Best Buy Co., Inc. and Customer Centricity Essay
Best Buy Co., Inc. and Customer Centricity
Best Buy Co. , Inc. is a specialty audio retail company that, through its unique marketing methods and willingness to risk and experiment, has expanded unto numerous subsidiaries across and among continents for providing consumer electronic products and services. It adopts the concept of customer centricity, in which a company’s efforts are designed to align their target and potential clients’ needs, wants, feelings, and behavioral patterns. Though they have incurred considerable challenges and losses along the way, Best Buy Co. , Inc.
’s journey to the business accomplishment has been one that has garnered them extensive experience and strong business disposition that has truly worked not only for their principle and processes but more importantly on their development. Marketing Case Study: Best Buy Co. , Inc. and Customer Centricity Best Buy’s Top Concern: Understanding of Consumer Behavior Best Buy Inc. , Co. has made it of great importance to center their business and marketing trade operations on better recognizing and identifying the how’s, why’s, and what’s behind their consumers’ approach dynamics to electronic retail purchasers.
Philip Kotler defines consumer behavior as “the study of how individuals, groups, and organizations select, buy, use, and dispose of good, services, ideas, or experiences to satisfy their needs and wants” (Kotler, Keller, Ang, Leong, Tan, 2006, p. 179), which Best Buy has made their top priority through and through. With a humble beginning as “The Sound of Music” during the mid-nineteen sixties, Best Buy initially suffered a disaster blow which they quickly translated to building a sense of customer relations and, in every extent, better brand recall.
As Store Service Manager Joe Brandt emphasized, “When the tornado hit, we decided to market to the community as a whole, and get electronics out there to everybody. We geared our selves up to win by understanding what consumers want in technology,”—Best Buy has not only managed to turn the most unfortunate of circumstances into positive output, but they also exuded their willingness to identify who their consumers were, why they purchase from them, and what would make them happy (Author’s Last Name, Year, p.
139). During the steady growth through the mid-nineteen eighties, Best Buy wanted to keep the customer connection they have started. Thus, they broke away from traditional business sales by “eliminating commissioned sales representatives” (Author’s Last Name, Year, p. 139). Despite having experienced momentary financial woes, the company pushed through furthering circumstances. Amidst many adjustments, significant acquisitions of Geek Squad and Magnolia Audio and Video were made possible.
Today, Best Buy is more equipped to depart from individual selling and is capable of providing better, wider, and more customer-focused services, from in-store, home, and office computer services needs. Focusing on the end-users, the development in understanding the various attributes the customers and clients led to the company’s five segment priority. This meant that discovering more about who their clients really are and how their clients shop for their electronics meant that in-store service processes could be further developed to suit their target consumers and those others in between who do get their electronics needs at Best Buy.
The five segment priority not only gave them the opportunity for bettering customer service and knowledge, but also with customers’ and their respective segments as the focal point of all operations, personalization even in a the setting of business relations were made possible and sustainable. The process which Best Buy Inc. , Co. started and revolved centrally on different aspects for their customers, of which they were able to maintain through out and has been key their growth and success which translated to “1,172 stores, 140,000 employees, and $35.
9 billion in revenue” and world-wide business achievement and recognition (Author’s Last Name, Year, p. 139). Best Buy’s Journey through Customer Centricity With the employment of customer centricity as the company’s foremost business principle, Best Buy has learned many business lessons which they had to accept, adjust, balance, and realize as either forms in reward or drawback. The most obviously beneficial characteristic of customer centricity which provided Best Buy with a strong sustainable business advantage is its soaring customer relations.
Creating an atmosphere wherein customers are not only comfortable but also confident that all their electronic needs and concerns shall be tended and answered in any Best Buy store. Through building individual customer rapport, Best Buy creates a business situation where brand retention, customer service, quality product, and service offering are all and more associated with their name and reputation. However, in considering the whole process of adaptation, the company underwent some difficulties.
In the early-on stages that led to the principle acclimatization, Best Buy experienced an increase of expenses and a decline of profits when they decided to deviate slowly from doing business via sales representatives. Additionally, this move was critically queried by analysts, but more importantly, it was greatly identified and appreciated by the customers. As the market for consumer electronics slowed down, Best Buy continued to differentiate their style of business from the competition. Hence, risk was its key catalyst that brought success, though accompanied by some hardships.
In creating the five-customer segment priority—Barry, the affluent professional, Jill, the soccer mom, Carrie and Buzz, early adopters, Ray, practical adopter, and Small business—Best Buy financially endeavored through the company’s vision of centering on the customer and were prepared to incur loses to better understand the inner-workings of their consumer. Within each segment, all had specific needs and features to which Best Buy fittingly offered solutions both product and service-wise.
In the process of appreciating and grasping the purchasing techniques of their customers, Best Buy realized the need for financial pre-requisite that the adaptation entails to substantiate the processes and services to better fit the client, via the trialing of “lab” stores. These lab stores stood as an evidential gauge on who customers would receive, react, and respond to “product offerings, store designs and service offering targeted at each segment” (Author’s Last Name, Year, p. 140). In the transition of adopting, Best Buy computed costs up to $600,000 to qualify a specific store outlet as customer centric.
However, it all paid off since it was positively acknowledged and received by its customers (relatively performing better, compared to the average chain counterpart). Thus, it spearheaded the formal integration of Customer Centricity throughout all its stores. With this, the identification of customer qualities had to be more specific, as they had fleetingly overlooked the differences between men and women as consumer electronics shoppers. Yet, with extensive research and tuning, consumer markets further distinguished their full potential was explored and utilized. Best Buy’s Pursuit to Accommodate Male and Female Market Shopping Qualities
The constricting soccer mom segment seemed to limit the female market. “Research showed that women spend $68 billion on consumer electronics each year and influence 89 percent of all purchases. ” This suggests that there is much potential for profits and improving female customer relations for Best Buy (Author Last Name, Year, p. 140). In addition to this, in terms of their shopping style, “men tend to be independent, whereas women tend to seek assistance while shopping for electronics” (McGraw-Hill Irwin, n. d. ). With these facts in hand, Best Buy opted to gear their processes even more to better answer the needs of their female market.
Incorporating the customer assistant program was also premeditated and established for any and every query the customer has to bring “personal shopping to the next level” (McGraw-Hill Irwin, n. d. ). The personal shopping assistant not only facilitates the discussion of the clients’ electronic needs, but they also thoroughly explain key benefits on how and why certain electronic products would impact the lives of the customers, relating them on a personal level at each transaction, which favors the more dependent shopping style of women.
Also, after broadening the Jill segment, Best Buy modified their in-store design for women, from color theme, lay-out, and displays of kitchen vignettes to packages, to house more appropriately their needs and thus, be more “female friendly” (McGraw-Hill Irwin, n. d. ). Best Buy Co. , Inc. truly adapted a system in which customer comes first, in every possible business and marketing scenario and circumstance. Through centricity, Best Buy elevated their brand and brand of service which put them in a class of their own, above from competition, beyond traditional marketing, and in the minds of their customers.
References Kotler, P. , Keller, K. L. , Ang, S. H. , Leong, S. M. , Tan, C. T. (2006). Marketing Management: An Asian Perspective (Fourth Edition). Singapore: Prentice Hall. McGraw-Hill Irwin. (Producer). (n. d. ). Best Buy: Using Customer Centricity to Connect with Customers [Case Study Video]. Retrieved February 20, 2009 from http://www. mhhe. com/business/marketing/kerin9e/video/Ch05_BestBuy. swf. Last Name, First Initial (Author). (Year). Book Title. (Edition). New York: McGraw Hill Irvin.