Group no: 9
VISHAL LAXMAN BANSOD
* Consumer electronics was a $30 billion industry in US
* The market was growing at 5.6% CAGR, and is expected to grow through 1998 * Lechmere and Circuit City- leading consumer electronics retailers * Tweeter founded by Sandy Bloomberg as a small retailer of high-end audio/video equipment * Due to decline in market in mid 1980s to 1993, not all retailers survived and survivors started competing on price by providing Discounts in weekend “Sales” * Tweeter tried to compete on price as well as product quality and services but perceived as high priced retailer and was unable to lure customers * Tweeter instituted Automatic Price Protection-to compare price of tweeter’s item to other ads in newspaper if price by tweeter is more they will reimburse the amount to customer * Tweeter provided 100% refund for 30 days
* Tweeter also decided to change its marketing mix like along with newspaper ads, to invest 20%of marketing budget in radio advertising, direct mail, in-store promotions etc. * APP worked for Tweeter, its sales almost doubled i.e. from $43.7 million in 1993 to $82.3 million in 1996 * APP didn’t work in case of Tweeter’s acquisition Bryn Mawr stereo and was was not able to improve sales for it * Nobody Beats the Wiz, new entrant providing intensive customer service and offered 110% price protection for 30 days * The Wiz has potential to reshape rowing market of New England * Tweeter’s price competitiveness was effective for tweeter but not for Bryn Mawr
Competitive advantageCompetitive advantageProposition advantageUSPMarketing reach
| 1. Customer perception of high quality products. 2. Known for high levels of customer service and knowledgeable salesman. 3. Customers were ready to pay premium for quality and service. 4. Automatic Pricing Protection- customers were automatically refunded without any effort on their part, which increased their credibility. 5. Television and radio advertising as well as direct mail and product catalogs.
| 1. Only 5% clientele “Convenience Customer” which means different categories are not available at the store. 2. Only 5% clientele “Entry-Level Customers”, so people don’t associate Tweeter with cheap price. 3. 70% clientele Quality /Service oriented which is only 10% of New England Customer base. 4. Only 3.6% market share.
| Gap in capabilitiesGap in capabilitiesDisadvantage of propositionFinancials
Market developmentsNew Market
| 1. CAGR 5.6 % of the $30 billion industry. 2. Retail margins averaged as 30%. 3. Recently purchased Bryn Mawr known for high quality stereo in Pennsylvania.
| 1. Failure of Automatic Price Protection for Bryn Mawr Stereo and Video. 2. ‘The Wiz’ has entered into New England market - known for, monstrous marketing campaign, rock bottom prices and better APP. 3. Increasing value of APP checks, Tweeter had paid 29526 checks totaling over $780,000.
| Vital partnerCompetitorFinancial backing
5 c analysis
* Tweeter –chain of specialty consumer electronic stores, founded by Sandy Bloomberg in 1972 * Was positioned in stereo component market initially
* Was recognized as a retailer of high quality, high end audio component and video equipment * Tweeter’s selling proposition were- high quality products and great customer service * In 1996, tweeter acquired Bryn Mawr Stereo and Video
* Tweeter initially focused on the student market serving their more sophisticated taste for higher quality stereo components * Customer perceived tweeter as a retailer of...
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