Best Buy Case
How has an understanding of consumer behavior helped Best Buy grow from a small specialty audio retailer to the world’s largest electronics retailer?
Best Buy maintains a constant connection to the customers, and it is always keen on understanding their opinions. This is essential in helping the company to understand the preferences of customers in terms of how they would like employees to treat them, the brands they prefer, the shop’s ability within the store, and many other things, which influence their purchasing decisions. Following such an understanding, the company managed to give customers what they need as well as serving them in a manner relevant to their preferences, helping the company to maintain constant growth.
Best buy eliminated commissioned salespeople and introduced service friendly incentives such as delivery and installation of equipment for its customers. It also focused on selling complete systems, leading to increasing in its profits and captivating a reasonable market share allowing for its expansion to a world electronics retailer. The company understood the needs of its customers and met their needs wants and demands following personal and societal demands.
What were the advantages and disadvantages of using ‘consumer centricity’ to create five segments of Best Buy customers?
The ‘consumer centricity’ strategy used by Best Buy had advantages and disadvantages to the company. The greatest disadvantage suffered by the company in its decision was in the cost of implementation. There was a need for training and physical changes in the stores and all that required financing, which became costly to sustain in the many stores owned by the company. The advantage of the creation of the five segments of the ‘customer-centric’ strategy was that it helped in the creation of a distinct classification of customers into the five categories and further efficient serving and fulfilling of their needs.
How are men and women differ in their consumer behavior when they are shopping in a Best Buy store?
The purchasing behavior of men and women at Best Buy differs in that men felt welcome because of the male outlook of the stores. That is contrary to the feeling the store felt in the male-dominated store because they are always looking for simple means of meeting their needs. Women need understanding and practical experiences that they can use to back up their needs. On the other hand, men are largely experimental and do not want home orientation and personalization of electronics for decision-making (Verhoef and Leeflang 14-17).
What are two or three (a) objective evaluative criteria and (b) subjective evaluative criteria female consumers use when shopping at Best Buy?
The two objective evaluative criteria used by female consumers shopping at Best Buy are the tendency of women touching products and purchasing them because of a personal connection they develop with the product. They ask basic to simple questions regarding the electronics they wish to buy and mostly go for products only when they need them. Women face environmental subjections created by product impressions, styles of the products, and the present features, which they may use in cases of emergency. Many are the occasions when experiences with Best Buy products make them shop at the store in the future. Their perceptions about Best Buy are a great influencer to the decisions they make for shopping at the store.
What challenges does Best Buy face in the future?
The challenges Best Buy must deal with for the future is in the maintenance of its satisfaction of all the five customer categories. Since the purchasing options of women seemed unsatisfied in the initial approaches, it is upon the company to reinforce a women-friendly shopping experience for its female target. This is through maintaining female staff and maintaining a feminine arrangement like it already started. It has the challenge of understanding the changing needs of customers. The company must maintain the new standards and work hard to change towards the new needs of its consumers, especially in meeting the skepticisms and delicacy in the shopping of women.
Describe the first “P” in the Marketing Mix, People. Who are the consumers and what is the nature of their demand
The consumers of Nivea are young and in need of specialized face care products and that is what they did through the provision of NIVEA VISAGE Young suitable for young girls in need of products suiting their natural skins. This is a market section in no need for medicated products and that makes Nivea be above its competitors in providing a product, which is user friendly and accommodating of the young people in need of beautiful skin. The product is available in the most convenient places having an effort in ensuring that the right people find the product at easy disposal through enhanced methods of modern promotion. Consumers are keen to get products with the greatest values as long as they provide the value and quality they can equate to their money.
Describe what is meant by a business being ‘consumer-led’
Being consumer-led means understanding the needs of consumers and their regions for better exploitation of the regions where they stay. This allows for serving relevant market segments regardless of their locations just as practiced by Nivea. Customers in different market segments have varying needs and for a company to be ‘consumer-led’, it must know the specifications of each market segment and satisfy its customers according to their special needs. That helps a company in the management of all the ‘four Ps’ relevant for effective marketing of a product within the market for profit maximization and achievement of company objectives.
What are the key parts of the marketing mix? Explain how each works with others
The key parts of the marketing mix are product, price, promotion, and place. The product helps in the development of a product suitable for a given target market. The choice of product to put in the market is what gives a competitive advantage for a company as it aims to maximize its profits. However, that is only possible by ensuring that consumers can receive value for their cash through the division of suitable pricing strategies for a product such as cost-based pricing, pricing penetration, and price skimming. These go well through the efficient placement of a product in the right places where consumers can access them easily. A company can devise means of the availability of products to its market and that is through effective promotional strategies. The success of a product lies in its pricing, distribution, advertisement, and proper selling.
Explain why the balance of the marketing mix is as important as any single element
The sole importance of balancing the market mix is that it helps in the production of a differentiated product. This allows for the satisfaction of each of the components of the product mix in a manner suitable for the market segment. It will help in ensuring that the product suits the defined target market and that the pricing is suitable. At the same time, there is a need to make sure that the product reaches the customers in convenient areas for their ease of reach and that is only possible through appropriate marketing and promotional strategies (Kotler 8-10). A company must put the marketing mix in balance for it to achieve the best profit standards as it satisfies its customers.
Analysis of the marketing mix for NIVEA VISAGE Young. What are its strongest points? Explain why you think this is so
The strongest point of NIVEA VISAGE is its focus on the needs of consumers. Its target market is the one that other providers of skincare products ignored because of the provision of product-oriented in problem-solving. While other products focused on providing medicated skincare products, Nivea provides a product that helps its young customers to maintain healthy skin in a natural manner suitable for their delicate skins. I think that that is essential and captivating to that market segment because they need to have their skins well maintained without having to use high alcohol content products that harm their skins. Therefore, NIVEA VISAGE remains an exclusive product that the youths can identify with amidst no worries about side effects that come with products from other companies.
Kotler, Philip. “Marketing: The Underappreciated Workhorse,” Market Leader, Quarter 2(2009): 8-10.
Verhoef, Peter, C and Peter S. H. Leeflang “Understanding the Marketing Department’s Influence within the Firm.” Journal of Marketing 73 (2009):14-17.