Case Study: The Business Strategies of QVC
MIE 480, Spring 2010
John Segal founded QVC in West Chester, Pennsylvania in June of 1986, two years behind the launch of its predecessor, the Home Shopping Network. Despite this later emergence onto the cable scene, QVC surpassed its competitor quickly and has maintained a dominant position in the television-retail industry ever since. Never relinquishing its strong commitment to quality, value, and convenience, the company has strategically gained consumer confidence, brand loyalty, and a competitive ...view middle of the document...
For example, in order to gain consumer loyalty, the home-shopping channel employs an in-house quality assurance lab. The management at QVC realized that selling products without brick-and-mortar stores and tangible products meant they would have to win over customers’ trust and loyalty. In the words of Mr. Hamlin, VP of iQVC, “What customers are looking for is trust”. Therefore, each product promoted by the channel undergoes a stringent quality satisfaction test before ever reaching the television screen. QVC also offers a 30-day, 100% money back guarantee with zero hidden fees which serves to reassure first-time buyers and retain repeat customers. Further emphasizing its commitment to quality and value, QVC welcomes customers to call in during live broadcasts to offer their personal testimonials to other viewers.
This customer-centered focus is just one aspect of QVC’s strategy. In 1996, the company launched its internet division known as iQVC to capitalize on its commitment to convenience. Over the past 14 years, the site has been redesigned to become more user-friendly, and to integrate the TV channel with the internet site and QVC distributors. Logistically this has allowed the company to keep pace with television orders placed 24 hours a day, 7 days a week. The increasing integration of information systems and operations enables QVC to process orders efficiently and ship most orders within 48 hours.
QVC has also managed to stay ahead of the curve by diversifying its product mix and incorporating brand names and designers. Products offered now include not only clothing, jewelry, and accessories, but also electronics, food, and appliances—to name a few. Choosing to incorporate top designers has paid off immensely as well. QVC knows its demographic (80% female) and targets that demographic strategically to optimize sales. The channel stays relevant to the consumer by selecting popular designers that will resonate with its audience. Furthermore, they tap charismatic, enthusiastic designers like Isaac Mizrahi, who not only design fashionable products, but can double as captivating salespeople on-air.
A unique and differentiated product line increases the potential for impulse buys on the consumer’s part because it is something new that they have never seen before and cannot easily find at other retail stores. QVC is also constantly evaluating the market and the profit margins relative to each product category. If a product is not performing as expected, QVC can adapt quickly, forego the product and replace it with a more popular item in a timely manner.
Their marketing is equally as powerful as the other elements of the company. QVC is excellent at targeting segments of their market through varying methods. This allows them to be able to better utilize airtime and make every costly second translate into sales. They break up their airtime into segments that have like products together so interested...