dewalt tools : The Yin Yang Of Marketing And Performance

The Yin Yang Relationship Between Marketing And Performance

There has been a lot happening in the NASCAR world lately. Teams losing drivers and sponsors seem to be the norm rather than the exception this silly season. I am writing this blog out of sequence but it touches on a subject STP43 and I discussed awhile back and its been weighing on my mind ever since. That is the relationship between marketing and performance which is not understood and yet to be capitalized completely upon by most NASCAR teams.

NASCAR teams usually are divided into a “go fast” operation which is the racing side. And a business side which is the marketing side. Traditionally the marketing side always kind of takes a back seat to the racing side. This is a critical mistake and perilous condition.

The reality is that marketing and “go fast” operations are two equal halves of a whole and must be maintained in balance. Marketing needs performance to sell the teams product. Performance needs marketing to sustain sponsorship. In other words performance is why we get paid and marketing is how we get paid.

If one side of the symbol is neglected for the other. Both Suffer

I used to be a dispatcher for a major air carrier and as such have seen Billions of dollars wasted in one failed marketing program after another because marketing was not in contact with performance. The horror stories can become a bit lengthy. The number of which could be a series of books. I will spare you the details. However over ten years, the figure probably exceeds 3 or 4 BILLION DOLLARS AT THE LEAST .

In the old days before deregulation, airlines really did not have marketing departments per see. Routes and fares were assigned by the government. What airlines maintained were traffic departments. Traffic kept the stats. Then deregulation hit..Now anybody with an MBA suddenly became an airline executive. Few had prior business experience and none had any operational experience.

In conversation one evening with an international pricing administrator. I found out we lost as much money in our North Atlantic operations as we did out of our Denver hub. So ten flights lost as many as 169. However, Marketing was able to claim we had “The Best Wine Service “ across the North Atlantic according to Conde’ Naste Traveler magazine. Marketing also claimed that maintaining North Atlantic operations was crucial to the companies credibility/branding. So in five years between the two, there was over a billion dollars right there.

Because marketing was not in contact with performance the results were devastating. Two bankruptcies and a stock delisting. Thousands of jobs lost. Hundreds of millions of vendors and creditors/investors/stockholders dollars lost. All because marketing focus was greater than focus on performance. The natural balance had been disturbed and both suffered.

But can it work the other way round? What happens when performance outstrips marketing?

After taking the early retirement package I returned home to Utah. Somehow my life long dream of working in a hardware store was fulfilled. I started selling tools for a living. Pretty good at it as well. Two tool companies stand out as examples of the effects of marketing and performance and what happens when marketing has a diminished focus.

Makita happens to make some excellent tools and they make a number of specialty tools that can make your life a whole lot easier. The list has shrunk a little over the years but they still make so many tools it’s mind boggling. However nobody knows about them. Makita did not believe in a lot of advertising. So even if they made a tool that could save a contractor hundreds of hours per year or a home owner a couple of days for a DIY job. Neither knew. The fact that their tools were more reliable was lost on the public. Makita’s philosophy was that their tools would sell themselves. That was not the case and as a result Makita lost several tools and market share.

Contrast that to Black and Decker with their DeWalt line of tools. Black and Decker opted to use the DeWalt brand name and trademark to market a whole new line of power tools. DeWalt had never made hand power tools. They made radial arm saws and the best radial arm saw. The DeWalt name was one of quality. Black and Decker opted to use that name to draw a premium price for their tools. Black and Decker then engaged in a multi year program to brand its tools as quality into the American Psyche.

It didn’t matter that most were cheaper quality tools from the old Black and Decker line or new cheaper quality tools.. Some with abnormally high failure rates. It made no difference to the public.. It was a “DeWalt.” Further proving that P.T Barnum was right. You can fool most of the people most of the time.....


The result was Black and Decker gained significant market share at other tool companies expense. They also lost money and later market share back as people discovered that [I] “all that is yellow is not gold”. This lead into a buying spree of other tool companies that produced quality tools to save the line. It also led to the redesign of their own tools.

While Black And Decker’s marketing campaign was successful. The performance side had been overlooked. The result was that the company had to spend millions of dollars on tool redesign. Those costs were on top of what they spent (at a loss) in an aggressive marketing campaign. Then besides normal growth, Black and Decker was forced to purchase companies that built quality tools to save the branded name.

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