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Best Buy. A Marketing Solution. Goals. The marketing team at Best Buy has identified 5 distinct areas of past error: Too many demographics targeted Too many products Cost of large scale brick and mortar locations Cost for tech support Poor reputation for customer service. Goals.
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Best Buy A Marketing Solution
Goals • The marketing team at Best Buy has identified 5 distinct areas of past error: • Too many demographics targeted • Too many products • Cost of large scale brick and mortar locations • Cost for tech support • Poor reputation for customer service
Goals • Plans to address these areas of error • Reduce demographic • Reduce inventory • Reduce size • Reduce price • Increase training
Getting Specific • Plans to address these areas of error • Target online shoppers of specific age, income brackets, and technological knowledge • Steer focus away from the appliance industry and focus on newest and best valued technology in the electronics industry • Reduce large scale brick and mortar locations to specialized showrooms and counseling boutiques where customers can receive personalized service • Remove charge for tech support, utilize Geek Squad employees • Implement strong training for in-store personnel
Current and Internal • Strengths • Existing overall brand recognition, 40% market share • Limited specialized competition, exit of Circuit City • Relationships, Samsung and Apple • Resources, physical presence • Offerings, Geek Squad
Current and Internal • Weaknesses • Poor reputation, customer service • Poor reputation, inventory management • Relationships may be costly to end, appliances • High overhead, large scale brick and mortar • Costly tech support through Geek Squad
Current and External • Opportunities • Growing knowledgeable consumer base is ready and willing to purchase products online • Technology, product offerings, inventory management, and tech support abilities • Distinctive name and brand awareness in the industry
Current and External • Threats • Consumers may remain loyal to strong competition from low or no overhead internet retailers like Amazon • Prices of new technology, targeting and serving a small market • Decreased US presence (-50 stores in 2012) may be seen as opportunity to new entrants
Current Target Markets • In the past, Best Buy has focused on virtually every market, targeting almost every demographic in the country from suburban females known as “Jills” to older couples named by Best Buy as the “Charlies” .
The New Target • The target market for this proposal will be a 25 to 45 year old consumer with a moderate to high level of technical knowledge and a propensity to shop online as well as small business owners who value electronic discounts and online services. • Receive the most benefit from online purchases. • Receive the most benefit from (free) online tech support
The New Focus • There are two main points of difference that will set Best Buy apart from its competitors: • Best Buy can offer a unique relationship from point of sale through the life of a product. • By specializing in the best-valued and latest technology over the infinite range of Amazon products, Best Buy can tailor and personalize their service to individual consumer wants and needs.
Amazon.com User Interface User Comments are only source of non-technical information.
BestBuy.com User Interface Again, user Comments are only source of non-technical information.
BestBuy.com User Interface Chat About This Item New page features access to online sales associates who can address more specific concerns.
BestBuy.com User Interface See It Live! button directs online customers to nearest showroom containing a demo unit. (When possible) Chat About This Item See It Live!
BestBuy.com User Interface Chat About This Item See It Live! Offer codes from in-store associates give customers access to special regional offers and promotions. In-store code
What’s Next? • In the following weeks, Group 2 will focus on the Marketing Mix, discussing Product, Place, Price, and Promotion. • Product: online relationship starting with point of sale through in-home tech support, eco-friendly appliances • Place: reduction in large-scale brick and mortar, counseling boutiques and specialty stores, online focus • Price: free Geek Squad (online tech support) • Promotion: in-store incentives to buy online from Best Buy
Product Ideas Being Explored Shift product mix away from larger, less profitable appliances and toward greater variety of electronics. If appliances are retained, reduce selection to focus on energy-efficiency/eco-friendly/green products. Possible addition of electronics/computer component sales. (May steal some market share from Fry’s or Newegg.com) Reduced breadth of product allows greater ease in tailoring promotions to regional sales trends.
Place Changes Being Explored Reduction in large-scale B&M locations to manage increasing overhead costs. More centralized inventory to reduce size requirements of stores. Smaller, lower-cost boutique style locations allow for more convenient location placement. Stores designed to change Best Buy from the Amazon showroom to the Best Buy showroom. Larger stores still used in areas where sales/demographics warrant the use. Larger stores rebranded to “Best Buy Superstores”.
Price Changes Being Explored Shift from strictly pay-for-service Geek Squad to mixed format offering both free and pay services. Centralized inventory and lower company-wide overhead costs allow for more competitive pricing to match online retailers. Utilize existing Geek Squad employees to support online services. Offer “work from home” positions providing online tech support. 3rd shift option to create 24/7 support.
Promotion Ideas Being Explored Utilize sales info to create regional promotions targeting underperforming products. Offer special promotions on bundled electronics packages. Special In-Store pricing offers for customers who visit boutique locations and order same day. Limited additional services offered as online incentives. (Free install this week only, etc.)
