Tweeter Case Summary

I. Situation Analysis. Tweeter is a specialty electronics store, which dealt in middle and high end electronics in the New England area. The majority of consumers in the market for electronics are interested in price and Tweeter is in most cases well above the other retailers advertised starting prices. The middle and high end electronics are sold at around the same prices in all stores, but the product offerings made by Tweeter and the competitors advertising has made it price somewhat uncompetitive. The price biter and the quality/service customers together account for 90% of Tweeter customers. Tweeter targets a niche segment, to be sustaining growth in that segment amongst the low cost players and mass marketers should be synonymous
The decision to keep or fail to keep APP depends on both the product mix and promotion strategy. If Tweeter seeks new customers from the low end of the market, it likely doesn’t make sense for Tweeter to continue APP as the cost incrementally increase. This leaves Tweeter susceptible to price cuts from other providers and could culminate in a price war. The niche in which Tweeter occupies would be less unique and would have Tweeter competing more directly with the big-box retailers. However, if Tweeter chooses to stay competing in the same market niche, it is imperative that they align product and promotion policies that enhance the overall offering.
The key to success is the management of their product overlap while at the same time maintaining enough uniqueness to maintain higher margins and sustain the business. APP may not be credible as a pricing strategy. With too much overlap on the other hand, it may prove unprofitable. It would be beneficial to know what specific products are costing us the most money. In the table below we can deduce that the areas with more overlap are creating more cost exposure and more cost
Tweeter has a challenge in changing the price perception if they chose to do so. It is fundamentally easier to change price, however in the mind of the consumer it is much more difficult to sway perception to a company’s favor. Continuing to signal to the consumer by drawing attention toward ‘price’ is a significant challenge that Tweeter needs to overcome. The marketing strategy requires rigorous analysis to arrive at a positioning strategy. The APP program is not a standalone activity; it is an integrated part of how Tweeter seeks to position itself in the marketplace. They look to find points of parity as well as points of differentiation versus the competition. My view is the role of the APP program works depending on segmentation and targeting (Price Biters/Quality & Service). Good decisions rely on both quantitative and qualitative data analysis. The current perception will be difficult to change and by continuing to draw the consumer’s attention toward their pricing, they run the risk of maintaining this perception in the market. Other parts of the marketing mix need to be adjusted and over time, this should help Tweeter modify and manage perceptions in the market to their advantage. They need to focus on making APP a know program for Tweeter, but may need to look at a more specific segment. Without altering other elements of the marketing mix, again, Tweeter runs the risk of failing to alter consumer perceptions and