Marketing homework help

Evaluate the case study below and respond to each of the questions below using both theory and practical managerial thinking as well as supporting research.

Marketing Excellence Best Buy
Best Buy is the world’s largest multichannel consumer electronics retailer, with $45 billion in sales in fiscal 2013. Sales boomed in the 1980s as the company expanded nationally and made some risky business decisions, like putting its sales staff on salary instead of commission. This decision created a more consumer-friendly, low-pressure shopping atmosphere and resulted in an instant spike in overall revenues. In the 1990s, Best Buy ramped up its computer product offerings, and by 1995 it was the biggest seller of home PCs, a powerful market position during the Internet boom.
At the turn of the 21st century, Best Buy faced new retail competitors, including Costco, Walmart, and Target, which boosted their electronics divisions and product offerings and often priced lower than Best Buy. The company believed the best way to differentiate itself from the competition was to emphasize customer service by selling product warranties and offering personal services like home delivery and installation. Its purchase of Geek Squad, a 24-hour computer service company, proved profitable and strategically wise as home and small-office networks became more complex and the need for personal computing attention increased. By 2004, Best Buy had placed a Geek Squad station in each of its stores, providing consumers with personal computing services in multiple channels: in the stores, online, on the phone, and at home.
Best Buy also segmented its broad customer base into a handful of specific targets such as the affluent tech geek, the busy suburban mom, the young gadget enthusiast, and the price-conscious dad. It used extensive research to determine which segments were the most abundant and lucrative in each market and configured its stores and trained its employees to target those shoppers. For example, stores targeting affluent tech geeks offered a separate home theatre department with knowledgeable salespeople on location. Stores with a high volume of suburban mom shoppers offered personal shopping assistants to help Mom get in and out as quickly as possible with the exact items she needed.
Sometimes a store experienced a new type of lucrative customer. For example, in the coastal town of Baytown, Texas, the local Best Buy observed frequent visits from Eastern European workers coming off cargo ships and oil tankers. These men and women used their precious free time to race over to the store and search the aisles for Apple’s iPods and laptops, which were cheaper in the United States than in Europe. To cater to this unique consumer, the store rearranged its layout, moving iPods, MacBooks, and their accessories from the back to the front, and added signage in simple English. The result: Sales from these European workers increased 67 percent.
Best Buy is hailed for growing into a $50 billion company virtually through one channel. However, in recent years, the company has struggled to maintain its retailing dominance. One reason is that consumers no longer have the same interest in large television sets, computers, or entertainment centers that took up so much retail space in years past. In addition, “showrooming” has become a problem, in which consumers visit stores to look, touch, and test out the products but leave empty-handed and purchase online instead. In fact, online retailers like Amazon.com have become Best Buy’s biggest competitors in recent years. The company’s overall market share in electronics and appliances is 16 percent, but it has only a 7 percent market share online. In comparison, Amazon’s overall market share in electronics/appliances is 4 percent, but it is the market leader online, with a 21 percent market share.
Best Buy has acknowledged that it was slow to respond to category and channel shifts and was too focused on a single channel strategy when consumers’ behaviors were changing. As a result, sales slipped, customer satisfaction declined, and stock value went with it. To turn things around, the company hired a new CEO who implemented a strategic initiative in 2013. “Renew Blue” was developed to reinvigorate and rejuvenate the customer experience. Online, Best Buy put a huge emphasis on improving the consumer’s experience with faster and easier navigation tools, more competitive pricing, and relevant product offerings. The company also started shipping many of its online orders directly from nearby store locations, which improved delivery time and inventory turns.
Within its 1,477 domestic retail stores, Best Buy integrated a new optimization layout, which allocated additional space to growing and more profitable products like smart phones and reduced space for declining categories like entertainment. The company also plans to decrease the number of large stores it operates and increase the number of smaller, mobile stores.
As Best Buy evolves from a single-channel to a multichannel retailer, it faces many opportunities to grow its business even further. The U.S. consumer electronics and appliance market is a $228 billion industry, and the company is making changes to compete better and capture more market share. With so many storefronts across the nation, Best Buy has a competitive advantage and can leverage these assets as it expands into more channels.
Best Buy

What were the keys to Best Buy’s success? How have they differentiated themselves?
What pricing model has Best Buy adopted?
What are the challenges it faces in today’s retail environment from both a micro and macro environmental standpoint?
How else can Best Buy compete against retail competitors like Walmart and Costco as well as online competitors like Amazon.com?

In formatting this case analysis, do not use the question-and-answer format; instead, use an essay format with subheadings. APA-formatted case study should be a minimum of 500 words in length (not counting the title and reference pages). You are required to use a minimum of three peer-reviewed, academic sources that are no more than 5 years old (one may be your textbook). All sources used, including the textbook, must be referenced; paraphrased material must have accompanying in-text citations.
Evaluate the case study below and respond to each of the questions below using both theory and practical managerial thinking as well as supporting research.

