Best Buy Uncovers Angels in the Market Case Study

Customer profitability was a determinant used for segmenting and targeting, studies were done on customers’ likes, dislikes and types of products they would benefit from and models were developed to determine their propensity to buy.

Best Buy Co. Inc. a public company is known to be the largest electronic retailer in the United States of America. This may attribute to the fact that it commands a market share if 19% these results in estimated electronic sales in the United States, 19% of these items are sold by Best Buy Incorporated. This company is a large company with about 2,800 stores in other countries outside the Unite States. These countries include: Canada, Mexico, China and Turkey. To add on to this, it has a number of subsidiaries namely the Geek Squad, Pacific Sales, Future Shop and Magnolia Audio Videos.

Best Buy is electronic retailer that has brand names under 11 brand names in the United States. The company also has services in Canada, China, Europe and Mexico. It specializes in selling technology and entertainment products and services. The company became successful by using a low cost strategy and high cost customer service practices. The company has a lead market position because of its differentiation strategy, its brand names that are reputable and the many series of acquisitions.

Best Buy Co., Inc. is a multinational retailer of technology and entertainment products and services in the U.S., Canada, and Mexico. The multinational retailer sells both products and services through more than 1,600 retail, mobile stand- alone, and smaller express stores under the Best Buy, Best Buy Express, Best Buy Mobile, Five Star, Future Shop, Geek Squad, Magnolia Audio Video, and Pacific Kitchen and Home Sales banners. Its stores sell a variety of electronic gadgets and wearables, tablets, movies, music, computers, mobile phones, and appliances. On the services side, it offers design, delivery, installation, repair, maintenance, technical support, and subscriptions for mobile phone and Internet

Best Buy Co. is a leading global producer of electronics, technology and home office products, appliances, and related services such as service contracts, technical support, product repair, and installation services. The company offers its products and services directly to consumers, small businesses, and educators on both domestic and international markets. The domestic segment includes but is not limited to such brand names as Best Buy, Best Buy Mobile, Magnolia Audi Video, Geek Squad, Pacific Sales, and Napster. Retail store and e-commerce operations in Canada and Mexico represent the international segment of the company. In Canada Best buy Co. is known under such brand names as Best Buy, Best Buy Mobile, Cell Shop, Future Shop and Geek Squad when the Mexico’s affiliates operate under the brand names Best Buy, Geek Squad, and Best Buy Express. International stores, similarly to U.S. Best Buy stores, use an operating model that involves inventory management, customer relations, human resources training, and merchandise display.

As the markets evolved more in the early 1990’s, Best Buy then introduced a newer concept to include an even larger store format with hands on stations for customers to examine and view products prior to purchasing them. Best Buy continued to grow, but in 1995, they started to operate in the red mainly due to inventories going obsolete. By the late 1990’s, Best Buy started to offer products online and entered new markets with its latest concept design of stores with digital products and more detailed feature stations for computer software and DVD’s. Best Buy also moved to have more specialized products offered to its customers directly from its suppliers. In the early 2000’s, they committed to providing higher-end consumer electronics and moved directly into this market segment. As markets evolved, Best Buy adapted strategies to enter these markets and stay current with the high demand of consumer

Best Buy, a familiar retailer in the technology world, is struggling to stay on top. Online and mass stores have cornered the market in terms of convenience, customer service and price matching. The recent closing of over two hundred stores alongside falling sales has experts predicting that the giant won’t be in business long. Using a results-only work environment (ROWE), Best Buy has removed the customer from the equation and forced many employees out. A marketing disaster, Best Buy must change its marketing strategy from sales-based to a customer-based to stay afloat.

The segmentation has been done on the basis of buying behavior of the customers. Knowledge of segment buying behavior can help redirect marketing resources for profit gain.

Customers are assets, and their values grow and decline. Segmenting customers based on their lifetime value is a powerful way to target them because marketing mix activities can then aim at enhancing customer value. (Ho, 2006)

Relying purely on socio-economic and demographic data only provides a partial glimpse into the needs, preferences and wants of a given target market. Psychographic-based segmentation research is often used for determining how potential customers' self-assignment to groups, unique interests and preferences for retail products and services influence and often predict their purchasing behavior and long-term loyalty (Bearden, Teel, Durand, 1978). Psychographics is the study of how customers assign

Today, customer relationship management is very important to the business world. Most of the companies established a department and the programs to manage their relationship with the customers. Customer relationship management (CRM) is a business strategy which designed to help a company to understand and look forward to the needs of its potential and current customers (Anderson & Stang, 2000). Customer data is being collected in several different areas of the company, stored in a central database, analyzed, and distributed to key points (Anderson & Stang, 2000).The business world once was “product-centric”, the companies just provided what they could produce. However, it is now become “customer-centric”, they provide products and service

In 1966, Richard Shulze opened a small business in St. Paul, Minnesota called Sound of Music. In the next 17 years Shulze's small store rapidly grew into a multi-million dollar outfit. In 1983, Sound of Music changed its name to Best Buy Co., Inc and the first superstore was opened in Burnsville, Minnesota. With the new name the store also began carrying more name brands, appliances, VCRs and offering central service and warehouse distribution. Throughout the nineties Best Buy became pioneers in offering the newest technology such as DVDs and high definition TVs. In 1999, Best Buy and Microsoft combined to cross promote each other and also offered a two for one stock split. Now in 2005, almost 40 years after the first store

In our current times of fierce and harsh competition, customer-relationship management is emerging as an essential and critical factor in the process for companies to win the loyalty of their customers. Current customer base is so diverse, that one simple kind of strategy cannot work alone. However, a company that is able to show customer value and appreciation can leverage the potential of this diversity to ensure a successful customer business relationship. Dell Inc. is one such organization and Michael Dell is an innovative leader that provides value and strategy at managing diversity and multicultural settings. While Michael Dell continues to grow his company and his philosophy on diversity management, Michael Dell believes customer-relationship management is emerging as an essential and critical factor in the process for companies to win the loyalty of their customers and employees.

The customer centric strategy also affected such companies to shift themselves from close to open in the form of connect and develop with the external stakeholders for creating values to their products and services (Chesbrough, 2003, as cited in Johannessen & Olsen, 2010). The connect and develop model change such companies in these areas of doing business, such as individualized immediate feedback, a new organizational logic, and new cooperation structure that influence by information (Johannessen & Olsen, 2010).

1.Identify the sources of internal and external data for all three (3) types of customers.