Target Market Analysis: Best Buy - Case Study Example

Marketing: Best Buy

Best Buy is viewed by many as one of the most profitable and largest consumer electronics retailer in both North America and globally, with stores across the globe, the organization has been sustaining its profitability through effective strategy formulation and implementation. Admittedly, through focusing on adapting to the potential consumer market, the company has been on the upward trend. As such, through the focus of the organization on the targeting, marketing, positioning and merchandising, Best Buy has sustained relevancy and profitability in the sector. As well, the company’s comprehension of the target market has been successful which dynamism in operations and aspect of noteworthy. Nonetheless, the prospect of competition especially in the retail sector has led to further changes in the operational mandate with a more specialized approach to consumer analysis. As such, the focus on the specific market niches by the organization has been equally a worthwhile approach. Therefore, this paper will examine Best Buy’s operational mandate through an analysis of the college students as their target market.

Target Market

Ensuring successful operations is reliant on comprehensive targeting approach. It is through the implementation of plausible targeting that organizations such as Best Buy manage to capture a distinctive target market. Admittedly, from the evaluation of Best Buy, it has ben implementing a differentiated targeting strategy that was based offering distinctive brands that cater to the needs of the different consumers. As such, through targeting the entire consumer market, Best Buy has managed to develop a highly profitable organization. However, to maintain a plausible market capture of the college students, it is evident that the company has had to implement a highly undifferentiated targeting approach to cater for the segment. As such, in ensuring successful market acquisition, the company has mainly been investing on the needs and wants of the given consumer market.

From the analysis of the college segment, Brynjolfsson, Hu & Rahman (2013) emphasize that Best Buy has been focusing on the needs and wants of the market since they determine the purchasing decision of the potential market. Hence, through the undifferentiated targeting approach of the college students, the business has invested into focusing on two main facets:

Venue

Venue is extensively important for the college market. As such, to college segment, in reference to Brynjolfsson, Hu & Rahman (2013) is highly reliant on convenience regarding making purchases. Therefore, the company has invested into two main approaches to necessitate consumer acquisition of the target market. Brick and Mortar stores that are strategically located coupled with the online approach has been successful for the organization. Accordingly, its target market can efficiently make purchases and in most instances, delivery is in a plausible and quick manner.

Information Availability

Information availability is fundamental to the consumer segment. Admittedly, from the analysis of the college segment, the prospect of an emergence of the internet has led to the ease of accessibility to information. Accordingly, the ease of information access has led to Best Buy to invest in a highly optimized website. Through the focus on website optimization, the company has enabled its potential consumer market to enjoy a highly efficient website in which the consumers can access information in a plausible mandate. The organization has been emphasizing on the prospect that product feedback should form a plausible avenue towards the successful maintenance of loyalty among the consumers. Admittedly, the company has generated a website in which communication can prevail between the consumers and the organizational support group. Furthermore, the organization has invested highly in product labeling. The company appreciates the information needs. Therefore, its products, especially in their stores, are highly labeled and documented effectively to enable the potential customers to understand the use and operational dynamics of the electronic product. Furthermore, the organization has been emphasizing on the implementation of young or youthful employees on their sales division. As such, the youth potential employees ensure that they can offer in-depth information to the college segment on the electronic details in a plausible and comprehensive manner.

Positioning/Store Image

Best Buy as a consumer electronics organization depends highly on in-depth and successful positioning. Admittedly, positioning which entails the organizational placing or operational statement regarding its product and service delivery is imperative for proper operations. Kotler & Armstrong (2010) emphasize that positioning for any organization necessitates the proper development of a market niche or differentiation from the distinctive potential rivals. Therefore, from the evaluation of Best Buy, it entails an organization whose operational mandate is the provision of high-quality products within a low-cost mandate for its customers. As such, the organizational focus is towards ensuring that it can capture both business and individual potential clients through the low-cost approach. On the other hand, the company also positions itself as a quality centric business that offers low-cost products to its business clients that need promotional products for their organizations. As compared to other stores like Wal-Mart, Best Buy’s operational positioning enables the company to offer highly reliable products and its different employees necessitate superior or highly plausible service delivery.

Moreover, in the recent years, the company has been focusing on the emerging online market. Therefore, with a focus towards ensuring they capture the highly sophisticated consumer market, the company has invested in the online shopping approach. The online shop, in reference to Taylor & Hunter (2015) has been focused towards positioning its performance to suit mainly the youth market that comprises of college students, high school students, and even recent graduates. Therefore, in their positioning statement, the organization emphasizes on the prospect that it offers great services that simplify the shopping experience for its online consumers (Skarzynski & Gibson 2013). Additionally, the company emphasizes on ensuring quick delivery of the purchases to its consumers who are located within a five-kilometer radius from their different stores.

Spatial Considerations

In regards to spatial considerations, the format of the store has played a significant role in the decision-making the process of the target consumers. Admittedly, the company, the capture the potential college segment focused on emulation of the "old Corner Store" experience (Skarzynski & Gibson 2013). As such, the format of the store entailed implementation of an open environment in which the potential customers could visit their stores and make purchases at an interactive mandate. Focusing on convenience and no pressure to the customers in making purchases formed the core facets in spatial considerations for the business.

Merchandising

Merchandising is imperative towards the successful capture of the college segment. Therefore, from the analysis of Best Buy, its aggressive operational dynamics have been focusing on ensuring that they can capture the potential segment through the sale of up-to-date electronic products. Therefore, the company has been investing in data mining to ensure that they sell up to date electronic products to the potential college segment. Furthermore, the appreciation of college segment demand for music has also been evident through the acquisition of Musicland Stores Corp. through the acquisition of the earlier mentioned store; the company has managed to incorporate sale of music to its portfolio.

