Jake Wasilewicz

Robert Bosch Tool Corporation

Product Marketing Intern at Dremel
Matthew Fox
Mattew.Fox@us.bosch.com
MKT 393
4/26/2022
Background
With over 35,000’s associates and more than 100 locations, Robert Bosch Tools
Corporation is one of the largest tool companies in the world and is based in Gerlingen,
Germany. Bosch owns many companies across the world, including a subsidiary company,
Dremel tools. Dremel creates many different tools, primarily rotary and oscillating power tools.
Dremel has created such a reputation, that people refer to other rotary tools as “Dremel’s”, like
how people know Velcro, Chapstick, or Kleenex.

In 1935, Albert J. Dremel invented the first handheld rotary tool which he named the
“Moto-tool” (1). 90 years later Dremel has released hundreds of other products including
oscillating tools, compact saws, home solutions cleaning, butane torches, and even experimented
with 3D Printers (2). Dremel has offices and manufacturing plants around the world, in places
like Mexicali, Germany, and Brazil.

Dremel is also very famous for their attachments and accessories because they are
compatible with Dremel tools and almost all competitors’ tools as well. With over 100
accessories and attachment, the possibilities are endless for users. Dremel’s promise is “Dremel
has built the tools to empower you to accomplish your vision, bringing your ideas to life… we
are craftspeople redefining the way we all make.” (2).

Environments
A. Dremel is the leader of the rotary tool industry, which is the best place to be in as a
company, but it comes with lots of competition. Dremel’s largest competitor is Ryobi
power tools, who has recently taken much of their shelf space at their largest retailer,
The Home Depot. Other competitors include Milwaukee and Dewalt, who focus more
on professional users, and they compete with hundreds of Chinese companies that sell
on Amazon and provide users with tons of extra accessories and attachments, but the
quality is much lower than Dremel’s. Many companies tend to copy Dremel, so
innovation is a large factor of their business, but when people copy their products and
advertisements, this leads to legal wars.

In Exhibit 1, a price performance chart shows where Dremel stands against their
competitors relative to the quality and price of their products. Dremel is in the middle
with other brands like Hart, Ryobi, and Masterforce which are in the “Intermediate &
frequent use” Cluster, while Milwaukee and Dewalt are in the “Professional” cluster,
and Tacklife, Goxawee, Wen, and Performax are in the “Beginners” cluster. In
Exhibit 2, we can see why these products were placed in these clusters based on
prices, target market, and quality.

Dremel is sold in many stores, in person and online, and there is a battle to get pallet
space in these large retail stores. Their 4 main retailers include Home Depot, Lowes,
Menards, and Walmart, in Exhibit 3, it shows all their key accounts in person and
online, and which brands partner at these large retail stores. Dremel outstands its
competitors in retail space as many of their competitors are only sold in 1-2 large
retail stores, but then competing for shelf and pallet space becomes an issue when
 companies like Ryobi are primarily sold at The Home Depot, which leads to them
having more space.

B. With technology rapidly growing, Dremel has decided to grow and adapt with it.
Creating the first Bluetooth rotary tool is proof that Dremel uses technology in their
products to make them better. Dremel has been using technology to improve their
products for quite some time now, creating the first cordless rotary tool was another
prime example of this, and now almost half of their rotary tools are cordless.

Another way that technology has had an impact on this industry is through the
different programs companies use in their everyday work. Through advancements in
technology, it is possible to reserve part numbers for tools within seconds, make
changes to the website with a click of a button, and order tools to be shipped for
samples within days.

Technology has also affected the way that Dremel markets and advertises their
products. With a boom in social media, Dremel now focuses on trying to bring in new
users through apps like Tik Tok or Instagram. According to Hootsuite.com, Tik Tok
has over 1 billion monthly users, with an average of 650,000 new users joining daily,
this means that Dremel can market to nearly a billion users (Hootsuit.com). With the
most viewed video on Tik Tok having 2.2 billion views, Dremel just needs one viral
video to reach millions of potential users.

C. During Covid, and to this day, there have been plenty of supply chain issues, which
has either resulted in Dremel’s product margins decreasing or being unable to get
specific parts for tools in time. We have had to adjust many ways that we do things
logistically because of the problems with freight and other transportations.

With the inflation rate skyrocketing over the last year and reaching 4.7% in 2021 (3).
Prices needed to be increased as well. This has not necessarily been a large factor
sale, however, this resulted in many new users potentially choosing cheaper products
over Dremel because they couldn’t afford Dremel’s price. Prices for parts will
continue to increase, which will lead to Dremel considering raising their prices,
however, they still have to maintain a competitive price with their competitors.

