Best Buy Case Analysis

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Date Submitted: 06/11/2011 05:35 AM

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Best Buy Uncovers Angels in the Market

Case Summary:

Best Buy a Minneapolis based company is a retailer that supplies the consumer needs for electronics, entertainment items, appliances and home office equipment/supplies. The consumer industry for electronics is very competitive. Initial collection of consumer data for Best Buy was collected through transactions made, rain checks and calls received through the call-center. Consumer demographic information was collected through census records, surveys and focus groups. To gain further insight on the customer needs Best Buy (through consultant Larry Selden) data analysis identified the customers categorizes (“Devil” and “Angel”). Best Buy focused on the “Angel” (desirable) customer. Best Buy developed a model (customer-centric) that focused on key customer groups. Each store would develop elements that would target each group of customers. Making their buying, a positive experience. The undesirable customer (“devil”) would be discouraged in making purchases in-store. With this new concept Best Buys sales increased by 8.2 percent.

Key Marketing Issues:

• Customer relationship management (CRM) – Using information about customers to create marketing strategies that develop and sustain desirable customer relationships. Best Buy created a complete Customer relationship management solution. It created a comprehensive customer database that gave them a deeper insight into all their customers.

• Database – A collection of information arranged for easy access and retrieval. This database gave them more comprehensive information on the customer for e-mail marketing and the traditional direct marketing.

• Customers – The purchasers of organizations’ products; the focal point of all marketing activities. Best Buy new customer database incorporates purchases history. It develops a more complete picture of customers and provides insight into consumers’ current and future needs.