|Type of paper:||Business plan|
Best Buy is a leading retailer of consumer electronics, home appliance, home office products, computer software and other services. The company has been experiencing various challenges to sustain its customers who are seeking out products and other services from other buyers online. Best Buy should devise a new marketing plan to maintain its customers.
The Porter's five forces model plays a significant role in analyzing some of the issues affecting Best Buy. Best Buy faces various internal and external challenges that are affecting its survival in the big box industry. Competitive forces are affecting Best Buy's operations. Competitors such as Walmart, Amazon, and Dell pose a significant threat to Best Buy. Barriers to entry in the big box industry are high, and many organizations focus on online stores. Best Buy has an added advantage to create partnerships with other companies. The bargaining power of buyers is high. Customers are now shifting to online shopping. The trend has affected Best Buy's revenue. The bargaining power of suppliers is at a medium level. Best Buy seems to have a mutual relationship with its vendors; thus, an added advantage to its sustenance in the business.
Based on Porter's five forces analysis, the following sections will discuss some of the marketing strategies that Best Buy should incorporate to bring back the customers and retain them in their vicinity. One challenge facing Best Buy is inventory shortages on popular electronics. In this case, Best Buy should increase same-store sales by collaborating with companies such as Apple and Samsung to sell their products in their stores. Best Buy should build more stores to ensure timely delivery of products to clients. According to Kenney and Khanfar (2011), Best Buy should adopt the customer centricity approach, which ensures and empowers store level managers and employees to assume an active role in providing products ordered by customers are delivered on time. Timely delivery will enable the company to retain its customers. Additionally, Best Buy should encourage companies such as Apple and Samsung to set up their storefronts in the store to maintain their relationship with the electronic giants. Allowing such companies to set up storefronts will offer customers with the same customer experience they have been witnessing in other stores.
Best Buy should acquire high potential companies and maintain their services to satisfy their customers. Best Buy has already purchased Geek Squad that offers professional computer services. However, customers have been complaining about the customer service they have been receiving (BI Intelligence, 2017). In this case, Best Buy should refine its customer services by ensuring same day delivery and availability of products to sustain its omnichannel services.
Best Buy should also reorganize its marketing team. According to Pasquarelli (2017), Best Buy is restructuring its marketing division into a more streamlined department with fewer costs. Best Buy has designed a showroom that consists of experienced personnel who are eager to help customers to select their best products and purchase them in the store. Roose (2017), narrates how the video game aisle in the store was bustling, the store was filled with gadgets from major companies such as Apple, and the presence of happy looking support team. Equally important, Best Buy should balance its commodity prices to that of Amazon to attract new customers and retain the existing ones. The presence of a well-designed showroom, onsite and online customer service, and affordable commodity prices will attract customers significantly because they will have a fantastic experience of testing the products, buying, and delivery of their commodities all conducted under one roof.
Despite the challenges that Best Buy has been facing, if the company adopts the mentioned marketing strategies, it will manage to compete against Amazon and retain as well as attract new customers; thus, increase revenue and market share.
BI Intelligence. (3 Mar, 2017). Best Buy struggles with omnichannel. Retrieved from http://www.businessinsider.com/best-buy-struggles-with-omnichannel-2017-3?IR=T
Kenney, M., & Khanfar, N. (2011). How best buy implements the five forces model to build market share and customer loyalty. International Journal of Arts & Sciences, 4(22), 159-164.
Pasquarelli, A. (21 Apr, 2017). Why best buy is reorganizing its marketing team. Retrieved from http://adage.com/article/cmo-strategy/buy-reorganizes-marketing-team/308756/
Roose, K. (18 Sep, 2017). Best Buy's secrets for thriving in the amazon age. Retrieved from https://www.nytimes.com/2017/09/18/business/best-buy-amazon.html
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