Marketing and Advertising of Best Buy Company Paper Example

Introduction

Best Buy Company Inc. is an American multinational retailer of entertainment and technological products and services, with nineteen percent of US market share of consumer electronics. It similarly has operations in China, Mexico, United Kingdom, Canada and Turkey. The subsidiaries of the company include Pacific Sales, Magnolia Audio Video and Geek Squad, and in Canada operating under two brand labels, Future Shop and Best Buy. In China, the company operates under both Five Star and Best Buy label. The company has over a thousand stores distributed throughout across the world with its corporate headquarters in Richfield, Minnesota. The company deals in consumer electronics and a range of associated merchandise, such as computers, hardware, software, music, video games, DVDs, music, mobile phones, car stereos, digital cameras, and home appliances, such as refrigerators, washing machines, and dryers. Employees of the Best Buy do earn commissions as a result of sales, which is less motivating in closing deals. Every store has a departmental store for visual and audio equipment for automobiles with Geek Squad for computer maintenance with onsite, warranty services, installation services, and insurance plans. Over the recent past, Best Buy has restructured operations and partitioned its businesses into Europe, America and Asia. The newly developed structure support the company's sharing of capabilities across regions as it has been shared globally.

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Promotional Strategies

For purpose of remaining competitive within the online electronic segment, Best Buy implemented improved price-matching strategy. The online promotion encourages consumers to request a match in price for comparable merchandise provided by an online operator and retail store. The initiative was implemented following a successful pilot carried out during the 2013 holiday season (Mooij, 2014). The company has the ability to match the prices of competitors by exploring the global vendor partnership, economies of scale, and sustaining low-cost and efficient operations. There are variations in store sales across countries with European nations reporting gains in market share, because of effective promotional strategies. In Canadian stores, there were reported decline in sales with the major contributors being gaming and televisions sales, which lagged behind and reinforced the general weakness of the industry. The decline in sales in China was lopsidedly offset by the growth in the sales of tables and mobile phones. In China, the rise in competition from vendors led to a decline in prices across various price categories. The ban of stimulus program by the American government led to the continued weakening of sales. The continued reduction in profits, as well as the reduction in global segment was as a result of a combination of marginal sales in China and Canada, a reduction in gross profit across Europe, increased promotional cost and adverse product mix. The company incurred over four hundred million dollars, which is a substantial reduction from the previous year. It is believed that the online promotional strategy will help address the challenges faced by the company.

For consistency with its vision and mission, Best Buy has implemented a number of strategies to accelerate its growth. The company has accelerated growth of its online market share through enhancement of online traffic by employing competitive search platforms with increased relevance capabilities and product find, as well as generating online reviews based on the preferences and recommendations of customers (Mooij, 2014). The company has developed integrated product pages to generate consistent and uniform browsing experience across multiple devices,. It has also improved access to rewards and subsequently redemption capabilities. The process of supplementing products and services has been eased through extended support and warranties with product mix and the accompanying product signposts increased. Best Buy anticipates major improvements against such initiatives through enhancement of multi-channel purchasing experience. The Net Promoter Score has been t=introduced by the company to best evaluate customer satisfaction.

The tool measures the degree of customer satisfaction in a range of areas, such as services and devices, the level of company's knowledge of its employees, shopping schedules, price competitiveness, stock availability, technical support, and customer price perception, as well as allocation of store hours and higher personalization of online offers. The company has worked towards increasing gross profit and revenue per square foot through the merchandizing and optimization of store space (Coyle, 2002). Best Buy seeks to reduce the square footage allotted to the low or reducing margin segments, such as movies and music, and plan to replace them with higher-growth segment inventory, such as appliances, mobile phones and the related accessories. The objective of the company is to enhance product selection, reexamines marketing investments and train store employees. It further plans to drive operational costs down through efficiencies in the supply chain.

The Marketing objective of Best Buy are fourfold: to market itself based on customer-centered operating model, to be at the core of technological advances, to address the customers' needs of lifestyle groups and to meet such needs based on end-to-end solutions. The company prides itself for customer centricity, which caters to a give customer behaviors and needs. Throughout the years, the company has developed a portfolio of merchandise that are complementing to each other and have contributed to the success of Best Buy. These products are part of the seven distinct brands traded locally and internationally. Best Buy is a brand that offers a range of consumer electronics, entertainment, home office, appliances, software and related services (Coyle, 2002). The other Brand is Best Buy Mobile, which are standalone stores providing a range of mobile phones, installation services and accessories at the front stores. Geek Squad offers commercial and residential products, support, repairs, and installation services on-site and in-store. Magnolia Audio Video deals in high-end video and audio products and services while Napster offers digital music (Mooij, 2014). Pacific Sales is a brand providing high-end home improvement merchandise, such as consumer electronics, entertainment, home office, appliances, software and related services. Speakeasy is an affiliate and brand of Best Buy dealing in broadband, data, voice, and information technology services to small and medium enterprises. The company began the transition to the customer centric model of operation to attract more customers and promote its products through different platforms.

Conclusion

Before the implementation of the customer centric model, Best Buy concentrated customer groups, such as young entertainment enthusiasts, affluent professional males, , technologically advanced families, subscale suburban mothers and so forth. However, following the transition to the new model, the focus is more on lifestyle groups, such as the trend-setting urban dwellers, affluent suburban residents and closely knit middle class families. Its target is the various market segments and the companies that have aligned their operations to such model. The approach has offered Best Buy the necessary competitive advantages against its rivals, such as Walmart and Circuit City.

References

Coyle, J. R. (2002). Internet Resources and Services for International Marketing and Advertising: A Global Guide. Portsmouth: Oryx Press.

Mooij, M. K. (2014). Global marketing and advertising: Understanding cultural paradoxes. Thousand Oaks, Calif: SAGE.