According to the American Marketing Association (2008), consumer behavior is characterized as the dynamic interplay between affect and cognition, behavior, and environmental events. This interplay occurs during exchanges in individuals’ lives. Essentially, consumer behavior pertains to the actions of consumers and the diverse strategies they employ when deciding on purchases.
Understanding the decision-making process is complex and can be influenced by various factors, including a person’s lifestyle. Marketers must use research techniques to comprehend consumer behavior. This involves analyzing the intent to purchase, buying process, and post-purchase issues from a marketing perspective. These aspects raise multiple questions and require a thorough approach. As stated by Solomon (2004), “The basic marketing concept is that firms exist to fulfill consumers’ needs.” Once this fundamental concept is understood, an organization can focus on essential objectives for gaining a competitive advantage.
Marketing strategies are employed to gain a deeper understanding of various aspects including the market, consumers, environment, supply and demand, and competition. Companies design their marketing techniques based on the behaviors of consumers, which encompass personality, emotions, attitudes, learning style, and perception. Additionally, external influences must be examined, with factors such as culture and sub-culture, demographics, social status, and family structure contributing to the comprehension of consumer decision-making processes.
The starting point for a successful marketing strategy is understanding the consumer’s decision-making process. One useful tool for understanding consumer behavior is the four P’s of marketing: product, place, price, and promotion. By grasping these concepts, marketers can develop a strategy to achieve the objectives necessary to meet the company’s marketing goals. When consumers are aware of the four P’s of marketing, they can make more informed purchasing decisions. [pic] These types of strategies are frequently employed in large electronics stores like BEST BUY.
Best Buy is a specialty retailer that offers various consumer electronics, home-office products, entertainment software, appliances, and related services. They have retail stores in different locations throughout the US and also operate through their websites: BestBuy.com and BestBuyCanada.ca. The company consistently implements new strategies to increase revenue and enhance customer service. According to Bob Willett, the former executive president of operations for Best Buy, their goal is to establish an efficient supply chain that provides customers with improved product availability at reduced costs.
Best Buy consistently reduces prices to outperform competitors and maintain quality customer service. They accomplish this by leveraging price elasticity of demand, by ensuring they offer competitive pricing and regularly updating their prices based on their competitors’ current offerings. According to management, the key to attracting customers to Best Buy is through word-of-mouth recommendations, which can be achieved by fostering relationships between consumers and employees.
Best Buy strongly believes that fostering relationships between motivated employees and contented customers will result in financial gains and expansion. Best Buy has achieved this by enhancing its influence over consumer electronic vendors and providing more competitive prices. Moreover, Best Buy has broadened its consumer installation and repair services by offering them through various channels, both as standalone offerings and within its retail stores through Geek Squad. Additionally, Best Buy is dedicated to societal welfare and promoting technology education.
Best Buy showcases its social responsibility through a combination of positive publicity and strategic marketing. A significant portion of their resources, amounting to $13 million, is dedicated to funding Awards for schools. This initiative aims at equipping students with up-to-date classroom technologies, thus promoting education. Moreover, Best Buy extends its support worldwide by offering scholarships to students globally. According to Best Buy stores, they have already awarded more than $13 million in scholarships to approximately 11,000 students nationwide. In today’s fast-paced world where new technologies emerge constantly and become outdated rapidly, it is imperative for Best Buy to remain competitive by staying informed and consistently monitoring advancements.
To withstand fierce competition from Dell, Wal-Mart, and HH Gregg, Best Buy has adapted its business strategies. In an effort to stay ahead, they now offer online purchasing options like their rivals.
Consumers have the option to either have the product delivered or pick it up from a nearby Best Buy store. Best Buy has expanded their range of products through partnerships with Apple, Dell, and Napster. A significant milestone for Best Buy was becoming the first authorized retailer in the US to sell the Apple iPhone. To ensure that employees are well-informed about the iPhone, Apple provided trainers for each store. Moreover, Best Buy is now the sole retailer of Dell computers.
Best Buy made strategic decisions to increase their subscribers and expand in the digital downloading business by acquiring Napster. It also bought 50% of Carphone Warehouse in Europe, aiming to expand its presence in European countries. These decisions were successful marketing tools, as they made Best Buy an exclusive retailer for products like Dell computers and Apple iPhone. Consequently, this strategy attracted new customers and boosted sales from repeat customers.
Best Buy employs a specific approach to target their customers, which involves categorizing them into distinct lifestyle groups. This segregation is distributed among four groups: Urban Trendsetters, Upscale Suburban, Middle America, and Empty Nesters. Among these groups, Urban Trendsetters represents approximately 26% of Best Buy’s customer base and contributes to about a quarter of their revenue. This group primarily consists of individuals aged between 23-30 who are typically unmarried. The second lifestyle group, Upscale Suburban, comprises roughly 22% of Best Buy’s customers and contributes to approximately 25% of the company’s revenue. The third lifestyle group, Middle America, constitutes around 31% of Best Buy’s customer base; their patronage accounts for about 32.9% of the company’s revenue.
The final lifestyle groups possess over 80% of the personal savings in the US, and they also control 70% of the financial assets. Moreover, they are currently experiencing the peak of their earning potential. Analyzing this breakdown of their customer profile aids Best Buy in comprehending their customers’ requirements and spending patterns, which can be utilized in formulating effective marketing strategies. Best Buy adopts a vibrant and cheerful approach when delivering their advertisements. Their paper advertisements predominantly feature a blue background accompanied by various shades of yellow and red to captivate the attention of consumers.
Generally, Best Buy highlights their special for the week in red at the bottom of the cover page. The store is famous for its yellow tag, which displays prices for all products, whether in advertisements or on price tags in stores. This distinctive advertising approach sets them apart from their competitors during promotions and sales. In conclusion, this successful electronics store effectively utilizes marketing strategies to attract new customers and retain loyal ones.
They have a strong advantage with customers due to their highly competitive pricing policy. Additionally, they offer unique and exclusive products that are not commonly found elsewhere. They maximize publicity by actively promoting their socially responsible acts. Through thorough customer research, they have gained insights into the preferences of those who visit their stores or shop online. They are known for their innovative advertising approach, particularly with amusing advertisements that effectively communicate their message. As a result, these marketing strategies have propelled them to become highly profitable companies in present times.
WORK CITED
- Solomon, M. R (2004). Consumer Behavior: Buying, Having and Being sixth edition.
- Upper Saddle River, N. J. : Prentice-Hall. (2008). Marketing Power. Retrieved June 30, 2008, from American Marketing Association Web site: http://www. marketingpower. com/Pages/default. aspx
- The Marketing Mix, the four P’s of Marketing. Retrieved June 28, 2009, from Net MBA Web site: http://www. netmba. com/marketing/mix
- Great Ads. (2008) Best Buy Inc. Commercial etc. Retrieved Nov. 29th, 2008. http://great-ads. blogspot. com/2008/11/best-buy-funny-commercial-2008-holiday. html
