Marketing and Tweeter

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Case Analysis
Tweeter etc.

Company Overview
Tweeter etc. was founded in 1972 by Sandy Bloomberg in Boston to sell high-end stereo components. The current portfolio of the company consists of brand stereos, television, car radios and car phones. Tweeter has recently witnessed a healthy growth in its financial performance. Sale has almost doubled in the last three years reaching $82.3 million in FY 1996. Its sales per store has increased by 50% and number of stores increased to 21 from 14 during the same period.

The Making and Current Scenario
During its formative years, Tweeter gained the reputation of being the retailer of high quality, high-end audio components and video equipment. They had a knowledge able sales force providing high levels of customer service and their sales soared during this period. However in the late 1980’s, there was an overall decline in the New England electronics market and caused two things: price wars with the local competition and Tweeter joining the Progressive Retailers organization in 1988. In the early 1990’s, Tweeter’s sales were dropping. They conducted focus groups to find out what the problem was. Their surveys indicated that the consumers perceived them to be providing excellent service, but at high price. The consumers were highly price sensitive at that time which led to a dip in their sales. So Tweeter’s management came up with a three-fold strategy to counter the problem. Firstly, they eliminated the use of “sale” and rather adopted an “Every Day Fair Pricing” strategy. Secondly it instituted “Automatic Price Protection” to combat its perception of high prices. Tweeter would monitor the weekly sales ads of all the major local newspapers and cross check that with sales within 30 days and if a customer paid more for a product than what its competitors would offer for a particular model, Tweeter would refund the difference by mailing the cheque of the difference amount to it to the customer. The sales almost...
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