Pricing

The pricing approach implemented by Best Buy has mainly been through the analysis of the potential market. Admittedly, through effective market analysis, the company has appreciated the prospect that its target market is highly price sensitive. The sensitivity of the vast spectrum of the target market in consumer electronics emanates from the cheap and affordable products that have saturated the market. Most importantly, imports from Chinese market have rendered the electronics market highly competitive and daunting for organizations to sustain profitable outcomes. Therefore, from the evaluation of Kotler & Armstrong (2010) the consumer electronics market has become highly saturated with the notion of targeting based on sensitivity price mandatory. Accordingly, the consumer electronics sector especially in buying decisions has to be accessible to a product description, price, details, and review. The information needs of the consumers compounded by the extensive competition have led to a highly daunting prospect in the pricing approach. Therefore, the demand for consumer electronics by the college segment has been influenced by different facets such as convenience, quality, and price. However, pricing of the products, mostly for the personal use has formed the most evident consumer decision prospects.

Henceforth, pricing is important for any organization since it determines the level of sales that the business can obtain. As such, from the examination of Best Buy, it is evident that it has been successful through the focus on penetration price tactic. Accordingly, the penetration price strategy in reference to Taylor & Hunter (2015) entails the low-cost approach to the pricing of its products. Penetration price approach further entails an inexpensive approach for the sale of its products to both individual college students and the distinctive organizations that purchase in bulk. Therefore, Kotler & Armstrong (2010) emphasize that the name “Best Buy” is a clear depiction of the pricing approach by the organization. There is an extensive prospect of great value at a low price for the different products on sale in the business. Hence, from the analysis of the organization, the price penetration strategy is mandatory since consumer electronics products call for a highly comparative behavior among the target markets. Most importantly, the college segment mainly focuses on quality and price in their purchase decisions. The internet presents an avenue in which the college segment of consumers can compare the different prices and make buying decisions. Therefore, through the appreciation of the buyer behavior, Best Buy has maintained low-cost pricing strategy. Furthermore, the company has also focused on a highly effective payment plan for the target market. The payment plan, in reference to Scott (2015) has mainly entailed the focus on flexible solutions for the college segment in regards to the process of payment. Through the hire purchase approach, Best Buy has enabled the distinctive college segment can purchase the different electronic products. Therefore, through the appreciation of the prospect that prices form the most imperative aspect of consumer decision making, the company has effectively targeted the college segment.

Service

Customer service, in regards to the college student target market plays a pivotal role towards successful operations. Consequently, from the examination of the organization, the target market has been successfully acquired through the employment of the human resource that they term as “geek drivers”. As such, the geek drivers are mainly focused towards ensuring effective and formal communication on the different products available in the organization. The company affirms that through ensuring its customers are informed of the electronic products, features, and the distinctive capabilities, the college segment is bound to become repeat purchasers. Scott (2015) emphasizes that the necessitation of information relay in a plausible manner is imperative to ensure consumer satisfaction and thus culminate into purchasing of the given product. Furthermore, in regards to service delivery, Best Buy also invests in the three aspects of consumer want. Product delivery, warranty and installation are the main aspects that are not only for the college students but also for the holistic consumer segment. Through the implementation of the additional services, especially warranty, the company has been sustaining consumer loyalty. With the prospect of social media, the company ensures that it offers high standard electronic products to the target market. As such, the company recognizes the influence of the social media and how the target market, college student, commands a significant authority. Any bad publicity in the social sites such as Facebook, Twitter, and Myspace on Best Buy would impact on their image. Therefore, customer service delivery forms the most fundamental approach for the organization especially the college student target market.

Integrated Marketing Mix (IMC)

Integrated marketing mix denotes the implementation of diverse promotional techniques to ensure brand awareness. As such, marketing, that entails the generation of product awareness, has become a formidable tool that Best Buy has been implementing to target the college segment. In reference to Scott (2015), the college segment presents a highly diverse and vast segment that requires the implementation of multiplicative approaches for successful information relay. Therefore, from the evaluation of Best Buy it has implemented both Above the Line (ATL) and Below the Line (BTL) approaches towards the acquisition of both the college ad holistic consumer market.

As the first approach, the Above the Line (ATL) has mainly entailed the focus on implementing promotional tactics that aim towards capturing a wide array of consumers. As such, the promotional mediums that capture a vast consumer segment that Best Buy implements include: internet marketing, television and radio advertising. Of utmost importance has been the internet marketing initiative. Accordingly, the organization has realized the significant potential of the internet. Through its website the company has been advertising its products in a real-time mandate (Skarzynski & Gibson 2013). All the electronics available are communicated, and any changes in the stock levels are changed on the site in an immediate mandate. Additionally, television has been a successful initiative through the implementation of infomercials. Accordingly, infomercials enable the organization to ensure that its target consumers can understand the electronics and their uses.

On the other hand, below the line approach has mainly entailed the focus on techniques that ensure a close interaction between the organization and the consumers. As such, focusing on personal selling has become a successful approach. Most importantly, in targeting the college segment, Best Buy has focused on employing personnel who visit the distinctive colleges especially in different events of the colleges to present the different products and services that the organization can offer. Through the unique personal selling approach, the business has managed to capture a wide array of potential customers in the college segment.

Conclusion

Business operations as evident from Best Buy rely extensively on comprehension of the target market. From the analysis of the college students target segment, the company has invested into distinctive approaches to ensure that they acquire and dominate the potential segment. Through effective pricing, service delivery, marketing and spatial considerations, Best Buy has successfully captured the college segment.