zalapski
Jun 5th, 2007, 04:31 PM
It appears Best Buy's strategy of buying Future Shop and maintaining the two brand name approach has worked out quite well. Doubling their market share with plans for further expansion. Link to Report on Business article (http://www.reportonbusiness.com/servlet/story/RTGAM.20070605.wrbestbuy05/BNStory/robNews/home).
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Interesting comment:
"It increases the choice to the consumer," ... well, not sure that I 'buy' that. The two-brand strategy is, no question, a powerful corporate strategy. Don't kid yourself, it has NOTHING to do with what is good for the consumer. It has more to do with what the consumer perceives is good for them. Most consumers DO NOT realize that Future Shop and Best Buy are the same company. Where this strategy is most powerful is co-location... i.e. FS and BB locating their stores within blocks, or at least, km's of each other. FS and BB typically do not price similar products the same... especially advertised deals. The consumer shops one outlet, then checks out the other. They see the 'strategic' price difference and either buy from the lower, or ask for the price guarantee. As a result, the consumer walks out feeling good about how they shopped and got the best deal. But what the consumer did not do is shop somewhere else.
The real FS / BB corporate strategy is to become their own 'consumer perceived' competition, thereby, placating the consumer's need to feel they have done their homework and have the best deal.
.
Interesting comment:
"It increases the choice to the consumer," ... well, not sure that I 'buy' that. The two-brand strategy is, no question, a powerful corporate strategy. Don't kid yourself, it has NOTHING to do with what is good for the consumer. It has more to do with what the consumer perceives is good for them. Most consumers DO NOT realize that Future Shop and Best Buy are the same company. Where this strategy is most powerful is co-location... i.e. FS and BB locating their stores within blocks, or at least, km's of each other. FS and BB typically do not price similar products the same... especially advertised deals. The consumer shops one outlet, then checks out the other. They see the 'strategic' price difference and either buy from the lower, or ask for the price guarantee. As a result, the consumer walks out feeling good about how they shopped and got the best deal. But what the consumer did not do is shop somewhere else.
The real FS / BB corporate strategy is to become their own 'consumer perceived' competition, thereby, placating the consumer's need to feel they have done their homework and have the best deal.