Poor Marketing Strategy of Best Buy - Case Study Example

0 Poor Marketing Strategy of Best Buy 1 Introduction Best Buy, as an organization dealing with the supply of consumer electronics, possesses one of the best characteristics required by a firm in the industry in order to prosper. With its good culture of invention in its products, the organization has all the avenues of achieving growth and remaining the most dominant player in the industry. However, innovation must always aim at achieving greater consumer satisfaction, which has the effect of expanding the market share of the company’s products. To achieve this objective, consumers must be aware of the availability of the improved or innovated product with the unique features that make it different from the other products offered by competitors. Again, consumers will acquire the information only with a well-designed marketing strategy. If innovation of the products goes together with improved marketing plan then no doubt the company will gain high reputation and loyalty from consumers. In addition, apart from retaining its current customers it will have the potential of attracting new customers which will finally enable the company to benefit from large economies of scale. For example, the consumer centricity plan drove the sales higher even without any other change in the products or operations of the company (Wells and Danskin 3). This therefore provides a proof to the benefits of a good marketing strategy. With the highly innovated products, Best Buy international division failed to produce good results, which lead to a failure (Wells and Danskin 7). This necessitates the need of improving the means of monitoring the behavior of international markets to come up with the best method of marketing most appropriate in each region. The same products that perform well at the home country should also be able to perform in another country; the only difference is the communication language that best suits each region that the organization has to know. 1.2.0 Marketing Challenges To be able to come up with the best marketing strategies most appropriate in the modern world of consumer electronics, Best Buy has to understand the marketing challenges it faces. From the challenges, it is easier to identify the opportunities and take advantage out of them. The company faces the following challenges, 1.2.1 Communication challenge The product promotional design features should directly reflect to the consumers. There is need to communicate the exact information about the product. Consumers always make purchasing decisions based on the information they have. This calls for the need to pass all the important details about the product to enable consumers understand the product and develops a positive attitude towards the product. An advert successfully used in the United States may require changes for it to impart the same effects to consumers in China (Wells and Danskin 5). This is because interpretation and influence also depend on the cultural beliefs of the given population. 1.2.2 Tough competition Another severe challenge that Best Buy must deal with is the stiff competition from its close rivals like Amazon. These rivals mostly tend to imitate the strategies adopted by the company in order to gain high influence in the market. There is therefore the duty of ensuring that Best Buy, as a goal oriented company, carry out massive product promotional campaign to ensure that the brand names of its products and the good image of the company remains in the memories of consumers (Wells and Danskin 5). 1.2.3 High prices of products Another area that greatly hinders the speedier growth of the company and the ability to expand the company’s market is the high price of the products. The company sometimes fails to perform in some regions just because other companies are offering similar products with reduced prices. It is common knowledge to every person that consumers always go for what satisfy more at the lowest cost. While designing new innovated products to meet consumer demands, the company has to strike a balance between the quality of the product and the final price of the product. If the prices are similar to those of the competitors then consumers will be fewer prices sensitive and go for quality where Best Buy will have an added advantage (Wells and Danskin 5). 1.2.4 Complex channels of distribution The characteristics of the channels of distribution change from country to country depending on the level of economic development, government policies and many other factors. It is therefore a task for the company to study and understand the channels of distribution in each country. This ensures that the company products reach consumers timely to provide an opportunity for them to see them before they can see any other similar product. In most cases consumers honor what they first see than a similar product that comes after. The distribution channel chosen in one country such as United Kingdom may not be equally efficient in China hence the company can decide to choose a different channel of distribution suitable for each country. Again the suitability of a given channel of distribution will not remain forever and at some time the organization has to change and embrace a new one ((Wells and Danskin 6) 1.2.5 Change in consumer behavior Consumers are rapidly changing in the manner that they do their market research and purchase products. The company therefore has the tough job of ensuring that they monitor these changes early enough to take the most appropriate approach that match the changes. Most often, it has to win the preliminary consideration of consumers and respond to words of mouth. It is necessary to constantly, revive the loyalty program and manage consumer experience (Wells and Danskin 5). 1.3 Suitable Marketing Strategies There are several marketing strategies, which the company can adopt to earn more market share and improve its competiveness in the market. First, the company should come up with the necessary mechanism to reduce the prices of its products. This in turn is achievable by lowering the cost of production of the company’s products by utilizing the technical knowhow of its teams. When the cost of production is low, the company can benefit by selling at lower prices than the competitors sell and earn a large share of the market to benefit from large economies of scale. Another way, the company can sell at the same price as other companies to increase the profit margins, which increases revenue in the organization (Wells and Danskin 5). To intercept those organizations that imitate Best Buy and produce similar products, product differentiation can be the best weapon. This entails the addition of unique features on the products that make the products appear different from other products in the eyes of buyers. Through this strategy, the consumers become less sensitive to price differences and go for quality and innovated products. The high pace of innovation in the organization will therefore gain an advantage over the other organizations. However, another way of carrying out differentiation is through advertisement in which the consumers gain a good understanding of the product and thus perceive it different from other products. Differentiation within the products of the company will also help identify the performance of each particular brand in the market (Wells and Danskin 9). Some of the features present in the best performing brand when incorporated in the less performing brand can help boost its demand. In addition, a product promotional program can target a particular brand with the aim of boosting its demand to reach the other brands. Furthermore, differentiation will assist to identify consumer interests and preferences in different regions hence design products based on the preferences of consumers for each separate region (Wells and Danskin 7). It is most desirable for the company to focus on a given group of consumers and at a given geographical area. The company should therefore reduce the pace at which it is expanding its operations in the world. Expansion is costly and requires new market research in the targeted area and if this does not happen well it will result to failure. Expansion is good with proper understanding of the market will yield the best results. Therefore, if the company concentrates on the products it can produce best for the particular group then it will continue performing well. Rapid expansion is also dangerous due to the numerous market uncertainties in the market. This means that slow expansion minimizes the chances of getting loses in case these uncertainties produce negative results for the company (Wells and Danskin 7). 1.4 Conclusion Best Buy has all the chances of overcoming the challenges and become a leader in the supply of consumer electronics in the world. With all the other areas performing well, the most important part that requires good modification is the marketing section. By lowering the cost of production that will reflect to low prices of its products, differentiating the products to acquire uniqueness and focusing on the market areas that it can perform best, the company will achieve the highest growth rate ever. Work Cited Wells, John, R., and Danskin, Galen. Best Buy in Crisis. Harvard Business School, 30 June 2012. Web. 13 October 2014. Read More