Performance Made Simple Professional Pressing Results Lightweight Sure steam system Auto-clean valve Maximum steam performance Superior glidability In-use comfort Instead of focusing on ALL iron users, we learned consumer attitudes/habits about ironing drove usage/purchase behavior Key learning: appearance driven users were the heavy users – 20% of users, but 40% of ironing activity (Uninvolved ironers were 60% of users, but only accounted for 40% of ironing activity) This study proved consumer attitudes can drive purchase behavior vs. just what consumers say or do. Source: 1995 B&D A&U Study
  4. 4. 4 This was how we communicated our new product line strategies to the trade/consumers Team obtained $18MM in capital to re-tool and launch this new product line strategy Garment Care Actions
  5. 5. 5 Maximum Steam Performance: No other premium iron steams more Professional Pressing Results at Home - just like a dry cleaner!! Superior Non-Stick Glide: New “space age” soleplate coating Comfortably Designed: Comfort Grips & Unique Control Design (New feature for the category) Garment Care Actions ProFinish had 21 utility and design patents, the first iron to launch “comfort grips” into the market Voted a Consumer Digest “best buy” in 1998, achieved 100% distribution in all retail channels Developed and Launched New Premium Iron in the >$30 price point segment
  6. 6. 6 ProFinish premium irons became a $30MM franchise from zero. Exceeded all expectations and paid out original capital investment. Total Garment Care was “right-sized” in 1998 to $90MM with $7MM of operating income – a $20MM operating income swing. B&D total iron share moved up from 30% to ~40% Eliminated/consolidated over 60 sku’s enhancing product cost and working capital efficiencies. Today, Garment Care is a $100MM business for Spectrum Brands. (the subsequent owner of Garment Care after B&D divestiture/Applica). The consumer segmentation study is still quoted in trade publications as how consumer really buy irons. Garment Care Results