D. Although Dremel hasn’t been directly affected by the war between Russia and
Ukraine, we still do business in Russia which might soon change. Bosch is also
heavily based in Europe, and there may be changes to how they do business between
Germany and Russia.

In April, the USA banned shipments from Russia because of the actions and results of
their attacks on Ukraine https://www.offshore-energy.biz/u-s-bans-russian-affiliated-
ships-from-its-ports/. Dremel does not receives any parts or manufacture in Russia,
however, this could affect users in Russia to purchase from American brands like
Dremel.
 E. With Covid-19, and more people working from home, customers have tended to
spend much more time shopping for Dremel products online. As a user, it used to be
that you would want to see the product in person at a store before, but the reality now,
because of the pandemic, is that people trust to buy online and are more likely to buy
online than in person. As online shopping has drastically increased because of this, so
have our sales on Amazon. “Overall, in 2021, consumers spent $870.78 billion online
with U.S. merchants, up 14.2% from $762.68 billion in 2020.” (4) this shows that
online shopping has boomed over the last two years because of the pandemic and
quarantines.

Another trend that has been present in customers is that are looking for more for less.
This means that consumers tend to want the cheapest option, with the most
accessories, but still expect a very high-quality product. Consumers are more
persuaded towards large kits with 30+ accessories, because they think they are getting
a deal, but in reality, do not even know or need any of the accessories.

F. “Beginning in early 2020, the COVID-19 pandemic disrupted maritime shipping and
air freight services, leading to canceled sailings and flights, port delays, and container
shortages. These disruptions were particularly profound for U.S. imports originating
from Northeast Asia.” (5). This had a large impact on Dremel the last two years, as
people were still buying their products online, but shipping and freight was not
happening.

With life getting back to normal, there has been a boom in freight and shipping this
past year, which has caused problems and congestion in many ports around the world
(6). Dremel luckily has local manufacturers around the world, so this wasn’t as big of
an issue, but still some products coming from other countries had supply chain issues
that needed to be resolved.

The Organization’s Marketing Mix

A. Target Market: Dremel’s target market is DIY users and at home users, and they sell
to them mainly through large hardware stores including The Home Depot, Lowers,
Menards, and Walmart. Since they are such leaders in this industry, they know them
very well, but with how the market is changing, we are seeing different types of DIY
users and we are learning their wants and needs everyday through research and
surveys. Our main competitor is Ryobi, who’s target market is also DIY users, and
they provide consumers with very similar quality products, but tend to be at a cheaper
price. Dremel’s products however range from beginner level to medium level, to very
high and professional level, so we can target to every type of user.

In Exhibit 4, it shows how Dremel targets towards this market, by providing videos
and tutorials for DIY projects on their website.

B. Offering (Product/Service): Dremel offers customers with a large set of tools and
accessories ranging for beginner level to professional level products. Dremel is also
 very well known for its accessories, and many users use Dremel’s wide range of
accessories with their tools, even if they aren’t using Dremel’s rotary tools since they
are compatible with almost every rotary tool in the industry. In Exhibit 5 a full
accessory guide from our catalog is shown.

Other than rotary tools and accessories, Dremel offers customers with oscillating
tools, compact saws, home solutions cleaning, butane torches, and pet grooming
tools. Since they are such a large company, they can explore these different markets
and industries which helps grow their brand awareness and growth as a company,
rather than staying in the same place.

C. Revenue/Pricing: Dremel is owned by Bosch, so most of their funding and expenses

come from them, but with great sales and revenue, their profits can hold the company
together. In recent years, Dremel’s online sales have grown tremendously due to the
Covid-19 pandemic and a worldwide quarantine. Amazon leads the pack generating
the most sales for Dremel.

As shown in the price performance curve in Exhibit 1, Dremel places itself in the
middle when it comes to pricing versus other tool brands. This matches with their
target segment.

D. Distribution: When selling Dremel products, we focus on four different sectors of

the world, North America, Europe, Asia, and rest of world. With stores across the
world and with Amazon being able to ship almost anywhere, customers have many
ways to access Dremel products. We have manufacturing facilities in each of these
sectors, so products can be distributed across the world.

E. Marketing Communication: Dremel doesn’t promote their products through

commercials, but because of their large presence at large retail stores, and high sales
on Amazon, their reputation is strong enough for them to sell their products without
any large advertising. One way that Dremel improves their numbers online, is by
offering new products to consumers before they come out in return for reviews on
their products, that way when they are released to the public, there are reviews there
so people aren’t scared to purchase a product with zero reviews. Dremel has been a
leader in the rotary tool industry, so consumers trust their products, but when new
innovations come out, we push those more than other products.

Recently, Dremel has made a large push in promoting their brand on social media, by
creating fun and informative videos to grow brand awareness. Dremel has been verified
on all its social medias, and posts regularly, in Exhibit 6, an image of their Instagram
profile is shown where they have almost 100,000 followers.

