Tuesday 15 November 2011

Electronics Retailers Struggling - How does your marketing department turn it around?

Hello There

Comet sold for £2, Best Buy to close all UK stores by the end of the year and Argos operating profit dropped to £3.4 million from £54.4 million (a large percentage of Argos' profits come from electronics sales). As a member of an electronics marketing department how do you deal with the electronics downward spiral? 

A good starting point is to review the environment you are working in. Porter's Five Forces model will help you review the five things that impact on you as an electronics industry retailer http://www.learnmarketing.net/porters.htm 

And a PEST analysis will help you work out how to manipulate factors in your external environment http://www.learnmarketing.net/pestanalysis.htm. A PEST analysis is important because the current economic conditions have reduced consumer spending and significantly affected electronics sales. Electronics aren't essential buys, so they will be at the bottom of shopping lists of consumers struggling with money.

There will also be things that you do in your organisation which need to be improved. A stakeholder analysis will reveal micro environmental factors http://www.learnmarketing.net/microenvironment.htm. (such as relationships with suppliers and the competence of employees) that are holding your business back.

Finally the impact of supermarkets and online retailers on profit margins (in the "traditional" electronics retail industry) continues to increase . Tesco now even have TV adverts promoting their technical support teams and consumers have been using electronics goods shops as a "test and view" stop before purchasing the goods they like from online retailers. Online retailers can undercut high street shops as they don't have the costs, rents and rates of a high street shop. A detailed competitor analysis will help you analyse what your competitors are up to http://www.learnmarketing.net/competitoranalysis.htm. 

In the our next blog we will discuss how to turn your analysis into a strategic plan that will help your business overcome the challenges, it is currently facing.

Thank You

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