Case Study of Tweeter
Decision: APP would not continue to be an effective policy in the future. Instead, Tweeter may think about abandon the APP strategy and focus on high-end market, emphasizing ‘high quality and high service’.
Several considerations about the decision:
Based on the dimension of ‘price’ and ‘quality/service’, there will be 4 segments, which are ‘entry-level customer’, ‘the price bitter’, ‘the convenience customer’ and ‘the quality/service customer’.
According to Herschman’s estimation that ‘the quality/service customer’ group accounted for 70% of Tweeter’s clientele though it only represented only 10% of the total New England customer base, which also ...view middle of the document...
In addition, will the rock bottom price strategy still work in the future? It is true that in the Shake-Out Years, the New England electronics market declined and the increasing competition induced price-war. Consumers just cared about prices. However, the market is not stable and it is changing now that with the development of new technology and increasing living standard, customers will probably care more about the product itself and service.
In 1988, Tweeter joined the Progressive Retailers Organization which enabled him to obtain competitive prices from manufacturers. To some extent, as a member of association, Tweeter grasps the bargain power over suppliers. But it didn’t have advantages over other competitors if it wanted to reduce cost by suppliers’ side.
4. Tweeter it self
Though the introduction of APP strategy has brought positive effects on Tweeter’s financial performance, there are several limitations and concerns. The perception of Tweeter was unchanged that customers still thought that Tweeter was...