Tweeter Case Study Solution

Submitted by: Shuchi Batra Madhavi PGP-IIM,Indore,RAK,UAE

Index

1) Situational Analysis 2)Problem Identification 3)Alternatives 4)Critical Evaluation of the alternatives 5)Proposition

Situational Analysis:
Tweeter started out as a small retailer of high-end audio/video equipment right outside of Boston University.This store was a success and soon expanded into 13 stores through out New England. It began to get a reputation for its excellent service and quality products and sales soared.

Macro Environmental analysis:

a)Economic environment: There were 4 types of customers according to their purchasing power. 1.)Entry level 2.)Price bitter 3.)Convenience customer 4.)Quality/Service customer b)Technological Environment:They implemented the Automatic Price Protection pricing strategy which helped Tweeter to grow to 13 stores in England. c)Cultural Environment:People had the perception that Tweeter was an expensive outlet. d)Demogarphy Environment: Location: New England Population:6,86,51,246 People with different characterstics and behavior: a)Customers thought to purchase the product after 1-2 months before actually making purchase.

b)Customers visited 2-3 retailers prior to purchasing. c)8/10 customers checked newspaper advertisements before purchasing. d)Customers also visisted the competitor retailer. e)Natural Environment:Middle to high end and included brands like Denon,Alpine,Canwood,etc.

Problem Identification:
a)In 1988,people's concern was just price so Tweeter's profitability suffered. b)They were considered to be as an expensive and specialized than other New England retailers. c)Their print advertising was actually driving people away damaging their business badly. d)The Automatic Price protection (APP) caused few skeptics like : 1)People percieved that many items would not qualify for the refunds. 2)Tweeter's moderate to high level products didnot overlap with many other retailers. e) Entry of No body beats the Wiz into a local market. f)Tweeter's message of price competitiveness was not reaching the potential customers. g)Tweeters send about 29526 APP cheques totalling $780000 being the prices competetive.

Alternatives: Critical evaluation of Alternatives: a)Tweeter holds no strong competitive advantage against large
discount retailers like Best buy, Circuitcity,etc and they are only hurting themselves when attempting to compete against them. b)Twitter should work on strengthening their custom installation marketing strategies, because the service they offer is of high quality,

and so are the actual products, but they have not successfully found a marketing strategy in which to position itself in the market. c)Tweeter wants its customers to perceive their prices as the best in the industry. The truth, however, is that Tweeters competitive advantage does not lie in its prices, in fact in lies in its customer services and custom installations.This, then, is what needs to be the focus of Tweeters marketing and planning objectives. d)Tweeter is trying to serve a common market of consumers looking for audio/ video needs, but what they must really focus on, and try to position themselves within, in a niche market, one in which its customers are willing to pay more for the added service and customization e)Tweeter sells to a certain customer, one that is educated about its products and is looking for innovation, as well as quality, and so it is time for Tweeter to turn its attention to this specialized consumer and target its market more effectively. f)There are some areas in the United States in which Tweeter is not located. Tweeter should expand into Denver, Colorado; Seattle, Washington; and Lansing, Michigan because these cities are the homes of consumers that we feel are part of Tweeters target market.

Proposition:
Tweeter has shown that although it has implemented strategies over the years that have hurt the company, they are still strong and are still growing. They have endured the unsuccessful APP strategy, and have suffered from it, but they have also learned from it. We think Twitter should work on strengthening their custom installation marketing strategies, because the service they offer is of high quality, and so are the actual products, but they have not successfully found a marketing strategy in which to position itself in the market.It should focus on Objective and Subjective price perception. Tweeter can also follow the remaining alternatives to change the perception of people who feel it is an expensive retailer showroom. We feel that they have room for continued growth, and if our recommendations to the company are followed, they have the opportunity to put themselves at the forefront of high-end video and audio equipment.