Swot Analysis
Dremel’s strong global presence and powerful parent company provides them with
stability and resources which is a great strength to their success. With their strong global
presence, they can sell their products without the need to educate the market about their brand.
This also leads to new users choosing Dremel over their competitors that are not as well known
because of their great reputation and global brand awareness. With the number of recourses that
they have, they can produce products globally, which makes them a global brand. This is a huge
strength because they can manufacture and sell to countries all over the world and continue to
generate more sales and increase their brand awareness.

With strengths, there come weaknesses, including the large amounts of plastic and waste
that is being used in nearly all their packaging. Although this is a big weakness and can be
improved, Dremel plans on making changes and is focusing on creating more sustainable
packaging in the future.

Dremel has many opportunities to grow and improve their brand with the number of
recourses and power they have. Although Dremel focuses on intermediate users, their wide
variety of products allows them to reach many different target groups including the beginner and
professional users. There is an opportunity for them to market towards these groups and switch
tool users from other brands to Dremel. Dremel also can explore many different product lines
and enter new markets as we have seen them do before in 3D printing and pet grooming tools.
Dremel also can be leaders and be more sustainable by providing more recyclable products and
packaging.

Being leaders in the tool market, many threats arise for Dremel, with low barriers to enter
the tool market, Dremel is constantly competing with small brands that have taken over Amazon.
With new brands releasing products for lower quality tools at a low price, many new users will
be persuaded to try out their products instead of a more expensive option in Dremel. Dremel can
retaliate and fight off these brands, however, there are too many and new ones come out very
often. Another threat that Dremel faces is competition copying their products and ideas.

Statement of the Benchmark and Marketing Goal

Dremel is a leader in the rotary tool industry, being a household name, they can sell their
products just off their reputation, but they can continue to grow. They are dipping their toes in
many different industries, from pet to cleaning, they are outstanding themselves from nearly
every other tool brand. They are marketing to DIY users, but they have products for beginners
and professionals, and with over 100 accessories and attachments, it is hard to find room to
grow. But they must find another new industry to enter that their current target market already
uses, an industry that is parallel with current Dremel users.

Solution to achieve goal”

Dremel has many boundaries when it comes to creating and entering new industries,
because their parent company already creates many similar products to them, but finding a
product or industry that neither Dremel nor Bosch are in will elevate their brand. Dremel will be
able to sell at a higher price because of their reputation and people will be intrigued to buy their
products because of the brand name. Promotions can be done through social media to reach a
new audience and achieve the goal to grow their brand through new industries and markets.
References
1. Klamecki Nick (2021), Selectsafety, https://selectsafety.net/history-of-dremels/
2. Dremel.com

3. Published by Statista Research Department, & 13, M. (2022, May 13). United States -
monthly inflation rate April 2021/22. Statista. Retrieved May 24, 2022, from
https://www.statista.com/statistics/273418/unadjusted-monthly-inflation-rate-in-the-us/
#:~:text=The%20change%20in%20this%20price,has%20weakened%20in%20recent
%20years
 4. April Berthene, 2022, Digitalcommerce360,
https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/
5. USIT, 2021,
https://www.usitc.gov/research_and_analysis/tradeshifts/2020/special_topic.html#:~:text
=Beginning%20in%20early%202020%2C%20the,imports%20originating%20from
%20Northeast%20Asia
6. Jefferson Clay, 2021, https://www.insideindianabusiness.com/articles/2022-freight-
forward-outlook-the-pandemic-its-impact-and-what-to-do-about-it

Exhibits
Exhibit 1 (Created by me from data found primarily on Amazon and competitor’s websites. Data
shown in exhibit 2)
Exhibit 2 (Created by me)

Exhibit 3 (Created by me)

Exhibit 4 https://www.dremel.com/us/en/projects/project-plans
Exhibit 5 (From Dremel Catalog)
Exhibit 6 https://www.instagram.com/dremel/?hl=en
Exhibit 7 SWOT
Strength
 Strong global presence
 Manufacturers and factories across the
world
 Very powerful and known parent
company
 Plenty of resources

Opportunities
 Ability to reach several target markets
with their vast selection of products
 Enough recourses to explore new
markets for ex. Pet products, 3D
Printing, Professional
 Are able to retaliate against new
competitors since they are so big
Weakness
 Plenty of competition
 Need to have fair values and ethics
 Pricing can be challenging since they
are so well known they can charge a
premium, but competitors charge
lower prices
Threats
 Since there are low barriers to entry in
this market, anyone can mimic their
products and sell them on Amazon
 Everyone is competition against them
 Lots of brands copy their products but
they still must be leaders