As a team leader of a consulting company, John Landers is in deep thought wondering how to develop a presentation to the client firm, the Best Buy next month. (Please read the Case 4-1: Best Buy of the textbook). Last few years, market condition deteriorated dramatically with increased online competition and reduced customer spending. The tough business conditions and slow economic recovery drive many corporations into more intense customer relationship marketing programs. In addition, increased use of online and mobile shopping and e-purchase can threaten the growth and survival of the physical retail chains. John needs to collect any relevant information and document all these new developments in his report. Based on the assessment, John should develop alternative value based market segments, segment profiling, and relationship marketing options for the client firm.

In his presentation, John thinks that he needs to perform the client firms life time value analysis and customer portfolio analysis.John believes that he needs to answer the following questions for his client firm.

1. What specific factors should Best Buy include in calculating its customers lifetime value?

Calculate the lifetime value of typical customers and identify value based segments for Best Buy. Choose 2-3 value basedsegments and describe their typical customer profiles.

2. What is the impact of Best Buys new customer strategy on its customer portfolio? What recommendations wouldyou offer to Best Buy in managing its customer portfolio?