Marketing Excellence Red Bull
Red Bull’s integrated marketing communications mix has been so successful that the company has created an entirely new billion-dollar drink category—energy drinks. In addition, Red Bull has become a multibillion-dollar beverage brand among fierce competition from beverage kings like Coca-Cola, Pepsi, and Anheuser-Busch. To date, the company has sold more than 40 billion cans of energy drinks across 166 countries. How? Red Bull became the energy drink market leader by skillfully connecting with youth around the globe and doing it differently than anyone else.
Dietrich Mateschitz founded Red Bull with a single product in Austria in 1987. By 1997, the slender silver-and-blue can was available in 25 markets globally, including Western and Eastern Europe, New Zealand, and South Africa. Its size and style immediately signaled to consumers that its contents were different from traditional soft drinks. Red Bull’s ingredients—amino acid taurine, B-complex vitamins, caffeine, and carbohydrates—were specifically formulated to make the drink highly caffeinated and energizing. In fact, some users have referred to it as “liquid cocaine” or “speed in a can.” Over the past decade, the company introduced other products and flavors, many of which did not succeed. Today, Red Bull offers the original Red Bull Energy Drink, Red Bull Total Zero, Red Bull Sugar Free, and special editions infused with berry, lime, and cranberry flavors.
As the company continued to expand worldwide, it developed an integrated marketing communications plan that reached its target audience on many different levels and built its brand image of authenticity, originality, and community. First, Red Bull focused on pre-marketing, sponsoring events like the Red Bull Snowthrill of Chamonix ski contest in France to help build word-of-mouth excitement around the brand. Once the company entered a new market, it built buzz through its “seeding program,” micro-targeting trendy shops, clubs, bars, and stores. This enabled the cultural elite to access Red Bull’s product first and influence other consumers. As one Red Bull executive explained, “We go to on-premise accounts first, because the product gets a lot of visibility and attention. It goes faster to deal with individual accounts, not big chains and their authorization process.” The company also targeted opinion leaders likely to influence consumers’ purchases, including action sports athletes and entertainment celebrities.
Once Red Bull gained some momentum in bars, it moved into gyms, health food stores, restaurants, convenience stores near colleges, and eventually supermarkets. The company’s primary point-of-purchase tool has always been its refrigerated sales units, prominently displaying the Red Bull logo. These set the brand apart from other beverages and ensure a prominent location in every retail environment. To guarantee consistency and quality in its point-of-purchase displays, the company hired teams of delivery van drivers whose sole responsibility was stocking Red Bull.
Another essential aspect of Red Bull’s marketing communication mix is product trial. Whereas traditional beverage marketers attempt to reach the maximum number of consumers with sampling, the company seeks to reach consumers only in ideal usage occasions, namely when they feel fatigue and need a boost of energy. As a result, its sampling campaigns take place at concerts, parties, festivals, sporting events, beaches, highway rest areas (for tired drivers), and college libraries and in limos before award shows.
Red Bull also aligns itself with a wide variety of extreme sports, athletes, and teams and artists in music, dance, and film. From motor sports to mountain biking, snowboarding to surfing, rock concerts to extreme sailing, there is no limit to the craziness of a Red Bull event or sponsorship. A few company-sponsored events are notorious for taking originality and extreme sporting to the limit. For example, at the annual Flugtag, contestants build homemade flying machines that must weigh less than 450 pounds, including the pilot. Teams launch their contraptions off a specially designed Red Bull–branded ramp, 30 feet above a body of water. Crowds of as many as 300,000 young consumers cheer as the contestants and their craft try to stay true to the brand’s slogan: “Red Bull gives you wings!”
Red Bull uses traditional advertising once the market has grown mature and the company needs to reinforce the brand to its consumers. As one executive explained, “Media is not a tool that we use to establish the market. It is a critical part. It’s just later in the development.”
Red Bull’s “anti-marketing” marketing communications strategy has been extremely successful connecting with its young consumers. It falls directly in line with the company’s mission to be seen as unique, original, and rebellious—just as its Generation Y consumers want to be viewed.

Red Bull

What are Red Bull’s greatest strengths as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share? What are the risks to their brand equity of competing against such powerhouses?
Discuss the pros and cons of Red Bull’s nontraditional marketing tactics. Should the company do more traditional advertising? Why, or why not?
Discuss the effectiveness of Red Bull’s sponsorships, advertisements, personal selling strategies, promotion, events, and public relations. Where should the company draw the line in terms of risk?
Recommend the next steps for Red Bull with respect to their marketing and advertising strategies.

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