Abstract
This article explains the Best Buy marketing strategy, covering all key marketing aspects that influence the brand success. The article highlights some key strategic issues with implications for Best Buy’s marketing strategy, providing useful insights for strategic marketing students, researchers and teachers.
1. Introduction
In 2022, Best Buy achieved 94th rank in list of Fortune 500 companies, falling 26 spots compared to previous year. The 2022 was a rough year for Best Buy. This article explores how Best Buy marketing strategy is playing its role in guiding the brand through various challenges.
2. Best Buy Marketing Strategy
We apply 7-P framework to conduct Best Buy marketing strategy analysis:
2.1. Best Buy product strategy
2.1.1. Best Buy product mix
Best Buy offers a wide product mix, as depicted in following figure:
Best Buy adopts differentiated market coverage strategy by offering multiple brands to meet needs of diverse customers.
2.1.2. Best Buy segmentation, targeting, and positioning strategy
| Best Buy segmentation | Best Buy target market | Best Buy positioning strategy | |
| Demographic | Age, gender, family and income | Both- age and gender, mostly middle class families | The positioning strategy reflects in following taglines: “Your total tech-solutions provider” “Innovative and customer-centric” “Trusted retailer” |
| Geographic | Urban, suburban across US and Canada | Both- urban and sub-urban | |
| Psychographic | Interests | Tech enthusiasts | |
| Behavioural | Purchase frequency | Professionals in need of tech solutions | |
2.1.3. Best buy value proposition
Best Buy Unique Selling Point (USP) – a one-stop shop that offers extensive product selection, in-store experience, and tech support services, along with expert guidance and efficient post-purchase assistance.
Best Buy’s USP is getting eroded by emergence of online retailers and other Brick and Mortar Stores.
Competitors like Target and Walmart are expanding their electronics departments, challenging Best Buy by offering competitive prices and one-stop shop experience.
2.1.4. Best Buy vs. Amazon
Best Buy offers wide product variety, but lacks in innovation and quality, which reflects into following customer sentiment analysis:
Source: Comparably
The above Best Buy competitor analysis is made based on 20177 ratings, and puts Amazon ahead of Best Buy.
2.1.5. Key product challenges
In an effort to increase the sales, Best Buy decided to diversify its product portfolio. In 2022, Best Buy initiated health and wellness (Best Buy SWOT analysis<Expand healthcare segment) program for senior citizens, introduced more home exercise items, and added outdoor furniture. Although, these initiatives tap into new spending opportunities, but company is losing focus due to unclear synergies across new product categories- as reported by Forbes.
2.1.6. Key takeaway points
- Broad product mix.
- Positioning focused on innovation, customer focus, and trust.
- Intensed marketing competition from online and brick-and-mortar retailers.
- Challenges in product diversification.
- Difficulty in maintaining the USP
2.2. Best Buy pricing strategy
2.2.1. Best Buy pricing strategy
Best Buy employs ‘everyday low pricing strategy’ and ‘Matching pricing strategy’ to remain competitive in the market.
However, according to Harvard Business Review, Best Buy cannot, and should not match Amazon prices. It is not possible for them to match Amazon’s prices on every item (as depicted in below price comparison chart).
2.2.2. Best Buy Competitor Analysis
Key best buys competitors include- Amazon, Costco, Alibaba, Walmart and Target. Here is a price comparison of Best Buy and its key competitors:
Source: Market Watch
The chart shows that Best Buy could not compete Amazon on five out of 8 items.
Click here to read Amazon-Flipkart price comparison
2.2.3. Best Buy pricing challenges
Despite trying to charge low prices, Best Buy sales fell by 13.1% in 2022 due to inflation (Best Buy SWOT<threats<rising inflation). Falling demand is pressurizing the company to offer further discounts that may affect Best Buy’s profit margin.
2.2.4. Key takeaway points
- Mounting pressure to further reduce prices
- Challenging to match Amazon’s prices
2.3. Best Buy place strategy
2.3.1. Best Buy distribution strategy
Best Buy adopts selective distribution strategy, and offers its products through physical stores and website. The blend of extensive physical store network with strong online presence offers consumers the choice of digital convenience and in-person shopping at the same time.
2.3.2. Best Buy distribution channels
Best Buy uses various, well-integrated distribution channels. By following Omni-channel approach, Best Buy allows its customers to access the products/services through both- online and in-store, enhancing the accessibility and convenience.
Key distribution channels include:
Extensive physical distribution network has been a key part of Best buy business strategy.
As of 2023, Best Buy has 1,138 stores all over the world. However recently, Best Buy decided to focus on expanding its online presence to tackle the intensifying competition- as reported by Forbes.
2.3.3. Best Buy distribution challenges
Rising transportation costs, product shortages, inventory issues, and failure in major markets like China and Europe- all these factors are resulting into the closure of Best Buy’s physical stores- CNBC and Business Insider report.
Source: Statista
However, Best Buy is slowing bounding back from the product shortage challenges. As per Wall Street Journal, Best Buy is getting some relief in transportation costs as domestic and international distribution networks are becoming more readily available.
2.3.4. Key takeaway points
- Selective distribution, offering in-store and online shopping.
- Omni-channel integration
- Extensive physical store network
- Growing focus on expanding online presence.
- Distribution challenges include rising costs and market failures.
2.4. Best Buy promotion strategy
2.4.1. Best Buy promotion mix
Best Buy adopts a comprehensive and well-integrated promotion mix- tailored to engage both- online and in-store customers:
2.4.2. Best Buy advertisements
Best Buy advertising strategy combines multi-channel approach, using traditional and online media to reach broader audience. The ads usually make a rational appeal, emphasizing pricing, product features, and value to convince the customers in purchase decisions.
