Best Buy Case Study Write Up Essay
Best Buy Case Study Write Up
1. How does Best Buy define customer centricity?
The idea behind customer centricity was to be the customer’s smart friend and give a full solution. The sales people stand by the customers and try to find what they really need and what they want. The opposite of this would be product centricity. At this time the electronics were getting easier to use, their interaction required specific knowledge that only a fraction of the client base possessed. In this situation, the used to be advantage of best buy disappeared, and the company tested the first version of customer-centricity by setting up 12 laboratory stores and then rolling out tested concepts in 32 pilot stores.
The test were successful very successful. Best buy changed its segments from products such as MP3, TV, or PC to customers like Barry. All these make customers more convenient to shop in the store. Compared to the other stores, Best Buy did not focus on brands but usage. The sales person never asked what do you want to buy, but rather ask what you want to do. In launching customer centricity, Anderson used an autocratic set of power tools and expected swift support from his top team to execute his vision.
2. Is Customer-Centricity the same as customer services?
No, the customer-Centricity is not the same as customer service. The difference is that they can contour their sales and service pitch to each individual after they know which category that they fall into. They know from past company stastistics and knowledge about the different types and what their shopping style is like. Customer service is about trying to sell your existing products. The case states also that customer service may be in response to its competitors, and not its customers. Customer centricity mainly focuses on research of customers buying power, purchase preference and customer behavior. It is based on the research that Best Buy has gathered over time. From here, the company can redesign its products, and develop a new marketing strategy and give more suitable service.
3. How does it relate to Consumer behavior?
Chapter 10 touches upon things that could be related to consumer behavior. In store decision making talks about spontaneous shopping which is unplanned buying and impulse buying. Point of purchase stimuli is product display or demonstration that draws attention. The salesperson also can create exchange process. This involves commercial friendships. This is basically what customer centricity is about, forming commercial friendships. Chapter 10 also talks post purchase satisfaction which is the overall feeling about a product after someone has purchased it.
Chapter 13 discusses income and social class and this is directly correlated to the customer centricity model. The model puts people in different classes. They were Jill, Barry, angles and devils. Chapter 13 goes into detail and talks about how people can be put in classes based on income, education, age, religion, gender, just like Best Buy put these four people into classes to segment them. Best Buy, in essence, used consumer behavior to classify these people.
4. Finally, do you agree with this new strategy for Best Buy? What is its impact on the financial performance? We think that it was a good idea for Best Buy to implement this. It has worked financially and it seemed to have made the company more profitable. From looking at the financials from 2002 to 2004, it appears as though the strategy seems to be working. Best Buy remains at the top of the list for Consumer electronics companies in the United States. Its revenue was 49.7 billion dollars in 2010, which is 18% of North American market share. In the last 5 years, it keeps 25% of gross profit growth. It seemed like it was known that Wal Mart would catch Best Buy as the number one store at that time, but I think this was because of different reasons, like its building of so many new stores and supply chain capability.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 21 November 2016
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