Two decisions have to be made:
Should Bloomberg continue with APP? Why or why not? If not, should he have another form of price protection, like RPP, in place? Why? Or should he just follow another pricing strategy that you can think of? (This strategy should be close to the strategies discussed in the case.)
(6 POINTS) 2.
How should he raise awareness about APP (if he keeps it) or another pricing strategy? How should he allocate advertising funds among different media, e.g., newspapers, TV, radio, direct marketing, etc.
(2 POINTS) 3.
Suppose Bloomberg thinks that, whatever his current decision, he would still like to resolve some uncertainty in the market to aid with future decisions. If he could conduct some market research studies, what would you suggest and why? List any two.
Discuss 3. Above in a separate section called Market Research. So you case will have six sections: •
Basis for Recommendations
Alternatives, Risks and Assumptions
The following questions might be helpful for analyzing the case: •
Who are Tweeter’s customers? What influences their purchase decision? •
Why was APP successful earlier? What can it fundamentally change in the thought process of a potential customer? •
Who are Tweeter’s competitors? How do they make most of their money? •
A sizeable amount was written in APP checks. Would this be avoided if there were no APP, but RPP or no price protection but other pricing strategies?
Write your name and your section on the top of the first page. Your brief should not be more than 1200 words and your text response should fit into no more than two pages. You should use a minimum 11-point font size. You can have a third page with a maximum of three relevant exhibits. Running over the page limit for text will lead to a penalty in the grade.
The exhibits can be spreadsheets, tables, flow diagrams, plots, charts,...
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