Best Buy has strong presence over different social media platforms:
| Social media platforms | Followers |
| 8.2 million | |
| 526K followers | |
| 1.1 million followers | |
| YouTube | 533K subscribers |
| 485K followers | |
| 207K followers |
*Best Buy social media policy emphasizes on the professional and responsible use of social media platforms, while protecting the sensitive information, and adhering to the guidelines.
- Best Buy’s social media strategy engages the customers by sharing regular product updates and tech tips, and promoting sales and special offers to drive the sales.
- Best Buy uses social media to respond to the customers’ concerns, taking it an opportunity to strengthen ties with dissatisfied customers.
Take a look over following example:
2.4.4. Instore and sales promotion
Best Buy excessively relies on sales promotion to boost the sales. It also engages in instore promotion to encourage the immediate purchase.
Business Insider considered Best Buy’s Black Friday deals as the best in the town due to exciting discounts on toys, tablets, and TVs.
2.4.5. Best Buy loyalty program
Best Buy offers a three tiered- “My Best” loyalty program that offers points and rewards, free shipping, birthday gifts, extended return period, and exclusive offers:
Source: Best Buy.com
Despite offering the wide variety and value for money, Best Buy sales have cooled down, and company aims to double down its membership program to brace for a slower sale year- CNBC reports.
2.4.6. Sponsorships
Best Buy has a broad influencer network, and has sponsored various events to highlight the brand. Key brand sponsorships are depicted in following image:
2.4.7. E-WOM marketing
Best Buy engages in e-WOM marketing. The company displays the customer reviews and ratings on its website, helping customers to make well-informed choices:
Although, Best Buy displays high customer ratings over its website, it earns much lower rating on third party rating websites:
Source: Trust Pilot
Source: Reviews.io
Source: SiteJabber.com
The low ranking on third-party sites suggests that Best Buy needs to actively monitor and respond to the concerns of dissatisfied customers.
2.4.8. Key takeaway points
- Comprehensive promotion mix
- Rational advertising focusing pricing and value.
- Strong social media presence.
- Extensive sales promotions.
- Famous loyalty program.
- Sponsorships and influencer marketing.
- Negative e-WOM shared on third-party rating sites.
2.5. Best Buy people strategy
Best Buy people strategy prioritizes training the staff to offer exceptional customer assistance. However, at often, customers complain about the after-sale customer service (Best Buy SWOT<weaknesses<poor customer service). Take an example:
Source: Reviews.io
2.6. Best Buy process strategy
Best Buy’s process strategy ensures a convenient and seamless customer journey:
2.7. Best Buy physical evidence strategy
Best Buy invests on the store layouts and product displays, and has made its app and website user-friendly to reinforce the brand’s commitment to customer satisfaction and tech-innovation.
By analysing the Best Buy marketing strategy across the 7P marketing mix, it becomes evident that the brand’s success depends on a well-executed Best Buy marketing plan. Therefore, we propose following recommendations to enhance the Best Buy marketing strategy:
3. Recommendations
- Diversify Product Offerings, ensuring clear synergies and avoiding brand dilution.
- Invest in e-commerce capabilities to compete effectively in digital marketplace.
- Revise pricing strategies in the face of rising costs.
- Actively Monitor Customer Sentiments on third-party rating websites.
- Strengthen Loyalty Program to drive sales and brace for market fluctuations.
- Innovate the promotional strategies by blending the rational appeal with emotional engagement to set differentiation basis.
- Improve customer service by training the staff (particularly in after sale service).
4. Conclusion
In conclusion, Best Buy marketing strategy involves a broad product mix, an omni-channel approach, and efforts to drive the sales, while handling the pricing and distribution challenges.
Click here to read Best Buy SWOT analysis
5. References
Staff, F. (2023c, August 2). Best buy. Fortune.
Ruhl, J. (2023b, July 14). BestBuy: The Forecast of The Next Bankrupt Business. Medium.
Loeb, W. (2022, July 8). Best Buy’s challenges abound – Will sales rebound? Forbes.
Wessel, M. (2014, August 7). Best Buy can’t match Amazon’s prices, and shouldn’t try. Harvard Business Review.
Passy, J. (2019, July 16). Here’s how Amazon Prime Day’s deals stack up against sales at Walmart, Target and Best Buy. MarketWatch.
Unglesbee, B. (2022, August 30). Best Buy US sales slide 13% as inflation, discounting take toll. Retail Dive.
Trainer, D. (2021c, November 2). Best Buy Is Thinking Inside And Outside The (Retail) Box. Forbes.
Shedd, K. (2019, August 6). Why Best Buy thrives in the US but died in the UK. CNBC.
Groth, A. (2011c, November 6). Best Buy’s Overseas Strategy Is Failing In Europe And China. Business Insider.
Total number of Best Buy stores worldwide 2023 | Statista. (2023, June 8). Statista.
Magill, K. (2022, September 9). Best Buy bucks the glut trend, boasting healthy inventory. Supply Chain Dive.
Young, L. (2022, August 30). Best Buy says Supply-Chain strains are improving heading into fall. WSJ.
Saril, S., & Antonelli, W. (2022, November 27). Last-minute Best Buy Black Friday deals 2022: Don’t miss these top discounts on toys, tablets, and TVs. Business Insider.
Best Buy International: Select your Country – Best Buy. (n.d.).
Repko, M. (2023b, May 11). Best Buy doubles down on membership program as sales cool. CNBC.
Trustpilot. (2023b, October 12). Best Buy Reviews.
Best Buy Reviews – Read 1,201 genuine customer reviews | www.bestbuy.com. (2023, October 10). reviews.io.
Best Buy. (2023b, September 20). Best Buy Reviews – 3.3 stars.
