Samsung manufactures flat screen TVs. It does not sell TVs directly to consumers
ID: 1113477 • Letter: S
Question
Samsung manufactures flat screen TVs. It does not sell TVs directly to consumers. Rather, it sells them to retailers, like Best Buy, who then sell them to consumers. Best Buy provides extensive customer service including demonstrating how the TV works and answering customers' questions Because of this customer service, Samsung is able to sell many more TVs than it otherwise would. 1. Joe's TV Shack opens up next door to Best Buy. Joe's TV Shack consists of one employee (Joe) and a stack of Samsung TVs in boxes. Because it offers no customer service whatsoever, Joe's TV Shack is able to sell the Samsung TV's for much less than Best Buy. Why is this a problem for Best Buy? Why is this a problem for Samsung? Why is this a problem for consumers? What could Best Buy and/or Samsung do to fix the problem introduced by Joe's TV Shack? a. b.Explanation / Answer
a) Best buy is selling a TV after telling all its specifics, features and services provided by Samsung and any additional features which the best buy will provide to the customer. Doing so Best buy is adding lot more value to a TV, this value addition is helping the consumer know the features and service of the TV, helping the Samsung sell more TV and of course Best Buy to earn his living.
Joe's TV shack is selling them for a cheaper price. This will divert the consumer from Best Buy to Joe's Store because prices are less compared to Best Buy and affecting their business seriously, customers will be unaware of the various features provided by the Samsung TV. They will not get the necessary knowledge about how the TV works or do's and don'ts of the TV. In the long run, this will affect the whole goodwill and business of Samsung and their sales might come down too.
b) Samsung could set a standard for every store selling its TV. They can mention certain clause like every store selling Samsung's TV will have to tell the customer about all its features and services. This will force Joe to hire an employee or himself give better service to the consumers.
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