2. How customer profitability analysis can be used by companies in increasing customer focus? What is customer profitability analysis? As has been investigated that customer profitability analysis (CPA) is one method which identities activities of customer service, cost driver and the profitability of individual customer or the group of customer (Blocher, 2013). Further, firms will improve its overall profit and competitive by well performing of the profitability analysis of current and future customers, the implementation of customer profitability analysis will be as follow (Wilson & Gilligan, 2005): a. To distinguish the need between customer groups with different value. b. To distinguish the factors that causes difference in the costs …show more content…
Best Buy is one of the largest hypermarket store company in USA, with competition from similar local general merchandise store: K-mart, Best Buy do a research on demographic analysis and daily sales statistic to identity profitable customers (Blocher, 2013). Firstly, Best Buy identify its customers and highlight each category based on different value after analyzing demographics (Best Buy, 2015), for instance, in customer folder: Customer A was a IT geek, Customer B is crazy on a local soccer club, Customer C, a teacher in primary school, and Customer D the housewife. Second, Best buy would renovate its exist stores in different branch based on the more catalogue of customer who living in(Best Buy, 2015). Therefor, some stores is especially designed for a group of customer like A, some became Customer B stores, C stores. For instance, a delicates service stores with exclusive salesman for IT geek like Customer A. If Customer B, a soccer fans buys a headphone, he or she only want to ease his or her demand to listen music instead of the brand. However, Best Buy not only focus on current profit, but also focus on customer group interaction- to analysis customer purchase behavior (Best Buy, 2015). Accordingly, Best Buy would effectively estimate the next purchase and product combination from customer based on this method. For example, normally, a customer will purchase DVD after she or he buys a DVD player but Best buy’s customer profitability analysis indicated that this kinds of customer also buys music accessories in second day after she or he buy DVD. Thus Best Buy would be able to send more relevant e-mail and special combination offer specific customer after customer purchaser behavior
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As seen in Exhibit F, Best Buy has 1,055 main locations that consist of their standard large format stores, and 406 Best Buy Mobile locations that focus on mobile device sales. To supply these locations, Best Buy has 23 distribution centers located throughout the country. Comparatively, Wal-Mart has 4,625 stores stocked by 158 strategically located distribution centers. This puts Wal-Mart at a huge advantage in a couple of ways. Not only is Wal-Mart much more likely to have a store nearby any given customer, they are also better equipped to keep its products in stock at all times. This means more customers visit, and due to stocking, more customers can make the purchase they want. On an international level, Wal-Mart also exceeds Best Buy’s few hundred stores with 6,308 stores in over 11 countries. This furthers Wal-Mart’s availability to customers and puts them at an advantage over Best Buy. Additionally, the increased scale of Wal-Mart’s retail and distributive operations make them extremely competitive on pricing, a major aspect of purchase decisions for high-ticket items like consumer electronics.
Best Buy has grown steadily and improved its business and customer’s experience in many ways throughout its journey from 1966 until 2011. The company’s main objective is to focus on making the customers visit to the store as pleasant and as informative as possible. The company is on its steady path of revolution and innovation by implementing customer driven and technology powered strategies. When any new business is setup, it faces its preliminary phase challenges and so has Best Buy but now the business is booming in the world of technology. It’s well known to be a one stop shop for all technological needs.
With the passion for the latest and greatest technological knowledge, and the charisma and devotion towards the youth, Best Buy is sure to continue on the high road to success. Best Buy will be changing and advancing to accommodate the ever-changing field of technology. They are truly a testament to upholding and exceeding their vision statement of “meeting the customer at the intersection of technology and life” (FAQ).
Since Best Buy sells the same items as competitors like Walmart and Target, Product Differentiation is an area that needs improvement for Best Buy. Where Best Buy excels for the Possible Competitors category is with their services. Developing specific services that are tailored to the customer needs and preferences allows Best Buy to have a competitive advantage. Consumers that shop at Best Buy often shop their because they can see the product in person and get information about new technologies or products prior to making decisions.Because Best Buy is a retail store that means its supplier are companies that produce electronic goods. The electronic goods market is saturated with manufactures and this gives best buy an advantage as it can offer more selection than some if it competitors in the specialty market of electronic goods. There are many alternate industry providers that can provide electronic goods to the costomers but with the recent failure of Radio Scach few speciality electronic stores remain, this provides an dadvantage for Best Buy.
The company was founded by Richard Schulze in 1966 in St. Paul, Minnesota and was originally called Sound of Music. In 1970 the $1 million mark was hit in annual revenues. Later in 1983, the name was changed to Best Buy. The company adopted the yellow tag logo in 1989. In 1999, Best Buy partners with Microsoft to increase sales. In 2009, a goal was created to reduce carbon. This was called "20 by 20," a 20% reduction in our absolute carbon emissions in North America by the year 2020. In 2012 there was a $1.7 billion quarterly loss. Currently, Best Buy is a multinational retailer of consumer electronics, computing and mobile phone products, entertainment products, appliances and related services. The Company operates retail stores and call centers, and conducts online retail operations under a range of brand names. With these brands, the company has had almost $50 billion in annual revenue in 2013 that employs over 145,000 people. There are 1,400 stores and locations in the United States alone. The online shopping sector has about 1 billion visitors shoppers annually. With that stated, BestBuy.com is in the top 10 retail websites in the United Sta...
First of all, Best Buy lacks a various range of different basic business concepts, throughout the years the electronics retailer hasn’t been meeting the minimal needs of consumers, I’ve been reading several different reviews on Best Buy’s customer support forum on their website, and it’s just plain shocking the lack of customer satisfaction Best Buy hasn’t been
Some users become customers after seeing an advertisement, public relation or media statement while others are referred to the device by a friend who is a satisfied user. With the increase in e-commerce customer reviews, it is likely that a large sector of new customers are drawn in from reviews on websites such as Amazon. (NATASHA)
Bed Bath and Beyond is currently the largest superstore domestics retailer, although their market share is only 4%. Competitors like Target, Wal-Mart and JC Penney offer a wider variety of merchandise such as apparel and electronics. Since 2002 growth has been a result of acquiring the Christmas Tree Shops and the Harmon Stores. In addition BBBY believes that their product offerings, customer service and advertising program have contributed to the company's financial success.
There has always been a saying that the customer is always right and in this modern age and and with new methodologies emerging in software development. There is always room to go to the past to get fresh new ideas. Customer here needs to feel that he is right and their opinion is being heard. The most important factor here is that everyone needs to leave the table happy and for a project manager, Customer walking with knowing he is right is always good even though you know they are a bit out of place.
Albertson’s also has also taken steps to boost it average sales. Albertson’s goal is to fill every shopping cart to as full capacity as possible, as well as getting to know their customers a lot better. They have installed have installed a $50 million NCR Teradata where house in order to analyze customer data, and what type of products certain customers primarily purchase. They then plan to use their customer loyalty cards, so that they can match individual buying preferences against store inventories. Also through technology this data is available for analysis minutes after customers leave the store. This is a very valuable resource, because now Albertson’s may be able to reach its goal of having the right products, on the right shelves, at the right time.
This paper presents a dynamic model on the consumer behaviour on the real world marketing issue. It will further discuss the marketing and industrial experiences encountered daily in everyday business life, in addition is the Consumer behavioural issues and consumer analysis or recommendations.