![References
Holden, Reed K, and Mark R Burton. Pricing With Confidence. Hoboken, NJ: Wiley,
2008.
Price Waterhouse Coopers, (2015). [online] Available
at:https://www.pwc.com/es_CL/cl/publicaciones/assets/retailing2015.pdf
[Accessed 6 May 2015].
Anon, (2015). [online] Available at: http://uk.businessinsider.com/reverse-
showrooming-bricks-and-mortar-retailers-fight-back-2-2014-2
http://www.wsj.com/articles/wake-up-brick-and-mortar-retailers-1416874241
[Accessed 6 May 2015].
Anon, (2015). [online] Available at:
http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm
https://www.youtube.com/watch?v=Y8nX_mKnQg0 [Accessed 6 May 2015].
Key Price DecisionsReferences](https://image.slidesharecdn.com/f0f8b42b-5aea-4764-a433-32b5fadad8bd-150728100918-lva1-app6891/85/Group-5-Best-Buy_vf-15-320.jpg)
Group-5-Best Buy_vf
- 1. Show Rooming at Best Buy Harvard Business School Thales Teixeira Elizabth Anne Watkins Group 5 | Master of International Marketing | Pricing Strategy | Prof Mike Berry
- 2. Background….……………………………….….2min Show Rooming……………………………...…..2min Key Pricing Decisions…………………....……2min Recommendations……………………….…….4min Questions……………………………….……….5 min
- 3. Background Online Retail USA CAGR 08-15: 17% Background 2004 2012 Technological Devices Online Shopping “The everything Store” Penetration Price Strategy 1) Lower operation costs 2) Product Cost Negotiation 3) No sales tax (USA) Price Comparison Apps Price Transparency On line Add complexity to purchase decision
- 4. Problem Situation Stimulus Zero MOT First MOT Awareness Discovery Purchase In Store In StoreMedia 2004 2012 Stimulus Zero MOT First MOT Awareness Discovery Purchase Media In Store On line Show Rooming High Fixed Costs Penetration Price Competitors Sales Loss Transfer Profits
- 5. Price War - Permanent price match online retailers. Use Price-match strategy during the seasons. Avoid Price War – Block bar codes to price comparison apps. Key Price DecisionsKey Price Decisions Until 2011 Early 2012 Nov 2012
- 6. Price War - Permanent price match online retailers. Key Price Decisions PROS Fairness Recover Sales Breakeven Risk Key Price Decisions Tripled Stock Price Reactive CONS Willingness to pay, not value Strategic Pricing Proactive Value-based Profit-Driven Success in pricing requires master the art of diplomacy, not the art of war. Price Match reduce show rooming, but it does not overcome it.
- 7. Moving Forward Stimulus Zero MOT First MOT Awareness Discovery Purchase Key Success Factor: Complete Understanding of Consumer Journey Media In Store On line Show Rooming Media Online In Store Reverse Show Rooming Second MOT Ultimate MOT Experience Recommendations
- 8. Recommendations Stimulus Zero MOT First MOT Awareness Discovery Purchase Media In Store On line Media Online In Store Second MOT Ultimate MOT Experience Recommendations Taking Advantage of Show Rooming Capitalizing in Reverse Show Rooming Target Collaboration with the industry Partnership Brick and Click
- 9. Recommendations You CAN showroom, but you MUST share Mobile Platform linked with social media where users can share their technological aspirations, ask for friend`s advices, they also can build the living room of the dreams . Recommendations Stimulus Zero MOT First MOT Awareness Discovery Purchase Media In Store On line Second MOT Ultimate MOT Experience Recommendations Taking Advantage of Show Rooming Mobile Strategy Sales Team Impulse purchase Visitor’s Profile • Not ready to buy just browsing. • Don`t have information. • They will not get a basket when they get in the store. E-Commerce
- 10. Recommendations Media Online In Store Capitalizing in Reverse Show Rooming Stimulus Zero MOT First MOT Awareness Discovery Purchase Second MOT Ultimate MOT Experience Recommendations Online Portal Sales Team Social MediaExcellence in Post Sales ServicesFidelity Program Visitor’s Profile • Informed clients. • Ready to Buy.
- 11. Recommendations Zero MOT Discovery In Store Target Collaboration with the industry Vantages for the Industry: Price Consistence; Product Exposition; In Store First MOT Purchase Transfer Price Standard Promotional Calendar Controlling inventory in the Online Channel Experience in Store
- 12. Recommendations Partnership Brick and Click First MOT Purchase On Store Amazon inventory In Best Buy Purchase Amazon Inventory In Best Buy Cut Amazon delivery Costs Best Buy Stores would offer products in better prices than On line Cost Savings are translated in better margins to Amazon and a discount in final price
- 13. Questions Stimulus Zero MOT First MOT Awareness Discovery Purchase Media In Store On line Media Online In Store Second MOT Ultimate MOT Experience Recommendations Taking Advantage of Show Rooming Capitalizing in Reverse Show Rooming Target Collaboration with the industry Partnership Brick and Click
- 14. THANK YOU Group 5 | Master of International Marketing | Pricing Strategy | Prof Mike Berry
- 15. References Holden, Reed K, and Mark R Burton. Pricing With Confidence. Hoboken, NJ: Wiley, 2008. Price Waterhouse Coopers, (2015). [online] Available at:https://www.pwc.com/es_CL/cl/publicaciones/assets/retailing2015.pdf [Accessed 6 May 2015]. Anon, (2015). [online] Available at: http://uk.businessinsider.com/reverse- showrooming-bricks-and-mortar-retailers-fight-back-2-2014-2 http://www.wsj.com/articles/wake-up-brick-and-mortar-retailers-1416874241 [Accessed 6 May 2015]. Anon, (2015). [online] Available at: http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm https://www.youtube.com/watch?v=Y8nX_mKnQg0 [Accessed 6 May 2015]. Key Price DecisionsReferences
Editor's Notes
- #4: Best Buy was elected the company of the year by Forbes in 2004; Decreasing traffic in retail stores and malls, and increasing traffic online; Electronic devices purchase behaviour has special compatibility with online shopping; Online competitors could offer better price deals because of operation costs, scale negotiations with the industry, and tax structure; Because of that, online retailers start to push price comparison apps. Suddenly the market started to require price transparency; This apps add complexity to purchase decision.
- #5: December 2011 – Best Buy was elected the best place browser and not buy. The same pool estimated that Best Buy was losing on average $280 per transaction to lower price internet competitors.
- #6: Competitive Reactions to Online Retailers
- #7: What the key price decisions Best Buy made in recent years? Were they right? Would you have recommended doing anything different?
- #8: What the key price decisions Best Buy made in recent years? Were they right? Would you have recommended doing anything different?
- #9: What are your price recommendations for Best Buy going forward? How can Best Buy growth its business profitably?
- #10: What are your price recommendations for Best Buy going forward? How can Best Buy growth its business profitably?
- #11: Scenario which Best Buy got value advantage over competition Sales team building selling backbone; negotiating with value
- #12: 1) Coordination of pricing with suppliers can improve the efficiency of pricing
- #13: - Profit along side with amazon