CASE Presentation_ IIM Sambalpur Consumer Behavior Marketing management

1. Showrooming at Best Buy
Sayantan Biswas
IIM Sambalpur

2. 5 C analysis
Company: BestBuy
Customers: Customers in need of Electronic appliances & Gadgets
Competitors: Online Stores like Amazon, Retail outlets
Collaborators: Manufacturers, ShopKick, Celebrity, and web designers
Context: Online stores with lower price are attracting more customer to
buy online, and offline stores are losing their customers and growth

3. Problem Statement
Could best buy afford to sell its products at the price point of online
retailer despite having higher operating costs?
Alternatives
1. Diversify business, start operating in the product categories like
appliances, toys, jewelry & watches etc. and go back to earlier pricing
model.
2. Operate in offline and online businesses simultaneously, with existing
pricing model.

4. Evaluation of Alternatives
Diversify business, start operating in the product categories like
appliances, toys, jewelry & watches etc. And go back to earlier pricing
model.
• Toys and jewelry are less popular categories for online shoppers.
• Best buy established itself as Electronics retailer, diversification
might destroy its value proposition.
• A lot of negative publicity would be there if they start charging more
like earlier and footfall would be hugely reduced.
• $5 for ‘just looking’ is largely criticized by customer, bring that back
might turn into the last nail in the coffin.

5. Evaluation of 2ND Alternatives
Operate in offline and online businesses
simultaneously, with existing pricing model
• US customers are more inclined towards ‘touch and feel’ experience. Existing
outlets would satisfy this need, coupled with price matching strategy.
• Stores give more data on consumer behavior and shopping trends.
• After 2008, US consumers shifted towards price sensitivity, offering the lowest
price would certainly give then the competitive edge.
• In existing price model, the margins would be less but volume would make up
for profitability.

6. Recommended Action
I. Invest more in the stores along with Online platform. Remodeling of stores.
II. Start focusing on customer experience rather than only pricing. E.g. food courts, child’s corner etc.
III. Build a strong sales reps team, to help customers with product specifications to maximize utility.
IV. Build a take away model. And online delivery model. Use stores as mini warehouses.
V. Build a same day delivery system with in the same city. Help them with installation.
VI. Start referral program to maximize customer engagement.
VII. Partner with multiple brands to be their exclusive outlets. Allow brands to install their kiosk in stores.
VIII. Start in house brands.
IX. Advertising could be used to make the customers aware of the latest happenings andOngoing
promotional offers. In store flash sale for bulk buying.