Jb Hi-Fi Contemporary Organisation

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Marketing Practices

Marketing practices of JB Hi-Fi is increase brand awareness, put importance on price, and develop the product mix and chosen advertising. Brand awareness is important because it is the only way through which business can be recognised in the market and eminent from its rivals. (Bovee & Thill, 2013).The significant element of the brand awareness is what message company delivers to the customers. ‘Cheap prices’ and ‘big range’ are terms which are used by JB Hi-Fi to promote itself. Once brand is settled down in the market, it is easy for the company to gain new customer base. JB Hi-Fi has strong branding which helped it to attract more new customers. Moreover, JB Hi-Fi works continually to improve its brand name in the dynamic market (Thomson, 2017). Price is the vital element of the JB Hi-Fi’s marketing strategies. On the other hand, price plays same important role in costumers buying decisions. JB Hi-Fi places itself in the market by emphasising on the commitment to price competitiveness with slogan like ‘always cheapest prices’. Pricing strategies such as Penetration pricing (selling products on the lower price than the cost price) and ongoing discount pricing are the two main strategies followed by JB Hi-Fi. Advertising is a crucial part of promotional strategy. JB Hi-Fi concentrates on two advertising media. First, it delivers catalogue on state and website basis. As JB Hi-Fi has its own website with featured products, it helps them to promote itself in the competitive market. Product mix is the mixture of diverse brands and products. There are three elements of product mix which are line (group of same products), breadth (group of different products) and depth (different items in a line). JB HI-FI has its own promotional brochure along with its website which gives a thorough knowledge about the product mix. JB Hi-Fi has implemented relationship marketing with their customers by sending marketing campaigns regularly (Barrile, 2010).

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- Elements of product mix (Barrile, 2010).

Since 2010, JB Hi-Fi collects the used mobile phone from customers and started recycling it which reduces the impact on the environment by decreasing the number of mobile phone going into landfill. JB Hi-Fi has also tie up with NSW and Victorian government which educates their employees on which product to recommend to its customers about energy effectiveness of products (JB Hi-Fi annual report, 2016)

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Financial Practices

JB Hi-Fi has shown tremendous growth even during the times when the economy wasn’t performing well and the market for electronic retailers wasn’t looking good enough. The main reason for this growth is the large amount of revenues they generate from their sales. In electronic retailing, new technologies arrive every day and they become obsolete very soon too. JB Hi-Fi has to make sure that a product does not remain in their shelf for too long. The products should move in and out of their stores very quickly and so they keep in mind that they do not over spend on inventories. If they spend too much on their inventories in the times when technology changes at a fast rate, then their stocks will start becoming obsolete, they wouldn’t be sold fast enough and will not generate cash flows and thus block the money which was invested in buying the inventories and thus they will not be able to buy new products and services which the consumers demand from them. They have to avoid what Dick Smith did. Dick Smith ended up with a lot of old stock on hand (Murphy, 2016). Things nobody wanted to buy cluttered the stores and as a result reduced sales, blocked capital and thus led to their downfall. Cash flow management is very important aspect of sound financial practices, and cash flow management at JB Hi-Fi involves making appropriate use of cash for activities such as buying inventories and carrying out regular business operations. A large amount of cash is generated via sales and the company has been continuously reducing its borrowings and paying off its debt with the cash flow it generates and another substantial amount of revenue of JB Hi-Fi is spent in paying its suppliers (JB Hi-Fi annual report, 2016).

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Integration

Another important aspect which affects the success and the profitability of the organisation is its supply chain management. Their organisational structure helps them in exercising complete control in their supply chain process throughout all the stores at all the locations. The supply chain network operates at more efficient and quicker speed that makes the product available on time and thus reduces the overall cost incurred on logistic management. They don’t have a warehouse network and the associated costs such as rent and insurance. using the high sales model, they order stock from suppliers, have it arrive one day and sell it the next (Bartholomeusz, 2016). In an industry were consumer behaviour changes so quickly, it is the ability of the business to adjust to this. The organisation aims in getting an advantage through price over its competitors. Price competitiveness increases customer base and that results in higher margins across the business through the increase in sales volume despite lower margins on each individual sale. The business model of JB Hi-Fi allows them to carry out their business at a lower rate and it has achieved that competitive edge through its strategies that include reducing the support staff for senior managers and having no layers of investor relations or media communications staff (Slade, 2010). The organisation focuses on diversification and growth, and its recent takeover of The Good Guys matches its strategy. With the acquisition of The Good Guys organisation will not only widen its reach, they will also enter into a new segment of home appliances which earlier was not there in their catalogue. This has impact on all the practices of the business. It resulted in the share prices of the organisation going up and gaining a big advantage over its competitors. The organisation continues to execute its brand and range extensions seamlessly. They are opening new stores at many new locations and bringing the small appliance strategy in many stores and the acquisition of The Good Guys, they are expanding at a fast rate. JB Hi-Fi has been consistent of its brand positioning and